While a finance minister’s meetings with secretaries, additional secretaries and joint secretaries are pretty much common, the practice of meeting only these officers who are lower in rank than joint secretaries but are instrumental in policy-making is relatively rare. Finance minister Nirmala Sitharaman on Monday held a rare meeting with directors at the department of financial services (DFS), as part of a series of interactive sessions being planned with such officers in the ministries of finance and corporate affairs. While a finance minister’s meetings with secretaries, additional secretaries and joint secretaries are pretty much common, the practice of meeting only these officers who are lower in rank than joint secretaries but are instrumental in policy-making is relatively rare. The meeting with directors and deputy secretaries, who often play a key role in the drafting of various policy initiatives, signals Sitharaman’s renewed focus on the relatively lower-rung of policy-making apparatus to improve governance. Minister of state for finance and corporate affairs Anurag Thakur was also present at the meeting. The series of interactions come at a critical juncture when the economy is reeling under the damaging impact of a pandemic of epic proportion, with several anlaysts predicting an up to 7% contraction in real GDP in FY21, although they are divided over the possibility of a sharp recovery in FY22. However, economic affairs secretary Tarun Bajaj last month exuded confidence that the economy would witness a V-shaped recovery as early as FY22 and the situation wasn’t as bad as anticipated. The meetings also follow the government’s announcement of a Rs 21-lakh-crore relief package to soften the Covid blow and its plans to roll out more measures in the coming months to reverse a slide in economic growth. Interestingly, Prime Minister Narendra Modi had held a series of meetings directly with additional secretaries and joint secretaries of all departments, in a first-of-its-kind exercise for a head of the government in recent memory, to seek their inputs on ways to improve governance. Before that, Modi had held a series of meetings with secretaries of various departments as well.
Source: PIB
The Kerala Authority of Advance Ruling (AAR) ruled that 12% GST is applicable on the Manufacture of PVC Tufted Coir Mats / Mattings / Floor coverings by the process of embedding coir yarn into PVC. The applicant is engaged in the manufacture of PVC backed coir mats/mattings/floor coverings by a special molding process. There is confusion among the industry and trade as to whether the mats manufactured by them are to be classified as tufted under Heading 5703 or under 5705. The applicant has sought advance ruling on various issues. Firstly, whether the process of manufacturing embedding coir yarn into vinyl (PVC) compound and curing by heating or cooling, which is called “Tufting” or a process “other than those processes mentioned in Headings 5701 to 5704” of the Customs Tariff and the HSN Explanatory Notes to Chapter 57. Secondly, Whether “coir mats or matting or floor covering with Vinyl (PVC) backing” manufactured by the process of embedding coir yarn into vinyl (PVC) compound and curing by heating / cooling is rightly covered under the description “coir mats, mattings and floor covering”. Thirdly, Whether “coir mats or mattings or floor covering with vinyl (PVC) backing” manufactured by the process of embedding coir yarn into vinyl (PVC) compound and curing by heating / cooling, would merit classification under the Heading 5705 (more specifically under CTH 5705 00 49) of Chapter 57 of the 1st Schedule to the Customs Tariff. The Authority consisting of Joint Commissioner of Central Tax, Shivprasad S. IRS and Additional Commissioner of State Tax, B.S. Thyagarajababu, while addressing the first issue ruled that Manufacture of PVC Tufted Coir Mats / Mattings / Floor coverings by the process of embedding coir yam into PVC cannot be considered as textile floor coverings of coir covered under HSN 5702, 5703 or 5705. The process undertaken is a tufting process and if any, PVC or rubber or any other materials are tufted on the textile of coir, which is used as floor mats or mattings, it will come under the Customs Tariff Head 5703 90 90 and is liable to GST at the rate of 12% as per Entry at SI No. 144 of Schedule II of Notification No. 01/2017 Central Tax (Rate) dated June 28, 2017. “No, PVC Tufted Coir Mats and Matting cannot be considered as coir mats, mattings and floor coverings covered under HSN 5702 or 5705 and is appropriately classifiable under HSN 5703 90 90 as tufted mats / matting / floor coverings of coir,” the AAR said. “No, The PVC Tufted Coir mats/mattings/floor coverings are classifiable under Customs Tariff Heading 5703 90 90 and attracts GST at the rate of 12% as per SI No. 144 of Schedule II of Notification No.01/2017-CT (‘Rate’) dated 28-06-2017,” the AAR, while ruling on the last issue said.
Source: Tax Scan
The ongoing COVID-19 pandemic has slowed the industrial activities across India and the textile sector is not immune to this. Touted as the largest employment provider after agriculture, it also witnessed job losses. Despite the slow pace of work, the youngsters are considering courses in Textile related industry. “Thanks to government focus on the upliftment of the textile sector, availability of the raw materials and setting up of textile parks make India advantageous over other countries when it comes to production and export,” says P Alli Rani, director, Sardar Vallabhbhai Patel International School of Textiles and Management (SVPISTM), Coimbatore. The ongoing COVID-19 pandemic has slowed the industrial activities across India and the textile sector is not immune to this. Touted as the largest employment provider after agriculture, it also witnessed job losses. Despite the slow pace of work, the youngsters are considering courses in Textile related industry. “Thanks to government focus on the upliftment of the textile sector, availability of the raw materials and setting up of textile parks make India advantageous over other countries when it comes to production and export,” says P Alli Rani, director, Sardar Vallabhbhai Patel International School of Textiles and Management (SVPISTM), Coimbatore. Giving details of the MBA programme, Rani says that it is aimed to create a specialised workforce needed for the sector. “It is an endeavour to fulfil the demand of industry’s need of managerial workforce,” she adds. The absence of a specialised workforce, says Parasher, left the textile industry with limited options and they end up hiring regular MBA graduates with limited technical knowledge. Job roles Highlighting the job opportunities in this sector, Rani adds that those opting for the textile-related courses will not face a problem with the placements. “Not only jobs, but candidates with domain knowledge can also hope to have their own ventures which can be started with a small investment,” adds Rani. Students opting for BSc Textiles programme can hope to have career options as quality control manager, merchandiser, fabric, production co-ordinator, supervisor, fashion merchandiser, industrial supervisor etc. She further adds that post the completion of the MBA course, students are employed as mid-level managers, assistant managers to name a few. Eligibility and admission For BSc Textiles, candidates must have passed class XII or equivalent exam in Science stream from any recognised board. For the MBA, graduates in any discipline can apply. The institute conducts an online entrance examination for admission to both the programmes.
