Commerce and Industry Minister Piyush Goyal is in London on a two-day official visit to discuss issues related to the implementation of the Free Trade Agreement (FTA) and explore ways to boost trade and investment between the two countries, an official statement said on Wednesday. During the visit, Goyal will hold a bilateral meeting with the UK Secretary of State for Business and Trade Jonathan Reynolds. "Both leaders will review the progress made in the ongoing FTA negotiations and chart out a clear, time-bound roadmap for its finalisation and implementation," the commerce ministry said.
India and the UK had announced the conclusion of the FTA on May 6. The pact aims to eliminate duties on labour-intensive Indian exports such as leather, footwear and clothing, while easing imports of UK products like whisky and cars. It targets to double trade between the two economies to USD 120 billion by 2030. The agreement is yet to be formally signed and implemented. The minister will also meet the UK Chancellor of the Exchequer Rachel Reeves, to discuss macroeconomic priorities, financial cooperation, and investment facilitation between the two countries. He is also scheduled to meet the Secretary of State for Culture, Media and Sport, Lisa Nandy to explore avenues of collaboration in creative industries and innovation-driven sectors. "These engagements will bring together global business leaders, investors, and policy experts to deliberate on the strategic contours of the India-UK economic corridor and the transformative impact of the proposed FTA," it said. The minister is expected to interact with leading CEOs and industry stakeholders from key sectors, including shipping, fintech, logistics, and advanced manufacturing, with a view to deepening commercial linkages and promoting cross-border investments. The bilateral trade between India and the UK increased to USD 21.34 billion in 2023-24 from USD 20.36 billion in 2022-23.
Source: The Economic Times
The India-UK social security agreement was made a nonnegotiable part of the free trade agreement (FTA) discussions two years ago, commerce and industry minister Piyush Goyal said on Wednesday. Termed the Double Contribution Convention Agreement (DCCA), it was agreed to along with the FTA between the two countries in May. "It was on the table for the last three years to bring balance and equity and balance to the trade deal between the two economies," Goyal said at an event in London. The minister is on a two-day visit to London from Wednesday.
The agreement exempts Indian professionals and their employers from paying social security contributions in the UK for short-term assignments of up to three years. The pact will allow temporary Indian workers in UK to pay their social security contributions in India for the first year and for two years nothing will be collected from them. At the same event, UK secretary of state for business and trade Jonathan Reynolds said it is a business mobility provision which the UK has with every country for persons coming temporarily for business or MNCs posting staff in UK. "With 50 other countries we have extended the provision. It is reciprocal so UK nationals employed by those companies in India pay into our system (for one year)
Goyal said since temporary professionals stay less than the 10-year threshold to qualify for receiving benefits against their social security contributions in the UK, this money otherwise won't be paid back to them.
Source: The Economic Times
The Indian rupee continued to slide against the dollar as speculation of US involvement in the West Asia conflict fueled risk-off sentiment. The domestic currency depreciated 13 paise to open at 86.37 against the dollar, the lowest level since April 9 this year, according to Bloomberg. The currency has fallen by 0.86 per cent so far this month and has depreciated 0.75 per cent in 2025. As noted earlier, the rupee closing above 86.20 opens the path to 86.70, according to Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP. With the currency opening at 86.38 today, it may rise toward 86.60 unless the Reserve Bank of India (RBI) intervenes, he added. Exporters should continue selling, as the rupee could retreat to 85.50 once the conflict ends, Bhansali said. "Importers are advised to wait for a correction to buy dollars and use existing forward contracts in the meantime." After cutting short his visit to the Group of Seven summit in Canada on Tuesday, US President Donald Trump pushed Iran for an "unconditional surrender" in its fight with Israel. As missile exchanges continued for a fifth straight day, reports indicated that Israeli strikes had damaged Iran’s underground uranium enrichment facility at Natanz. Crude oil prices shot up to near a five-month high after Trump warned Iran to surrender. Brent crude price was up 0.54 per cent to $76.86 per barrel, while WTI crude prices were higher by 0.63 per cent at 75.31, as of 9:05 AM IST.
Brent prices can touch $150 a barrel (bbl) — up a whopping 103 per cent from the current levels — in the worst-case scenario if the Israel–Iran geopolitical tensions escalate, suggest analysts. Meanwhile, the dollar index edged lower a day after seeing soft US data on retail sales and Industrial Production, with both missing expectations. The index, which measures the greenback against a basket of six major currencies, was down 0.14 per cent at 98.68. However, the focus will now turn to the US Federal Reserve as it gears up to announce its rate decision later today. The Fed is expected to keep rates on hold in June and July, according to a Bloomberg report.
