|
Item |
Price |
Unit |
Fluctuation |
|
PSF |
1122.54 |
USD/Ton |
0% |
|
VSF |
1887.76 |
USD/Ton |
0.43% |
|
ASF |
2447.40 |
USD/Ton |
0% |
|
Polyester POY |
1174.75 |
USD/Ton |
0% |
|
Nylon FDY |
3051.09 |
USD/Ton |
0% |
|
40D Spandex |
6689.56 |
USD/Ton |
0% |
|
Nylon DTY |
2838.98 |
USD/Ton |
0% |
|
Viscose Long Filament |
2594.24 |
USD/Ton |
0% |
|
Polyester DTY |
1378.70 |
USD/Ton |
0% |
|
Nylon POY |
3312.15 |
USD/Ton |
0.50% |
|
Acrylic Top 3D |
5767.71 |
USD/Ton |
0% |
|
Polyester FDY |
1443.97 |
USD/Ton |
0% |
|
30S Spun Rayon Yarn |
2594.24 |
USD/Ton |
0% |
|
32S Polyester Yarn |
1860.02 |
USD/Ton |
0% |
|
45S T/C Yarn |
2887.93 |
USD/Ton |
0% |
|
45S Polyester Yarn |
2724.77 |
USD/Ton |
0% |
|
T/C Yarn 65/35 32S |
2610.56 |
USD/Ton |
0% |
|
40S Rayon Yarn |
2006.87 |
USD/Ton |
0% |
|
T/R Yarn 65/35 32S |
2480.03 |
USD/Ton |
0% |
|
10S Denim Fabric |
1.14 |
USD/Meter |
0% |
|
32S Twill Fabric |
1.00 |
USD/Meter |
0% |
|
40S Combed Poplin |
1.35 |
USD/Meter |
0% |
|
30S Rayon Fabric |
0.77 |
USD/Meter |
0% |
|
45S T/C Fabric |
0.79 |
USD/Meter |
0% |
Source: Global Textiles
Note: The above prices are Chinese Price (1
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Exporters from select labour intensive sectors will be able to access cheaper credit soon as the Government gets ready to reintroduce an interest subvention scheme in the next two-three months. “The Finance Ministry has given us the sanction to extend the interest subvention scheme for exports for three years. We are working out the details of the scheme and hope to be ready with it in two-three months,” Commerce Secretary Rajeev Kher said at a seminar on the Foreign Trade Policy organised by FICCI on Thursday. This should come as a relief for exporters who had been pushing for extension of the subvention scheme since April last year, when the previous scheme had lapsed.
Under the interest subvention scheme, the beneficiary exporters are provided credit at a subsidised rate by banks, which are later compensated by the Government. The subvention scheme for the current fiscal year, however, may not be more expansive than the previous one as the provision of Rs. 1,625 crore is only marginally higher than the Rs. 1,475 crore spent two years back. “The only thing I can say is that labour intensive sectors will be given prominence,” Kher said. The benefit of a 3 per cent subsidy under the lapsed interest subvention scheme was available to sectors such as handicrafts, handlooms, carpets, readymade garments, processed agricultural products and the small and medium sector.
SOURCE: The Hindu Business Line
The textile and clothing (T&C) sector, which has seen a slowdown in growth in recent years, has expressed disappointment with the “inadequate” subsidy provisions and the abolition of certain export incentives under the foreign trade policy (FTP) 2015-20. While the Centre has ruled out yielding to pressures from certain WTO members about phasing out subsidies to the T&C sector that has achieved “global competitiveness”, it’s clear that some of the labour-intensive segments within the sector have been given a miss in the FTP. Commerce minister Nirmala Sitharaman told FE: “The WTO rule is that you cannot support a sector which has already reached that international trading threshold. That means if it has already exceeded that level we will have to (remove export incentives).”
According to the WTO’s Agreement on Subsidies and Countervailing Measures, when the share of a developing country — with per capita income below $1,000 a year — in global exports touches 3.25% in any product category for two straight years, thereby gaining “export competitiveness”, it has to phase out export subsidies for the items within eight years from the second year of breach. Countries like the US contend that India’s T&C exports first breached the threshold in 2005 and remained above the level in 2006 also and it should, therefore, end its export subsidies for these items by January 2015. New Delhi believes that many items within the T&C group may not have attained export competitiveness, and, therefore, need continued support. Commerce secretary Rajeev Kher told FE: “You are aware of the debate going on regarding sections and heads (within International Harmonised Systems code). We are still engaging ourselves in the WTO.”
Industry executives say the exporters were already facing stiff competition from countries like Bangladesh, Pakistan, Vietnam and Cambodia due to their duty-free access to some of the major markets, and the abolition of certain domestic export subsidies in select segments within the T&C sector would just hurt their competitiveness further. The absence of any concrete assurance from the government on their demand for a 3% interest subvention to partially offset high credit costs have disappointed them. Mills’ demand to restore benefits for cotton and cotton yarn under the focus market scheme (FMS), which were withdrawn in 2013, seems to have also been ignored. Under the FMS, exporters used to get up to 4% of the freight-on-board value of cotton yarn in the form of transferable scrip.
