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A representative of the Indian Consulate General in Ho Chi Minh City recommended Vietnamese companies look for investment opportunity in the Indian market of 1.3 billion people, particularly in garment and textiles.
Currently Vietnam and India are among the five leading garment exporters in the world. Last year, the value of India apparel exports to Vietnam grew 44 percent to 429 million USD, while Vietnam’s shipment of garment-textile products to India reeled in 178 million USD, an annual increase of 42 percent.
The Indian Government is allowing 100 percent foreign direct investment (FDI) in single-brand retail via automatic route, which means foreign investors can pour money into the market without prior permission from the authorities. Vietnamese garment companies can take advantage of the policy by investing in the production of threads, fabrics and ready-made clothes. It was estimated that between April 2017 and January 2018, Vietnam – India trade reached 10.39 billion USD, surpassing the figure of 10.13 billion USD recorded from April 2016 to March 2017.
Improving trade transactions and connectivity have been classified as a strategic target by the two countries’ leaders.
The two countries aim to bring bilateral trade to 15 billion USD by 2020.
Last year, Vietnam exported 31 billion USD worth of textile and garment products, up 10.23 percent from the same period last year while its imports of textile and garment materials, mostly yarns and fabrics, amounted to 19 billion USD.
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ICE cotton futures inched down after hitting a five-week high as the market awaited more clarity on weather forecasts with the beginning of planting season in major producing countries India, China and the United States.
* ICE cotton contract for July expiry CTN8 settled down 0.13 cent, or 0.16 percent, at 83.22 cents per lb.
* It traded within a range of 83.04 and 83.94 cents a lb, the highest since March 13.
* “Planting is now beginning in the major global producers, but so far the weather forecasts are about average, which is why prices have been somewhat stable,” said Gabriel Crivorot, an analyst at Societe Generale (PA:SOGN) in New York.
* “Weather and planting will be the major driver of prices for the next months, but we do not have much to go by as of now, which is why the market is muted.”
* India is likely to receive average monsoon rains in 2018, the weather office said, raising the possibility of higher farm and economic growth in Asia’s third-biggest economy, where half of the farmland lacks irrigation. Speculators raised their net long position in cotton by 1,144 contracts to 77,382 contracts, in the week to April 10, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday. CFTC/
* Total futures market volume fell by 21,595 to 37,480 lots. Data showed total open interest fell 5,240 to 272,052 contracts in the previous session.
* Certificated cotton stocks CERT-COT-STX deliverable as of April 13 totaled 67,863 480-lb bales, down from 67,864 in the previous session.
* China sold 11,800 tonnes of cotton at an auction of state reserves, according to cotton industry website cncotton.com on Monday.
Global and domestic seed companies like Monsanto, Syngenta, Rasi Seeds and Shriram Bioseeds have formed a new association ‘Alliance for Agri Innovation’ to take up the policy issues related to the sector and promote new farm technologies. Bayer Bioscience, Dow Agro Sciences, DuPont Pioneer, Mahyco and Metahelix are also members of ‘Alliance for Agri Innovation’ (AAI). The new association has been formed amid a legal battle between US biotech major Monsanto and Indian firm Nuziveedu Seeds Ltd over patent and royalty issues. Recently, the Delhi High Court dismissed Monsanto’s plea to enforce the patent for its BT cotton seeds in India.
The AAI said in a statement that this is a new industry body to promote new and emerging agricultural technologies for the benefit of Indian farmers. The association said that it would focus on promoting the development of agricultural biotechnology and other emerging plant breeding innovations in India to create value for farmers in India. The AAI would also work with all stakeholders to create an ecosystem which provides protection for Intellectual Property Rights (IPR), the statement said. AAI’s Executive Director Shivendra Bajaj said the members have come together to promote innovation in seed technologies.
Additional Commissioner, GST, Delhi, Mr. Sachin Jain assured business and trading communities that their export relating refunds would be expedited quickly as the government staff has been working on it with faster pace and speed and advised the members to be little more patient. Mr. Jain admitted that grey areas still remain though fewer in number relating to GST in general and with the passage of time, these would also be addressed to the best and optimum satisfaction of all stakeholders.
He pointed out that GST being a new legislation and a remarkable financial reform undertaken in the history of India’s taxation reforms, it is natural that government takes time to resolve the remaining clich and therefore, trade and businesses should understand this compulsion of government machinery.
So far as refunds are concerned in general and particularly those that are yet to be released on export front would be facilitated shortly as the functionaries in the government are promptly engaged on this front, pointed out Mr. Jain adding that the government would continue to handhold those that sound aggrieved as on date. He advised the trade and business communities to directly approach the respective offices for their GST related grievances in case such grievances stay put unaddressed through written mode as government machinery is quite pro-active in disposing of the pending complaints of trade and business communities.
