Speaking on the Bill in the Rajya Sabha, Sitharaman said, “You can imagine the number of MSMEs that will directly benefit because of this.” The amendments to the factoring law, which were approved by the Rajya Sabha on Thursday, would enable as many as 9,000 non-banking financial companies (NBFCs) to participate in the factoring market, instead of just 7 now, boosting cash flow to small businesses, finance minister Nirmala Sitharaman said. Factoring is essentially a transaction where an entity (like MSME) sells its receivables (dues from a customer) to a third party (a ‘factor’ like a bank or NBFC) for immediate funds. It often helps a firm satiate its working capital requirement. Many MSMEs, whose payments against supplies are stuck, participate in the factoring business with receivables. However, thanks to certain restrictive provisions in the extant law, amendments were brought in to widen the participation of entities, especially NBFCs, in the factoring business, thus expanding the avenues of working capital credit to even small businesses. The Bill also empowers the central bank to come out with norms for The Lok Sabha already cleared the Factoring Regulation (Amendment) Bill, 2020, on Monday. Speaking on the Bill in the Rajya Sabha, Sitharaman said, “You can imagine the number of MSMEs that will directly benefit because of this.” Even as the economy is reviving, for MSMEs to have greater access to liquidity and working capital and have the opportunity to sell their receivables to a third party in exchange for cash will make a great difference to them, the minister said. Amid frequent disruptions in House proceedings, the Bill was passed without a proper discussion. The new Bill will basically allow all NBFCs, instead of a select few, to engage in factoring business. Despite growth in recent years, the factoring market accounts for only 0.2% of India’s GDP, way behind comparable developing economies such as Brazil (4.1%) and China (3.2%), according to a report of the parliamentary standing committee on finance, which endorsed the Bill. The factoring market worldwide is projected to reach $ 9.2 trillion by 2025. The House panel, in its report submitted in February, stressed the need for the RBI to build sufficient regulatory resources to ensure effective supervision of factoring activities now that a large number of players may take part in such businesses with the implementation of the new norms.
Source: Financial Expres
The Inland Vessels Bill 2021 was passed in Lok Sabha today. It was introduced in the House by Union Minister for Ports, Shipping and Waterways Shri SarbanandaSonowal last Thursday. The Bill seeks to incorporate unified law for the country, instead of separate rules framed by the States. The registration certificate under the new law will be considered valid all over the country, and separate permissions from States shall not be required. The Bill also provides for a central database for recording the details of the vessels and their crew on an electronic portal. Shri Sonowal has said the Bill promotes cheaper and safer navigation, ensures protection of life & cargo and brings uniformity in application of laws related to inland waterways & navigation.
Source: PIB
“A glance at the FY21 data suggests that some of the major export destinations for India’s top 10 major commodities are also the regions which are expected to witness strong import growth in 2021,” the ratings agency said. India Ratings & Research on Thursday said that led by strong momentum, rising import demand across India's major export destinations and favourable global trade outlook, India's exports are poised to see major growth in FY22. It said that North America is set to see major import growth of 11.4% and Europe of 8.4% in 2021. “A glance at the FY21 data suggests that some of the major export destinations for India’s top 10 major commodities are also the regions which are expected to witness strong import growth in 2021,” the ratings agency said. It said that India’s exports, which have been languishing for quite some time, can take advantage of the favourable trade growth outlook of 2021 and consolidate its position further than what has been witnessed in the first quarter of FY22 In terms of annual growth, India’s exports grew 60.29%, 195.72%, 69.35% and 48.35% in the months of March, April, May and June 2021, respectively. However, this was largely due to an extremely low base effect whereby annual growth calculations got skewed as India's exports in the same months of the previous year were extremely low due to the pandemic. “No doubt, the growth numbers reflect the depth of the COVID-19 shock last year but we believe they also show the strength of the current recovery, adequately captured by the monthly export number,” India Ratings said, adding that the exports momentum began in March 2021, which witnessed the highest ever exports in a single month, clocking $34.45 billion. It added that India’s average monthly exports in FY20 were $26.14 billion, nearly the same as in FY14. The average monthly exports during the first quarter of FY22 jumped to $31.80 billion.
