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President Ram Nath Kovind on Monday called for more cooperation between India and Vietnam in the areas of agriculture, pharmaceuticals, textiles and IT.
“Agriculture has been a key sector of our cooperation involving trade, investment and training,” Kovind said while addressing the Vietnam-India Business Forum here.
“We feel privileged to have supported the Vietnamese agricultural revolution through the establishment of Cuu Long Rice Research Institute,” he said.
Stating that Vietnam is a huge agricultural economy with agro-marine-forestry exports surpassing $35 billion last year, Kovind said that agricultural products already occupy over 45 per cent of India-Vietnam bilateral trade.
“Agro-processing, agro-chemicals, farm machinery, bio-technology and high-tech farming hold immense potential for bilateral cooperation,” he said.
“Indian industry can also learn from Vietnam’s success in crops such as coffee, pepper, cashew, fruits and vegetables.”
The President also said that the Indian pharmaceuticals industry, the third largest in terms of volume and the world’s largest provider of generic drugs, can partner Vietnam in providing quality health-care, medicines and medical devices for the public health system at an affordable cost.
“Indian pharmaceutical companies are also looking at domestic production opportunities in Vietnam,” Kovind said.
He pointed out that both India and Vietnam are leading players in the textile industry.
“We must cooperate further to facilitate integration of value chains,” Kovind said.
He also highlighted significant opportunities between the two sides in the oil and gas, power, infrastructure and renewable energy sectors.
Stating that the Indian IT services, including digital economy and fin-tech sector have much to offer to Vietnamese growth, Kovind said start-up sectors and innovation based industry must be encouraged to leverage each other.
“We must also learn from each other on how to improve productivity; how to approach the Fourth Industrial Revolution; how to promote innovation and entrepreneurship; and not the least, how to leverage technology for governance,” he stated.
Vietnam is a key partner country of India in Southeast Asia and served as New Delhi’s coordinator country with the Association of Southeast Asian Nations (Asean) regional bloc till July this year
India and Vietnam have set a bilateral trade target of $15 billion by 2020.
Later, Kovind also addressed an Indian community reception during which he invited members of the community to attend next year’s Pravasi Bharatiya Divas, the External Affairs Ministry-organised conclave of the Indian diaspora.
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Fetching growers up to Rs 5,600 per quintal, well above the MSP of Rs 5,350
Though the area under cotton cultivation has declined in Malwa region this year, the cotton arrival in the state’s markets is on the higher side as compared to last year.
While some experts say it may be the result of increased cotton yield, others say the trend might be the outcome of apprehensions regarding the drop in its prices as the season proceeds. At present, cotton is fetching a price of up to Rs 5,600 per quintal, which is above the MSP of Rs 5,350 per quintal. As per reports, 2,37, 518 quintals of cotton arrival was recorded till November 14 last year, which is 2,42,720 quintals for the corresponding period this year.
Talking to The Tribune, former North India Cotton Association president Ashok Kapur said, “No doubt that the arrival of cotton in the region’s markets is more this year, but it may be due to the fact that the prices are ranging between Rs 5,200 and 5,600 per quintal, which is fairly reasonable. The arrivals reflect that the farmers are satisfied with the prevailing cotton prices and there may be a fear at the back of their mind that the prices may decline in the coming days.” At the same time, he felt that the cotton yield may be marginally up this year. He revealed that the millers are going slow when it comes to cotton purchase, as they are waiting for the prices to come down. They will step up the purchase once the prices fall.
He said the quality of cotton was relatively down this year, as it doesn’t have the desired length. Besides, there was dryness in the produce, he added.
PAU’s senior farm economist Dr GS Romana said though he could not spell out clearly right now whether the cotton yield was up this year, but they expected it to be on the higher side, as the region had conducive weather conditions for the crop.
“We will have to wait for the season to end for a clear picture in terms of cotton yield,” he added. Satish Bansal, a leading commission agent, said cotton fetched a price of up to Rs 5,600 per quintal in Bathinda’s market on Saturday.
