MARKET WATCH 15 OCT, 2020

NATIONAL

INTERNATIONAL

India should resist misleading allure of domestic market; boost exports: Research

New Delhi: India should resist the misleading allure of the domestic market and should zealously boost reports, according to a research paper co-authored by former chief economic advisor Arvind Subramanian. The paper titled 'India's Inward (Re)Turn: Is it Warranted? Will it Work?' -- jointly authored by Subramanian and Pennsylvania State University professor Shoumitro Chatterjee - - said that India is turning inward, domestic demand is assuming primacy over export-orientation and trade restrictions are increasing, reversing a three-decade trend. "Resisting the misleading allure of the domestic market, India should zealously boost export performance and deploy all means to achieve that. "Abandoning export orientation will amount to killing the goose that lays golden eggs and indeed to killing the only goose laying eggs. Alas, to embrace atmanirbharta is to choose to condemn the Indian economy to mediocrity," the paper noted. Further, it said that the consensus to favour an inward orientation was emerging even before COVID-19 had struck India, reflected in increasing calls to atmanirbharta or self reliance. This shift is based on three misconceptions that India's domestic market size is big, India's growth has been based on domestic not export markets, and export prospects are dim because the world is deglobalising, it noted. The paper also said that India still enjoys large export opportunities, especially in labour-intensive sectors such as clothing and footwear, but exploiting these opportunities requires more openness and more global integration. "Indeed, given constraints on public, corporate and flhousehold balance sheets, abandoning export orientation is akin to killing the only goose that can lay eggs," it said. The paper said that India's real market size, dened as consumers with a modicum of purchasing power is not big. "It is much smaller than the headline GDP number, much smaller than China's, and only a small fraction of the world market. The reason is that India has many poor consumers, while the rich tend to be large savers, limiting their consumption," it added. Similarly, the prognosis that export prospects are dim because the world is deglobalising is overly pessimistic, the paper pointed out. To begin with, it is unclear whether the world is really deglobalising, at least in services. Even if it is, India's export share is so small-even smaller than Vietnam in manufacturing exports-that its exports could grow rapidly by gaining market share, according to the paper. In particular, the paper said that India has major unexploited opportunities in low-skill manufacturing and services, which it could exploit in the post-COVID-19 environment where firms are looking to exit China and diversify their sources of supply. "Meanwhile, protectionism is unlikely to succeed as an export strategy because exploiting the big opportunities in the key labour-intensive sectors requires more openness and more global integration, as the experience of China and Vietnam have shown," it said.

Source: Economic Times

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IMF's debt recast programme should help nations overcome fiscal stress: FM

Finance Minister Nirmala Sitharaman said the International Monetary Fund's debt restructuring programme should aim at helping the countries overcome the fiscal stress caused by the coronavirus pandemic. "...it would be important to take into consideration the circumstances and concerns of both creditors and debtors and that in the process of debt restructuring, care must be taken to not saddle the debtor countries with overly burdensome conditionalities," she said while addressing the G20 Finance Ministers and Central Bank Governors Meeting through video conferencing.One of the key outcomes of the G20 Action Plan has been the Debt Service Suspension Initiative (DSSI) which provides time bound suspension of debt service payments for the low-income debtor countries that request forbearance, a finance ministry statement said. The initiative came into effect in April was initially agreed till end of 2020.During this meeting, in light of the continued liquidity pressures, it said the G20 finance ministers and central bank governors agreed to extend the DSSI by six months, and to examine by the time of the 2021 IMF/World Bank Group Spring Meetings if the economic and financial situation requires a further extension of the initiative. To receive DSSI relief, countries are required to apply for an arrangement with the International Monetary Fund (IMF) which could be either a regular programme or a shorter-term emergency facility. Talking about addressing the debt vulnerabilities of low income countries, Sitharaman observed that in a longer term, a more structural treatment of debt is required. She emphasised that this process should primarily be guided by the objective of helping such countries overcome the fiscal stress caused by the pandemic. Addressing her counterparts, Sitharaman highlighted the need to balance the health and economic objectives in the recovery plans. Besides, the finance minister also spoke about the need to consider heterogeneity of policy responses among member countries, international spillovers from domestic policy actions and reforms required in the global regulatory regimes, particularly with respect to the procyclicality of credit rating downgrades. Updated commitments in the G20 Action Plan have to be kept relevant in the current policy context for the action points to remain effective as a policy response to Covid-19, she added.

