Textile Raw Material Price 2015-05-04
|
Item |
Price |
Unit |
Fluctuation |
|
PSF |
1295.9206 |
USD/Ton |
-1.25% |
|
VSF |
2034.579 |
USD/Ton |
0% |
|
ASF |
2451.3 |
USD/Ton |
0% |
|
Polyester POY |
1405.412 |
USD/Ton |
-0.58% |
|
Nylon FDY |
3121.322 |
USD/Ton |
1.60% |
|
40D Spandex |
6536.8 |
USD/Ton |
0% |
|
Nylon DTY |
2598.378 |
USD/Ton |
0% |
|
Viscose Long Filament |
1626.029 |
USD/Ton |
0% |
|
Polyester DTY |
3382.794 |
USD/Ton |
0% |
|
Nylon POY |
5899.462 |
USD/Ton |
0.28% |
|
Acrylic Top 3D |
1658.713 |
USD/Ton |
0% |
|
Polyester FDY |
2925.218 |
USD/Ton |
0% |
|
30S Spun Rayon Yarn |
2696.43 |
USD/Ton |
0% |
|
32S Polyester Yarn |
2075.434 |
USD/Ton |
0% |
|
45S T/C Yarn |
2990.586 |
USD/Ton |
0% |
|
45S Polyester Yarn |
2859.85 |
USD/Ton |
0% |
|
T/C Yarn 65/35 32S |
2745.456 |
USD/Ton |
0% |
|
40S Rayon Yarn |
2206.17 |
USD/Ton |
0% |
|
T/R Yarn 65/35 32S |
2565.694 |
USD/Ton |
0% |
|
10S Denim Fabric |
1.14394 |
USD/Meter |
0% |
|
32S Twill Fabric |
1.0001304 |
USD/Meter |
0% |
|
40S Combed Poplin |
1.356386 |
USD/Meter |
0% |
|
30S Rayon Fabric |
0.776245 |
USD/Meter |
0% |
|
45S T/C Fabric |
0.7909528 |
USD/Meter |
0% |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.16342 USD dtd. 04/05/2015)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The government should expeditiously clear Rs 6,423 crore of duty refund claims as the mounting arrears are hurting shipments, exporters have demanded. Exporters' body FIEO said that despite repeated requests, the customs authorities have not cleared their claims. "They (revenue department) appear to be more concerned about meeting their revenue targets rather then helping exporters. Since two-and-a-half months, the claims are pending and it has reached Rs 6,423 crore," Federation of Indian Export Organisations (FIEO) President S C Ralhan told PTI. Exporters get refunds for duties paid on import of input or raw materials used in manufacturing products that are meant for outward shipments. Liquidity is a big issue for exports and pending claims of duty drawback and Cenvat refunds are affecting exports, he added. While asking government to give special attention to exports, Ralhan cautioned that continuous decline in the outbound shipments could also lead to job losses.
According to him, if claims continue to rise, the country's shipments will be affected adversely. "Situation is not good for India's exports. We have already missed last fiscal's target. In the current fiscal, it would fall further due to steep decline in the container volumes at ports and poor order book position," Ralhan said. He further said that compared to exporters from countries such as China and Bangladesh, the Indian exporters get incentives less than one per cent of the country's total merchandise shipments. In 2014-15, under various schemes - Vishesh Krishi and Gram Udyog Bhavan, focus market and product scheme, interest subsidy and market development assistance - government has provided incentives worth Rs 17,995.81 crore. During the fiscal, the country's exports aggregated at Rs 18, 97,026 crore. India's exports plunged in the negative zone recording a decline of 21 per cent in March, the biggest fall in the last six years, pulling down the total shipments for 2014-15 to $310.5 billion. The country had set the export target at $340 billion.
SOURCE: The Economic Times
Ahead of Prime Minister Narendra Modi's visit to China, India today relaxed the border trade by raising the transaction value of consignments between the two countries. "For border trade between India and China, the CIF (Cost, Insurance and Freight) value per consignment is being increased from Rs 1,00,000 to Rs 2,00,000 in case of Nathula, while for Gunji and Namgaya Shipkila, the existing CIF value limit of Rs 25,000 is being enhanced to Rs 1,00,000," the Directorate General of Foreign Trade said in a notification. Traders at the border areas primarily import carpets, readymade garments, blankets, shoes, jackets and quilts and export mostly vegetable oil, rice, processed food, canned food, textiles and copper items. Modi is scheduled to undertake a three-nation tour of China, Mongolia and South Korea this month.
China is a major trading partner of India, but New Delhi has serious concerns over widening trade deficit between the two countries. India's trade deficit with China climbed to a whopping USD 37.8 billion last year whereas bilateral trade stood at USD 65.85 billion in 2013-14. India will take up the issue and greater market access for domestic products during the Prime Minister's visit.
SOURCE: The Economic Times
French companies are looking at 10 per cent growth in their investments in India amidst growing ties between both the nations and Prime Minister Narendra Modi's recent visit to France. Long drawn business relations with India are being satisfactorily addressed by the Modi-led government, French Ambassador to India Francois Richier told yesterday. "Considering this, we expect investment by French companies in India to grow by 10 per cent this financial year," he said. He added that French investors are now diversifying from old areas of interest and exploring investment opportunities in newer sectors like port management and car manufacturing. Richier said around one thousand companies headquartered in France have invested in India, bringing in investment worth around $ 20 billion, employing three lakh people. "Some of them have been here for more than one hundred years," he added.
French investment in India increased during the former NDA government in 2000, with French companies investing across sectors, including cosmetics, cements, aeronautics, among others. "Until recently there were some concerns. Conditions in India were not as good as they used to be but interestingly we have not seen a slowdown due to long-term engagements which French companies had with India," he said. Richier said that these concerns are now being fixed by the Modi-led government. "We have seen real determination to fix it," he added.
SOURCE: The Economic Times
A free trade agreement (FTA) between India and China may put India at disadvantage as China enjoys an edge in the manufacturing sector as well as tariff rates, according to Assocham. The industry chamber has pointed out that the benefits of an FTA between the two neighbours may accrue to China, at least in the short term. "An FTA between the People's Republic of China (PRC) and India certainly goes in favour of PRC and is disadvantageous to India at least in the short run. This is because of the higher tariff regime in India," Assocham said. "At this juncture, an FTA with China will reinforce the existing trade asymmetries between the two countries."
