In a move that could ease the burden for petroleum and tobacco players in the country, the finance ministry is all set to revamp the old Central Excise Act 1944 with a new Central Excise Bill 2024, aligning it with recent GST and customs laws.
According to the proposed Bill, the Central Board of Indirect Taxes and Customs is pushing for easier access to refunds, reducing interest on delayed payment of duty, clarification in the definition of related persons, and much more. The new proposed bill is currently out for stakeholder comments before the government formally introduces it in Parliament and seeks approval.
HOW THE NEW BILL IS DIFFERENT FROM THE OLD
Under the new bill, regarding the provisions for special economic zones, the bill proposes not to exempt excisable goods produced or manufactured in Special Economic Zones and brought to any other place in India from duty. However, under the old excise Act, an exemption from payment of duty is available on all excisable goods produced or manufactured in Special Economic Zones. According to the industry, the draft bill allows the government to provide exemptions to Special Economic Zones by way of notification in the official gazette. This may subsequently prove to be a relief. Similarly, on the definition of related persons, the new draft adopts it in letter and spirit from the customs law, whereas in the old law, no such definition was available in the existing framework of the Act. Here, too, the industry feels that this will help provide clarity on the taxability of transactions. However, valuation may still pose a challenge, and they expect the government to ease the pain there. Regarding interest on delayed payment of duty, the new draft states that the rate of interest on delayed payment of duty cannot exceed 18% per annum, in line with the GST law. In the old law, the rate of interest on delayed payment of duty ranged from 10% to 36%. The industry claims this may prove to be a substantial relief to taxpayers. On refunds, the proposed Central Excise Bill 2024 stipulates that the limitation to apply for a refund should be one year. However, in the old law, the limitation period to apply for refunds is two years. Sources in the government say the motive is to encourage taxpayers to seek refunds sooner so that the government can process them early, which will, in turn, help taxpayers with their working capital. Regarding demands and recovery, the new draft Central Excise Bill 2024 aims to set the time limit for this at three years to serve notice to the taxpayer. In the old law, there was no such time limit. This helps both the government and taxpayers by providing certainty within this timeline. The industry had often alleged that the government could pick any year and issue a notice under the existing law, but with the new proposal, the government will be bound to assess cases of evasion and non-payment within a three-year time limit. The industry feels this would provide clarity regarding the initiation of proceedings against the assesses
EXPERTS SPEAK Meanwhile, hailing the proposed new Central Excise Bill, Rajat Bose, Partner at Shardul Amarchand Mangaldas & Co., says, "The bill has been drafted keeping in mind the limited applicability of the law in respect of specific goods that are leviable to Central Excise duty such as certain tobacco and petroleum products. Moreover, this bill will help in removing outdated and redundant provisions following the introduction of the Goods and Services Tax (GST)." "The bill intends to borrow the concept of ‘related persons’ from the customs law. With respect to the limitation, the time limit for claiming a refund by an assessee is proposed to be one year, whereas earlier it used to be two years. The tax authorities may get three years to raise demands," it added. Expressing similar sentiments, Mahesh Jaising, Partner at Deloitte says, "The Central Excise Bill 2024 introduces several key changes aimed at modernizing and streamlining India's excise framework. Notably, the Bill does not automatically exempt excisable goods produced in Special Economic Zones (SEZ) and export-oriented units, emphasising the need for specific government notifications for exemptions." "The replacement of CENVAT credit with a new section on Central Excise Duty credit, along with detailed conditions and restrictions for its utilization, reflects a significant shift towards efficiency. Additionally, the transfer of unutilised credit balances as transitional credit is a pragmatic move to ensure continuity." "The extension of the time limit for recovery of duties from two years to three years and the reduction of the time limit for claiming refunds from two years to one year indicate regulatory oversight. Overall, these changes signal the government's intent to create a more predictable and business-friendly excise regime." It remains to be seen how soon the government will take the bill to Parliament and get the new provisions up and running for the industry.
