The government has received requests from Export Promotion Councils and leading exporters that we should continue with current Foreign Trade Policy (2015-20), which had been extended from time to time. In recent days, exporters and industry bodies have strongly urged the government that in view of the prevailing, volatile global economic and geo-political situation, it would be advisable to extend the current policy for some time, and undertake more consultations before coming out with the new policy. The government has always involved all stakeholders in formulating policy. In view of this, it has been decided to extend the Foreign Trade Policy 2015-20, valid till Sept 30, 2022 for a further period of six months, w.e.f. October 1st , 2022.
Source: PIB
After the United Arab Emirates (UAE), India will sign an economic cooperation and trade deal with Australia tomorrow, the trade ministry said in a news release on Friday. “Piyush Goyal, Minister for Trade Industries, Consumer Affairs, Food and Public Distribution and Textiles, Government of India, and Dan Tehan, Minister for Trade, Tourism and Investment, Government of Australia, have signed the India-Australia Economic Cooperation, A trade deal (“IndAus ECTA”) will be signed tomorrow by Indian Prime Minister Narendra Modi and Australian Prime Minister H.E. Scott Morrison.” “The expansion of economic and trade ties between India and Australia has added to the stability and strength of the rapidly diversifying and deepening relationship between the two countries. It is a balanced and fair trade agreement that will further strengthen the already deep, close and strategic relationship between the two countries, significantly improve bilateral trade in goods and services, and new trade will create jobs. It will provide opportunities, raise living standards and improve the overall well-being of people in both countries.” Indian exporters in the leather, textile, jewelery and machinery industries will be granted duty-free access to the Australian market shortly after the interim trade agreement between the two countries comes into force, government sources said. The agreement will enter into force on a mutually agreed date after being approved by the Indian Federal Cabinet and the Australian Parliament. Sources said that more than 6,000 tariff lines will be offered to Indian exporters at zero tariffs on the first day of implementation of the interim agreement. Australia has offered tax exemptions to India for about 96.4% of its exports from day one, which will affect products currently subject to her 4-5% tariff in Australia, sources said. said. About 6,500 fare lines are traded in Australia, while there are 11,500 fare lines in India. Labor-intensive sectors that would yield significant gains include textiles and clothing, footwear, furniture, sporting goods, jewellery, machinery, electrical equipment, rail vehicles, and select pharmaceuticals and medical equipment. The deal is beneficial for India as it imports raw materials and intermediate products mainly from Australia, the sources added. Meanwhile, India offers duty-free access to over 70% of customs items destined for Australia, including products such as coal. Coal makes up about 74% of Australia’s imports and is currently subject to a 2.5% tariff. India plans to phase out tariffs on Australian wine over her decade. To protect sensitive sectors, India has some exempt categories of goods that do not allow tariff relief. The deal will include a safeguard mechanism to deal with an unusual surge in imports, sources said. Such products include milk and other dairy products. India will liberalize standards in over 100 service sub-sectors.
Source: Bolly Inside
Credit and Finance for MSMEs: TEA in a press statement to Nirmala Sitharaman, Union Minister of Finance has said that 20 per cent of existing credit should be provided to bailout the Tiruppur knitwear garment exporting units from the ongoing liquidity crisis. Credit and Finance for MSMEs: Tamil Nadu’s textile centre, Tiruppur Exporters’ Association (TEA) on Saturday appealed to the union government to announce the Emergency Credit Line Guarantee Scheme (ECLGS) specifically for Garment Sector micro, small and medium enterprises (MSMEs), as per a report by the Knowledge and News Network India. The association in an official press statement to Nirmala Sitharaman, Union Minister of Finance has said that 20 per cent of existing credit should be ensured to rescue the Tiruppur knitwear garment exporting units from the ongoing liquidity crisis. Issues like fewer booking orders, delay in receiving the payment, non-acceptance of booked orders and deferment of shipment were the major precursors of the crisis. TEA president, Raja M Shanmugham highlighted that at a time when Tiruppur Knitwear Exporting MSMEs have been struggling to escape the double whammy of the COVID pandemic and cotton yarn price hike, the Russia-Ukraine War has altogether worsened the situation in the European Union, United Kingdom and United States of America markets. Talking about the adverse conditions of Tiruppur Knitwear Exporting MSMEs, Shanmugham said that he apprehended the sustenance of these businesses. The association has also requested Reserve Bank of India (RBI) Governor Shaktikanta Das for relaxation in Non Performing Assets (NPA) norms to the MSMEs when the overdue timeline exceeds 90 days and appealed not to classify them as NPAs. Additionally, TEA has also issued letters to the respective bank’s Chairman/Managing Director (MD)/Executive Director (ED) to underline the ground reality of the situation Tiruppur Cluster is currently facing. The association is hopeful that the government will come forward to protect MSMEs and its employees, the report said. Importantly, TEA in September has requested Tamil Nadu’s Chief Minister M.K. Stalin to reassess the Power Tariff Hike and reduce it to save Tiruppur’s Knitwear Industry. Earlier in May, the association urged the State Bank of India (SBI) to help MSMEs deal with the liquidity crisis, as an unprecedented surge in cotton prices pushed the knitwear sector in dire situation.
