The government is scrutinising the interest equalisation scheme for exporters to analyse its usefulness in promoting exports so far, including from the MSME sector, to decide if it should be continued beyond June 30 2024, sources have said. “The DGFT office is holding consultations with various export bodies and banks to have more clarity on those benefitting from the scheme and find out if it actually played a role in promoting exports,” an official told businessline. The interest equalisation scheme, first implemented in April 2015 for five years, allows exporters of 410 identified products and all exporters from the MSME sector, to get bank credit at a subsidised interest rate determined by the government. The banks are later reimbursed by the government for their lower interest earnings. The scheme has since got a number of extensions and the last one is set to lapse on June 30, 2024. “There is a need for a detailed analysis of beneficiaries of the scheme under various sectors to pinpoint where the benefits are accruing and if a correlation can be established with growth in exports. If no direct correlation can be established, then the government will take a call on whether it should be withdrawn completely or for certain sectors,” the official said. The Commerce and Industry Ministry has already been taking steps to ensure a better distribution of the outlay set aside for the interest equalisation scheme to ensure that it is not cornered by just a few. Last year, the government introduced a cap of ₹10 crore per Importer Exporter Code (IEC) on the annual net subvention amount. This means that an individual unit cannot claim equalisation benefits beyond ₹10 crore. In December 2023, an additional outlay of ₹2,500 crore, over and above the current outlay of ₹9,538 crore under the scheme, was approved by the Union Cabinet to bridge the funding gap to continue the scheme up to June 30, 2024. Currently the scheme provides an interest equalisation benefit at the rate of 2 per cent on pre and post shipment rupee export credit to merchant and manufacturer exporters of 410 identified tariff lines at four-digit level and 3 per cent to all MSME manufacturer exporters. Exporter bodies have been asking the government to increase the subsidy rate to 5 per cent for MSME exporters and 3 per cent for others to help them be more competitive and cope better with global headwinds and the uncertain geopolitical scenario. In FY2023-24, India’s goods exports declined 3.11 per cent to $437.06 billion.
Source: The Hindu Business Line
India and Oman will sign a trade deal in the coming months, two Indian government officials said, as New Delhi seeks to expand its ties in the Middle East, where rising tensions are putting major shipping routes at risk. "It will help India with a strategic partner and access to key trade routes in a volatile region," one official told Reuters. India and Oman have annual trade of less than $13 billion, but the relationship is important for New Delhi as the Gulf nation is a gateway to the narrow Strait of Hormuz between Oman and Iran, a major transit point for global oil shipments. Israel's war against Hamas in Gaza has spread to hostilities with Iran, and Yemen's Iranaligned Houthi militants have launched repeated drone and missile strikes in the Red Sea area, claiming solidarity with the Palestinians in Gaza. The trade deal requires the approval of the government that wins India's ongoing national elections, whose results are to be announced on June 4, the officials said. Prime Minister Narendra Modi is widely expected to win a rare third term. The officials asked not to be named as the discussions are private. India's trade and Foreign Ministries and Oman's embassy in India and Foreign Ministry did not respond to emails seeking comment. Making little progress on a deal with the Gulf Cooperation Council (GCC), India has pivoted to seeking bilateral deals with GCC member nations such as Oman and United Arab Emirates. The planned deal with Oman "also gives a competitive edge as GCC is negotiating trade agreements with Pakistan and China," the official said. Oman has agreed to eliminate duties on Indian exports worth an annual $3 billion including agricultural products, gems and jewellery, leather, automobiles, medical devices, engineering products and textiles, the officials said India has agreed to reduce duties on some petrochemicals, aluminium and copper from Oman, while capping imports of such goods, the officials said.
Source: The Hindu
In contrast to the global scenario, the Indian economy continues to exhibit strong economic performance with broad-based growth across sectors, the Ministry of Finance asserted. "The optimism regarding growth prospects is also reflected in consumer and investor perceptions," according to the Monthly Economic Review report of the Department of Economic Affairs under the Finance Ministry. Many international organisations assert India's pivotal role in determining the growth path of Asia in the coming years, the review report said. Reserve Bank of India also, in its latest Monetary Policy Committee meeting, noted the strong growth momentum in the economy and projected real GDP growth for 2024-25 at 7 per cent, driven by a pickup in rural demand and sustained momentum in the manufacturing sector. The International Monetary Fund in its latest report forecasted India's growth at a high of 6.8 per cent in 2024-25 and 6.5 per cent in 2025- 26, based on its assessment of continuing strength in domestic demand and a rising working-age population. "As per the latest consumer confidence survey, households' sentiments on the general economic situation and employment prospects recorded notable improvements for both the current period as well as the upcoming year," said the monthly review report of the finance ministry.
