Textile Raw Material Price 2015-05-26
|
Item |
Price |
Unit |
Fluctuation |
|
PSF |
1273.896 |
USD/Ton |
-0.32% |
|
VSF |
2038.234 |
USD/Ton |
0.00% |
|
ASF |
2494.713 |
USD/Ton |
0.00% |
|
Polyester POY |
1249.398 |
USD/Ton |
-1.29% |
|
Nylon FDY |
3135.744 |
USD/Ton |
0.00% |
|
40D Spandex |
6483.804 |
USD/Ton |
0.00% |
|
Nylon DTY |
3380.724 |
USD/Ton |
0.00% |
|
Viscose Long Filament |
5953.014 |
USD/Ton |
0.00% |
|
Polyester DTY |
1535.208 |
USD/Ton |
-0.53% |
|
Nylon POY |
2939.76 |
USD/Ton |
0.00% |
|
Acrylic Top 3D |
2689.88 |
USD/Ton |
0.00% |
|
Polyester FDY |
1494.378 |
USD/Ton |
-0.54% |
|
30S Spun Rayon Yarn |
2727.444 |
USD/Ton |
0.00% |
|
32S Polyester Yarn |
2041.5 |
USD/Ton |
0.00% |
|
45S T/C Yarn |
2988.756 |
USD/Ton |
0.00% |
|
45S Polyester Yarn |
2204.82 |
USD/Ton |
0.00% |
|
T/C Yarn 65/35 32S |
2547.792 |
USD/Ton |
0.00% |
|
40S Rayon Yarn |
2890.764 |
USD/Ton |
0.00% |
|
T/R Yarn 65/35 32S |
2760.108 |
USD/Ton |
0.00% |
|
10S Denim Fabric |
1.14324 |
USD/Meter |
0.00% |
|
32S Twill Fabric |
0.999518 |
USD/Meter |
0.00% |
|
40S Combed Poplin |
1.355556 |
USD/Meter |
0.00% |
|
30S Rayon Fabric |
0.77577 |
USD/Meter |
0.00% |
|
45S T/C Fabric |
0.783936 |
USD/Meter |
0.00% |
SOURCE: The Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.16332USD dtd. 26/05/2015)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The achhe din for the textile sector has started to arrive, said textile minister Santosh Kumar Gangwar on Monday, as the Narendra Modi govenrment completes one year. The government has set target of $47.5 billion for textile and clothing exports for the current fiscal year, aiming for an almost 14% rise in outbound shipments from the actual level of 2014-15. The country’s overall textile and garment exports grew roughly 5% to $41.4 billion against the official target of $45 billion for 2014-15, said a textile ministry official. Earlier, quick estimates had showed that the exports during the April-February period went up by nearly 2% from a year before. With demand from China remaining tepid and the government withdrawing certain export incentives to the sector, the shipment target for the current fiscal would be hard to achieve, especially in view of stiff competition from countries like Vietnam, Bangladesh and Pakistan.
For its part, the textile ministry has sought a quick resolution of the India-EU free trade agreement, which would pave the way for duty-free access of Indian textile and garment items to the EU, which account for more than a third of the country’s garment exports, the senior ministry official said. Similarly, the ministry has asked for the continuation of the interest subvention scheme, which was withdrawn from late 2014, to boost exports. According to Industry executives, under the scheme, certain segments like the SMEs, handlooms, handicrafts and garments, were entitled to a 3% interest subvention on export credit. The industry wants certain incentives to capture markets in countries such as Bangladesh, Vietnam and Cambodia. Currently domestic textile exporters are given a 2% export incentive for outbound shipments only to the US, the EU, Canada and Japan — the markets where the appetite is far more for garments than for textiles
SOURCE: Yarns&Fibers
One of the focus areas of the Narendra Modi government, which completed one year on Tuesday, was to promote the ‘Make in India’ concept to boost domestic manufacturing. However, despite its key role as the second-largest employment generator and having immense potential for manufacturing, the textile sector has failed to make much progress on this front. Poor demand from overseas has hurt export prospects, while volatile raw material prices have made the matter worse, especially for the spinning segment. While most of the problems plaguing the sector —including the faulty tax structure in man-made fibres, inflexible labour laws and inconsistent raw material policy — existed in the past, the ministry hasn’t made much headway in correcting such legacy issues. Inordinate delay in processing subsidy claims under the TUFS, as has been the case over the past two years, and the commerce ministry’s withdrawal of certain incentives for textile and garment exporters under the foreign trade policy (2015-20) have just hit the industry harder.