Source: Business Standard

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IMF recommends three policy priorities to overcome Covid-19 crisis

The IMF on Wednesday proposed three policy priorities, including continuing with essential measures to protect lives and livelihoods, building a more resilient and inclusive economy, and dealing with debt, to overcome the COVID-19 crisis and build a brighter future. IMF Managing Director Kristalina Georgieva said that nine months into the pandemic, the world is still struggling with the darkness of a crisis that has taken more than a million lives, and driven the economy into reverse, causing sharply higher unemployment, rising poverty, and the risk of a lost generation in low-income countries. More than ever, we need strong international cooperation - especially on vaccine development and distribution. Faster progress on medical solutions could speed up the recovery; it could add almost USD nine trillion to global income by 2025. Which, in turn, could help narrow the income gap between poorer and richer nations, Georgieva told reporters at a news conference. Releasing Global Policy Agenda at the start of the annual meetings of the International Monetary Fund (IMF) and the World Bank, Georgieva said three measures are needed to overcome the crisis and build a brighter future. First - continue with essential measures to protect lives and livelihoods. A durable economic recovery is only possible if we beat the pandemic everywhere. Stepping up vital health measures is imperative. As is fiscal and monetary support to households and firms, she said. These lifelines - such as credit guarantees and wage subsidies - are likely to remain critical for some time, to ensure economic and financial stability. Pull the plug too early, and you risk serious, self-inflicted harm, she warned. Second - build a more resilient and inclusive economy. Our new research shows that public investment - especially in green projects and digital infrastructure - can be a game-changer. It has the potential to create millions of new jobs while boosting productivity and incomes, Georgieva said. Supporting workers as they transition to new jobs is another key feature of a more resilient and inclusive future. This is particularly important for women and young people, who have been disproportionately affected by the crisis, she said. “Third - deal with debt, she said, adding that global public debt is projected to reach a record high of 100 per cent of GDP in 2021. This is partly because countries need to boost spending to fight the crisis and secure the recovery. Addressing this issue over the medium-term will be critical. But for many low-income countries, urgent action is required now, she said. Given their heavy debt burdens, they are now struggling to maintain vital policy support. They need access to more grants, concessional credit, and debt relief, the IMF chief said. The picture over the last few months has become less dire, yet we continue to project the worst global recession since the Great Depression. Growth is expected to fall to -4.4 per cent this year, she said, adding that over the next five years, the crisis could cost an estimated USD 28 trillion in output losses. At the same time, we can see stars shining above us. We see unprecedented efforts in vaccine development and treatment. We see extraordinary and coordinated fiscal and monetary measures putting a floor under the world economy. And the world is starting to learn how to live with the virus, she said. While there is tremendous uncertainty around our forecast, we project a partial and uneven recovery in 2021, with growth expected at 5.2 per cent, Georgieva said. All countries, she warned, now face a Long Ascenta journey that will be difficult, uneven, uncertain, and prone to setbacks.

Source: Business Standard

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India's GDP 11 times more than Bangladesh in PPP terms: Government

