Synopsis As per a public notice issued by the Directorate General Of Foreign Trade (DGFT), exporters will now get additional time to submit installation certificates for imported capital goods, reducing pressure on businesses to meet timelines. NEW DELHI: To make it easier for exporters to do business, the government has simplified the Export Promotion Capital Goods (EPCG) scheme which allows import of capital goods at zero customs duty against an obligation to export. As per a public notice issued by the Directorate General Of Foreign Trade (DGFT), exporters will now get additional time to submit installation certificates for imported capital goods, reducing pressure on businesses to meet timelines. Also, from now all Policy Relaxation Committee (PRC) decisions regarding Export Obligation extensions and regularisation of exports will be implemented with a levy of a uniform composition fee making it easier to implement through the system. "With a view to enhance ease of doing business and reduce the compliance burden, certain provisions...are amended for EPCG authorizations issued under Foreign Trade Policy," the DGFT said in a public notice. The DGFT has also simplified the fee structure for extending Export Obligation periods with less paperwork and more efficiency. "These operational amendments are aimed at enhancing ease of doing business by providing up to three years from date of completion of import for submitting installation certificates, which may further be extended upon payment of a fee of ?10,000 per year," said Mayank Arora, Director- Regulatory , Nangia Andersen India. Additionally, requirement for submission of installation certificates for import of spares have been done away with. "These changes would ease compliance burden on capex heavy manufacturers, such as electronics, mobile and IT equipment, who have committed to make large investments under the PLI Schemes," Arora said. An extended deadline for submitting Installation Certificates and by expanding automated rule-based processes, DGFT aims to reduce human intervention, mitigate risks and improve overall efficiency in trade facilitation.
Source: Economic Times
Synopsis India is not reconsidering its stance on allowing Chinese investments, Trade Minister Piyush Goyal stated on Tuesday. Although Chief Economic Adviser V. Anantha Nageswaran had suggested that increased Chinese Foreign Direct Investment could help balance India's trade deficit with China, Goyal noted that such recommendations are non-binding. India is not re-thinking on the issue of allowing Chinese investments into the country, Trade Minister Piyush Goyal said on Tuesday, reported Reuters. Earlier in July, India's Chief Economic Adviser V. Anantha Nageswaran said New Delhi should focus on Foreign Direct Investments from China to boost its exports and help keep India's growing trade deficit with Beijing in check. The economic survey recommendations are not binding on the government, Goyal said. India's Finance Minister Nirmala Sitharaman, however, had backed Nageswaran's suggestion to allow more Chinese investment into the country. India might ease curbs on some Chinese investments: India is likely to ease restrictions on Chinese investment in non-sensitive sectors like solar panels and battery manufacturing where New Delhi lacks expertise and which hinders domestic manufacturing, two government sources told Reuters last week. In 2020, India tightened scrutiny on investments from companies based in China due to military tensions in the remote Himalayan border. The government is planning to free up sectors from government scrutiny that it deems less sensitive from a security point of view for Chinese investment, said one of the officials, who did not want to be named. The govt official told Reuters that restrictions on Chinese investments in sectors such as electronics and telecom would continue.
Source: Economic Times
NEW DELHI (Reuters) - India plans to expand production linked incentives (PLI) to small textile firms soon, part of efforts to increase garment exports to $50 billion by 2030, the federal textile minister said on Tuesday. The government introduced incentives for the textile sector in 2021, and has so far approved 64 proposals worth 198 billion rupees ($2.37 billion) to promote production of man-made fibre (MMF) fabric, garments and technical textiles. "We are considering to review the PLI scheme," Giriraj Singh, federal textile minister, said at the India International Garment Fair, noting the scheme had emerged as a big success to attract investments and expand production. He said state incentives for improving product quality, entering new markets and signing free trade agreements with several countries, including the UAE and Australia, could help the labour-intensive industry - a priority for the Prime Minister Narendra Modi's administration. "We are working on a roadmap to move ahead of China, not only Bangladesh in textiles," he said, adding his ministry would soon hold meetings with big companies to understand their concerns. India's $170 billion textile and apparel industry, which employs over 45 million, has been facing a decline in exports as European and the U.S. consumers cut back spending in 2023 amid tight monetary conditions. Textile and apparel exports declined to $35.94 billion in the 2023/24 fiscal year ending in March from a record $44.51 billion in 2021/22, commerce ministry data showed. Garment exporters are lobbying government ministers, ahead of the annual budget next month, seeking a lower investment threshold limit of 150 million to 300 million rupees under the PLI scheme from 10 to 30 billion rupees, besides higher subsidies on bank loans. Currently, the government offers 4%-6% cash incentives over a period of five years to the selected companies for achieving production targets, industrialists said. "The government needs to lower the threshold investment limit and expand PLI benefits to all garments across all fibres," said Mithileshwar Thakur, secretary general, Apparel Export Promotion Council, an apex body of small exporters.