Source: Times of India
The first cluster 'Rai Textiles & Allied Products Pvt ltd' under the Mini Cluster Scheme of Haryana government has been started in the district. The mini cluster is supported by the Haryana government and it was inaugurated by R K Rana, Joint Director, District Industries Centre (DIC) on Friday. While sharing the information about the cluster a Sonipat-based businessman, Rakesh Chabra said, ''Haryana Government launched the Mini Cluster Scheme in its Industrial Policy of 2015. In this scheme the government share will be 90 per cent of the cost of Machines. The MSMES of same trade & same industrial area can make a Mini Cluster.'' ''Total number of MSMEs shall be minimum 10 but preferably it should be 15. Considering plant and machinery, the project cost can be upto Rs 2 crore,'' he added. He further said that after getting the sanction approved the machines are purchased by the government E tender system. ''90 per cent of the cost of the project will be granted by the Haryana government and 10 per cent have to be contributed by the other members. This scheme is based on the Government of India scheme of making clusters that cost is upto Rs 15 crores,'' he avowed. The Mini Cluster scheme of Haryana has got much appreciation from the central government. This time in the new Draft of Industrial Policy 2020 Haryana government has proposed to increase the project cost upto Rs 5 Crores. He also informed that there will be one cluster in each district of Haryana for one product and the remaining fourteen clusters have already been started or will start in a few days.
Source: KNN India
Moody's Investors Service on Tuesday said India, China and Indonesia will be the only G-20 emerging economies to post a strong enough pick up of real GDP in the second half of 2020, and retained its projection of 3.1 per cent growth contraction for India in 2020. "The economic outlook of emerging market countries is more challenging than in advanced economies. In our baseline projections, China, India and Indonesia will be the only G-20 emerging economies to post a strong enough pick up of real GDP in the second half of 2020 and full-year 2021 to end next year above pre-coronavirus levels," Moody's said in the August update of Global Macro Outlook 2020-21. For 2021 year, Moody's has projected Indian economy to grow 6.9 per cent. The Indian economy grew at the slowest pace in 11 years at 4.2 per cent in 2019-20. Moody's said an economic recovery is underway, but its continuation will be closely tied to the containment of the virus. Economic data show a quick rebound in goods consumption in a number of advanced economies. However, pandemic fears will continue to hinder a complete recovery. It projected a 4.6 per cent contraction for G-20 economies in 2020, followed by 5.3 per cent growth in 2021.With the exception of China, we expect economic activity in every G-20 economy to fall this year. It said in countries with existing banking sector weakness, such as India and Turkey, there is a risk of a self-sustaining negative loop in which adverse real economic developments and bank weakness reinforce each other and harm long-term productive capacity. Moody's said disputes over trade, technology and foreign policy between China and some of its trading partners, including the US, Australia, the UK, Canada and India, have escalated since the start of the pandemic. The emphasis of various governments on shoring up domestic productive capacities can also be viewed as an attempt to reduce their co-dependence on the global economy."Over time, geopolitical tensions between competing powers could exacerbate in a less interdependent world. Asian countries are particularly vulnerable to changes in geopolitical dynamics. "The rise in tensions between China and countries bordering the South China Sea and clashes on the border with India suggest that geopolitical risks are rising for the entire region," Moody's added.
Source: Business Standard
After restricting bidders from China and Pakistan from participating in tenders for official procurement without its approval, India has notified a format for potential bidders from these countries to apply for registration with authorities here. The bidders having beneficial ownership of up to 10% in these bordering countries will be eligible to bid in public procurement in India, only if they are registered with the department for the promotion of industry and internal trade (DPIIT). They are also required to submit application for “security clearance” in the format specified by the DPIIT. In an office memorandum, the DPIIT has said once the registration is done, it will be valid for 12 months. “However, in case of appointment of new director(s)/ new shareholders with more than 10% shares/ change in controlling ownership interest or control through other means, the registration shall stand cancelled,” it said. In such cases, the bidders will have to apply for a fresh registration. The list of registered bidders will be displayed on the DPIIT website. While notifying the restrictions on bidders from bordering nations last month, the government, however, exempted the countries to which India provides lines of credit or developmental assistance. This effectively meant the restrictions were confined to only China and Pakistan. Although India provided relaxations in certain limited cases, such as for the procurement of medical supplies for Covid, it’s valid only till December 31, 2020. The private sector, however, has been exempted from any such restriction.
