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The government has constituted a think tank, chaired by Commerce Minister Suresh Prabhu, specifically to frame rules and regulations for the sector.
NEW DELHI: With increasing number of e-commerce companies and no specifications and regulations regarding such business in India, the Union government is planning to come up with a separate regulator for the sector.
“There is so much confusion regarding e-commerce in India. Space is expanding fast and it requires well-defined regulations and policies. That is the reason why space requires a separate regulator. The government is working on it,” said a member of the recently constituted think tank on e-commerce The government has constituted a think tank, chaired by Commerce Minister Suresh Prabhu, specifically to frame rules and regulations for the sector. The think tank member further said that all digital businesses will be legally bound to register with the regulator. This will also make a real estimation of the total number of e-commerce companies and their registered offices.
The think tank will come up with its final draft on the e-commerce policy by the end of this month. The final draft is being reviewed by the committee, which is incorporating the suggestions and framework. Once the draft is ready and out, the government will seek comments and suggestions from the public.
“Apart from the general business regulations, the regulator will also look into discount policies, monitoring of product quality, more clarification on FDI rules on inventory and the server and data issues. We have already done several brainstorming sessions on this and are holding talks with stakeholders for suggestions,” the official added.
The think tank is also fine-tuning certain grey areas that exist in e-commerce companies regarding Goods and Services Tax. Recently, the merger of Amazon and Flipkart once again fuelled discussions regarding the lack of strict regulations, where big players manage to manipulate FDI rules. Retailers contend that in the absence of strong regulations, big global chains are manipulating rules to their advantage. Retailers have also complained regarding the product quality and services of e-commerce players. According to Praveen Khandelwal of Confederation of All India Traders, these complaints are not being taken seriously.
‘Not quite impartial’
Retailer associations allege that the government think tank’s draft report on e-commerce policy, parts of which they are already aware of, is already tilted in favour of major e-commerce players such as Amazon, Ola and Paytm.
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The fourth meeting of the Cotton Crop Management Group has developed a consensus to consume all resources to accomplish production of 10 million cotton bales with the help of more than 0.9 million farmers trained on modern techniques of cultivation and ruthless crackdown should be initiated against spurious pesticides and adulterated fertilizers.
The meeting was held under the chair of Punjab agriculture secretary Wasif Khurshid here on Friday. The meeting directed the fertiliser controllers and pesticide inspectors to keep vigilant to prevent the spread of adulterated pesticides and fertilisers.
Punjab agriculture secretary Wasif Khurshid said the meeting had decided consuming all resources to achieve the target of 10 million cotton bales in the province. He said the master trainers trained the farmers on most modern techniques of cultivation in cotton growing districts. The master trainers had imparted training to 9,40,113 farmers and also distributed literature among them. The meeting was regularly held to ensure testing of cotton seeds and provision to farmers at maximum level. The staff was recruited in research and pest warning for swift monitoring of crop and district level committees were also formed for healthy growth of cotton. He said free plots of PB ropes were established at 50 acres in 54 tehsils of Punjab likewise the last year. The sex-pheromones trips were installed at union council level in cotton growing districts.
He said the government would hold prize competition this year for giving maximum production. The farmers were provided with spray machines worth Rs140.7 million on subsidised rates. The availability of high quality fertilisers and pesticides was ensured. The government had adopted zero tolerance policy against adulterated pesticide mafia and crackdown would continue against them across the province.
Genetically modified cotton could be commercialized in Kenya as early as March 2019, the head of the country’s National Biosafety Authority (NBA) said on Friday.
“If the results of the national performance trials are positive, then it is anticipated that the Kenya Plant Health Inspectorate Service will permit the release of the genetically modified cotton seeds to farmers by March 2019,” said Dorington Ogoyi, CEO of NBA. The trials for the transgenic cotton, which began in June, are expected to continue until the end of the year.
Before the genetically modified cotton seeds are released for commercialization, they will have to satisfy the condition of being a distinct, uniform and stable variety of cotton, Ogoyi said.
The performance trials are currently taking place in seven different sites under the Kenya Agriculture Livestock Research Organization. The Maharashtra Hybrid Seeds (Mahyco) is expected to make the seeds available to farmers on behalf of Monsanto company. According to the NBA, the transgenic cotton is pest resistant, which can help farmers cut spending on the use of insecticides. Jane Otadoh, assistant director of agriculture at the Ministry of Agriculture, said biotech cotton is one of the strategies that Kenya will utilize to help revive the cotton sector. Cotton production has been on the decline due to high prevalence of pests that has reduced incentives for farmers to grow the cash crop, Otadoh said. He said the country has the capacity and infrastructure required for research and regulation of biotech crops. Otadoh noted that the country has more than 100 scientists in research and development activities, with over 45 percent of them working for the government.
Tariff fears are driving port traffic.