($1 = 83.4100 Indian rupees)
Source: Yahoo News
Synopsis: The Indian government has announced measures to promote India-US economic engagement, including a reduction of corporate tax from 40% to 35% and the removal of the Angel Tax. The move is seen as a strategic move to strengthen India's economy and foster inclusive development. The budget also includes provisions for capital expenditure on infrastructure, which could boost job creation. The reduction of corporate tax is expected to encourage foreign companies to establish branches and offices in India, boosting foreign inflows. Reduction of corporate tax in the 2024 Indian Budget and removal of Angel Tax are among the measures that will promote India-US economic engagement, according to a leading Indian economist. Subramanian addressed a gathering of the business community and investors on the Union Budget 2024-25 at an event organised by the Consulate General of India in New York here in collaboration with the US-India Strategic Partnership Forum (USISPF). Subramanian highlighted the reduction of Corporate Tax from 40 per cent to 35 per cent; and the removal of Angel Tax among other measures that would promote India-US economic engagement, a post by the Consulate on X said. Lauding the budget, Subramanian described it as one that would strengthen the foundations of India's economy, foster inclusive development by strategically advancing the vision of 'Viksit Bharat', Developed India @2047, the 100th year of its independence, a press release by the Consulate said. He pointed out that the India-US partnership is at present at an important juncture and it would further strengthen in the coming years, benefitting both the nations. Subramanian highlighted the reduction of Corporate Tax from 40 per cent to 35 per cent, which would encourage foreign companies to set up their branches and offices in India and boost foreign inflows. He also voiced appreciation for removing the Angel Tax in the current budget which would be significant for India's start-up ecosystem and encourage investments from outside, the release said adding that this move would foster innovation and entrepreneurship. He "praised the budget for its provision for capital expenditure especially on infrastructure which would boost job creation. However, he also emphasised on formal job creation by setting up more manufacturing units," the release said. The discussion also focussed on the announcement of simplifying tax procedures, fiscal management, Indian investment in digital infrastructure, and reduction of customs duty on a range of goods in the budget. Nishith Desai from Nishith Desai Associates, one of the leading legal and taxation firms in the US, spoke about simplifying Indian legal and tax procedures in the budget. Chief Economist of ICICI Bank Sameer Narang lauded the budget's fiscal prudence by lowering the fiscal deficit to 4.9 per cent from an earlier estimate of 5.1 per cent in the interim budget. Sandeep Chhajed, CEO, of IIFL Capital Inc USA spoke about India's investment in digital infrastructure, simplification of GST and reduction in customs duty on a range of goods, the release said. USISPF said in a post on X that key discussions at the event focussed on the reduction of Corporate Tax from 40 per cent to 35 per cent to boost FDI, improving the ease of doing business environment, investing in India's infrastructure, strengthening supply chains, and building a clean energy economy.
Source: Economic Times
Indian clothing retailer Arvind posted a 40 per cent fall in its first-quarter profit, as inflationary pressures weighed on consumer spending on apparels despite discounts.
The company, which sells international brands like Tommy Hilfiger, Arrow and Calvin Klein, said its consolidated net profit fell to Rs 39.31 crore ($4.7 million) from Rs 65.87 crore a year earlier.
Arvind's shares fell 2.8 per cent after the results.