New Delhi: India's Gross Domestic Product (GDP) in terms of purchasing power parity was 11 times more than that of Bangladesh in 2019, government sources said on Wednesday as they played down IMF projections of India slipping below the neighbouring nation on per capita GDP this year. Earlier in the day in a tweet, Congress leader Rahul Gandhi took a dig at the government over IMF growth projections showing Bangladesh closing in on India in terms of per capita GDP this year and described it as a "solid achievement" of six years of BJP's "hate-lled cultural nationalism". The government sources, on their part, emphasised that under the Modi government, the per capita GDP has increased from Rs 83,091 in 2014-15 to Rs 1,08,620 in 2019-20, representing an increase of 30.7 per cent. In 2019, India's GDP in Purchasing Power Parity (PPP) terms was 11 times more than that of Bangladesh while population was eight times more. In PPP terms, India's per capita GDP in 2020 is estimated by IMF at USD 6,284 as compared to USD 5,139 for Bangladesh, according to the sources. Under UPA 2, the sources said that it had increased from Rs 65,394 in 2009-10 to Rs 78,348 in 2013-14 which is an increase of 19.8 per cent. The International Monetary Fund (IMF) has estimated India's GDP to grow at 8.8 per cent in 2021 twice that of Bangladesh at 4.4 per cent, they added. According to IMF, India is set to drop below Bangladesh in terms of per capita Gross Domestic Product (GDP) as the economy is projected to contract by a massive 10.3 per cent this year IMF's forecast for India -- a huge downward revision from its previous prediction in June -- is also the biggest contraction projected among major emerging markets amid the COVID-19 pandemic. However, India is likely to bounce back with an impressive 8.8 per cent growth rate in 2021, thus regaining the position of the fastest growing emerging economy, surpassing China's projected growth rate of 8.2 per cent, the IMF said in its latest 'World Economic Outlook' report. Released ahead of the annual meetings of IMF and the world Bank, the report said global growth would contract by 4.4 per cent this year and bounce back to 5.2 per cent in 2021. America's economy is projected to contract by 5.8 per cent in 2020 and grow by 3.9 per cent the next year, IMF said. China is the only country, among the major economies, to show a positive growth rate of 1.9 per cent in 2020, it said. IMF in its report said that revisions to the forecast are particularly large for India, where GDP contracted much more severely than expected in the second quarter. "As a result, the economy is projected to contract by 10.3 per cent in 2020, before rebounding by 8.8 per cent in 2021," it said. In 2019, India's growth rate was 4.2 per cent. Last week, the World Bank said India's GDP this fiscal is expected to contract by 9.6 per cent. "India's GDP is expected to contract 9.6 per cent in the fiscal year that started in March," the World Bank said in its latest issue of the South Asia Economic Focus report. The Reserve Bank of India has projected the country's economy to contract by 9.5 per cent in the current financial year.

Source: Economic Times

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India among top three FDI destinations in near future: CII-EY survey

NEW DELHI: A survey by the Confederation of India Industry (CII) and EY of around a hundred companies has revealed that India has emerged as one of the top three choices for overseas investments in the next 2-3 years and about 30% of the firms are planning to invest more than $500 million. As per the survey, for more than two-thirds of the multi-national corporations (MNC) respondents and 25% of the non-India headquartered MNCs, India as the first choice for investments. Aimed to gauge the market sentiment among the Indian as well as non-Indian MNCs, the survey noted that about half the respondents see India among the top three economies or leading manufacturing destinations of the world by 2025. It assesses India’s competitiveness in terms of key parameters and analyses whether India is likely to be the “+1” jurisdiction for those seeking to relocate investments or making fresh investments. The survey themed around ‘How can India step up its game?’ shows that more than 80% of all the respondents and 71% of the non-Indian headquartered respondents plan to make investments globally in the next 2-3 years. “The CII-EY survey results strongly indicate that India will be the next global investment hotspot with a high of MNCs placing it at the top of their investment agenda,” said Chandrajit Banerjee, director general, CII. Market potential, skilled workforce, and political stability are the top three reasons that make India a favoured foreign direct investment (FDI) destination besides cheap labor availability, policy reforms and raw material availability. Banerjee attributed the global investor interest to the recent major structural reforms, proactive government processes and the quick pickup in economic activity following Unlock measures. The report comes in the wake of FDI into India in the first quarter of FY21 plunging 60% from a year-ago to $6.5 billion amid the Covid-19 pandemic. “For 40% of the non-Indian HQ companies, effective implementation of labour laws and FDI reforms are very significant, while 52% of the Indian HQ companies believe corporate tax rate reduction would be the prime mover of future investments,” CII and EY said. However, firms highlighted infrastructure development, faster clearances, and implementation of the improved labour laws and labour availability as the top three issues followed by R&D, and tax reforms besides faster turnaround time for exports- imports, improved cargo handling, and trade facilitation measures.
 

FDI PITCH

·India is top choice for future investments for 2/3rd of MNCs

·50 % of cos see India among top 3 economies, manufacturing destinations by 2025

·Capacity expansion, digital transformation, R&D to drive new FDI

·Market potential, skilled workforce, political stability make India attractive

·Cos want govt to focus on infra development, faster clearances

·MNCs seek labour law implementation, trade policy reform

Source: Economic Times

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GST compensation: States can borrow up to 4% of GDP sans reform