Meanwhile, RBI's chief Sanjay Malhotra said that if inflation is below the central bank's current projections, it could open up policy space. But he added that incoming data will be watched closely to strike "the right growth-inflation balance".
Source: Business Standard
India's textile sector may gain a competitive edge in the global market due to rising labour costs in Vietnam and ongoing political instability in Bangladesh, two of its key export rivals, according to a report by Systematix Research. The report, however, highlighted that the near-term outlook for the sector remains challenging. Tariff-related uncertainties may force exporters to absorb part of the additional costs, putting pressure on margins. Companies are also expected to pass on a significant portion of these costs to consumers, which could lead to higher textile and apparel prices and potentially reduce demand from key markets like the US The report pointed out that global macroeconomic shifts are gradually working in India's favour. With Bangladesh facing political instability and Vietnam seeing a rise in labour costs, India is expected to become a more attractive sourcing destination for global retailers. It said "India's textile industry seem strong, as channel inventories seem to be normalizing at the global retailer level, there is a likelihood of the US raising tariffs for China, labour costs are rising in Vietnam, and Bangladesh is seeing political instability". Despite these long-term positives, Indian textile companies reported a muted performance in the fourth quarter of FY25 Amid tariff uncertainty, the revenue of the companies rose by 5 per cent year-on-year (YoY), EBITDA declined by 3 per cent, and profit after tax (PAT) grew by only 3 per cent YoY, mainly due to weak volumes and ongoing uncertainty around tariffs. "Textile companies reported muted revenue/EBITDA/PAT performance of +5 per cent/-3 per cent/+3 per cent YoY, respectively, due to tepid volumes, amid tariff uncertainty," the report stated. Spinning companies, however, saw a marginal improvement in gross margins, supported by a 10 per cent YoY and 2 per cent quarter-on quarter (QoQ) drop in cotton prices, and stable yarn prices, which were down 3 per cent YoY and flat QoQ. Garments showed strong recovery, with normalizing retailer inventories pushing up sales volumes by 10 per cent YoY and 20 per cent QoQ. On the other hand, home textiles continued to witness weak demand, with volumes falling by 9 per cent YoY and 6 per cent QoQ. Nevertheless, stable cotton prices, favourable forex rates, and a continued focus on operational efficiency are likely to support profitability for Indian textile firms.
Source: Retail .com
UK manufacturers have dropped US out of the top 3 global export growth markets for the first time, according to a major survey. It has now fallen to fourth place, with manufacturers now favouring Asia/Oceania and the Middle East in response to mounting trade barriers and economic unpredictability, as per the Make UK/BDO Q2 Manufacturing Outlook survey. Historically a consistent second to the EU, the US’ diminished appeal comes as six in ten UK firms anticipate a decline in export volumes to the country. A similar share (63 per cent) expects their business to suffer due to tariffs, while nearly a third (30 per cent) are reconsidering their supply chain sources, revealed the survey.The findings aligned with separate data from the National Association of Manufacturers, which showed optimism among US manufacturers has plunged to its lowest level since the pandemic. A striking 77 per cent of American manufacturers identified trade uncertainty as their primary concern. The outlook for UK manufacturing appears increasingly bleak. Make UK has slashed its 2026 manufacturing growth forecast from 1 per cent to -0.5 per cent, following an expected contraction of -0.2 per cent in 2025 and stagnation in 2024. The data points to a worrying trend of prolonged industrial decline. Make UK has urged the government to prioritise a robust industrial strategy, warning that the UK’s high industrial energy costs must be tackled to reverse the sector’s downturn. “While at first glance the headline numbers may not look too bad, manufacturers are facing a gathering storm of huge uncertainty in one of their major markets, a skills crisis and eye watering energy costs which are providing a harsh reality for many,” said Seamus Nevin, chief economist at Make UK. “In response, it is essential that the forthcoming industrial strategy takes bold measures to bring down the cost of energy and takes equally radical action to ensure companies can access the people they need to take advantage of a more competitive landscape. If these two issues are not addressed, then we will face the serious prospect of the UK accelerating into de-industrialisation,” added Nevin. “This quarter’s results are a testament to the increasingly challenging landscape our British manufacturers are operating in. The forecasted decline in growth is concerning and the delayed industrial strategy won’t help to assuage uncertainty in the sector,” said Richard Austin, head of manufacturing at BDO. “That said, there remains pockets of positivity. Growing output levels are proof of manufacturer’s resilience and last month’s trade deals should remove barriers as UK companies seek new trading partners and opportunities for growth. As always, they need urgent clarity and targeted investment from the government if this recovery is to continue into next quarter,” added Austin.
