New Delhi: Driven by India's inherent strengths and a strong policy framework that encourages investment and exports, the textiles sector in the country is expected to grow to $350 billion by 2030, the Centre said on Thursday. The textiles sector is set for significant expansion, with an 11 per cent growth in readymade garments (RMG) of all textiles exports (year-onyear), according to Ministry of Textiles. With end-to-end value chain capability, a strong raw material base, a large export footprint and a vibrant and rapidly expanding domestic market, India is a traditional leader in the textiles sector. According to the ministry, over Rs 90,000 crore of investment is expected to flow through PM Mega Integrated Textile Region and Apparel (PM MITRA) Park and Production Linked Incentive (PLI) Scheme in the next 3-5 years. Moreover, schemes like the National Technical Textiles Mission are expected to help the country acquire leadership position in emerging sectors such as technical textiles. Prime Minister Narendra Modi laid the foundation stone of the PM MITRA Park at Amaravati in Maharashtra last month which will be a major step in realising the vision of making India a global hub for textile manufacturing investment and exports. When completed, each PM MITRA Park is expected to attract an investment of Rs 10,000 crore and generate nearly 1 lakh direct employment and 2 lakh indirect employment. According to the government, PLI scheme, with a total projected investment of over Rs 28,000 crore, projected turnover of over Rs 2,00,000 crore and proposed employment generation of nearly 2.5 lakh, is aimed at promoting production of MMF apparel and fabrics and technical textiles products in the country to enable textile industry to achieve size and scale. "The supportive policy framework at the central level is supplemented by the policy initiatives of a number of states with a high growth potential in textiles," said the government.
Source: Economic Times
Commerce and Industry Minister Piyush Goyal on Friday said that India and the European Union (EU) should sign an “outcome-oriented” and “meaningful” free trade agreement (FTA), by removing “extraneous items” from its ambit. “When we bring in too many extraneous items, which have no relevance to trade and business, to FTAs…we get cornered into slow progress,” said Goyal at the launch of the Federation of European Business (FEBI) in the country. Goyal also highlighted that the EU’s deforestation regulation and carbon tax are unfair, which would impact Indian industries, and said that the union’s safeguard measures on some steel products are “irrational”. “Unfair trade rules around deforestation like the Carbon Border Adjustment Mechanism (CBAM) are disrespectful of the Paris Agreement where the developed world was supposed to provide grants to the developing countries and act responsibly,” the minister said. Several major agricultural-exporting countries, such as Brazil, India, and the US, have voiced opposition to the EU Deforestation Regulation (EUDR). Adopted on May 16, 2023, the EUDR aims to prevent the import of certain goods linked to deforestation and forest degradation into the EU market. Products covered under this regulation include coffee, leather, oil cake, wood furniture, paper etc. According to the Global Trade Research Initiative (GTRI), India’s exports of products worth approximately $1.3 billion annually to the EU could be affected by the EUDR. India has also raised strong objections to the EU’s Carbon Border Adjustment Mechanism (CBAM), which proposes an additional duty on imports from seven carbon-intensive sectors, including steel, cement, fertilizers, aluminum, and hydrocarbons. This “carbon tax” is set to take effect on January 1, 2026. Earlier this week, Finance Minister Nirmala Sitharaman voiced concerns regarding CBAM, and said that it is “unilateral and arbitrary”. “The world today can’t work on the principle of retaliation, but on mutual cooperation. Despite several efforts, cooperative elements have not taken centre stage as yet,” said Goyal. In September, India had proposed the imposition of retaliatory customs duties on certain goods imported from the EU. “India does not have unfair trade practices, why should we be subject to that additional duty…now after six years, we have to take other measures,” Goyal said, while adding that those measures are “not going to be conducive for the kind of good relations that we believe Europe and India share.” FEBI is the official Chamber of EU businesses in India. It aims to maintain constructive ties with Indian and European authorities, acting as a credible intermediary between government and businesses and an advocacy place for pro-business policies and solutions.
