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The Hong Kong-based Epic Group, is interested in setting up of a textile factory in Jharkhand, a top company official said Tuesday.
“The company is interested in starting manufacturing units in India. Jharkhand Textile Policy is the best. IfJharkhand government assists the company then it will start its factory in Jharkhand,” Epic Groups Chairman Ranjan Mahtani told Chief Minister Raghubar Das here.
The Epic Group is an apparel supplier and has manufacturing units in Bangladesh, Jordan and Ethiopia.
During his meeting with the chief minister, Mahtani said that the Epic Group is a Hong Kong-based multi-national company, which works in textile, an official release said.
Responding to Mahtanis request, Das said the textile policy of Jharkhand has attracted companies like Arvind Mills and Orient Craft, which have started manufacturing units in the state, and many more are in the pipe-line, the release quoted Das as saying. The chief minister said Jharkhand would be developed into a textile hub as it has immense potential in generating employment. He said that the government is imparting skill training to the youth in different trades. The chief ministers Principal Secretary, Sunil Kumar Barnwal, and Epic Groups Executive Director K P Pradeep were present during the meeting, the release added.
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The economy of Uzbekistan is one of the largest in the Central Asian region. In recent years, the Uzbek economy has been actively developing and showing high results of stable growth.
The foreign trade turnover of Uzbekistan amounted to $ 3.35 billion, according to the results of January 2019 and increased by 26.8 percent, compared with the same period in 2018.
According to the State Statistics Committee of Uzbekistan, exports reached $ 1.67 billion (growth rate – 16.6 percent), import volume – $ 1.67 billion (growth rate – 38.9 percent). The foreign trade balance totalled to $ 31,000.
According to the results of January 2019, the number of enterprises engaged in the export of goods, compared to the same period in 2018, increased by 81 units and their total number reached 1,037 units.
Analysis of the dynamics of foreign trade turnover also showed an increase and in January 2019 it hit $ 3.35 billion, which, compared to the same period in 2018, shows an increase of $ 707.8 million.
As a result of measures taken by Uzbek Government to strengthen cooperation with the CIS countries and comprehensive support for foreign trade, the share of CIS countries in foreign trade turnover was 29.2 percent in January 2019 and, compared to the same period last year, the growth rate of foreign trade turnover reached 115.3 percent.
The share of other countries in foreign trade turnover in January 2019 increased by 2.9 percent and, amounted to 70.8 percent, compared to the same period in 2018.
The volume of exports of Uzbekistan in January 2019 amounted to $ 1.67 billion (an increase, compared to the same period last year, reached 16.6 percent). The share of goods in the composition of exports reached 88.0 percent, of which energy resources and petroleum products – 14.8 percent, food products – 3.6 percent, ferrous and non-ferrous metals – 5.3 percent. Exports excluding gold increased by 46.1 percent, reaching $ 863.6 million.
Analysis of the dynamics of exports of goods and services showed that in January 2019, compared with January 2018, the volume of exports of goods increased by $ 228.9 million and amounted to $ 1.47 billion. The export of services reached $ 201.3 million.
China and Russia occupy the largest share in the export of goods and services of Uzbekistan. The share of these countries in total exports is 31.8 percent.
Exports of textile products amounted to $ 107.5 million in January 2019, and increased, compared to the same period of 2018, by 4.7 percent, which is 6.4 percent of total exports.
Of the export structure of textile products, the main share is cotton yarn (60.2 percent), as well as finished knitwear and garments (20.7 percent). Since the beginning of the year, more than 186 types of goods have been exported to 32 countries of the world.
In January 2019, imports in Uzbekistan amounted to $ 1.67 billion (a growth rate of 38.9 percent). The main share in its structure is occupied by machinery and equipment (42.3 percent), chemical products and products from it (13.3 percent), as well as ferrous and non-ferrous metals (6.6 percent).
The share of imported machinery and equipment in its total volume increased from 33.1 percent to 42.3 percent.
Analysis of the dynamics of imports of goods and services also showed that in January 2019, compared with January 2018, the volume of imports of goods increased by $ 447.5 million and totalled to $ 1.5 billion. Service imports reached $ 168.1 million.