The additional unconditional borrowing freedom of 0.5% of the gross state domestic product (G-SDP) given to 21 states and two Union Territories is in fulfilment of the promise made by the Centre that such incentive will be given to all states choosing its ‘Option 1’ to bridge the goods and services tax (GST) revenue shortfall in FY21. While these will be open market borrowings (OMBs), the special RBI-facilitated window for states to raise the funds required for part GST compensation will be available to them separately, the Centre clarified on Wednesday. As many as 20 states chose Option 1 for GST compensation on Tuesday; on Wednesday, Tamil Nadu became the 21st state to join the bandwagon; additionally, UTs of Delhi and Jammu & Kashmir also chose the route. The extra OMB space accorded to these 21 states and two UTs added up to Rs 78,542 crore. The decision means these states and UTs can raise 4% of G-SDP via OMBs this fiscal, even if they don’t fulfil any of the reform conditions set out by the Centre in May, as it raised the FY21 borrowing ceiling for states. The ceiling was then raised from 3% of G-SDP to 5% of G-SDP or by about `4.28 lakh crore in aggregate. Of course, some of these states, including Andhra Pradesh, Telangana and Karnataka, have also availed themselves of a 0.25% of G-SDP additional OBM freedom as they rolled out the One-Nation-One Ration Card scheme. As per the May decision, which was taken in view of the revenue constraints and enhanced expenditure commitments faced by the states due to the Covid-19 pandemic, the 2% of G-SDP additional borrowing was split as follows: the first 0.5 percentage point (Rs 1.07 lakh crore) was made available to all states unconditionally, the next 1 percentage point was to come in four equal tranches with each tied to “clearly specified, measurable and feasible reform actions”. The balance 0.5 percentage point was to be accessed by states, subject to their ‘completely achieving’ the milestones in at least three out of the four reform areas. The last 0.5% of G-SDP has now been made available to the 21 states and two UTs, by waiving the rider. So, effectively, these states/UTs have obtained 1% of G-SDP additional borrowing space this fiscal each without having to undertake any of the specified reforms. Justifying the decision to ask the states to borrow for GST compensation, a top government functionary on Tuesday said no state has so far breached even the original 3% of G-SDP borrowing target this fiscal. The Centre, in contrast, borrowed as much as Rs 7.66 lakh crore, or close to 4% of the country’s GDP, from the market in H1. So, the states have much leeway to borrow, the source said, indicating that the Opposition’s allegations of the Centre pushing the states into a debt trap are unfounded. Under the borrowing Option 1, the Centre had put the upper limit of combined borrowing by all states at `1.1 lakh crore. The amount is related entirely to losses due to implementation of GST while it is estimated that total shortfall, which includes impact due to the pandemic, would be `2.35 lakh crore for the current fiscal. The states don’t have to bear the interest or principal repayment costs under the special borrowing window; the repayments would be fully adjusted against future collections of the cess, which has been extended beyond June 2022, till such time necessary for servicing the debt fully. While the Option 2 – which involved raising the entire GST revenue shortfall, including the pandemic-induced one — initially meant the interest cost will be on the states, the Centre later indicated that this would also be made cost-free for states. Ten states are, however, reluctant to accept either of the two options and insist that since it is the Centre’s obligation to compensate the states for any slippage (from the protected annual revenue growth of 14%), the borrowing must be done by the Centre. Already, the gross State Development Loan issuance has expanded by a substantial 56.8% to Rs 3.53 lakh crore in H1FY21 from Rs 2.25 lakh crore in H1FY20. The net SDL issuance rose by an even higher 91.4% on year in H1FY21 to Rs 3.02 lakh crore. The weighted average yield of state government dated securities (across states and tenures) auctioned on October 6 was at 6.80%, 23 bps higher than a week ago and 31 bps higher than in the first week of September. The reforms linked to part of the extra borrowing space given to the states are one-nation-one ration card scheme; ease of doing business; reforms of power sector distribution companies and reforms of urban local bodies. On the rolling out of the one-nation-one-ration-card scheme, on September 24, the Centre granted permission to five states – Andhra Pradesh, Telangana, Goa, Karnataka and Tripura — to raise extra resources of a total of `9,913 crore via OMBs. The states that have chosen to use Option 1 for GST compensation are Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Goa, Gujarat, Haryana, Himachal Pradesh, Karnataka, Madhya Pradesh, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Odisha, Sikkim, Tripura, Uttar Pradesh and Uttarakhand and Tamil Nadu.