Source: Financial Express
Synopsis Imported inflation in India's CPI has gradually increased since April 2024, contributing 0.5 percentage points by August 2024. With global prices rising, imported inflation is expected to further impact core inflation. The RBI is managing the rupee's value to counter this. Strong FPI inflows and currency management by the RBI may control imported inflation. After remaining in the negative zone for several months, imported inflation or cost of imports has been slowly edging up since the beginning of this financial year. The contribution of imported inflation in the Consumer Price Index (CPI) inflation has increased by 0.5 percentage points since April, showed an analysis by the RBI. Strong foreign portfolio investment (FPI) inflows and the RBI's currency management could, however, help bolster the value of the rupee which in turn would help rein in such inflation, said experts. Of the 3.7% CPI headline inflation in August, 3.5% was on account of domestic factors, while the balance was due to imported factors. "The contribution of imported components to headline inflation turned positive from April 2024 and increased gradually to 0.5 percentage points by August 2024," the RBI said in its latest monetary policy report. Significantly, the contribution of imported inflation to overall CPI inflation was negative since December 2022. Global commodities that drive domestic prices or the items that drive imported inflation include petroleum products, coal, electronic goods, gold, silver, chemical products, metal products, textiles, cereals, milk products and vegetable oils. These together have a weight of 36.4% in the CPI basket, the RBI said in its latest monetary policy report. Imported inflation tends to have an upward impact on the overall CPI inflation when the domestic currency tends to weaken against the US dollar. Keeping this in mind, the central bank is likely to be more cautious in influencing the level of the rupee and ensure that it does not adversely hurt the import prices in local currency. "The Reserve Bank will be alert on currency as imports will increase. But FPI should steady the rupee," Sabnavis said. The rupee is overvalued by 4.7% relative to its intrinsic worth, as of Septemberend, in terms of real effective exchange rate, showed the latest RBI data. The 40 currency trade weighted real effective exchange rate (REER) index is at 104.7 as of September 27, as per the data, while the six currency trade weighted REER index is at 101.7 implying the rupee is overvalued by 1.7% here.
Source: Economic Times
The Union government has collected ₹11.26 trillion so far this financial year in direct tax revenue after adjusting for refunds, showing an 18.4% annual growth, aided by strong growth in personal and corporate earnings as well as in taxes on stock market transactions, the income tax department said on Friday. Net direct tax revenue receipt after adjusting for refunds was ₹9.5 trillion in the same period a year ago. The tax department said that it has refunded ₹2.3 trillion to taxpayers, including individuals and businesses, which was over 46% more than the tax refunded in the same period a year ago. Net direct tax revenue of ₹11.26 trillion collected as of 10 October accounts for more than half of the ₹22 trillion budgeted for this financial year, indicating that revenue collection was on a strong footing. Collecting more than half of the target in the first half of the fiscal itself is likely to give confidence to policy makers about comfortably meeting budget estimates. Net direct tax collection growth rate is faster than the 12.8% growth assumed in the full year budget presented in July after the national elections. This is a positive sign, experts said. “This growth can be attributed to various factors, including widened tax base, improved voluntary tax compliance by the taxpayers, economic growth and effective tax administration backed by extensive technology usage and data analysis. Overall, this was expected,” said Amit Maheshwari, Tax partner at AKM Global, a tax and consulting firm. Corporate tax collection after adjusting for refunds grew over 11% so far this financial year to ₹4.94 trillion, while personal income tax receipts after refunds stood at ₹5.98 trillion, showing an impressive 23% growth. While net corporate tax collection growth is in line with budget estimates, personal income tax collection growth is well above the budget estimate of 14%, showed budget documents. Dividends from companies are now taxed in the hands of the shareholders after an amendment to the tax law in 2020, giving a boost to personal income tax collection. Securities transaction tax (STT) collection has jumped 87% so far this financial year to ₹30,630 crore, up from ₹16,373 crore collected in the same period a year ago. STT collection has been buoyant for some time in line with hectic stock market activity. Gross direct tax collection before adjusting for tax refunds stood at ₹13.6 trillion as of 10 October, showing a growth of 22.3% from the year-ago period. Corporate tax receipt before adjusting for refunds stood at ₹6.1 trillion, while personal income tax receipt before refunds stood at ₹7.13 trillion in the period under review.