Source: Financial Express
The Reserve Bank on Tuesday suggested setting up GST Council type apex authorities for land, labour and power to drive structural reforms and expedite implementation of national infrastructure pipeline. It said targeted public investment funded by monetisation of assets in steel, coal, power, land, railways and privatisation of major ports by central and state governments under an independent regulator can be the way forward to revive and crowd in private investment. "In fact, Goods and Services Tax (GST) Council type of apex authorities can be set up in respect of land, labour and power to drive structural reforms," RBI said in its 2019-20 annual report. The reforms could include speedier implementation of the national infrastructure pipeline, a north-south and east-west road corridor together with a high-speed rail project that builds on the success of the golden quadrilateral, alongside steps to improve business sentiment and environment for investment. It suggested that states can be encouraged to publicise the availability of litigation-free land in their jurisdictions with access to modern infrastructure. "In the power sector, the opportunity has arrived to leapfrog India into becoming the world leader in renewable energy by incentivising the domestic production of solar panels and connecting dispersed transmission links with remote areas," it said.For the sector as a whole, elimination of cross-subsidisation through tariff structure and provision of subsidy, if any, through direct benefit transfer (DBT) should be a priority, along with due consideration to the privatisation of electricity distribution companies (DISCOMS). "With regard to railways, there is a strong case for manufacturing units to be corporatised," the report said, adding that FDI into railways can be encouraged by removing bottlenecks in access to infrastructure -- land, procurement rules, project risk-sharing mechanisms. The growth potential of land banks can be exploited, particularly in metropolitan areas, by long-term leasing to the private sector, including for the development of the commercial real estate. Further, "a comprehensive policy is needed with regard to building adequate reserves of strategic materials, including the initiatives undertaken for crude oil". The report also said the progress made on building modern physical infrastructure in the country over the last five years has been noteworthy in the areas of roads, civil aviation and airport connectivity, telecommunication (including internet and broadband penetration), and ports. Nonetheless, the infrastructure gap remains large, needing around USD 4.5 trillion of investment by 2040, as per the Economic Survey 2017-18, with emphasis on upgrading the poor quality of infrastructure, it added. "It is also time to turn to the unlocking of entrepreneurial energies and risk appetite by improving the business environment." Faster enforcement of contracts, including through the expansion of judicial and insolvency capacities, would be a game-changer, it said. "Property registrations can be speeded up from the current 58 days, and a centralised website can provide real time information on all regulatory compliance requirements. In general, the compliance burden can be streamlined substantially," the report suggested.The Covid-19 crisis, RBI added, can be converted into an opportunity by using online provision of education and training to implement reforms in social infrastructure by skill development and reskilling so as to prepare a labour force equipped to keep pace with a big thrust on infrastructure.
Source: Business Standard
CAIT has urged him to hike in customs duty on various articles import from China, plug alternate routes which can be used by China for pushing its exports to India The Confederation of All India Traders (CAIT) has sought support from the Government for celebrating this year's Diwali as Hindustani Diwali. In a letter sent to Union Commerce Minister Shri Piyush Goyal, the CAIT has urged him to hike in customs duty on various articles import from China, plug alternate routes which can be used by China for pushing its exports to India, Implement mandatory mentioning of Country of Origin with each product sold on e-portal from 1st September 2020 and impose ban on other chinese apps which can pose threat to security of the Country and debar Huwaei and ZTE Corporation from participation in 5G network roll out in India. CAIT National President B.C.Bhartia & Secretary General Praveen Khandelwal said that upcoming festival season which includes Diwali is unquestionably the largest most celebrated festival of India. The next four months beginning September are 'purchasing months' every year and therefore to reduce the consumption of Chinese goods and to raise purchase of Indian goods the above steps are necessary to support vocal for local and Atmnirbhar Bharat call of Prime Minister Shri Narendra Modi. In its letter to Piyush Goyal that CAIT suggested that a logical hike in import duty on the products like God Idols, Electric Goods including decorative electric bulb series, decorative articles, toys, textiles, home appliances, textiles, electric & electronic gadgets, cameras, solar modules, batteries and cells, inverters, cleaning equipment, furnishing fabric, furniture, aluminium utensils & other aluminum goods, paper & stationery, beauty products, FM-CG goods, consumer durable and other related sections of retail trade. The CAIT further said that since the Union Government has taken several extraordinary and exemplary steps to restrict participation of Chinese Companies in several core sectors including infrastructure, Highways, Railways etc which is an alarming bell for China. "We apprehend that China may adopt another strategy of not exporting goods directly to India but can take the route via ASEAN and SAARC countries. Therefore, there is an urgent need to draw preventive steps to stop imports of Chinese goods into India from such routes"-said Mr. Bhartia & Mr. Khandelwal Mr. Bhartia & Mr. Khandelwal said that it is a well-known fact that most of the major Ecommerce Companies operating business activities in India are largely selling Chinese Goods without the knowledge of consumers as to what he is buying. We welcome the decision of the Government for mandatory adoption of Country of Origin mentioning every product that is sold on E-portals. Since next four months are high purchasing months of every year, it is requested that the E -portals should be directed to implement the said directions from 1st September 2020 to enable the consumers to exercise their choice in purchasing goods. The CAIT further said that besides banning 59 Chinese Apps but there are still about more than 30 such Apps which also need a ban on the same principle. It also reiterated that Huawei & ZTE Corporation of China should be debarred from participation in any manner in rolling out a 5G network in India.