Source: Financial Express

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GST compensation shortfall: Tamil Nadu becomes 21st state to pick Option 1

Tamil Nadu became the 21st state to pick Option 1 to access additional market borrowing, of Rs 9,627 crore, on Wednesday taking the total borrowing permitted by the Centre to Rs 78,000 crore, over and above the Rs 1.1 trillion special window provided to all states to compensate for inadequate GST cess collection. The additional borrowing for states constitutes 0.5 per cent of their respective gross state domestic product. On Tuesday, the Department of Expenditure had permitted 20 states to raise an additional Rs 68,825 crore through the market. “With today’s permission, 21 states have been granted permission to mobilise Rs 78,542 crore so far,” an official release said on Wednesday. The Rs 1.1 trillion borrowing will be facilitated through a special window by the finance ministry. The framework for this window is being finalised, the ministry said in a statement. After Tamil Nadu joined 20 other states and Union Territories — Delhi and Puducherry — in picking an option, eight states remain that have not opted for either of the two options offered by the Centre. Kerala Finance Minister T M Thomas Isaac reacted strongly to the Centre’s policy, saying it was trying to “divide” states. “(I) had repeatedly appealed to the Council to increase unconditional component of additional 2 per cent borrowing permitted, to ensure fiscal space for the states, while negotiations could go on for a new compromise option. Now the Centre uses it for dividing states. Still, the Centre wants a consensus,” he tweeted. Kerala, Punjab, Chhattisgarh, and West Bengal have rejected both options. They are pressing the Centre to borrow instead, and are exploring legal options to contest Centre’s decision to proceed with its offer despite the GST Council not reaching a consensus.

Source: Business Standard

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India, Portugal discuss ways to expand bilateral ties in defence, trade

India and Portugal on Wednesday agreed to further boost cooperation in areas of defence and security, trade, and migration and mobility partnership. External Affairs Minister S Jaishankar and his Portuguese counterpart Augusto Santos Silva held a virtual meeting during which they deliberated ways to further expand the bilateral cooperation in a range of areas."They agreed that the momentum in the ties will be maintained particularly in new areas of cooperation such as migration and mobility partnership, defence cooperation, and deepening of economic ties," the Ministry of External Affairs (MEA) said. In the talks, the two foreign ministers also reaffirmed their commitment to "reformed multilateralism" and agreed to maintain close contact and coordination on regional and global issues with particular reference to India's presence in the UN Security Council from 2021, the MEA said in a statement. "Both leaders undertook a detailed review of bilateral ties including the extensive cooperation between the two countries during COVID-19 pandemic and possibilities of cooperation in the post-COVID-19 scenario," it said. Jaishankar and Silva also discussed India-EU relations. The MEA said the two foreign ministers also agreed to work closely for the next IndiaEU leaders' meeting during Portugal's Presidency in 2021 for which Prime Minister Antonio Costa has already issued an invitation to Prime Minister Narendra Modi.

Source: Business Standard

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Eye on China: Govt may step up monitoring of fund flow from Hong Kong

Chief economic adviser (CEA) Krishnamurthy V Subramanian on Wednesday favoured greater scrutiny of both direct and indirect Chinese investments, indicating that the government will likely step up monitoring of fund flow from Hong Kong, a close proxy for Beijing. Conceding that such curbs may impact funding for start-ups in the short term, Subramanian, however, exuded confidence that the vacuum will be filled up by investors, especially private equity funds, from other countries. Tighter scrutiny will curb the possible diversion of Chinese investments through Hong Kong. Responding to a question if indirect investments from Hong Kong will also be subject to a treatment akin to Press Note 3 (under which FDI from China and other bordering nations requires government approvals), the CEA said: “Investments that are coming from across the border, from the country with which we have tensions right now, need to be scrutinised, and those include not just the direct but also indirect ones.” It’s not immediately clear if these curbs could be extended to foreign portfolio investors (FPIs) as well, in which case the implications will be much larger. Currently, there are 111 registered FPIs from Hong Kong and 16 from China. FPIs are among the biggest drivers of the Indian financial markets, as net FPI inflows in 2019 stood at $18 billion. Speaking at a Ficci event, Subramanian also highlighted the need to ensure bankers are not pulled up later for honest business transactions in the course of resolution of toxic assets under the Insolvency and Bankruptcy Code, especially on the critical issue of haircuts. “There is always a possibility of hindsight bias, which can create enormous risk aversion. If a decision is read as a possible mala fide intent, that can also make bankers skittish in being able to take that judgment,” Subramanian said. He also called for the creation of a market to discover the price of distressed assets.  As for greater monitoring of Chinese investments, India on April 18 tightened its FDI policy to curb “opportunistic acquisitions” of domestic firms that saw a massive crash in valuations after the Covid-19 pandemic. It stipulated that all FDI proposals from bordering nations would require government clearance. Importantly, the notification also covers any transfer of investments or future FDI resulting in beneficial ownership falling with firms from the bordering nations, including China. FDI from Hong Kong stood at $4.51 billion between April 2000 and June 2020, or close to 1% of the total, while that from China touched just $2.41 billion during this period, or only 0.5% of the overall inflows. Nevertheless, given the low valuations of Covid-hit Indian firms, such investments were expected to surge, especially in sensitive sectors. A Chinese embassy spokesperson in Delhi had in late April said his country’s cumulative investments (including FDI) in India exceeded $8 billion as of December 2019. Also, according to a recent report by researchers Amit Bhandari and Aashna Agarwal, Chinese tech investors have put an estimated $4 billion into Indian start-ups. Over the five years ending March 2020, 18 of India’s 30 unicorns are now Chinese-funded. “TikTok, the video app, has 200 million subscribers and has overtaken YouTube in India. Alibaba, Tencent and ByteDance rival the US penetration of Facebook, Amazon and Google in India. Chinese smartphones like Oppo and Xiaomi lead the Indian market with an estimated 72% share, leaving Samsung and Apple behind,” the report said.