Chairman, Indirect Taxes Committee, PHD Chamber, Mr. Bimal Jain in his observations admitted that with each passing day a substantial progress is noticed in disposing of the concerns of the trade and business communities on GST front including matters arising out of E-Way Bill mechanism, composition scheme and job work transaction, yet glitches stay on and the aggrieved should have patience for redressal of their queries.
1. The ministerial panel, under Bihar Deputy Chief Minister Sushil Modi, on GST return simplification will meet tax experts and representatives from industry tomorrow.
2. As it looks to finalise a single-page return form for businesses under GST, the Group of Ministers (GoM) will seek views of the experts and representatives from businesses as to how they expect the return form to be.
3. As per the structure being worked out by the Centre and state officials as well as Nandan Nilekani, businesses having zero tax liability for six consecutive months may get to file returns only twice a year.
4. The return filing date will be spread out and businesses having annual turnover of up to Rs 1.5 crore will have to file return by 10th of next month, while others can file return by 20th.
5. The number of returns filed by both small and large taxpayers will be 12 in a year.
6. The GST Council, chaired by Finance Minister Arun Jaitley and comprising state counterparts, have asked businesses to file the summary returns GSTR-3B and final sales return GSTR-1 till June, following which the new system of return filing will come into effect.
7. Besides, the first meeting of the GoM on reverse charge mechanism under GST was held today.
8. The GoM was constituted under Modi last month to iron out issues being faced by businesses under the reverse charge mechanism. The GST Council has kept the reverse charge mechanism in abeyance till June.
The law review committee, comprising officers from the Centre and states, had suggested reworking Section 9(3) of Central GST Act by bringing composition scheme dealers in the purview of reverse charge mechanism.
It also suggested that the Council should specify certain goods and services on which GST (Goods and Service Tax) will be collected through reverse charge mechanism and also specify category of taxpayers who should be paying taxes as per this process.
For unregistered dealer, the committee suggested collection of information based on PAN, Aadhaar or any other such identifier.
With regard to Section 9(4) of Central GST Act which required payment of tax by registered dealers in cases where he procures goods from unregistered businesses, the law review committee suggested doing away with the provision.
AMRG & Associates Partner Rajat Mohan said, “GST reverse charge provision needs rationalisation since it places unjustified compliance and cost burden on several categories of taxpayers, including small and medium size enterprises, NGOs, educational institutions, government organisation, religious bodies and charitable institutions”.
India’s trade deficit with China increased more than two-fold (219%) from $16 billion in 2007-08 to $51 billion in 2016-17, according to commerce ministry data. India’s imports ($61 billion) from China were six times its exports ($10 billion) in 2016-17, making rising trade imbalance a major concern.
“Increasing trade deficit with China can be attributed primarily to the fact that Chinese exports to India rely strongly on manufactured items to meet the demand of fast expanding sectors like telecom and power, while India’s exports to China are characterized by primary and intermediate products,” C.R Chaudhary, minister of state in the commerce ministry, said in a reply to the Lok Sabha (parliament’s lower house) on December 18, 2017.
The recent trade war between the United States of America and China has sparked a ray of hope for Indian exports such as cotton, soya bean and maize to Asian markets, especially to China. As China imposes tariff barriers to US products, Indian exports are expected to increase.
For instance, cotton has been one of India’s leading exports to China, but volumes have shrunk considerably in the past few years. Now, China has imposed a 25% tax on US imports of cotton, and shipments from India are expected to see a boost this year.
China is India’s largest trading partner with bilateral trade reaching almost $72 billion in 2016-17, an increase of 88% from $38 billion in 2007-08.
Bilateral trade between April 2017 and January 2018 was reported to be more than $73 billion, the most over the last decade.
India’s imports from China have more than doubled (125%) over the last decade, from $27 billion in 2007-08 to $61 billion in 2016-17. Imports crossed $63 billion in January 2018, the most in the last 10 years.
India’s exports to China have declined by 6% from $10.9 billion in 2007-08 to 10.2% in 2016-17. India reported exports worth $18 billion in 2011-12, the most in the last 10 years, which fell 43% to 2016-17.
India’s major exports to China include ores, slag and ash, cotton, organic chemicals, mineral fuels/oils, copper and its articles. Imports include telecom instruments, electronic components and instruments, computer hardware, organic chemicals, plastics and plastic items.