While textile exports growth remained subdued at just under 5% in April-December from a year earlier, garment exports started picking up only since 2013-14, primarily because of the rupee depreciation. Higher T&C exports augur well for the economy as they accounted for around 11% of the overall outbound shipments and the sector employs 45 million people — largest employer after agriculture. Southern India Mills’ Association chairman T Rajkumar pointed out that while Cambodia has a zero-duty access to the EU, China and the US, Vietnam has a zero tariff access to China. Similarly, Pakistan and Bangladesh have an unrestricted access to the EU, which also accounts for around 35% of India’s garment exports. However, Indian yarn, fabrics and made-ups & garments attract export duties of 4%, 5% and 12%, respectively, in the EU. In the US, Indian yarn attracts 7% export duty, fabrics and made ups 10% and garments 17.5% duty. Industry, however, hailed the reduction of export obligation to be eligible for duty-free import of capital goods under the EPCG scheme and the 2% duty scrip announced for mainstream cotton products and 5% for handloom, carpet and coir products.
SOURCE: The Financial Express
The Narendra Modi-led government has taken a least anticipated but bold step in aligning the Foreign Trade Policy (FTP) 2015-2020 with the global trading norms under the World Trade Organization (WTO), even as it has made efforts to bring exporters to the changing realities of the global trading paradigm. The FTP, which came into effect on Wednesday, spoke for the first time about global value chains and their relevance in world trading order. Global value chains are fast becoming the most important aspect of any bilateral and multilateral trading arrangement.
Global value chains are typically created by integrating goods and services from various countries into one composite production network to produce a single product or service. These are turning out to be a prominent feature in mega-regional trade pacts such as the Trans-Pacific Partnership (TPP), the Trans-Atlantic Trade and the Investment Partnership and Regional Comprehensive Economic Partnership.
“The mega agreements are bound to challenge India’s industry in many ways, for instance, by eroding existing preferences for Indian products in established traditional markets such as the US and EU (European Union) and establishing a more stringent and demanding framework of rules. The Indian industry needs to gear up to meet these challenges, for which the government will have to create an enabling environment,” said the FTP statement. This is the first time a government has introduced an FTP, explaining the intent and rational that has gone behind shaping the policy.
It adds that going forward, India will have to sign bilateral and regional trade pacts not only with countries that turn out to be lucrative markets for its produce but also with those which are crucial suppliers of critical inputs and have complementarities with the Indian economy. Commerce and Industry Minister Nirmala Sitharaman said India was not in a position to join the TPP and neither was it invited due to poor standards. Therefore, she exhorted the exporters to view this as an opportunity to improve the quality of their products.
“These mega-agreements give us a tremendous opportunity of creating an environment within the country for producing high quality products for reforming our standards, for updating ourselves on value chains and to strategise out trade relations,” said Commerce Secretary Rajeev Kher. The government has also made it clear with the new FTP that the days of innumerable subsidies and doles given to exporters will now be done away with but in a phased manner. Bucking the trend, the FTP for the first time deals with a separate section on ‘Phasing out of export subsidies.’ This is done to comply with the WTO’s Agreement on Subsidies and Countervailing Measures. “In the case of India, some sector may be affected and would require rationalisation of support over a period of time. The phasing out and eventual elimination of agricultural export subsidies is also one of the key elements of the Doha Development Agenda,” the statement said.
SOURCE: The Business Standard
The Government of India has unveiled the much awaited Foreign Trade Policy (FTP) 2015-20, focusing on supporting both the manufacturing and services sectors, with a special emphasis on improving the ‘ease of doing business’. The new five-year FTP provides a framework for increasing exports of goods and services as well as generation of employment and increasing value addition in the country, in keeping with the “Make in India” vision of Prime Minister Narendra Modi.
FTP 2015-20 introduces a new scheme “Merchandise Exports from India Scheme (MEIS)” for export of specified goods to specified markets. The scheme replaces 5 different schemes of earlier FTP (Focus Product Scheme, Market Linked Focus Product Scheme, Focus Market Scheme, Agri. Infrastructure Incentive Scrip, VKGUY) for rewarding merchandise exports which had varying conditions (sector specific or actual user only) attached to their use.
Under MEIS, handloom, coir, jute products, technical textiles, handmade carpets, other textile and readymade garments have been supported for European Union, US, Canada and Japan. Products supported under MEIS include 396 lines of readymade garments, which are women centric products, i.e. women constitute a majority among workers producing these items. There would be no conditionality attached to any scrips issued under MEIS. Duty credit scrips issued under MEIS and the goods imported against these scrips are fully transferable.