Source: Financial Express

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Tremendous potential to take the Indo-Gulf economic relationship to a higher level: Secretary, MEA

New Delhi: Mr Sanjay Bhattacharyya, Secretary, Govt of India, Ministry of External Affairs today said that Indians are the most preferred migrants in the Gulf region and human resource exchange between both the countries is set to see a new horizon which will benefit both sides.  Addressing the session on Gulf & West Asia Session Reimagining Business Beyond Oil during ‘FICCI LEADS 2020’, Mr Bhattacharyya said that Indians are the largest expatriate community in the Arab world with nine million workers and professionals which form 30 per cent of all ex-pat workforce. With both India and the Arab region engaged in restructurings and transformational changes in the economy, the strong political understanding and goodwill between the people provide the tremendous potential to take the economic relationship to a higher level. He further stated, “Skill mapping and skill matching of the employees will reduce transaction cost of hiring and ensure a competent workforce with improved job security and better compensation.” Pointing out that India provided emergency medical supplies to several Arab countries, emerging as the first provider of humanitarian assistance to COVID-19, he said that in the new COVID era, there will be changes in social interactions, institutional exchanges and individual preferences. “At the economic level, we will have to design a new normal which will depend on the revival of our old businesses,” said Mr Bhattacharyya. He explained that the key fundamentals of economic engagement, characterized by energy security and human resources, have a scope of further development. “The nature of our partnership has evolved over time from buyer-seller to a partnership and participation in upstream-downstream projects on both sides.” We must explore partnerships between the countries to develop oil and gas reserves of India which will make it a win-win solution for both, said the Secretary. “The diversification of our trade basket beyond hydrocarbons must include engineering goods, gems and jewellery, precious metals, food products, textile and chemicals, which will provide further impetus to our trade relations,” said Mr Bhattacharyya. He further mentioned that the development of joint projects in third world countries, a stronger corporate presence in each other’s areas and expansion of connectivity will provide a new dimension for economic engagement. Speaking on the future endeavours, he said, FICCI LEADS 2002 agenda looks towards practical business solutions to optimize the opportunities and to maximize economic returns. “Our relationship is founded on strong traditional ties and deep political understanding. This is the best time to step up the economic relation, match the understanding at the political level by linking up with each other’s development priorities, future-oriented technologies, and people to people exchanges,” said Mr Bhattacharyya. “Cultural exchanges will promote goodwill among the people and facilitate further economic engagement,” he said. Mr Redha bin Juma Al Saleh, Chairman, Oman Chamber of Commerce, and Industry Oman, said the government of Oman has come up with a number of amendments in taxation systems, bankruptcy rules and moving towards privatization to increase investment in Oman. “We assure India of all necessary services and we want to find better corporate relation between Oman and India,” he said. Dr Mazin M Al Zaidi, Director, Entrepreneurship & Innovation, Ministry of Investment, Saudi Arabia said, the Saudi Vision 2030 was to build the roadmap to diversify the economy. We wanted to shift from oil to new sectors, as diversification is a key element in doing business. Due to digitization in the post COVID era, many opportunities exist between both countries. “We want new investors to invest and add value to Saudi Arabia,” he said. Dr Siddeek Ahmed, Chairman & MD, Eram Group, & Co-Chair, FICCI India-Arab Council said, the Middle East has envisaged its future engagement in India at a time when the economy is adapting through the disruptions created by COVID19. The major economies of the Middle East are looking at India for business collaborations to transform themselves and adapt to the new realities. “Adaptability is the key to the new normal,” said Dr Ahmed. Mr Dilip Chenoy, Secretary General FICCI said the new emerging technologies like fintech, edutech, health services, consultancy and others have huge business potential to leverage further growth and development.