He said the cotton rates were hovering above Rs 5,500 per quintal for almost a week now, which might be the reason for increase in cotton arrival in the markets. Incidentally, the area under cotton cultivation in the state has declined from 3.83 lakh hectares last year to 2.84 lakh hectares this year.
The finance ministry proposes to mop up Rs 14,000 crore through an acquisition deal between Power Finance Corporation (PFCNSE 3.13 %) and Rural Electrification Corporation (REC), but the power ministry is concerned that the move will hurt two sound navratnas in the otherwise ailing sector
The power ministry is concerned about operational and administrative issues that might crop up after the proposed deal, said a senior government official.
However, the finance ministry is of the view that any such issues can be managed to create a large financing company for the power sector rather than having two central public sector units competing in the same space, he said.
The ministry has at various levels expressed reservations about PFC and REC merger since these are two large companies with established setups,” said the official on condition of anonymity. However, the finance ministry is upbeat about the acquisition.
The contours of the deal have yet to be decided. But if REC acquires PFC, the government can raise nearly Rs 3,000 crore more, given the higher shareholding of the government in PFC,” said a finance ministry official. The government owns 58% in REC and 66% in PFC.
The power ministry is concerned that the net worth of the acquiring company will come down drastically, according to the official. The capital adequacy ratio of PFC is 17.7%, while that of REC is 16.7% against the RBI norm of 15% for non-banking financial companies (NBFCs).
Upon an acquisition deal there will be requirement to raise tier-I funds, which will dilute government holding in these NBFCs. The power ministry has been indicating that due to higher government holding, PFC is better placed with enough cushion to raise tier-I capital,” the official said.
Feedback Infra Group chairman Vinayak Chatterjee said with the gradual withdrawing of the banks, NBFCs and others from infrastructure financing, India needs sectoral developmental financial institutions. “Under the current circumstances, it would be useful for the country to have a standalone power finance corporation. But REC is an implementing organisation. Merging of a finance company and an implementing company may not be appropriate and in my view they should be kept separate,” he said.
The government official said that the power ministry was concerned that if not implemented properly, the proposal would damage the fundamentals of both companies. The finance ministry official, however, said REC and PFC are in the same business. “The books of the project implementing division in REC are separate from the main firm and a mega finance firm with expected loan book of Rs 6 lakh crore will help in raising finance at lesser rates,” he said.
As global crude prices soften and the world demand heads southwards, exports growth may soften in the second half of the current fiscal.
Experts told DNA Money that even though a depreciated rupee and a strong order book could provide some tailwind to exports, unfolding external factors like oil prices and slowing GDP growth in some economies could pin down its growth.
Ajay Sahai, director general and CEO, Federation of Indian Export Organisations (FIEO), said “maintenance” of exports growth will be a challenge from October onwards.
Petroleum is the common factor in both imports and exports. On one hand, it boosts exports and on the other, it bloats the import bill too. Now, with the easing of crude prices, we expect the import bill to come down, but the bigger challenge from October onwards is that the base effect of crude price will kick in along with lower crude prices and so maintenance of export growth will be a challenge,” he told DNA Money.
Elaborating further he said; “if we look at the 17.86% growth in exports in October, the last figure reported, the net export, or the value of exports, is much less than the value in September, which was negative. In September, we suffered a negative growth. In October, we have a growth of around 17% but still, the value of exports in October is less than September”.
The October trade numbers, released by the government last week, reveal exports jumping over 17% to $26.98 billion compared to $22.89 billion last year. However, when compared to September this year, the month-on-month dip was 3.47% in October, down from $27.95 billion.
September had also seen the first slip in exports in the current fiscal as it fell 2.15% from $28.75 billion in the same month last year.
In the current fiscal, exports have consistently registered a robust growth till September. Experts see this trend reversing a bit.
Madan Sabnavis, chief economist, Care Ratings Ltd, also sees “moderate” export growth due to lower global crude prices. He expects the current fiscal year to end up with an export growth of 10-12%. Last fiscal, exports grew 9.8% to $303 billion.