Indian textile manufacturers were met with weak demand environment throughout fiscal year 2024, as consumers were weary of spending on discretionary items. Following this, the retail inflation rate for the April-June quarter hovered around 5 per cent, primarily due to high food prices. This led to a decrease in spending on non-essential items. Arvind posted a 1 per cent fall in revenue from operations, while revenue from its core textile segment, which accounts for 73 per cent of total sales, slipped 5 per cent from a year earlier. The company also flagged "illegal workers' unrest" that impaired the performance at its largest factory for 21 days, affecting businesses like the woven and denim segments. The strike had an approximate impact of about Rs 200 crore on revenue, the company said. Retailers have been offering discounts to sway customers into buying their products. Arvind's total expenses rose 1 per cent, further hurting its margins. The advanced materials segment, through which Arvind makes fabrics and protective gear for construction work, fell about 4 per cent. Earlier this month, rival department-store chain Shoppers Stop swung to a quarterly loss, as high inflation weighed on consumer spending.
Source: Business Standard
The process of getting negotiating teams back in the room will kick-start soon to deliver a Free Trade Agreement (FTA) with India, the UK's newly elected Labour government announced on Monday as it set out its trading priorities.
Business and Trade Secretary Jonathan Reynolds spelt out his department's approach to international trade deals, which he said will put economic growth at the heart of the negotiations to achieve high-quality pacts that give British businesses access to international markets and boost jobs. The Department for Business and Trade (DBT) said it also plans to publish a trade strategy which aligns with the government's industrial strategy, enhances economic security and supports net zero ambitions. Boosting trade abroad is essential to deliver a strong economy at home. That's why I've wasted no time taking stock of progress and getting ready to press on with trade talks with our international partners, said Reynolds. From the Gulf to India, our trade programme is ambitious and plays to the UK's strengths to give British businesses access to some of the most exciting economies in the world. Our teams will be entering negotiating rooms as soon as possible, laser-focused on creating new opportunities for UK firms so they can support jobs across the country and deliver the growth we desperately need, he said. India and the UK began negotiating an FTA in January 2022 under the then Conservative Party government and 13 rounds of negotiations have been completed since then to enhance the GBP 38.1 billion a year bilateral partnership. Reynolds has now set the tone for the new Labour government's plans to not only sign off on a deal, but also to carry on the process from where it was left off in the fourteenth round of discussions amid general elections in both countries. India, with which the UK is negotiating a Free Trade Agreement and Bilateral Investment Treaty, is projected to be the world's third largest economy by 2027. A trade deal would give UK businesses better access to its burgeoning market of middle-class consumers, projected to grow to over a quarter of a billion consumers by 2050, notes the DBT. The announcement follows Foreign Secretary David Lammy's visit to India last week to discuss economic and global security. Chairman of Tata Sons Natarajan Chandrasekaran said in a statement: I am delighted that the new government has moved so quickly to restart trade negotiations with India. As one of the largest international investors in the UK, the Tata Group supports any action that strengthens the British economy. And as two of the world's greatest trading nations with deep historical ties, India and the UK should be close economic partners, to the benefit of the citizens and businesses of both countries. Besides India, the DBT wants to deliver trade deals with the Gulf Cooperation Council (GCC), Israel, South Korea, Switzerland and Turkey. Monday's announcement is intended to kick-start the process of getting negotiators back into the room with counterparts as soon as possible, with the first round of trade talks under the new British government expected to take place during the autumn period which begins towards the end of August. The DBT said its trade programme aims to deliver deals that will benefit the UK economy and boost trade with some of the most dynamic economies in the world. Meanwhile, the department stressed that FTAs are not the only tool to drive economic growth through trade, with a proposed trade strategy aimed at helping reset the UK's relationship with the European Union (EU) to support more small businesses to export by tearing down unnecessary barriers to trade and jobs. According to the DBT, UK exports totalled GBP 855 billion as the world's fourth-largest exporter in 2022 and high-quality British goods and services continue to be admired globally and the government is committed to using every lever available to help British businesses sell around the world.
