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A National Logistics Portal is being developed to ensure ease of trading in the international and domestic markets, as India eyes lowering logistics cost from 14 percent of GDP to less than 10 percent by 2022, the Commerce Ministry said today.
The portal will link all the stakeholders of export-import, domestic trade and all trade activities on a single platform.
“The portal will be implemented in phases and will fulfil the commitment of the Government of India to enhance trade competitiveness, create jobs, boost India’s performance in global rankings and pave the way for India to become a logistics hub,” the ministry said in a statement.
In this year’s budget speech, Finance Minister Arun Jaitley had announced that the Department of Commerce will create a portal which will be a single window online marketplace for trade. It will connect business, create opportunities and bring together various ministries, departments and the private sector.
Stakeholders like traders, manufacturers, logistics service providers, infrastructure providers, financial services, government departments and groups and associations will all be on one platform.
“India’s logistics sector is highly defragmented and the aim is to reduce the logistics cost from the present 14 percent of GDP to less than 10 percent by 2022,” the statement said.
The country’s logistics sector is very complex with more than 20 government agencies, 40 partnering government agencies (PGAs), 37 export promotion councils, 500 certifications, 10,000 commodities and $160 billion market size.
It also involves 12 million employment base, 200 shipping agencies, 36 logistics services, 50 IT ecosystems and banks and insurance agencies. Further, 81 authorities and 500 certificates are required for EXIM.
As per the Economic Survey 2017-18, the Indian logistics sector provides livelihood to more than 22 million people and improving the sector will facilitate 10 percent decrease in indirect logistics cost leading to the growth of 5 to 8 percent in exports.
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India is the second largest investor in Kenya according to KenInvest. The bilateral trade was valued at USD 2.05 billion in 2017-18.
India will explore opportunities to increase exports of petroleum products, cars and motorcycles, and mobile phones to Kenya during the joint trade committee meeting of the two countries beginning Thursday, sources said today. The Eighth Session of the India-Kenya Joint Trade Committee Meeting is being held in Nairobi, the capital city of the African nation. India is the second largest investor in Kenya according to KenInvest. The bilateral trade was valued at USD 2.05 billion in 2017-18.
“We are keen to explore new opportunities in logistics, agriculture, energy, pharma and many other sectors with Kenya,” Commerce Minister Suresh Prabhu said in a tweet after landing in Kenya.
According to the sources, India has identified petroleum products (medium and light oils); medicaments for therapeutic or prophylactic purposes; motor vehicles/cars/motorcycles and products of iron and steel, as potential products to increase its exports to Kenya. Cane or beet sugar, wheat and meslin, cement clinkers, aeroplanes and other powered aircraft, telephones for cellular networks or for other wireless networks, self-propelled mechanical shovels, excavators and shovel loaders and polypropylene, are other products which India sees as “potential products” of exports.
In 2017-18 India’s top items of exports were petroleum products, drug formulations, biological, industrial machinery, paper, iron and steel, plastic raw materials, manmade yarn, fabrics madeups, and electric machinery, among others.
The joint trade committee meeting is taking place against the background of India’s exports to Kenya dropping to USD 1.97 billion in 2017-18 from from USD 4.11 billion in 2014-15. India’s imports from Kenya too slowed down from USD 117.42 million to USD 72.57 million during the same period.
Ministerial meeting of the JTC between Prabhu and Peter Munya, Cabinet Secretary (Minister) for Ministry of Industry, Trade and Cooperatives, Kenya, will take place tomorrow.
Both the countries would also be signing host of agreements in various sectors. Sources further said that Indian side has sought details of procedure and process of setting up assembly operations for both commercial and passenger vehicles in Kenya.
India has also requested the African nation to consider reducing the import duty on steel bars from the current 25 per cent to 10 per cent. Meanwhile, sources also said that Air India has expressed inability, as present, to consider the operations on India–Nairobi route because of non-availability of resources in terms of aircraft and crew, and also departure/arrival constraints at Delhi and Mumbai Airports.
