NATIONAL

• Interest subsidy scheme for exporters in a month: Rajeev Kher
• Steps to arrest decline in exports should be taken: FIEO
• More focus, policy changes can double garment export: Texpreneurs Forum
• CEA-led committee to suggest GST rates, report likely in two months
• Global crude oil price of Indian Basket was US$ 61.71 per bbl on 17.06.2015

INTERNATIONAL

• Pakistan negotiating FTAs with Turkey, Korea and Thailand to boost exporting sectors
• Australia, China sign landmark Free Trade Agreement
• Export slowdown could weigh on Japan's Q2 GDP growth
• Pakistan govt working out plans to make exports truly zero rated

Textile Raw Material Price 2015-06-17

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.16296 USD dtd. 14/06/2015)

The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

Interest subsidy scheme for exporters in a month: Rajeev Kher

Worried over continuous decline in exports, the government is expected to extend the interest subsidy scheme for exporters by the end of this month. Commerce Secretary Rajeev Kher said that in the Budget there is an arrangement for interest subvention scheme, under which exporters get loans at affordable rates. "We only have to decide about the sectors (which would get the benefit of this scheme) and the rate," Kher told reporters here. He said the ministry has completed the process and soon, under an institutional mechanism of the Department of Revenue, they will take the decision on the issue. "I think next week, we will be able to take that decision and after that we will seek approval of the cabinet committee. So, I think the whole process will be completed in a months time," he added. Loans at subsidised rates would help exporters to boost shipments as the country's exports were in the negative zone during the last six months. Besides global slowdown, dip in oil prices and high interest rates are impacting exporters. The interest subvention scheme of 3 per cent ended on March 31, last year. Exports body FIEO is demanding to extend it retrospectively from April 2014. Continuing its declining trend, India's exports shrank by about 20.19 per cent in May to USD 22.34 billion, marking a fall for the sixth straight month. Kher said that the main reason for decline in exports is significant dip in oil prices. "Due to this, imports have come down and in our export basket, petroleum products have significant contribution," he said adding "slowdown in global economy is also one of the reasons". Further, he said that the Commerce Ministry is in the process of preparing an export strategy to boost agriculture exports. "There is a need to boost exports of processed products and value added goods in agri sector. We are trying to get more markets for our agri exports. There is a huge potential there. The whole aim is to get into the second line of agri exports that is processed goods, branding and packaging," he added.

SOURCE: The Economic Times

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Steps to arrest decline in exports should be taken: FIEO

While expressing concern on sharp decline in India's export for May 2015, FIEO Southern Region Chairman, A Shaktivel said that continuous decline in export need to be arrested at any cost. In a statement, Shaktivel urged the Centre to take pro-active step and address the concerns of the Industry especially the issue of reintroduction of Interest Subvention Scheme and fine tuning of SFIS (serviced from India Scheme) benefits. He also demanded that availability of fund under Market Development Assistance and MAI should be increased immediately to help MSME exporters to do vigorous marketing in potential and emerging markets, as more than 45 per cent of India's exports are from this segment. Even though data on sectors which have shown negative trend in export was not available now, Shaktivel urged the Government to provide special focus for export growth of Textiles and Ready made Garments, Leather, Auto components, Pharmaceuticals and Chemicals so that the negative trend can be reversed in the coming months.

SOURCE: The Economic Times

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More focus, policy changes can double garment export: Texpreneurs Forum

India can easily double its garment export volume immediately and in the long run, with more focus and fundamental policy changes, according to Texpreneurs Forum, a city-based textile industry body.  In large-volume export segment, garments are the second best-performing sector after pharma, averaging 10 per cent growth over the last few months, Texpreneurs Forum Secretary Prabhu Dhamodaran told PTI.  Referring to export data on garment released recently, he said the industry "should not be content" with the current growth rate since China's export volume in textile clothing stood at around Rs 1,70,000 crore.  But because of rising wages and strict control on pollution, China may lose some ground in coming years, he predicted.  So, the two top most priorities for the industry are rationalisation of duty structure in Man Made Fibre (MMF) and specific support for performing export clusters in terms of infrastructure, Prabhu said.  With rationalisation of duty structure in MMF, India can avoid rising imports of yarn and fabrics in MMF from various countries, which will help generate domestic employment, he added.