MISSES
HITS
SOURCE: The Financial Express
While the poor performance of exports has been attributed to several factors — a stronger rupee, a weak global economy and also the sharp drop in the price of petroleum — it turns out that what’s really causing the problem are bottlenecks at home, reports fe Bureau in New Delhi. HSBC points out that stalled projects — delayed due to the promoter not being able to acquire land or the lack of fuel linkages — have contributed to half of the slowdown in India’s exports since 2008. Stalled investments, HSBC says, tend to impact exports with a one-year lag as export competitiveness is built over time. Infrastructure-related issues, such as rail, road and port connectivity not keeping pace with demand, have eroded competitiveness of Indian exporters as well, it observes. What’s worrying is that even in the current year Indian exporters might find the going tough as world growth is still sluggish and domestic bottlenecks linger. However, if better availability of coal mines kickstarts stalled private-sector power projects and industrialists get licences more easily and problems related to land acquisition are sorted out, there could be some revival in the shipment of Indian goods abroad with exporters gaining competitiveness. However, slowing growth in exports and muted domestic demand due to lower export-led capex could shave off 40 basis points (bps) from this year’s GDP growth. If world growth recovers and domestic issues are resolved, exports could recover from 2016 onwards, which in turn can add 70 bps to India’s GDP growth.
SOURCE: The Financial Express
Commerce Minister Nirmala Sitharaman will meet her EU counterpart Cecila Malmstrom next week to take stock of the proposed FTA at political level, European Union envoy Joao Cravinho has said while identifying cars and services among others as issues that need attention. The envoy also said taxation will not be a part of the negotiations for the free trade agreement (FTA), but expressed unhappiness at the goings-on, identifying taxation along with the bureaucracy as the biggest "obstacles" in doing business in the country. Once the political leaders give a broad direction for negotiations on FTA, it will be a matter "of a few months" for the pact to be signed, he said. "The way forward (on FTA) is the meeting between Commerce Minister Nirmala Sitharaman and EU trade commissioner Cecila Malmstrom. Next week they will meet, take stock at the political level and they will identify what is the path forward," Cravinho told PTI late last evening. He did not specify where the meeting will be held.
Cravinho said this is the first time in over two years that senior officials from the two sides are coming together and expressed the hope that the meeting "will be a very strong stimulus to restarting the negotiations". "Personally, I believe the FTA is a question of only a few months once the political instructions to finish the deal have come. We are very close to an agreement and that shouldn't take too long," he said, when asked about his expectations on the timeline. The pact has the potential to double the trade between the EU and India to 200 billion euros in two years, he said.
When asked about the issues which need to be sorted out, he pointed out to cars, car parts, services, wines and spirits, and public procurement which need attention. "All of this needs addressing. But at the same time, we are not very far from each other," Cravinho said. "If there is an uncertainty on taxation, companies will stay away. That's what many European companies have told me. They will like to invest, but they are worried about the taxation regime," he said. On the recent worries among investors on the minimum alternate tax (MAT), he called it as a "blip" which "shouldn't have happened". "Your government realises with MAT it's going to provoke a flight of foreign capital which nobody wants, so they will find appropriate means of addressing this," Cravinho said, stressing that the worry over long-drawn court process remains as some investors have approached the courts. He said European companies employ over 6 million people here and that number will only grow as India climbs up the ranking in the ease of doing business, which will attract more investments.
The EU can help the Indian companies in all the flagship programmes like the 'Clean Ganga' and 'Make in India' he said, adding the EU is also eager to support India in its programme for increasing renewable power capacity. "One thing I have understood about India is that this country can change if it wants to. There is a transformation of India that is happening, everybody says it can be transformed," Cravinho, who will end his assignment in the country in August, said. He said in the past one year, the optimism level has improved and many EU companies are willing to invest in the country. "However, there are certain issues which need to be fine tuned. The government is saying the right things and the vision is clear. Things do not change overnight, but we are waiting for a qualitative change. Once there is a qualitative change, quantitative change will automatically happen," Cravinho added.
SOURCE: The Economic Times
Wadia group’s textile firm Bombay Dyeing & Manufacturing Company Ltd (BDMC) has received approval from its board of directors at the meeting held on 25 May to sell/dispose off its textiles processing unit situated at Ranjangaon in Maharashtra, to Delhi based Oasis Procon, a textile manufacturer established in 2004 together with all specified tangible and intangible assets in relation the the undertaking (excluding its brand name and specific liabilities) for Rs 230 crore ($36.2 million), according to a stock market disclosure. The net proceeds from the sale of the undertaking will be utilized to repay the existing loans and reduce interest burden, or enhancement of working capital of the company or general business purpose. The sale is conditional upon the company’s shareholders’ approval and other customary closing conditions including technical, financial and legal due diligence.
