The Government yet again has ignored the Textile Sector as a whole despite it being the largest employment provider in country. The agony of Man Made Textile Industry which is highly capital intensive and the only sector capable to attract future FDI has been highly discriminated against cotton. Unfortunate but true that a sector which alone can help Government to achieve its ambitious target doesn't find mention in list of items granted liberal MEIS benefits under the FTP announced on 1st April 2015. Council has a number of times appraised the Government that the Indian Manmade Fibre(MMF) Textiles sector has still not reached 3.0% of world trade and is within threshold limit, while Cotton has crossed 5%. Thus, both should be separately handled while allowing Chapter 3 benefits for promoting exports.
It is also to be noted that Cotton, which pays no taxes, has still been given the high reward in the FTPS’s new scheme, MEIS, while the MMF Textiles that contributes Rs. 7000 crores as taxes and holds high potential is given lower reward rate as compared to cotton in the FTP. For Europe and USA, MMF products have been given lower incentives as compared to cotton textiles. The industry is deeply disappointed being greatly overlooked by both its administrative ministry, Ministry of Textiles as well as Ministry of Commerce.
The major emerging markets for MMF textiles are Latin American Countries(LAC), Far East and African Countries. In the FTP 2015-20, the benefits for promoting exports to these Countries have been completely stopped, that too abruptly, without giving any adjustment space to the exporting fraternity. The MMF sector has developed its space in LAC and African markets after lot of efforts. The Council held successful export shows in Chile, Columbia, Nigeria, Togo and Addis Ababa and could create niche market for MMF textiles. Thus continued incentives are need for 1 or 2 years for strongly establishing and stabilizing MMF textiles in emerging markets. The sudden withdrawal of export promotion incentives will have severe implications on the export towards these markets, which have huge potential for MMF Textiles.
If the Government follow these kind of policies, How do we manufacture more in India? How do we promote ‘Make in India” in Textiles sector? During the Budget the long standing demand of MMF Textiles Industry for reduction of Excise duty from 12.5% to 6 % was overlooked. Further, no efforts have been made by the Government to neutralize the taxes between Cotton and MMF Textiles. While Cotton has zero taxes, the Poor and Common men who wears MMF Textiles Cloth are taxed the highest in the Country. Unless the Government wakes up and takes necessary steps immediately to boost production and consumption of MMF Textiles, India can never achieve their target of reaching from present US$ 110 billion to even US$ 200 bn in next five years.
SOURCE: Tecoya Trend
Tirupur Exporters’ Association (TEA) has sought the inclusion of the readymade garment sector under the 3 per cent interest subvention scheme. Hailing various proposals in the Foreign Trade Policy (FTP), TEA President A Sakthivel said the Budget allocation of Rs. 1,625 crore for interest subvention is a welcome move, but sectors which will benefit under the 3 per cent interest subvention scheme have not been specified appealing for inclusion of the readymade garment sector. “This women-dominated sector uses 99 per cent domestic content while exporting garments and fulfils the Prime Minister’s Make in India initiative. The sector should, therefore, be considered under the 3 per cent interest subvention scheme,” he said, stressing the importance of including the garment sector.
Lauding the support given to women centric products under MEIS (Merchandise Exports from India Scheme), he suggested extension of the 2 per cent Duty Credit Scrip reward to the garment sector, where women account for more than 70 per cent of the workforce. Noted economist Ritesh Singh observed that the FTP was smartly designed to focus on less developed sectors than the developed sectors. “It gives the impression that “ease of doing business” would be the important factor, without favouring one sector or other. Services export promotion has been simplified,” he said, adding “this would benefit the SEZs, which were penalised because of the imposition of Minimum Alternate Tax earlier.”
SOURCE: The Hindu Business line
The Foreign Trade Policy (FTP) 2015-2020 which was undraped by Minister of State for Commerce & Industry Nirmala Sitharaman on 2nd April ,2015 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. The local chapter of Indian Chamber of Commerce and Industry, welcomed the policy saying, it has bold initiatives and aims to achieve a compound annual growth rate of 11.5 per cent so as to increase the Merchandise and Services Exports.
But the Chairman of Southern India Mills’ Association (SIMA) T Rajkumar feels that the FTP has failed to address specific issues on textile sector. According to him, the present banking norms, several thousands of small and medium textile units across the country, particularly South India would soon become NPAs in the absence of improvement in exports. The cotton textile industry, particularly spinning sector, has been reeling under a severe recession during 2014-2015 due to the drop in exports by 30-40 million kg of yarn per month.