Source: Business Standard
Top government officials from India and the European Union (EU) on Friday acknowledged slower than expected progress in the proposed trade agreement and called for mutual cooperation and understanding to take the negotiations forward. Commerce and Industry minister Piyush Goyal said that “extraneous elements,” having no relevance to trade or business, are hurting the interests of both trade and business. They are slowing down the progress of India-EU Free Trade Agreement (FTA) negotiations, he said. “The EU will have to decide whether they are looking at expanding trade, expanding business between the two sides, or whether they are looking at issues which are dealt with by other international organisations… we should be focusing more on our mutual engagements through our FTA on trade and business-related issues,” the minister said at the launch of the Federation of European Business in India (FEBI). EU Ambassador to India Hervé Delphin, who was also there at the launch, pointed out that the progress in the FTA has been ‘marginal’ as both sides are yet to overcome the ‘fundamental differences’. In order to finalise the trade agreement, according to Delphin, both sides need to recalibrate, but also ensure that the trade deal is meaningful. “Both sides must reflect on potential packages of mutual concessions, which would see both parties move into trade policy territory where they have never ventured so far. The EU will be ready to do its share, but this will also require India to cover a large part of the distance that still separates us for the time being. The time has come for such a political call,” he said. In June 2022, India and EU kick-started formal negotiations towards an FTA that has been stuck for close to nine years. Nine rounds of negotiations have taken place till now and the next round is expected early next year. Delphin and Goyal also called upon the need to resolve constraints and regulatory hurdles faced by companies while doing business in India and in the EU, respectively. Delphin pointed out the need to address issues such as quality control orders, stringent import licences, legal uncertainties regarding investment protection and taxation, that European businesses grapple with in India, Goyal touched upon ‘unfair’ trade practices, in the form of ‘irrational’ duties such as Carbon Border Adjustment Mechanism (CBAM) and deforestation-related duties. Goyal also said that for over half a decade, India has been negotiating on such duties which are against the Most Favoured Nation (MFN) clause of the World Trade Organization (WTO) since the EU has been bringing in newer elements in the Indo-EU trade relationship. “We have the same problem on standards that irrational standards are set by the EU which act as a trade barrier to expanding trade between India and the EU. We have people coming and telling us about the significant unfair trade practices on the European side… I have been requesting that India doesn’t have any unfair trade practices, why should we be subject to additional duty also, and after six years, we may have to take other measures,” said Goyal. “The world today can’t work on the principle of retaliation. It has to work on the principle of mutual cooperation and finding solutions,” Goyal added.
Source: Business Standard
Synopsis FEBI launched in Delhi to push FTA negotiations between India and Europe, fostering collaboration among over 100 European companies. German Ambassador Ackermann acknowledges FEBI's significance in strengthening EU-Indo business ties and expresses condolences on Ratan Tata's death, lauding his legacy. New Delhi: Philip Ackermann, the German Ambassador to India, expressed his happiness over the launch of the Federation of European Business in India (FEBI) in Delhi adding the organisation will push the free trade agreement (FTA) negotiations between India and Europe. Talking to ANI, Ackermann said that the launch of FEBI in Delhi is an important step as Europe plays an important role in the Indian business ecosystem "It's a great moment. I think FEBI is a very, very interesting network. It is now a network that has over a hundred companies from Europe, and it's an umbrella organization of all the bilateral chambers of commerce. And I think in the time where Europe play an always more and bigger role in India, it is a very, very interesting and important network. In the near future, we will see FEBI being very active in very many fields, not least also when it comes to the FTA negotiations between India and the EU," the German Ambassador He further added that Germany is very happy to see this organization being launched on Friday. Going further he also expressed his deepest condolences on the passing of Ratan Tata, the renowned Indian industrialist and philanthropist. He said, "We are very sad and we mourn with his family and his friends. He was an icon of India. I had the privilege to meet him 15 years ago. I still vividly remember him. And I must say it's a great loss for India. He has been a wonderful person, a philanthropist, but also a fantastic entrepreneur, the pride of the nation." The Federation of European Business in India is an independent organisation of European businesses in India, bringing together companies and national bilateral chambers to strengthen the collective EU policy advocacy voice and acting as a credible intermediary between government and businesses. FEBI is supported by the EU Delegation in India and the Embassies of the EU Member States in India. FEBI was introduced as the EU's official Chamber of Commerce in India, tasked with advocating for European businesses operating in the country and promoting closer trade relations.
