In order to address and prevent the under-invoiced imports of synthetic knitted fabric (under Chapter 60) and the misdeclaration of HS codes at Indian ports, the Northern India Textile Mills’ Association (NITMA) has appealed to Prime Minister Narendra Modi for his involvement. The list of importers affecting these cheap materials, who are evading HS codes to import the fabric at a price of about US $ 1 per kg although the genuine pricing ranges between US $ 4-6/Kg internationally, was part of the request made by NITMA President Sidharth Khanna. It is important to note that the government extended the Minimum Import Price (MIP) of US $ 3.50 per kilogramme for 13 particular HSN codes of synthetic knitted textiles earlier this month, until 31st March 2025. While praising the Ministry of Textiles and the Ministry of Commerce & Industry for enforcing a Minimum Import Price (MIP) until 31st March 2025, Khanna also noted that, in spite of the government’s efforts to stop these cheap imports, import volumes have been rising rather than falling, rising from 89 million kg in January-March 2024 to 130 million kg in July-September 2024. This increase suggests that importers have moved their imports to other non-MIP HS codes under chapter 60 since the introduction of Minimum Import Prices (MIP). The present approach to implementing MIP on HS codes is no longer effective as a result of this change. He added that the textile industry is suffering greatly as a result of these under-invoiced imports, which is leading to the closure of the knitting, spinning, and dying sectors. As a result of avoiding both direct and indirect taxes, the exchequer has lost more than US $ 1.16 billion (Rs. 10,000 crore). Oddly, logistics firms are the biggest importers of synthetic knitted fabrics, with Nandiambakkam Sez (Chennai) accounting for the majority of imports. He has urged the Prime Minister to step in and start a thorough inquiry campaign into the cases of mis-declaration of HS codes at Indian ports and under-invoiced imports of synthetic knitted fabric (under Chapter 60).
Source: Apparel Resource
New Delhi – India’s largest global textile event will showcase the entirety of the country’s resources when it makes it second annual outing next month. Bharat Tex is scheduled to take place from Feb 14-17 in two prominent venues: Bharat Mandapam in New Delhi and the India Expo Centre and Mart in Greater Noida. This event is organized by a consortium of Textile Export Promotion Councils (EPCs) and supported by the country’s Ministry of Textiles. It covers the entire value chain from fibers and yarns to fabrics, apparel, home textiles, handlooms, technical textiles and more. Show organizers are expecting participation from over 5,000 exhibitors and 6,000 international buyers across 110 countries, with total visitors anticipated come in at over 120,000. Exhibitors will include major global and national brands such as Aditya Birla, Reliance Industries, Trident Group, and Welspun. Additional key participants include Mafatlal Industries Ltd, EM Crafts, and Supreme Nonwoven Industries Private Limited, highlighting the diverse industry involvement. The event will also feature over 60 educational sessions, providing insights into the latest trends and advancements in the textile sector. As the second largest sector in India (after agriculture), the country’s textile industry contributes 2.3% to the GDP and employs over 45 million people directly, with an additional 55 million indirectly involved across the value chain. “India’s ability to produce various textiles at competitive prices continues to attract global brands and retailers,” the fair organizers stated in the latest update on the event. They also noted that to balance its fiber portfolio, India is reducing its over-dependence on cotton and scaling up synthetic fiber production in order to better compete with China. In addition, India is moving into high-value technical textiles to service industries such as healthcare, automotive and agriculture. “Significant technological investments have boosted India’s manufacturing capabilities, establishing it as a formidable competitor against key regional players like Bangladesh and Vietnam,” the organizers stated. “These improvements not only enhance operational efficiencies but also elevate the quality of outputs, reinforcing India’s reputation as a reliable partner in the international textile arena.”