Source: Economic Times
Ministry of Micro, Small and Medium Enterprises (MSME) through its MSMEDevelopment Institutes (DI) situated in all States, facilitates MSMEs to export from Domestic Tariff Area (DTA) and Special Economic Zone (SEZ). For this purpose, 52 Export Facilitation Cells (EFC) have been established to provide hand-holding support to MSMEs as well as creating linkages with Export Promotion Councils, Commodity Boards, etc. Further, Government has recently included retail and wholesale trades under the MSME category making them eligible for Priority Sector Lending (PSL). To support MSMEs reach out to customers across the world, Ministry is implementing the International Cooperation Scheme (ICS) facilitating the participation of the MSMEs in International Exhibitions, Trade Fairs, Buyer-seller meets, etc. Further, various other schemes are being implemented by the Ministry to help MSMEs expand their business in the global market by providing them assistance for technology up-gradation, skill development, quality certification, etc. Besides, the Directorate General of Foreign Trade (DGFT) is implementing schemes like the Niryat Bandhu Scheme (NBS) for mentoring new and potential entrepreneurs about the intricacies of foreign trade and Interest Equalization Scheme (IES) to provide a cheaper source of rupee credit for pre-shipment and post-shipment activities, wherein all tariff lines are covered for MSMEs with 5% subvention rates. This information was given by Union Minister for Micro, Small and Medium Enterprises, Shri Narayan Rane in a written reply in Lok Sabha today.
Source: India Ties
The Tamil Nadu government is setting up a university of textiles here, said the State Minister of Housing and Urban Development S Muthusamy. The Minister made this announcement on Thursday while inaugurating road-laying work in and around Erode at a cost of Rs 10.63 crore. At Semur near the Erode Railway Station, a bus-stand and a vegetable market are coming up, he said. To promote sports, he said, the government would spend Rs 35 crore for a stadium. There are plans to start a law college and develop the existing home for juveniles, he said.
Source: Times Of India
The company had posted a net loss of Rs 247.60 crore during the April-June quarter of the previous fiscal, Raymond said in a regulatory filing. Raymond Ltd on Thursday reported a consolidated net loss of Rs 157.10 crore for the quarter ended June 2021. The company had posted a net loss of Rs 247.60 crore during the April-June quarter of the previous fiscal, Raymond said in a regulatory filing. However, its revenue from operation rose over four-fold to Rs 825.70 crore as against Rs 163.16 crore in the corresponding period of the previous fiscal. Total expenses in Q1 FY 2021-22 were at Rs 971.06 crore, up 78.54 per cent over Rs 543.87 crore earlier. Raymond Chairman and Managing Director Gautam Hari Singhania said, "The quarter gone by was a difficult one as it was severely impacted by the second wave of pandemic. However, we were able to handle the situation better with past learnings and closed the quarter with higher revenues." The consumer sentiments were seen positive during the month of June with higher number of wedding dates, he added. Raymond was also able to maintain strong profitable momentum in the engineering business as it focused on exports as the domestic market was impacted due to lockdown, he said. "With vaccination drive gaining pace, we are cautiously optimistic of consumer demand picking up with upcoming festival and wedding season," Singhania added. Shares of Raymond Ltd settled at Rs 453.40 on BSE, down 2.66 per cent from the previous close.