The UK manufacturing output rebounded to 9 per cent in Q2 from -1 per cent in Q1, with total orders improving to -2 per cent from -6 per cent, according to the latest manufacturing outlook survey. The export orders rose to 7 per cent, offsetting weak domestic demand (-1 per cent).
Looking ahead, output is forecast to reach 11 per cent, with exports expected to climb to +22 per cent, surpassing long-term averages. However, recruitment remained flat at 1 per cent, and investment intentions continued to slide, falling to 2 per cent from 5 per cent in Q1. Make UK has warned that if this trend persists, investment could turn negative later in 2025—posing risks to much-needed industrial growth.
Source: China Daily
The government of Vietnam has approved the establishment of its first-ever free trade zone (FTZ) in Da Nang. Spanning approximately 1,881 hectares, the FTZ will include functional areas dedicated to logistics, trade, digital technology, and innovation, Viet Nam Government News said in a release. Deputy Prime Minister Nguyen Hoa Binh signed Decision No. 1142/QD-TTg on June 13, officially sanctioning the FTZ, which will operate under the management of the Da Nang Hi-Tech Park and Industrial Zones Authority (DHPIZA) through a streamlined ‘one-stop, on-site’ model, as per local media reports. Designed with modern, synchronised infrastructure, the FTZ is expected to enhance high-tech manufacturing and digital transformation in the region. It is also expected to turn Da Nang into an important hub of supply chain networks in the Asia-Pacific region and the world. Complementing this, the government is also considering the establishment of an International Financial Center (IFC) in Da Nang. With its favourable location, robust infrastructure, and business-friendly environment, Da Nang is poised to emerge as a regional economic and financial powerhouse.
Source: The Star
President Donald Trump recently said Japan was being ‘tough’ in trade talks and the European Union (EU) had not yet offered a ‘fair deal’. "We're talking [with the EU], but I don't feel that they're offering a fair deal yet," Trump told reporters on board Air Force One on his way back to the United States from a G7 summit in Canada. Before his departure, Trump and EU Commission Chief Ursula von der Leyen met for a few minutes on the sidelines of the G7. "Of course, it's complex, but we are advancing and that is good," von der Leyen said after Trump's criticism of the EU's position. World leaders at the summit urged Trump to back away from his trade war, saying it posed a risk to global economic stability. Trump also met Japanese Prime Minister Shigeru Ishiba at the G7 Summit, but both made little headway in bridging gaps over tariffs, according to Japanese media reports. The United States has offered Japan and other countries a 90-day reprieve from ‘reciprocal’ tariffs. Ishiba, however, did not say whether he and Trump discussed the possibility of an extension, after Washington hinted that the pause can be extended for trading partners engaged in negotiations in ‘good faith’. "We have yet to reach a deal as a package because we remain apart over certain aspects," Ishiba told reporters after his ‘candid’ discussions with Trump.
US treasury secretary Scott Bessent stayed behind after Trump left, to discuss trade issues with the other G7 members.
Source: Fibre2fashion
The Government of Pakistan appreciates the proactive engagement of textile sector associations in highlighting the challenges faced by the value-added textile export industry. The sector’s role in employment generation, foreign exchange earnings, and industrial development is well-recognised, and it remains a central pillar of the government’s export strategy. Recent concerns, particularly regarding the Export Facilitation Scheme (EFS), sales tax on cotton yarn, liquidity constraints, and market access barriers, have been raised vocally in national media. The government believes it is important to address these openly and constructively to foster a more sustainable and competitive textile export ecosystem. It has been argued that changes to the EFS have had an adverse effect on small and medium-sized enterprises (SMEs), leading to a loss of competitive edge, and there are calls for the restoration of the original scheme. However, the government’s policy decisions regarding the EFS and the sales tax on cotton yarn are aimed at correcting long-standing market distortions and promoting equitable local value addition.
