Textile Raw Material Price 2015-05-17
|
Item |
Price |
Unit |
Fluctuation |
|
PSF |
1292.91 |
RMB/Ton |
-0.25% |
|
VSF |
2032.88 |
RMB/Ton |
0% |
|
ASF |
2484.17 |
RMB/Ton |
0% |
|
Polyester POY |
1366.09 |
RMB/Ton |
0% |
|
Nylon FDY |
3122.50 |
RMB/Ton |
0% |
|
40D Spandex |
6505.20 |
RMB/Ton |
0% |
|
Nylon DTY |
5903.47 |
RMB/Ton |
0% |
|
Viscose Long Filament |
1642.56 |
RMB/Ton |
0% |
|
Polyester DTY |
2927.34 |
RMB/Ton |
0% |
|
Nylon POY |
2678.52 |
RMB/Ton |
0% |
|
Acrylic Top 3D |
1577.51 |
RMB/Ton |
0% |
|
Polyester FDY |
3366.44 |
RMB/Ton |
0% |
|
30S Spun Rayon Yarn |
2715.92 |
RMB/Ton |
0% |
|
32S Polyester Yarn |
2049.14 |
RMB/Ton |
0% |
|
45S T/C Yarn |
2976.13 |
RMB/Ton |
0% |
|
45S Polyester Yarn |
2878.55 |
RMB/Ton |
0% |
|
T/C Yarn 65/35 32S |
2748.45 |
RMB/Ton |
0% |
|
40S Rayon Yarn |
2195.51 |
RMB/Ton |
0% |
|
T/R Yarn 65/35 32S |
2553.29 |
RMB/Ton |
0% |
|
10S Denim Fabric |
1.14 |
RMB/Meter |
0% |
|
32S Twill Fabric |
1.00 |
RMB/Meter |
0% |
|
40S Combed Poplin |
1.35 |
RMB/Meter |
0% |
|
30S Rayon Fabric |
0.77 |
RMB/Meter |
0% |
|
45S T/C Fabric |
0.79 |
RMB/Meter |
0% |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.16362 USD dtd. 17/05/2015)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Credit rating agency Crisil has suggested the need for export interest subvention for spinning textile sector, according to media reports. As per the interim report, prepared based on the request of Texpreneurs Forum, a copy of which was presented to the Commerce Minister, Nirmala Sitharaman last week, rising NPA levels in textile, falling EBITDA and net margin (majority of the mills in net loss) and fall in credit rating showed the reality. "If the same trend continues, in next stage, fall of spinning sector will lead to a major crisis to farming community, because every year cotton output is increasing in our country," the report said. Though in general, government was of the opinion that spinning was well organised and well grown and self-sustainable, because of 2011-12 historic losses due to cotton volatility and subsequent development in China in the last two years and also new capacity addition in spinning sector, created big trouble in finances of 'stand alone spinning mills,' it said. Stating that cotton as commodity only has limited export potential, because only 10 countries will import cotton, the report said in case of yarn, export potential was more as it can be exported to more than 60 countries, indicating that cotton farming also directly linked with the health of spinning industry.
SOURCE: Fibre2fashion
Narendra Modi (left) and Li Keqiang in Beijing/Courtesy: PIBIndia and China have agreed to optimally exploit the present and potential complementarities in the textiles and other sectors, as identified in the Five Year Trade and Economic Development Plan signed in September 2014. In a joint statement issued by the two countries during Indian Prime Minister Narendra Modi’s visit to China last week, the two sides took note of the increase in two-way trade and investment flows in the past few years, and acknowledged its positive contribution to strengthening their overall bilateral relationship and to supporting each other’s growth and development processes.
In this regard, both sides agreed to take “necessary measures to remove impediments to bilateral trade and investment, facilitate greater market access to each other’s economies, and support local governments of the two countries to strengthen trade and investment exchanges, with a view to optimally exploiting the present and potential complementarities in identified sectors in the Five Year Trade and Economic Development Plan signed in September 2014, including Indian pharmaceuticals, Indian IT services, tourism, textiles and agro-products.” “The two sides resolved to work together to further strengthen their closer developmental partnership as it would provide impetus to economic growth and prosperity of the two countries as well as of their respective regions and the world at large,” read the joint statement.