Source: CNBC
The Indian government has exempted polyester staple fibre (PSF), filaments and spun yarn imported under the Advance Authorisation Scheme. The quality control orders (QCOs) issued for these products will now no longer be applicable on imports meant for using in goods that are to be exported. Industry organisations including The Southern India Mills’ Association (SIMA) has thanked the government for the move. It is to be noted that after the implementation of QCOs, exporters were facing problems to procure raw materials from global suppliers. The Ministry of Chemicals and Fertilisers has issued a notification No 16/2024 dated 6.06.2024 in this regard. The user industry will be exempted from QCO for imports of these raw materials for exports after one stage value addition. Consumer industries are bound to adhere to pre-import conditions (using the imported fibres only for export purpose) and also the period for fulfilment of export obligation has been reduced from 18 months to 6 months for all types of MMF imported under Advance Authorisation Scheme. Ministry of Textiles had already exempted viscose staple fibre (VSF) imported under Advance Authorisation Scheme vide Notification No 71/2023 dated 11.03.2024. It came into effect from the date of the Notification. It is to be noted that textile related raw materials come under two different ministries, i.e. the ministry of textiles and the ministry of chemicals and fertilisers. SIMA chairman Dr. SK Sundararaman has thanked the government for considering the representations made by the Association. He said that the announcement in this regard has given a relief to the MMF textile products exporters enabling them to improve their export performance that had been significantly affected in the last two years. The Association has been demanding the government to facilitate smooth supply of raw materials at an internationally competitive rate to achieve a sustainable growth rate, both in domestic and export markets. The Ministry of Chemicals and Fertilisers (Department of Chemicals and Petrochemicals) had implemented QCO for PSF in second half of the last year. As per the order, every user has to purchase the raw materials only from BIS licence holders, both from the domestic and international markets. Though the domestic manufacturers of the said products have obtained BIS licence, the applications submitted by several foreign manufacturers are still pending before the BIS authorities for inspection and approval. This has severely affected the manufacturer-exporters, who are the consumers of speciality fibres and filament yarns and spun yarns, as specified by the buyers, especially the overseas buyers and global brands. The said raw materials are not being manufactured in the country. It has disrupted the smooth flow and availability of MMF raw materials, thereby seriously impacting the export performance of the MMF value chain. There was similar problem in the case of VSF. Ashish Gujarati, former president of the Southern Gujarat Chamber of Commerce & Industry (SGCCI), told Fibre2Fashion, “Raw materials are always exempted from tariff and non-tariff barriers in India. But the ministries did not specify such provisions for exporters in orders issues for quality standards. They have issued notifications after hue and cry from the industry. Indian exporters were not able to compete in MMF products in the global market. Now, they can procure quality raw materials at competitive prices.” He said that the government should consider exempting domestic market also from such quality standards on raw materials. It should implement quality standards on finished consumer products like other countries to ensure quality products in the domestic market.
Source: Fibre2fashion
India's apex indirect taxes body on Saturday directed customs authorities to release goods imported via third-party invoicing under free trade agreements (FTA) "without delay". Industry was facing delays in release of consignments and denial of free trade agreement benefits with authorities questioning value addition in third-party invoicing, ET reported on June 8. The Central Board of Indirect Taxes and Customs, or CBIC, has clarified that any verification of invoice, if required, should be carried out only in the terms of legal provisions of the free trade agreement and the Customs (Administration of Rules of Origin under Trade Agreements) Rules that provide for verification of exports from the exporting country on certain grounds. Customs authorities had begun denying duty concessions under FTA and sought payment of differential customs duty with interest in the case of a thirdparty invoice or the full duty. Multinational companies use third-party invoicing for imports in which billing is carried out in a country different from country of origin. Third-party invoicing is permitted under free trade agreements (FTAs). CBIC in a communique, seen by ET, to customs authorities has reiterated the provisions of CAROTAR, 2020 that lay down that though the importer may be requested for supporting information, he is under no compulsion to submit commercially sensitive information such as the export invoice in case of third party invoicing. The bill-to-ship-to-business model ensures commercial confidentiality in global value chains. CAROTAR rules do require an importer to seek details which may be confidential and if any importer fails to provide sufficient information or documents, the verification process as prescribed under the trade agreement shall have to be initiated. Industry had represented the matter to the CBIC after consignments, particularly under India-Asean FTA, were held up at Nhava Sheva and some other ports.