For grant of rewards under MEIS, countries have been categorised into 3 groups, with rates of rewards ranging from 2 per cent to 5 per cent. Category A consists of 30 traditional markets — 28 countries of the European Union, Canada and the US. Category B consists of 139 emerging and focus markets – 55 African countries, 45 countries from Latin America and Mexico, 12 CIS countries, 13 West Asian countries and Turkey, 10 Asean countries, Japan, South Korea, China and Taiwan. All other 70 markets are placed under category C.
To boost e-commerce exports, goods falling in the category of handloom products, leather footwear, and customised fashion garments, having FOB value up to Rs 25,000 per consignment (finalised using ecommerce platform) shall be eligible for benefits under FTP. Such goods can be exported in manual mode through Foreign Post Offices at New Delhi, Mumbai and Chennai. Commerce minister Nirmala Sitharaman stated that in order to give a boost to exports from SEZs, government has now decided to extend benefits of both the reward schemes (MEIS and services export scheme SEIS) to units located in SEZs. It is hoped that this measure will give a new impetus to development and growth of SEZs in the country. The release of Foreign Trade Policy was accompanied by a FTP Statement explaining the vision, goals and objectives underpinning India's Foreign Trade Policy, laying down a road map for India’s global trade engagement in the coming years.
SOURCE: Fibre2fashion
A day after a foreign trade policy (FTP) was unveiled for 2015-2020, Commerce Secretary Rajeev Kher said exporters would have to stop looking for subsidies and incentives eventually and concentrate on better branding and quality of products. Addressing the Federation of Indian Chambers of Commerce and Industry (Ficci) on the new FTP, which came into effect on Wednesday, Kher said these subsidies and incentives would eventually have to be phased out in line with international commitments.
“This policy has tried to sensitise the industry on two accounts. These are extremely important. The global trading architecture is completely changing. Within two-three years, you’ll see a paradigm shift in global trading architecture. India has so far run on the competitive advantage of its products. In the past few years, this competitive advantage has suffered. We have not begun reviving or improving it. We have started the motion but the process to bring results will take its own time. Therefore, it is a challenge for us to become globally competitive,” said Kher.
He added Indian exporters should acknowledge that they have to be competitive “not through route of subsidies, not through the route of dole.” “We have to acknowledge the institutional architecture, which is emerging, and in that context the Trans-Pacific Partnership and Regional Comprehensive Economic Partnership have to be taken into account.” This is because there would be preferential arrangement among the members of these mega trade pacts, while Indian exports would face trade erosion, he explained. Pravir Kumar, director-general of foreign trade, echoed similar views.
According to him, although the present policy has reduced the rate of incentives to 2-5 per cent from a level of 10 per cent earlier, in the coming years, even the two per cent level of subsidies will be done away with, owing to resource constraint as well as global factors. “In times to come, subsidies will have to be phased out,” he said. The new FTP has been aligned with the government’s larger vision of promoting manufacturing, digitisation and making it more inclusive with greater involvement of states.
The FTP, unveiled after a gap of a year, has introduced a policy statement for the first time in its history. According to Kher, this will lead to more ownership of the policy by various departments of the governments. “FTP statement is a flow of thought in the government on how India should evolve as a responsible foreign trading nation. This a first generation foreign policy statement, but many embellishments can continue to happen in this. One should take it with a composite strength of the government rather than just a commerce departmental document,” he said.
SOURCE: The Business Standard
India will continue to provide export subsidies wherever they are required and legitimate and there are no plans to phase them out, says Commerce Secretary Rajeev Kher. However, efforts would be made to ensure that over the next five years an environment is created that would enable exporters to be competitive without subsidies, Kher said in an interview with BusinessLine. “This is my personal view, but hopefully in the next five years, much would happen in the areas of ease of doing business, trade facilitation and infrastructure, and most sectors would not need the crutches of subsidies. If at all, only some newly evolved sectors would need sops,” he said. Kher pointed out that at present India did not have any compulsions under World Trade Organisation (WTO) rules to do away with export sops, but things may change soon.
WTO threshold
“We are only trying to bring it to the notice of the industry that subsidies on some products, where exports exceed 3.25 per cent of world trade, will come under the scanner of the WTO. We have to be prepared for that. But we are certainly not phasing out legitimate export sops,” Kher said. Textiles is one sector where exports have already crossed the threshold of 3.25 per cent of world trade. But the new Foreign Trade Policy has provided sops to exporters from the sector as the country has time at least till 2018 to withdraw the incentives.
India also stands to lose the privilege of extending export sops once its per capita income exceeds $1,000 a year.
Responding to industry complaints that the new export schemes for goods and services announced in the foreign trade policy had lowered incentive rates for several sectors, Kher said that the Government was operating under resource constraints. “While deciding which sector should get how much subsidy for exporting to specific markets, we have followed such precise principles that the industry will not be able to find faults,” Kher said.