As a term of the sale, the company has agreed not to directly and/or indirectly engage in the business of export of bed linen/bed linen fabric with any person in the territory of the United States of America for a period of five years from the closing date. This will not have any impact on the company’s existing retail business ‘Home & You’. Bombay Dyeing offers linens, towels, home furnishings, leisure clothing, kids wear, etc. Earlier, the flagship firm of Wadias, the group's interest is now diversified into several businesses, including airlines, food, chemicals, petrochemicals, plantations, light engineering and real estate. Bombay Dyeing & Manufacturing Company is currently trading at Rs. 71.55, up by 0.10 points or 0.14% from its previous closing of Rs. 71.45 on the BSE. The promoters holding in the company stood at 52.35% while Institutions and Non-Institutions held 16.74% and 29.56% respectively.
SOURCE: Yarns&Fibers
Textile and apparel major Raymond has rebranded its bed and bath range of home furnishing products, which was launched in 2013, as Raymond Home to exploit the opportunities in the rapidly growing segment. Raymond has already launched a print advertising campaign to promote the new brand. It now plans to open 28 exclusive brand outlets (EBOs) at select cities this year to expand reach, a senior company executive said. Pankaj Saxena, deputy general manager (sales), Raymond, said that with sales of Rs 70 crore in FY15, the company is targeting Rs 100 crore in FY16 and Rs 300 crore by FY18. Raymond expects about 20 per cent of its annual sales to come from the e-commerce platforms like Jabong and Flipkart, among others. He said Raymond Home will offer complete collection of bed sheets, pillow covers, comforters, blankets, bath robes, towels and exclusive wedding sets in a wide selection of colours and designs.
With sales of Rs 70 crore in FY15, Raymond Limited is targeting Rs 100 crore in FY16 and Rs 300 crore by FY18 once it completes expansion across the country. The company is targeting four different business modules for placement of home furnishing range. It wants to be present in the large format stores with shop-in-shop concept in major metros and B towns and opening of franchisee exclusive brand outlets and exclusive dealers all over the country. It also plans to reach out through its existing The Raymond Stores (TRS) in all Tier-II and Tier-III cities. Presently, its TRS network spans 800 outlets spread all over the country, Saxena said. The distribution network will service vast home furnishing retailers pan India. The company has put in place a dedicated sales team under Saxena, who is heading the division. Raymond is currently test marketing its range of products at two of its EBOs in Kolkata and will open two more outlets in Bengaluru and Hyderabad very soon, he said.
Apart from physical stores under various formats, Raymond is also testing waters through e-commerce platforms like Jabong, Flipkart among others. It expects about 20 per cent of its annual sales to come from the E-commerce route. However, the company does not have any plans to start its own online sales platform at the moment, Saxena said. Raymond Home also offers its customers the choice to mix and match to create a look that is unique or select from its range of theme inspired offerings, he added.
SOURCE: The Business Standard
Minister for Industries and Commerce, Chander Parkash inaugurated a Handloom Cluster Development Project. The project, which has been taken up under the comprehensive Handloom Development Scheme of National Handloom Development Programme, Ministry of Textiles, Government of India. Minster for Industries & Commerce said that this is first such project for J&K, sanctioned by the, Ministry of Textiles, Government of India to empower handloom weavers and build their capacity to enhance competitiveness of their products in the domestic and international market. The project will facilitate collectivization of handloom weavers and provide assistance for procurement, production, marketing and other support activities to promote sustainable growth and diversification.
Chander Parkash also distributed cheques of an amount of eight thousand each among ten beneficiaries for setting up looms to revive their traditional livelihood sources. The Minister said that the Government is committed to uplift the economic condition of the people related to handloom industry. He directed the concerned departments to organize more and more awareness camps in rural areas in order to aware the people about various welfare schemes so that they avail maximum benefits from these schemes. Minister of State for Finance and Information Technology, Pawan Kumar Gupta appreciating the efforts of Handloom development department for organizing such a programme at Chenani urged the people to come forward and avail maximum benefits from the centrally sponsored schemes and raise their economic standard. The project was inaugurated in presence of Minister of State for Finance and Information Technology, Pawan Kumar Gupta and MLA Chenani Dina Nath Bhagat at Panchayat Ghar, Chenani yesterday.
SOURCE: Yarns&Fibers
Chief Economic Advisor Arvind Subramanian has criticised the proposal to impose a one per cent levy over the Goods and Services Tax (GST) to help manufacturing states. The government should reconsider this levy as it could make intra-state movement of goods expensive and hurt the Make in India campaign, he told reporters here on Tuesday. "Think of a good going from Gujarat to Tamil Nadu, crossing four states. The good would embody an additional tax of about four-five per cent, because it is one per cent in every state. That might make it easier to import into Tamil Nadu from Bangkok," Subramanian said.