SOURCE: The Economic Times

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CEA-led committee to suggest GST rates, report likely in two months

A committee headed by the Chief Economic Adviser (CEA) will recommend the possible rates of Goods & Services Tax (GST), slated to be introduced from April 1 next year. A Finance Ministry statement has announced the setting up of two committees to facilitate implementation of the new indirect tax regime. The other will be a Steering Committee under the co-chairmanship of the Additional Secretary in the Revenue Department and Member Secretary, Empowered Committee of State Finance Ministers.  This move comes at a time when the government hopes to get the Constitution Amendment Bill (for introduction of GST) passed by Parliament in the Monsoon Session, expected to commence from the third week of July. The CEA-led committee will “recommend possible tax rates under GST that would be consistent with the present level of revenue collection of the Centre and States. While making recommendations, this Committee would take into account expected levels of growth of economy, different levels of compliance and broadening of tax base under GST.  The Committee would also analyse the sector-wise and State-wise impact of GST on the economy”, the statement   said. The committee is expected to submit its report in two months.

For consultations

The Steering Committee will monitor the progress of information technology preparedness, finalisation of reports of all the sub-committees on different aspects relating to the mechanics of GST and drafting of tax legislations and rules. It will also keep an eye on the progress on consultations with various stakeholders, such as trade and industry and training of officers. The statement also said that progress is underway to finalise various aspects of GST design, such as business processes, payment systems, matters relating to dual control, threshold, exemptions, place of supply rules, among others. This task is being undertaken through various sub-committees formed by the Empowered Committee. It said the Goods and Services Tax Network is taking steps for preparing the IT infrastructure for the rollout, which shall enable online registration, filing of returns and getting refunds.  Various State governments are also preparing the necessary back-end IT infrastructure for GST implementation of GST. Periodic reviews are being held in the Department of Revenue to monitor the progress of all these activities, it added.

SOURCE: The Hindu Business Line

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Global crude oil price of Indian Basket was US$ 61.71 per bbl on 17.06.2015 

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$ 61.71 per barrel (bbl) on 17.06.2015. This was higher than the price of US$ 61.53 per bbl on previous publishing day of 16.06.2015.

In rupee terms, the price of Indian Basket increased to Rs 3956.23 per bbl on 17.06.2015 as compared to Rs 3947.15 per bbl on 16.06.2015. Rupee closed stronger at Rs 64.11 per US$ on 17.06.2015 as against Rs 64.15 per US$ on 16.06.2015. The table below gives details in this regard:

SOURCE: PIB

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Pakistan negotiating FTAs with Turkey, Korea and Thailand to boost exporting sectors

Federal Commerce Minister Khurram Dastgir Khan said on Monday after holding a meeting with Pakistan Carpet Manufactures and Exporters Association (PCMEA) and All Pakistan Textile Mills Association that Pakistan is negotiating free trade agreements (FTAs) with Thailand, Turkey, and Korea to boost exporting sectors including textile. The commerce minister said that Pakistan is negotiating with governments of these three countries regarding signing of free trade agreements in search of new markets to boost exports. The export-oriented sector is the bread winner for the country and the government is trying its best to facilitate it. He said that export diversification was widely recognised as a positive trade policy objective in sustaining the economic growth. The minister said that the government wants to make Pakistan major exporting country and to double the textile export from $13 billion to $26 billion. There should be zero rated tax on textile and other exporting sectors while there should not be any sort of provincial taxes on these sectors. He said that the Ministry realizes the need to expand export markets and enhance its share in regional trade. Pakistan has signed free trade agreements with China, Sri-Lanka and Malaysia. There are also ongoing Free Trade Agreement discussions with Thailand, Turkey and Korea. The minister further said that in order to improve transparency, enhance competitiveness and remove anti export bias, the Ministry of Commerce and Federal Board of Revenue (FBR) have undertaken a tariff rationalisation exercise. This is for a coherent and clean tariff structure that would ease doing of business in Pakistan. Pakistan is also cognizant of the immense potential of the export from the services sector. In this context, Ministry of Commerce has established Trade in Services Council with representatives from public and private sector.