Source: The Economic Times
New Delhi: The Centre is proposing to introduce a bill - the Central Excise Bill, 2024 - in the upcoming budget session to replace the Central Excise Act, 1944. The bill 2024 proposes to do away with the outdated provisions, align excise law with the GST and customs framework to ensure a more cohesive indirect tax system and incorporate the CENVAT credit provisions previously governed by a separate delegated legislation, according to the draft released earlier this week. It also aims to relook at excise duty exemption given to the special economic zones (SEZ) and introduce stricter audit processes to increase transparency on the lines of GST and customs. "Our attempt is to table the draft bill in the budget session," a senior official told ET. The Centre has asked for comments and suggestions from the stakeholders till June 26. The budget session is expected after the second week of July. "This bill may lead to a reduction in compliance burden, and provide a comprehensive legal framework better suited to the current economic landscape," said Mahesh Jaising, Partner, Deloitte India. The bill introduces many interesting features. The proposed bill also seeks to relook at excise duty on goods produced or manufactured in a Special Economic Zone (SEZ). Any excise duty exemption will require separate notification. "The bill also empowers the authorities to demand duty from directors of private companies and partners of partnership firms," said Rachit Jain, Partner at Lakshmikumaran & Sridharan Attorneys. The bill also intends to introduce the concept of 'related persons' from customs and GST Laws. Besides, the bill has proposed to extend the limitation for department authorities to raise duty demand to three years from two years prescribed in the current excise law. Further, in cases of refund of duty, the interest on delayed refunds will start accruing after 60 days from the date of the refund application instead of a 3- month period prescribed under the incumbent excise law. "This bill may lead to a reduction in compliance burden, and provide a comprehensive legal framework better suited to the current economic landscape," Jain added.
Source: The Economic Times
The biggest challenge for the commerce and industry ministry under the coalition government led by Prime Minister Narendra Modi would be to revive the growth of merchandise exports that has been grappling with external factors such as geopolitical risks and high inflation. A dedicated road map is expected to be drawn towards this, aligning with the $1 trillion merchandise exports target by 2030. The new government is likely to complete the unfinished agenda, particularly related to signing of the free trade agreement (FTA) with Oman. The negotiation between India and Oman concluded earlier this year and the pact is ready to be signed as soon as it gets an approval from the Cabinet after the formation of the new government. While the earlier plan was to complete negotiations with India and the United Kingdom (UK) in July— as a part of the new government’s 100-day action agenda—talks may take more time to resume, since London is also headed for elections in July. While FTA negotiations with Peru, the European Union (EU) may continue, discussions for the launch of FTA talks with South African Customs Union (SACU), Chile as well Gulf Cooperation Council (GCC) are expected over the next few months. Another priority in the first 100 days could be the launch of an e-platform —Trade Connect—to help exporters connect with stakeholders of international trade. The new government may bring back the focus on the pending amendments in the Special Economic Zone (SEZ) law, in line with the emerging order of global trade, to support the building of industrial parks with world class infrastructure and to attract investment in manufacturing. However, the exact timing may depend on the priorities of the new government. The new minister is likely to oversee the redesign of the structure of the commerce department, thereby making the system more efficient.