Tax authorities had earlier sent notices to companies belonging to several sectors, enquiring about the freebies which also became taxable under the ambit of the GST
In what seems to be a huge relief for several sectors, the Goods and Services Tax (GST) on ‘buy one get one’ products, free samples and additional quantities of products may not be taxed anymore, reported The Economic Times. Several sectors like FMCG, pharma, textile, food and retail chains, who offer freebies along with their products as part of a marketing strategy will breathe a sigh of relief if tax collection on ‘extras’ is stopped.
The report goes on to suggest that tax authorities had earlier sent notices to companies belonging to the aforementioned sectors, enquiring about the freebies which also became taxable under the ambit of the GST.
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Besides, a select number of officials who are members of the GST Council have also upvoted the idea of doing away with GST on freebies. However, a final call will be taken to settle the issue by the council later in the year, according to a government official.
Earlier, the Law Review Committee had also said in its report – later submitted to the Council – that the total consideration towards such additional goods should be chargeable under GST, adding that the input tax should also not be denied in such cases.
It should be noted that the price paid by a consumer for purchased goods is considered while levying GST even if one item comes free with another. In such a scenario, both the items (the purchased one and the free one) would be applicable for input taxes against the final tax.
Taking the above point into consideration, the committee suggested that gifts and samples packs should not be denied input tax credit. Such promotional schemes are very popular among certain sectors but were thrown out of practice since the GST regime came into force last year.
The cotton crop in 11 districts of Telangana has been hit by extensive rains in the last two weeks. According to official figures, the cotton crop in over 1.30 lakh acres and paddy in about 50,000 acres was hit by the rains. Adilabad and undivided Warangal districts, the two key cotton-growing districts in the state, were hit the hardest.
While 11 of the 31 districts were hit by heavy rains, Sangareddy, Medak , Siddipet, Yadadri and Medchal districts remained in the ‘deficit’ rainfall category. Farmers’ unions, however, said cotton crop losses would be far higher as the rains came at the wrong time. They said heavy rains hit the crop at the flowering stage and this could result in heavier losses.
Farmers in the state grew cotton in about 42 lakh acres this kharif, despite losses in the last season due to the virulent attack of pink bollworm. “Losses in Adilabad would be much higher as heavy rains lashed the cotton-growing district,” Telangana Rythu Sangham leader, Malla Reddy, said.
Adilabad district recorded 1,112 mm of rainfall, while Jogulamba Gadwal district received the lowest rainfall of 216.7 mm. Official figures put the crop losses in Adilabad district at 1.25 lakh acres. “The rains were not well spread out and were not timely. There were either no rains or insufficient rains,” he said.
Cotton farmers in several areas had to go for second sowing as the monsoon failed them after they sowed the seeds in the beginning of the kharif season. “Heavy rains in a span of 10-14 days would hit them the second time too,” Malla Reddy said.
Jaipal Reddy, a former leader of the Confederation of Farmers’ Association, said farmers faced two diametrically opposite problems. “While some were hit by heavy rains, others in districts such as Nalgonda, Sangareddy and Mahaboobnagar received less rainfall,” he said.
What used to be a vibrant local garments industry could return to its heyday if the Philippines could be able secure a free-trade agreement (FTA) with the United States, the country’s trade chief said on Thursday.
At the sidelines of the 1st Philippine Garment, Leather Goods Industries and Fabric Expo, Trade Secretary Ramon M. Lopez said one reason the Philippines is keen for an FTA with the US is to revive the local garments industry. He argued a bilateral trade agreement with the United States will be critical in bringing the labor-intensive industry back to activity.
“Hopefully, [we can revive the garments industry] with the potential FTA with the US. We used to be one of the biggest exporters of garments in the world. We supply the US, but we lost that [a long time ago]. Hopefully, we can bring [it] back with an FTA,” Lopez said in a mix of English and Filipino.
The garments and textile export sector used to be valued at $3 billion and was considered a sunrise industry back in the 1990s, according to a news release by the Board of Investments (BOI). It was heavily relyiant on the Multi-Fiber Agreement (MFA), which allows clothing makers to export with preferential rates to developed countries.
“Our garments industry used to be one of the top-performing sectors both locally and internationally. But, with the challenges brought by the end of the MFA, which grants preferential tariffs to the country’s exports of garments and textiles, we saw a decline in the sector’s general performance,” Trade Undersecretary and BOI Managing Head Ceferino S. Rodolfo Jr. said.