Indian manufacturing industry has in the past expressed its reservations over such an arrangement with China. The industry has been complaining of dumping of Chinese products in India, which has already imposed anti-dumping duties on them. "In view of the comparative advantage China enjoys in the manufacturing sector, any form of trade agreement between the two has to tread cautiously. India's opening up of the trade sector has to be carefully calibrated to balance interests of domestic manufacturing over the medium term," Assocham said.It suggested that Indian exports to China should move beyond primary goods. To tap the huge Chinese market, Indian exporters should target China's demand for consumer goods and plug into its supply chain networks, the chamber said. Prime Minister Narendra Modi is expected to visit China on May 14-16.
SOURCE: The Economic Times
India has failed to take advantage of a slowdown in China’s textile and garment exports as also persisting global concerns about violations of labour norms in Bangladesh in recent years, while tiny Vietnam seems to have emerged as the largest beneficiary, reports Banikinkar Pattanayak in New Delhi. An analysis of export trends of key nations shows that while the average annual growth rate of Chinese textile and clothing (T&C) exports slowed to 6.1% since 2012 (it was as high as 20.1% in 2011), India has managed to perform only a tad better, with an average expansion rate of 8.2% in the last three years.
Vietnam, however, clocked an impressive 15.8% growth rate in its T&C exports since 2012. Even Bangladesh, despite facing an international backlash for poor labour standards following a number of tragedies at its garments units that claimed hundreds of lives in recent years and resulted in some global retailers cutting down on their garment orders, managed to perform decently with a 7.8% growth rate since 2012. Indian industry executives say inadequate incentives, excessive emphasis on cotton fibre and handlooms by the government, flip-flop in raw material policy, faulty duty structure in the man-made fibre segment where imports of certain raw materials (like PTA) are taxed higher than those of finished products and inflexible labour laws — particularly those relating to the garment sector — have constrained growth in the textile and apparel sector. A vision document, aimed at raising the country’s textile and clothing exports, including handicrafts, to $300 billion by 2024-25 from the current $41 billion, is still waiting to be taken up by the Cabinet, even 10 months after the Ajay Shankar panel had submitted it.
The withdrawal of certain export incentives in the recently-announced foreign trade policy 2015-20 is going to make it even more difficult for domestic exporters.With China gradually shifting from labour-intensive industries (like garments) to capital-intensive ones due to soaring wage costs, India is unlikely to capitalise on that opportunity if it fails to address the structural issues plaguing the sector at the earliest.
SOURCE: The Financial Express
The newly packaged export incentives in the latest foreign trade policy (FTP) have created fresh trouble for the textile sector at the World Trade Organisation (WTO). The US has accused India of handing out additional export subsidies to the sector which has become globally competitive and should not be incentivised going by global trade rules. India, however, has defended itself, saying that it has three more years to remove all subsidies and a number of schemes in the textile sector had either been removed or should not be considered as export subsidies. Criticising the new sops announced recently for the textiles sector at a recent meeting of the WTO’s committee on safeguards and countervailing measures in Geneva, the US representative said that providing new incentives to the sector is a step backwards as India is supposed to remove all textile export subsidies this year.
‘A new name’
“We have not provided additional sops to the exporters of textiles and garments. On the contrary, we have reduced the quantum of benefits going to the sector. Just because the incentive scheme has a new name doesn’t mean the sops are additional,” a Commerce Ministry official told BusinessLine .However, both countries expressed hopes of sorting out their differences through bilateral meetings. The five-year FTP announced last month came up with a new incentive scheme for goods exports — the Merchandise Export Incentive Scheme — under which most textiles and garments sectors have been entitled to sops worth 2 per cent of their exports, which is lower than the 3 per cent or higher sops that the sector received under the older schemes.
Share in world trade
According to the WTO rules, India has become export competitive in the textile sector as it has already accounted for more than 3.25 per cent of share in world trade for two consecutive years and needs to phase out export subsidies to the sector in eight years. While the US says that India became competitive in 2007 and should thus remove all subsidies in 2015, India maintains that its export competitiveness was calculated in 2010 and it has time till 2018 to remove the subsidies.
SOURCE: The Hindu Business Line
The Directorate General of Foreign Trade is planning to institutionalise regular “systemic interaction” between DGFT and the Customs Department. Sanjeev Nandwani, Additional Director General of Foreign Trade, told reporters on the sidelines of an event, organised by Bengal Chamber of Commerce and Industry, here on Monday, that the attempt was to have such meetings once every two months. “This is to facilitate operational coordination between the two wings of the Centre, with respect to monitoring foreign trade,” Nandwani explained. Meanwhile, the DGFT will hold port officers meeting on May 15.
Under the new policy regime, though the review will be conducted during the mid-term (after 30 months), regular operational review meetings based on feedback will be conducted from time to time. According to trade insiders, there are quite a few misgivings about the clubbing of advance licence authorisation. The trade expects to sort out some of them with the DGFT. During 2014-15, India’s export dropped to $310.5 billion from $314.4 billion in the previous year. Import, on the other hand, was also down $447.5 billion ($450.2 billion) on lower crude oil price. The trade deficit moved marginally up to $137 billion ($135.8 billion).
SOURCE: The Hindu Business Line
After March 1, 2015 our excise authorities told us that a new definition of 'export' has been inserted in Rule 18 and Cenvat Credit Rule 5, which covers only taking goods to a place outside India and so, for supplies to SEZ, rebate will not be available. We started clearing under UT-1 bond but they said that refund of unutilised Cenvat Credit will also not be available. CBEC has now issued circular no. 1001/8/2015-CX.8 dated April 28, 2015 clarifying that any licit clearances of goods to SEZ from DTA will continue to be export and, therefore, will be entitled to the benefit of rebate under rule 18 of CER, 2002 and of refund of accumulated Cenvat credit under Rule 5 of CCR, 2004, as the case may be. We refer to your reply (SME Chatroom dated April 21, 2014) stating that conceptually you see no harm in issuing DFIA as per current policy against exports already made, as the essential requirements of the DFIA scheme in the new Foreign Trade Policy are being met.
In case of exempted units, issue of DFIA as per current Policy would result in denial of CVD exemption, which was available under the earlier FTP for units that did not avail Cenvat Credit. Can you please explain?
I agree with you. Unfortunately, the new FTP contains no provision to issue DFIA as per old Policy for exports already made. In fact, there is no provision to issue DFIA even as per current Policy for exports made before April 1, 2015. The new FTP requires the exporter to file a DFIA application as per current FTP and then make exports within 12 months and then claim DFIA on post-export basis. Some provision has to be made to help exporters who filed their DFIA applications last year and made exports before April 1, 2015 but DFIA was not issued to them before the new FTP came into effect. Therefore, you may represent the matter to the DGFT, as many more exporters may be facing such a situation.