Source: Financial Express
Chief Economic Advisor (CEA) V Anantha Nageswaran on Monday said the Indian economy was on the path to recovery but cautioned that foreign investors may remain cautious because of geopolitical challenges. Chief Economic Advisor (CEA) V Anantha Nageswaran on Monday said the Indian economy was on the path to recovery but cautioned that foreign investors may remain cautious because of geopolitical challenges. Speaking at a virtual seminar organised by Swadeshi Research Institute, he said all sectors of the economy such as agriculture, manufacturing and construction are "doing well". "The Indian economy is showing resilience and on the path to recovery. Private demand and the services sector are doing better than expected," he said. Private capital formation is taking place, while foreign direct investment (FDI) flow is keeping steady, he said. However, there are challenges, and geopolitics is messy for which foreign investors are cautious, the CEA said. Noting that India has a "well-capitalised banking sector", the economist said, the Insolvency and Bankruptcy Code (IBC) also played a big part in "improving the health of the banking system" which had high NPAs due to the financial crisis of 2008. The economy is going to see "good capital formation for good credit growth", he said Nageswaran, an academic and former executive with Credit Suisse Group AG and Julius Baer Group, also stated, "Inflation in India is now at seven per cent. But we are worried about this rate which shows the country is becoming less tolerant to it (inflation)."
Source: Economic Times
Welspun India Ltd., in the textile industry, has bagged the highest rating in all three ESG aspects by Crisil, which recently evaluated it as “strong” in its Sustainability Year Book 2022. Based on a number of factors, the company outperformed other businesses in its industry, it said. Only 63 out of 586 enterprises published data on Scope 3 emissions, and 25% of the firms reported Scope 1 & 2 emissions during the evaluation of environmental factor. Welspun India said it had published all of quantitative data regarding emissions. Under the guidance of Dipali Goenka, CEO and Managing Director, the company said it had been working towards a number of ESG initiatives that it had developed over the years to prevent negative impacts on the environment during production process. Welspun India said it prioritised using sustainable fabrics (obtained from Better Cotton Initiative, Organic or Recycled cotton), for which it also runs a sustainable farming initiative, which generates both BCI and organic cotton. From a sewage treatment facility that recycles over 7 billion litres of water annually, to requiring no freshwater, rainwater harvesting and saving energy, Welspun said its motto was to reduce carbon footprint. The company said its staff wholeheartedly supported the sustainability efforts by coming up with creative ideas and campaigns. The company aims to be carbon and water neutral by 2030 and obtain 100% of the cotton sustainably. Under the Well-Krishi programme, the company is promoting selfreliant farming to empower over 16,400 farmers across more than 375 villages to sustainably produce more than 25,000 metric tons of cotton, it said. The company said it had focused on educating and assisting farmers to use sustainable agricultural practices, making them aware of social issues, and even providing them with finances to carry out such practices. Welspun India said it had spent over ₹13 crore on social projects in FY22.
Source: The Hindu
FIEO plans series of activities in GCC markets to push India's exports Synopsis In the current financial year, FIEO has planned various activities -- including exhibitions, B2B delegations, interactive sessions and capacity building programmes -- to increase India's export to the region, FIEO President A Sakthivel said. India and the UAE signed a comprehensive economic partnership agreement in February this year, and it came into force on May 1. Exporters body FIEO on Monday said it has planned a series of activities in the Gulf Cooperation Council (GCC) markets to push India's exports. The GCC was established in May 1981. Its members are Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the UAE. Indian exports to the GCC grew by 44 per cent in 2021-22 to USD 43.9 billion compared to USD 27.8 billion in 2020-21, according to FIEO. "Our export performance in the GCC in 2021-22 has been marvellous. Apart from the UAE, our exports to Saudi Arabia grew by 49 per cent, Oman by 33 per cent, Qatar by 43 per cent, Kuwait by 17 per cent and exports to Bahrain increased by 70 per cent," said Ajay Sahai, Director-General of FIEO. In the current financial year, FIEO has planned various activities -- including exhibitions, B2B delegations, interactive sessions and capacity-building programmes -- to increase India's export to the region, FIEO President A Sakthivel said. FIEO members are here to participate in the Super Sourcing Dubai (SSD) show. He said FIEO members have participated in exhibitions and trade activities in Qatar, Egypt, Jordan, Oman, UAE and Saudi Arabia and there are even more activities lined up in Bahrain, Kuwait, Iraq, Oman and the UAE. Sahai said that huge business opportunities are there for Indian industry in the UAE post implementation of a trade pact between the two countries. India and the UAE signed a comprehensive economic partnership agreement in February this year, and it came into force on May 1. The export prospects will further scale up since zero-duty access for Indian products to the UAE is expected to expand over 5-10 years to 97 per cent of UAE tariff lines or 99 per cent of Indian exports by value, Sahai said. SSD is an exclusive show for Indian exporters to get connected with decision-makers in the supermarkets, hypermarkets, retail chains, buying agents and importers in the Middle East, GCC and African region.