The chief economic advisor (CEA) also said the time was right for the Reserve Bank of India (RBI) to cut the policy rate as inflation had moderated and the fiscal deficit was contained. To address manufacturing states' concerns, the Constitution amendment Bill on GST had provided for an additional one per cent tax for two years. The tax was proposed to bring on board manufacturing states, as these were against the destination-based GST. The Bill has been referred to a Rajya Sabha select committee, which is expected to submit its report at the beginning of the next session of Parliament. The Lok Sabha had cleared the Bill. "It (the one per cent additional tax) has the potential to undermine Make in India. That is why we need to look at this provision carefully. This period that we have gained, some of these issues need to be looked at again," Subramanian said. The government plans to roll out GST from April 2016. On repo rate, he said: "Looking at the analysis of what is the inflation forecast, what is the fiscal consolidation, what is the international environment ... and how the monetary policy should respond, I think there is scope for monetary easing." RBI is scheduled to announce its second bi- monthly policy on June 2. Subramanian said: "Inflation...is going to be lower than the RBI's target. Fiscal policy is supportive and that (will have) implications for interest rates."
Since January, RBI has cut the key policy rate or repo rate twice, by 0.50 per cent, to 7.5 per cent as inflationary pressures eased. Adequate food stocks would help contain inflation, even if the monsoon turns out to be weak, Subramanian said. The meteorological department had said monsoon would be slightly below normal. But private weather forecaster Skymet had said it would be close to excess. Subramanian said India should take action to keep its currency competitive, in view of the aggressive rate cut policy of China and other countries. "It is not that everything that China does should be imitated but that's a lesson we need to learn...." Moreover, he added, most countries are trying to keep their currencies competitive and cheap. "The question is how we should respond. We should take defensive action. At the very least, we should not allow our currency to become more uncompetitive. We should keep it (Rupee) competitive if we want Make in India to be a long-term success. We have to have a very supportive currency policy."
SOURCE: The Business Standard
The rupee fell the most in more than two weeks on speculation that importers are stepping up purchases of the greenback to pay month-end bills. It slumped to the 64-level against the US currency before ending at 63.98, falling by another 41 paise on persistent dollar demand from banks and importers. The rupee resumed lower at 63.60 to a dollar against Monday's closing level of 63.57 at the interbank foreign exchange market and dropped further to 64.0050 before ending at 63.98, showing a loss of 41 paise or 0.64 per cent. It was traded at 64.04 a dollar during intra-day trade on May 14. It had ended lower by 0.05 paise or 0.08 per cent on Monday. The domestic currency moved in a range of 63.60-64.050 per dollar during the day. "The rupee's weakness is partly due to dollar demand from importers to make month-end payments," said Ankur Jhaveri, co-head of currency and rates at Edelweiss Financial Services Ltd in Mumbai. Expectations the US is moving closer to raising interest rates are also weighing on the rupee, he said. Increasing borrowing costs in 2015 will be "appropriate," provided the economy meets forecasts, Federal Reserve Chair Janet Yellen said in a May 22 speech in Providence, Rhode Island. The Bloomberg Dollar Spot Index rose 0.5 per cent at 5:27 pm in Mumbai, with the currency reaching its strongest level in more than seven years against the yen.
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$ 62.26 per barrel (bbl) on 26.05.2015. This was lower than the price of US$ 63.68 per bbl on previous publishing day of 22.05.2015.
In rupee terms, the price of Indian Basket decreased to Rs 3975.30 per bbl on 26.05.2015 as compared to Rs 4051.32 per bbl on 25.05.2015. Rupee closed weaker at Rs 63.85 per US$ on 26.05.2015 as against Rs 63.62 per US$ on 25.05.2015. The table below gives details in this regard:
|
Particulars |
Unit |
Price on May 26, 2015(Previous trading day i.e. 25.05.2015) |
Pricing Fortnight for 16.05.2015 (April 29 to May 13, 2015) |
|
Crude Oil (Indian Basket) |
($/bbl) |
62.26 (63.68) |
64.51 |
|
(Rs/bbl |
3975.30 (4051.32) |
4115.09 |
|
|
Exchange Rate |
(Rs/$) |
63.85 (63.62) |
63.79 |
SOURCE: PIB
Amid flagship programmes and announcements by the government over the past year, most small businesses feel left out and are yet to see an improvement in the ease of doing business. Though optimistic that sentiment will improve over the next 18 months, many small business owners feel the "Make in India" programme did not highlight the contribution of small and medium enterprises (SMEs) in building the country's manufacturing prowess. While efforts to improve the business environment did strike a chord, changes on the ground was still some time away, say many SME owners. The proposal to roll out the goods and services tax in 2016 is making many SMEs apprehensive. Many feel the impact of the tax will be mixed, an opportunity for many, and a threat for some. "Many concerns of the sector are lost in the cacophony of big-ticket announcements by the government," says Anil Bhardwaj, secretary general of the Federation of Indian Micro and Small & Medium Enterprises (FISME).