Source : Business Standard
To sharpen its negotiating stance with the ten-member ASEAN , the Commerce Department has sought more inputs from various industry and export promotion bodies on items where deeper tariff concessions can be demanded ahead of the next round of negotiations on the ASEAN-India FTA review in Indonesia next month, sources said. “Commerce Ministry officials are meeting industry and export body representatives to get their views on the items to focus on for greater market access. Other inputs, include those related to non-tariff barriers, are also being solicited,” the source told businessline. The India-ASEAN FTA, formally known as the ASEAN-India Trade in Goods Agreement (AITGA), has resulted in disproportionate gains for the ASEAN countries which India wants to correct through the review. In 2023-24, India’s trade deficit with the bloc widened to $38.46 billion from $7.5 billion during the implementation of the agreement in 2010. India exported goods worth $41.2 billion to the region while its imports were valued at $79.66 billion. New Delhi is seeking greater market access for its goods, more flexibility in determining rules of origin (ROO) for products through product specific rules, and redressal of non-tariff barriers, to address its growing trade deficit with the bloc, sources have said. “Since the ASEAN countries, too, are seeking more market access for their goods as part of the review despite India’s attempt to level the uneven field, our negotiators have to pro-actively demand lower duties wherever there is a scope. That is why Commerce Ministry officials are holding meetings with the industry so that there is a better understanding of what it wants,” the source said. The ten-member ASEAN includes Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia. Review of AITGA India had been asking for a review of the AITGA for a long time as its trade deficit with the bloc widened significantly since the trade pact was implemented in January 2010. Four meetings of the `joint committee’ for the review of AITIGA have already taken place while the fifth is scheduled in Jakarta on July 29-31, 2024. In the earlier meetings, India sought product specific rules (PSRs) in ROO determination so that the requirements could be relaxed for high value items where the value addition is low. ROO are the criteria to determine the origin of a product and establish if it qualifies for duty cuts under a FTA. PSRs can be introduced in the ROO chapter for relaxing rules for certain items where meeting the prescribed ROO is difficult. In the India-ASEAN FTA, the ROO calls for value addition of 35 per cent whereas for certain industries, like gems and jewellery, the value addition that takes place is less than 10 per cent because the raw material is of high value. Under the AITGA, both sides agreed to progressively eliminate duties on about 75 per cent of goods and reduce tariffs on around 15 per cent of goods. However, the commitments made by the ten ASEAN countries varied considerably. While an open economy like Singapore committed to almost 100 per cent elimination, countries like Indonesia and Vietnam offered much less.
Source : The Hindu Business
The statistics ministry doesn’t expect to undertake any significant downward revision to the official economic growth estimate for FY24, and may disprove many analysts in this regard. It also sees the possibility of the gross domestic product (GDP) expansion in FY25 to exceed 7%, with the “strong momentum” being witnessed. “We don’t think any significant revision is warranted – either for gross-value-added (GVA) or the gross-domestic-product (GDP),”a ministry source told FE, adding that data compilation methodology for computing the national income is “robust”. As per the National Statistical Office’s provisional estimates, India’s GDP in FY24 grew 8.2%, while GVA grew 7.2%. The unusual gap between the two growth numbers has raised some concerns, and so has the fact that consumption growth was half the GDP rate. “India’s growth momentum is strong, and this fiscal year in all possibility will witness an above 7% growth in GDP,” the official said. “But the GVA and GDP wedge in FY25 may be much smaller,” the person added The Reserve Bank of India has projected India’s economy to grow 7.2% in FY25, but many economists say the growth rate could be lower than 7%, and some have even pegged it at 6.5%. In the previous financial year, the sharp 100 basis points (bps) gap between GDP and GVA was mainly a consequence of higher collection of indirect taxes as compared to previous years, and a substantial decline in subsidy expenditure. In FY24, subsidy expenditure had contracted 22% on year. Moreover, the low deflator had also pushed up real growth in FY24. The wholesale inflation (WPI) averaged at (-)0.7% in FY24 as against 9.6% in FY23, which was why the deflator turned out to be unusually low last year. These factors may not play out this year, which is primarily why the GDP print could be lower, say economists. The statistics ministry compiles the national income data, or the GDP data, using the benchmark indicator method. It uses data from several sources, such as Index of Industrial Production (IIP), crop output data, financial performance of listed companies, production of cement and steel, sales of commercial vehicles etc, for calculating the GVA. Improved data coverage and revision in input data made by source agencies later have a bearing on subsequent revisions of these estimates. And hence, the estimates undergo revisions in due course.