Growth in exports will be moderate, probably 10-12%. We should also remember that one of the major components of our exports is petroleum products. When the price of petrol goes up our exports benefit. That’s what we have gotten in the month of October also. It (October exports) can also be higher because our exports are going up. That kind of scenario (higher crude prices) will get moderated in the coming months, which will mean that exports are not going to grow at that kind of rate. It could be in the region of 10-12%, assuming crude remains below $70 a barrel and don’t start moving up,” he said.
The Care economist also feels that subdued global demand due to subdued growth in some major economies could also adversely impact India’s export growth.
“We are not looking at the world economic growth being steady as was expected earlier. Our exports depend on what happens to global economic conditions/ demand. That is why we were looking at 8-10% (exports growth), which we scaled up because of the advantage from higher crude in the last couple of months. I believe, we will not be exceeding 10-12%, which is on the higher side,” Sabnavis projected.
Recently, International Monetary Fund (IMF) revised world GDP growth downwards by 20 basis points (bps) to 3.7% for 2018 and 2019. It has also cautioned about growth in many major economies slowing down in the coming months due to several economic and geopolitical factors.
FIEO’s Sahai has a higher growth forecast than Sabnavis at 15%. He sees Indian exports benefiting from the US-China standoff and a weaker rupee. According to him, exporters’ order books for the coming period are healthy and this has given the export group, he heads, the confidence to raise a robust growth outlook for the current fiscal.
“I must say that it is a problem so far as petroleum exports are concerned, but looking at the order books of exporters we expect 15% growth because in some sectors, particularly in textile and apparel, when I talk to exporters they say that with rupee moving to over 70 a dollar, many buyers have come back to them,” said the FIEO chief.
According to him, exporters have informed him that when the rupee was at 65 per dollar, they were “outpriced” in the international market.
“Earlier, when the rupee was 65 a dollar, they (exporters) were factoring the currency at around 61-62 against the dollar and they were outpriced in the market, but now that rupee is around 72 a dollar and they quote 70, many buyers have come back to them,” said Sahai.
He believes if the rupee remained soft by 12-13% against the dollar and volume growth is maintained at 5-6%, then India could easily achieve an export growth of 15%.
Sahai said Indian exports was also reaping gains from the US-China trade war; “global demand has definitely come down but China has suffered a lot. Some orders, which were earlier going to China from the US, have come to India”.
However, Sabnavis feels otherwise and does not expect India to profit much from the US-China trade war; “has India actually captured the market on account of the US-China war? In my view, I don’t think it has happened that way. If you are looking at China they have got into other markets”.
Sahai also feels that with India’s exports growth rate expected to outstrip global rate, it is likely that India could further increase its share in global exports.
“Our share in total global exports is 1.7%. This may go up because if we clock 15% and global trade grows at 3.5% then definitely our share will go up,” said Sahai.
Pakistan’s Federal Board of Revenue (FBR) recently issued procedure for the textile and leather industries to avail reduced sales tax rate of 6 per cent by integrating their supplies with its online system. The facility would be available subject to certain terms and conditions and in case of failure, the FBR would impose a sales tax rate of 9 per cent.
FBR would notify integrated units and their outlets from where the units intended to sell the goods and avail reduced rate of sales tax. This integrated system provides full information on sales from each point of sales (POS) of a unit by generating online sales invoices and buyers details to verify in case of refunds and input or output adjustments, according to Pakistani media reports. To avoid misuse, FBR has incorporated a strong audit mechanism to check sales invoices. An integrated supplier, who is found to have tampered with the system or made sales otherwise than the prescribed devices or who contravenes any of the provisions, will no more be eligible for the reduced rate.
The US has expressed its interest in revising the list of Nepali products that receive duty free access through the Trade Preferences Act (TPA). In the new development, US officials have assured Nepal that Nepali readymade garment will be considered for the list. Currently, there are 77 products listed under the TPA.
According to the Ministry of Industry, Commerce and Supplies, US officials expressed their commitment during the fourth meeting of the Nepal-US Trade and Investment Framework Agreement (Tifa) Council, on Tuesday, in the US. “The participants of the meeting expressed their commitment that they would forward the proposal to the US Congress soon,” the Ministry’s Secretary Chandra Kumar Ghimire said.