On certain categories of Special Economic Zones (SEZs) such as gems & jewellery not being extended the benefit of export sops, he said that only those sectors were excluded that were not getting the benefit in the domestic tariff area as well. He added that the Commerce & Industry Ministry would continue to push for withdrawal of the Minimum Alternate Taxes (MAT) and the Dividend Distribution Tax (DDT) on SEZs, although the Finance Ministry had not come on board yet.
SOURCE: The Hindu Business Line
The new Foreign Trade Policy (FTP) announced by the government on Wednesday has left the textile sector disappointed. "The government has fairly ignored the textile and clothing sector, the second-largest employment provider in the country and whose contribution to the country's growth has been well recognised by the Economic Survey. In terms of strengthening the manufacturing base, promoting exports and generating employment, the sector hasn't got its due in the FTP," said R K Dalmia, chairman of the Cotton Textiles Export Promotion Council.
The sector will, however, benefit from some of the measures announced in the policy. Under the Merchandise Exports from India Scheme (MEIS), man-made fibre yarn, woven fabrics and knitted fabrics typically have a two per cent reward in regions such as the US, the European Union and Japan, those not in China, Bangladesh, Turkey, Vietnam, South Korea, etc, major destinations for these products. In the case of garments, a two per cent reward has been provided for most products. The reward is convertible into relaxation in service tax, excise and customs duties; it is also transferable.
Duty scrip of two per cent has been granted to mainstream cotton textile products, though higher rates have been announced for handlooms, carpets and coir products under the MEIS. Sectors such as cotton yarn has been ignored, even as export of these products has declined sharply. Also, exports to Latin American markets face high logistic costs. Without adequate support to handloom and coir products, the high export targets set by the government would be unachievable, said Dalmia.
The FTP did not touch upon an extension of interest rate subvention, needed to partly compensate high capital costs. Despite growing opportunities for textile products such as yarn, fabrics and made-ups in China, the government has not included these for pursuing market access negotiations with that country. If the rates on fabrics exported to China are reduced from the current 10 per cent to at least five per cent, exports to China will rise substantially.
SOURCE: The Business Standard
For the e-commerce sector, struggling with regulatory and taxation challenges, the central government's new five-year Foreign Trade Policy (FTP) is reason to cheer. Among other things, the policy talks of incentives to companies exporting products from sectors that create jobs. “We are extremely pleased with the FTP. The policy is a recognition of the contribution to the exchequer made by small-time retailers and small and medium enterprises which export via e-commerce,” said Latif Nathani, vice-president and managing director, eBay India.
“The policy will provide a fillip to such retailers, as they will not only be able to ship small consignments via courier but reduce their burden on transaction costs. With a focus on handloom products, the guidelines will also boost the Make in India campaign.” eBay India has about 15,000 e-commerce sellers that use its platform to sell in 206 countries. Mainly, two new schemes -- Merchandise Exports from India Scheme (MEIS) and Services Exports from India Scheme (SEIS) -- launched by the government under the new FTP (2015-20) will benefit Indian e-tailers, experts said.
Under MEIS, companies exporting goods through the foreign post office or couriers using e-commerce of a freight on board (FoB) value up to Rs 25,000 per consignment will be entitled for rewards. The objective of MEIS is to offset infrastructure inefficiencies and associated costs in export of goods, especially those having high export intensity, employment potential and able to enhance our export competitiveness. If the value of exports using an e-commerce platform is more than Rs 25,000 per consignment, the MEIS reward would be limited to an FoB value of Rs 25,000. The goods entitled for benefit under the scheme are handlooms, books & periodicals, leather footwear, toys and customised fashion garments.
“Export of such goods under courier regulations shall be allowed manually on a pilot basis through airports at New Delhi, Mumbai and Chennai... Department of Revenue shall fast-track the implementation of EDI mode at courier terminals,” the policy said. Amit Kumar Sarkar, partner at Grant Thornton India LLP, said: “The government has taken a long time to introduce the new FTP, which with the promises made in the Union Budget finally provides the specific fiscal support India Inc was asking for. The simplified fiscal incentives proposed in the FTP (particularly the merged MEIS and SEIS schemes), coupled with the administrative reliefs on import and export of goods and services, should serve to underscore the intention of the Government to meet its Make in India slogan.” He added it was now for the other ministries (finance, in particular) to support the FTP by issuing the required notifications.
SOURCE: The Business Standard
Bhimavaram in Andhra Pradesh's West Godavari district and Visakhapatnam have been recognized as 'towns of export excellence' under the seafood category. "Visakhapatnam and Bhimavaram have been recognised as towns of export excellence under the seafood category and it is for the first time that the cities from Andhra Pradesh have entered the list," TDP leader and Rajya Sabha member Seetha Rama Lakshmi told reporters.