Source: Business Standard
The Uttar Pradesh government is planning to invest Rs 5 trillion in the newly created State Capital Region (SCR) that will position Lucknow as a major investment hub in North India. The investment is expected to materialise in the next two years. The SCR spans across 27,826 sq km and encompasses six districts — Lucknow, Hardoi, Sitapur, Unnao, Rae Bareli, and Barabanki. To achieve the goal, the state has mandated the UP State Industrial Development Authority (UPSIDA) and the UP Expressway Industrial Development Authority (UPEIDA) to acquire land. The UP-State Capital Region Development Authority (UP-SCRDA) has been given the charge to manage Lucknow-SCR. The acquired land would be allotted to investors for setting up of industries, housing, and infrastructure projects. Lucknow-SCR will come up on the lines of the New Okhla Industrial Development Authority (Noida) in terms of attracting investment, said UPSIDA Chief Executive Officer (CEO) Mayur Maheshwari. While the state CM will be the ex-officio chairmanship of the UP-SCRDA, the chief secretary will be the vice-chairman with senior officials of the housing and urban planning department as its members. The SCR will seek to decongest Lucknow by providing jobs and self-employment opportunities in the constituent districts, thus curbing the migration of youth to big cities. Since a large number of UP districts are connected with expressways and airports, the SCR is expected to leverage the state’s industrial and agricultural landscape for socioeconomic development in the years to come.
Source: Business Standard
Synopsis If digitalisation were to lead to a decline in resistance to price change by 10%, say, due to the rising online presence of retail stores and dynamic pricing algorithm, inflation fall could be higher at 35 bps without impacting the output in the economy. If the price elasticity of demand falls, inflation could drop by 30 bps (5 bps more than its baseline level), the study explains. Transmission of policy rates could be more effective in a digitalised scenario as it could help in steeper reduction in inflation according to the Reserve Bank's latest Report on Currency and Finance. A study published in the report explains various scenarios in which a unit repo rate hike on inflation. In a baseline scenario a 100 basis point (bps one bps is 0.01 percent) rise in the policy rate leads to a fall in output and inflation by 40 bps and 25 bps, respectively. But in the scenario of digitalisation on the other hand, on account of an improving factor productivity, the effect of monetary tightening on output remains the same while that on inflation is lower at 20 bps. If digitalisation were to lead to a decline in resistance to price change by 10%, say, due to the rising online presence of retail stores and dynamic pricing algorithm, inflation fall could be higher at 35 bps without impacting the output in the economy. If the price elasticity of demand falls, inflation could drop by 30 bps (5 bps more than its baseline level), the study explains. The report also highlights the number of ways digitalisation helps in monetary policy transmission. Digital financial system can automatically adjust interest rates on deposits and loans in response to policy rate changes, potentially accelerating the transmission of monetary policy, RBI said. Digitalisation influences the nature, composition, and behaviour of money in the economy, with ramifications for monetary aggregates and monetary policy transmission. Enhanced liquidity through financial innovation facilitates more effective transmission of monetary policy. Besides, digitalisation can improve access to financial services and enhanced financial inclusion is found to improve the transmission of interest rate-based monetary policy impulses. Conceptually, CBDCs can induce changes in public’s demand for currency; banking system deposits and credit; retail, wholesale and cross-border payments; and monetary policy implementation and transmission. Given that digitalisation can impact inflation and output dynamics, and monetary policy transmission in diverse manners and the overall impact could vary over time given the fast pace of developments, the report suggests that central banks would need to incorporate digitalisation aspects comprehensively into their models for the continued efficacy of monetary policy and the achievement of their price and financial stability goals.