The two sides also resolved to take joint measures to alleviate the skewed bilateral trade so as to realise its sustainability. On this, both sides will make full use of the India-China Joint Economic Group. Further, leaders of both countries welcomed the decision to expedite discussion and endeavour to favourably address, in the spirit of mutual cooperation and reciprocity, the issues pertaining to tariff reduction in respect of relevant Indian products under the framework of Asia-Pacific Trade Agreement. Modi and Chinese premier Li Keqiang welcomed the signing of the MoU to institute a dialogue mechanism between the NITI Aayog of India and the National Development Research Centre (NDRC) of the State Council of China. They agreed that the Strategic Economic Dialogue is an important mechanism to explore new areas of bilateral economic cooperation. The next meeting of the Strategic Economic Dialogue, co-chaired by vice chairman of NITI Aayog of India and chairman of NDRC of China, will be held in India during the second half of 2015. The leaders noted with appreciation the positive momentum in investment projects as Chinese companies respond to the invitation to ‘Make in India’ and Indian companies expand their presence in China. The two sides expressed their readiness to enhance cooperation between the financial regulators and enterprises of the two countries in support of the building of the Closer Developmental Partnership.
SOURCE: Fibre2fashion
India and the European Union could break the deadlock impeding the Free Trade Agreement when Union Minister of State for Commerce and Industry Nirmala Sitharaman travels to Paris in June to attend an Organisation for Economic Cooperation and Development (OECD) event, European Union Ambassador in New Delhi Joao Cravinho told The Hindu. Mr. Cravinho says though there have been no negotiations on the Free Trade Agreement with India, decision-makers in New Delhi and Brussels are keen on ending the stalemate. “We haven’t had progress for two years, no negotiations, but there is a recognition that this stalemate has gone on far too long,” he told The Hindu. The decision-makers have concluded that it is time to sit down and create a political momentum to finalise the deal. “Personally, I am convinced we are less far apart than we were two years ago. The world has changed; even if we have not been negotiating and what it takes in terms of political capital is perfectly affordable. We need to have major decision-makers at the ministerial level sit down for talks, and I expect that to happen within a few weeks,” he said.
India’s participation at the OECD could offer the opportunity for discussions between New Delhi and EU Trade Commissioner Cecilia Malmström. Both Union Minister for Commerce Nirmala Sitharaman and Ms. Malmström are expected to be present in Paris in June and officials are hopeful that a dialogue could be scheduled. Work is also under way for fleshing out the details of the India-EU Summit scheduled for later this year. “We are working on a rich agenda, which will justify the summit.” Mr. Cravinho said the India-EU Summit to be held later this year would have as its broad themes how Europe could support India’s transformational and development agenda, how India could support the challenges that Europe faced, and how India and Europe could work together on issues of global governance.
“India and the EU are major players in global governance, and coming together, finding a platform on which both can work, will mean not only contribution to each other but also towards global peace. The recognition of that will be part of the summit outcomes,” he said. He said the Modi government had set an “ambitious transformational agenda,” and the EU countries, keen on partnering India in the implementation of schemes such as Smart City, Swachh Bharat and “Make in India”, were looking for appropriate responses. Citing the example of the Ganga cleaning programme, he said EU members were strategising on how to share their best practices on river cleaning. “We have a number of interesting experiences in Europe, with cleaning the Danube, [the] Rhine, and [the] Thames. Those were massive cleaning operations, not only about water but also involved a massive transformation in the interaction between the population and the rivers,” he said.
Mr. Cravinho said that with a new government in place, there was a noticeable change in the pace of projects such as the one to develop Smart Cities. “We have been working with Mumbai for the last three years, well before the Smart Cities project was announced. It is interesting work that has gained speed in the last six months because of the change in government at the Centre and in the State. There is an understanding that business as usual is not an option, there is a lot of desire for change and a lot of energy,” he said.