At present, there are 33 towns in this category across the country but there was no representation from AP. She said it will encourage the exporters, keeping in view common service providers in the areas, who are eligible under the Export Promotion Capital Goods (EPCG) scheme, which enables the import of equipment with nil or concessional duties. "We had earlier, submitted a memorandum to Minister of State for Commerce and Industry Nirmala Sitharaman and state Chief Minister N Chandrababu Naidu, citing statistics representation on shrimp exports from Bhimavaram in August last year and urged them to give its due recognition," Lakshmi added. "Now, we will receive priority for assistance for rectifying the identified infrastructure gaps," she said, adding that the state shall utilise the funds for developing infrastructure required to boost export. She said facilities like export industrial parks/zones, equity participation in infrastructure projects, development of minor ports and jetties would have not been possible till Bhimavaram was recognised. The TDP leader said Naidu took a keen interest in the matter and was in touch with the government for recognising the two cities as towns of export excellence under seafood category.
SOURCE: The Economic Times
Manufacturing activity in the country rose in March over the previous month on the back of output growth and increase in new orders, but was lower than January, showed the widely tracked HSBC purchasing managers’ index (PMI). Ahead of the Reserve Bank of India (RBI) monetary policy review next week, the PMI survey showed that inflation has risen both on the input and output sides. Firms have not been hiring additional workers for 14 months now and this time, rising costs have deterred them from doing so. The PMI reading rose to 52.1 points in March from 51.2 in February. A reading above 50 shows expansion and one below that implies contraction. The PMI stood at 52.9 points in January. To put things in perspective, Markit Economics, the compiler of PMI data, says the average reading for the first three months of 2015 was lower than in the final three months of 2014. The former stood at 52.06 points and the latter at 53.13.
Manufacturing output increased for the 17th consecutive month in March and faster than in February, Markit Economics said further. Pollyanna De Lima, an economist at Markit Economics, said, “Momentum is building in manufacturing. Stronger expansion of output, new orders and stocks of purchases all contributed to a higher PMI reading in March.” Even then, staffing levels have barely changed over the past 14 months. The relief is that hiring did not decline in March, unlike in February. De Lima said that was a signal that hesitation still prevailed among firms to hire additional workers. However, the labour market was likely to recover in the coming months, De Lima said. Underpinning the expansion in output was a quicker rise in new order flows. According to the survey participants, demand conditions improved. Continuing the trend that started in October 2013, new export orders increased in March. Although solid, the overall growth rate moderated to the weakest in 10 months.
PMI data do not match with official figures since India's merchandise exports fell for both January and February 2015 and that too by double digits. Also, core sector data fell to a 17-month low of 1.4 per cent in March. The official and PMI methodologies differ in the sense that PMI is a month-on-month calucation and official figures are year-on-year. Besides, official numbers are actual numbers and PMI is based on a survey of over 500 companies. However, Markit Economics said there was evidence of ongoing pressure on the capacity of manufacturers' operations, as unfinished business increased for the 32nd consecutive month. This indicates that demand is very much there in the economy, but there are capacity constraints. March saw a return of inflationary pressures across India’s manufacturing economy. After falling in the prior month, purchase costs rose at a marked rate that was the most pronounced since August 2014. According to panelists, chemicals, metals, plastics, energy and paper had all risen in price. Output charge inflation quickened to the strongest in four months, as firms attempted to sustain profit margins by raising their tariffs.
SOURCE: The Business Standard
The government is likely to forego revenue to the tune of Rs 500-2,500 crore by way of incentives given under Merchandise Exports from India Scheme (MEIS) and Services Exports From India scheme (SEIS) to units located inside special economic zones (SEZs) under the new Foreign Trade Policy (FTP) 2015-2020. The Foreign Trade Policy 2015-2020, unveiled on April 1, gave a breather to ailing SEZ units by bringing them under the newly introduced MEIS and SEIS incentive programmes. However, according to experts, this will mean an additional revenue impact on the government, which is already reeling under resource constraints, over and above the existing quantum of revenue foregone. Currently, there are 199 operational SEZs having 3,937 units located in them. The total exports achieved by these units stood at Rs 3,48,584 crore during April-December 2014-2015, according to latest data from the Ministry of Commerce and Industry.
Revenue forgone
Under the two new schemes – MEIS and SEIS – exporters will be allowed rewards for export of goods given as a percentage of realised free-on-board (FOB) value. The rate of these rewards, given in the form of duty scrips, will be 2-5 per cent. Similarly, under the Served From India Scheme (SFIS), the rate of rewards will be 3-5 per cent. These sops or duty scrips were not given to SEZ units earlier. “As a result of benefits given under both the schemes (MEIS and SEIS), the revenue forgone will be in the range of Rs 500-2,500 crore in a financial year,” said an official on condition of anonymity. The actual revenue forgone by the government on account of tax incentives for export profits of SEZ units in the financial year 2013-2014 stood at Rs 17,036 crore, higher than the projected revenue impact of Rs 14,992 crore.