APTMA chairman SM Tanveer said that billions of rupees of textile exporters were blocked in sales tax and customs rebate and other schemes introduced in the textile policy for 2009-14. He added the zero-rating sales tax facility was intended to save them from the hassle of claiming refunds. Pakistan’s textile exports could soar to $25 billion if the government took the stakeholders on board and framed policies in consultation. Key issues discussed during the meeting were the 50 per cent import duty imposed by Turkey on Pak carpets. PCME SVC Qamar Zia said that the Pakistani carpet manufacturers should have access to new markets like Russia, South Korea and countries of South America other than the existing markets. He appreciated the efforts of Punjab CM Shehbaz Sharif and PBIT for supporting the industry. The minister fully supported the issues raised by the PCMEA delegation and said that he would take the matter forward. He also informed the participants of the meeting that first draft of the Free Trade Agreement has already been sent to Turkish side. The delegation emphasised the need to improve the investment climate and access to finance, with support for creating small and medium enterprises (SMEs), bringing innovation in the production methods, and training the workforce for a forward-looking industry. The meeting was also attended by its chairman SM Tanveer and Gohar Ejaz while PCMEA meeting was attended by central chairman Usman Ghani, SVC Qamar Zia, Latif Malik and Shahid Hassan Sheikh.

SOURCE: Yarns&Fibers

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Australia, China sign landmark Free Trade Agreement

Australia has signed a landmark Free Trade Agreement with China, its largest trading partner, with total trade worth almost $160 billion in 2013-14, and a growing source of investment, the Australian government said in a statement. The China-Australia Free Trade Agreement (ChAFTA) will lock in existing trade and provide the catalyst for future growth across a range of areas including goods, services and investment. The agreement secures better market access for Australia to the world’s second largest economy, improves our competitive position in a rapidly growing market, promotes increased two-way investment and reduces import costs. It is a win for households and businesses alike. On day one of the ChAFTA, more than 85 per cent of Australian goods exports will be tariff free, rising to 95 per cent on full implementation. One of the highlights of the FTA is that China shall operate the Country Specific Tariff Quota (CSTQ) in a transparent manner and, on request of Australia, provide information on the quantity of the CSTQ issued. Unless otherwise agreed, the rules applying to the administration of the CSTQ for the products of Australian origin will be consistent with the Detailed Rules for Implementation of Administration on Import Tariff Quotas of Wool and Wool Tops in 2015 or any successor rules in force in any given calendar year.

The FTA was signed by Australian trade and investment minister Andrew Robb and his counterpart, Chinese commerce minister Gao Hucheng. “This agreement will give our nations unprecedented access to each other's markets. It removes barriers to Australian agricultural exports across a range of products, including beef, dairy, lamb, wine, horticulture and seafood. It means duty free entry for 99.9 per cent of our resources, energy and manufacturing exports within four years,” Australian prime minister Tony Abbott said after the signing ceremony. But Australian trade unions do not quite share the prime minister’s optimism. Unions are deeply concerned the FTA will undermine local jobs and increase unemployment. The Abbott Government has been deliberately vague on the details about labour mobility and labour market testing clauses within the agreement, they say. “The Abbott Government needs to come clean on the impact the China Free Trade Agreement will have on unemployment and local jobs. Free trade agreements must support local jobs and industry and all indications are that the deal with China does not. There must be strong rules around labour market testing and labour mobility clauses in the China free trade deal to ensure local jobs are protected,” said ACTU President Ged Kearney. The agreement will enter into force after the completion of domestic legal and parliamentary processes in China and Australia, including review by the Australian Parliament’s Joint Standing Committee on Treaties, and the Senate Foreign Affairs, Defence and Trade References Committee. Both countries are working to complete these steps and bring the agreement into force as soon as possible.