Source: Business Standard
With a view to create a robust human resource for the textiles sector, particularly the need for trained and skilled workforce in all segment of the textiles sector, Ministry of Textiles has been implementing various skill development schemes and programmes since the financial year 2010-11. Under the comprehensive Integrated Skill Development Scheme (ISDS), a total of 11.14 lakh persons have been trained during FY 2010-11 to 2017-18, in various diverse segments of textiles covering textiles and apparel, jute, spinning, weaving, technical textiles, sericulture, handloom and handicrafts of which 8.43 lakh persons have been employed. In further continuation, Ministry of Textiles has extended the skill development programme in the form of Samarth- Scheme for Capacity Building in Textile Sector for a period upto 2023-24 with the objective to provide demand driven, placement oriented National Skills Qualifications Framework (NSQF) compliant skilling programmes to incentivize and supplement the efforts of the industry in creating jobs in the organized textile and related sectors, covering the entire value chain of textiles, excluding Spinning and Weaving in organized sector. The training programme under the scheme is implemented through State Government Agencies, Textile Industry/ Industry Associations and Sectoral Organizations of Ministry. Training programme for about 3.3 lakh beneficiaries allocated to various implementing partners after due process of empanelling and physical verification of training centres is progressing at various stages. Samarth Scheme is implemented across the country including backward, rural tribal and hilly areas. State government agencies and sectoral organizations of Ministry have been allocated targets for training programme in these areas to promote the traditional textiles such as handlooms, silk, jute and handicrafts. Need-based skill upgradation programmes for handloom workers in technical areas viz. weaving, dyeing, designing, etc., earlier conducted under National Handloom Development Scheme, Comprehensive Handloom Cluster Development Scheme (CHCDS) are now undertaken under Samarth scheme. Further, the Government imparts various training programmes and schemes for promotion, development and generation of employment for artisans of handicraft sector under “National Handicraft Development Programme (NHDP)” and Comprehensive Handicrafts Cluster Development Scheme (CHCDS) to provide sustainable livelihood opportunities to the artisans.
Source: PIB
Leaders of the country’s apex trade bodies including the textile and readymade garment (RMG) industry on Thursday again urged the government to allow factory operation as soon as possible amid the strict two-week lockdown until August 05. They reiterate their appeal of reopening all industrial units, explaining the current situation including trade, vaccination of workers, wage payment, the possible layoff of factories in line with the existing law due to the long closure of factories and possible labour unrest over wage cut, before August 05 at a meeting with cabinet secretary at the latter’s secretariat office in Dhaka. Presidents of Federation of Bangladesh Chambers of Commerce and Industry (FBCCI), Dhaka Chamber of Commerce and Industry (DCCI), Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), and Bangladesh Textile Mills Association (BTMA) held meeting with cabinet secretary at the latter’s secretariat office in the city. Though the leaders did not mention any date for reopening the factories, many of them are in favour of opening factories from August 01, meeting sources said
Source: The Financial Express
PHMA chief Bilwani asks Prime Minister Imran Khan to focus on the knitwear sector as it has the potential to enhance exports manifold. Pakistan’s knitted garment manufacturers have requested their government to allow them representation in meetings related to textile exports, The Express Tribune reports. In a statement this week, Pakistan Hosiery Manufacturers and Exporters Association (PHMA) Chief Coordinator Muhammad Jawed Bilwani highlighted that Pakistan’s knitted garment exports had surged by 36.57% in the 2020-21 fiscal year. Total exports rose from $21.4 billion in FY20 to $25.3 billion in the previous fiscal year, and the share of textiles in overall exports came in at 60.86%. “Hosiery products have kept a major share of 15% in the textile group and this segment has the potential to contribute 25% to the total textile exports of the country,” Muhammad Jawed Bilwani, told the newspaper. Bilwani added that the share of knitted garments in total exports would rise to 20% in fiscal year 2021-22. “Had the government keenly considered proposals of the knitwear sector and addressed all problems and issues of businessmen, the contribution of knitwear garments to the total exports would have been much higher in fiscal year 2020-21,” he said. The export value of hosiery products rose from $2.8 billion in FY20 to $3.8 billion in FY21. “Knitwear exports recorded an increase of 36.6% despite the adverse impact of the Covid19 pandemic,” he said. “The segment also emerged as the highest foreign exchange earner, of $3.81 billion, in the previous fiscal year.” Mr Bilwani elaborated that the foreign exchange earned by the sector was 25.83% higher than the export revenue earned from exports of readymade or woven garments and 37.68% more than the receipts for bedwear exports. “If the export of knitted bedsheets and fabric was included, the total foreign exchange earned by the knitwear sector would soar to $4.5 billion, accounting for 29.2% of the entire textile group and 17.91% of the total exports,” he said. Bilwani asked Prime Minister Imran Khan to focus on the knitwear sector as it had the potential to enhance exports manifold. Bilwani pointed out that major exports of Bangladesh included knitwear products as well and they covered 43.66% of total exports of that country. He also mentioned that the annual global demand for knitwear stood at $208 billion but Pakistan’s share in the global knitwear exports stood at a meagre 1.83%. He was, The Express Tribune said, of the view that Pakistan had the resources to enhance hosiery exports within a short time frame. He, however, regretted that the government had failed to hold consultations with stakeholders of the knitted garments sector on boosting exports while officials belonging to the rest of the textile chain were invited for meetings.