“Imports exceed exports because of shortages/non-availability of items domestically or because of the cost competitiveness of the foreign manufacturers,” Chaudhary said in another reply, this time to the Rajya Sabha (parliament’s upper house), on March 7, 2018.
What Is Causing India’s Trade Deficit
Ores, which are minerals used to extract metals or manufacture chemical compounds of metals, were India’s top export to China in 2016-17, totalling $1.7 billion. This figure was 73% lower than the $6.2 billion worth of exports in 2007-08.
Cotton is the second most exported commodity to China in terms of value. Cotton worth $1.3 billion was exported to China in 2016-17, which comprised an 18% increase in trade value compared to 2007-08, when $1.1 billion worth of cotton was exported. However, exports have declined by 67% over the last six years, from a peak of $4 billion in 2011-12.
China is the largest market for India’s cotton yarn, yet exports halved from $2.2 billion in 2013 to $1.1 billion in 2016. The decline is attributed to China’s increasing import of cotton yarn from Vietnam, which registered an 88% increase over the same period.
“China has shifted from India to Vietnam/Indonesia as they have duty free access while Indian yarn carries 3.5% import duty,” Sanjay Kumar Jain, chairman of the Confederation of Indian Textile Industry, told The Times of India in this December 15, 2017, report.
Another important factor is competitive prices of Chinese products in the Indian market. For instance, Chinese solar cells cost 35% less and solar panels 10-15% less compared with locally made ones.
Over the last five years, India’s import of solar panels from China has increased more than six-fold (623%) from $389 million in 2012-13 to $2.8 billion in 2016-17. India imported 88% of all its solar panels from China in 2016-17.
India “does not have a manufacturing base for polysilicon, ingots/wafers, the upstream stages of solar PV manufacturing chain, which is a very energy intensive and capital intensive process… some of the reasons for poor manufacturing capacity are high cost of land/ electricity, low capacity utilization, high cost of financing”, the reply to the Rajya Sabha said.
Domestic manufactures have, in fact, complained that Chinese solar panels and chemicals are dumped into Indian markets. (Dumping implies selling in a foreign country at a price lower than the cost of manufacture in the home country.)
A hundred Chinese products bear an anti-dumping duty, according to the government’s reply to the Lok Sabha on December 18, 2017. Of these, chemicals and petroleum constitute the most (47 products), while steel and other metals (10) and fibers and yarn (9) are among the top products.
How To Boost Indian Manufacturing
India ranked 30 among 100 countries on the structure of production scale, a global manufacturing assessment index created by the World Economic Forum for its Readiness for the Future of ProductionReport 2018. Japan topped the list, followed by South Korea, Germany, Switzerland and China. India scored 5.99 on the index (on a scale of 0-10, where zero is the worst and 10 the best score), as compared with China’s 8.25 and Japan’s 8.99.
The assessment was based on two key components: ’Structure of Production’, a country’s current baseline of production, and ‘Drivers of Production’, the key enablers that position a country to transform production systems at the advent of the ‘fourth industrial revolution’.
On the Drivers of Production index, the US topped the list, followed by Singapore and Switzerland. India ranked 44, below China (25).
It cited human capital and sustainable resources as the two key challenges for India.
Efforts are made to promote manufacturing through initiatives like ‘Make in India’, ‘Digital India’, ‘Skill India’ etc. which provide support for promoting domestic manufacturing capacity in the country,” Chaudhary’s Lok Sabha reply stated.
Investment is one of the key challenges for India, Uttara Sahasrabuddhe, professor of international relations at the University of Mumbai told IndiaSpend. “There have been significant efforts to push investments through initiatives like Make in India, but still we are far off to match with China. Poor governance, labour laws that are becoming fast outdated and connectivity are some of the other issues that we face,” she said, “[The] Chinese have an upper hand when it comes to infrastructure which is the foundation of any good manufacturing sector. We don’t have that type of port connectivity or transport linkages within the country, or even uninterrupted electricity supply. India will have to overcome these challenges to compete with China, transforming itself into a manufacturing hub, key to boost exports.”
Towards Trade Balance
In a move to promote Indian exports and reduce the trade deficit with China, the two countries developed a Five-Year Development Programme for Economic and Trade Cooperation in September 2014.
The programme aims to strengthen cooperation and achieve trade balance over the next five years by focusing on services, especially in information technology and related services.
With the success of Bollywood movies at the Chinese box office, India is planning to appoint Aamir Khan as its brand ambassador to China.
The Ethical Trading Initiative has teamed up with Better Buying, the platform which allows textile and apparel suppliers to anonymously rate their customers as part of an 18-month plan to promote responsible buying in the Bangladesh garment industry.