Source: Everything Experiential
Make in India programme of the government comes in a full circle when the feasibility of import replacement was deliberated between steel and auto industry. Various agencies are putting forward their estimates for India’s GDP growth in Q1 FY21. That the economy performed much below normal contraction level due to the pandemic and the subsequent lockdown is a foregone conclusion and there is hardly any surprise awaiting on that count. Looking forward, the Q2 is yet to exhibit a sharp U type growth path, although the government is trying its best to help and support the economy within its own limitations of rising fiscal deficit, increasing food prices and unemployment. Unlike in some other advanced countries, specifically China, where massive stimulus measures have been announced out of mounting public debt and issuance of bonds to fund the expenditure. The falling trend in GST collections in the first four months of the current fiscal year (collections of Rs2,72.642 crore— more than 20% shortfall compared to last year) and revenue loss in customs duty due to decline in imports (both oil and non-oil) have led to a limited fiscal space for the government to enhance investment in infrastructure. It is therefore certain that apart from roadways (NHAI for national highways from market borrowing), railways (DFC, Metro from World Bank and other foreign aid), affordable housing (under credit -linked subsidy scheme), pipeline expansion (transportation of gas and petroleum products funded by oil companies), there are other critical sectors left requiring massive private investment. Private investment is sought for airport construction, which has also become synonymous with Atmanirbhar Bharat Abhijan. Earlier six airports viz. Ahemedabad, Mangalore, Lucknow, Guwahati, Thiruvanthapuram, Jaipur were offered to Adani group for development and upgrade. The concessionaire agreement has been signed for Jaipur, Guwahati and Thiruvanthapuram. The plan is to construct and develop 100 airports (major and minor) in the country by 2024. New airports immensely contribute to mobility, networking, and communication and these being mostly on build-operatetransfer (BOT) mode of public-private partnership (PPP), would render support to the construction sector. Interestingly, private investment is also coming via construction of houses in Tier-II and -III cities (Jhansi, Kanpur, Indore, Karnal, Panipat etc.) as developers like DLF, Emami, ATS Omaxe are turning to these cities for more open space, environment friendly ambience, lower cost of acquisition etc. The trend of urban mobility is fully catered to by construction of dwelling places in these cities, which would also go a long way in easing the pressure seven mega cities in terms of housing, commercial space and other associated urban infrastructure. The road connectivity between Tier-II & -III cities and also the mega cities assumes higher degree of optimisation. The government has rightfully identified a number of areas that still necessitate imports. The case in point is imports of power plant equipment like pressure vessels etc. The Centre has decided to offer productivity-linked incentives and phased manufacturing for certain power plant equipment manufacturers like BHEL, NHPC and Alstom, L&T etc. Apart from a few PSUs, a host of other private entities are involved. The unique contribution of Dedicated Freight Corridor can be summed up by visualising the country having been cordoned off by railway freight lines — East coast Corridor (1115 km), East West Corridor (1673 km), Andal Route (195 km) and North South Sub-corridor (975 km). It is known that by 2022, the Eastern Dedicated freight Corridor would successfully connect 1875 km between Ludhiana and Dankuni and would also run 1506 km between Dadri and JNVT. In addition, the railways are completing 10 port connectivity projects and five coal connectivity projects by March 2024. They are working towards 100% localisation, now that Head Hardened Rails (R-1080 grade) and Metro Rails are indigenously made available by both SAIL and JSPL. The Railways are vigorously going ahead with converting single line of 11500 km into double lines. New trains in specific medium speed routes offer scope for private investment. Make in India programme of the government comes in a full circle when the feasibility of import replacement was deliberated between steel and auto industry. It is certain that localisation levels should be pursued across value chains in the sector in order to reduce import of steel, electronic components and parts. This implies localisation at OEMs, TierII and -III vendors. A very close interaction between suppliers of these items indigenously, the technology involved and the cost of production data would have to be established and study their replacement with no additional costs to the users. With respect to the solar panels, India’s imports comprise around 80% of the total requirement and most of these are from China. The localisation of solar panels and cells has commenced and this needs to be speeded up. Wind turbine towers require only 20% import content, which also can be locally developed and the grade of steel (EN-10025, S355) can be made locally available at some economic scale of operation. Last week we discussed about the government’s Make In India efforts in procurement of defence equipment. The import restriction schedule starting from December is to be monitored along with development of indigenous capabilities to produce the items. Thus, all the above areas provide good opportunities for private investment and FDI ($17 billion in April-July’20) to flow into the economy as these areas offer firm demand and little uncertainty on return on investment — the two critical factors to attract private investment.
Source: Financial Express
Vijay Rupani said that Gujarat has been able to perform in an outstanding manner through the formula of Farm ->Fiber->Fabric ->Fashion ->Foreign given by Prime Minister Narendra Modi. Gujarat Chief Minister Vijay Rupani inaugurated FABEXA 2020- India’s First and Longest Virtual Exhibition organized by one of the oldest cloth markets in the country, Maskati Mahajan. During his address, the CM said, “Gujarat is the Textile Capital of India with a contribution of 33% of cotton production to India. The state government has ensured technology upgradation, skill enhancement and development and textile cluster parks through the Textile Policy. More than 28 textile parks are operational in the state today. Garment export in Gujarat has achieved a new pace due to various advantages like interest subsidy on credit, assistance and encouragement for Textile Parks, in addition to keeping in mind the aspects of environment conservation, and pollution control.” The CM added that Gujarat has been able to perform in an outstanding manner through the formula of Farm ->Fiber->Fabric ->Fashion ->Foreign given by Prime Minister Mr. Narendra Modi. Labour reforms and infrastructure coupled with political stability have ushered trade and commerce in the state. The Chief Minister congratulated the organisers for conducting this virtual exhibition keeping in mind the COVID-19 crisis. More than 100 exhibitors have participated in this event which will run for 90 days. Rupani also briefed about the subsidies and assistance given by the state government to the MSME sector since a large part of the textile industry falls under MSMEs. A large number of traders, dignitaries and people associated with textile industry were present during the inauguration.