We refer to the notification no.12/015-CE(NT) dated April 30, 2015 allowing Education Cess (EH) and Secondary Higher Education Cess (SHE) to be utilised for payment of excise duty. Please clarify whether we can now utilise all the accumulated EH and SHE towards excise duty payment. The said notification allows utilisation of EH and SHE paid on inputs and input services received after March 1, 2015 and balance 50 per cent Credit of EH and SHE paid on capital goods received during 2014-15. It does not deal with utilisation of Credit of EH and SHE on inputs or input services received before March 1, 2015, or balance 50 per cent Credit of EH and SHE paid on capital goods received before April 1, 2014, or EH and SHE paid on capital goods received during 2014-15 in respect of which even the first 50 per cent Credit was not taken. Also, this amendment applies only to manufacturers and not service providers. You may represent to CBEC for amendment to the above notification.
SOURCE: The Business Standard
In a move that will standardise training in the textile units, several textile mills in Coimbatore region have agreed to train workers through the Textile Sector Skill Council, which is supported by the Union Government. J.V. Rao, chief executive officer of the council, told The Hindu here on Friday that though there are several State and Union Government schemes that support skill development in the manufacturing sector and the units have in-house training programmes, the skill council has standardised the training syllabus for 56 jobs in spinning, weaving, knitting and processing. It has prepared a syllabus for each job and the worker will be trained to get maximum efficiency in that job. The syllabus has been prepared with inputs from the industry and it will be reviewed every year.
The proposal is to have approved agencies to train the trainers and they will in turn train the employees. “We are now requesting all the textile research associations to enhance the skill training capabilities,” he says. The council’s immediate focus in on textile units in Tamil Nadu and Madhya Pradesh as the number of spinning units is high in these States. The units can have in-house trainers or employ trainers from outside. Each unit that is willing to take part in this project will have to be affiliated with the council. The trained workers will get a certificate and the units can avail of assistance under different schemes of the Union Government. “The objective is to involve the private sector to develop the skills of workers,” he says. Each worker who undergoes training will have to go through biometric registration and if a worker is already trained at a unit and moves to another one, there will be recognition for prior learning.
The 56 jobs cover 80 per cent of the workers in the industry. Most of them have undergone training on an ad-hoc basis. But, the initiative needs to be standardised. Workers also need training in soft skills, safety and health issues, he says. The textile industry is transforming with units investing huge amounts in automation. The focus now is on skills, knowledge and performance. The Centre provides Rs. 2 crore annually for the two years and Rs. 1 crore to the council for the third year. The industry contributes Rs. 20 lakh a year for two years and Rs. 10 lakh in the third year. Prabhu Damodaran, secretary of Texpreneurs Forum, added that new recruits constitute almost 30 per cent of the workforce in the spinning sector.
SOURCE: The Hindu
Tirupur exports of readymade garments has almost touched Rs 21,000 crore in 2014-15, witnessing 17 percent growth over last year. With Comprehensive Economic Partnership Agreement (CEPA) expected in September, exports from Tirupur, the knitwear hub is likely to grow by 20 to 50 percent in a few years, said an exporters' association functionary. Tirupur Exporters' Association president, A Shaktivel expressed confidence that though exports to Canada from Tirupur was nil, despite India's exports of Rs 650 crore, CEPA would boost exports from Tirupur, which can register at least Rs 200 crore in the initial year, with major markets still being the US and European Union. The prime ministers of both the countries recently discussed the CEPA issue for mutual benefit, by which India can get master trainers for developing skills.
Moreover, garment manufacturers were now concentrating more on polyester and viscose material, to compete with China and at least 15 to 25 percent market can be captured in the long run, he said, adding, compared to China, India has also labour advantage, to give that nation a run for its money. Tirupur manufacturers have ventured into technical garments like cool mats, anti-bacterial and sweat management, for which the demand was growing across the globe, particularly in sports wears. Moreover, there were lot of investments going into latest printing machinery, such as 3D, which were hitherto available only in Italy and Turkey, that would add value and also give edge to the products from Tirupur. Similarly, an agreement with Australia, another major market, could also create a conducive atmosphere for Tirupur exporters.
SOURCE: Yarns&Fibers
Kumar Mangalam Birla-led Aditya Birla Group has decided to merge two of its arms — the Aditya Birla Nuvo-owned fashion retailing business with Pantaloons Fashion & Retail — to create a Rs 12,000-crore (nearly $2-billion) branded apparel behemoth. To be called Aditya Birla Fashion & Retail (ABFRL), it would be the largest not only among listed branded apparel retail companies but also in the non-listed space. Under the scheme of arrangement, approved on Sunday by the boards of the respective companies, Madura Fashion, the branded apparel retailing division, and Madura Lifestyle, the luxury branded apparel retailing of Aditya Birla Nuvo, will be demerged into its listed subsidiary — Pantaloons Fashions and Retail (PFRL), which will be renamed ABFRL. "This consolidation will create India's largest pure-play fashion and lifestyle company with a strong bucket of leading fashion brands and retail formats. This move brings India's number one branded menswear and womenswear players together," said Aditya Birla Group chairman Kumar Mangalam Birla.
SOURCE: The Times of India
The 2015-16 fiscal year has started with a slowdown in manufacturing, an HSBC survey has indicated. The HSBC India Purchasing Managers’ Index (PMI) stood at 51.3 in April, down from 52.1 in March. Commenting on the PMI, Pollyanna De Lima, Economist at Markit, the agency which compiles the data, said despite recording softer rates of expansion, the Indian manufacturing sector held its ground in April, benefiting from ongoing improvements in operating conditions. A highlight of the latest survey was the strong external market, with the rise in new export business.
No job creation
“However, we are yet to see growth lead to meaningful job creation, as the index measuring employment has shown little change to staff numbers since the beginning of 2014. "On the price front, tariffs fell for the first time since May 2013, as firms responded to weaker cost inflation. “Even with the slower pace of expansion, the goods-producing sector is on course to provide a boost to the overall economy,” she said.
The PMI is a measure of factory production and based on data compiled from monthly replies to questionnaires sent to purchasing executives in around 500 manufacturing companies. An index above 50 shows expansion, while one below 50 indicates contraction. Taking note of the manufacturing slowdown, Anis Chakravarty, Senior Director with Deloitte, said despite growth slowdown, higher output levels were seen in all the monitored goods categories, with the crucial capital goods segment recording the strongest growth and consumer durables recording the lowest, reflecting the fact that domestic demand was yet to pick up. However, he felt, even as input prices paid by producers rose for the second consecutive month, average selling prices declined for the first time in almost two years highlighting the scope for further easing of monetary policy.