Source: Knitting Industry
Envoy cites agriculture, pharmaceutical, tourism as potential areas of cooperation. Nigeria is keen to promote trade and economic relations with Pakistan as both countries have great potential to push bilateral trade in many areas for achieving mutually beneficial outcomes, said Nigerian High Commissioner to Pakistan Muhammed Bello Abiuye. During his meeting with the business community at the Islamabad Chamber of Commerce and Industry (ICCI), he highlighted that agricultural equipment, information technology, pharmaceutical, tourism and textile as potential areas of cooperation between Nigeria and Pakistan. The envoy said that Nigeria was allowing business e-visa on arrival for Pakistani citizens and emphasised that Pakistan should also streamline its visa policy for Nigerian businessmen, which would help to improve bilateral trade ties. Abiuye added that Pakistan and Nigeria should focus on operating direct flights and establishing strong air linkages to ramp up trade and exports. He stressed that the establishment of banking channels between the two countries was a key requirement to facilitate business transactions. Highlighting the role of Indian companies, the high commissioner stated that Indian firms had a significant presence in Nigeria and emphasised that Pakistan should also work on strategies to achieve better penetration into the African nation’s market. Speaking on the occasion, ICCI President Sardar Yasir Ilyas Khan said that PakistanNigeria bilateral trade in 2020 was around $146 million, which was negligible given the huge market size of both countries. He said that Pakistan could export many products to Nigeria which included pharmaceuticals, textiles, rice, sports goods, IT products and services, surgical instruments, leather products, electronic gadgets and equipment, fruits and vegetables at competitive prices and stressed that Nigeria should focus on increasing imports from Pakistan.
Source: The Tribune
NIGERIA’S failure to industrialise and diversify its export base has been brought into sharp focus by trade statistics that reveal an overwhelming disparity between the volume of imported manufactured goods and exports. Citing data from the National Bureau of Statistics, a report in The PUNCH that N40.94 trillion worth of manufactured goods were imported between January 2017 and March 2021 compared to only N4.22 trillion worth of exports, demonstrates the continued reliance on commodity export and rising import dependency. This imbalance has become dangerously unsustainable in an increasingly turbulent global economy and a country beset with existential economic, political and security problems. Clearly, decades of rhetoric, policy initiatives and funding interventions to promote industrialisation, exports and import dependency reduction have not delivered the desired outcomes. The President, Major General Muhammadu Buhari (retd.), inherited the quagmire; but pressured by unprecedented revenue shortfalls and a pandemicinduced meltdown, he has a unique opportunity to effect a drastic change by taking necessary steps to finally wean the country from its reliance on oil revenue. The NBS Foreign Trade report brought out the country’s unfavourable position: though the total value of exports in the period was N67.3 trillion, compared to imports of N66.43 trillion, the thin surplus was cold comfort because manufactured goods dominated the import bill but contributed little to exports. Instead, crude oil exports fetched N49.31 trillion. OPEC said petroleum exports provide 86 per cent of Nigeria’s export earnings though the oil sector contributes just about 10 per cent to GDP. The country is missing out on global trade by failing to leverage its natural resources to build a thriving industrial base and export value-added goods; it spends huge sums importing what it can produce. The NBS said major imports include milk and cream in powder, used vehicles and cycles. The Organisation of Economic Complexity in a 2019 report, said Nigeria’s top imports were refined petroleum products, cars, wheat, laboratory glassware, medicines. That year, the country was the world’s biggest importer of lab glassware with $1.45 billion worth; it imported embroidery, and other textile fibres. This is a recipe for underdevelopment. But Nigeria can produce these for domestic consumption and exports. For instance, with an estimated 20.77 million cattle population, the 14th largest in the world, according to the United Nations Food and Agricultural Organisation, Nigeria ought to be a net exporter of dairy and beef products, but is trapped in the outdated nomadic, open grazing culture. An automotive policy that in the 1970-the 80s birthed at least six vehicle assembly plants and numerous parts makers crashed and new ones are only just springing up. The country’s