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FAISALABAD: The Pakistan Textile Exporters Association (PTEA) has stressed the need for continuing the Duty Drawback of Taxes (DDT) incentive for another three years to boost value-added textile exports.
The DDT incentive has had a positive result as textile exports recorded a 7.7% growth year-on-year to $9.99 billion in the first nine months of 2017-18.
2011 to 2017: Textile, clothing exports fall 10% in six years
PTEA Chairman Mian Shaiq Jawed said that as a result of growth-led initiatives of the government, exports surged by 13.1% in July-March 2017-18 over the corresponding period last year. The main driver was the value-added textile sector as exports of ready-made garments went up 12.56% during the period in value and 12.85% in quantity while those of knitwear edged up 14.12% in value and 3.52% in quantity during these nine months.
Exports of bedwear went up 4.99% in value and 3.16% in quantity whereas exports of made-up articles, excluding towels, increased by 7%.
He termed the positive growth in exports as a welcome sign for an economy struggling to contain falling foreign exchange reserves; however, he underlined the need to continue the DDT scheme allowed under the PM package.
Textile sector irked by delay in refunds
“Production of exportable surplus is the need of the hour,” he said, adding that revival of closed production capacity is a challenge. Only an enabling environment can attract prospective investors to undertake new investment initiatives, he asserted.
The PTEA chairman urged the government for immediate release of stuck liquidity as cash flow crunch is negatively impacting the export-oriented textile industry.
Giving details, he said that Rs30 billion are held in sales tax regular refund regime; whereas Rs10 billion are held on account of customs rebate and Rs15 billion are held under income tax credit. Similarly, incentives allowed under textile policy 2009-14 are also unpaid as Rs20 billion are outstanding under TUF schemes; whereas Rs10 billion under mark-up support and Rs3 billion are stuck up under the DLTL scheme. Furthermore, an amount of Rs21 billion is also unpaid against duty drawback of taxes under the PM trade enhancement initiative.
Textile sector top priority in budget
Vice Chairman Ammar Saeed also urged the government for immediate release of blocked refunds to enable the textile exporters to retain their hard-earned export markets at this time of tough competition. The government, at several times, set deadlines of liquidating the long outstanding refunds of the textile industry but still huge amounts remain outstanding. This is having an adverse impact on employment and the economy of the country as textile industry is unable to tap its potential, he said.
Regional competing countries are rapidly multiplying their exports just because of the edge they have on the cost of doing business. Pragmatic policies in consultation with stakeholders need to be formulated to reduce the cost of business by fixing rates of inputs in line with competing countries, he suggested.
The government should set its priorities and accord preferential treatment to boost exports and generate industrial activities, he demanded.
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Trade and Industry Minister TareK Kabil attended on Sunday the signing ceremony of an agreement to manage rights of the “Egyptian Cotton” brand. The three-year deal was inked by the ministry, the Egyptian cotton exporters association and Cotton Egypt Association.
The agreement is meant to promote for products made of Egyptian cotton on local and international markets, Kabil said. Under the agreement, a special unit will be formed to ensure the optimal use of the brand and to sign deals with international textile companies on that score, he added.
Moreover, a committee will be set up to approve and follow up the implementation of the marketing plan, Kabil noted.
The decision was taken in a meeting of the Standing Committee on the Ministry of Foreign Affairs on Saturday, said the Federation of Bangladesh Chambers of Commerce and Industry or FBCCI in a statement.
The statement said the FBCCI leaders will visit Africa soon to explore scopes for contract farming in agriculture and other sectors. They are also keen to take land on lease and invest in farming in the African countries particularly in Uganda, Ethiopia, Ghana, Liberia and Senegal. The business leaders will also explore markets for readymade garments, pharmaceuticals, jute and jute goods, cement, plastic goods and ceramic products in the African markets.
Standing Committee Chairman Abul Hossain presented a detailed plan of the committee at the meeting. He is also Honorary Consul of Uganda in Bangladesh. Bangladesh exported a total of $78.61 million worth of knitwear in Africa in 2016. Bangladesh is far behind China, India and Mauritius in exports to the region. Bangladesh is the world’s second largest garment exporter, but fourth in Africa.