One reason, feel many, is the ministry of micro, small and medium enterprises does not find adequate weight in the government's scheme of things. "The ministry needs to be empowered, its efforts to bring in change are often stuck in other ministries," says an SME owner who closely interacts with the ministry as part of an industry body. The last four years have been rough for the 60-year-old Meerut-based sports goods manufacturing company BDM. Sales are down 40 per cent with margins under pressure and competition eating away market share. Managing three rates of tax does not help matters. The company pays excise duty of 12 per cent on certain items, two per cent on others, and zero tax on a third category of goods. "It means three invoices if all types of items are part of one order. It also means added training for employees. For a medium-sized company, it is a big task," says Rakesh Mahajan, director, BDM. There has been very little improvement in the ease of doing business, say most entrepreneurs. Most feel much depends on action by state governments.
Rohit Kanthale, managing director of Varanasi-based Fibroin Weave, which clocked a turnover of Rs 5.5 crore last year selling saris and kurtis under the Bunkar and Plush brands, says he has expansion plans on hold. "I know of many schemes launched by government. But I cannot take benefit of any one. Either the eligibility criteria are hard to meet or the schemes have little for companies like ours," he says. He needs raw material, skilled manpower and credible sources to raise capital. "I have not seen any improvement on these fronts in the last one year," says Kanthale.
Small businesses appreciate transparency in clearances, but rising input cost is a big concern. "This is a hindrance when competing in the global market," says Gaurav Munjal, managing director of Ludhiana-based Hero Eco, which makes eco-friendly electric vehicles and bicycles. Most SME owners that Business Standard spoke to are optimistic of improved sentiment. "We see light at end of the tunnel," says Annapoorni Muralidharan, executive director of Trichy-based GK Sons Engineering Enterprises, which makes components for thermal power plants. However, she expects it will not be till 2017 that her revenue will reach the 2013 level. "Year 2016-17 will be a year to watch out for," she adds. "We will have to improve standards of our products and services in line with international benchmarks," says Praveen Toshniwal, chairman of Indore-based Nivo Controls, a process-control company. Any improvement in standards will help SMEs to stand up to the inflow of goods into the country, while improving their export potential, he adds. Industry players, however, note any push to improve standards will have to occur in a phased manner over the next two-three years with help from the government. While the GST is expected to help ease many tax issues faced by small businesses, its dual structure - with states and the Centre imposing a tax - raises too many concerns. "SME units that are part of a supply chain will benefit more," says Bhardwaj. Tax experts say this is also expected to curb cash dealings rampant among SMEs. "SMEs are a crucial cog in the manufacturing story. It is time for the government to look inwards to re-energise this sector," says Bhardwaj.
SOURCE: The Business Standard
India is set to sign agreements with Japan to resolve as many as 15 transfer pricing disputes. These agreements follow the one recently signed with the US. The agreements will be for cases that fall in the ambit of the mutual agreement procedure (MAP). Indian tax officials will travel to Japan next month to sign the MAPs. However, the agreement with Japan might not be similar to that signed with the US, which was based on a framework that would help resolve a number of cases pending with Indian tax authorities. The MAPs with Japan would be different, as a 'one-size-fits-all' approach isn't possible for industrial relations between India and Japan. The tax disputes involve Japanese companies in the automobile and auto ancillary sectors, as well as large trading houses. There are about 30 transfer pricing disputes between India and Japan; these pertain to determining royalty, tax dues, profitability of trading houses, and the commission paid.
According to estimates, the MAPs would bring relief of Rs 10,000 crore to Japanese industries. MAPs prevent tax disputes that aren't covered in tax treaties through action by one or both contracting states in specific cases. The major concern for multinational companies and the nations they are headquartered in is the markup and tax dues on costs for services provided. "We are planning to sign multiple MAPs with Japan to help companies to determine the markup. It will be based on activities to make it easier for companies and tax authorities to work through cases," said an official. In the first tranche, the two governments hope to resolve cases in various stages of litigation and assessment.
According to sources privy to the matter, after MAPs with Japan, the Central Board of Direct Taxes (CBDT) plans to sign such agreements with European nations such as the UK and France, too. "Trade and industrial relations between India and Japan are continuously improving. After the introduction of the new rollback rules, new MAPs and bilateral advance pricing agreements could be signed. These agreements will further aid in improving business relations," said S P Singh, senior director, Deloitte Haskins & Sells. Some feel besides signing MAPs and advance pricing agreements (APAs), the government should form a policy that prevents tax controversies from arising. Many multinational corporations sign APAs to avoid litigation while doing business in India. In 2012, 146 applications were filed, followed by 232 the next year.