Source: Financial Express
Ahmedabad: The textile taskforce of Gujarat Chamber of Commerce and Industry (GCCI) will organize Textile Leadership Conclave-2024 in Ahmedabad on June 15 where experts will discuss the potential of technical textiles and the emerging trends in the textile value chain. Saurin Parikh, chairman, GCCI Textile taskforce, said, “We are going to have expert speakers from composite textile mills, technical textiles and will also connect startups with industry leaders at the conclave.” Gaurang Bhagat, treasurer, GCCI said, “The textile industry is facing challenges due to geopolitical issues but the prospects of the industry are bright because global brands are focused on India.”
Source: Business Standard
After a decade of single-party rule at the Centre, India has returned to an era of coalition politics. As the Lok Sabha election results trickled in on the morning of June 4, the Sensex plunged into a sea of red. The fear among stock market investors and corporate leaders was palpable: what if India’s ongoing reform agenda slowed down? However, some analysts reminded us that the country’s economic reforms were born in a coalition era. Moreover, regional satraps like N Chandrababu Naidu, on whom the prime minister, Narendra Modi, will have to rely, could well be political mavericks but are not opposed to economic reforms. Coalition politics will throw up its own challenges, but the real economic test for Modi 3.0 could lie in navigating the rising protectionist tides from seemingly friendly advanced economies like the US and the European Union (EU). India is unlikely to gain the same level of access to these affluent markets that China once enjoyed. “India is not in the same boat China was some years ago,” says Ajay Dua, former Union industry secretary. “We won’t get the kind of free ride China got from the rich world.” Pritam Banerjee, head of the Centre for WTO Studies under New Delhi-based Indian Institute of Foreign Trade, says there is a growing protectionist tendency in major economies due to their vulnerability to economic, technology and geopolitical shifts. “Advanced countries will like to maintain or deepen their lead in technology-intensive sectors that represent the bulk of future global demand. These include goods and services related to green transition, digital technologies, advanced medicine and automation,” he says. Sample this: exporters to EU will soon need to demonstrate that their products such as bovine meat, palm oil and coffee originate from land that hasn’t been deforested since December 31, 2020. This requirement stems from EU’s deforestation regulations of 2023, to be implemented in a phased manner from this year. For Indian companies exporting chemicals to EU, a regulation called REACH (registration, evaluation, authorisation and restriction of chemicals) presents a challenge. Often considered a non-tariff barrier, REACH necessitates high registration fees for each chemical and requires companies to share technical data with EU. The US has already implemented measures affecting Indian shrimp exports. In 2018, it banned imports of wild-caught Indian shrimp due to concerns about protecting sea turtles. Its issue is that Indian fishers don’t use turtle excluder devices. The US also employs another non-tariff barrier: complex authorisation requirements that lead to increased costs and delays for Indian exporters trying to ship their products. While non-tariff measures (NTMs) are domestic rules for protecting human, animal and plant health, there are occasions when such measures turn arbitrary and go beyond scientific rationale. These are called non-tari barriers (NTBs). For instance, the Japan Toys Association, which authorises laboratories to certify toys for the Japanese market, has yet to accredit any lab in India. As a result, Indian companies have to dispatch entire shipments to Japan for testing and certification, causing significant delays and increased costs.