In financial year 2014-2015, it is estimated that total revenue foregone on account of sops given to SEZ units would reach Rs 18,393.70 crore. According to the finance ministry, the actual impact is going to be “even higher”, said the statement on revenue forgone. According to Amit Kumar Sarkar, partner, Grant Thornton India LLP, the revenue foregone might exceed Rs 2,000 crore to Rs 2,500 crore if subsidies are calculated based on 5 per cent of duty scrips. “The tax burden is going to be substantial. It is going to be more for goods exports compared to services,” said P C Nambiar, chairman, Export Promotion Council for EOUs and SEZs (EPCES). However, the industry feels that the increase in subsidy outgo will not be much of a concern for the present government. “Increase in the subsidy bill should not be a major concern as Indian exporters are at a disadvantage on many fronts vis-à-vis their competitors from other countries. These incentives are to offset infrastructural inefficiencies and other cost disadvantages,” said Ajay Shriram, president, Confederation of Indian Industry (CII).
MAT & DDT problems to persist
Minister of state (independent charge) for commerce and industry Nirmala Sitharaman has said the proposal to remove minimum alternate tax (MAT) and dividend distribution tax (DDT) on SEZ developers and units is still lying with the finance ministry. “It is suggested that the rate of MAT should be reduced to its original rate of 7.5 per cent, which can be done through a notification, so that the government gets revenue in time and the SEZs are able to set off the advance tax MAT paid within the stipulated period. Reduction or removal of MAT will help in growth of SEZs. For reduction of tax rate, no approval of Parliament is required,” Nambiar said. According to Sarkar, the incentives given to SEZ units under the new FTP are not lucrative enough for investors to stay invested in SEZs despite the fact that SEZs are entitled to duty-free imports and income tax benefits.
Confusion over SEIS rewards
Although the government has maintained that both MEIS and SEIS benefits will be given to SEZ units, the policy fine print states that these are eligible for SEIS incentives, according to the ineligible categories under section 3.09 II (e). Hence, if only the MEIS incentives are taken into account then the total export subsidy burden of the government is expected to be benign. “The MEIS burden will not be much as the petroleum sector, which contributes to sizeable exports of SEZs, besides IT and ITeS, will be outside the purview of MEIS. By a rough estimate, the burden on the exchequer on account of MEIS benefits to SEZs is expected to be between Rs 500 crore and Rs 600 crore,” said Ajay Sahai, CEO and director general, Federation of Indian Export Organisations. SEZs contribute almost 25 per cent of the country’s total exports. Total exports from SEZs stood at Rs 3,48,584 crore during April-December 2014-15, declining 7.61 per cent from the corresponding period in 2013-14. In 2013-14, exports from SEZs stood at Rs 4,94,077 crore. After cancelling almost 67 SEZs, the SEZs that have received formal approvals so far are 436, of which 347 are notified and will be operational soon.
THE FTP MATHS
SOURCE: The Business Standard
Indian government has decided to set up 800 SFURTI (Scheme of Fund for Regeneration of Traditional Industries) clusters with an investment of Rs 850 crore by March 2017 to boost khadi and village industries, according to media reports. “Modernisation of Khadi and village industries is the key to increase more number of job opportunities at the rural and grass root level without affecting the environment,” micro small and medium enterprises minister Kalraj Mishra said at a workshop organised by the Khadi and Village Industries Commission (KVIC) in Delhi recently.
Mishra said that during the 12th Five year plan (2012-17), 800 SFURTI clusters will be set up which will be a great boost to the khadi and village industries. The MSME Ministry had launched SFURTI in 2005 to promote cluster development. The Scheme envisages need-based assistance for replacement of production equipment, setting up of common facility centres (CFC), product development, quality improvement, improved marketing, training and capacity building. The target for the revamped SFURTI clusters under 12th Five Year Plan is to set up 800 clusters under KVI and Coir with an outlay of Rs 850 crore to cover four lakh artisans across the country.
SOURCE: Fibre2fashion
The commerce department is working on a five-year plan towards regional integration, in line with Prime Minister Narendra Modi's efforts of building close ties with South Asian countries. The plan is to focus on sectors relevant to the region, such as textiles, leather, tourism, auto components, chemicals and health care, the government said in its foreign trade policy statement released by Commerce and Industry Minister Nirmala Sitharaman this week. It will aim to identify specific value chains that run through different countries, besides stepping up infrastructure development along the borders. The South Asian Association of Regional Cooperation includes eight nations: India, Afghanistan, Bangladesh, Bhutan, the Maldives, Sri Lanka, Pakistan and Nepal.