Source: Home Textiles
Synopsis Union minister Ashwini Vaishnaw stated that simplifying the tariff structure is a priority for the Modi government to boost exports as a major driver of economic growth. The goal has shifted to 'Make in India, Make for the World', emphasizing export-led growth. Customs laws and procedures will also be streamlined to aid this strategy. A "calibrated" tariff structure simplification remains a priority for the Modi government, as it views exports as a key driver of the next phase of economic growth, Union minister Ashwini Vaishnaw said on Thursday, exuding confidence that India will sustain a 6-8% real expansion rate for years. Highlighting a "change in the mindset" and growth strategy, the minister said: "Earlier, we were looking at import substitution-manufacturing for the domestic demand. Now, we are looking at 'Make in India, Make for the World'; we are looking at export-led growth as the next phase of growth." The simplification of customs laws and procedures is also in the works, he Vaishnaw was speaking on India's Economic Blueprint at the World Economic Forum in Davos. His statement comes at a time when American President Donald Trump has threatened to impose extra import duties on countries with which the US has a negative trade balance. While China, Mexico and Canada could bear the maximum brunt of his tariff policies, given their massive trade surplus with the US, India may also face some heat, experts have cautioned. The new strategy, Vaishnaw said, is already taking shape in industries, including pharmaceuticals, chemicals, garments and electronics. India, however, will keep import tariffs in certain critical segments to protect local industry from dumping from overseas, he said. "And that kind of calibrated approach is a better approach," he added.
Source: Economic Times
Synopsis The Central Board of Indirect Taxes and Customs (CBIC) announced a waiver of late fees for delayed filings of reconciliation statements and annual returns (GSTR-9C) for the financial years 2017-18 to 2022-23. Taxpayers must file the reconciliation statement by March 31, 2025, to avail the waiver. The Central Board of Indirect Taxes and Customs (CBIC) Thursday announced a waiver of late fees for delayed filings of reconciliation statements and annual returns for the financial years 2017-18 to 2022-23.
To avail this waiver, taxpayers must file reconciliation statement Form GSTR9C on or before March 31, 2025, CBIC said in a late-night notification. Additionally, no refund will be provided for any late fees already paid for the delayed furnishing of GSTR-9C for these financial years, the notification said. This move is expected to bring relief to taxpayers who have delayed filing reconciliation statements in the past. The government's decision is seen as a step towards easing the compliance burden on taxpayers and promoting voluntary compliance.
Source: Economic Times
Synopsis US-India trade relations face uncertainty as President Trump pushes for reciprocal tariffs. India, with a trade surplus, contemplates reducing tariffs on specific American products. Officials consider a limited trade deal and broader concessions, aiming to strengthen economic ties despite historical disagreements. In December last year, US President Donald Trump had said India charges "a lot" of tariffs, reiterating his intention to impose reciprocal tariffs in retaliation for what New Delhi imposes on the import of certain American products. Now with Donald in the White House the threat of tariffs looms large over India. The US is the largest trading partner of India and India enjoys a trade surplus with it. In 2023-24, India's exports stood at $77.51 billion, while imports aggregated at $42.2 billion in the last fiscal. During April-December this fiscal, the country's exports to America rose by 5.57 per cent to about $60 billion, while imports grew by about 2 per cent to $33.4 billion. The US has in the past raised issues of high import duty on Harley Davidson and limited market access to medical devices and equipment as well as its dairy products into India. Right after Trump's victory last year in November, India had begun a detailed sector-wise analysis, drawing up multiple scenarios, to prepare for a possible increase in tariffs on product exports to the US under the Trump administration, ET had reported in December.