During the one-day meeting, a Ghimire-led Nepali delegation held talks with high level officials from various department of the US led by Assistant US Trade Representative Mark Linscott. The representatives from the US State Department, Department of Agriculture, Department of Labour, US Aid, United States Patent and Trademark Office and Deputy Chief of Mission at the US Embassy in Nepal Michael C Gonzales were among the officials from the US side who participated in the bilateral meeting.
Enforcing the TPA in 2015, the US has provided duty free access to 77 Nepali products that have high potential in the world’s largest economy. The goods include certain carpets and pashmina, headgear, shawls, scarves and travel goods. Nepal has been offered the facility until 2025.
Ghimire said the Nepali side pushed for Nepali garment in particular, citing the high comparative advantage in the product.
“We highlighted to the US officials that Nepal has not been able to benefit from the trading of some items facilitated under TPA and to consider the inclusion of other goods which have larger export potential,” said Ghimire adding that they sought the support of the US government regarding exports until Nepal could fully complete its political transition.
Earlier, the economic giant had been denying providing duty free facility to Nepali garments saying that it could violate the clause of the World Trade Organisation (WTO).
As per the ministry, the US officials also expressed their interest to provide technical support to Nepal to promote production of the goods under TPA lists.
The US appeared keen to help Nepal implement the provisions of Trade Facilitation Agreement carried out in the ninth ministerial conference of WTO held in Bali, Indonesia, in 2013.
The agreement talks on reducing the trading costs through improvement in customs procedures, trade related infrastructures, Sanitary and Phytosanitary measures and food safety.
The ministry officials said the US has expressed that the country has considered Nepal, among the South Asian countries, under high priority for promoting bilateral trade and investment. Ghimire said the US officials in turn expressed their concern over the investment environment in Nepal to inject capital
from the US.
Ghimire said the US officials expressed their concern over the policy reform at a time when Nepal is heading towards political stability. “Implementation of existing provision in labour act, improvement in the law related to intellectual property right including copyright and facilitation of e-commerce are also major areas of interest of the US before they inject their investment in Nepal,” he added.
Nepal signed the TIFA with the largest economy on April 16, 2011. Under the provision, the two countries had agreed to hold the TIFA council every year. Last time, the meeting was held in Kathmandu on April 20, 2017.
At the Cotton Sourcing USA Summit in Scottsdale, Ariz., Cotton Council International President Ted Schneider updated the more than 400 attendees on how the U.S. cotton industry intends to meet its 2025 sustainability goals.
Central to his remarks was the introduction of the U.S. Cotton Trust Protocol; an integrated data collection, measurement and verification procedure that will document U.S. cotton production practices and their environmental impact.
The data is intended to benchmark farmers’ gains towards the industry goals and will provide the global textile supply chain additional assurances that U.S. cotton is produced in a responsible manner.
The U.S. cotton national sustainability goals, as announced last year, aim for the following by 2025:
• 13% Increase in productivity, i.e. reduced land use per pound of fiber;
• 18% Increase in irrigation efficiency;
• 39% Reduction in greenhouse gas emissions;
• 15% Reduction in energy expenditures;
• 50% Reduction in soil loss; and
• 30% Increase in soil carbon.
“I would argue that U.S. cotton is already among the most sustainably produced in the world,” Schneider said. As evidence, Schneider cited the comprehensive regulatory environment in the United States, the close connection of U.S. growers to their land, the high adoption rates of precision agricultural techniques by U.S. cotton growers, and a near 40-year track record of environmental improvement.
“We know that U.S. cotton growers continue to embrace new technologies and management techniques that reduce impact and increase yield, but today’s textile industry needs more than just our word,” Schneider explained. “The Trust Protocol is meant to address that need with a tangible and transparent snapshot of U.S. cotton growing practices and the gains resulting from them.”