Source: Economic Times
Of the total 29 major industrial groups covered under the Annual Survey of Industries (ASI) – ‘food products’, which involves preserving and processing of meat, fish, crustaceans, fruits, vegetables, and dairy products among others, has the highest number of operational factories (40,508) and engaged most number of people (2.1 million) in the organised manufacturing sector in the financial year 2022-2023 (FY23), showed findings from the latest ASI results released by the National Statistical Organisation (NSO).
The second-highest number of operational factories are in the ‘other non-metallic mineral products’ industrial group (29,321), which includes manufacturing of glass products and other non-metallic mineral products, while textiles hired the second-highest number of people at 1.7 million. Data shows that the total number of operational factories in the organised manufacturing sector increased to 253,334 in FY23 from 249,987 in the financial year 2021-2022 (FY22).
Source: Business Standard
Union Minister of State for Textiles, Pabitra Margherita, visited Guru Nanak Dev University here today. On reaching the university campus, the minister was received by Dr Palwinder Singh, Dean Academic Affairs and Dr Varinder Kaur, Head, Department of Apparel and Textile Technology (DATT), of the Guru Nanak Dev University.
The minister interacted with the faculty and emphasised on the importance of collaboration with other national institutes like NIFT in the area of fashion designing to give the students more exposure. The head of the department also shed light on the release of a grant of Rs 7.05 crore under the National Technical Textile Mission (NTTM) for the establishment of laboratories for technical textiles. Dr Varinder Kaur highlighted the activities of the department (DATT). She informed about the academic courses being run in the department — B.Tech in Textile Processing Technology (four-year course) and Masters in Fashion Designing (Five Year Integrated Programme) under the New Education Policy
Source: Tribune
India’s overall air cargo volumes are projected to see healthy growth of 9-11 per cent year on year (YoY) to 3.6-3.7 million tonnes in fiscal 2024-25 (FY25), supported by 11-13 per cent expansion in international and 4-6 per cent growth in domestic cargo, according to rating agency ICRA. The international cargo volumes had seen a muted YoY rise of 1 per cent in the first half (H1) of FY24 on the back of the slowdown in the global economy and geopolitical conflicts. However, international cargo volumes witnessed a healthy expansion of 18 per cent in H2 FY24 amid the Red Sea crisis, which started in October 2023. Consequently, the seaborne cargo traffic was affected, which in turn benefitted international air cargo traffic. “ICRA’s outlook on [India’s] airport infrastructure is stable, with revenues of ICRA’s sample set likely to grow by around 12-14 per cent YoY in FY25, supported by the sustained improvement in both domestic and international passenger traffic, increase in tariffs at some of the major airports and ramp-up in non-aeronautical revenues,” said Vinay Kumar G, vice president and sector head, corporate ratings, ICRA, in a release.
The credit profile of airport operators is projected to remain strong, supported by healthy accruals and comfortable liquidity, he added.
Source: Business Standard
The South India Spinners Association has sought two urgent measures from the Central government for survival of the small-scale textile mills.
The Association said in a press release that the mills should have access to raw materials – cotton and manmade fibre – at competitive prices. During the last two financial years, the textile sector in Tamil Nadu had seen closure of mills, loss of livelihood, and lack of opportunities. The raw material prices had crippled the industry and exports markets had moved away. The required policy support from the government did not come through, it said. The spiralling cost of cotton and other raw materials had made it nearly impossible for mills to keep up production and access to finance was limited as banks were hesitant to lend to an ailing industry. Without these two support factors, the resilience of the mills remained challenged.
The government should remove the import duty on cotton and the micro and small-scale textile mills need access to credit at reasonable interest rates, it said.