VEXED EXPORTERS Meanwhile, the Indian gemstone industry faces a different challenge. In the 1990s, due to concerns about child labour in the industry, it was included on a list maintained under the US Trafficking Victims Protection Reauthorisation Act (TVPRA). While the industry maintains that there is no child labour now the US has yet to remove it from the list. “The landscape of India’s gemstone industry has changed substantially in a way that there are no child labour instances in the industry,” said a working paper published by the Economic Advisory Council to the Prime Minister (EAC-PM) in November 2022. “Many of the craftsmen have now become exporters. Craftsmen have been educated and have realised the importance of compliance and so are not involving their children in the industry,” the paper adds. The paper also includes barriers faced by exporters such as high certification and labelling costs in the US, delays in Japan’s inspection system for sports goods and toys, and UK’s decision to maintain EU’s stringent limits on Aflatoxins, which are toxins produced by fungi found on certain agricultural crops. This will put up further hurdles for Indian exporters of certain food products. According to a report published by Delhi-based trade think tank Global Trade Research Initiative (GTRI) last year, key Indian exports that routinely face high non-tariff barriers in advanced economies include chillies, tea, basmati rice, milk, poultry, bovine meat, fish and chemical products shipped to EU, and sesame seed, black tiger shrimps, medicines and apparels to Japan. Ajay Srivastava, founder of GTRI, argues that developed economies led by the US and the EU have taken a sharp turn towards protectionism, restricting imports and making them expensive. “They do not honour the commitments made at the WTO (World Trade Organisation) or in climate negotiations and push for unilateral measures,” he says, citing the examples of EU’s introduction of at least five regulations in 2023. These include forest regulations, and carbon tax, officially called the Carbon Border Adjustment Mechanism (CBAM). “EU-CBAM when fully implemented is estimated to be 20-35% tax equivalent on Indian firms,” he says. “Industry has to share all plant and production details with EU. Also, a firm may need to run two production lines. Expensive yet green for making products to export to EU countries and normal products for the rest of the world,” he adds.
On multiple occasions, Finance Minister Nirmala Sitharaman had hit out at the EU for crafting the policy on carbon tax. “So, my non-green steel is okay for you as long as I pay extra. That extra is not coming for me to convert my dirty steel into green steel, good steel,” she said at the Peterson Institute for International Economics in Washington in April last year, exposing EU’s hypocrisy that it would buy the “dirty” products as long as the carbon tax is paid.
WHAT WILL BE THE IMPACT? According to Banerjee of the Centre for WTO Studies, advanced economies and emerging countries like India are locked in a competitive space that would require all aspects of policy to come into play, including industrial policies that might be violative of WTO obligations and protectionist tariff and nontariff measures. “The economic impact of such measures would be disproportionate in terms of restricting India’s own goals and economic objectives,” he says. He adds that there will be more pushback once India moves up the valuechain and competes for the same industries and occupational specialisation for workers in manufacturing and services. “The relatively open markets that China took advantage of would not be available to us to the extent it was available to China,” he adds. Take textiles and apparel, a sector of immense importance for the Indian economy. Exporters in this sector currently face 290 notifications under the Technical Barriers to Trade (TBT) agreement. These notifications act as nontariff barriers, essentially setting technical standards that all imported goods must meet. For example, the US focuses on flammability standards for clothing textiles, while EU prioritises clear labelling of fibre composition. Mithileshwar Thakur, secretary general of the Apparel Export Promotion Council (AEPC), agrees that such notifications present challenges in terms of compliance and potential costs. “But they also offer an opportunity for the Indian exporters to enhance the quality and safety of their products,” he says. “By proactively participating in the rule framework, one can mitigate the risk of rejections.” While environmental and labour standards are crucial for promoting sustainable practices, some argue that developed countries are deploying them strategically to restrict trade. The United States Mexico-Canada Agreement (USMCA) exemplifies this concern. For instance, the USMCA mandates that a certain percentage of an auto component’s value must be produced by workers earning at least $16 per hour. This requirement can pose challenges for countries with low wage “Through free trade agreements (FTAs), developed countries are pushing developing countries to accept their standards and regulations,” says Srivastava of GTRI. “Higher environmental standards of US or EU are designed for domestic application in countries with a per capita income of $50,000. The problem is in forcing countries with a per capita income of $2,000 to adopt Today, a key concern for India’s FTA negotiators with UK and EU is the potential spillover effect of stricter environmental and labour standards. Experts like Abhijit Das, former chief of the Centre for WTO Studies, warn that adopting such standards for exports could necessitate applying them domestically, leading to “huge” economic and social impacts. Das argues that developing nations like India, Brazil and Indonesia are increasingly seen as competitive threats by developed economies, leading to stricter demands in trade negotiations, including at the WTO. Yielding to such pressure could have dire consequences for India’s micro, small and medium enterprises (MSMEs), warns Das, as those small companies with limited resources won’t be able to comply with very high standards. “Our domestic market will then be open to only large players,” he adds.