Imports at the nation’s major retail container ports have set two new records this summer and are expected to set another this month, according to the National Retail Federation’s monthly Global Port Tracker report.
Tariffs on most consumer products have yet to take effect, but retailers appear to be getting prepared before that can happen,” said Jonathan Gold, NRF vice president for supply chain and customs policy. U.S. ports covered by Global Port Tracker are: Los Angeles/Long Beach, Oakland, Seattle and Tacoma on the West Coast; New York/New Jersey, Port of Virginia, Charleston, Savannah, Port Everglades, Miami and Jacksonville on the East Coast; and Houston on the Gulf Coast.
Together they handled 1.85 million Twenty-Foot Equivalent Units (TEUs) in June, the latest month for which after-the-fact numbers are available. That was up 1.6% from May and up 7.8% year-over-year.
The June number set a new record for the number of containers imported during a single month, beating the previous record of 1.83 million TEU set in August 2017, NRF noted. A TEU is one 20-foot-long cargo container or its equivalent. July was estimated at 1.88 million TEU, up 4.4% year-over-year. This figure is subject to revision when the numbers become final. August is forecast at 1.91 million TEU, up 4.4%, and “should set yet another record,” NRF added. Predictions for the remainder of 2018 are: September at 1.82 million TEU, up 2.1%; October at 1.88 million, up 4.9%; November at 1.81 million TEU, up 2.6%; and December at 1.79 million TEU, up 4%.
While cargo numbers do not correlate directly with sales, NRF said the record imports mirror strong results seen by retailers this spring and summer that are expected to continue through the remainder of the year.
Retail sales as calculated by NRF – excluding automobiles, restaurants and gasoline stations – were up 4.2% year-over-year in June and up 4.4% on a three-month moving average. The organization is forecasting this year’s total sales to be up between 3.8% and 4.4% over 2017. The first half of 2018 totaled 10.3 million TEU, an increase of 5.1% over the first half of 2017. The total for 2018 is expected to reach 21.4 million TEU, an increase of 4.4% over last year’s record 20.5 million TEU.
Culture secretary Raghvendra Singh has been appointed in his place
Anant Kumar Singh, Secretary Textiles, has been shunted out in an unusual transfer order and posted as Secretary, Department of Land Resources.
The post of Secretary, Land Resources, was lying vacant after superannuation of Dinesh Singh in June this year.
Culture secretary Raghvendra Singh has been appointed new Secretary of Textiles. He is 1983 batch IAS of West Bengal cadre.
According to top sources in the government, Mr Singh’s sudden transfer was necessitated as he and Textiles Minister Smriti Irani “did not get along.”
Interestingly, this is second time Textiles Secretary has been moved out after Smriti Irani was shifted to the Ministry from high profile Human Resources Development (HRD). Earlier, Rashmi Verma was transferred as Textiles Secretary.
In Mr. Raghvendra Singh’s place, Arun Goel, Special Secretary, Ministry of Culture, has been made full fledged Secretary in the Ministry. Mr Goel, a Punjab cadre IAS office of 1985 batch.
Maharashtra Chief Minister Devendra Fadnavis today announcedconcessions of Rs 370 crore in power tariff to the textile industry in the state.
It will help revive sick textile mills and generate jobs, the chief minister said at a review meeting of textile department officials here.
He also directed officials to provide interest and capital grants to the industry, the chief minister tweeted.
The land belonging to the Maharashtra State Textile Corporation, which is struggling financially, should be sold and the proceeds should be transferred to the textile department, he directed.
The government is considering a proposal to tighten rules on the origin of imported garments, amid warnings by the industry that Bangladesh — which enjoys duty-free access to the Indian market — is buying cheap fabrics from China in large volumes and dumping garments made out of them here. The government is considering a proposal to tighten rules on the origin of imported garments, amid warnings by the industry that Bangladesh — which enjoys duty-free access to the Indian market — is buying cheap fabrics from China in large volumes and dumping garments made out of them here. The textile and garment industry has represented to the ministries of commerce and textiles to make it mandatory for Bangladesh under the South Asian Free Trade Area (Safta) agreement to use either their own or Indian yarn and fabric in their garments to be able to supply to India at zero duty, said Confederation of Indian Textile Industry chairman Sanjay K Jain.
“The proposal is under consideration,” said a senior government official. But a decision is yet to be taken, the official said, adding, though, that tweaking rules under trade agreements is not so easy and it needs more deliberations. Senior textile and garment industry executives have now cautioned that the move to double import duties on close to 400 products to 20% could fail to yield desired results, unless the rules of origin are made more stringent under the Safta agreement.
As such, India’s garment imports from Bangladesh jumped 44% to $201 million last fiscal from a year before and 80% in the first two months of 2018-19, despite the fact that India is a large manufacturer of apparel. The rise in imports comes at a time when India’s own garment exports have been dropping month after month since October 2017. Consequently, despite a relatively good performance by certain textile segments, India’s overall textile, garment and allied product exports eased 0.5% in the first quarter of this fiscal to $9.31 billion.