The MFA prescribed quota allocations in identified garments and textiles that are for export to developed economies from developing nations, including the Philippines, India and Vietnam.
However, the industry’s dependence on the MFA ended in 1995 after it was replaced by the Agreement on Textiles and Clothing, which revoked numerous provisions of the MFA. This developed to the full adoption of the General Agreement on Tariffs and Trade and put the quota system to a conclusion in 2005.
Lopez wants FTA talks with the US to begin the soonest possible, as he is keen to bargain for the elimination of tariffs on garments. Clothing is one product group that Washington still slaps with high import duty. Last year it imposed an average most favored nation rate of 11.6 percent on clothing, according to data from the World Trade Organization. It is also one of the four remaining product groups the United States still taxes at an average double-digit tariff, aside from beverages and tobacco, dairy products and sugars and confectionery.
The BOI is currently in the process of helping garment and textile makers rise again, following the string of work force downsizing and factory closures they have to face when the MFA was terminated.
“We focus on securing market access in key export markets, such as Japan, Europe and the United States, to FTAs and preferential trade agreements, including the Generalized System of Preferences [GSP] and the GSP+,” Rodolfo said.
The BOI is also drawing up a road map for the industry, targeted to be released by the end of this year, to chart its growth prospect based on assessment of its present condition, economic performance and challenges. The agency has likewise conducted six focus group discussions with garment makers, other government units and national organizations since December of last year.
Consumers in the UK are shunning man-made materials in favour of natural fibres, says a recent report. Of those who said they would avoid buying certain materials, 28 per cent refuse to buy polyester, 17 per cent avoid synthetic acrylics, and 2 per cent avoid rayon and viscose. Notably, Brits are optimistic about their current financial situation.
UK consumers feel positive about the cash in their pocket in 2018, with almost half of people (45 per cent) saying they feel optimistic about their own personal finance. Compared to 2014’s findings, overall optimism is up by 8 per cent, as per Cotton USA’s Global Lifestyle Monitor (GLM) survey.
Additionally, when asked who or what is most responsible for garments made in a non-environmentally friendly way, manufacturers received the most blame from UK consumers (40 per cent). This was followed by brands (21 per cent) and, interestingly, the consumers themselves (17 per cent).
When asked which fibres people feel are safe for the environment, cotton was found to be perceived as the safest (79 per cent), and 69 per cent of UK consumers also believe that cotton is the most sustainable fabric.
Nearly half of UK shoppers (45 per cent) say they would pay more for clothing made from natural fibres, such as US cotton, as opposed to only 4 per cent who would pay more for synthetics. The most cited reasons for preferring natural fibres are that they are considered to be more comfortable (65 per cent), of better quality (57 per cent) and more durable (34 per cent).
About 83 per cent of UK consumers also say that cotton and cotton blends are the fibres they want in the clothing they wear most often, and 80 per cent say cotton is best suited for today’s fashions. Reasons for preferring fibres such as US cotton include comfort (75 per cent), trustworthiness (72 per cent), and softness (69 per cent). Another 80 per cent of consumers also associate the fibre with being authentic.
According to the research, 70 per cent of UK consumers look at fibre content labels at least some of the time before purchasing a garment. Older generations were found to be most likely to look at fibre content labels, (75 per cent), compared to younger consumers (63 per cent).
“Across all parts of everyday life, consumers are becoming more conscious than ever before about how their actions impact the world we live in. Our findings truly reflect how this applies to the consumption of fashion and textiles, and really identifies the shift UK consumers have made in the past few years. However, despite these changes, British consumers continue to favour clothes and garments made from high-quality, natural fibres such as US cotton – a trend that we at Cotton USA are confident will remain and strengthen in the future,” said Stephanie Thiers-Ratcliffe, international marketing manager at Cotton USA.
The report adds that more than half of UK consumers enjoy shopping for apparel, suggesting a broad based interest in fashion and style, over 50 per cent of women under 35 shop for clothes once per month or more.
Internet browsing is popular, especially with younger consumers. Nevertheless, concerns about purchasing apparel online remain. Primary issues are shipping costs (70 per cent), clothing quality (67 per cent) and return policy (58 per cent). Chain stores (59 per cent), department stores (56 per cent), and discount stores (53 per cent) are each cited as channels where a majority of UK consumers say they shop for clothing.