Country’s export earnings from Turkey has continued to decline since 2013-14 fiscal due to supplementary duty barrier on apparel products imposed by Turkey as safeguards to its local industry.
Bangladesh’s export to Turkey in the first 10 months of the current 2017-18 fiscal fell by 19.35 per cent to $448.93 million from $556.66 million in the same period of FY17, according to Export Promotion Bureau data.
EPB officials said 10-month export data indicate that Bangladesh’s earnings from Turkey would fall for the fourth year in the current fiscal year as the total earning in FY18 would be much lower than that of $631.63 million in FY17.
Exporters said that Bangladesh had lost its competitiveness in the Turkey market as the country imposed safeguard duty on apparel imports in 2011. Turkey was a very promising market for Bangladesh and only government initiatives could help regain the potentials of that market, they said.
Despite initial safeguard duty, exports to Turkey continued to grow until 2013-14 fiscal when the country increased the rate of safeguard duty, resulting in the decline in FY15, said Shahidul Azim, former vice-president of Bangladesh Garment Manufacturers and Exporters Association.
‘Turkey was a very good market for Bangladesh. A good quantity of apparels used to be re-exported to Russia from Turkey. Now they have stopped imports of almost all types of apparels to protect their local industry,’ Shahidul said.
Turkey imposed the safeguard duty at a rate of 17 per cent in September 2011 on apparel imports from the least developed countries, including Bangladesh.
Following the imposition of safeguard duty, exports to Turkey declined by 24.23 per cent to $551.87 million in the FY12 from $724.45 million in the FY11, while the export in the FY13, rose by 15.57 per cent to $637.81 million. Country’s export to Turkey in the FY14 grew by 34.23 per cent to $856.19 million.
According to EPB data, export earnings from Turkey in the FY15 fell by 15.80 per cent to $720.88 million from $856.19 million in the FY 14.
Data showed that export earnings from Turkey declined by 8.18 per cent to $661.88 million in the FY16 while the earnings fell by 4.57 per cent to $631.63 million in the FY17.
‘I attended the hearing on safeguard duty on importing apparels from least developed countries, including Bangladesh, held at Istanbul. Later on, Bangladesh’s exporters started losing their competitiveness in the market,’ said Mohammad Hatem, vice-president of the Exporters Association of Bangladesh.
He said that it would not be possible for Bangladesh to regain the market share in Turkey if the governments of the two countries did not sign any agreement in this regard.
Turkey is also a major readymade garment producing country and a competitor of Bangladesh on the global market with around $17 billion annual clothing export and nearly $10 billion textile export.
The textile factory owners see an increase in their productivity, as the government has finally decided to allocate 2,000 new industrial gas connections and supply adequate gas to the existing units.
The move to allow new industrial gas connections after a seven-year pause comes in light of the recent import of liquefied natural gas from Qatar.
The government has already approved 196 new gas connections last month for members of the Bangladesh Textile Mills Association, the platform for spinners, weavers, dyeing mill owners and other allied industries.
The BTMA members are one of the major gas consumers as the running of spinning mills requires a lot of gas, said Mohammad Ali Khokon, vice president of the association.
The primary textile sector will be immensely benefitted as many of the factories could not begin production in the absence of gas connections, while the other mills were running below capacity for want of adequate gas pressure
I hope that productivity in my mill will go up now,” said Razeeb Haider, managing director of Gazipur-based Outpace Spinning.
Last month, state-owned Titas Gas agreed to increase the gas pressure in the unit of Haider in response to an application which was submitted in 2014.
Khokon said the development will come as a boon for garment manufacturers as they look to boost their export receipts to $50 billion from the existing $28 billion by 2021.
“Their lead time will be cut significantly.”
At present, the garment makers have to import fabrics from China and India, but soon the local spinners and weavers would be able to supply the fabrics to them.
Gas supply through the new connections will start from next month, according to Mir Mashiur Rahman, managing director of Titas Gas.
Khokon urged the government to fix the price of LNG as low as possible so that the industry truly benefits from the initiative. The government has proposed to fix the LNG price for factories at more than Tk 14 a cubic metre, up 45.53 percent from the existing rate.