India's opportunity in Trump administration Trump's memorandum entitled “America First Trade Policy” issued on his first day in office can provide a window of opportunity to India. In the memo, he directed the United States Trade Representative (USTR) to identify countries with which to negotiate trade agreements on a bilateral or sector-specific basis to obtain to enhance export access for various American stakeholders. The Indian government is studying the memo. "We are studying and examining the memo. We have to evaluate things before framing any strategy...As of now from a plain reading of that, I do not see something we need to be worried about. Everything that we examine does not translate into action," sources told PTI. The government is also awaiting confirmation of appointment of key trade officials in the US. Indian and US diplomats are trying to arrange a February meeting between Prime Minister Narendra Modi and Trump in Washington, sources told Reuters. However, it's not certain the leaders will meet in February. Sources said a bilateral meeting was possible later in the year, including when leaders of the Quad grouping of India, Australia, Japan, and the U.S. meet at an annual summit hosted by India Indian officials are considering a limited trade deal with the US under one of its scenarios, people familiar with the matter have told Bloomberg recently. The plan under discussion would include reducing some “most-favored nation” tariffs, which are imposed on countries with which India doesn’t have a bilateral trade deal. Reuters had reported last month that India is preparing to offer tariffs cuts on some farm and other goods mainly imported from the US, aiming to clinch a broader trade and investment deal once Trump takes charge. To tackle Trump's threat of a "reciprocal tax" on Indian goods for high tariffs, some officials of the Indian commerce ministry are ready to consider cuts on certain products such as pork, a senior government source said. Currently India slaps about a 45% import tariff on pork, which is mostly supplied by the US. Tariffs could also be reduced on high-end medical devices such as pacemakers and luxury motor-cycles, including Harley Davidson, said a second official with direct knowledge of trade issues, citing the 25% to 60% tariffs on these products. To address Trump's concerns over the trade imbalance, officials have also proposed buying more LNG and defence equipment from the US, as source told Reuters. "That is an opportunity," Arvind Virmani, a government adviser and member of the state-run policy think-tank NITI Aayog, told Reuters. "It is in the interest of the U.S. and India that more of critical manufacturing or the sensitive manufacturing be done in India rather than China," he said, adding a "preferential trade cum investment deal," which is more ambitious than an earlier proposed mini-trade deal, would benefit both countries. Starting over where India-US left off lasttime During Trump's first term, a proposed mini-trade deal aimed at addressing trade imbalances and strengthening trade ties through limited agreements faltered over disagreements on tariffs, market access and intellectual property. The Biden administration is also not in favour of a free trade agreement. India is now seeking a broader deal, Reuters reported, offering significant concessions including production-linked incentives for shipping and support for logistics companies. Kenneth I. Juster, a distinguished fellow at the Council on Foreign Relations, and Mark Linscott, a senior advisor at the U.S.-India Strategic Partnership Forum and the Asia Group, have written in 'Foreign Policy' that This time around, Modi and Trump should seize the opportunity to strike a substantial bilateral agreement. They say though US-India economic ties have grown steadily in the 21st century, they have underperformed relative to the extraordinary advances in virtually every other aspect of the bilateral relationship. "Yet there are reasons to be optimistic. Trump loves the art of the deal and would like to improve the U.S. economy. His tariffs may well be designed as leverage to open foreign markets for U.S. companies, thereby creating U.S. jobs related to exports and lowering bilateral trade deficits. Modi is a strategic thinker who is focused on growing India’s economy and expanding its role in the world," they say. "The United States and India both want to enhance their economic influence in the Indo-Pacific region and blunt China’s economic primacy. The time is ripe and the incentives are in place for these two leaders to beat the odds and make a major deal."
Source: Economic Times
Synopsis Some Indian exporters are facing margin calls and losses due to the sharp decline in the rupee. They had used the target redemption forward (TARF) structure, attracted by the promise of quick profits under low volatility. However, the rupee's recent fall and increased volatility hindered profit caps and resulted in significant losses. The lure of quick profits drew some Indian exporters to an exotic option structure when the rupee was rangebound. A handful of them are now facing margin calls and losses due to the currency's sharp decline, according to three bankers. The structure, called a target redemption forward (TARF), allows exporters to sell dollars on fixed dates, usually a month apart, at a predetermined rate which is significantly better than what they would get by selling forward dollars. However, profits under TARF - the difference between the pre-determined rate and the spot rate on the fixed dates - is capped and the option is terminated automatically when the limit is reached. When rupee was in a narrow range, this profit cap was reached well before the duration of the TARF option, an ideal scenario for exporters, a forex and derivatives sales person a bank said, declining to be identified because he is not authorised to speak to the media. Exporters were drawn to TARF by the promise of these quick profits, he said. At the time the options were sold, the rupee was trading in a narrow band of 83 to 84 and volatility was expected to remain low.