SOURCE: The Hindu Business Line
After a 12-month honeymoon with the Narendra Modi-government at the Centre, foreign investors appear to be losing patience, as a revival in corporate earnings is taking longer than expected. Neelkanth Mishra, India Equity Strategist, Credit Suisse, explains to Malini Bhupta why they are finding it tough to figure out whether the Indian economy is picking up steam or slowing. Edited excerpts:
India was the best performing market in 2014-15, after the new government took charge in May last year. Do you see some of the sheen fading, now that earnings are not showing any pick-up?
We continue to believe the market rally last year was mostly due to a global rally. In equities, helped by a reduction in the two important tail risks for India – the currency, and a stable central government. The Indian market's price to earnings (P/E) premium to global equities P/E is currently at seven per cent. This is barely off 10-year lows if one excludes the financial crisis. We believe few would argue that India cannot grow faster for longer than any large economy in the world, particularly given its low base. This should warrant a P/E premium. The risk, as seen in the past, has been that sometimes the gains in equities were eroded by either a sharp fall in the currency or high political instability. Both risks are now low, in our view. Over the past year, we also saw India's GDP growth bottom out, and ending of the phase of super-high inflation. For any asset class, the identification of a trough in prospects usually drives a re-rating. This further helped along the market. We continue to be constructive on the Indian market, as growth revives this year, and steady earnings growth continues.
Earnings downgrades have started yet again for FY15 and FY16. What are your estimates?
Earnings have now become far more important for investors and the market than earlier. For global investors, the new GDP series has compounded the problem of tracking economic momentum. There aren't enough comprehensive and reliable high-frequency indicators that investors can rely on. That the Reserve Bank of India (RBI) and the finance ministry face the same problem is no solace — it actually increases investors’ concerns! In such an environment, we believe the only numbers investors can trust are earnings. We expect FY16 index earnings growth to be 14-15 per cent. This implies cuts to current consensus numbers that suggest 19-20 per cent growth but at a reduced pace. The improvement in pace is what should matter to the market, in our view.
Are foreign investors still bullish on India?
The medium-term outlook on India’s equity market still seems quite positive among investors, but one can sense a bit of confusion, and impatience with the long delay in a pick-up in corporate earnings. As we discussed earlier, global investors are also struggling to understand whether the economy is picking up steam or slowing. The allocation of funds to different markets occurs at multiple levels and in many different ways. At the source of most savings (mainly pension funds, insurance funds, family offices and sovereign wealth funds), the allocations can be near-formulaic, i.e., allocate the year's savings to markets on the basis of per ent of GDP. This type of capital flow does not change much from year to year, and takes a very long-term view on the economy. For intermediate levels, such as Asia funds or Emerging Market funds that are benchmarked to various indices, the decision does get influenced by the near-term/medium-term growth outlook. A third type of flow comes from absolute return funds, or hedge funds, which seek opportunities based on volatility and changes in momentum. Hedge-fund activity does seem to be influenced by changing prospects of economies. Among the latter two types there are a number of momentum investors, who are now being attracted by the rebounds in China, Korea and now Taiwan.
What are the top concerns that might derail the sky-high expectations that investors have from the Indian market?
We see two India-specific factors that could derail the market further: if political rhetoric turns away from good economics, and if the banking system asset quality stresses somehow permeate into the rest of the economy. However, both these are low probability risks, in our view. A greater risk lies outside India. Several catalysts could drive a global risk-off, which could then affect Indian equities negatively.
The government has been making a host of announcements and is attempting to roll out reforms. How do you see this impacting corporate India?
The central government's presence in the economy has shrunk dramatically since 1991. There are only five economic sectors of size that the Centre dominates — banking, railways, commercial mining of coal, defence production and nuclear energy. Each needs structural reforms that are difficult, and will take time. We continue to believe more exciting reforms need to happen at the state level. That said, the government is doing much better than we expected. On banking, the refusal to recapitalize PSU banks shows a strong intent to reform. People question why government entities like Air India get allocations in the budget. But no one questions why PSU banks need to get Rs15-20,000 crore every year. If the banks were performing efficiently, they should have been able to raise capital from the market: for most of them, the government holding limit is not a constraint. This is the first government to be raising the issue of moral hazard of recapitalizing banks that misuse capital. Letting them lose market share improves the efficiency of capital allocation in the economy. We had not expected this to happen, and it has been a welcome surprise.
Similarly, we had not expected the government would be able to undo Coal India's legal monopoly on commercial coal mining in India. In the Coal bill passed in March, it did exactly that, and the unions did not oppose it. When the government monopolies on telecoms and airlines were cancelled in the early 1990s, the markets may have ignored this initially, but these industries were completely transformed, with sharp increases in efficiency as government companies steadily lost share. On Railways, the big changes may have to wait for the final report of the Debroy committee. We will then see the government's resolve on structural changes. But, in the interim, there are encouraging changes afoot already – a much needed capacity build-up, as well as a focus on JVs with state governments to get them aligned with important projects, and also to decentralize control.
But, as one would expect, the impact on corporate India of these changes will only be visible several years later. In the near term, the key driver will still be the government's fiscal spending. The central government was forced to aggressively curtail spending in the last several months of the fiscal year that recently ended, and that drove the sharp slowdown we saw. In the last few years, the June quarter has become much stronger than the March quarter, as the spillover of curtailed spending from March boosts the economy. We should start seeing that now. In the second half we also do not expect the government to be forced into a spending crunch like in the last few years, as this year's fiscal numbers look credible. This should bring back growth numbers for the listed entities.
What is your view on Make in India and is it expected to give a boost to the manufacturing sector?
Tired of explaining what it means to turn the fortunes of a sixth of humanity, I now carry around a map of India in which for every state I plot the name of the country that comes closest to it in population. So, UP is bigger than Brazil, Bihar has as many people as Mexico, Maharashtra is like Japan, Karnataka as big as France, Kerala is like Canada, etc. With that in the background, let's start discussing what it takes to drive change. A Pena Nieto in Mexico is like Nitish Kumar in Bihar. An Abe in Japan is like Devendra Fadnavis in Maharashtra.