At present, the textile millers pay Tk 9.62 for every cubic metre of gas and use Tk 8 to Tk 9 worth of gas to produce a kilogramme of yarn, according to industry insiders.
The ship carrying Bangladesh’s first import consignment of LNG anchored in the Bay of Bengal on April 25. Supply to the national grid is scheduled to begin next month.
The last date for filing of return in Form GSTR-3B for the month of April has been extended by two days.
Taxpayers can now file their April GSTR-3B return till May 22. Filing GSTR 3B is mandatory for all those who have registered for the Goods and Services Tax (GST)
The move to extend the due date follows the “emergency maintenance” being carried out on the system in the wake of technical issues being faced by the taxpayers during the filing of Form GSTR-3B. MS Mani, Partner-GST, Deloitte India, said considering the difficulties faced in filing the GSTR 3B returns including issues such as data not being saved, data becoming null, etc, it would be preferable that the return filing timeline is extended by a week and not two days.
Abhishek Jain, Partner, EY, said the extension is expected to bring substantial relief to those taxpayers who were struggling with system issues on the last working day (for most) before the due date for filing on May 20.
Site handed over to SIPCOT, says Perambalur Collector
A detailed proposal for providing basic infrastructure facilities at the proposed textile park in Padalur in the district has been sent to the State government through the SIPCOT.
The site identified for establishing the textile park has already been handed over to the SIPCOT, Collector V. Santha informed on Friday.
Textile owners from Karur and Tiruppur had already visited the site and have expressed to the SIPCOT the basic infrastructure required for the proposed park, the Collector said presiding over the agricultural grievances redressal meeting held here.
Replying to queries raised by farmers regarding the present status of the proposed textile park, Ms. Santha said a detailed proposal has been forwarded to the State government through SIPCOT for provision of basic infrastructure at the park.
Renewal of licences of stone quarries surrounding the site identified for the proposed park have not been allowed, she said adding that the permitted time period of a couple of quarries would get over soon.
The Perambalur district administration was extending all support and assistance to the SIPCOT for the textile park, she said. The Collector called upon the farmers to make use of the Uzhavan mobile application launched to make available services of agriculture department and other farm-related information.
A host of demands were raised by the farmers which included according sanction to lift top soil for more days; desilting of channels leading to tanks; engaging human labour to the maximum extent under the Mahatma Gandhi National Rural Employment Guarantee Scheme and steps to prevent damage of crops by wild boars.
District Revenue Officer A. Alagirisamy, officials from agriculture and other departments participated.
Government places bulk orders for Bathukamma sarees
With the State government placing bulk orders for weaving around 95 lakh Bathukamma sarees with powerloom weavers of Sircilla textile town, the district Handlooms and Textiles Department has called upon powerloom weavers, who have migrated to other States in search of employment, to return to their native villages and secure jobs in the existing powerlooms.
In a press note here on Friday, AD (Handlooms and Textiles) P. Ashok Rao said the government has placed orders for weaving Bathukamma sarees with 104 Mutually Aided Cooperative Societies (MACS) and 71 small scale industries (SSI) here. This time around, the sarees would have pre-dyed zari border in 80 colours. A total of six crore meters of fabric would be produced on 20,000 powerlooms before September this year.
The weavers would get wages between Rs. 16,000 and Rs. 20,000 a month unlike in the past when their wage was Rs. 8,000 a month. The MACS and SSIs have been instructed to give about Rs. 4.25 paise per meter of fabric that’s weaved by the weavers. Mr. Ashok Rao said the State government has released Rs. 40 lakh to give Rs. 1,200 to each weaver as thrift fund. As the government has extended 10% subsidy on the yarn, weavers would get additional Rs. 200 per day, he said.
United Nations, May 17 (IANS) India remains the world’s fastest growing major economy in the UN’s latest survey of the global economy which on Thursday raised India’s growth rate prospects to 7.5 per cent for this year and 7.6 per cent for the next year because of “robust private consumption”, supportive fiscal policies and benefits from past reforms.
The update to the “World Economic Situation and Prospects 2018 report” raised by 0.3 per cent the gross domestic product (GDP) growth estimate for this year that was made in the report last December and the estimate for next year by 0.2 per cent.