Five major partner countries (China, Russia, Kazakhstan, South Korea and Turkey) have a share of 64 percent in total imports, which is $ 1.07 billion.
The volume of imports of services in January 2019 amounted to $ 168.1 million, or 10.0 percent of total imports, and increased by 15.0 percent, compared to the same period in 2018. The main imports of services are tourism, transport services, as well as financial and telecommunication, information and computer services.
In January 2019, the volume of imports of construction materials amounted to $ 96.0 million, and increased by 29.6 percent, compared to the same period in 2018.
The share of imports of building materials in the total amount is 5.7 percent. In the structure of imports of building materials, the main share is occupied by wood and wood products (54.0 percent), cement (8.2 percent), glass and wood products (6.1 percent), and asbestos (1.9 percent).
Indonesia and South Korea agreed on Tuesday to resume talks on a bilateral trade and investment agreement and aimed to sign a deal by November.
Speaking at a business conference in Jakarta, Trade Minister Enggartiasto Lukita said an agreement could boost two-way trade to $30 billion within three years from $20 billion in 2018.
Indonesia had put the negotiations on hold in 2014 due to a change of government in Jakarta and various technical reasons, said Iman Pambagyo, a trade ministry official.
“South Korea has so much potential for investment and trade,” he said, adding it was the fifth largest foreign direct investor in the Southeast Asian nation.
South Korea was seeking to collaborate in technology and heavy industries, including the chemical and construction sectors, Trade Minister Kim Hyun-chong told the conference.
Indonesia aims to increase exports of agriculture and fishery products, as well as textiles and machinery to South Korea, trade officials said.
Cotton procurement by the Cotton Corporation of India (CCI) has crossed 8.5 lakh bales in the ongoing 2018-19 cotton season as prices remained below the minimum support prices (MSP) due to weak global prices and low exports.
Cotton procurement by the Cotton Corporation of India (CCI) has crossed 8.5 lakh bales in the ongoing 2018-19 cotton season as prices remained below the minimum support prices (MSP) due to weak global prices and low exports. The Corporation expects procurement to touch 15 lakh bales by the end of the season.
The procurement figure was three times higher from the 3.6 lakh bales procured during the same period last year, said P Alli Rani, chairman and managing director, CCI.
A majority of the stock had been procured from Telangana and Maharashtra where farmers are now coming forward to sell to the CCI instead of approaching traders, she said. Cotton is also being bought from Madhya Pradesh, Karnataka and Odisha. Daily arrivals were 13,000-16,000 bales.
Alli Rani said the increase in procurement to the drop in prices. The prices have been on a decline in the global market. On the Intercontinental Exchange, the price hit a 15-month low last week, while on the Multi Commodity Exchange of India, prices are currently ruling at 10-month lows.
Until now, spot prices were higher than the global price as farmers in Maharashtra and Gujarat, the top two producers, have been holding on to their crop expecting a realisation of Rs 6,000 per quintal because of the expectation of a lower output this year.
The MSP for medium-staple variety of cotton is at Rs 5,150/quintal and that for long staple at Rs 5,450/quintal which are roughly equivalent to Rs 43,000-43,500 per candy (1 candy = 356 kg). The government had raised the MSP for cotton by 26% this year. Around 52% of the crop has already arrived in the market.
In Gujarat, the Shankar-6 variety was sold for Rs 41,500-42,800 per candy (1 candy = 355.62 kg). In Maharashtra, the 29-30 mm variety was sold for Rs 41,500-42,500 per candy. Output in Maharashtra is estimated around 70 lakh bales, lower than 85-90 lakh bales projected during the sowing period. The season had began on a bullish note with prices touching `5,800-5,900/quintal last month.
According to trade sources, contracts worth Rs 5 lakh bales to Pakistan are on hold following the Pulwama attack and have brought down sentiment by Rs 500 per candy. Pradeep Jain, president, Khandesh Ginning and Pressing Association, said farmers who were holding onto stocks until now were in despair to get better prices and had begun bringing their cotton to the market. Prices in Maharashtra were around `41,000 per candy and a lot of uncertainty prevailed, he said.