On other areas of India-EU cooperation, including combating terrorism, Mr. Cravinho said there was a need to create fluidity in information-sharing. “There is a lot of information-sharing that can and should take place between India and Europe, helping each other understand different facets of terrorism. We have a counter-terrorism dialogue happening in Brussels soon, in which we will raise the issue of information-sharing and de-radicalisation; for instance, how to prevent marginalised groups from becoming radicalised for one reason or the other. We can share good practices.”
SOURCE: The Hindu
With Mongolia's rich mineral deposits in mind, India today asked the country to partner in its economic transformation while vowing to step up bilateral trade and investment. Prime Minister Narendra Modi, who is on a two-day visit to Mongolia, the first ever by an Indian Premier, held wide- ranging discussions with his Mongolian counterpart Chimed Saikhanbileg, pledging to take bilateral economic partnership to a new level.
India announced a USD one billion credit line to Mongolia to support its infrastructure development "I am pleased to announce that India will provide a Line of Credit of USD one billion to support expansion of Mongolia's economic capacity and infrastructure," Modi said at a joint press interaction with Saikhanbileg. The two countries upgraded their ties to a "Strategic Partnership". "The two Prime Ministers agreed to encourage development of equal and mutually beneficial trade, investment and economic cooperation, which is balanced, sustainable, and leads to prosperity in both countries," a joint statement said after the talks between the two leaders. "India will continue to support Mongolia's endeavour to create a business friendly foreign investment regime," it said.
During their talks, the two Prime Ministers agreed to encourage Indian companies to further explore cooperation opportunities in Mongolia's mining sector through joint ventures and investment. Modi and Saikhanbileg also noted the intensified cooperation in civil nuclear domain, such as societal and industrial applications of radioisotopes, exploration and mining of radioactive minerals in Mongolia, and human resource development. "Prime Minister of India welcomed Mongolia to partner in India's economic transformation and noted that Mongolia's rich mineral deposits, including radioactive minerals, could help power India's low-carbon growth, while helping Mongolia in developing indigenous capabilities and economic opportunities in the mining sector," the joint statement said. The two sides asked the Joint Working Group established between their atomic energy establishments to explore opportunities for future collaborative actions in the spirit of mutual benefit. "Given the immense potential to collaborate in the agriculture sector, the two Prime Ministers encouraged fostering deeper and closer cooperation in animal husbandry, production of dairy products, sharing of expertise and know-how, technology transfer and other forms of cooperation," the statement said.
SOURCE: The Economic Times
PM Narendra Modi on Saturday wound up his three-day visit to China, presiding over a function that saw as many as 26 business agreements worth over $22 billion being signed between Chinese and Indian firms, including the Adani group, Bharti Airtel and Welspun. These MoUs span a wide range of industries, including renewable energy, power, infrastructure and steel. The event saw Infosys unveiling a master plan for its new Shanghai campus. ICICI Bank announced its first branch in China, the fourth Indian bank to do so. "India is ready for business. Sensing the winds of change in India, I advise you to come and feel the same," Modi told the China-India Business Forum. "Many Chinese companies can take advantage of potential in manufacturing, processing as well as in infrastructure," Modi told the assembled group of over 400 Indian and Chinese business executives. The forum also saw three CEOs of Indian companies - who could not be identified - seeking Modi's blessings by touching his feet. Listing several initiatives taken by his government to enhance the ease of foreign investors to do business in India, Prime Minister Narendra Modi said at a function here that India-China partnership should and will flourish. "I expect very good outcome from this coming together," he said.
Bharti Airtel and Eros Group are involved in three projects each while Adani Power is involved in two agreements. Bharti is seeking finance on two projects from state-run China Development Bank and credit facility from the Industrial and Commercial Bank of China. Seven MoUs involved financing agreements for Indian projects by Chinese banks and other companies. CDB has agreed to fund three projects while the ICBC will provide credit for two Indian projects. Besides, Adani Power is seeking financing for its APL Mundra Power Plant from CDB while IL&FS will get funding from ICBC. Eros Group signed a partnership agreement with Shanghai Film Corporation and a co-production contract with China Film Group. Eros International has also signed a cooperation agreement with Fudan University in Shanghai. Wipro announced an agreement to build a complex with the government of Dalian city and the Yida China Holdings. IL&FS has contracted the China Huaneng Group to build a 400mw thermal power station.