Source: Economic Times
Pakistan should import cotton from neighbouring India to avoid another balance of payment crisis, said Pakistan Textile Council (PTC) on Monday. The country’s textiles industry, which earned more than $19 billion in exports last year, was facing a shortage of raw material as flash floods have damaged about half of the nation's cotton produce since June, PTC said in a statement. “The unprecedented rainfall resulting in floods has caused havoc in Pakistan,” it said. One-third of Pakistan was submerged in water, thousands of homes have been destroyed, more than 1,500 people have lost their lives and most importantly about 18,000 square kilometres of cropland has been ruined, including about 45 percent of the cotton crop. Pakistan faces a cost far greater than $10 billion in damages, with the loss of food crops alone amounting to about $2.3 billion, a particularly heavy burden at a time of rising food prices around the world, the council noted. Pakistan is a major producer of rice and cotton, and both crops have suffered severe damages. As part of the devastation, flood damage would likely force Pakistan to increase cotton imports at a time when production in the US was forecasted to plunge by 28 percent due to drought. The council said that with restrictions on China, Pakistan would not be able to procure raw materials from there as well. Outlook for Brazil has also not been very encouraging. According to ABRAPA, the drought there has already dried up an estimated 200,000 tonnes of cotton supply. All these factors were pushing the price of cotton higher in the local and international markets. Given the continuous depreciation of the rupee and record high shipping freight, importing cotton from far-located countries like the US, Brazil, Egypt, etc would not be economically viable, the PTC said. Last year, 2021-22, Pakistan’s textile exports rose to an all-time high of $19.3 billion, but even achieving this mark would be challenging given the lack of availability of raw material to factories. The PTC said that it was imperative for Pakistan to keep its export growth momentum to finance the import bill and keep the balance of payment situation manageable and avoid default conditions. “Import of raw cotton from India must be immediately allowed to mitigate the raw material shortage,” it said. The move would help Pakistan reduce trade time and curtail heavy logistics costs. “The declining textile exports will lead to the balance of payment crisis, and reduced productivity will put millions of jobs at stake, which the country cannot afford,” the PTC warned.
Source: Fibre 2 Fashion
Unless economic reforms are implemented, Bangladesh’s gross domestic product (GDP) is set to decline below 4 per cent by 2035, according to the World Bank. The international financial institution noted three roadblocks on the country’s path to economic reform — declining trade competitiveness, a weak and vulnerable financial sector, and unbalanced and inadequate urbanisation. Addressing the three hurdles will not only boost the country’s economic development but also make growth more sustainable, as per the report by World Bank. Even though Bangladesh is among the top 10 fastest-growing countries in the world for many decades, an economic boom cannot be presumed to be a permanent trend. Economic growth in countries going through rapid development is always at high risk and few nations see high growth for prolonged periods. Moreover, only one-third of the nations among the top 10 maintained high growth over the next ten years, Bangladeshi media said quoting the World Bank report. The World Bank recommended that products need to be diversified to continue growth in exports. It was also pointed out that since Bangladesh’s tariff rate is higher than that of other countries, the country’s trade capacity is decreasing. The banking sector will play a critical role in the future economic development of the country, the report predicted. Despite the improvement of the financial sector in the past four decades, it is yet to be sufficient. Balanced urbanisation should be focused on as urbanisation is vital for the next stage of Bangladesh’s development.
Source: Fibre 2 Fashion
Vietnamese textile-garment and leather-footwear firms have been advised by experts to improve sustainability of their production processes for export to the European Union (EU) after the European Commission (EC) proposed the goods must comply with ecological design criteria. This needs efforts from enterprises and government agencies, and incentives to encourage investment in supporting industries and material supply centres, they said. The EC earlier this year proposed a new strategy to make textiles more durable, repairable, reusable and recyclable to tackle fast fashion, textile waste and the destruction of unsold textiles, and ensure their production takes place in full respect of social rights. Phan Thi Thanh Xuan, vice chairwoman and secretary general of the Vietnam Leather Footwear and Handbag Association (LEFASO), said in addition to ensuring product origin and the use of recycled materials, meeting labour and environmental standards is essential for exports to the EU. A key solution is to invest in technology as it will help solve the labour deficit and environmental problems, Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS), was quoted as saying by a news agency. The number of textile enterprises using clean energy has increased to 60-65 per cent, either through buying electricity or investing in installing solar energy projects, Giang said. Giang is hopeful of cent per cent of textile and garment companies fully meeting the clean energy target in the next five to seven years. Promoting modern specialised waste treatment systems is also essential, experts added.