Puzzling order on utilisation of input tax credit
A plain reading of Section 49 of the CGST Amendment Act, 2018 is not possible due to the manner in the changes have been drafted.
Not surprisingly, the wordings of the sections have left everyone flummoxed.
Through Notification No 02/2019 of January 29, 2019, twenty-eight sections and three schedules of the CGST Act have been amended while the amendment of five sections has been deferred. The amendments that have got folks talking are those to Section 49 and the new clauses 49A and 49B.
If read sequentially, the three sections read as follows: Provided that the input tax credit on account of State tax shall be utilised towards payment of integrated tax only where the balance of the input tax credit on account of Central tax is not available for payment of integrated tax.
Notwithstanding anything contained in Section 49, the input tax credit on account of Central tax, State tax or Union Territory tax shall be utilised towards payment of integrated tax, Central tax, State tax or Union Territory tax, as the case may be, only after the input tax credit available on account of integrated tax has first been utilised fully towards such payment.
Notwithstanding anything contained in this Chapter and subject to the provisions of clause (e) and clause (f) of sub-section (5) of Section 49, the government may, on the recommendations of the Council, prescribe the order and manner of utilisation of the input tax credit on account of integrated tax, Central tax, State tax or Union Territory tax, as the case may be, towards payment of any such tax.
The CBIC, it appears, does not intend to change the sequence of IGST/CGST/SGST to set off credits. What would change is that some taxes may have to be paid in cash due to non-availability of set off from the other balances.
A tailor-made example could be an output tax liability of Rs. 100 each in I/S/C and input tax credit of Rs. 200, Rs. 50 and Rs. 50 each in I/S/C. As per the present set-off rules, no tax would be need to be paid in cash since the output liability equals the input tax credit of Rs. 300 and can be sequentially set off.
As per the CGST Amendment Act, 50 per cent of the SGST portion would need to be paid in cash and 50 per cent of the CGST portion would be carried forward.
The lack of examples to explain the amendments to Section 49 and the new Sections 49A/49B is bound to lead to multiple interpretations and possible litigation. Litigation could also arise on a very basic question: Can the CBIC impose restrictions on the manner in which taxpayers utilise credits?
It would lead to a situation of one nation, one tax, restricted credits. Rs. 1 lakh crore has been set as a sort of a minimum threshold for monthly GST revenues and actual monthly collections are mapped against this.
If GST revenue crosses this magic numerical benchmark over the next few months, it could be attributed to the combined effects of Sections 49, 49A and 49B.
The Amendment Act also closes an existing loophole in input tax credit as per which credit could not be claimed on a motor vehicle but could be claimed on services of general insurance, servicing, and repairs and maintenance of these vehicles.
Credit on these services can now be claimed only if credit can be claimed on the motor vehicle.
The writer is a chartered accountant
On Day 1, volumes touch 40% of market leader MCX
The first day of the launch of the cotton futures contract on the BSE saw encouraging participation from stakeholders.
On Monday, 539 lots of Cotton March contract were traded till the evening trades on BSE platform, which is about 40 per cent of 1,376 lots traded on market leader, MCX.
The Cotton Association of India (CAI), which helped the BSE to develop and design the cotton futures contract, expressed confidence that participation will increase further.
“This is probably the first such contract, suggested by the trade on its own terms. Unlike other contracts, BSE’s cotton contract is not enforced upon the stakeholders. In fact, it takes care of the interests of the participants. We are confident that in a short span it will gain 50 per cent market share,” Atul Ganatra, President, CAI, told BusinessLine. On Monday, BSE cotton March 2019 opened at Rs. 20,430 a bale (each of 170 kg) and last traded at Rs. 20,380. On MCX, cotton futures for March delivery opened at Rs. 20,500 a bale and last quoted at Rs. 20,390 in evening trades. The trading is to continue till 9 pm.
The total traded value on BSE stood at Rs. 28.6 crore, while that on MCX stood at Rs. 70.67 crore.