Consumers are most likely to say that fit (87 per cent), comfort (84 per cent), and price (79 per cent) are most important to know before purchasing clothing. When making clothing purchases, 39 per cent of UK consumers say they make clothing purchases on impulse, a slight decrease from 2016, when 43 per cent reported impulse shopping, according to the GLM survey.
The survey was conducted by Ipsos Public Affairs, Inc on behalf of Cotton Council International (CCI) on a base of 1,002 people in the UK aged between 15 and 54 by online interviews. CCI is a non-profit trade association that promotes US cotton fibre and manufactured cotton products around the globe with its Cotton USA mark.
The textile and garment industry, now far from its glory days, will have to bank on a possible free trade deal with the United States in a bid to revive its struggling businesses.
Trade and Industry Secretary Ramon Lopez told reporters on Thursday that the government will try to help the industry through a possible free trade agreement (FTA) with one of its oldest allies.
“We used to be one of the biggest exporters of garments in the world. We supplied to the US. Hopefully, we can bring it back with an FTA,” he said.
He said this on the sidelines of the first ever “Philippine Garment Leader Goods Industries & Fabric Expo,” participated by 81 local and foreign companies in search of buyers.
Only more or less 20 companies are from the Philippines, which shows a glimpse of the current state of the industry.
As the US focuses on bilateral FTAs instead of multilateral deals, there are high hopes that this would eventually bear fruit to an FTA with the Philippines.
Preliminary talks are already ongoing, with the initial goal of finding enough mutual gains to jumpstart the formal negotiations. This will be a good opportunity for the local industry, which used to be very competitive in its exports, and was even considered a sunrise industry during the 90s, according to DTI-attached agency Board of Investments in a separate statement.
Export performance, however, dropped since the abolition of textile quotas by the World Trade Organization in 2005.
As a result, garment and textile enterprises in the Philippines which relied on quotas underwent difficulties leading to closure of factories and downsizing, BOI said.
In a press briefing earlier this month, William Ang, manager of Globe Textile Inds. Corp., complained about the garment industry receiving little to no support from the government.
“Sayang ang Pilipinas [the Philippines could have been more]. We have a lot of talented designers. We should be the Paris of Asia but what’s happening?” he said. “Never in my lifetime had the government asked what it could help us with in the industry,” Ang said, who represented the Garments Manufacturers Association of the Philippines during that time.
Wrapping up an FTA might take years, however. In the meantime, Lopez said that companies can apply under the Investment Priorities Plan, which provides incentives such as income tax holiday on preferred kinds of businesses that help reach inclusive growth. It is not clear, however, if any company in the garment and textile industry applied under the IPP, even though the list includes manufacturing activities.
He also said that garments might be eventually included under the US Generalized System of Preferences (GSP), a trade arrangement allows market access for numerous Philippine exports. He said this will have to come after the inclusion of footwear in the US GSP
As per the latest update from Cotton Association of India, Indias cotton exports are likely to reach only 7.0 million bales of cotton in 2018/19, slumped by 30 per cent from previous targets due to limited rainfall and an attack of pink bollworms.A decline in planting area and the pest attack will reduce the total exports to 7 million bales in the marketing year starting on Oct. 1, down from 7.2 million bales in the current crop year.
Cotton ginners from across the state on Wednesday demanded reduction of market fee from 2 per cent to 0.8 per cent to provide them level playing field with their counterparts in Punjab and Rajasthan.
A meeting of the cotton ginners was held in Sirsa on Tuesday with Bajrang Dass Garg, state president of the Haryana Pradesh Vyapar Mandal and general secretary of the Akhil Bhartiya Vyapar Mandal in the chair
The Haryana Government is trying to ruin cotton industry in the state by imposing heavy market fees on them. The government recently organised a ‘kapas rally’ in Barwala and claimed that it had provided Rs 5,150 per quintal as MSP for cotton. However, the fact is that the crop is already selling for Rs 5,900 per quintal in the market. If the government is really interested in the welfare of farmers, it should reduce market fee immediately,” said Garg.