Source: Fibre 2 Fashion
The World Trade Organization (WTO) opens its annual public forum this week with an ambitious goal: to stabilize a global economy disrupted by the COVID-19 pandemic, trade wars and armed conflict. Seeking to build on last June’s renewed commitment to a rules-based system, the WTO now calls for more sustainable, more inclusive trade rules. Rewriting the rulebook is both desirable and necessary given widespread dissatisfaction with the institution. But reform will not be easy. Any fundamental changes to the WTO have to overcome long-standing disagreements among countries over market access. They will also require fixing the WTO’s broken dispute resolution system. “Inclusive rules” mean several things in international…. trade law. One of them is promoting equitable growth by leveling the playing field between rich and poor markets. On paper, the WTO was created so that each member country enjoys the same rights under the law regardless of wealth, market size or any other feature of a member’s economy. If anything, the rules grant special privileges to the organization’s less developed countries. For example, poorer economies are given longer periods to implement their trade-liberalizing commitments so that opening the economy does not shock the domestic market too abruptly. Small markets also commit to less burdensome tariff “bindings,” which are the ceilings members place on their tariff rates. Higher bindings mean that small economies have greater leeway in their tariff policies, and that their commitments are less restrictive than members like Japan, Canada and the United States, all of whom have very little room to maneuver. Despite what the WTO calls “differential provisions,” developing nations face several disadvantages. Even though wealthy WTO members (including the United States and European Union) extend preferential access to less developed countries through their separate trade policies, poorer members still run up against de facto trade barriers. Not least, developing country farmers run up against subsidies and price supports that make it harder to do business in the West. In agriculture alone, subsidies have totaled over $400 billion in the United States since the WTO was created. As a result, many poor members still suffer from limited access to key markets, especially in textiles and agriculture, two sectors vitally important to smaller economies. This problem is not new. There has been enduring debate (dating back to before the WTO’s formation) over agriculture and textiles. (It is no coincidence those two sectors are the subjects of their own legal agreements.) Then, as recently as last June, Director General Okonjo-Iweala noted that disagreements over agricultural policies stunted progress at the 12th Ministerial Conference, stating that “we could not achieve consensus on a new roadmap for future work.” Making matters worse, things are trending in the wrong direction. Farm subsidies, which were already substantial, actually increased in recent years amid the market pressures brought on by trade wars and the pandemic. In theory, the WTO has a built-in mechanism for protecting all members’ rights. Developing countries could fight back against discriminatory practices by suing richer nations under the WTO’s Dispute Settlement Understanding. But the dispute system remains almost exclusively the domain of wealthy countries like the U.S., European Union and more recently China. The U.S. alone is involved in almost half of the WTO’s 614 disputes. By contrast, developing countries rarely participate. Litigation consumes valuable legal and bureaucratic resources — two things in short supply among smaller member governments. It is no surprise that only two African nations have ever initiated disputes. Aware of this problem, the WTO’s Advisory Centre has helped smaller countries build capacity. But that does not guarantee greater access to the system. Even if small states could afford litigation, concerns over trade retaliation often discourage them from targeting rich nations. When smaller countries do initiate disputes, they often sue one another instead of bringing grievances against the wealthiest members. Moreover, the current crisis facing the Appellate Body, wherein too few seats are filled to hear appeals, means that disputes cannot proceed through the full legal process. Not having a functioning Appellate Body means that panel rulings are now left in limbo. Plans to repair or replace the dispute system have circulated for years, and the WTO membership committed to further discussions at MC12. But a clear solution is difficult to see. Concerns about dispute settlement are complicated and divide the preferences of the United States and European Union. While the big players argue it out, poorer members are left without opportunity to defend themselves under the rules. None of this is to say that the WTO’s efforts to reboot the rules-based system are misguided. Recent global events, from trade wars to real wars, highlight the dangers of unpredictable, volatile markets. Developing countries stand to lose the most from that volatility because their economies are more concentrated and often more trade dependent. A more inclusive, modernized system – one that can add stability to the marketplace – is worth pursuing. Jeffrey Kucik is an associate professor in the School of Government and Public Policy as well as the James E. Rogers College of Law (by courtesy) at the University of Arizona.
Source: The Hill