At the Cotton Sourcing USA Summit in Scottsdale, Ariz., Cotton Council International President Ted Schneider updated the more than 400 attendees on how the U.S. cotton industry intends to meet its 2025 sustainability goals.
Central to his remarks was the introduction of the U.S. Cotton Trust Protocol; an integrated data collection, measurement and verification procedure that will document U.S. cotton production practices and their environmental impact.
The data is intended to benchmark farmers’ gains towards the industry goals and will provide the global textile supply chain additional assurances that U.S. cotton is produced in a responsible manner.
The U.S. cotton national sustainability goals, as announced last year, aim for the following by 2025:
• 13% Increase in productivity, i.e. reduced land use per pound of fiber;
• 18% Increase in irrigation efficiency;
• 39% Reduction in greenhouse gas emissions;
• 15% Reduction in energy expenditures;
• 50% Reduction in soil loss; and
• 30% Increase in soil carbon.
“I would argue that U.S. cotton is already among the most sustainably produced in the world,” Schneider said. As evidence, Schneider cited the comprehensive regulatory environment in the United States, the close connection of U.S. growers to their land, the high adoption rates of precision agricultural techniques by U.S. cotton growers, and a near 40-year track record of environmental improvement.
“We know that U.S. cotton growers continue to embrace new technologies and management techniques that reduce impact and increase yield, but today’s textile industry needs more than just our word,” Schneider explained. “The Trust Protocol is meant to address that need with a tangible and transparent snapshot of U.S. cotton growing practices and the gains resulting from them.”
The details of the Protocol are being fine-tuned, and a pilot program will be launched in 2019 and fully implemented with the 2020 cotton crop year. Participating growers would be required to adopt a data tool that allows for the quantitative measurement of key sustainability metrics, such as the FieldPrint Platform from Field to Market.
Growers also would complete a self-assessment checklist of best management practices; with a sampling of participating producers subjected to independent verification. The online interface and associated databases are currently being developed by a Memphis-based company The Seam.
Feels it is being left out on key issues
The government wants greater involvement in the RBI’s decision-making as it feels the current practice leaves it out on many critical issues such as single-day default turning a loan into an NPA, sources said ahead of the crucial board meeting of the central bank.
The Centre feels that as the representative of the people, it should be involved in critical policy decisions made by the Reserve Bank of India (RBI), they added.
To buttress its point, the government cites that quorum for some of the sub-committees is completed by the presence of the Governor and four Deputy Governors and not requiring any other directors to be present.
However, the central board of the RBI is headed by the Governor and includes two government nominee directors and 11 independent directors. Currently, the central board has 18 members, with the provision of it going up to 21. The board will meet on Monday where the government is expected to push for easing of norms for lending to the MSME sector, relaxing the Prompt Corrective Action (PCA) framework for weak banks and appropriate size of reserve to be maintained by the central bank, among others. The Centre and the RBI seem to be veering around to reach a solution, particulary with respect to relaxation of PCA framework and easing of lending norms for the MSMEs, sources added.
A team of manufacturers and exporters affiliated to Tirupur Exporters Association (TEA) visited the AMRL Multiproduct Special Economic Zone at Nanguneri here on Friday to explore the possibilities of establishing their units here as they are scouting for promising areas with abundant labour availability.
As the district, particularly Nanguneri, Valliyoor, Kalakkad and Thisaiyanvilai areas, all situated close to the SEZ, are blessed with abundant skilled, semi-skilled and unskilled labourers, now moving to Tirupur, Coimbatore, Chennai and Mumbai for greener pastures, the labour-starved TEA’s search is likely to end here.
After visiting the site, T. R. Vijayakumar, general secretary, Tirupur Exporters’ Association (TEA), said they had come to ascertain the basic infrastructure facilities such as water, uninterrupted quality power, communication, customs and excise clearance on the sprawling AMRL Multiproduct Special Economic Zone premises, availability of labour and then exploring the possibilities of starting the units here.