Recently, India signed a bilateral APA with Mitsui, for five years. Such agreements involve the governments on the two sides, as well as the company concerned. The governments of the two countries could also finalise a second bilateral APA in June, as some changes have to be made in the wake of new rules for the APA rollback notified by the CBDT. The tax department will also issue a note clarifying the guidelines on the rollback and transaction years. Additionally, it is collecting feedback on recent APAs. "First, we might allow rollback on the nine APAs signed recently. After that, the APA and rollback will happen at the same time," said a source.
SOURCE: The Business Standard
The government has planned to impose higher tax on export of apparel items for collecting more revenue from the sector, officials of the finance ministry said. They said that tax at source on export of RMG products might be increased to 1.5 per cent, five times higher, from the existing 0.30 per cent in the upcoming national budget for the fiscal year 2015-16. Tax at source at 0.30 per cent is set to expire next month as the government lowered the tax rate in April 2014 for 14 months from the 0.80 per cent. The government may incur an estimated loss of around Tk 2,000 crore in the period because of reduction of tax at source on export for the sector, according to the estimate of the revenue board. Special tax rate calculation facility which was scraped in last fiscal year for showing increased income from export earnings by the apparel exporters may also not be reinstated, they said.
RMG item exporters could show several times income from export earnings than actual ones taking the advantage of the special tax calculation facility under which, from 2005 to June, 2014, taxmen calculated tax at an estimated 10 per cent at the annual tax assessment though exporters paid tax at the rate of 0.80 per cent. Now, the tax will be calculated at the regular 35 per cent as the revenue board in last fiscal year scrapped the facility. Officials said that the National Board of Revenue had already finalised budget proposals including such measures for the sector in line with the instructions of the government high-ups. Top executives of the government think that the apparel exporters now should pay tax at higher rate after enjoying huge tax benefits over the last few decades, they said.
RMG exporters enjoy various fiscal incentives that include payment of income tax at reduced rate, cash incentives at 0.25 per cent on freight on board value of export items, duty-free import of raw materials, duty drawback facility and full waiver on utility bills. RMG exporting companies need not pay any other tax on their export earnings, except tax at source paid on export proceeds, as it is considered as final settlement though other sectors have to pay income tax at regular rate of 35 per cent for companies. At the pre-budget discussion with the revenue board in April, Bangladesh Garment Manufacturers and Exporters Association and Bangladesh Knitwear Manufacturers and Exporters Association, however, demanded for continuation of the special tax rate calculation facility and 0.30 per cent export tax for next five years. But the government decided to realise more tax from the sector as the sector has become more resilient and profitable sector, an official of the revenue board said. A large amount of revenue will come as tax at source on export receipts if the rate is increased, he said. Officials said that the NBR primarily made a proposal to increase the tax to 0.80 per cent to one per cent but the government high-ups instructed to set the rate at 1.5 per cent.
SOURCE: The Global Textiles
Pakistan Textile Exporters Association (PTEA) has called for zero-rating sales tax facility on export oriented textile chain, as huge amounts stuck up in refund regime has squeezed the financial streams and are breading the cash flow jerks for textile exports. Talking to newsmen, Chairman PTEA Sohail Pasha termed liquidity crunch as a stumbling block in export promotion. Textile industry is facing unprecedented crisis since many years and consequently, sizeable textile capacity had been severely impaired. Textile exports in quantity and value terms could not get the momentum and remained below the targets. Although GSP Plus window has increased the flow of orders to textile sector but lack of necessary funds and energy shortage has adversely hit the outcomes of this duty waiver relief, they argued. They termed withdrawal of zero rating and imposition of sales tax a detrimental to the business activities as around 80 percent of textile produce is exported in one or the other form, with only 20 percent left for local consumption. Therefore, zero rating of the entire value chain for the export is imperative to remain competitive in the international market. Textile Industry was made zero rated on the pattern of "no tax-no refund" in order to get rid of numerous complaints and irregularities. Exporters have been dragged into the vicious circle of payment of sales tax and claiming refunds by incorporating changes in SRO 1125(I)/2011. Initially, five export sectors were declared zero-rated but subsequently the facility of zero-rating has been gradually withdrawn. SRO 1125(I)/2011 should be restored to its original status to declare textile export sector as zero rated, they emphasised.
SOURCE: The Business Recorder
Turbulence in Africa and the Middle East coupled with further strengthening of sterling is putting ‘downward pressure’ on UK export prices for used clothing, the Bureau of International Recycling has been told. Addressing BIR’s textiles division at the annual convention in Dubai, Alan Wheeler, director of the UK’s Textile Recycling Association (TRA), told delegates that the value of UK used clothing and textiles has continued to decline, with the value of the British Pound now at a seven-year high against the Euro. And, textile recyclers have told letsrecycle.com that runaway inflation in Ghana, and restrictions placed on trading routes in Pakistan by the rise of Islamic terrorism in the region, all continue to impact selling prices.