Source: The Hindu
The textile sector will witness significant expansion with an 11 % year-on-year growth in readymade garment exports, according to the Ministry of Textiles. The August trade data showed that readymade garment exports had registered 11 % y-o-y growth. A number of schemes and policy initiatives of the government aim to leverage and catalyse these inherent strengths to help the textile sector achieve the $350 billion goal by 2030, the Ministry said in a statement. “While over ₹90,000 crore of investments is expected to flow through the PM Mega Integrated Textile Region and Apparel (PM MITRA) Park and Production Linked Incentive (PLI) Scheme in the next three to five years, schemes like the National Technical Textiles Mission are expected to help India acquire leadership position in emerging sectors such as technical textiles,” the Ministry said. Encouraging reports of a number of investment decisions in the pipeline are healthy portents for the industry, it added.
When completed, each of the seven PM MITRA parks will attract investments of ₹10,000 crore.
The PLI Scheme, with a total projected investment of over ₹28,000 crore and a turnover of over ₹2 lakh crore, will promote production of MMF apparel and fabrics and technical textile products. Industry sources in Coimbatore said while the efforts of the government are a welcome move, it is imperative for the government to relax the quality control order (QCO) norms. While India is competitive globally in the cotton textile sector, it is not so in the manmade fibre (MMF) sector.
For polyester and viscose fibre, the raw material price is nearly 45% and 21% expensive respectively, they said.
Source: The Hindu
Islamabad, Oct 14 (PTI) The International Monetary Fund has asked Pakistan to swiftly end preferential treatment, tax exemptions and other protections for the agriculture and textile sectors, which it says, have stifled the country's growth potential for decades, a media report said here on Monday.
The International Monetary Fund (IMF), in its staff report on the diagnosis of the factors behind Pakistan's struggling economy, blamed these two sectors not only for failing to contribute adequately to the national revenue but also for consuming large portions of public funds while remaining inefficient and uncompetitive, The Dawn newspaper said.
As part of the recently approved USD 7 billion Extended Fund Facility (EFF), the IMF stressed that Pakistan must break from its economic practices of the past 75 years to escape its recurrent boom-bust cycles.
The IMF report released on October 10 highlighted the country's significant lag behind similar nations, a stagnation that has compromised living standards and pushed over 40.5 per cent of the population below the poverty line.
It said Pakistan had struggled to develop more sophisticated export goods, and the share of knowledge-intensive exports remains low as it failed to innovate. As of 2022, Pakistan ranked 85th in the Economic Complexity Index, the same rank it held in 2000.
With an export basket strongly biased towards agriculture and textiles (cotton yarn, rice, woven fabrics, beef, and leather apparel), the country has struggled to reallocate resources towards more technologically complex products, it said.
The current focus on agriculture has limited Pakistan's ability to diversify into more technologically complex goods. While Pakistan does export some high-value products, such as medicines, medical instruments and plastic products, these sectors operate in a heavily distorted economic environment, it said.
The report highlighted tariffs on intermediate and final goods as barriers to competitiveness and domestic market growth, inhibiting the country's transition towards more advanced manufacturing.
Reallocation, however, is held back by existing microeconomic distortions, including public procurement of agricultural goods, price controls on raw inputs, and fiscal and financial incentives for low productivity sectors, it observed.
The report identified the textile sector as having the highest tax gap relative to its value added, noting that between 2007 and 2022, the sector benefited from subsidies, favourable pricing on inputs, concessional financing schemes and preferential tax treatment.
Earlier, the IMF on September 26 finally gave a nod to the assistance package and also released over USD 1 billion as the first tranche after Pakistan committed to certain conditions. This USD 1 billion tranche came under an agreement to receive USD 7 billion over 39 months.
The latest IMF report pointed out that as of May 2024, 70 per cent of the outstanding concessional central bank loans were tied to the textile sector.
The IMF recommended that the government focus on simplifying trade policies under the upcoming National Tariff Policy (2025-29) and urged Pakistan to avoid using tariffs to promote industrialisation or protect inefficient sectors, arguing that such policies weaken exports, hinder participation in global value chains, and incentivise rent-seeking.
The report also warned that trade policies aimed at promoting specific domestic sectors, including export subsidies and local content requirements, should be discontinued as they are likely to promote resource misallocation and may violate international obligations.