Source: Newsroom
The Telangana government is holding a two-day virtual conference ‘Make in Telangana’ on August 27 and 28. The conference will be addressed by CEOs of leading Indian and global companies, including IT, pharma, textiles, electric vehicles, food processing, aerospace and defence, retail and infrastructure. Despite the Telangana government struggling to tackle the growing intensity of Covid-19, the state continues to attract huge investments in various industrial, infrastructure and information technology sectors amid the health crisis. State industry department’s official figures indicate that in the last month alone, projects worth around Rs 4,500 crore were grounded in Telangana, particularly in and around Hyderabad. “We continue to receive investment proposals worth hundreds of crores of rupees, which is a good sign for the state’s economy in the post-Covid-19 scenario,” a senior official in the department familiar with the development said. The Telangana government is holding a two-day virtual conference “Make in Telangana” on August 27 and 28 with the theme “Invest in Telangana: Opportunities in Post Covid19,” with an objective to explore investment opportunities and new partnerships. The conference will be addressed by CEOs of leading Indian and global companies including IT, pharma, textiles, electric vehicles, food processing, aerospace and defence, retail and infrastructure, the official said. On August 11, Medtronic, an Ireland-based medical equipment giant, announced its plan to scale up and expanding its Medtronic Engineering & Innovation Centre (MEIC) in Hyderabad at a cost of Rs 1200 crore. “It is going to be the largest global R&D centre outside of the United States for Medtronic generating over 1000 jobs,” state industries minister K T Rama Rao said. “It will be a big boost to Telangana and it will cement Hyderabad’s position as the medical devices hub in India,” he said. On August 13, Telangana received yet another major investment proposal from Medha Servo Drives Pvt. Ltd to set up Medha Rail Coach Factory, India’s largest private sector rail coach factory at an investment of Rs 1000 crore with an employment potential of 2,200 (1000 direct and 1200 indirect) in the state. KTR took part in the ground-breaking ceremony of Medha Rail Coach Factory in Kondakal village of Shankarpally, Ranga Reddy district in the presence of his cabinet colleagues T Harish Rao and P Sabitha Indra Reddy. “The facility will have a capacity of manufacturing coaches, locomotives, intercity trainsets, metro trains, monorail, etc. Production capacity is planned for 500 coaches (of various types) and 50 locomotives per year,” the industries minister said. Similarly, on August 17, KTR laid the foundation stone for an advanced polyester film manufacturing facility at Shahabad in Ranga Reddy district, to be set up by Ester Industries Ltd, a leading manufacturer of Polyester Films at an investment of Rs 1,350 crore. It will provide jobs to about 800 people. The minister also laid the foundation for two other projects in the last one month: Rs 500 crore smart data centre of the National Payments Corporation of India (NPCI), an umbrella organisation for operating retail payments and settlement systems in India at Nanakramguda and a new Research and Technology Centre of Sai Lifesciences Limited, a growing contract research organisation, at an investment of Rs 400 crore at Genome Valley. The industries minister said post-Covid-19, there is immense opportunity for the state to attract investments from other parts of the world, and the infrastructure development and construction sector would play a major role in it.
Source: Hindustan Times
Future Retail shares on Monday closed 6.62 per cent down at Rs 114. This is because one of its lenders sold the firm's pledged shares because of default Future Retail, which is in talks with Reliance Industries (RIL) on sale, on Monday averted a default by paying Rs 100 crore of interest on its foreign bonds. Any legal complication due to default at this stage would have delayed the deal with RIL, a source said. The interest was paid on the last day of the 30-day grace period granted by the bondholders of the $500-million senior secured notes. For this, the company drew on its internal accruals and borrowed from banks. A Future executive confirmed the bondholders were paid their dues. Future Retail shares on Monday closed 6.62 per cent down at Rs 114. This is because one of its lenders sold the firm’s pledged shares because of default. Soon after the “technical” default on July 22, Future had said it would be able to make the payment within the grace period through bank funding or any other means, including selling assets. The group was planning to sell its stake in two insurance arms but was unable to do so within the deadline. As the group’s cash flow dried up and it started defaulting, the lenders, who have the entire promoter stake pledged with them, began negotiating the sale of Future’s retail businesses to RIL. According to the plan, which is in the works, three Future group companies -- Future Lifestyle, Future Supply Chain Solutions, and Future Retail -- will be merged into Future Enterprises. Once it is over, RIL may invest Rs 8,500 crore in the merged entity, taking a 50 per cent stake in the merged outfit. A source on Monday said Future vendors had been asked by RIL to take a haircut of 20 per cent on their pending dues. Lenders to Future Group are also being asked to take a haircut of up to 40 per cent. Banks, however, are likely get Future Group’s real estate, which will be hived off into a company. Even as Future Group had high debt for long, both at the level of the promoters and listed entities, the pandemic made things worse. It disrupted the operations of group companies, leading to severe challenges in sourcing, manpower, supply chains, and distribution. Several stores, including franchisees/retail outlets, were closed on account of lockdown. Apart from company debt, the promoters' debt rose from Rs 11,790 crore in March 2018 to Rs 11,970 crore in March 2019, despite monetisation. The group further raised Rs 4,620 crore between April and December 2019 through a mix of debt, equity, and stake sales. Blackstone invested Rs 1,750 crore and Amazon Rs 1,430 crore. Of the proceeds, Rs 1,440 crore was ploughed back into Future Retail, but it did not help matters.