New partners have come up for establishing three solar energy projects. The new partners are Essel Group linking with JA Solar, India's Welspun Group with Trina Solar and Sun Group with Canadian Solar China. Bhushan Power & Steel and China National Technical Corporation. Adani Port has linked up with Guangzhou port. "(These) are a reflection of the strong interest of Chinese companies to invest in India and contribute towards 'Make in India' initiative," an official statement said. It further said the agreements would also facilitate cooperation between Indian and Chinese companies in the film and entertainment industry and "will help in making more Chinese friendsaudiences aware of India's strength in this area".
SOURCE: The Economic Times
The central government's fiscal deficit for 2014-15 was four per cent of gross domestic product (GDP), according to provisional figures released by the finance ministry. The revised estimate presented in late February had put it at 4.1 per cent. The Centre had to resort to more cuts in plan expenditure to rein in fiscal deficit. The revenue deficit would be 2.8 per cent of GDP in 2014-15, against the revised estimate (RE) and earlier Budget estimate of 2.9 per cent. Final data on the central government accounts for 2014-15 would be issued by this month-end, which would modify the RE for the year, issued at end-February when this year's Budget was presented. The finance ministry on Sunday issued its provisional estimates of these RE revisions. These are based on the anticipated adjustments from various ministries and revenue figures of the year. The controller general of accounts will give the final figures of the fiscal accounts and there would be a slight change in those, compared to what was given.
According to these latter figures, the Centre's fiscal deficit finally would be Rs 501,880 crore, about 98 per cent of the Rs 512,628 crore RE for 2014-15. The revenue deficit would be Rs 358,306 crore, about 99 per cent of the Rs 362,486 crore RE for 2014-15. "The government is firmly committed to the path of fiscal consolidation and this is a step forward," the ministry said. Gross tax collections at Rs 12,45,037 crore showed growth of nine per cent as compared to 2013-14. Devolution of tax collections to states at the end of 2014-15 was Rs 3,37,808 crore. This implied net collections were Rs 9,07,229 crore, slightly lower than the Rs 9,08,463 crore in the RE. Non-tax revenue was Rs 196,959 crore, about 90 per cent of the RE at Rs 217,831 crore. Non-debt capital receipts, which includes disinvestment, was Rs 43,439 crore or 103 per cent of the RE. Plan expenditure at the end of 2014-15 was Rs 435,621 crore, around Rs 32,000 crore lower than the RE at Rs 467,934 crore. The RE was already lower than the BE by a little over Rs 1 lakh crore. Non-plan expenditure was Rs 11,91,140 crore or 99.8 per cent of the RE at Rs 12,13,224 crore.
SOURCE: The Business Standard
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 64.45 per barrel (bbl) on 15.05.2015. This was lower than the price of US$ 64.88 per bbl on previous publishing day of 14.05.2015.
In rupee terms, the price of Indian Basket decreased to Rs 4097.73 per bbl on 15.05.2015 as compared to Rs 4141.94 per bbl on 14.05.2015. Rupee closed stronger at Rs 63.58 per US$ on 15.05.2015 as against Rs 63.84 per US$ on 14.05.2015. The table below gives details in this regard:
|
Particulars |
Unit |
Price on May 15, 2015 (Previous trading day i.e. 14.05.2015) |
Pricing Fortnight for 16.05.2015 (April 29 to May 13, 2015) |
|
Crude Oil (Indian Basket) |
($/bbl) |
64.45 (64.88) |
64.51 |
|
(Rs/bbl |
4097.73 (4141.94) |
4115.09 |
|
|
Exchange Rate |
(Rs/$) |
63.58 (63.84) |
63.79 |
SOURCE: PIB
Is Pakistan’s textile and clothing industry headed for a perfect storm? Factory owners across the textile supply chain say it has already hit one. The high cost of doing business, energy shortages, aging machines, myriad of taxes on exports, influx of smuggled and imported textiles and clothing in the domestic market, absence of institutional support, rising exchange rate, raw material shortages, and the divide between policy and its implementation have eroded the economic viability of their business both at home and abroad. “Pakistan is no longer in the race for a bigger share in the global textile business. Even our domestic market has been stolen from us by China and India. We’re just struggling to survive and save our jobs,” muses Gohar Ejaz, a textile business leader. “It is painful to see factories built by three generations facing an imminent threat of extinction on a very large scale because of the government’s policies.”