Compared to other regional peers, Pakistan's export growth has been weak, with sales to the world particularly stagnant during the 2010s. It said several complex goods were within likely technological proximity to Pakistan's current export basket, including glassware, paints, chemicals, fabrics for industrial use, paper, cosmetics and rubber products.
However, to facilitate the development of such new industries, the country needed a level playing field for business, avoiding targeted policies aimed at picking winners. This includes greater integration into global trade and easier access to imports, both as intermediate inputs for production and as final goods to promote domestic competition, the IMF said, adding, the removal of fiscal incentives would reduce the existing misallocation of resources and promote price discovery across firms.
Source: Rediff.com
The recent trends in economic activity, particularly the inflation rate, inspire optimism about Pakistan's economic conditions. The inflation rate has dropped to its lowest level in nearly four years, while the trade deficit remains stable at around $5.4 billion in the first quarter of the fiscal year. Exports, standing at $5 billion, have increased by almost 15%, and imports have risen by 7% in the first two months of the fiscal year. The foreign exchange reserves at the State Bank of Pakistan (SBP) increased to over $10.7 billion as of September 27, 2024, following the receipt of a new tranche from the International Monetary Fund (IMF) earlier in the month. Although the current business confidence index is still in negative territory, the expected business confidence is in the positive zone, with businesses anticipating improved economic conditions over the coming months. The business community is particularly focused on the policy rate, expecting a significant cut in interest rates in the upcoming monetary policy statement. One of the primary concerns regarding the recovery of economic activity is the rise in imports, which could lead to another balance-of-payments crisis. This cyclical pattern forces Pakistan to repeatedly approach the IMF for assistance. It is essential that Pakistan breaks free from this cycle, which requires a rethinking of the country's import strategy, as this directly impacts its domestic productive capacities.
Import demand is expected to rise as inflation declines, increasing the purchasing power of domestic consumers, and as interest rates decrease. This shift may influence consumption patterns, leading to greater demand for imports. Fuel products account for approximately 30% of Pakistan's total imports, while consumer goods such as tea and palm oil are also among the largest import categories. In contrast, imports of textile machinery and intermediate goods in the textile industry have declined over the past two years, as producers have faced restrictions on their ability to import. The decline in business activity due to the inability to import essential capital goods and inputs has adversely affected productivity and competitiveness. Therefore, as the economy enters a recovery phase, it is crucial to ensure that the right mix of products is imported those that promote productivity growth and enhance competitiveness.
It is important to note that Pakistan imposes some of the highest tariff rates in the region and has one of the lowest rates of manufacturing value-added and exports as a percentage of GDP. Pakistan lacks economic complexity, primarily producing goods with low levels of sophistication. Import restrictions and the inability to acquire goods that promote technological progress exacerbate the challenges businesses face. As foreign exchange reserves accumulate and the immediate risk of a balance-of-payments crisis diminishes, there is likely to be an increase in import demand. However, challenges remain. According to data from Global Trade Alert, Pakistan not only has a relatively complex web of import interventions but has also disproportionately affected imports of capital and intermediate goods more than those of consumer goods. For example, even though the textile industry generates the largest exports for Pakistan, the country's imports of textile machinery are smaller than those of its major regional counterparts. According to trade data from ITC's Trademap.org, Pakistan imported $140 million worth of textile machinery in 2023less than one-fourth of what Bangladesh imported. Imports of knitting and weaving machines, which contribute more to value-added production than spinning, amounted to less than $40 million. In contrast, Pakistan saw a surge in textile machinery imports in 2021, totalling approximately $700 million. Pakistan must also ensure that its imports shift toward more environmentally friendly goods and reduce its dependency on fuel imports. A report published by the Consortium for Development Policy Research (CDPR), titled "Trade Policy Measures to Encourage a Shift towards Green Technologies," highlights the need to reduce tariffs on various environmental goods imported into Pakistan. The report notes that Pakistan imposes some of the highest average tariff rates on such goods in the region, while the average tariffs on non-environmental goods are lower. Additionally, Pakistan lacks the application of technical non-tariff measures that could enhance product quality and consumer safety, both essential for preventing the dumping of substandard goods. If Pakistan reduces tariffs on environmental goods to the average rate of 8% imposed by India, it could increase its total imports by $1 billion. Furthermore, Pakistan is reported to have some of the cheapest solar panel imports globally, thanks to favourable policies. As the world moves toward renewable energy, it is imperative that policymakers encourage the adoption of cleaner energy technologies. In fact, the shift toward greener energy sources will soon become a prerequisite for exporting to several developed countries.