Source: Economic Times
New Delhi: The Indian economy could grow higher than 7 per cent and possibly closer to 7.5 per cent in the current fiscal on the back of normal monsoon and receded electoral uncertainty, economic think tank NCAER has said. In its July 2024 issue of Monthly Economic Review (MER), NCAER said real GDP grew by 8.2 per cent in FY2023-24, driven by stable consumption demand and steadily improving investment demand. "Based on the momentum in the high-frequency indicators, normalised monsoon, a relatively benign global outlook and receded electoral uncertainty, both in India and in the rest of the world, growth will likely turn out to be higher than 7 per cent, and possibly closer to 7.5 per cent," NCAER director general Poonam Gupta said. Gupta said the Union Budget 2024-25 lived up to the expectations of unwavering commitment to fiscal consolidation, prudence, and quality. The Budget has kept the fiscal deficit target at 4.9 per cent of GDP and capital expenditure at 2.4 per cent of GDP during 2024-25. According to the National Council of Applied Economic Research (NCAER), the short to medium-term growth strategy is based on six key areas -- private sector capital formation, green transition financing, MSME development, agricultural transformation, Education and skill development, and enhanced state capacity. The NCAER-NSE business confidence index (BCI) increased to 149.8 in the first quarter (Q1) of FY25, up from 138.2 in the fourth quarter (Q4) of FY24, indicating an improvement in business sentiments. The International Monetary Fund (IMF) revised its growth projection for India upward to 7 per cent, while the Asian Development Bank (ADB) maintained its projection at 7 per cent as of July 2024 for FY2024-25. The range of projections for India for the current fiscal year is between 6.6 to 7.2 per cent. As per the Economic Survey 2023-24, India's real GDP grew by 8.2 per cent in FY2023-24 due to stable consumption and improving investment demand and it is projected to grow between 6.5-7 per cent in FY2024-25. The Union Budget for FY2024-25 emphasised fiscal prudence and capex. Nominal GDP is projected to grow at 10.5 per cent in FY2024-25; while the fiscal deficit is budgeted at 4.9 per cent of GDP.
Source: Economic Times
Minister of Investment/ Head of Indonesia Coordinating Board (BKPM) Bahlil Lahadalia has confirmed of massive layoffs in textile industry in several location in Indonesia’s West Java Province. “It is true that there are massive layoffs of workers in West Java ,” Bahlil said on Monday, July 29, 2024 . He cited that the layoffs have been caused by three factors. First, the relocation of factories from West Java to other areas in Java. Second, the factories were closed because the machines used were obsolete. Third, the production cost is too high in comparison with other countries. “All those factors are related to productivities of Indonesian workers. We need to find the middle path, we pay attention to workers’ rights, and the workers also have concerns on the sustainability of the company,” Bahlil said. “If the factories are closed down, we all will be in a loss. There will be no jobs, the industry cannot run, and the state revenue will be diminished.” he added.
However, the minister said, despite massive layoffs, there are also new investment in textile sector. He cited the inauguration of a new shoes factory in Batang Industrial Estate, Central Java, that creates 2,000 new jobs. “We should also report on new investment, not only those [investment] leaving this country,” he said. Indonesia, he added, needs to grant sweeteners for textile industry in order to make the industry runs well, citing an example on how banks can financé rejuvenation of machines. “If we do not grant incentives, they will leave,” he said. “There should also be cooperation from workers. Those receiveing living wages should think about the survival of industry. Because both parties (workers and employers) need each other,” he added. As reported by Kontan, layoffs have been rampant again this year, especially at industrial centers in West Java. The textile and garment, shoe and furniture industry sectors dominate cases of workers’ dismissal due to factory closures or relocation. In fact, this mass layoff has started since 2021 and is still ongoing. The Confederation of Labor Unions of the Archipelago (KSPN) noted that 13,800 textile company workers were laid off during the first six months of this year. It is predicted that this will continue to happen given the fluctuating global economic conditions. Inevitably, export-oriented companies are affected because orders are low.