Source: Business Standard
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
788.23 |
USD/Ton |
0% |
26-08-2020 |
|
VSF |
1225.74 |
USD/Ton |
0.06% |
26-08-2020 |
|
ASF |
1708.08 |
USD/Ton |
0% |
26-08-2020 |
|
Polyester POY |
737.61 |
USD/Ton |
-0.97% |
26-08-2020 |
|
Nylon FDY |
1923.58 |
USD/Ton |
0% |
26-08-2020 |
|
40D Spandex |
4020.71 |
USD/Ton |
0% |
26-08-2020 |
|
Nylon POY |
5206.68 |
USD/Ton |
0% |
26-08-2020 |
|
Acrylic Top 3D |
957.45 |
USD/Ton |
-0.45% |
26-08-2020 |
|
Polyester FDY |
1807.88 |
USD/Ton |
0% |
26-08-2020 |
|
Nylon DTY |
1880.19 |
USD/Ton |
0% |
26-08-2020 |
|
Viscose Long Filament |
932.86 |
USD/Ton |
0% |
26-08-2020 |
|
Polyester DTY |
2176.68 |
USD/Ton |
0% |
26-08-2020 |
|
30S Spun Rayon Yarn |
1692.17 |
USD/Ton |
1.56% |
26-08-2020 |
|
32S Polyester Yarn |
1352.29 |
USD/Ton |
0% |
26-08-2020 |
|
45S T/C Yarn |
2176.68 |
USD/Ton |
0% |
26-08-2020 |
|
40S Rayon Yarn |
1851.26 |
USD/Ton |
0% |
26-08-2020 |
|
T/R Yarn 65/35 32S |
1677.71 |
USD/Ton |
0% |
26-08-2020 |
|
45S Polyester Yarn |
1518.62 |
USD/Ton |
0% |
26-08-2020 |
|
T/C Yarn 65/35 32S |
2053.75 |
USD/Ton |
0% |
26-08-2020 |
|
10S Denim Fabric |
1.14 |
USD/Meter |
-0.13% |
26-08-2020 |
|
32S Twill Fabric |
0.64 |
USD/Meter |
-0.22% |
26-08-2020 |
|
40S Combed Poplin |
0.93 |
USD/Meter |
-0.16% |
26-08-2020 |
|
30S Rayon Fabric |
0.47 |
USD/Meter |
0% |
26-08-2020 |
|
45S T/C Fabric |
0.65 |
USD/Meter |
0% |
26-08-2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14463 USD dtd. 26/08/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The German economy, Europe’s biggest, shrank slightly less in the second quarter than originally estimated, the official statistics agency said Tuesday though the 9.7 per cent drop was still easily the worst on record. The Federal Statistical Office revised the quarter-on-quarter contraction in gross domestic product down from the 10.1 per cent it initially reported at the end of July. Despite the revision, it remained by far the steepest drop in the 50 years that quarterly GDP figures have been recorded easily beating a 4.7 per cent decline in the first quarter of 2009, during the global financial crisis. The German decline was one of the less drastic second-quarter contractions among Europe’s major economies as wide-ranging shutdowns because of the coronavirus pandemic took their toll on economic activity during the spring. France, Italy, Spain and Britain all saw double-digit drops.
Source: Financial Express
China has said that it is actively considering establishing a BRICS innovation base to strengthen practical cooperation with the five-member bloc, urging it to focus more on digital transformation, especially in 5G, Artificial Intelligence and the digital economy in the post-COVID-19 era. China is vigorously promoting the resumption of work across the entire industry chain, and is keen to see more development in new industries such as 5G, AI and the industrial Internet during the COVID-19 pandemic, Minister of Industry and Information Technology Xiao Yaqing said during a video meeting of the BRICS industry ministers on Monday. The meeting adopted a joint statement on cooperation in new industries among BRICS (Brazil, Russia, India, China and South Africa) countries, state-run media reported on Tuesday. China is actively considering the establishment of a BRICS innovation base in the country in order to strengthen practical cooperation with the BRICS bloc, Xiao said. He urged the BRICS countries to strengthen their cooperation on digital transformation, especially in 5G, AI, the digital economy and others to promote the digital transformation of enterprises and their innovation capabilities, and to promote sustainable economic and social development. “At present, growth in China’s industrial economy is gaining momentum, in turn supporting the steady recovery of China’s overall economy, and contributing to a new impetus and stability in the global industrial chain and supply chain,” Xiao said. China is committed to ensuring the production and supply of key medical materials, meeting China’s domestic epidemic prevention and control needs, and providing a large amount of material assistance to countries around the world to fight against the pandemic. “BRICS countries should cooperate to promote economic recovery, strengthen communication and sharing their experiences in epidemic prevention and control, guarantee medical supplies, resume work and production, and promote economic development during COVID-19,? He said. Xiao urged BRICS countries to strengthen the industrial chain and supply chain, enhance development resilience and the countries’ abilities to respond to risks, and jointly create a good development environment, he added. According to a tally by Johns Hopkins University, more than 813,000 people have died of COVID-19 which has infected 23,676,599 globally. Nearly 5.7 million cases have been reported in the US, making America the worst-hit country in the world after the disease emerged in the central Chinese city of Wuhan last year.