textile industry in the mid-1980s had 95 registered main factories and provided 22 per cent of manufacturing jobs, said Textile History, a trade journal. Sadly, the country was once headed for the industrial age. Import-substitution policies by the federal and sub-national governments encouraged the establishment of subsidiaries of major and smaller multinationals; home-grown industrialists also flourished and backward integration schemes created employment in agriculture, logistics and services. But wrong choices, a botched structural adjustment programme, the shrinking autonomy of the states, and a dwindling private sector devastated the industrial sector. Recapturing the momentum and attracting investment should, therefore, be a national objective. Manufacturing is integral to industrialisation; by producing goods through the use of labour, tools, machines, and chemical or biological processing. It adds value to the products of the primary sector of the economy –agriculture, mining hunting– thereby diversifying exports, creating value-added jobs and alleviating poverty. The most economically successful countries are those that thrive in international trade. Nigeria’s share of world trade is a measly 0.25 per cent, compared with South Korea’s 2.92 per cent and city-state Singapore’s 2.69 per cent, both with much smaller populations and scanty natural resources. The United Nations Sustainable Development Agenda declares that inclusive industrialisation, innovation, and infrastructure “can unleash dynamic and competitive economic forces that generate employment and income.” It is the key to transiting from import-dependency to an export-led economy. The economy needs an infusion of domestic and foreign direct investment that the Nigerian Investment Promotion Commission said slid by 80 per cent in the second quarter of this year. The transition requires an effective policy, consistency, and leadership. Let’s start with the low-hanging fruit to improve the country’s economic complexity. In the scheme, productive knowledge is imperative. Ricardo Hausmann, a Harvard Kennedy School professor of the Practice of International Political Economy, says traditional exports cannot create enough jobs for any growing population. Nigeria should identify tradable products that lie at its knowledge frontier and economise on transport costs. The IMF has repeatedly advised going for the “low-hanging fruits;” such as privatisation of stateowned commercial assets, liberalisation of all economic sectors with policies to improve the ease of doing business, port reforms and plugging all revenue leakages. Leveraging mining and agriculture to provide raw materials for the industry is crucial. There should be policies by the federal and state governments to attract investments into these sectors targeting exports. The current administrative arrangement that deprives states of fiscal autonomy and resource control severely inhibits economic development. The wealth of the country should be the aggregate of output in the states. Unlike in the First Republic when the defunct regions had thriving economies and maintained representative trade offices abroad, today’s 36 states only exist to share from oil funds and run bureaucracies. Germany’s 16 states have autonomous thriving import and export economies, competing for investments and markets. Small and medium industries are the main drivers of industrialisation, exports, job creation and innovation. More effective measures should be put in place to make them effective; the problems of funding, multiple taxes, insecurity, and forex should be tackled head-on. SMEs contribute 42 per cent to China’s exports, 40 per cent to India’s and 26 per cent to Malaysia’s. Like the Asian Tigers, export-led growth strategy should identify and support niche sectors, invest in research, ICT, and human capital. Such policies helped Japan, South Korea, and Singapore to transit from underdevelopment to fourth, eighth and ninth places respectively on the World Bank’s top exporting countries table. But there is hope. Manufacturing has moved from a dismal 4.5 per cent share of GDP in 2004 to about 10 per cent in 2020. The Anchor Borrowers’ Programme has helped reduce the dependence on rice imports and promoted rice milling across the country. Nigeria is now a net exporter of cement, thanks to a robust policy. Buhari should dust up numerous policies such as the National Industrial Master Plan, policies on mining, agriculture and automotive sectors and rigorously implement them. Cronyism, corruption, sectional, and ethnic considerations should be overthrown in disbursing intervention funds to agriculture and SMEs. Fostering competition is essential to innovation and export. Pare down the bureaucracy and reform export trade processes. Export diversification should go beyond rhetoric.