The commerce department has laid down an eight-point strategy to engage with the SAARC members. Besides intensifying efforts at infrastructure development, India will also promote multimodal connectivity, including inland waterways, towards the vision of a seamless South Asia. "It is commendable that India is creating a vision for the region and integrating it into the national plan. While 60-80% of exports for these countries is just textiles, auto components is where India could be the driver said Nisha Taneja, professor, Indian Council for Research on International Economic Relations.
"We should be investing in these countries and import products back. Sri Lanka has a very good rubber or tyre industry, which can be harnessed into the global value chain." The eight-member region has a South Asia Free Trade Agreement (Safta) in place since 2006. It required the developing countries in South Asia (India, Pakistan and Sri Lanka) to bring their customs duties down to 20% in the first phase ended in 2007 and to zero by 2016. In 2012, India reduced the number of products on which tariff concessions do not apply to 614 from 868. India provides duty-free quota-free access to all items barring just 25 to the least developed countries in the group. New Delhi has, however, pointed out that Pakistan's reservations have impacted full implementation of SAFTA, which has deprived consumers in Islamabad to affordable and quality products from India.
"The operationalisation of SAFTA with respect to trade with Pakistan has been constrained by Pakistan's unique approach to trade with India under the SAFTA Agreement," the statement said. Pakistan has a negative list of 1,209 items which cannot be exported from India to Islamabad. "The two countries had agreed to a roadmap for normalisation of relations in 2012 but this roadmap has not been acted upon due to continued reservations expressed by Pakistan," the government said. The proposal included reciprocating non-discriminatory market access to India. The government aims to conclude SAFTA in services with SAARC countries at the earliest. India's exports to SAARC registered 14.71% growth in 2013-14 at $17.3 billion.
SOURCE: The Economic Times
Bangladesh has the world’s second largest textile industry, generating around $24 billion in 2014 and employing 4 million workers, 80 percent of whom are women. Washing, dyeing, and finishing (WDF) activities are a key pillar of the country’s economy: 1,700 WDF units and 200,000 workers contribute a net value added of up to 20 percent to the textile value chain. Despite their profitability, WDF factories are the second biggest polluter in the country, consuming an annual 1,500 billion liters of groundwater and relying on inadequate wastewater treatment. Many mills use 250 to 300 liters of water per kilogram of fabric, far beyond the global best practice of 50 liters per kilogram or less.
To help the sector adopt eco-friendly technologies and practices, the Governor of Bangladesh Bank, Atiur Rahman, recently announced the central bank’s plans to earmark $500 million of low-cost “green fund” for textile factories. Rahman’s announcement follows the recommendations made at a seminar jointly organized by the World Bank Group’s Trade and Competitiveness Global Practice and the Policy Research Institute of Bangladesh (PRI). The seminar is a part of the Partnership for Cleaner Textile (PaCT) project.
PaCT aims to eliminate the harmful environmental and social impact of groundwater extraction, surface water pollution, and misuse of energy and chemical resources in textile wet processing to support the sector’s long-term competitiveness. The Bank Group’s Trade and Competitiveness Global Practice led stakeholder engagements with national and sector-level stakeholders to address water sustainability challenges.
Following a series of efforts to improve the resource efficiency of WDF activities, three interim working groups were formed in May 2014 to discuss sector-related regulatory, finance, and industry issues. Jointly led by PRI, the working groups met frequently and conducted several diagnostic assessments of regulatory and access to finance issues. At least six major policy recommendations on finance issues were proposed by working group members to the central bank governor on February 14, 2015. As a result, $500 million for resource efficiency financing in textile sector was announced by the governor. IFC was requested to take a lead role in structuring the fund. In addition, all financial institutions in Bangladesh must allocate at least 5 percent of their lending to green finance by 2016.The central bank chief emphasized the need to brand the textile industry, saying the fund’s timing is critical as the global demand for environmental-friendly goods continues to rise.
SOURCE: The WorldBank
The government of Ethiopia has ushered in a manufacturing boom that is set to make the country a major regional player across several lines of products. According to government sources, the textile sector is among the industries poised to ride the boom. A large domestic market and an increasing number of skilled workers is turning Ethiopia into an investment destination. Some have already dubbed Ethiopia as the ‘Bangladesh of Africa’ and with good reason. There has been tangible success already, with Chinese, Turkish and European garment manufacturers seeking to expand their operations.
Under the Growth and Transformation Plan, production of textile and garments, leather products, cement industry, metal and engineering, chemical, pharmaceuticals and agro-processing are priority areas for investment. As far as textiles and clothing are concerned, spinning, weaving and finishing of textiles from the raw material to the production of garments are there for the taking for investors. The manufacture of knitted and crocheted fabrics, carpets and sportswear are also on offer. There are ample manufacturing opportunities for prospective investors in tannery and leather products involving fashion items such as handbags, shoes, jackets and leather garments. The Ethiopian government has asked the country’s Investment Commission to guide prospective investors through every step of the way.