Around one quarter of the total installed capacity across the textile chain has already shut down, mainly because of the energy crunch and rising costs. The production capacity impairment in the spinning sector — at 30pc — is estimated to be higher than the industry’s average. The differential between the peak export revenues fetched by different sub-sectors and the value of their present overseas shipments stands at $3.3bn — or equal to the closed capacity — owing to falling export quantities. ‘Our economic managers, instead of promoting exports for real economic growth, are depending on borrowed money from the IMF to show their performance, while our value-added exports are burdened by rising costs’. In March alone, the quantity of exported goods by every sub-sector from yarn to readymade garments recorded a loss of between 13pc and 33pc, except for knitwear. The conditions in the domestic market aren’t easier for textile manufacturers either. Almost three quarters of the 1,800m kilograms of fibre/yarn consumed by Pakistanis every year is either legally imported, smuggled as used clothing, or under the Afghan transit trade.
India’s textiles and clothing imports are just one quarter of Pakistan’s imports — including both official and smuggled. An estimated three-fifths of its entire production is consumed domestically. “It is hardly possible to save textile exports without retrieving the domestic market from smugglers and importers,” concludes Ahmed Kamal, a former chairman of the Faisalabad-based Pakistan Textile Exporters Association (PTEA). “Our production can rise by 50pc if we get back our domestic market from China and India,” he adds. Pakistan’s textiles and clothing exports of under $14bn — or 1.8pc of the total global textile trade of almost $800bn, have increased at less than half the average world growth rate of 45pc since 2008. Bangladesh’s exports, on the other hand, have grown by 160pc, while China and India have almost doubled their share in the global textile and clothing business. The textile producers attribute the strong export performance of the regional rivals to the policy and financial support they get from their respective governments to keep their cost of doing business low and to diversify their markets and products.
Pakistan’s yarn producers, for example, were much more efficient and modern in 2006 than their Indian competitors. Today, the conversion cost of 20 carded and 30 combed yarns in Pakistan is respectively 33pc and 27pc higher than those in India. As if that is not enough, the Indian government has consistently supported its textile exports through rebates, subsidies and timely policy responses to their issues, protected its domestic market, and given huge incentives to encourage investments in new machinery and capacity. India spent $3.5bn between 2007 and 2012 on its textile industry to add 14m spindles, 36,000 shuttles and jet air looms, grow exports by $16bn, create 16m jobs, and increase its share in the world textile trade from 3.5pc to 5pc.
Pakistan, on the other hand, spent less than $300m during 2009-14. Consequently, its exports have stagnated, jobs lost and machines rusted. For the future, India has set aside $5bn to be spent on its textile industry till 2017, compared with the $640m package given by Pakistan for the next five years. “We can compete with exporters from India, China, Bangladesh and elsewhere. But we cannot fight with their governments,” says Gohar. Others share his feelings. PTEA Chairman Sohail Pasha says “our policymakers have been raising the cost of doing business for manufacturers, while our rivals are busy helping their exporters. In the given conditions, it is hardly surprising that Pakistan has failed to take advantage of the European Union’s trade concessions under its GSP+ scheme. Our economic managers, instead of promoting exports for real economic growth, are depending on borrowed money from the IMF to show their performance, while our value-added exports are burdened by rising costs.”