In his report, Mr Wheeler commented that the value of the Pound has risen 11-12% since December 2014, pushing up the price of UK textile exports relative to clothing exporters based in the Eurozone. And, he said that during that six month period, the value of charity shop grade clothing and clothing collected through textile banks has dropped by about £20 per tonne. Collectors are now paying some councils and charities in the order of £250 per tonne and between £300 and £350 per tonne respectively. In the Dubai report, Mr Wheeler also noted: “Whilst there has always been a need to dispose of some of the items collected (typically up to 5%), the costs associated with disposing these items has and will continue to rise. I think everyone accepts that on the whole the cost of waste disposal should reflect the cost to society. “However, there is a logical case to be made to give some dispensation to those re-use and recycling businesses whose core activities actually reduce the amount of waste being disposed of, particularly in these difficult times.”
The situation has been exasperated by continued uncertainty in countries that import textiles and used clothing from the UK. The rise of Islamic State in the Middle East has caused trading difficulties according to one TRA member, including Pakistan – a traditional market for low grade clothing and an entry point for the region. Mr Wheeler also highlights that clothing destined for Pakistan is “suffering”, with flocking, mixed synthetic hosiery and wipers being sold at prices that are “far from satisfactory”. In Africa, Ghana’s economy has also been badly affected by an alarming decline in currency value coupled with an ongoing energy crisis that has shut down electricity supply to businesses. The TRA member told letsrecycle.com: “As one of the world’s fastest growing economies, Ghana imported thousands of tons of UK second hand clothing a week. It is impossible to say where the future lies.”
Summit
Textile recyclers are also concerned by the decisions made at the East African Communities Head of State Summit in Kenya in February, in which ministers agreed to ‘study the modalities’ for the promotion of domestic textile production and stopping the importation of ‘used clothes, shoes and other leather products’. Mr Wheeler added: “I would also like to take this opportunity to call upon members of the textiles division to collectively work together on challenging poor research and bad publicity which is contributing to unjustified decisions by politicians, particularly in countries which import used clothing.”
SOURCE: Letsrecycle
Prime Minister Nguyen Tan Dung is scheduled to leave for Kazakhstan on Thursday to attend the signing ceremony for the Vietnam – EEU Free Trade Agreement, according to Dau Tu (Investment) newspaper. One such trade pact is the FTA between Vietnam and the Eurasian Economic Union, which is slated for signing by the end of this month. The EEU consists of Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, and Russia. Vietnamese enterprises still face some hurdles in terms of procedures when exporting their products to Russia, but these obstacles will be cleared once Vietnam signs free trade agreements of which Russia is a member, according to the state president.
State President Truong Tan Sang said during a meet in Ho Chi Minh City on Sunday that Vietnamese businesses should all contribute to boosting trade ties with Russia so that the bilateral trade value in 2020 can be double the target set by the two governments. He added that Vietnam and Russia have targeted a bilateral trade value of US$10 billion in 2020, but enterprises should do even more to send the number to $20 billion. Local businesses should try to grab every chance to invest in the Russian market, the president said. The government has exerted efforts to facilitate penetration into the Russian market for Vietnamese businesses.
Last year Vietnam and Russia posted $2.6 billion in bilateral trade revenue. Russia, meanwhile, is the third largest country for Vietnam’s outbound investment. In 2008 Vietnamese businesses only invested $100 million in Russia, but the figure is expected to rise to $2.5 billion this year with 19 projects, according to the Vietnam News Agency, which cited the Bank for Investment and Development of Vietnam. President Sang urged that after the trade pact is signed, Vietnamese businesses should try to raise the value of Vietnam’s exports to Russia to $20 billion in 2020.
According to the Ministry of Industry and Trade, Vietnam is also expected to sign a trade pact with the Eurasian Customs Union, which Russia is also a member of, next month. The ministry said that the FTA between Vietnam and the Customs Union of Belarus, Kazakhstan, and Russia will be closed following eight negotiation rounds. The trade pact will help boost the export of Vietnamese agricultural produce, seafood, textile and garments, and footwear to the three markets, according to the ministry.It will also create more conditions to boost bilateral ties between Vietnam and the Eurasian Customs Union.
SOURCE: Yarns&Fibers
Business leaders of Pakistan and Belarus after meetings at the Pak-Belarus business forum organized by the Board of Investment have signed 12 contracts worth $42 million on Monday. The Belarus delegation was led by Minister for Industries Vitaly Vovk, representatives of 36 companies from Belarus working in the fields of farm machinery, agricultural inputs, engineering, oil refining, medicine, chemicals, light industry, minerals and gems and jewellery took part in the forum. More than 60 representatives from Pakistan led by BoI chairman Miftah Ismail interacted with Belarusian businessmen. Pakistan is one of the key markets for Belarusian tractors outside the Common¬wealth of Independent States, with annual supplies of around 4,000 units. Besides, major exports to Pakistan include potash fertilisers and synthetic fibre, while Belarus imports textiles, leather, rice, fruits and leather products.