SOURCE: Fibre2fashion
A Bank of China Ltd report has predicted China's economy to stabilize in the second quarter of this year, and GDP growth to rise from around 7 percent in the first quarter to 7.2 percent in the second. Zhou Jingtong, a senior economist with the bank's Institute of International Finance, said in the report on Monday that while the economy continues to slow, "we are seeing a series of positive changes emerging from the recent economic moves, such as the rapid growth of private investment and strong profit growth in the equipment and high-tech manufacturing industries".
The tertiary sector of the economy, also known as the service sector, is growing rapidly, making it a main channel for employment, Zhou said. In the first two months of this year, service industry production increased 7.4 percent. Statistics show that every percentage point of GDP growth created 1.79 million jobs in 2014. The report said consumption rose 11 percent in the first two months, up 20 basis points from the previous year, and its contribution to economic growth is expected to further increase in the first quarter.
During the same period, it also showed that private investment increased 14.7 percent year-on-year and new forms of businesses related to the Internet continue to expand at a high speed. Online sales of products and services increased 44.6 percent from a year earlier to 475.1 billion yuan ($76 billion). Fixed-asset investment, meanwhile, slowed further in the first two months, among which the growth of real estate investment fell 8.9 percentage points from the previous year.
Bank of China's economists said they expected the housing market to remain in a relative trough, "due to a lack of momentum for recovery" in the second quarter. They expect that the investment in real estate will grow 8-10 percent during the period, compared with 10.4 percent from January to February. The bank expects new yuan loans to reach 10 trillion yuan to 11 trillion yuan this year, which will help stabilize the economy, and about 3.5 trillion yuan of the total will be extended in the first quarter. "The central bank will further cut the reserve requirement ratio two or three times to inject liquidity into the market, as China's funds outstanding for foreign exchange will continue to drop this year, thus creating a gap worth 3.5 trillion yuan between base money supply and demand," said Li Jianjun, a financial analyst at BOC.
Analysts have said in recent days that a sharp showdown is possible in the first quarter, after a slew of indicators and forecasts suggested policymakers were under added pressure to maintain GDP growth targets, as structural changes continued to have an effect on the economy. According to the latest data from the National Bureau of Statistics, industrial profit reached 745.24 billion yuan in the first two months, a 4.2 percent drop compared to a year earlier, after slipping 8 percent in December, 4.2 percent in November and 2.1 percent in October.
The flash manufacturing Purchasing Managers Index for March, jointly released by the HSBC Holding Plc and Markit Ltd last week, showed factory activity unexpectedly dipped to an 11-month low of 49.2 as new orders shrank. The below-50 reading means that contraction may return to manufacturing businesses amid the persistent weakness in the world's second-largest economy, and increase the risk of deflation.
SOURCE: Global Textiles
The free trade agreement between India and Australia that is expected to be signed by end of this year may not be the most robust but would create mechanisms to harvest immense business opportunities, the head of a think-tank here said. “The agreement could be later improved upon and that would signal huge opportunities that exist between the two nations,, CEO and foundation director of Australia India Institute said. “It would also create the mechanisms to harvest immense business opportunities,” he said.
“The Free trade agreement may not be the most robust one but it will certainly begin by identifying sectors where the two can do much more,” said Mattoo, while giving a talk on ‘The Modi Government An early assessment of its policies and impact’. Bilateral trade between Australia and India has been pegged at Australian dollars (AUD) 15 billion and the two sides have set a target to lift it to AUD 50 billion. During official visits to India and Australia in September and November 2014 respectively, Abbott and Modi renewed both countries commitment for an early conclusion of an equitable, balanced, comprehensive and high quality agreement.
SOURCE: The Customs Today
As the Pakistan federal government withheld the notifications of initiatives under the Textile Policy 2014-19 to avail of the terms of Technology Upgradation Fund Scheme (TUFS), the All Pakistan Textile Mills Association (APTMA) has lamented the delay, citing that it is hindering the industry from undertaking BMR and fresh investment initiatives for the textile industry. The APTMA chairman S M Tanveer has urged the prime minister, finance minister and commerce minister to immediately take notice of the situation and issue directives for notifying the Textile Policy 2014-19, in particular the TUFS, to ensure investment for undertaking initiatives under BMR and greenfield projects.
Tanveer said that the textile industry has lacked behind the region on the front of technology and machinery upgradation. There is no meaningful addition in the sector since 2006, he added. Only 15 percent of the previous Textile Policy 2009-14 could be implemented due to lack of funds. Moreover, refunds relating to investment markup support and Technology Upgradation Fund Scheme have not been cleared as yet. Tanveer apprehended the new scheme may also witness a similar fate in case no timely steps are taken by the government. As a fall out, serious structural imbalances have occurred across the textile value chain, as 25 percent of the basic textile worth US$4 billion is being exported annually without converting into garments due to the non-existence of backward and forward linkages to add value up to US$15 billion exports, Tanveer said.
SOURCE: Yarns&Fibers