SOURCE: The Dawn
A file photo shows spools of yarn at a trade show in Dhaka. National Tariff Commission of Pakistan has initiated proceedings to impose anti-dumping duty on import of hydrogen peroxide, which is used in the textile industry, from Bangladesh. National Tariff Commission of Pakistan has initiated proceedings to impose anti-dumping duty on import of hydrogen peroxide from Bangladesh, commerce ministry officials said. They said that the NTC had already issued a notice of initiation on April 28 and invited the interested parties to attend hearing on the issue. ‘Bangladesh Tariff Commission on behalf of the government and exporters will become parties in the hearing and fight against the allegation of dumping the product as the allegation is not true,’ a senior official of the commerce ministry told New Age on Monday. BTC and the exporters have already informed it to the NTC, he said.
Dumping occurs when a company exports a product to any country at prices lower than the normal value (the domestic price or the cost of production) of the product on its domestic market. According to the World Trade Organisation, the importing country can impose anti-dumping duty on import of the product if it finds proof upon investigation that dumping has occurred, such dumping has caused or is causing material injury to the domestic industry and there is a causal link between the dumping and the injury found. Anti-dumping duty cannot be imposed if the conditions are not met. Exporters and trade officials said that hydrogen peroxide is used in bleaching and sterilising process in textile and paper and pulp industry. It is also generally used in bleaching, oxidizing, detoxifying and deodorising purposes.
Bangladesh in July-April of the current fiscal year 2014-2015 exported the product worth around $6.5 million in different countries including Pakistan, India, Malaysia, Sri Lanka and Nepal. Pakistan is the second largest importer of the product from Bangladesh taking item worth more than $1.2 million. In July-April, India imported the product worth around $4.5 million from Bangladesh. Samuda Chamical Complex Ltd, ASM Chemical Industries and Tasnim Chemical Industries are the major exporters of the product from the country. ASM Chemical Industries managing director Rajibul Huq Chowdhury told New Age that they were jointly handling the issue and had already notified the NTC to become interested parties in the hearing. The NTC initiated the investigation following an allegation by a local manufacturer that the item was being exported to Pakistan at dumped prices from Bangladesh.
Commerce ministry officials said that All Pakistan Textile Processing Mills Association, however, requested the NTC not to impose any such duty without hearing its arguments for the betterment of industry and business of Pakistan. According to the proceedings of imposition of anti-dumping duty, the NTC will seek information, comments and documents from the interested parties including manufacturers, importers and exporters. And then, it will arrange hearing on the issue before taking decision on imposing anti-dumping duty on the product. The NTC will complete the investigation within 180 days from the date of initiation of the investigation.
SOURCE: The Global Textiles
America’s National Council of Textile Organisations (NCTO) has commended the US Senate for passing two important pieces of trade legislation H.R. 1295 and H.R. 644, addressing trade preference programmes and customs enforcement. As the Senate now moves to consider another trade package including Trade Promotion Authority (TPA) and Trade Adjustment Assistance (TAA), NCTO has urged the chamber to pass a clean TPA bill without harmful amendments that will damage US textile jobs, manufacturing, and exports. In a statement, the NCTO pointed out that the US textile industry is a large manufacturing employer in the country which employed 499,500 workers in 2014. US textile shipments totaled more than $56.7 billion in 2014 and the industry is the third largest exporter of textile products in the world. Exports of all textile products were nearly $18.3 billion 2014. Total textile and apparel exports were a record $24.4 billion in 2014, NCTO said.
The US textile industry invested $20.5 billion in new plants and equipment from 2001 to 2013. And recently producers have opened new fiber, yarn, and recycling facilities to convert textile waste to new textile uses and resins. The NCTO wants safeguards for the textile industry and pointed out that US textile mills increased productivity by 34 per cent between 2002 and 2012, making textiles one of the top industries among all industrial sectors in productivity boost.