SOURCE: Fibre2fashion

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Export slowdown could weigh on Japan's Q2 GDP growth

Japan’s export growth slowed for a second straight month in May, with weak external demand now threatening to erode economic growth in the current quarter. Ministry of Finance (MOF) data showed exports grew 2.4 per cent year-on-year in May, less than a 3.5 per cent gain seen by economists and a eight per cent rise in the prior month. Compared with April, exports fell 2.7 per cent. Export growth, in tandem with domestic demand, is seen as crucial for building on the momentum evident from recent data showing stronger-than-expected economic expansion - led by corporate capital expenditure at the start of the year. The data will be scrutinized by the Bank of Japan, which is expected to keep its monetary stimulus program unchanged at its policy review later this week, after having offered a slightly more upbeat view of the economy last month. “Exports are undoubtedly weak and the momentum is stalling due to slowdown in China,” said Takeshi Minami, chief economist at Norinchukin Research Institute. “Exports are likely to keep a drag on economic growth, which could grind to a halt or turn negative in the current quarter given weak private consumption and external demand.” The Japanese currency hit a 13-year low above 125 yen to the dollar Japanese yen this month before gaining some ground, down about 20 per cent for the year. But weak external demand caused export volume to fall 3.8 per cent in the year to May, with the volume of car shipments declining for the first time in six months.

Shipments to China, Japan’s largest trading partner, grew 1.1 per cent, slowing from a 2.4 per cent gain in April. China-bound car exports nearly halved from a year ago. Exports to Asia, which account for more than half of Japan’s shipments, rose 3.3 per cent, after a six percent gain in April. Exports to the United States, a key market for Japanese goods, rose 7.4 per cent in the year to May, slowing sharply from the prior month’s 21.3 per cent gain. US-bound export volume fell for the first time in six months. Imports fell 8.7 per cent in the year to May to below 6 trillion yen ($48.61 billion), the lowest since December 2012, due to annual declines in energy prices. That brought the trade balance to a deficit of 216 billion Japanese yen, roughly in line with a 226.0 billion yen deficit expected. Revised gross domestic product data this month showed external demand knocked 0.2 per cent off first-quarter economic growth as imports outpaced exports, even though the economy had shown unusually strong annualized growth. “To be sure, output expanded at an annualized rate of 3.9 per cent last quarter. But we think that growth will slow sharply in the second quarter,” Capital Economics said in a note. “Firms’ projections for industrial production, which tend to overstate the future strength of output, suggest that GDP may have stagnated in Q2. We expect growth to remain tepid in the second half of the year.”

SOURCE: The Business Standard

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Pakistan govt working out plans to make exports truly zero rated

Commerce Minister Khurram Dastagir after his separate meetings with the All Pakistan Textile Mills Association (Aptma and carpet exporters on Monday said that the government after two years of consolidation was now in a position to facilitate the exporting sectors through incentives, market access and a viable long-term policy. During the meeting, Aptma chairman S.M. Tanveer apprised the minister of the precarious position of the industry that operating much below its capacity because of lack of global orders. He cited high cost of doing business in Pakistan and subsidies given by rival textile exporting countries as the main cause for this decline. Dastagir said that the cumbersome issues of businessmen need right actions from different ministries, including commerce, finance, petroleum, and water and power. Further acknowledging that the industry was in dire straits because of delayed refunds and many policy flaws, Dastagir said that from now on the government would engage with the textile sector regularly. He would also take up the issue of local taxes on textile exporters with other ministries and agencies to make the exports “truly zero-rated”. The expected approval of the Strategic Trade Policy Framework next month would make a financing of Rs6 billion available to exporters under the government’s trade facilitation programme.

Prime Minister Nawaz Sharif would be soon forming a business advisory council comprising leading figures from different sectors. The prime minister would meet this advisory council every quarter along with his team of ministers and bureaucrats concerned. As Pakistan’s exports fell short of target due to the decreasing global trend in prices of commodities like cotton. He would extend any help to rescue the textile industry that was operating at 70 percent of its capacity. They also aim to address the basic challenges the textile industry is facing such as energy crisis, law and order, and imposition of taxes on industrial exports which has created a negative impact on the competitiveness of the textile industry and exports as they would like to double textile exports from $13bn to $26bn. Commerce Ministry is also in talks with Turkey, China, South Korea, Thailand and Japan to sign free trade agreements (FTAs) to resolve the high tariff issue concerning Pakistan’s textile exports. The government would ensure that all FTAs are in the interest of Pakistani businesses.

SOURCE: Yarns&Fibers

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