After explaining in detail the facilities available here to the TEA members – both manufacturers and exporters following the visit, the TEA would bring aspiring investors to the SEZ. Since Tirupur was facing acute labour shortage and this region had been blessed with adequate manpower, possibilities for establishing new units out of the ‘dollar city’ was quite high. As of now, the investors from Tirupur are establishing their units at Andhra Pradesh, Odhisha and Jharkhand owing to manpower shortage.
Since this SEZ is advantageously situated close to the VOC Port in Thoothukudi, the products being manufactured here could be easily taken to the seaport within an hour and exported to overseas destinations. Presently, the transportation of knitwear products and readymade garments from Tirupur to Thoothukudi takes more than six hours.
“We’ll weigh the advantages of the SEZ and the demerits, if any, while discussing all salient features of this campus with our members. Only after comprehensive discussions, we can decide on the number of investors from Tirupur taking land for establishing their units on AMRL Multiproduct Special Economic Zone premises at Nanguneri,” Mr. Vijayakumar said.
The team members also visited the training institute on the SEZ premises where labourers are getting trained for a range of industries to ascertain the ‘work culture’ of the trainees.
“After studying the labourers’ interest for working in the textile industry, we will have to develop the ‘textile work culture’ in them through year-long training before starting our units here,” Mr. Vijayakumar noted.
Vice-president, AMRL Multiproduct Special Economic Zone, Nanguneri Bodgan George took the visitors to the water storage point, power station and the training institute on the SEZ campus and explained in detail the salient features.
Tapping global pension funds, showcasing India’s first offshore wind project and completing the first greenfield smart city — Gujarat is going all out to secure foreign direct investment (FDI) at the upcoming Vibrant Gujarat investment summit.
Chief Minister Vijay Rupani on Friday pointed out the state’s credentials as a prime destination for FDI at a curtain-raiser to the mega event that has already seen more than 23,000 registrations from companies. The ninth edition of India’s largest investment summit, to be held in January, 2019, will be the last one before the country witnesses general elections around May.
This time, the government has finalised the participation of major sovereign pension funds. Senior bureaucrats have also been dispatched to nations such as the United Arab Emirates and Russia to ensure greater participation from businesses.
Automobiles, chemicals and infrastructure remain the major focus areas. But newer favorites for investment include sectors like renewable energy and new economy after the first 1 gigawatt wind power project was finalised in the Gulf of Khambhat and start-up incubators launched across cities in the state. Gujarat boasts several economic and business indicators that helped it get the highest FDI nationally and become the source of 17 per cent of India’s industrial production. According to the state government, $3.67 billion worth of investments were received in 2017-18.
Among the major showstopping projects this time is the Dholera Special Investment Region, a smart city being built from scratch at the largest investment node on the Delhi Mumbai Industrial Corridor, Chief Secretary J N Singh said.
The greater investment region spread across 900 square kilometres is set to invite a range of micro, small and medium enterprises, Singh said. It is also betting big on the Gujarat International Finance Tec-City (GIFT City), India’s only international financial services centre. Currently, 11 domestic banks including State Bank of India and ICICI Bank have started their operations in GIFT City, with three-four foreign banks in the fray to open shop.
The state government has sent out requests to major multinationals operating in India to shift their headquarters to the city, a senior Gujarat government official said, under conditions of anonymity. As a result, creation of an estimated 500,000 direct jobs and an equal number of indirect jobs is expected, he added. On the other hand, the state government has toned down the promotion of the Ahmedabad-Mumbai high speed rail project that has been hit by land acquisition issues, the official added.
The coastal state is also targeting to become a major trans-shipment hub with 48 medium to large ports coming up by 2022, M K Das, principal secretary to the chief minister, said. This will supplement the cargo handling capacity of the state’s ports which already processes more than 40 per cent of national cargo.
Das added this will provide a boost to the state’s position as a major export hub. According to figures by the Department of Industrial Policy and Promotion, the state is the origin of more than 17 per cent of India’s exports, just behind Maharashtra.
The Vibrant Gujarat summit was conceptualised in 2003 by Narendra Modi when he was the chief minister of Gujarat. The last summit, held in 2017, witnessed participation from business and political leaders from over 100 countries.