Source: Zee Business
Free trade agreement (FTA) talks between India and Canada, on pause since September 2023, will not be resumed unless political issues that have soured bilateral relations are addressed, two people aware of the matter said. The negotiations will not resume unless the Canadian government addresses the issues raised by India and the political issues between both countries find a resolution, said the first person mentioned above, who didn't want to be named. "As of now, there is no timeline for resuming the talks between both countries," the person added. Spokespersons of India's Commerce Ministry and the Canadian High Commission didn't respond to emailed queries. Resuming talks Canada halted the talks in September 2023, after they resumed nearly after a decade in March 2022, stating that both countries would mutually decide on resuming the talks in the future. Both countries, talking off and on since 2010 about a comprehensive economic partnership agreement, re-launched negotiations for an interim agreement in March 2023. At the time of pausing the talks, over half-a-dozen rounds of negotiations had taken place. Prime Minister Narendra Modi had during September 2023 expressed concern over antiIndia activities and Khalistan extremism in Canada in a meeting with his Canadian counterpart Justin Trudeau on the sidelines of the G20 Summit. A few weeks later, Trudeau told Canada's House of Commons that the Indian government may have been involved in the killing of Hardeep Singh Nijjar, a Canadian citizen and a prominent figure in the pro-Khalistan movement. Nijjar was designated as a terrorist by the Indian government. The Canadian government also expelled a senior Indian diplomat from the country. "Canadian security agencies have been actively pursuing credible allegations of a potential link between agents of the Government of India and the killing of a Canadian citizen, Hardeep Singh Nijjar," Trudeau told an emergency session of the Canadian parliament last September, adding that his government has declared its concerns to Indian security and intelligence officials. Change of guard Following this, Canada removed 41 of the country's 62 diplomats in India after New Delhi threatened to revoke their immunity. Interestingly, Canada will be conducting its federal election to elect members of its parliament in 2025, which could lead to a change in guard at the helm of the Canadian government. "The elections could throw up a new government at the helm, which could have a different view (of the political issues with India)," the first person mentioned above added. Merchandise trade between India and Canada stood at about $7.6 billion during the calendar year (CY) 2023. During CY23, India's merchandise exports to Canada stood at $3.49 billion, down 7.5% annually, while its imports stood at $4.10 billion, up 7.43% annually. During the trade negotiations between both countries, Indian businesses were looking for duty-free access for various products like textiles and leather, and easy visa norms for the movement of professionals, while Canadian companies were looking for easier access in sectors like dairy and agricultural products.
Source: Live Mint
India beat the world average in the services export growth in calendar year 2023 with overseas earnings from the sector expanding 11.4% on year to $ 345 billion, according to a United Nations Conference on Trade and Development report. During the year world services trade grew 8.9% to cross $ 7.9 trillion. International travel receipts increased by 40%, continuing the recovery from the COVID-19 pandemic throughout the year. Transport dropped by some 12% in 2023. Other services, many of which can be traded digitally, recorded a solid rise over the year, surpassing 7% in each quarter of 2023, the report said. According to the report India is the 7th largest exporter of services in the world. Among the developing countries it is the second biggest just behind China. The US is the biggest services export in the world at $ 999 billion followed by the UK at $ 584 and Germany at $ 440 billion. For the financial year 2023-24 the services exports were $ 339.6 billion, up 4.4% on year, according to Indian government data.
Source: Financial Express
RAJANNA-SIRCILLA: To learn and address the issues faced by the powerloom unit owners and workers, the Handlooms and Textiles department has developed the T-Nethanna app. The department said that by downloading the app on Google Play Store and registering through the application, those involved in the textiles sector can lodge complaints with geo-tagged photos, learn the eligibility for relevant schemes, and receive immediate SMS notifications about any changes or additions to the schemes, including the Thrift Fund Scheme and Netanna Bhima.The department has also mandated all employees, labourers, and allied workers of the sector involved in the Thrift Fund Scheme to register their details on the app by April 30. It said that failure to do so will result in the withdrawal of funds credited to respective accounts under the scheme by the department.
Powerloom units to hold event today to secure orders
Several powerloom unit owners, mutually aided cooperative societies and small-scale Industries (SSIs) will be holding an event at Shivalayam in BY Nagar in Sircilla at 11 am on Monday to secure orders from interested buyers. Textile businesses from Patarghat in Hyderabad, will be in attendance to place cloth orders as needed.