Mr Ismail said that the agreements would help enhance bilateral trade which is hovering at $30m per annum. The volume of bilateral investment was also negligible and it did not reflect the potential existed between the two countries. He emphasized the need for cooperation between the two countries in the field of banking. The Chairman of the Belarusian Chamber of Commerce and Industry, Mikhail Myatlikov said that the Belarusian companies were eager to introduce their products in Pakistan. Talks with the business community will be held at a local chamber of commerce and industry on Tuesday.
Speaking at the business forum, the chairman of Amkodor Holding Company, Alexander Shakutin, said that his company was prepared to open its special-purpose vehicles plant in Pakistan. The Chairman of Bellegprom Concern, Niko¬lai Yefimchik said that Belarus was Pakistan’s large market in light industry. Pakistani business concerns had shown interest in fabrics, particularly poly-viscose manufactured in Belarus. He also expressed keen interest to set up a joint enterprise to manufacture goods from Belarusian flax and Pakistani cotton. The Belarusian business delegation expressed interest in cooperating in the leather industry as Pakistan produces high-quality leather used in footwear and furniture.
SOURCE: Yarns&Fibers
China’s currency is no longer undervalued given recent appreciation, but the government should pick up the pace in loosening controls on the exchange rate, a senior International Monetary Fund official said Tuesday. Speaking at the conclusion of an annual review of the Chinese economy, IMF First Deputy Managing Director David Lipton said along with the exchange rate, China should further address economic imbalances, promoting consumption and reducing reliance on investment-fueled growth. Reforming the exchange rate is part of that process, Mr. Lipton said, urging Beijing to make rapid progress toward a more flexible exchange rate, moving beyond the narrow trading band currently used against the U.S. dollar.
Mr. Lipton said the currency, the yuan, had appreciated against most other currencies in recent months, helping China to reduce its “very large” current- account surplus and slow its accumulation of foreign reserves. Those were all signs that the yuan is no longer undervalued, he said. The Wall Street Journal reported earlier this month that the IMF was on the verge of making such a declaration after years of criticism of Beijing’s management of the currency. The U.S. has also complained for years that Beijing has kept the yuan undervalued, giving China’s exporters an unfair price advantage. Mr. Lipton said the aim should be a floating exchange rate within two to three years, and that such a move would help the government manage the economy and weather expected continued upward pressure on the yuan as productivity improves. “We urge the authorities to make rapid progress toward greater exchange-rate flexibility, a key requirement for a large economy like China’s that strives for market-based pricing and is integrating rapidly in global financial markets,” he said.
The IMF review comes as the Chinese economy is decelerating—some analysts say more rapidly than projected—and as the government tries to balance between moves to boost short-term growth and longer-term structural reforms. Among those are piecemeal efforts to promote wider global use of the currency, with an aim to get the yuan included in the IMF’s basket of reserve assets, known as Special Drawing Rights. The IMF welcomes China’s bid to have the yuan included in the SDR basket, Mr. Lipton said. The IMF is expected to make an evaluation of the composition of the SDR this year. While all of the SDR currencies are freely convertible, the yuan isn't. The IMF’s criteria are less definite, requiring that a currency be “freely usable.” Given that, the U.S. and other major IMF shareholders have significant discretion on whether or not to include the yuan this year, some economists said. “It’s not straightforward from the technical aspect, it’s more political now,” said Standard Chartered economist Shuang Ding. “A lot depends on Washington.”
Mr. Lipton said that China should step up fiscal spending if economic growth slips below 6.5%, although the IMF still projects growth of 6.8% this year. The government target is for 7% annual growth—the pace the economy hit in the first quarter, its slowest year-over-year rate in six years. China has moved too slowly on its program to reform state companies, Mr. Lipton said, adding that Beijing needs to level the playing field between the public and private sectors. China also needs to address mounting debt levels, Mr. Lipton said, and moves to stimulate the economy should be done in ways that support reform.
In recent months, as the economy has slowed, Beijing has cut interest rates and encouraged banks to lend more by reducing the amount of reserves they are required to hold with the central bank. It has also signaled to local governments that they can ease up on efforts to pare debts. Those moves, some economists said, show that Beijing is tilting in favor of growth at the expense of structural reforms such as the deleveraging of high levels of debt. The IMF’s call on Beijing to push ahead on reforms despite slowing economic growth is likely to be at least partially disregarded by Chinese leaders, some economists said. “Beijing of course won’t listen. They’re bound by their 7% annual growth target, a political goal, which is much more important than the opinion of the IMF,” said Crédit Agricole CIB economist Dariusz Kowalczyk. He said that the growth target and generating employment remain paramount.
SOURCE: The WSJ