It was essential to make zero access entry for yarn, fabrics and garments in China to grab the emerging market opportunities which otherwise would be grabbed by countries like Pakistan, Vietnam, Cambodia and Indonesia. He thus appealed to Prime Minister Narendra Modi and Commerce Minister Nirmala Sitharaman to have a re-look on the Foreign Trade Policy and consider the pleas made by the industry to regain its global competitiveness. He has requested the Government to recognise the textile industry's potential to foster export growth and job creations for millions of rural population and announce suitable incentives under MES for yarns, fabrics, garments and made-ups as stated in the objective of FTP.
SOURCE: Yarns&Fibers
Indian economy’s real growth remains “very elusive” and markets have “resigned” to a slower recovery, while foreign investors are still optimistic for want of alternatives, British major Standard Chartered has said. “A lot of macro parameters have improved for sure, but growth has been very elusive. The high new GDP numbers are puzzling. But on other active parameters, things still look to be challenging,” Standard Chartered Managing Director and Regional Research Head for South Asia Samiran Chakraborty told PTI. “The way we thought that growth will come back, it now appears that both the markets and analysts have resigned to the fact that the recovery will be much slower than anticipated,” he added.
Foreign investors are very optimistic, he said while attributing this to lack of alternatives and also their ability to see-through advantages the country has in the medium term, Chakraborty said, drawing from his recently concluded tour of investor meetings across the world. A revision in the computation of GDP growth showed growth of 6.9 percent in FY 2014 from the earlier 5 per cent. The government has been saying the country is the fastest growing economy in the world and is on course to clip at 7.4 percent in the just-concluded fiscal. However, factory output data, core sector numbers and exports and imports are all heading south.
On optimism of foreign investors, Chakraborty said: “Part of the reason is the so-called TINA factor (there is no alternative). But part of it is also the fact that sitting 10,000 km away, they can actually take a slightly medium-term perspective on us which is tougher for us sitting right here.” Investors derive optimism from factors like changes in the monetary policy framework which makes the Reserve Bank an inflation-targeting central bank, he said, adding that they also get the comfort that current account deficit is under control, among others. When asked about what are the concerns being voiced by international investors, Chakraborty said one big concern is how fast a democracy can work. “One of the concerns is that how fast can a democracy work, at what point of time will the government be forced to turn more populist, can reforms continue for long?” he said.
He further said that stiff political opposition, even from within the ruling front, to the issues being sought to be incorporated in the Land Acquisition Act or minimum support prices or rise in rural wages are things which investors are watching. Earlier in February HDFC Chairman Deepak Parekh, known as a guiding voice of the Indian industry, had said: “I think there is still a lot of optimism among the people and among the industrialists and entrepreneurs that the Modi government will be good for business, for progress, for reducing corruption. They think this government means business on all these fronts.” “However, after nine months, there is a little bit of impatience creeping in as to why no changes are happening and why this is taking so long having effect on the ground. The optimism is there but it is not translating into revenues. Any industry you see, when there is a lot of optimism, he growth should be faster,” Parekh had said.
On the new GDP numbers, Chakraborty, said the analyst community does not take the new GDP numbers too seriously, especially when other indicators like corporate earnings, factory output etc continue to remain subdued. He said that they are eagerly awaiting back data from the CSO of previous years growth computed in the same way, which is expected in May. In the interim, Chakraborty said he will depend on the subdued corporate earnings to gauge the health of the economy. Citing the example of China, where analysts have created composite indices in the absence of credible government data, Chakraborty said the same may come true here as well if the credibility is not restored in the official numbers.
SOURCE: The Financial Express
India's trade deficit with China could nearly double to $60 billion in the next two years if the two partners do not address market access constraints and nontariff barriers faced by Indian goods in the neighbouring country, the department of commerce cautioned in the foreign trade policy statement released last week. The statement came ahead of Prime Minister Narendra Modi's expected visit to Beijing in the second week of May. India is pushing for tariff concessions from China in oil seeds, textile items and marine products in the fourth round of tariff concessions under Asia-Pacific Trade Agreement (APTA) in a bid to correct the imbalance in bilateral trade. The trade deficit widened to $36 billion in 2013-14, accounting for a quarter of India's overall export and import gap. While India's exports to the bigger Asian rival fell 18.6% in April 2014-January 2015, imports grew 17.16%. India's imports include manufactured items in both "non-essential" categories and power and telecom equipment, as per the statement.