Source: Financial Express
Ahmed Chinoy, Chairman Pakistan Cloth Merchants Association (PCMA), on Monday appealed to the government to release the outstanding Sales Tax/Duty Drawback Refunds of textile industry that was facing severe liquidity issues owing to COVID-19 led economic sluggishness. “There is no visible improvement in employment even after the business activities have been reopened by the government. The small and medium industries, being the main providers of jobs, are still struggling because of lack of funds,” Chinoy said in a statement. He said the global lockdown badly affected economic activities, businesses, people’s income and their purchasing power and as a result, the demand for many products dropped sharply. “Textile industry is struggling to attract foreign buyers and the financial health of the companies around the globe is deteriorating,” Chinoy said. The industry official also urged the Federal Board of Revenue (FBR) to take concrete action/efforts for early disposal of refund claims of industries FBR must take steps to further improve its systems and it must simplify the Annexure-H to facilitate the taxpayers.
Source: The News
The Vietnam Textile and Garment Group (Vinatex) forecasts Vietnam's textile and garment exports will continue to decline by 14-18 per cent each month for the rest of 2020 over the same period last year. The group also said the total textile and garment export value for this whole year is estimated to hit about US$32.75 billion, a year-on-year decrease of 16 per cent. Vinatex general director Le Tien Trưong said the textile and garment will face greater difficulties in the final half of the year than the first half. “At present, there are almost no orders for member companies producing in the fourth quarter. That is a huge challenge for the group's business plan. Mask orders have reduced to low quantity while the price of this product has also decreased to the level that is the same rate with production cost," Trưong told the Voice of Vietnam (VOV). According to the Vietnam Textile and Apparel Association (VITAS), the second quarter was the most difficult quarter for the textile and garment industry because customers in major export markets such as the US and EU cancelled 30-70 per cent of orders because the markets were closed due to the Covid-19 pandemic. Strong reductions in orders have caused higher inventories and increased pressure to pay workers, bringing more and more difficulties to textile and garment companies. The Ministry of Industry and Trade also said as of July, many textile and garment enterprises had few orders for the last two quarters of this year, especially high-value products. Meanwhile, face masks and personal protective equipment, which are considered major products for many garment enterprises, have sharply decreased due to global oversupply. The ministry said nobody knows when the pandemic will end so by this year-end, textile and garment enterprises need to pay attention to demand on the domestic market due to lower export orders. At the same time, they should manage production costs and maintain product quality to minimise the decline in revenue. In addition, the businesses need to provide jobs and income for workers who have accompanied the enterprises during a difficult period. At present, 80 per cent of enterprises in the textile and garment industry have cut their labour force while most businesses have slashed operation capacity by 50 per cent, the association said. According to the Ministry of Industry and TradeVietnam's export value of textiles and garments in July was estimated at $3.43 billion, up 14.4 per cent compared to June but down 11.8 per cent year-on-year. In the first seven months of this year, the textile and garment export value was at $19.21 billion, down 13.8 per cent year-on-year. Of which, fibre exports in the first seven months reached 876,000 tonnes, earning $1.89 billion. Exports plunged by 7.9 per cent in volume and 20.9 per cent in value over the same period of last year. Garment export value during the first seven months was estimated at $16.18 billion, down 12.1 per cent year-on-year, accounting for 84.22 per cent of Việt Nam's total textile and garment export value. In July, export value rose by 15.3 per cent month-on-month to $3 billion though it reduced by 8.9 per cent year-on-year. The ministry forecasts Vietnam's textile and garment export value this year would reduce by 10-15 per cent to $33.6-36 billion compared to last year. This value is higher than the Vinatex forecast.
Source: The Star
Officially, Bangladesh is still the second-largest garment exporter worldwide and it is expected that the country will be able to retain its second position globally because of the regular flow of work orders with the reopening of the stores in the western world. Between January and July, Vietnam, Bangladesh's main competitor in global apparel trade, exported textile and garment items worth $16.2 billion. In that time, Bangladesh's apparel exports stood at $15.2 billion. This might give off the impression that Vietnam has usurped Bangladesh as the second-largest supplier of apparel in the world. But there is a caveat: Vietnam's amount is counted for two items, textile and garments, while Bangladesh's amount is counted only on one item, garment. So, Bangladesh is still far ahead of Vietnam in terms of garment export worldwide and still the second-largest exporter. "You are not comparing apples with apples but apples with oranges," said Arshad Jamal Dipu, vice-president of the Bangladesh Garment Manufacturers and Exporters Association. According to the latest data from the World Trade Organisation, which is of 2019, Bangladesh retained its second position in garment export, grabbing 6.8 per cent of the market share while Vietnam took 6.1 per cent. In 2019, Bangladesh exported garment items worth $34 billion and Vietnam exported garment items worth $31 billion, the WTO data also said. It may be noted that Vietnam exported about $9 billion worth of textile in 2019 as per the WTO report, Dipu said. "So, if the textile export value can somehow be excluded from Vietnam's textile and clothing export, then Bangladesh would remain the second," he said. Besides, there is no such authentic official data that proves that Vietnam has taken over Bangladesh to be the second-largest clothing exporting country. "We are still in the middle of 2020, so we have to wait until July 2021 for the WTO data for 2020," he said. However, the data that is being referred to in media reports these days to draw a comparison between Bangladesh and Vietnam is a misleading comparison. Even if Vietnam takes over Bangladesh in the near future, it should not be a matter of surprise, because Vietnam has been registering higher export growth than Bangladesh and any other apparel exporting country in the past decade. However, the question that may be asked is how Vietnam is being able to perform so well compared to Bangladesh. And the answers would suggest where Bangladesh should put its focus in the coming