Sushil Mittal, state president of the Haryana Cotton Millers Association, said that till 2010-11, they were paying 4 per cent fee to the State Marketing Board of which 2 per cent was market fee and 2 per cent Haryana Rural Development Fund (HRDF). In contrast, Rajasthan charges 1.6 per cent and Punjab has 2 per cent rate of market fee.
On the demand of millers, the previous Congress government had reduced both the market fee as well as the HRDF to 0.8 per cent each making it at par with Rajasthan in 2010-11.
While the HRDF was reduced permanently, the notification for market fees was issued on year to year basis.
“Since 2016, the government has not reduced the market fees despite announcement. We are being denied level playing field with our counterparts in the neighbouring states,” alleged Mittal. However, sources in the State Marketing Board who did not want to be quoted said that the ginners themselves were to blame for this, as they failed to fulfil minimum fees guarantee due to evasion of the fees by their members.
Sources said that after the reduced rates were introduced, the collection of fee from cotton dwindled from Rs 36.53 crore in 2012-13, to Rs 29.80 crore in 2013-14, Rs 16.28 crore in 2014-15 and finally came down to Rs 8.65 crore in 2015-16 due to large scale evasion by ginners.
A. Cotton
Spot price (Ex-Gin) 28.5 to29 mm
Rs/Bale Rs/Candy USD Cent/lb
22660 47400 86.59
Domestic Futures (Ex-Gin) July
Rs/Bale Rs/Candy USD Cent/lb
23340 48822 89.18
International Futures
NY ICE USD Cents/lb. ( Dec 2018) 82.29
ZCE Cotton: Yuan/MT (Jan 2019) 15790
ZCE Cotton: USD Cents/lb. 88.77
Cotlook A Index – Physical 92.90
B. Currency
USD/INR Close Previous Close
Spot 69.825 69.825
Cotton Guide
Cotton price continued to trade down. On Wednesday at IC E the cotton future for December contract ended lower at 82.29 cents per pound. The month of August has not been kind to the bulls at all. During August so far, December contract has a loss of 730 points. The other months settled from 28 to 98 points lower. Their August losses up to date range has been from 189 to 776 points.
On the trading front volume were 16,465 contracts on Wednesday and cleared previous day were 17,503 contracts. For reference December first notice day is November 26th, leaving 65 sessions until then. Dec open interest has declined every day so far this month for a total drop of 30,323 contracts to begin the session on Wednesday at 147,974 contracts. Total open interest was at 253,259 contracts, up 155 contracts, its first increase in sessions.
Wednesday was the first day of trade talks in Washington DC between officials from the US and China. The meeting is not expected to result in a resolution but it should set the stage for higher level conversations later. News on the talks was lacking. China’s ZCE futures had a 4th day of gains, and that was the first time it has scored 4 higher sessions in a row since May. Wednesday’s settlement was the highest of the last 7 sessions.
Chinese State Reserve cotton on Wednesday’s auction had a turnover rate of 56.6 percent, spinners only. Offered were 30,001.026 tons (137,795 bales); and sold were 16,951.517 tons (77,858 bales). The cumulative turnover rate is 56.74 percent (offered versus sold). This auction series started at 24.1 million bales and 15.15 million bales remain.
On the domestic front India markets were closed due to Eid celebration. However, the future market was opened for limited trading hours. The most active October future traded in the range of Rs. 23460 to Rs. 23280 and ended at Rs. 23340 per bale. Market is expected to remain lower today as the ICE future is already trading lower by 0.78% at 81.66 cents. We think the trading range for the day would be Rs. 23200 to Rs. 23440 per bale.
FX Update
Indian rupee has depreciated by 0.3% to trade near 70.02 levels against the US dollar. Rupee is pressurized by recovery in US dollar post FOMC minutes as central bank officials maintained case for interest rate hikes on back of strong economic growth. Also weighing on rupee is sharp gains in crude oil.
Brent crude trades near $74 per barrel after a 3% rally yesterday on bigger than expected decline in US crude oil stocks. Also weighing on rupee is mixed trade in equity market as market players assess US-China trade talks. Rupee may remain under pressure as Fed’s stance will support US dollar. USDINR may trade in a range of 69.85-70.15 and bias may be on the upside.