Changes on this scale cannot happen in a day or even a year, and cannot be encapsulated in a presentation. They must start with a bigger vision, a slogan, which then drives changes to people's thoughts and actions. It takes many years to develop global manufacturing competitiveness in a sector. In the first few years, gains may only come in sectors we are strong in already, like IT Services, generic pharmaceuticals or auto components. But over time, as states compete to improve their own ease of doing business rankings, we should see India's manufacturing competitiveness improve. In new sectors initially it may not appear in large factories employing thousands of people, even though those are the factories that get the media coverage. But momentum does seem to be building in terms of states projecting a more industry-friendly image. The West Bengal CM tweeting about the lack of strikes in WB during her tenure is a strong sign how political drivers are also changing.
Do you see growth picking up in India?
In our view, FY15, the year that just ended, was hurt badly by the strong fiscal consolidation. With this headwind gone in the new year, GDP growth should be better in this financial year than the last one. So far, the RBI has cut interest rates by 50 basis points.
How many more cuts do you expect and is this enough to revive corporate investments?
At Credit Suisse, we expect another 25 basis points cut. But I don't think rate cuts are that important. First, think about transmission. With a large part of the banking system under-capitalised and some banks even struggling with liquidity stresses, even if the RBI were to cut rates it would not necessarily translate into lower costs of borrowing for corporates. This does not mean we should rush to recapitalise the broken banks, particularly as the reason for low loan growth right now is not lack of funds, but lack of loan demand.
There is a misconception that that if public sector banks are unable to grow then the economy cannot. This needs to be more nuanced: more than 40 per cent of outstanding loans are to sectors like metals, power generation and energy, where loan demand is justifiably weak (other than for ever-greening). That overall loan growth is still 11-12 per cent, meaning that the rest of the loan book is still growing at 20 per cent. So growth is not being constrained. Also, look at the trend of disintermediation. The BoP (balance of payments) surplus has brought down bond yields much lower than the base rate, and the good quality corporates are moving to the bond market. So the bank credit growth number is also a bit misleading, in our view.
Given that some of the most profitable sectors are now seeing stress (IT &Pharma) what are the emerging sectors that will drive earnings in the future?
The "stress" in IT and Pharma is temporary, in our view. IT is now a large sector and growth cannot continue to be 25%, but the industry growth is still healthy. The structural drivers of that industry are still intact – a growing supply of English-speaking engineers, and steady end-demand growth, with increasing outsourcing. The cuts we have seen of late are related to currency movements. Once the downward reset is done, earnings momentum should normalize.
The Pharmaceuticals sector on the other hand is trickier – as the sector has become larger in the indices, it has seen more generalist interest, and the nuances of valuation are getting lost. For example, 4-5 years back”exclusivity" related profit for a generic company was valued at 1x cash flows over the duration of the exclusivity. Now it is getting a 20x multiple. This may not end soon, but the sector may already be pricing in a few years of growth. That said, we believe India's competitive strengths in the sector will be sustained.
SOURCE: The Business Standard
Government could breathe easy on the GST bill in Lok Sabha on Tuesday with Trinamool Congress pledging its support to the key economic reform measure even as several opposition parties, including Congress, BJD and the Left, are sticking to the demand to refer it to the Standing Committee. Standing Committee and Select Committee have already taken a view on the measure. So there is no point sending it again to the Standing Committee," Trinamool Congress leader Derek O' Brien told PTI when asked about the party's stand on the issue. He said that the government has promised compensation to states due to the roll-out of GST.
"In our manfiesto in 2009, 2011, 2014, we had committed to support the GST. West Bengal is a high-consumption state in terms of liquor, tobacco, petroleum," he said making it clear that Trinamool Congress will back the government on the issue. On April 26 when the Bill was moved in Lok Sabha by Finance Minister Arun Jaitley, members of Congress, led by Sonia Gandhi, along with those of TMC, Left and NCP had staged a walk out after their plea for referring the Constitution amendment Bill to the Standing Committee was not accepted. The protest of Trinamool Congress, was then, however, on the technicalities, and not on the content of the bill. AIADMK and BJD also opposed its consideration but did not walk out. Congress has been trying to reach out to these two parties to make a common cause.
BJD leader Bhartuhari Mahatab said that his party was firm in the demand to refer it to the Select Committee as it it is a "new bill" because it has a number of new provisions which have not been deliberated so far. Besides, he said that BJD has also given certain amendments on issues realted to tobacco and minerals. With the budgetary exercise in the Lower House over, government has listed the bill for consideration there tomorrow. Government is hopeful of support from some opposition parties and was particularly reaching out parties other than Left and Congress which have governments in states. The real legislative challenge for the government will be in Rajya Sabha where it does not have a majority. Government has been giving indications that it is willing to make some concessions to get the key measure through. "GST brings national integration on tax. But in order to make a larger reform, you will have to make certain concessions," Parliamentary Affairs Minister M Venkaiah Naidu had said a few days ago.
As GST would be a destination-based tax, manufacturing states like Gujarat, Maharasthra and Tamil Nadu have expressed the fear that they may lose out on revenue. The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014 was moved for consideration in the Lower House on April 24 amid stiff resistance of the Opposition which wanted the bill in respect of GST to be referred to a Standing Commmittee. Moving the enabling bill, Finance Minister Arun Jaitley had said it is a "win-win" measure and states have nothing to fear. Congress, which has said that GST was its "baby", is adamant that since new provisions have been brought into the bill, it must go a Standing Committee. "GST is our baby. We do not oppose as a matter of policy. What we are opposing is the procedure. The Standing Committee route is being bypassed," the party has said. When implemented, GST is expected to eliminate several logistical logjams and vastly increase the speed of freight, as a World Bank study showed Indian truckers lose millions of operating hours a year stuck at interstate checkpoints, creating more opportunities for harassment and bribe-taking.
SOURCE: The Hans India
Prime Minister Narendra Modi leading the prayers on International Buddha Poornima Diwas is part of the government's growing focus on Buddhist activism as part of its foreign policy. India is likely to bolster its 'Look East Act East' policy with a good dose of Buddhism and project it as a cultural and civilisational bridge with the countries in South East Asia. Modi himself gave enough indications of this in his speech on Monday. He said: "It is said that the 21st century will be Asia's century. There is no disagreement on that." And then he added, "Without Buddha this century cannot be Asia's century." This is what Indian government is working at — to put Buddhism at the heart of India's diplomacy in the region. According to top sources in the government, Modi is keen on projecting India as a "soft power" using the Buddha connect in both the political and economic diplomacy.