According to CAI, on other platforms, a Gujarat-based ginner was required to give location discount, which runs as much as Rs. 10,000 per lot in some cases for delivery outside Gujarat, while BSE’s contract doesn’t ask for a location discount. The basic delivery centre for the cotton contracts is Rajkot with additional delivery centres at Aurangabad, Jalgaon and Yavatmal in Maharashtra; and Mundra and Kadi in Gujarat.
Similarly, for spinning mills, BSE’s cotton contract is comparatively more attractive as it doesn’t require them to pay premium charges at the time of taking delivery. Unlike other bourses, which charge as much as 2 per cent premium charges on the price, BSE’s cotton contract doesn’t charge a price premium, Ganatra stated.
Ashishkumar Chauhan, MD & CEO, BSE, said: “With the launch of cotton contracts, we look forward to gain wider participation from cotton business stakeholders.”
BSE launched the March contract for cotton with a lot size of 25 bales (each of 170 kg) and delivery unit will be 100 bales with a zero transaction charge for the initial period.
Indo-Pak tension: no impact
Meanwhile, the industry does not see much of an impact on the cotton trade with Pakistan after the Pulwama terror attack.
For India, Pakistan has been an irregular buyer of the fibre. According to Ganatra, about 10 lakh bales were contracted to be exported to Pakistan, of which about 6-8 lakh bales have already been shipped and the remaining will also be shipped without much impact.
Cotton export from India is estimated at around 50 lakh bales for the year 2018-19. This is lower by about 19 lakh bales as compared to the 69 lakh bales estimated for the last year, primarily on account of lower crop projections.
Globally, fibre consumption is dominated by man-made fibres (MMF), having 70% share in the total fibre consumption, while natural fibres constitute only 30% .
It is high time India must focus on man-made textiles, along with cotton ones, to achieve the desired target of $300-billion market by 2025, said the Confederation of Indian Textile Industry (CITI).
Globally, fibre consumption is dominated by man-made fibres (MMF), having 70% share in the total fibre consumption, while natural fibres constitute only 30%.
Contrary to the global trend, fibre consumption in India is skewed towards natural fibres, especially cotton. The growth of cotton is limited owing to low agricultural land availability and price volatility. Hence, it had become important for India to focus on man-made textiles along with cotton ones, said Sanjay Jain, chairman, CITI, on Monday.
Jain also expressed concerns over rising imports of man-made textiles after the implementation of the good and services tax (GST). In the post-GST regime import of yarn, fabrics and garments has increased substantially by 60%, 12% and 29%, respectively. The government should increase the import duty on MMF-based spun yarn and fabrics as huge surge of imports has been seen in this category post-GST which is impacting spun yarn and fabric manufacturers in a big way.
Rakesh Mehra, convenor, sub-committee on MMF and yarn, CITI, said the downstream industries in the MMF textile value chain – spinning and weaving — which is also the largest employment generator in the entire value chain, are facing acute stress due to high prices of domestic staple fibre. He said this affected export competitiveness of the domestic downstream MMF textile industry and also made the sector venerable to imports of value-added MMF products.
Mehra also said anti-dumping duties in the beginning of the textile manufacturing chain hurt the downstream sector.
Currently, anti-dumping duty on purified terephthalic acid (PTA) is `4-6 per kg and `12 per kg on viscose staple fibre (VSF).
India has a huge and efficient capacity in manufacturing polyester staple fibre and VSF. Moreover, import of man-made staple fibre in 2017-18 stood at 149 million kg which is less than 15% of the total man-made staple fibre consumption in India.
Hence, it has been suggested that the government may abstain from enhancing custom duties and levying anti-dumping duties on staple fibres. This would allow the downstream industries along the value chain to grow, he added.
CAI president Atul Ganatra said that, the app, developed by a team of Mayank Sakseriy and Tanay Mirani, will help traders and cotton stakeholders to calculate ginning costs and parity and get MSP predictions. The app will also have personal trade book, apart from calculators and currency converters, which will allow user to record own trades and save it in the app. Critical information such as trade summary, long/short position and average prices will be accessible at the finger tip.