The imposition of 18% sales tax on imported cotton yarn is a step towards leveling the playing field. Previously, imported inputs for export under EFS enjoyed a 0% sales tax, while domestic materials for the same purpose were subject to 18%. This created a significant disadvantage for local spinning and weaving sectors, encouraging reliance on imports even when local capacity existed. This measure is intended to foster local manufacturing and strengthen backward linkages across the entire textile value chain, from cotton growers to garment manufacturers. It is crucial to recognise and safeguard Pakistan’s unique advantage in locally produced cotton yarn. This local supply chain serves as the lifeblood for countless small and cottage-scale manufacturers.
Unlike larger entities, these vital players often cannot “dream” of importing yarn from other countries, relying heavily on the immediate and accessible supply of even small quantities (e.g., 4 bags) of local cotton or cotton/poly blends to run their knitting machines. This segment is a significant employer and contributor to the value-added sector, and their ability to readily procure raw materials locally is a competitive edge that must be protected and amplified. The government believes these changes, over time, will strengthen the entire domestic ecosystem, benefiting all segments. Concerns regarding the potential misuse of the EFS scheme by certain entities, particularly regarding the import of fine count yarns (60s, 80s, 100s) by some giants, are legitimate. The government is committed to ensuring transparency and accountability. Any reported irregularities in the utilisation of imported raw materials and their correlation with export products will be thoroughly investigated to prevent exploitation of the scheme and ensure that its benefits are genuinely directed towards enhancing value-added exports. On the taxation front, there is emphasis on reinstating the exporters’ final tax regime, stating its withdrawal has increased compliance costs and financial stress, particularly for SMEs. The government is committed to a transparent and equitable tax system.
While acknowledging concerns about compliance costs, the move away from the final tax regime is part of a broader strategy to broaden the tax base, enhance revenue mobilisation, and ensure fair contributions across all sectors of the economy. Simplification of procedures to minimise administrative burdens remains a continuous priority for the Federal Board of Revenue (FBR), and the focus is on streamlining processes rather than a return to regimes that may have inadvertently narrowed the tax base. At the same time, Pakistan has already reaped substantial benefits from the EU’s GSP+ status, with exports to the bloc doubling since 2014, reaching €8 billion in 2023. But over-reliance on the EU and US markets makes Pakistan’s exports vulnerable to external shocks. The government encourages the industry to actively explore newer markets—East Asia, Africa, and emerging economies—just as competitors like Bangladesh have done with great success.
Pakistan eyes East African market with new sea trade corridors
Calls have been made for a national branding and marketing campaign for “Made in Pakistan” garments. The government fully supports this, but such campaigns must be co-owned by the private sector, which has the insights, networks, and incentive to drive global brand building. The Ministry of Commerce welcomes partnerships on this front—through trade show participation, joint marketing funds, and digital campaigns. Warnings about the closure of export units, rising unemployment, and foreign exchange losses are serious. Yet, these are precisely the outcomes the government seeks to prevent—not through short-term relief—but through structural reforms that build long-term competitiveness. These reforms must be seen in the context of a broader industrial modernisation agenda. To reach the $100 billion export target, Pakistan’s textile industry must break out of its over-reliance on cotton. The global market is shifting rapidly to man-made fibers (MMFs), which now account for over 70% of global fiber consumption. Pakistan lags far behind—with just 11% MMF share. Bangladesh, by contrast, has diversified aggressively into MMF-based apparel. Future growth lies in embracing these trends, and the government is committed to supporting this shift, including in technical textiles.
Furthermore, associations must also turn inward and propose strategies for domestic production of dyes, chemicals, polyester yarn, and accessories. These inputs form a large chunk of Pakistan’s textile import bill and are critical for backward integration. Reducing import dependency not only saves foreign exchange but strengthens resilience. Fiscal constraints are real, and every sector must contribute fairly to the national exchequer. Support for export industries remains a priority—but must be consistent with long-term fiscal sustainability and reform. On a final note, I wish to draw attention to an ambitious initiative by the Government of Punjab: the establishment of a fully compliant Garment City on 250 acres at the Quaid-e-Azam Business Park in Sheikhupura. This industrial estate is designed specifically to empower SMEs with modern infrastructure and compliance standards. The government invites the textile industry to partner with it in making this a showcase for Asia. Let us work together to strengthen Pakistan’s textile value chain—through smart policy, shared responsibility, and forward-looking strategy. The $100 billion export dream is achievable, but only if we move decisively beyond short-term fixes and toward long-term transformation.
Source: BRecorder