Source: The New Indian Express
In the bustling city of Tumkur in Karnataka, where the sounds of a vibrant textile industry once echoed through the streets, a sombre mood prevails in the air. Once adorned with flourishing cotton and silk mills, Tumkur today is at the crossroads, thanks to the fading textile industry. With the upcoming general elections, Tumkur's textile community waits in anticipation for a government that will rekindle the flames of its lost jewel. Tumkur's textiles sector is facing multiple challenges like labour shortage, falling exports and bureaucratic delays. Subsidies and approvals are slow, hindering growth. With entrepreneurs rallying for policy reforms, the industry seeks a revival amid the adversity. Hafeezur Rahman of Techmax Structurals, which builds infrastructure for the textiles industry, said labour shortage and surging export rates are hurting the garment industry. Cheaper labour in Bangladesh and China is also adversely impacting business in India. “There is no boom in the textiles industry now. If this particular segment is developed, the employment issue will be resolved, and foreign exchange will also be generated. The government should focus more on strengthening the micro, small and medium enterprises (MSME) sector than high-profile companies, as the former is the backbone of economic growth,” said Rahman. Rahman added that simply earmarking money by the government would not bring in change. According to him, the government should work on “quality, modernisation, and training” for the industry. He said, “The government should take initiatives to build a separate special economic zone (SEZ) for the textile industry.” Ronald, business head of MAF Clothing, said water scarcity is hampering dyeing and washing operations while land scarcity is hurting growth. He called for “strong wage incentives through the central government” as it is a critical factor in attracting and retaining skilled labour within the industry. Tumkur-based industry consultant Prabhu SR said the previous government announced about 70-80 per cent subsidies for SC/ST candidates in the garment industry. However, funds have not been received yet. “Additionally, over the last few years, people have struggled to process their application forms in the textiles department. Entrepreneurs were hopeful and invested in the industry, but now, they are frustrated. The government is promising several things but not executing them,” Prabhu said. He said, “In the garments sector, the big players have successfully established themselves, but the smaller ones or first-time entrepreneurs are struggling. It is because of the lengthy time it takes for approvals. In the books, there is a list of policies but, unfortunately, no implementation.” Prabhu expects the government to “implement the policies and sanction loans for rural businesses on time.” The apparel businesses, which came up in Tumkur, have eventually shut down due to these hurdles. In Tumkur's textile landscape, 18 firms stand as pillars of the industry, according to Government of Karnataka records. Dominating the scene, Shahi Exports and MAF Clothing together employ close to 5,000 workers, shaping the city's economic narrative. Karnataka’s new textiles and garment policy aims to position the state as a leading destination for textiles and apparel in the country. The policy aims to provide stimulus to the textiles industry and generate 500,000 jobs in five years by attracting investments worth Rs 10,000 crore.
Source: Business Standard
After a gap of one year, India's key statistical body, the National Statistical Commission, will now operate at full capacity with the appointment of two members. The Ministry of Statistics and Programme Implementation (MoSPI) has appointed A Ganesh Kumar and Debasis Kundu as members of the commission, which is mandated to strengthen the country's statistical system and firm up surveys to be undertaken to provide administrative statistics. The appointments will take the panel's strength to the mandated five, including its chairman. The National Statistical Commission was set up in 2005 on the recommendations of a panel headed by former RBI governor C Rangarajan, with an objective to provide "strategic direction and leadership to the national statistical system in MoSPI, line ministries and state governments". The commission's purpose is to serve as the country's nodal body for core statistical activities, suggest standards for statistical surveys and ensure coordination with other departments. Last year, the commission set up five expert committees to improve survey processes and provide suggestions on issues such as incorporating technology in surveys, sampling methodology, data collection processes and statistical methods. The commission, chaired by RL Karandikar, also has Asit Kumar Sadhu and Mukesh Mohania as members since December 2022. Ganesh Kumar is currently a professor at the Indira Gandhi Institute of Development Research, Mumbai, and has worked with the MoSPI in the past. He was also a member of the Advisory Committee on National Accounts Statistics, which advises the ministry on revising the base year of national accounts. Kumar was also a member of the working group for the ministry's 77th round of the National Sample Survey. Kundu is a professor at the Department of Mathematics and Statistics at the Indian Institute of Technology, Kanpur. The latest appointments come in the backdrop of demands for reforming the country's statistics system. Earlier this year, the Prime Minister's Office called for a meeting to discuss the overhauling of the country's statistics system. One of the suggestions at the meeting was to empower the National Statistical Commission further.