"If the current situation persists, by 2016-17, merchandise imports from China will exceed $80 billion while India's exports will be around $20 billion, leaving an unsustainable trade deficit of $60 billion," the commerce department said. The matter was also taken up during the recent visit of an Indian delegation to China in March, but Beijing refused to give an assurance."We did not get any commitment from their end on any of the issues, be it agriculture, pharmaceuticals or IT. It has so far maintained that the wide trade gap can be explained by the divergent nature of the two economies, with India being a services-led one while China is a manufacturing economy," said a government official. "There is definitely a level of frustration as there have been a lot of MoUs on bovine meat to IT and pharma, but no action on the ground," he added. India is seeking reduction in tariffs on close to 200 product lines from China under APTA including textiles, oil cakes and marine products. APTA is a preferential trade agreement between the six countries of Asia- India, China, Bangladesh, Sri Lanka, Laos and South Korea "PM is also likely to take this up during his visit,' said the official. "PM is also likely to take this up during his visit,' said the official.
According to the government, a series of non-tariff barriers block India's exports of pharmaceuticals, IT/ITES and agri commodities including bovine meat, oil meals and cake, tobacco, rice, fruits and vegetables to China. India has also been pushing China to allow Indian companies to bid for tenders in its state-owned enterprises. In pharmaceuticals sector, India has been seeking removal of entry barriers as registration of existing drugs in China takes three-five years, compared to just three-six months in India. India also questioned China's decision to continue curbs on Indian buffalo meat imports at an agriculture committee meeting of the World Trade Organisation (WTO) recently. Non-essential imports is another issue Of the $12.5 billion (about Rs 78,000 crore) worth of consumer imports in each of the past two years, mobiles phones alone accounted for $5 billion (about "31,000 crore) worth of imports and this segment has seen a surge in imports in the past three-four years.
The statement pointed out that the approach for electronics exports promotion must include discouraging non-essential imports and improving product standards, among other things. The commerce department also recommended that states play a role in rationalising non-essential imports."Foriegn direct investment flow from China is one way of addressing the problem of widening trade deficit. If China sets up manufacturing facilities in India, those items will not get imported from Beijing," said Ram Upendra Das, professor, RIS for developing countries. The department of industrial policy and promotion secretary Amitabh Kant conducted a 'Make in India' workshop in Beijing last week to drive Chinese investment into Indian manufacturing. During Chinese president Xi Jinping's visit to India in September last year, China had committed investment of $20 billion in India over the next five years. The commerce department recommended that the country must remain vigilant and"take action to safeguard against unfair trade practices to protect the legitimate trade interests of Indian industry".
SOURCE: The Economic Times
A high level official delegation from India will visit Iran to discuss enhancement of trade ties between the two countries. The visit assumes significance as India is one of the largest importers of crude oil and exporters of basmati rice from Iran. Iran has the world’s fourth-largest oil reserves. Commerce Secretary Rajeev Kher, who will be on a two-day visit starting from Monday to Tehran, will meet his Iranian counterpart and is also expected to meet the Iranian trade minister. “Both the sides would deliberate upon issues including exports of basmati rice, project exports and other areas where both countries can increase trade,” an official said.
The resolution of issues between Iran and the West over its nuclear programme is expected to help India in increasing trade ties particularly in oil sector with that country. The US and its allies had blocked all financial channels to Iran in order to choke it and asked countries to cut their oil purchase from the Persian Gulf nation. India had cut its imports from over 18 million tonnes five years back to 11 million tonnes in 2013-14. India’s exports to Iran have increased two-fold in the last couple of years. This has been facilitated by the Rupee- Riyal payment mechanism. The new Foreign Trade Policy has said that the potential for bilateral trade, however, has not even been scratched on the surface. “Given the significant complementaries between the two economies, project exports to Iran hold out a lot of promise and need to be adequately supported,” it has said.
Keeping in view the long-term potential of project exports to Iran especially in the railways sector, an umbrella financing agreement for rupee credit has been signed between EXIM Bank of India and Iranian banks. The financing will be on commercial terms and in rupees. As per the new Foreign Trade Policy, the Rupee-Riyal mechanism has stabilised and is now showing results. “We will continue to strengthen this mechanism for long term results,” it added. Bilateral trade in areas such as meat, agricultural products, gems and jewellery, engineering, pharmaceuticals, automobiles and auto components will be encouraged, the policy has said. The bilateral trade between India and Iran stood at USD 15.27 billion in 2013-14 as against USD 14.94 billion in the previous fiscal.
SOURCE: The Financial Express
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 54.77 per barrel (bbl) on 02.04.2015. This was higher than the price of US$ 54.11 per bbl on previous publishing day of 01.04.2015.