It would also help counter China which is actively promoting Buddhism in the Asian neighbourhood by helping build and preserve monasteries in Burma, Thailand, Cambodia and Sri Lanka. "India is a natural repository of Buddhism. We should be using the deep Buddha connection to our advantage," said BJP national executive member Seshadri Chari, who was among the main organisers of the Buddha Poornima Diwas in the Capital. He confirmed Modi government's plan to go big on Buddhist diplomacy. "It will have a twin advantage for India. In addition to providing diplomatic leverage in the region, it can also be an entry point to attract tourists. Even world leaders can be taken to Buddhist centres like Bodhgaya and Sarnath," Chari told ET.
Modi too said, "During all my foreign visits, one day is always set aside to visit a Buddhist temple." He had prayed at famous Toji and Kinkakuji Buddhist temples in Japan last September. During his Sri Lanka visit in March, Modi had addressed Buddhist monks at Colombo's Mahabodhi Temple and prayed to the Mahabodhi tree in Anuradhapura. In China, he will visit President Xi Jinping's hometown Xi'an, where they are expected to visit the Great Wild Goose pagoda, dedicated to famous Buddhist pilgrim Hiuen Tsang or Xuanzang as he is called in China.
Xi'an houses the monastery where Hiuen Tsang lived and wrote about his travels to India 1,400 years ago. In South Korea, the PM is expected to plant a "Bodhi tree" sapling that India had sent to Seoul in March last year, which had now grown 160 cm tall. "It will be replanted in either Seoul or Busan that has a large Buddhist population," the government official said, adding there were some plans for Ulan Bator too, where majority of the population is Buddhist. Chari, also an advisor to International Buddhist Confederation, said India would host a conference next year, where practitioners of all kinds of Buddhism from various countries practicing the religion will be invited.
SOURCE: The Economic Times
Bangladesh’s minister for textiles and jute, Muhammad Imaj Uddin Pramanik has called for making apparel sector more competitive to attain the goal of upgrading the country to a middle-income nation by 2021, according to an official statement. He was speaking as the chief guest at 'Textile Engineers Convention 2015' organised by Association of Textile Engineers and Technologists in Dhaka. The minister said the government is working relentlessly to develop Bangladesh as a middle-income country by 2021. He urged the textiles engineers and technologists to work with more efficiency tostrengthen the apparel sector to attain this goal, the statement. Parmanik said the government will set up more textile engineering colleges and textile institutes in the country soon.
SOURCE: Fibre2fashion
Bangladesh tries to persuade China to give import license to Chinese retailers. The move comes at a time when trade gap with the world's biggest economy hit a new high of US$ 6.0 billion, even if Dhaka gets duty-free benefits. Vice chairman of EPB Suvashis Bose commented that despite having duty-free facility, their businessmen could not do well in boosting exports to China. But import from China is gradually increasing. He said that that has prompted his agency to sit with relevant parties to find out ways on how to reduce the trade gap. There is a good demand of Bangladeshi products in China, but there are certain reasons that hold back increasing exports to China. If they can implement the recommendations, they hope, their exports to China will grow. He added that China is a friendly country and we hope our negotiation with the government will bring a positive result.
China, a major trading partner of the country, accounts for around 2.47 per cent of Bangladesh's annual exports of $30 billion. A senior trade official said that the government has worked out a plan to minimize trade gap with China. The plan includes persuading China to give import licences to Chinese retailers, issue multiple visas to Bangladeshi businessman and arrange visits of increased Chinese trade delegations. It also includes seeking Chinese help in establishing fashion institutes in Bangladesh, local infrastructural development and taking part in increased international fairs held in China.
President of Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) A. K. M. Salim Osman said if the recommendations are implemented, garment exporters would be able to increase exports, since China is importing clothes from different countries across the world. He added that China does not issue import licenses to the retailers, if the government can convince China to issue import license to them, then import from Bangladesh to that country will increase significantly.
The BKMEA president also urged the government to facilitate local raw-material producers to lessen dependence on China, thus make local exporters more competitive in that country. In the last financial year, Bangladesh imported goods worth $7.55 billion from China on the other hand local exporters have exported only $746.2 million worth of goods to the country. While China offers duty-free facility of 4,788 Bangladeshi products, it has urged Beijing to include 17 more items on the duty-free list. An inter-ministerial meeting, held in February at the commerce ministry, empowered the Export Promotion Bureau (EPB) to make recommendations on how to increase merchandise shipment to China, while also narrowing the trade gap.
SOURCE: Yarns&Fibers
The country's business community Monday criticised the government especially commerce ministry for leaving local industry in the lurch with no visible effort made to resolve their issues. At the 66th meeting of Commerce Ministry's Advisory Council on Trade Policy held under the chairmanship of Commerce Minister Engineer Khurram Dastgir Khan. Secretary Commerce, Shahzad Arbab Chief Executive Officer (CEO), Trade Development Authority of Pakistan (TDAP), S M Munir and other senior officials of the ministry noted the proposals of private sector. Representation from business community in the meeting, an annual event, remained lower than expected as chambers and associations feel that their recommendations are not being given due consideration. The participants got surprised when they were told draft Strategic Trade Policy Framework (STPF) 2015-18 is ready and will be presented to the federal cabinet during the next four to five weeks. "We have been invited to present proposals for the STPF and at the same time the commerce ministry claims that the draft STPF is ready. For what purpose business community and exporters were invited across Pakistan," queried one of the participants.
Karachi Chamber of Commerce and Industry (KCCI) President Iftikhar A Vohra opposed the merger of the Ministry of Textile Industry with the Ministry of Commerce, saying that the latter could not manage the issues of the two ministries. He said refunds of textile industry should be released immediately as the industry direly needs this amount. He added that one focal person should be appointed at the commerce as well as the textile ministries to respond to the industries' queries. Likewise, finance ministry does not take care of industry's correspondence. He proposed that there should be no tax on industrial machinery. Vohra warned the commerce ministry that the textile sector is in trouble as India is going to launch a massive 'attack' on Pakistan. He further stated that Karachi is being ignored by the incumbent government as the industry is facing gas and water shortages. The price of water tanker in Karachi has increased from Rs 2,000 to Rs 8,000-10,000 after provincial government launched its drive against container mafia.