The UN estimate is slightly higher than the 7.4 estimate made for this year by the International Monetary Fund (IMF) earlier this month, but lower than the 7.8 IMF estimate for next year.
The update also raised the world economic growth outlook to 3.2 per cent for this year and the next, an upward revision by 0.2 per cent for the current year and 0.1 for 2019 fiscal year.
The report said that short-term prospects for the global economy continued to improve because of the “further uptick in the growth outlook for developed economies in 2018 on the strength of accelerating wage growth, broadly favourable investment conditions, and the short-term impact of the fiscal stimulus package in the United States”.
However, Dawn Holland, the head of the Global Economic Monitoring Branch at the UN Department of Economic and Social Affairs (UNDESA), warned at a news conference that if the tariff war initiated by President Donald Trump were to “spiral out of control” with retaliatory measures spreading to other sectors and to countries, the global economic growth next year could plunge to as low as 1.8 per cent next year.
She said at a news conference that it would create a “void of uncertainty” for companies who would not be sure where to produce or what to produce.
later she told IANS that India would be relatively sheltered from such a dire downturn because of it is less dependent on the broader world economy and its growth being driven more by internal factors like increasing domestic consumption.
Influential British weekly, “The Economist”, has regretted that India’s exports, which had reached a whopping 25% of Gross Domestic Product (GSP) in 2013, quadrupling since 1991, not far from the global average, thanks to the liberalising reforms which “helped integrate India into the global economy”, this year they have reached the “lowest level in 14 years”, around 17-18% of the GDP.
Pointing out that this has forced economists “to ponder why India has been unable to boost exports even as the global economy has purred along”, the top weekly says, “In the 12 months to March 2018, $303bn of Indian goods ended up overseas. That was up on the previous year, but still short of the $310bn achieved in 2014, when the Indian economy was a quarter smaller.”
It adds, “Imports, meanwhile, have increased to $460bn, pushing the merchandise deficit to $157bn last year, up from $109bn in 2016-17 and its highest level in five years. A surplus in services such as IT outsourcing helps reduce the overall trade deficit by around half, but even there imports are growing faster than exports.”
Asserting that India’s central bank, Reserve Bank of India, even today “holds enough foreign reserves to pay for nearly a year’s worth of imports”, “The Economist” warns, “India’s current-account deficit … is expected to reach 2% of GDP this fiscal year, triple last year’s reading”, adding, “Gold imports, used for saving or jewellery, have their own unpredictable rhythms, but also deepen the deficit.”
Suggesting that things have worsened because of oil prices, the weekly says, “The current trade lull extends beyond gold and oil, however. Exporters across the economy are being squeezed by the poor implementation of a goods-and-services tax (GST) that came into force last July.”
It adds, “Perhaps 100bn rupees ($1.5bn) of refunds due to exporters once they can prove they have shipped their wares abroad is being held up by sclerotic administration. That is working capital which small-time exporters cannot easily replace.”
“Worse”, “The Economist” says, “A $2bn suspected fraud by a diamond dealer in February has resulted in regulators banning certain types of bank guarantees that exporters use to ensure they get paid promptly, exacerbating their funding problems. These snafus come as many firms are still recovering from the ill-advised ‘demonetisation’ of November 2016, when most banknotes were taken out of circulation overnight.”
Noting that the move “snagged local supply chains, giving foreign rivals opportunities to fulfil orders that would have gone to hobbled Indian firms and to gain market share in India itself”, the weekly underlines, “Those woes come on top of perennial frailties”, especially “crippling red tape”.
Lamenting that, meanwhile, the Government of India is still “unwilling to enact labour and land-acquisition reforms that might foster larger firms”, the weekly says, instead, “it is trying to shield industry from foreign competition.” Thus, “In recent months it has imposed tariffs on a dizzying array of goods, from mobile phones to kites. Though those will no doubt help stymie imports, it is just as likely that trade measures imposed by other governments will hobble India’s exports.”
Especially taking on Modi’s friend US President Donald Trump, the weekly says, it is India’s misfortune that the US “has multiplied the salvos against India, whether decrying supposed export subsidies, making it harder for Indian IT workers to get visas or accusing India of artificially weakening its currency.” Thus, it adds, “Unlike many American allies, India has not been exempted from imminent steel tariffs.”