SOURCE: Fibre2fashion
Trade between Pakistan and Sri Lanka has shown lacklustre growth despite the FTA, as Pakistan's exports to Lanka grew from $154 million in 2004 to $316 million in 2013, but Pakistan could only claim 1.7 per cent of total Sri Lankan imports from the world in 2013. Sri Lanka's exports to Pakistan grew from $46 million to $63 million between 2004 and 2013, and Sri Lanka claimed only 0.14 per cent of total Pakistani imports from the world in 2013. Both countries claim significant market shares in precious few exports to the other. Trade has continued in roughly the same mix of products that existed prior to the FTA and most tariff lines continue to report zero trade. This is in stark contrast to Sri Lanka's trade relations with countries such as India and China, wherein significant and fast-paced growth has occurred. This was stated in a report compiled by the Pakistan Business Council, which suggests that fledgling Pakistan-Sri Lanka trade relations cannot be blamed on a paucity of opportunities or lack of potential for trade. Both countries produce goods that have healthy markets in the partner country.
Pakistan and Sri Lanka signed a Free Trade Agreement in July 2002 and it became operational in June 2005. The terms of the FTA were comprehensive and granted 100pc immediate concession to major Pakistani exports such as cotton and cement and major Sri Lankan exports such as rubber and coconut products. By 2010 both countries were required to have removed tariffs on all items barring those listed in their respective no-concession lists or those facing Tariff Rate Quotas (TRQ). Top Pakistani exports to Sri Lanka include cotton products, cement, refined sugar and potatoes. Top Sri Lankan exports to Pakistan include vegetable products, rubber, fibreboard and coconut products.
The FTA is comprehensive and offers full concession on a variety of important exports. Sri Lanka is currently in a period of reconstruction following the conclusion of long-lasting political conflict and is growing its status as a prime tourist destination. Moreover, Pakistan and Sri Lanka have strong political ties and the goodwill between them is part of what led Pakistan to sign its first free trade agreement with Sri Lanka. According to study, the major impediment to healthier trade relations between Pakistan and Sri Lanka seems to be disengagement between the countries' businessmen as well as their policy makers. This could be due to misconceptions regarding Sri Lanka's potential as a market for Pakistani goods and the resulting lack of interest in trade with the country. This suggests that trade potential remains unrealised largely because neither country views the other as a priority market despite an abundance of opportunities. This is evinced by the lack of regular trade delegations and single country exhibitions, which leads to weak ties between the business communities of the two countries, thereby making it difficult to jump-start trade within neglected high potential items. While there are specific items which can be put forward to be considered for further concessions, by and large the FTA terms themselves are comprehensive and do not seem to be in need of any serious amendments.
Trade delegations and single country exhibitions must be held regularly in order to lay the groundwork for stronger ties between the two countries' business communities, as well as to raise awareness regarding the significant potential that lies in Pak-Sri Lanka trade. One of the major complaints voiced by Pakistani exporters to Sri Lanka is that a lack of interaction with their Sri Lankan counterparts impedes the identification of further opportunities for business in either country and prevents existing partnerships from being deepened. The granting of arrival visas by both sides would be a significant step towards facilitating the kind of interaction required to boost trade. Any changes in tariffs, para-tariffs or no-concession lists that conflict with the terms of the FTA must be discussed by both countries before being brought into effect. There are instances of unilateral changes made by both Pakistan and Sri Lanka that have undermined the spirit of the FTA and consequently seriously disrupted business dealings between the two countries within products such as broom corn and steel pipes. Problematic changes such as these will likely become less common as trade between Pakistan and Sri Lanka becomes more significant. Industrialists and exporters should have greater involvement in the drafting of future FTAs and the review of this existing FTA. A commonly voiced complaint was that an FTA can only be maximally advantageous if it takes into account the variegated and interwoven issues and concerns of different sectors affected by the FTA. In other words, an item-by item discussion involving stakeholder is thought to be necessary.
Forums must be set up for the efficient arbitration of trade disputes. Disputes arise with regularity and end up unaddressed due to the lack of efficient mechanisms for their resolution. This has acted as an additional disincentive to trade between Pakistan and Sri Lanka, as the danger of a delayed resolution or no resolution has resulted in more frequent cases of fraud. The decade following the signing of the Pakistan-Sri Lanka Free Trade Agreement has witnessed low growth in trade between the two countries. This is particularly troubling because in addition to having strong political ties and comprehensive FTA terms to capitalise on, both countries also seem to possess markets for the other's major export goods.
SOURCE: The Nation