He also urged the commerce ministry to make arrangements for release of 200-250 containers of plastic detained in Lahore. Javed Bilwani, a top representative of Pakistan Apparel Forum, said that the commerce ministry should convene different meetings for local industry and export-oriented industry. He argued that the government should change its priorities with regard to supply of electricity and gas, adding that a separate status should be granted to both the local industry and export-oriented industry. He protested over unconfirmed proposals of increase in sales tax on textile, carpets, leather, surgical and sports goods from two percent to five percent on supply chain/exports arguing that when the FBR is not paying 2 percent refund how will it refund the enhanced rate of 5 percent? Bilwani pointed out that exports are declining even after the GSP Plus status from the European Union (EU) and quoted Bashir Ali Muhammad as saying that he was considering stopping exports of textile. He also claimed that textile exports increased by 35 percent during the implementation of the Textile Policy, however, exports nose-dived after Textile Policy ceased to be implemented. He suggested that if the government has any "sense" it should follow Bangladesh. Bilwani proposed that the government should stop deduction of Export Development Fund (EDF) until and unless the finance ministry releases the accumulated amount of Rs 26 billion to support the textile industry.
Representatives of different chambers and associations sought the government's financial help for local and as well as export oriented industry. Minister for commerce said that the government is endeavouring to present a realistic, stable, predictable and transparent medium-term trade policy framework which could effectively address the issues confronted by the exporters of Pakistan. He said that with improving law and order and enhanced energy availability in the country, the investors will regain confidence and start investing in the country. He argued that priority of the Government is to initiate policies which could reduce the cost and enhance the ease of doing business in the country. The Council was informed that the ministry of commerce sought proposals from all the relevant stakeholders during the formulation of STPF and received 800 proposals. These proposals were thoroughly scrutinised in the Ministry and several of them would find their way into the final draft of the policy framework. The participants put forward numerous proposals and emphasised the importance of bringing consistency in the economic policies. It was proposed that the Ministry of Commerce should work to improve the marketing and branding of Pakistani products abroad by effectively using its trade missions. Government support in seeking costly international certifications was sought as this would help the small exporters to reach high-ended lucrative Western markets. It was proposed that to enhance the exports of perishable items, the Government should enhance air cargo space in the national carrier. The participants proposed that the Government should negotiate visa issues with its trading partners so that businessmen may travel with considerable ease. The participants also proposed duty and tax exemptions which the Ministry will look into in detail.
In his concluding remarks, Secretary Ministry of Commerce said that to improve transparency, the ministry is rationalising its tariff structure and reviewing the concessionary regime. In this regard a High Powered Committee headed by the Finance Minister, comprising representatives of different ministries, divisions and trade bodies across the country has been constituted. He said that the new Strategic Trade Policy Framework will have policy thrust in building supply side capacities, strengthening business environment, creating new market opportunities and increasing our share in existing markets. In order to ensure the timely implementation of the new trade policy framework, comprehensive business processes are being developed simultaneously with the policy initiatives. The business processes will be notified concurrently with the announcement of STPF 2015-18. A mechanism for mid-course correction of the policy has been developed. The ministry plans to hold Advisory Council meetings annually to invite input for corrections and adjustments in policy initiatives without compromising on the basic framework of the three-year policy.
SOURCE: The Business Recorder
Spun yarns made of man-made fibres recorded sharp decline in export both in terms of volume and value. During March, a total of 6.85 million kg of man-made spun yarn were exported, comprising 3 million kg of polyester yarn, 2.1 million kg of viscose yarn and 1.7 million kg of acrylic yarn. Polyester yarn exports were down 31 per cent in value while viscose yarn export was down 16 per cent during the month. Unit price realization was down US cents 10 for viscose and US cents 27 for polyester from a year ago. Acrylic yarn export jumped 12 per cent in volume while unit price realization fell US cents 19 to US$3.02 per kg.
Viscose yarn found buyers in 25 countries in March with exports valued at US$6.46 million or INR39 crore and volume at 2.13 million kg, implying average unit price realization of US$3.04 per kg. This was US cents 18 higher than realized in February and US cents 10 lesser than a year ago. Belgium continued to be the single largest importer of viscose yarn worth US$1.60 million followed by Egypt with imports worth US$0.91 million. Algeria, Indonesia, Mexico, Japan and Thailand were the new markets for viscose yarns in March 2015, together importing yarn worth US$0.63 million with volumes at 178,000 kg. Meanwhile 12 other countries did not import any viscose yarns this March with majors ones being Syria, Costa Rica and Croatia. Belgium, Portugal, United Kingdom, Sri Lanka and Bangladesh have cut their import of viscose yarns from India compared to last year.
Polyester spun yarns were exported to 49 countries in March aggregating US$7.08 million with a unit price realization averaging US$2.36 a kg. A total of 3 million kg was exported, of which, 34 per cent was only to Egypt and USA. Nigeria, Argentina, Saudi Arabia, Kenya and Tanzania were the new markets of polyester yarns in March. Blended spun yarn exports aggregated US$38.6 million in March with volumes at 13.3 million kg. This includes 6.5 million kg of PC yarns worth US$17 million and 4.8 million kg of PV yarns valued at US$13.3 million. Egypt was the largest importer of PC yarn from India followed by Bangladesh, amongst the 49 countries that imported PC yarn from India in March. While Ecua-dor, Vietnam, Lebanon and Peru were the fastest growing markets for PC yarns, Sudan, United Arab Emirates, Djibouti, Honduras and Iran did not import any. Meanwhile, Pakistan, Mexico, Venezuela, Algeria and Israel significantly cut their imports of PC yarns from India. Among new markets Latvia was the major one in March 2015. Turkey remained the largest importer of Indian PV yarns in March with volumes at 2.65 million kg worth at US$7.3 million, followed by Iran and Pakistan. Egypt and Tunisia were the new ma-jor markets for Indian PV yarn during the month while Tanzania, Spain, South Korea and Colombia did not import any PV yarns from India.
SOURCE: Yarns&Fibers
In March 2015, about 58 million kg of filament yarns (all types) were exported to 79 countries. These include polyester, nylon, polypropylene and viscose filament yarns. More than 90 per cent of all filament yarns were of polyester, of which, DTYs were the largest at 78 per cent. During March 2015, 55 million kg of polyester filament yarns were exported worth US$82 mil-lion. Turkey and Brazil were the major importers of Indian polyester filament yarns, followed by Bangladesh. They together accounted for 49 per cent of polyester filament yarn exports. Turkey was also major importer of polyester DTYs and POYs while Egypt was the only importer of polyester FDYs. South Africa was the sole importer of polyester industrial yarns in March.