Source: Orissa Daily

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GST payout: Opposition states may decide on moving SC on Friday

New Delhi: Some Opposition-ruled states will take a call on Friday on approaching the Supreme Court on the issue of the Centre pressing states to borrow to meet the deficit in GST compensation cess fund. Kerala finance minister Thomas Isaac told ET that chief minister Pinarayi Vijayan will consult law department officials on Friday to decide on the legal position to be taken on the matter “and we will see that seven to eight…

Source: Economic Times

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Global Textile Raw Material Price 15-10-2020

Item

Price

Unit

Fluctuation

Date

PSF

832.78

USD/Ton

2.47%

15-10-2020

VSF

1501.97

USD/Ton

4.12%

15-10-2020

ASF

1820.51

USD/Ton

0%

15-10-2020

Polyester    POY

808.24

USD/Ton

0.18%

15-10-2020

Nylon    FDY

1992.71

USD/Ton

0%

15-10-2020

40D    Spandex

4461.30

USD/Ton

1.01%

15-10-2020

Nylon    POY

5353.56

USD/Ton

0%

15-10-2020

Acrylic    Top 3D

1026.10

USD/Ton

1.47%

15-10-2020

Polyester    FDY

1873.75

USD/Ton

0.40%

15-10-2020

Nylon    DTY

2007.59

USD/Ton

0%

15-10-2020

Viscose    Long Filament

959.18

USD/Ton

1.57%

15-10-2020

Polyester    DTY

2282.70

USD/Ton

0.66%

15-10-2020

30S    Spun Rayon Yarn

1940.67

USD/Ton

1.95%

15-10-2020

32S    Polyester Yarn

1561.46

USD/Ton

3.96%

15-10-2020

45S    T/C Yarn

2409.10

USD/Ton

1.25%

15-10-2020

40S    Rayon Yarn

2037.33

USD/Ton

0.74%

15-10-2020

T/R    Yarn 65/35 32S

1948.10

USD/Ton

1.55%

15-10-2020

45S    Polyester Yarn

1620.94

USD/Ton

0.93%

15-10-2020

T/C    Yarn 65/35 32S

2141.42

USD/Ton

1.41%

15-10-2020

10S    Denim Fabric

1.19

USD/Meter

0.63%

15-10-2020

32S    Twill Fabric

0.69

USD/Meter

2.22%

15-10-2020

40S    Combed Poplin

0.98

USD/Meter

1.53%

15-10-2020

30S    Rayon Fabric

0.49

USD/Meter

0.30%

15-10-2020

45S    T/C Fabric

0.67

USD/Meter

0.22%

15-10-2020

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14871 USD dtd. 15/10/2020). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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Ethiopian Bahir Dar Industrial Park to lift textile sector

Ethiopian Prime Minister Abiy Ahmed recently inaugurated the Bahir Dar Industrial Park, expected to boost the expansion of the textile industry in the capital of Amhara state. Textile, garment, pharmaceuticals and medical equipment are some of the products that would be manufactured there. The park has been constructed with an outlay of over $53 million. Ahmed said enhancing the manufacturing sector is one of the key pillars of his Home Grown Economic agenda unveiled in 2019. The first phase of the park, constructed by the China Civil Engineering Construction Company (CCECC) covers 75 hectares with eight factory sheds in which investors are currently finalising set ups to commence operation a news agency reported. When fully operational, the industrial park is expected to create jobs for more than 10,000 and boost exports. It is likely to double job opportunities during its second phase. Farmers relocated from the industrial park’s site would get jobs on priority.