Source: The Economic Times
The government may have to take a relook at the tax incentives being offered to units in the International Financial Services Centre (IFSC), a new financial hub in Gujarat, in view of Pillar Two of the Base Erosion Profit Sharing framework, according to a Deloitte report. "MNE groups having operations in the GIFT (Gujarat International Financial Tech) City will need to evaluate the overall tax impact in India, pursuant to the Pillar Two Globe Rules," the report said. A group having non-IFSC presence along with a unit in IFSC may be able to benefit from the jurisdictional blending at India level, it said. It suggested offering incentives in other forms to keep the attractiveness of IFSC intact. Pillar Two sets out global minimum tax rules aiming to ensure that large MNCs pay a minimum effective rate of tax of 15% on profits in all countries. The report pointed out that units in IFSC may not have enough employees and assets to avail of the benefits, so these units will need to evaluate the overall tax impact in India, after the Pillar Two Globe Rules. Conglomerates from the financial services industry that have set up base in the GIFT City are incentivised with tax holiday benefits for a period of 10 out of 15 years, and a lower rate of alternate minimum taxes at 9%, along with surcharge and cess, which brings down the effective tax rate to below 15% . This means their resident countries can apply top up tax on the income from IFSC. While the majority of European countries have already announced the Pillar 2 framework, India is expected to announce steps in this direction in its full budget in July. "The Pillar 2 overhang continues to dog policy makers in India," said Rohinton Sidhwa, partner - direct tax, Deloitte. "It's possible that India could potentially be tempted to look at ways to unilaterally also boost gains from Pillar 2, albeit staying within the overall consensus," he said.
Source: The Economic Times
Interest rates could remain higher than expected in 2024 and 2025 as global commodity prices level off, the World Bank said in a report released Thursday. The report also noted that a significant flareup in the Middle East could further stoke global inflation. "A key force for disinflation-falling commodity prices has essentially hit a wall. That means interest rates could remain higher than currently expected this year and next. The world is at a vulnerable moment: a major energy shock could undermine much of the progress in reducing inflation over the past two years," said Indermit Gill, chief economist, World Bank. The World Bank's index of commodity prices has remained unchanged since mid-2023. The new Commodity Outlook projects prices are expected to decline 3% in 2024 and 4% in the following year However, it noted that it is unlikely to have an impact on inflation, which has remained high across countries. "It will keep commodity prices about 38% higher than they were on average in the five years before the Covid-19 pandemic," it said. Experts have pushed the possibility of a cut by the RBI to the year's second half, given geopolitical concerns and the possibility of higher rates for longer in the US. The RBI's monetary policy committee held the policy rate at 6.5% for the seventh consecutive time at its meeting in April. "One critical factor behind this divergence relates to heightened geopolitical tensions that are keeping upward pressure on prices of major commodities and stoking risks of sharp price movements. Central banks must remain alert about the inflationary implications of commodity-price spikes amid elevated geopolitical tensions," said Ayhan Kose, deputy chief economist, World Bank.
Source: The Economics times
In this period, most of the country’s textile products were exported to Iraq, Afghanistan and Russia. The three countries accounted for 26, 18 and 6.0 percent share of Iran’s total textile exports, respectively. The majority of the textile products were exported from the country through the Kashan Customs Office, followed by Mashhad and West Tehran customs. Also $2.2 billion of textile products were imported into the country from March 21, 2023, to March 19, 2024, showing a 12 percent growth compared to a year earlier. The United Arab Emirates (UAE), China and Turkey were the main countries that exported textile products to Iran in this period Back in October 2023, Secretary of the Association of Iran Textile Industries Shojaeddin Emami Rauf said annual export from the country’s textile industry stands at $560 million, while the imports are currently about $1.880 billion.“The imports in the textile industry are currently $1.880 billion, which includes the import of yarn, clothing, fabric, etc.,” Emami Rauf said. According to the official, approximately $680 million of the above-mentioned figure is related to the imports of fabrics. “We have a big gap in the weaving industry and investment should be made in this field; with a small investment we can reduce the imports in this sector and turn raw materials into domestic products,” the official said. “If the government supports weaving units, we can also invest in the spinning and dye sector and increase exports while preventing currency outflow,” he added.
According to Emami Rauf, the Iranian textile industry has the capacity to increase exports by 3-4 times.
Source: Tehran Times
Textile artist and weaver Erin McQuarrie is hosting the next Saturday Studio workshop at Cove Park. A former resident at the arts centre on the Rosneath Peninsula, Erin will demonstrate the basics of weaving and how she creates her stunning woven sculptures. This special event will take place on Saturday May 18, with a morning and an afternoon workshop are available. These events are free – visit the Eventbrite page to book and find out more. This workshop is for children aged five and upwards, children over eight years old may attend without an accompanying adult. Please book a ticket for each person attending. Saturday Studio Workshops are made possible with support from Argyll And Bute Council.