Source: The Economic Times
Germany's real (price-adjusted) new orders in manufacturing experienced a marginal decline of 0.2 per cent in April 2024 compared to the previous month, after seasonal and calendar adjustment, according to provisional figures released by the Federal Statistical Office (Destatis). A three-month comparison showed that new orders from February to April 2024 were 5.4 per cent lower than in the preceding three months. This decrease was primarily attributed to a significant large-scale order placed in December 2023. When excluding large-scale orders, new orders in April 2024 rose by 2.9 per cent compared to March 2024. However, for the period from February to April 2024, new orders were still 1.4 per cent lower than in the previous three months. After revising the provisional data, it was found that new orders decreased by 0.8 per cent in March 2024 from the previous month, as opposed to the initially reported figure of a 0.4 per cent decline. Sector-wise, April 2024 saw new orders rise by 0.7 per cent in the consumer goods sector, while the intermediate goods sector experienced a drop of 1.7 per cent. Foreign orders overall fell by 0.1 per cent, with new orders from the euro area declining by 1.4 per cent. Conversely, new orders from non-euro area countries increased by 0.6 per cent. Domestic orders showed a slight decline of 0.3 per cent, as per details. The real turnover in manufacturing, when seasonally and calendar adjusted, decreased by 0.9 per cent in April 2024 from the previous month. The calendar-adjusted turnover was 3.2 per cent lower than in April 2023. After revising the provisional data, a decrease of 0.4 per cent was noted in March 2024 from February 2024, compared to the initially reported 0.7 per cent decline.
Source: Fibre2fashion
The terminal's operations will commence with the berthing of the Singaporean-flagged vessel MAERSK DAVAO, which is carrying import containers from Port Klang, Malaysia. "The Maersk Line container vessel will be berthed at the Patenga Container Terminal on 10 June, marking the beginning of the terminal's operational activities. From then on, regular berthing of ships will be carried out at the terminal according to schedule," Chattogram Port Authority Secretary Mohammad Omar Faruk told TBS. According to Maersk Line, the container ship will arrive at Chattogram Port on 8 June with approximately 1,700 twenty-foot equivalent unit (TEU) import containers. After unloading at the port's existing jetty, it will move to the Patenga Container Terminal to load about 1,000 TEU export containers. Currently, shipping operations are carried out at 19 jetties in the three terminals of the port — New Mooring Container Terminal, Chittagong Container Terminal and General Cargo Berth. These three terminals are operated by domestic terminal and berth operators. However, Patenga Container Terminal is set to be operated by Red Sea Gateway Terminal, a Saudi company. Patenga Container Terminal's construction began on 32 acres of land in the Patenga area in 2019 at Tk1,229 crore. It was inaugurated in November 2023 after construction was completed in June 2022. The port signed a 22-year agreement with Red Sea Gateway on 6 December 2023 to operate the terminal. The terminal has three container jetties and one dolphin oil jetty, allowing for the simultaneous berthing of three container ships and one oil tanker. It is anticipated to handle 450,000 TEU containers annually, enhancing the port's ship handling and container holding capacity. The terminal's operational activities were initially scheduled to commence in April. However, the process was hampered by delays in obtaining various regulatory approvals from government agencies. However, the eventual green light from the National Board of Revenue (NBR) in early June paved the way for the commencement of port activities. The NBR's temporary approval letter outlines the responsibilities of Red Sea Gateway Terminal, the foreign operator of the terminal. Red Sea Gateway is tasked with handling all aspects of operations at the terminal, including berthing of vessels, loading, unloading, transporting, handling, international movement, container clearance and delivery, and stuffing and unstuffing of goods from sheds and warehouses. The NBR's approval also comes with a set of conditions, including the establishment of connectivity to the ASYCUDA software for the Patenga Container Terminal, the provision of all necessary IT equipment, customs offices, vehicles, and security arrangements. Additionally, 100% physical examination of LCL cargo containers and risk-based physical examination of FCL cargo containers are mandated. Furthermore, Red Sea Gateway is required to obtain a license or approval from the NBR once the policy or regulations regarding private port operators are finalised. According to the terminal operator, only geared vessels (vessels equipped with cranes) will be allowed to berth at the terminal for the first two years of operation. Container handling will be carried out using ship cranes. Three gantry cranes have been ordered, but their delivery and installation will take two years. Once the machinery is installed, the terminal will be fully operational, including the berthing of gearless vessels. The Bangladesh Shipping Agents' Association Chairman Syed Mohammad Arif said, "It is good news for businessmen that the Patenga Container Terminal is finally starting operations, albeit late. This will make the country's import-export trade more dynamic." "The terminal will reduce the time taken for loading and unloading goods. The engagement of foreign operators will improve the service quality of domestic operators in port services," he added.