In nylons, Sri Lanka was the major importer of nylon filament yarn, although the volume was only 37,000 kg worth US$0.25 million. In March, a total of 414,000 kg of nylon filament yarns was exported valued at US$1.49 million. About 30 per cent were in form of nylon DTYs. Another 40,000 kg were mono filament yarns and 13,000 kg of nylon tire yarn. In case of polypropylene, 15 countries imported 250,000 kg of polypropylene filament yarns from India in March. Mexico was the top importer of these yarns largely the multi-filament yarns. USA and Germany were the other major importers of polypropylene filament yarns. Viscose filament yarns were imported by 27 countries from India in March 2015. During the month, 1.13 million kg of VFYs were exported with Japan continuing as the major importer of VFYs during the month. It was followed by Czech Republic and USA. The average unit value realization of VFY was US$4.13 a kg.
SOURCE: Yarns&Fibers
Crude oil has soared above $67 a barrel, rising 40% since January to the highest in 2015 amid expectation that the market would be tighter in the second half of the year, increasing fears fuel prices may start hurting the people and the government at home again. Rising oil and its potential impact on inflation may bring more bad news for India as the country is already battling mounting rural distress. Unseasonal showers damaged crops in many states in recent weeks, adding to the losses of farmers who suffered in the previous crop season due to erratic and deficient rainfall.
Upturn in oil has already prompted state firms to increase petrol rates by about Rs 4 a litre, the biggest increase in three years. Global prices have soared from six-year low of $45.19 in January. Slowly shrinking global supplies and expectations that Chinese demand may revive after weak factory activity reinforced the case for a policy stimulus to boost the world's second-largest economy have supported oil prices. Slowing Asian demand, a supply glut and the refusal by oil cartel OPEC to cut output to retain market share had contributed to a 60% fall in oil prices between June and January. A collapse in oil prices had largely helped the Narendra Modigovernment almost win the war over inflation lately but it may dramatically reverse within months if the current crude march were to continue.
Petrol prices are at the highest since mid-December. Diesel prices, deregulated over the past few years, have also been similarly raised and if the trend continues, could dent the growth agenda. Untimely rain and prospects of a deficient monsoon have accentuated rural distress leading to farmer suicides, curbed demand and worried a government seeking to push ahead with reforms, including a key land acquisition legislation that can make it easier to set up factories. A possible acceleration in inflation could also make it harder for RBI to cut interest rates and lower cost of capital for industry and consumers. A higher rate has kept industry from investing.
SOURCE: The Economic Times
The world economy’s growth prospects for the current year seemed somewhat dented on Monday, with China’s manufacturing growth suffering the steepest drop in a year in April and the sector’s expansion easing from the March level in both the euro zone and India. The latest data also revealed that the US’ manufacturing industry that came off the relatively robust levels six months ago was yet to rebound. At a time when India’s export-oriented industries have been hit hard by weak global demand (exports contracted for the fourth straight month in March and posted a 67-month-low growth of -21.0%), the headline HSBC India Purchasing Managers’ Index for the country for April released on Monday compounded policymaker’s worries as it fell to 51.3, down from 52.1 in March, on weak domestic orders.
Although last week’s US Federal Reserve decision, guided by lower-than-expected first-quarter growth, is interpreted to show its lack of intent to raise borrowings costs until next year (something that could help emerging market economies), India’s own economic data barely reflect any sharp pick-up in aggregate demand. Even as the government, ostensibly laying emphasis on project implementation, is anxious to see investment activity decisively picking up, recent incremental data haven’t given it any comfort. The output growth of core sector industries fell to a 17-month low of 0.1% in March and the IMD signalled a below-average monsoon ahead.
The Reserve Bank of India’s consumer confidence survey recently suggested that although urban consumption demand might pick up in the near term, with the rabi harvest damaged by unseasonal showers, rural demand would remain subdued. Although notorious for volatility, capital goods output — a proxy for fixed corporate investment — witnessed a slowdown in growth to 8.8% in February from 12.5% in the previous month. On top of these, Monday’s HSBC-Markit survey revealed that manufacturers could not attract fresh orders despite cutting selling prices for the first time since May 2013. Although the headline HSBC manufacturing PMI marked its 18th successive month above the 50 level that separates growth from contraction, in April a sub-index monitoring new business and denoting underlying demand fell to 51.9 in April from 53.2 while firms also reduced staff strength last month.
The Modi government, which has started facing criticism from corporate India on delayed and inadequate delivery on growth-enhancing policies, would have to try and flag some reforms expeditiously to prevent a simmering discontent from crystallising, analysts said. It has to complement the increased public investments in railways and roads and the steps taken to boost coal production with the more difficult policy reforms like the goods and services tax (GST), easing of labour laws and land acquisitions. Most of these reforms could, however, stumble on legislative road blocks given the Opposition’s stubborn refusal to support them. “The data supports a rate cut… They (the RBI) will continue cutting rates but slowly, perhaps waiting until the upcoming (June 2) meeting ,” said Pollyanna De Lima, economist at Markit. This view is buttressed by other analysts given that retail inflation stayed below 6% since September. “Despite recording softer rates of expansion, the Indian manufacturing sector held its ground in April, benefiting from ongoing improvements in operating conditions,” De Lima said, but added, “…we are yet to see growth leading to meaningful job creation, as the index measuring employment has shown little change to staff numbers since the beginning of 2014”.
The HSBC/Markit PMI for China fell to 48.9 in April, the lowest level since April 2014, from 49.6 in March, as demand faltered and deflationary pressures persisted. “The PMI data indicate that more stimulus measures may be required to ensure the economy doesn’t slow from the 7% annual growth rate seen in Q1,” said Annabel Fiddes, an economist at Markit. Euro zone manufacturing growth eased in April but factories raised prices for the first time in eight months and headcount rose at the fastest pace in nearly four years had a marginal impact on growth. (Markit’s PMI stood at 52.0, shy of March’s 10-month high of 52.2). The European Central Bank would welcome signs of inflationary pressure, given that it could dent growth only marginally.
As for the US, the HSBC PMI for April reflected no change from March, but the Commerce Department said on Monday new orders for manufactured goods increased 2.1%, the largest gain since July last. The International Monetary Fund had said that India would likely grow 7.5% in the current fiscal, pipping China as the world’s fastest-growing large economy, thanks to recent policy reforms, a consequent pick-up in investment and lower oil prices. Although the multilateral agency capped its global growth projection for 2015 at 3.5%, the same level as was forecast in January, it trimmed the US expansion forecast by 0.5 percentage point and 0.2 percentage point for 2015 and 2016, respectively, from earlier projection levels, to 3.1% for both years.
SOURCE: The Financial Express