Source: The Lochside Press
Kenya’s cabinet secretary for Investment, Trade and Industry Rebecca Miano has hinted at the nearing completion of trade negotiations between Kenya and the US, suggesting the possibility of a finalised pact by year-end. This development comes amidst US confidence in the renewal of the African Growth and Opportunity Act (AGOA), set to expire next year, ensuring continued preferential export terms for Sub-Saharan nations to the US market. The fifth round of in-person talks between Kenyan and US trade experts follows the conclusion of the fourth round in Washington DC. Miano indicated that negotiations are advancing, aligning with the commitment made by Presidents William Ruto and Joe Biden in October last year. Speaking at this year’s American Chamber of Commerce in Kenya (AmCham) 2024 Business Summit, Miano emphasised progress in the discussions, suggesting a potential deal before the US November elections. Key topics during recent talks in Washington included agriculture, environment, workers’ rights, anticorruption measures, and support for Micro, Small, and Medium-sized Enterprises (MSMEs). Assistant United States Trade Representative (USTR) Constance Hamilton led the US delegation, while Kenya was represented by principal secretary for Trade Alfred K’Ombudo. Concerns have been raised regarding potential delays due to the US presidential elections, prompting efforts to expedite negotiations. The US has advocated for transparent procurement processes and protection of intellectual property rights in Kenya, aiming to secure market access for US companies and agricultural goods. Additionally, Kenya has secured technical assistance from the US to strengthen public procurement processes. Miano highlighted efforts to enhance transparency in government procurement and urged US companies to invest in Kenya, emphasising the government’s commitment to facilitating business operations. The AmCham Summit aims to facilitate deals in various sectors, surpassing last year’s $700 million worth of agreements. US commerce secretary Gina Raimondo affirmed AGOA’s priority for the Biden administration and discussed modalities for its renewal during her visit to Kenya. Both African states and US officials are working towards AGOA’s extension by a further ten years. Negotiations for the Strategic Trade and Investment Partnership (STIP) aim to boost investment and economic growth, with Kenya targeting at least five per cent of the US market, potentially generating significant export revenues annually. Key sectors poised to benefit include agriculture, manufacturing, textiles, and mining, as Kenya seeks to bolster SMEs and establish economic zones to enhance exports and reduce imports.
Source: Fibre2fashion
US consumers are less concerned with sustainability now than they were a year ago, according to the Global Voices survey conducted by ESW. The survey highlights a decline in the US sustainability sentiment score, dropping from 51 in 2023 to 49 this year, which is below the global average of 55. The survey, which measures attitudes towards sustainability across various countries, shows that emerging markets are more focused on sustainability compared to economically mature markets. India scored the highest at 75, followed closely by the United Arab Emirates at 74, China at 70, and Mexico at 67. In contrast, Japan, Germany, the UK, Switzerland, and Canada scored significantly lower, indicating varying degrees of commitment to sustainable practices worldwide. Younger generations are generally more engaged with sustainability issues. Gen Z scored 61 and Millennials 60, significantly higher than Gen X at 53 and Baby Boomers at 49. Within the US, Millennials have the highest sustainability score at 59, though this has fallen from 62 last year. This group also scored higher than their younger Gen Z counterparts, who scored 57, as per the survey. The survey further identifies environmentally attuned shoppers, classifying those who scored 80 or above on the sustainability scale as such. One-third of all global respondents fall into this category, indicating a significant segment of consumers highly conscious of environmental issues. Additional findings from the survey indicate an increased awareness of greenwashing, with 55 per cent of global consumers acknowledging greater awareness compared to last year. Also, 27 per cent of consumers consider a brand’s environmental transparency when making purchases. Interestingly, luxury shoppers are 1.5 times more likely to be sustainably attuned, and those valuing brand authenticity are 50 per cent more likely to be environmentally conscious. Among shoppers who prioritise brand names, 32 per cent are likely to be environmentally attuned, with these consumers associating brand names with higher quality and better environmental records. “We were surprised to discover that the degree to which consumers are concerned about sustainability, as well as what they value from the brands they patronise, depends largely upon where they live,” said Martim Avillez Oliveira, chief revenue office, ESW. “The data suggests that while US consumers have been encouraged to make environmentally responsible choices for years, perhaps the intensity of that messaging, along with the increasing strain that inflation places on households, may have consumers at a tipping point.”
Source: Fibre2fashion