On the other hand, imports of textiles and garments rose 6% to $1.7 billion in the first quarter. Some industry executives also complain that some garments from China are finding their way into India, albeit in limited volumes, through Bangladesh, with which India has a trade arrangement under the Safta agreement. Gautam Nair, managing director at Matrix Clothing, one of the largest garment exporters, made a pitch for tightening the rule of origin clause under Safta. “Bangladesh is buying fabrics from China, converting them to garments and shipping out to India. Why should we incentivise Chinese fabrics?” he asked.
Noted textiles expert DK Nair said the existing rule of origin clause under Safta stipulates domestic value addition for Bangladesh to be able to supply to India at zero duty. But since Bangladesh is converting Chinese fabric to garments, they are able to show as much as 100% value addition and thus qualify for the duty-free access.
India will not be alone if it does tighten the rules. The US has imposed sourcing restriction under the North American Free Trade Agreement for accepting duty-free imports of garments from Mexico and others. Even under the Trans-Pacific Partnership (TPP), the US (which has pulled out of the pact now) had kept such restriction for members including Vietnam. India had permitted imports of ready-made garments up to 8 million pieces a year from Bangladesh at zero duty in 2006. The cap was, however, lifted in 2010.
The Centre has been implementing various policy initiatives and programmes for development of textiles and handicrafts, stated Minister of State for Textiles Ajay Tamta in a written reply in the Lok Sabha on Thursday.
Government has been implementing various measures for the textile sector, particularly for technology upgradation, infrastructure creation and skill development, said the minister.
The key schemes include Amended Technology Upgradation Funds Scheme (ATUFS), PowerTex India Scheme. Scheme for Integrated Textile Parks, SAMARTH- scheme for capacity building in Textile Sector, Silk Samagra- integrated silk development scheme, North Eastern Region Textile Promotion Scheme (NERTPS), National Handicraft Development Programme (NHDP) and Comprehensive Handicrafts Cluster Development Scheme (CHCDS), he stated.
The Government also launched a special package to boost investment, employment and exports in the garmenting and made-up sector, the minister said.
The special package was designed to create upto one crore jobs, and boost exports by US $ 31 billion and attract investment of Rs. 80,000 crores in 3 years. So far, it has generated additional exports of Rs. 5,728 crore and additional investments of Rs. 25,345 crore, he added.
Under the ATUFS, an amount of Rs. 17,822 crore was approved for providing one-time capital subsidy to eligible machinery for seven years from 2015-16 to 2021-22 (including committed liability of Rs. 12,671 crore and Rs. 5,151 crore for new cases). Rs. 8,078.94 crore has so far been released under the scheme.
The Government has set up an Apparel and Garment Making Centre (consisting of 3 Units installed each with 100 stitching machineries) at Bodhjungnagar, Agartala under the NERTPS at a total cost of Rs.18.18 crore.
Under NERTPS, a silk printing unit has also been set up at Agartala at a cost of Rs.3.71 crore with a capacity to print and process about 1.5 lakh meters of silk fabric per annum.
To promote handloom sector in Tripura, Government sanctioned 3 Block level clusters with Rs. 4.28 crore, 44 marketing events with Rs.2.41 crore, 9 Mudra loans (Rs.3 lakh) and enrolled 9,367 weavers and artisans under Health Insurance Scheme and 2,718 weavers and artisans under Mahatma Gandhi Bunkar Bima Yojana, the minister said.
Participating in the debate, senior Congress leader Mallikarjun Kharge said that the BJP-led government does not know how to implement GST.
The Lok Sabha today passed four bills to amend the GST law, as Finance Minister Piyush Goyal said lower tax rates will improve compliance and enhance revenue collection. Replying to a debate on Good and Services Tax (Amendment) Bill 2018, he said tax collection will not come down “The government is doing too little and taking too much time to do it,”despite reduction in taxes as he allayed the concerns to that effect raised by some members.
The lower rates will rather improve compliance and enhance revenue collection, he added.
The four bills, which were passed together by a voice vote, are the Central GST (Amendment) Bill, Integrated GST (Amendment) Bill, GST (Compensation to States) Amendment Bill and Union Territory GST (Amendment) Bill. Goyal said in the last one year, GST on about 400 goods and 68 services were reduced. GST came into force from July 1, 2017. “We are empowering 125 crore people of India through Good and Simple Tax,” he said, referring to the GST.
Promotion of an honest tax structure will improve compliance as it will encourage people to come forward and pay taxes, he said. On the problems faced by the textile sector, he said the GST Council has resolved most of the problems of the sector. With the introduction of GST, textile has become cheaper, he added.