Source: Punch
On an annualised basis, second-quarter growth was 6.5 per cent The US economy grew solidly in the second quarter (Q2), pulling the level of gross domestic product (GDP) above its pre-pandemic peak, as massive government aid and vaccinations against Covid-19 fueled spending on goods and travel-related services. GDP, the broadest measure of economic output, grew 1.6 per cent in Q2, the commerce department said Thursday, up from 1.5 per cent in the first three months of the year. GDP increased at a 6.5 per cent annualised rate last quarter, the commerce department said. The economy grew at an unrevised 6.4 per cent rate in the first quarter. Economists polled by Reuters had forecast GDP rising at an 8.5 per cent rate last quarter. With the Q2 estimate, the government published revisions to GDP data, which showed the economy contracting 3.4 per cent in 2020, instead of 3.5 per cent as previously estimated. That was still the biggest drop in GDP since 1946. The revisions to growth in other years and quarters were minor. From 2015 to 2020, GDP increased at an average annual rate of 1.1 per cent, unrevised from previously published estimates. The National Bureau of Economic Research, the arbiter of US recessions, declared last week that the pandemic downturn, which started in February 2020, ended in April 2020. Even with Q2 marking the peak in growth this cycle, the economic expansion is expected to remain solid for the remainder of this year. A resurgence in Covid-19 infections, driven by the Delta variant of the coronavirus, however, poses a risk to the outlook. Higher inflation, if sustained, as well as ongoing supply chain disruptions could also slow the economy. The Federal Reserve on Wednesday kept its overnight benchmark interest rate near zero and left its bond-buying program unchanged. Fed Chair Jerome Powell told reporters that the pandemic’s economic effects continued to diminish, but risks to the outlook remain. Economists expect growth of around 7 per cent this year, which would be the strongest performance since 1984. The International Monetary Fund on Tuesday boosted its growth forecasts for the United States to 7.0 per cent in 2021 and 4.9 per cent in 2022, up 0.6 and 1.4 percentage points, respectively, from the forecasts in April. President Joe Biden's administration provided $1.9 trillion in pandemic relief in March, sending one-time $1,400 checks to qualified households and extending a $300 unemployment subsidy through early September. That brought the amount of government aid to nearly $6 trillion since the pandemic started in the United States in March 2020.Equities advance US equities climbed as the latest read on the economy eased concerns about inflation and how long the Federal Reserve will maintain its ultra-accomodative policies. The S&P 500 and Dow Jones Industrial Average advanced. The S&P 500 rose 0.4 per cent as of 9:32 am New York time, while the Dow Jones Industrial Average rose 0.6 per cent. Ford Motor rallied after a surprise profit. The NASDAQ 100 was little changed as Facebook declined on a cautious outlook. Beijing’s efforts to soothe market nerves buoyed Asian equities listed in the US.
Source: Business Standard