Source: Fibre2Fashion

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Boris Johnson urged to act on unpaid wages

LONDON - The Labour Behind the Label campaign has written to the UK Prime Minister Boris Johnson urging him to put pressure on UK brands and retailers to compensate workers in garment supply chains for the money they have lost during the COVID-19 pandemic.  In an open letter to Johnson, and also Foreign Secretary Dominic Raab and International Trade Secretary Elizabeth Truss, Labour Behind the Label's advocacy director Anna Bryher says garment workers are owed billions in unpaid wages or severance. "The global pandemic has had a huge impact on workers in global fashion supply chains," the letter begins, quoting a Clean Clothes Campaign report which estimated that wages lost by garment workers worldwide was up to US$5.79 billion.

Source: Eco Textile

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Bangladesh declares 282 items 'versatile jute products'

The Bangladesh textiles ministry recently declared 282 types of attractive jute goods as ‘versatile jute products’—conventional jute products like Hessian, sacking, carpet backing cloth and any product other than jute yarn of six counts and above—keeping in view the demand in domestic and international markets and the global expansion of the jute sector. About 700 entrepreneurs of versatile jute products are exporting at present, according to Bangla media reports. Various steps have been taken by the government to diversify and use jute products through the Jute Diversification Promotion Centre (JDPC).

Source: Fibre2fashion

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Several Egyptian garment units reduce production by half15

Several Egyptian clothing units have halved production, while many others have stopped production altogether, according to the Readymade Garments Chamber chief Mohamed Abdel Salam, who recently said this dramatic slowdown is due to a projected decline in market demand for the Fall season. A massive overstock of summer clothing sat for months in factories. Egyptian factories have hardly sold 30 per cent of their summer season stock over the past three months. The demand for apparel is not expected to exceed half of the normal rate this fall, amid expectations that a second wave of the novel coronavirus will force the country into another lockdown, keeping people home and killing in-store shopping, Salam was quoted as saying by an Egyptian newspaper. Many Egyptians turned to online shopping amid the pandemic, with the country’s e-commerce sector already steadily rising pre-pandemic. Global e-commerce giant Amazon announced in September that it plans to manufacture more of its products in Egypt, as well as attract more Egyptian companies to market their products through Amazon’s electronic platforms – particularly with ready-to-wear clothes, household items, plastics, and electronic device accessories. According to the Apparel Export Council of Egypt, textile exports dropped by 29 per cent in the first semester of the year and a 40 per cent decline in production are imminent.

Source: Fibre2fashion

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UK factory workers said to be robbed of millions in wages

The British Retail Consortium (BRC) and member of UK parliament Lisa Cameron, chair of the all party parliamentary group for textiles and fashion, recently wrote to the home secretary to demand urgent action over labour exploitation. Garment workers are denied over £2.1million a week, which equates to £27 million in lost earnings since a previous letter in July. A joint letter, signed by over 50 cross-party MPs and peers as well as a further 40 retailers, investors and non-governmental organisations was sent in July. This letter called for urgent action from the government to introduce a licensing scheme for garment factories in the United Kingdom. According to the letter, a 'Fit-to-Trade' licensing scheme “would protect workers from forced labour, debt bondage and mistreatment, ensuring payment of National Minimum Wage, VAT, PAYE, National Insurance, holiday pay and health and safety”. This would also encourage retailers to source more of their clothing from the United Kingdom, supporting the development of an ethical, world-leading garment manufacturing industry, BRC said in a press release. It is estimated that over 10,000 garment factory workers are being paid an average of £3.50 an hour–well below the national minimum wage of £8.72. This violation of workers’ rights cannot be allowed to continue, and government has a key role to play in this, the letter said. BRC chief executive Helen Dickinson said: "The BRC has repeatedly called on government?to?do more to prevent labour exploitation in the UK garment manufacturing industry. Despite numerous reports in the media, and a previous letter to the home secretary signed by over 50 MPs & peers and more than 40 retailers, investors and NGOs, we have not seen any significant action from government to bring this injustice to an end. All the while garment workers are robbed of tens of millions of pounds in wages.” “Right now, we have an opportunity to create a more ethical and sustainable fashion manufacturing industry in the UK, providing better jobs and boosting the economy at a time when it is needed most. It is vital the home secretary takes action to introduce a licensing scheme for UK garment manufacturers and puts the rights of workers at the heart of the industry. Without urgent action thousands more people face exploitation,” Cameron said.

Source: Fibre2fashion

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