The share of IT-related goods in Pakistan's total imports is one of the lowest in the region. The lack of imports of technologically advanced goods hinders firms in both the manufacturing and services sectors from reaching the technological frontiers of their industries. As a result, businesses risk losing their competitiveness in regional and global markets due to their inability to adopt more sophisticated production methods, which are becoming increasingly prevalent worldwide. Encouraging the adoption of advanced IT-related products is essential. An article written by this author in The Express Tribune suggests that eliminating tariffs on IT-related imports would increase these imports by $2 billion, which could, in turn, boost Pakistan's GDP by 2% over the next decade. Easier access to high-tech products would not only improve consumer welfare but also enhance producers' productivity as they adopt production processes closer to the global technological frontier. In essence as Pakistan's economic indicators continue to improve, it is critical to reshape the country's import policy to promote long-term growth, sustainability, and competitiveness.
Source: Tribune
Global goods trade is projected to post a 2.7-per cent increase this year, up slightly from the previous estimate of 2.6 per cent, economists at the World Trade Organisation (WTO) said in an updated forecast.
The volume of world merchandise trade is likely to increase by 3 per cent in 2025. However, rising geopolitical tensions and increased economic policy uncertainty continue to pose substantial downside risks to the forecast. In the October 2024 update of ‘Global Trade Outlook and Statistics’, WTO economists said global merchandise trade rose by 2.3 per cent year on year (YoY) in the first half (H1) of 2024, and this should be followed by further moderate expansion in the rest of the year and in 2025. The rebound comes on the heels of a 1.1-per cent slump in 2023 driven by high inflation and rising interest rates. Inflation by the middle of 2024 had fallen sufficiently to allow central banks to cut interest rates. Lower inflation should raise real household incomes and boost consumer spending, while lower interest rates should raise investment spending by firms, the update said. Europe is expected to post a decline of 1.4 per cent in export volumes this year; imports will meanwhile decrease by 2.3 per cent.
Asia's export volumes will grow faster than those of any other region this year, rising by as much as 7.4 per cent in 2024. The region saw a strong export rebound in the first half of the year driven by key manufacturing economies such as China, Singapore and South Korea.
Asian imports show divergent trends: while China's growth remains modest, other economies like Singapore, Malaysia, India and Vietnam are surging. This shift suggests their emerging role as ‘connecting’ economies, trading across geopolitical blocs, thereby potentially mitigating the risk of fragmentation, the WTO report noted.
South America is rebounding this year, recovering from weaknesses in both exports and imports seen last year. North American trade is largely driven by the United States, although Mexico stands out with stronger import growth compared to the region as a whole. Mexican imports are rebounding after a contraction in 2023, underscoring the country's growing role as a ‘connecting’ economy in trade.
Africa's export growth is in line with the global trend. It has been revised downward from the April forecast, driven by an overall revision of Africa's trade statistics, and a greater-than-expected weakening in Europe's imports, Africa's main trade partner.
In April, WTO economists projected a contraction in the Commonwealth of Independent States (CIS) region's imports for 2024, but now it is projected to post 1.1-per cent growth, driven by stronger-than-expected GDP expansion.
Merchandise exports of least-developed countries (LDCs) are projected to increase by 1.8 per cent this year, marking a slowdown from the 4.6-per cent growth recorded in 2023. Export growth is expected to pick up in 2025, reaching 3.7 per cent. LDC imports, meanwhile, are forecast to grow by 5.9 per cent in 2024 and 5.6 per cent in 2025, following a 4.8-per cent decline in 2023. These projections are underpinned by GDP growth estimates for LDCs of 3.3 per cent in 2023, 4.3 per cent in 2024 and 4.7 per cent in 2025.
Source: Fibre3fashion