In rupee terms, the price of Indian Basket increased to Rs 3428.05 per bbl on 02.04.2015 as compared to Rs 3386.74 per bbl on 01.04.2015. Rupee closed at Rs 62.59 per US$ on 31.03.2015.
The table below gives details in this regard:
|
Particulars |
Unit |
Price on April 02, 2015 (Previous trading day i.e. 01.04.2015) |
Pricing Fortnight for 01.04.2015 (Mar 12 to Mar 27, 2015) |
|
Crude Oil (Indian Basket) |
($/bbl) |
54.77 (54.11) |
53.61 |
|
(Rs/bbl |
3428.05 (3386.74) |
3352.77 |
|
|
Exchange Rate |
(Rs/$) |
*62.59 |
62.54 |
SOURCE: PIB
Bangladesh garment sector has returned to a positive trend in the US market this year after the sector experienced a drastic fall in export since February last year. However, the sector registered 2.82 percent growth in the US market in the second month of the year. Bangladesh exported garment items worth $ 906 million in the last two months this year. A total of 367 million square meter of fabrics were exported in the same period which marked a growth of 1.53 percent. Meanwhile, Bangladesh got back in the positive course in a time when the US has cut down garment import from other countries.
The US Department of Commerce's Office of textiles and Apparels (OTEXA) on Saturday reported that imports of cotton, wool, man-made fiber, silk blends, and non-cotton vegetable fiber textile and apparel products equivalent to 4,365.1 million square meter in February 2015, an increase of 0.2 percent compared to February 2014. Bangladesh Garment Manufacturers and Exporters Association (BGMEA) leaders said the RMG export to US came down after the Rana Plaza collapse in 2013 followed by the political unrest in the country. BGMEA vice president Shahidullah Azim told Prothom Alo that the increase of garment export to the US market is a positive sign for us though the orders were placed on September-October last year. He also said the number of order has fallen due to political unrest in the country and as a result the export might also fall in May-June this year.
SOURCE: The Prothom Alo
Pakistan textile industry is incurring an annual loss of around $6 billion due to the presence of second-hand, smuggled textiles and clothing in the domestic market. Out of 10kg per capita consumption, the textile industry gets a share of only 3kg per capita while rest is grabbed by second hand, smuggled and imported textiles and clothing products that have entered into the domestic market, according to All Pakistan Textile Mills Association (APTMA) Chairman S M Tanveer.
He said that a heavy influx of second-hand smuggled and clothing products is being cleared by the Customs for a price as low as for fibre or cotton. He identified smuggling, trade through Afghan Transit Trade and personal baggage as the major sources of entry of the second hand, smuggled and imported textiles and clothing products in the domestic market. He urged economic managers to revisit the customs policy and ensure immediate remedial measures to check entry of second hand, smuggled and imported textiles and clothing in the domestic market.
Export figures for the financial year 2013-14 reveal that the textile industry, while consuming 3 million tons of all kinds of fibres, produced textile goods predominantly meant for exports. Out of this quantity, textile products worth 2.5 million tons of fibre were exported in one form or the other while half a million remaining textile fibre was consumed by the domestic market.The per capita consumption of all fibres in Pakistan is around 10 kilogrammes against an average of 13kg per capita world over. The idle textile capacity in Pakistan can be made operational only if the government plugs holes in the duty-free entry of textiles and clothing products.
SOURCE: Yarns&Fibers
LT Textile Cooperatief UA, a Dutch textile firm, has started the construction of a large textile complex spread over 30 hectares in Kashkadarya region of Uzbekistan, according to media reports. The construction of the textile complex comes on the back of an investment agreement between the ministry of foreign economic relations, investments and trade of Uzbekistan and LT Textile Cooperatief signed last October.
The Dutch company will invest at least $55 million in the textile enterprise in 2015-2016 in accordance with this agreement, including $17 million of its own funds, $38 million from foreign banks. The new complex will have a capacity to process 20,000 metric tonnes of cotton fibre and produce 15,000 metric tonnes of cotton and mixed yarn per year. Under the agreement, the enterprise will be provided with modern high-tech and energy-efficient equipment. The complex is targeted to be commissioned in November 2016 and will start operating to full capacity in Q1 of 2017. Exports will comprise 80 per cent of the enterprise’s products. Uzbekistan is the sixth producer and third largest exporter of cotton fibre in the world with a production of 1.2 million metric tonnes of cotton fibre.
SOURCE: Fibre2fashion