days, Dipu said. The BGMEA vice-president also said there was no debate on the fact that Vietnam has a better country competitive position than Bangladesh. At least the World Bank's doing business index reveals that fact. Vietnam's industry is dominated by foreign investors, which is not the case of Bangladesh, so they are ahead of in terms of technology, management know-how, efficiency and skills. They do also need less lead time than Bangladesh since China being next door to them makes the import of raw materials easier. Furthermore, Vietnam has gained significant progress concerning design input and the making of patterns, which is one of the key success factors for them. "And to be honest, Bangladesh lags way behind Vietnam in this respect." Without making considerable advancements in the areas of pattern making and design development, it would be difficult for Bangladesh to move to the next level of apparel manufacturing. Not only that, but Vietnam's progress and maturity in the area of economic diplomacy are also commendable. The country has already entered into free trade agreements (FTAs) and regional trade agreements (RTAs) with several trade partners including the Association of South-East Asian Nations (ASEAN) and the European Union (EU). The recent EU and Vietnam FTA and EU Vietnam Investment Protection Agreements testify Vietnam's capability in dealing with a trade partner like the EU. "Bangladesh has to go a long way, especially when the least-developed country (LDC) graduation is a matter of time for us and we are going to lose trade benefits." This will put the country's exporters in a disproportionately affected situation. "We have to improve the capacity of our industry. At the same time, we need better infrastructure to further increase country competitiveness, which can be achieved through the optimised cost of business and lead time. Those are long term steps, but we need to make progress faster." Bangladesh needs diversification of markets and to draw more local and foreign investments in high-end backward linkage industries, especially textiles, and forward linkage activities like putting up design and innovation centres. Most of all, FTAs with right trade partners will be crucial for Bangladesh to keep pace with competitors, he said. Moreover, the rebound shows that garment exports will also fare well soon, as the work orders are coming back to Bangladesh with the reopening of the economies and stores in the Western world, Dipu added. Between 1 and 22 August, Bangladesh exported garment items worth $2.4 billion, which is 45.8 per cent higher than that of the same period last year, according to data from the BGMEA. "It is a matter of hope that the buyers started taking back the previous cancelled work orders," said Mohammed Abdus Salam, acting president of the BGMEA. So, the local suppliers are getting back their previous arrear payments. The sector was mainly shocked when nearly 100 big companies in the US and the EU became bankrupt due to the coronavirus pandemic. However, in future, Bangladesh will face more competition from Vietnam because of the signing of the FTA between the EU and Vietnam, he added. Vietnam has been moving very fast because they have a lot of facilities like many seaports, foreign direct investment (FDI) in textile and garment and advantages in lead time, none of which Bangladesh has, said Ahsan H Mansur, executive director of the Policy Research Institute (PRI). Bangladesh should have encouraged the FDIs in textile and apparel items a lot earlier so that the country could earn more foreign currency and more employment generation and also technology transfer and technical knowhow. Mansur went on to advise the government to engage the Association of Southeast Asian Nations, apart from traditional markets like the EU, the US and Canada, for increasing exports and enjoying tariff benefits. He also recommended exploring the Asian markets like China, India and Japan more. The local garment manufacturers and exporters should also think about their product diversification. For instance, Bangladesh's concentration is 74 per cent on cotton-made fibres whereas the global fashion trend has been diverting to man-made fibres. So, Bangladesh should focus more on man-made fibre to make garment items for grabbing more of the market share worldwide, he said.
Source: The Daily Star
Philippines and Indonesia discussed the proposed conduct of industry dialogues on copper and textiles, capitalizing on each other’s complementation in terms of industrial strengths and resource endowments as among the areas of future cooperation. In a recent virtual 8th Meeting of the Joint Working Group (JWG) on Trade, Investments, Handicrafts and Shipping, Philippines Trade and Industry Undersecretary Ceferino S. Rodolfo and Iman Pambagyo, Director-General for International Trade Negotiations of the Ministry of Trade of the Republic of Indonesia agreed to finalize this year a number of Memoranda of Understanding on investment promotion, halal products, quality assurance, and the creative economy. On copper and textile industry dialogues, both sides agreed to capitalize on each other’s complementation in terms of industrial strengths and resource endowments. The industry dialogues which are also proposed to be convened within the year will serve as a platform for information exchange on best practices and current industry regulations, and discussion of collaboration activities, with the participation from both the government and private sector. In the long term, these dialogues are seen as avenues to boost the manufacturing capabilities of our industrial sectors through the infusion of investments and technology. Proposals were also brought forward by Indonesia on fisheries cooperation and border trade. “The Philippines is committed to consider the proposals given its relevance to both the Philippines and Indonesia as archipelagic states with common borders and taking into account the developments in sub-regional integration,” Rodolfo added. The Philippines and Indonesia also committed to work on outstanding issues with the end view of enhancing the business environment affecting the operations of both sides’ businesses. The JWG serves as a focused mechanism to discuss trade, investments, economic cooperation and other issues affecting the business environment, apart from the regular engagement of both countries under the ASEAN framework. “This is the first bilateral meeting convened by the Philippines since the onset of the pandemic. Convening the JWG with Indonesia is of strategic importance to the Philippines given the many commonalities we share. With the challenging times ahead, working together as two of the biggest economies in ASEAN to address the unprecedented crisis is the best recourse,” said Rodolfo. In 2019, Indonesia is the Philippines’ 8th trading partner (out of 225), 13th export market (out of 220), 6th import source (out of 191), and 27th source of approved investments. Total trade with Indonesia amounted to $7.5 billion.
Source: Manila Bulletin