He added that, “All the user information is not stored in the server but it is only stored on user’s phone. So no one can see the data. At present the app will be available on Android version. We have allocated a good budget to develop the App further and also launch an iOs version in future.”
Ganatra also explained about the upcoming International Cotton Conference to be held for the first time in India in the month of March. “We organised two successful domestic conferences last year and now we are hosting International Conference from March 6 to 8 at hotel Trident, Mumbai,” he said adding that already top 10 speakers from around the world have confirmed their participation.
Cotton trade body, Cotton Association of India (CAI) is preparing to introduce a devoted mobile app for cotton stakeholders for circulation of swift and reliable information on arrivals, price and cotton trade. Announcing the app, CAI president Atul Ganatra communicated that the app ‘CAI Trader Mobile App’ will have three main components and will be launched within a short time.
The app will also provide live data on currency – USD/INR and price quotes from ICE, besides providing fresh market data from Bombay Stock Exchange (BSE). Secondly, CAI is also attempting to publish spot prices and daily arrivals data on NCDEX Kapas and Khal rates live through this mobile app. Ganatra addressing a CAI Members’ Annual Gala Dinner in Mumbai said that, “This means, if you open this app, you will have Indian as well as international market idea within 30 seconds.”
New Delhi hopes to make the most of Crown Prince Mohammed Salman’s visit
Saudi Arabia will look at major areas for investments in India, sign pacts with agencies such as Invest India and participate in the country’s infrastructure fund during Crown Prince Mohammed bin Salman’s visit on Tuesday a day after he pledged investments worth an estimated $20 billion to Pakistan.
Five MoUs are expected to be signed during the Crown Prince’s visit to New Delhi in areas such as investments, tourism, housing, information and broadcasting, according to the Ministry of External Affairs.
“The investments that Saudi Arabia will make in India will be very different in scope from what it will do in Pakistan. In India, it would be participating in the country’s growth story while in Pakistan it would be helping in trying to keep a debt-ridden nation’s economy from sinking,” a government official told BusinessLine
While Salman’s closeness with Pakistan demonstrated during his Islamabad visit may not have made India happy, New Delhi has decided to focus on making the most of the Crown Prince’s visit to India by forging stronger ties with Saudi Arabia, its fourth largest trade partner. Saudi Arabia also accounts for about 20 per cent of India’s oil and gas imports.
Areas of cooperation
The two sides will discuss cooperation in several other areas such as energy, including renewable energy, fertilizers, ICT, healthcare & pharmaceuticals, electronic items, agriculture, aviation and cold storages will also be discussed. “A team from the NITI Aayog recently went to Saudi Arabia to look at potential areas for cooperation. The two sides identified a number of sectors for possible cooperation and these would be discussed during the royal visit,” the official said.
Saudi Arabia is the fourth largest trade partner for India with bilateral trade last fiscal at $27.4 billion and also accounts for about 20 per cent of India’s oil and gas imports. Moreover, India has been identified as one of the eight strategic partners with whom Saudi Arabia intends to deepen partnership in areas of political, security, trade and investment and culture.
“As part of this engagement, we are finalising the setting up of ‘strategic partnership council’ between the two countries at the ministerial level. We are confident that this will give greater thrust to our strategic partnership and take forward our discussions in a focussed and action-oriented manner. This engagement has already begun between concerned authorities of both the countries in select sectors of mutual interest especially in trade, investment and economic issues,” said TS Tirumurti, Secretary (Economic Relations) at a briefing.
Salman is scheduled to meet Prime Minister Narendra Modi and President Ram Nath Kovind during his visit.
The Indian textiles ministry recently honoured 12 weavers and artisans for their outstanding work in handloom and handicrafts at a function in New Delhi, where 15 agreements were signed to facilitate foreign trade of such items. An exhibition showcasing achievements of micro, small and medium enterprises (MSMEs) in the textilesector was also organised.
The ministry released a booklet on ease of doing business in ten languages at the National Conclave on Creating Synergy for MSMEs in Textiles Sector, according to an official release.
During a 100-day outreach programme across the country, textiles ministry officials worked in coordination with state and district administrations. Exhibitions were also held in specific districts to promote sales of such products