Source: Indonesia Post
ISLAMABAD: As the independent power producers (IPPs) come in for a lot of flak for receiving billions of rupees in capacity charges, the All Pakistan Textile Mills Association (Aptma) has approached government institutions including the Power Division and the Securities and Exchange Commission of Pakistan (SECP), asking them to provide details of IPP deals. In a letter, Aptma Secretary General Shahid Sattar said that pursuant to Article 19-A of the Constitution of Pakistan, which guaranteed the right of access to information in all matters of public importance, and in accordance with the Right of Access to Information Act, 2017, the association wanted to see the information about the IPPs established under the power policies of 1994, 2002, 2008 and 2015. He sought information relating to the power purchase agreements (PPAs), amendments and copies of all PPAs executed between the government of Pakistan and the IPPs. Textile millers particularly demanded the release of details of amendments made to the PPAs from the inception to date, including those after the significant amendments made to the Nepra Act in 2018. They requested the provision of copies of all extension agreements pertaining to the PPAs, including the terms and conditions. It sought details of any financial benefits provided following the extension agreements and settlement deals, including the copies of all settlement agreements. Aptma wants to see any financial benefits extended pursuant to the arbitration proceedings, both national and international, as well as the final decisions taken in those proceedings. Other details demanded by the association included information about any proceedings initiated for the termination of agreements with the IPPs, the grounds for initiating such proceedings and the current status and outcomes. The textile millers urged the government to provide detailed information about projects established under the build-operate-transfer (BOT) and build-own-operate-transfer (BOOT) models. “This request is made in the public interest to promote transparency and accountability in matters of public importance,” Aptma remarked in the letter. “The information provided will be used for research and analysis to better understand the power sector’s governance and policy implementation.” The association cited a latest judgement of the Supreme Court, which said that the “right of access to information is a bulwark against corruption and corrupt practices. It enables the citizen to know how they are being served and how the resources that belong to them are being utilised and spent.”
Source: Tribune
The textile sector primarily produces low-value-added goods of inferior quality due to outdated technology, scarce quality yarn, and lack of institutional financing. Talking to WealthPK, Muhammad Asad Islam Mahni, Additional Secretary of Industries and Production, said the growth of the textile industry, particularly in the value-added sector, will significantly boost employment. He warned that a downturn in this industry could drastically hinder economic growth. Although the production of cotton cloth in mills declined from 703.92 million square meters in 2022-23 to 652.748 million square meters in 2023-24, exports rose by 16.34 percent in volume to 278.626 million square meters, despite a 7.49 percent decrease in value to 1,422.882 million US dollars. The value-added sector, encompassing towels, tents, canvas, cotton bags, bedwear, hosiery, knitwear, and readymade garments, plays a vital role in employment. A substantial amount of raw materials for this segment is sourced locally. The spinning sector, the backbone of textile production, includes 408 textile units (40 composite and 368 spinning units), equipped with 13.409 million spindles and 198,800 rotors. Currently, 9.70 million spindles and 126,583 rotors are operational, achieving a capacity utilization rate of 72.3 percent and 63.7 percent, respectively, during July-March FY 2024. Pakistan has five major synthetic fibre producers with an annual capacity of 636,000 tonnes. During July-March FY2024, the exports of synthetic textile fabrics increased by 24.07 percent in quantity to 61.739 thousand square meters, although the value decreased by 11.56 percent to 273.659 million US dollars. The woollen industry focuses on manufacturing carpets and rugs. Despite a decline in export value by 21.61 percent to 44.640 million US dollars, the quantity increased by 23.03 percent to 2.500 thousand square meters during July-March FY 2024. The jute industry primarily produces jute sacks and hessian cloth for packing wheat, rice, and other food grains. The working capacity of spindles decreased by 8.34 percent to 16,815, and that of looms by 6.84 percent to 763 during July-March FY 2024, with the total number of units remaining at 10. Talking to WealthPK, Additional Secretary Industries and Production Muhammad Asad Aslam said the textile industry was crucial to Pakistan's manufacturing sector and economic framework. He highlighted that the industry had the longest production chain, starting from cotton cultivation and extending through ginning, spinning, weaving, dyeing, finishing, and into made-ups and garments. This sector not only adds substantial value at each processing stage but also contributes nearly one-fourth of the industrial value-added and employs about 40 percent of the industrial labour force. Aslam concluded that despite various challenges, Pakistan's textile industry remains a vital economic pillar by providing employment, enhancing value addition, and significantly contributing to exports.
Source: PK Nation
LEEDS – A new process for dyeing polyester is said to be more sustainable, compatible with existing machinery and even reversible to facilitate textile-to-textile recycling. This process, billed as CO2-mediated switchable solubility dyeing aims to eliminate the need for auxiliary chemicals, reduce energy and water use, and dyes textiles at much lower pressures than using supercritical CO2 processes.
Source: Eco Textiles