Things have since changed with the rupee plunging 3% over the last three months to an all-time low of 86.6475 and volatility climbing to multi-month highs. This means that the profit cap on the TARF structure has not been reached and exporters are now having to sell dollars at lower than the forward rate. "TARFs, which were marketed in the low volatility set up are suffering huge mark-to-market (MTM) losses," an fx salesperson at another bank said. "We are constantly getting reports (from the risk management team) on the MTM losses and have to see if additional collateral cushion is required."
The TRAF structure was popular with only a few large and mid-sized corporates and hedging via this structure was a tiny percentage of their overall exposure, bankers said. "The issue with TARF is the asymmetric payoff i.e., the potential profits are limited, whereas the potential loss is unlimited," Samir Lodha, managing director at risk management advisory firm Quant Art Market Solutions.
Source: Economic Times
Synopsis India and the EU are making significant progress in negotiations for a free trade agreement (FTA), according to commerce and industry minister Piyush Goyal. The two sides agreed to build a commercially meaningful trade agenda and work towards a mutually beneficial pact, ahead of the 10th round of talks. NEW DELHI: There is a significant progress in the negotiations for the proposed free trade agreement (FTA) between India and European Union (EU), an official said on Thursday. Commerce and industry minister Piyush Goyal was in Brussels last week to meet European commissioner for trade Maros Sefcovic to take stock of the progress of the negotiations. "Good progress is there on India-EU FTA. There is a significant progress in talks," the official said, without divulging more details. During the meeting between Goyal and Sefcovic, the two sides agreed to build a commercially meaningful trade agenda and work towards a mutually beneficial trade pact.
The two leaders have also outlined political directions for both the teams to develop a mutually beneficial agenda for trade and investment and a robust FTA in an expedited manner to meet global challenges. The meeting came ahead of the 10th round of talks between India and the EU, which is scheduled from March 10-14 in Brussels. In the ninth round, both sides discussed trade issues covering goods, services, investment and government procurement along with necessary rules such as rules of origin, SPS (sanitary and phytosanitary), and technical barriers to trade. In June 2022, India and the 27-nation EU bloc resumed the negotiations after a gap of over eight years. It was stalled in 2013 due to differences over several issues. The total trade stood at $180 billion in 2023-24. India exported $75.18 billion in goods and $31.13 billion in services to the EU, while the EU exported $63.44 billion in goods and $31.35 billion in services to India. At the same time, the ministry said, the EU is also a significant source of foreign direct investment, with total FDI estimated at $117.34 billion.
Source: Economic Times
Synopsis The CBDT has clarified that the Principal Purpose Test (PPT) will apply prospectively, ensuring that past investments under tax treaties with Mauritius, Cyprus, and Singapore are not affected. This provides investors relief, as existing grandfathering provisions will be respected. The amended treaty is expected to take effect from April 1, 2025. New Delhi: The Central Board of Direct Taxes (CBDT) has said that the Principal Purpose Test (PPT), which allows for deeper scrutiny of treaty benefits claimed by investors, will apply prospectively.
Source: Economic Times
Attributing the fall in Indian rupee solely to the US dollar getting stronger, former Reserve Bank governor Raghuram Rajan has said any intervention by the RBI on this can end up harming Indian exports even as he urged policymakers to focus on creating more jobs and boosting household consumption. Asked what the second term of US President Donald Trump means for the global and Indian economy, Rajan said, "I think it means uncertainty. President Trump during his campaign laid out a bunch of policies and measures that he wants to implement.".