Funded by the C&A Foundation and Humanity United, Better Buying gives brands and retailers anonymised ratings from suppliers on seven key aspects of purchasing practices: planning and forecasting, design and development, cost and cost negotiation, sourcing and order placement, payment and terms, management of the purchasing process, and CSR harmonisation.
UK clothing company, Bonmarché has already been working with Better Buying since the fourth quarter of 2017.
India’s trade deficit with China increased more than two-fold (219%) from $16 billion in 2007-08 to $51 billion in 2016-17, according to commerce ministry data. India’s imports ($61 billion) from China were six times its exports ($10 billion) in 2016-17, making rising trade imbalance a major concern.
“Increasing trade deficit with China can be attributed primarily to the fact that Chinese exports to India rely strongly on manufactured items to meet the demand of fast expanding sectors like telecom and power, while India’s exports to China are characterized by primary and intermediate products,” C. R Chaudhary, minister of state in the commerce ministry, said in a reply to the Lok Sabha (parliament’s lower house) on December 18, 2017.
The recent trade war between the United States of America and China has sparked a ray of hope for Indian exports such as cotton, soya bean and maize to Asian markets, especially to China. As China imposes tariff barriers to US products, Indian exports are expected to increase.For instance, cotton has been one of India’s leading exports to China, but volumes have shrunk considerably in the past few years. Now, China has imposed a 25% tax on US imports of cotton, and shipments from India are expected to see a boost this year.
Largest trading partnerChina is India’s largest trading partner with bilateral trade reaching almost $72 billion in 2016-17, an increase of 88% from $38 billion in 2007-08.
Bilateral trade between April 2017 and January 2018 was reported to be more than $73 billion, the most over the last decade.
India’s imports from China have more than doubled (125%) over the last decade, from $27 billion in 2007-08 to $61 billion in 2016-17. Imports crossed $63 billion in January 2018, the most in the last 10 years.
India’s exports to China have declined by 6% from $10.9 billion in 2007-08 to 10.2% in 2016-17. India reported exports worth $18 billion in 2011-12, the most in the last 10 years, which fell 43% to 2016-17.
India’s major exports to China include ores, slag and ash, cotton, organic chemicals, mineral fuels/oils, copper and its articles. Imports include telecom instruments, electronic components and instruments, computer hardware, organic chemicals, plastics and plastic items.
“Imports exceed exports because of shortages/non-availability of items domestically or because of the cost competitiveness of the foreign manufacturers,” Chaudhary said in another reply, this time to the Rajya Sabha (parliament’s upper house), on March 7, 2018.
What is causing India’s trade deficit
Ores, which are minerals used to extract metals or manufacture chemical compounds of metals, were India’s top export to China in 2016-17, totalling $1.7 billion. This figure was 73% lower than the $6.2 billion worth of exports in 2007-08.
Cotton is the second most exported commodity to China in terms of value. Cotton worth $1.3 billion was exported to China in 2016-17, which comprised an 18% increase in trade value compared to 2007-08, when $1.1 billion worth of cotton was exported. However, exports have declined by 67% over the last six years, from a peak of $4 billion in 2011-12.
China is the largest market for India’s cotton yarn, yet exports halved from $2.2 billion in 2013 to $1.1 billion in 2016. The decline is attributed to China’s increasing import of cotton yarn from Vietnam, which registered an 88% increase over the same period.
“China has shifted from India to Vietnam/Indonesia as they have duty free access while Indian yarn carries 3.5% import duty,” Sanjay Kumar Jain, chairman of the Confederation of Indian Textile Industry, told The Times of India in this December 15, 2017, report.
Another important factor is competitive prices of Chinese products in the Indian market.
For instance, Chinese solar cells cost 35% less and solar panels 10-15% less compared with locally made ones.
Over the last five years, India’s import of solar panels from China has increased more than six-fold (623%) from $389 million in 2012-13 to $2.8 billion in 2016-17. India imported 88% of all its solar panels from China in 2016-17.
India “does not have a manufacturing base for polysilicon, ingots/wafers, the upstream stages of solar PV manufacturing chain, which is a very energy intensive and capital intensive process… some of the reasons for poor manufacturing capacity are high cost of land/ electricity, low capacity utilization, high cost of financing”, the reply to the Rajya Sabha said.
Domestic manufactures have, in fact, complained that Chinese solar panels and chemicalsare dumped into Indian markets. (Dumping implies selling in a foreign country at a price lower than the cost of manufacture in the home country.)
A hundred Chinese products bear an anti-dumping duty, according to the government’s reply to the Lok Sabha on December 18, 2017. Of these, chemicals and petroleum constitute the most (47 products), while steel and other metals (10) and fibers and yarn (9) are among the top products.