Source: TBS News
The global air cargo market is poised for double-digit growth in volumes in 2024, following a notable 12 per cent year-on-year (YoY) increase in demand in May, according to the latest data analysis by Xeneta. This promising outlook contrasts with the conservative, low single-digit growth forecasts made at the end of last year, as the market has experienced six consecutive months of extraordinary regional demand for cargo capacity. In May, the global air cargo spot rate saw its second consecutive monthly growth, rising by 9 per cent YoY to $2.58 per kg, and increasing by 5 per cent month-on-month. The most significant YoY rate increase was observed in the Middle East & Central Asia to Europe corridor, where the spot rate surged by 110 per cent to $3.21 per kg due to ongoing disruptions in the Red Sea. Spot rates from Southeast Asia and China to North America also saw significant rises, up by 65 per cent and 43 per cent to $4.64 per kg and $4.88 per kg respectively. The China-Europe spot rate recorded a 34 per cent YoY increase to $4.14 per kg, as per Xeneta. “In terms of growth data, analysts sometimes say ‘once is an incident, twice is a coincidence, and three-times is a pattern’. In the world of air cargo, there’s an undeniable pattern emerging. We can’t use the word ‘surprising’ anymore. When we take a mid-term view of the market, with these kinds of numbers, we might be on track for double-digit growth for the year. It is now a possible scenario,” says Xeneta’s chief airfreight officer, Niall van de Wouw. Xeneta's dynamic load factor, a measure of cargo capacity utilisation based on volume and weight of cargo flown alongside available capacity, remained largely unchanged month-on-month at 58 per cent in May, but increased by 3 per cent YoY. However, not all regions experienced growth. Spot rates from North America and Europe to China fell by 32 per cent and 23 per cent YoY respectively in May, to $1.61 and $1.65 per kg. The Transatlantic market also suffered, with freight rate declines in both the front and backhaul lanes due to increased belly capacity from summer passenger travel. The Europe-North America spot rate declined by 21 per cent to $1.77 per kg in May compared to the previous year, while the eastbound North America-Europe corridor spot rate was 16 per cent lower at $1.08 per kg. Looking ahead to the second half of the year, Wouw, highlighted positive market indicators. A bright outlook for Q4 2024 may be on the horizon, potentially bolstered by a threefold increase in ocean container shipping spot rates from the Far East to North Europe and the US West Coast compared to the previous year. This increase, driven by port congestion and disruptions in the Red Sea, could narrow the cost gap for shippers considering a shift to air cargo. Despite these developments, Xeneta notes that a major shift of volume from ocean to air is unlikely. The current cost spikes are more likely due to shippers frontloading imports ahead of the ocean peak season to mitigate supply chain disruptions, rather than a long-term shift in shipping preferences. China's cargo market to North America continues to benefit from the resilient US economy and strong e-commerce demand. However, the air cargo industry faces uncertainty with the recent US crackdown on e-commerce shipments out of China, raising questions about future demand dynamics in this key trade lane.
Source : Fibre2fashion