"We are seeing some of them being implemented. We have to see how intensely, for example the policy on immigration and trade and tariff proposals against whom and against which sectors are implemented. As of now what and how all this will pan out," the eminent economist said. On appreciation in the US dollar and its impact on other currencies especially in emerging markets including rupee, Rajan said the dollar has been appreciating against other currencies, partly due to fear of Trump tariffs. "If he imposes tariffs, it is going to decrease US imports from other countries, narrowing the current account deficit and the trade deficit. So, from that perspective, it means that the US needs to import less and so dollar will strengthen because there would be fewer dollars in the rest of the world. So, that is the straight forward reason," the former IMF chief economist said. "There is also a view that the US is becoming more attractive as an investment venue because the people who can't export to the US will move their production to the US. Also, you are seeing more capital flowing into the US and that is also leading to a stock market boom and also strengthening the dollar," he said. All these reasons, along with the US economy growing very strongly, are leading to a stronger dollar, he added. Asked if there is not anything that the Reserve Bank of India can do to arrest dealing rupee, Rajan said, "I am not sure whether RBI should do anything because every other currency is depreciating against the US dollar because if it tries to elevate rupee vis-a-vis dollar, it will be essentially strengthening rupee against all other currencies and that would make it more difficult for our exporters.". "So, I will be careful about that. I will only intervene if the depreciation of rupee is really abrupt and creates a lot of volatility. That has always been the RBI's motive for any intervention, that is to reduce volatility and not to try and change the eventual level of rupee," he added. "I think the Reserve Bank has not acted in hurry and it is also not done any intervention with an aim of preserving the value of rupee at some particular level. It has always allowed the market to find its own level," he said. Asked whether the US becoming more attractive investment destination is happening at the cost of another country and can it have any impact on India as an investment destination, Rajan said, "The idea behind tariffs is to reshore production, so it will have an impact on foreign direct investments of other countries." Instead of investing in other countries, people will invest in the US, he said. "For example, we are seeing Taiwan investing more in US to produce semiconductors there. That is not so much because of tariff policy but because of incentives given though. But we can also see tariff policy producing incentives for producing from factories in the US directly," he explained. On expectations from the Union Budget in India, Rajan said, "We do need to worry about the recent slowing of economic growth." "Of course, one quarter does not tell the whole picture but it has come after we were growing very slowly before the pandemic, then during the pandemic, there was a little bit of crash and then we recovered," he said. "The worry is that a lot of the strong growth in the recent years was a recovery growth and now we have to build a sustainable growth. And that sustainable growth will come from having big investments and consumption growth," Rajan said. "We have worries on those two fronts. Private investments have not picked up. When we look at demand, earlier it was middle class and lower middle class which were soft on demand, for example on two-wheelers, and now it is the upper middle class where demand is softening," he said. Household demand for consumption comes when households feel comfortable and when their jobs and income are growing, Rajan said. "Recently we have seen worries about jobs people have and the kind of income they have. For these reasons, I will suggest that the focus in the budget is how we create more jobs, create better jobs and create more confident households," he said. "More households consuming more will result in private industries investing more. So, it is a virtuous circle and we need to figure how we fix this," he said.