How to boost Indian manufacturing
India ranked 30 among 100 countries on the structure of production scale, a global manufacturing assessment index created by the World Economic Forum for its Readiness for the Future of Production Report 2018. Japan topped the list, followed by South Korea, Germany, Switzerland and China. India scored 5.99 on the index (on a scale of 0-10, where zero is the worst and 10 the best score), as compared with China’s 8.25 and Japan’s 8.99.
The assessment was based on two key components: ’Structure of Production’, a country’s current baseline of production, and ‘Drivers of Production’, the key enablers that position a country to transform production systems at the advent of the ‘fourth industrial revolution’.
On the Drivers of Production index, the US topped the list, followed by Singapore and Switzerland. India ranked 44, below China (25).
It cited human capital and sustainable resources as the two key challenges for India.
Manufacturing Competitiveness: India, China and the US
Countries Structure of Production – Rank (Score) Drivers of Production – Rank (Score) Manufacturing Value Added 2010 $ Billion Manufacturing Value Added Growth Annual % Manufacturing Employment % Of Working Population
China 5 (8.25) 25 (6.14) 3000 6.5 NA
US 7 (7.78) 1 (8.16) 1969 0.8 10.2
India 30 (5.99) 44 (5.24) 424 8.4 11.4
Source: Readiness for the Future of Production Report 2018
“Efforts are made to promote manufacturing through initiatives like ‘Make in India’, ‘Digital India’, ‘Skill India’ etc. which provide support for promoting domestic manufacturing capacity in the country,” Chaudhary’s Lok Sabha reply stated.
Investment is one of the key challenges for India, Uttara Sahasrabuddhe, professor of international relations at the University of Mumbai told IndiaSpend. “There have been significant efforts to push investments through initiatives like Make in India, but still we are far off to match with China. Poor governance, labour laws that are becoming fast outdated and connectivity are some of the other issues that we face,” she said, “[The] Chinese have an upper hand when it comes to infrastructure which is the foundation of any good manufacturing sector. We don’t have that type of port connectivity or transport linkages within the country, or even uninterrupted electricity supply. India will have to overcome these challenges to compete with China, transforming itself into a manufacturing hub, key to boost exports.”
Towards trade balance
In a move to promote Indian exports and reduce the trade deficit with China, the two countries developed a Five-Year Development Programme for Economic and Trade Cooperation in September 2014.
The programme aims to strengthen cooperation and achieve trade balance over the next five years by focusing on services, especially in information technology and related services.
With the success of Bollywood movies at the Chinese box office, India is planning to appoint Aamir Khan as its brand ambassador to China.
Industries Minister, Bikram Singh has urged the Union ministry of Textiles for early approvals and release of funds under various pending schemes.
The minister met Union minister, Smriti Irani in New Delhi on Thursday evening and apprised her that 21 projects for training and upgradation of skills of artisans and weavers were sent to the Ministry out of which only six projects worth 11.80 lakh had been sanctioned so far. He said that one proposal of Akhara bazaar of Kullu involving an amount of Rs 56 lakh for covering 96 weavers was also awaiting approval.
The Himachal minister added that 50 per cent amount for 49 technical programmes worth Rs 1.32 lakh were released and another 50 per cent amount under the programme was yet to be released.
He further said that a sum of Rs 2.02 crore under marketing proposals or claims of eight primary weavers societies for last three financial years were also pending.
The Industries minister requested the Union minister to sanction three more clusters for weavers of Mandi, Kullu and Kangra. Two clusters amounting to Rs 96.25 lakh each were sanctioned for weavers of the state.
Bikram Singh informed the minister that presently nine training centres in Chamba, Kangra, Kullu, Solan, Mandi and Bilaspur districts were being run by State Handicrafts and Handloom Corporation after availing a central assistance of 1.32 crores for providing training to 360 handicrafts artisans in hand knotting embroidery, metal crafts, shawl weaving, leather craft, wood craft and weaving embroidery.
Apparel manufacturing has suffered the 10th straight monthly decline in production on account of issues which have arisen after the implementation of GST, Apparel Export Promotion Council (AEPC) said on Friday. India’s apparel production has shown a decline of 4.7% in February and 9.9% for April-February, FY18. HKL Magu, chairman, AEPC, said “Unresolved issues like cut in the duty drawback after the imposition of GST, slow GST refunds and uncertainties on future of export subsidies have hit the sentiments. The global demand is good and the industry is keen to take up more orders but cost disadvantage is affecting India’s relative position as a sourcing destination”, he said. TNS