Source: Business Standard
Textile and knitwear exports from Uzbekistan are projected to hit $4bn in 2025, with goals set for further growth in the coming years. Recently, President Shavkat Mirziyoyev signed a decree aimed at developing processing chains in the textile, garment, and knitwear industries. This strategic move is expected to boost the sector’s contribution to the national economy, with a target of $5bn in exports by 2026 and $7bn by 2027, with finished products accounting for 70% of the total. A significant portion of this growth is expected to come from deliveries to Europe and the United States, which are projected to generate at least $500mn. To achieve these goals, the government aims to integrate advanced technologies and design innovations into the industry. Additionally, efforts will focus on attracting global brands to Uzbekistan's textile sector, boosting product quality and enhancing its international market presence. In the next three years, the plan is to attract $5bn in investment specifically for yarn processing. A key component of the strategy includes transferring duties on yarn and fabric exports to the Fund for Support of Industries. This fund will provide commercial banks with resources to issue foreign currency loans for entrepreneurs to purchase equipment for fabric and finished product production. Loans for equipment purchases will be offered at an interest rate of 4% per annum for up to 7 years, with advance payments covering 15% of the cost. For 2025, $15mn will be allocated for these purposes, with the aim to use at least 80% of the revenues from duties starting from next year. In addition to lending, the Chamber of Commerce and Industry and the Uztukimachiliksanoat Association will have the option to use funds for equity financing. The maximum share size will be 25%, and companies will be required to repurchase the shares at an estimated value within five years. A key initiative under the new plan is the launch of the "Made in Uzbekistan" program. This $2mn initiative will focus on promoting local textiles and brands on global e-commerce platforms. Industry employees will be trained on how to navigate these sites, list products, and create and expand brands to increase global market presence.
Source: Daryo
New research is exploring the issue of microfibre pollution from textiles, with the aim of identifying targeted interventions to reduce shedding rates. Researchers at Northumbria University in the UK are exploring the extent and environmental impact of microfibre pollution from textiles. The newly established Fibre-fragmentation and Environment Research Hub (FibER Hub) is the result of a collaboration between the university and The Microfibre Consortium (TMC) and will extensively test a wide variety of fabrics to determine the level of microfibre loss under different conditions and the associated environmental impacts.
Source: Eco Textiles
The People's Bank of China (PBOC) and the Central Bank of Sri Lanka have extended the bilateral currency swap agreement, with a total value of 10 billion yuan (~$1.39 billion), or 410 billion Sri Lankan rupees.
The agreement is valid for three years and can be renewed upon mutual consent, PBOC said in a press statement.
The currency swap arrangement will strengthen financial cooperation between China and Sri Lanka, expand the use of these two currencies, and promote and facilitate bilateral trade and investment, the statement added. Dr P Nandalal Weerasinghe, governor of the Central Bank of Sri Lanka, signed the agreement with Pan Gongsheng, governor of the People’s Bank of China, representing their respective organisations.
The bilateral currency swap agreement was last signed in 2021 for a period of three years, adhering to the terms and conditions outlined in the original contract.
Source: Fibre2fashion
ISLAMABAD: Pakistan’s largest export sector, textile, is facing a severe crisis due to expensive electricity in the country. Out of 568 textile mills, 187 have ceased perations, highlighting the dire state of the industry. Punjab, the country’s largest province and a major hub for textile production, was severely hit due to the crisis. Of the 187 closed mills, 147 are located in Punjab, followed by 54 in Sindh and Balochistan, and 6 in Khyber Pakhtunkhwa. The closures include man-made fiber, polyester, and waste mills. In Punjab, key districts have suffered significant losses: 47 mills have shut down in Kasur, 33 in Multan, 31 in Faisalabad, 17 in Sahiwal, and 11 in Sheikhupura. Sources attribute the crisis to rising electricity costs and Pakistan’s challenging economic conditions, which have made it increasingly difficult for textile mills to sustain operations. The textile sector, a backbone of Pakistan’s exports, is now in urgent need of government intervention to address these critical issues and prevent further closures. Despite these challenges, the Pakistan Bureau of Statistics (PBS) reported a 9.67% growth in textile exports during the first half of FY2024-25, reaching $9.084 billion compared to $8.283 billion in the same period last year. However, the industry’s growth trajectory now faces significant risks as mills continue to shut down. The All-Pakistan Textile Mills Association (APTMA) has called for immediate government intervention, emphasizing the need to restore a level playing field for local inputs and ensure timely, complete refunds for exporters. APTMA has warned that without swift action, the backbone of Pakistan’s exports may suffer further setbacks, jeopardizing the country’s economic stability.
Source: Pakistan Today