While moving the bill for consideration, Goyal said the capacity to slash the GST rates on more items would go up as GST revenues and the compliance rate increases and the economy formalises.
He also pointed out that the government was able to collect GST in line with the country’s fiscal deficit target.
Participating in the debate, senior Congress leader Mallikarjun Kharge said that the BJP-led government does not know how to implement GST. “More than 50,000 MSME industries have closed down in Tamil Nadu alone due to faulty implementation of GST,” he stated.
Saugata Ray (TMC) said the recent cut in GST rates on 100 items was a “pre-poll” sop and the estimated loss to the exchequer on account of this would be Rs 12,000 crore. “The Finance Minister has to explain from where the money will come,” Ray said, while observing that Goyal was not present in the House. The BJP members then informed Ray that Goyal has gone to Rajya Sabha for voting on a bill, to which Ray remarked “This is why I say, Finance Minister should be from the Lok Sabha”.
Referring to Goyal, Ray said “the caretaker Finance Minister” has brought four amendment bills. “Today Arun Jaitley came to vote in the Rajya Sabha. I am wondering when the change in portfolio will happen,” he said.
Kalikesh Singh Deo (BJD), while supporting the bills, asked the government to make it easy to pay taxes under the GST. He said the MSMEs were being stifled with high compliance burden under GST.
“The government is doing too little and taking too much time to do it,” he said. Anandrao Adsul (Shiv Sena) said Goyal in the later part of his speech went on a “political tangent and then the discussion revolved around politics. I couldn’t understand if the discussion was on GST or was it poll campaign.”
However, he said that despite the fact that India’s economy was growing at a faster rate, why was the value of rupee declining and the price of fuel increasing. Jayadev Galla (TDP) reiterated the demand to fulfil the commitments made by the Centre for Andhra Pradesh. He said that the government talks about special category states in the GST law but do not want to extend the status to Andhra Pradesh.
“People of the state are not fools or illiterates. They will be giving befitting reply in the election. I demand extension of all benefits to Andhra Pradesh….How can we support this bill,” he said, while demanding that the period of compensation should be raised from 5 to 10 years.
He also asked the Centre to remove GST on red chilly and turmeric powder. K V Reddy (TRS) said the law has not been able to cut tax evasion and reduce fraud and “now there is more ambiguity”.
He asked the centre not to bring petrol and alcohol within the purview of the GST. Rajesh Ranjan (RJD), Ravindra Kumar (BJP), Renuka Butta (YSRCP), P S Chandumajra (SAD) also participated in the discussion.
Policy also aim to seize millions of jobs, lower down the value chain, that are shifting out of China to other developing nations
The proposed industrial policy, currently being prepared by the commerce and industry ministry, may have special provisions for manufacturing in the textile, leather sectors to leverage growth, and focus on spreading out export hubs across the country which are currently getting concentrated in a few states.
It will also tie in existing government initiatives and serve as a focal point for various industry-wise policies. “It will absorb the 2011 national manufacturing policy and focus on technological issues of Industry 4.0, apart from furthering the government’s push of the Digital India initiative,” a senior Department of Industrial Policy and Promotion (DIPP) official said.
While the government had floated an initial discussion paper on the proposed industrial policy in August 2017, it has not yet released a final draft of the policy in the public domain. The commerce and industry ministry had back then announced this final draft will be put out by January 2018.
“We will follow the due process and release a detailed draft. We are currently weighing the inputs from other ministries and stakeholders,” a senior DIPP official said. The initial document focused on the creation of jobs, the promotion of foreign technology transfer, the growth of micro, small, and medium enterprises, and the establishment of a goal to attract $100 billion foreign direct investment annually.
It will also have a special focus for sectors such as apparel and footwear in which India maintains a manufacturing edge, albeit one that is slipping. “Despite India being one of the largest exporters in both sectors, manufacturing jobs in Bangladesh, Indonesia, and several African countries are seeing an increase, while in India we are seeing a slowdown in growth. So, the policy will have special provisions to boost these sectors,” a senior DIPP official said.
The $36-billion textile export sector, the third-largest foreign exchange earner for India after petroleum products and gems and jewellery, clocked only 0.75 per cent growth in 2017-18, after a contraction in the past two years. On the other hand, outbound trade of leather articles rose 3.46 per cent to $2.42 billion, recovering from the contraction witnessed in 2016-17. The proposed policy may also act on the suggestion of successive Economic Surveys over the past three years which have repeatedly pointed to a slowdown in low skilled jobs in neighbouring China. India will also aim to seize millions of jobs, lower down the value chain, that are shifting out of China to other developing nations as Beijing makes adjustments to its own industrial policy under the pressure of growing basic wages and greater specialisation in high-end manufacturing, the official added.
Export-led growth
The policy is also expected to reaffirm the government’s belief in export-led growth and as a result will have an extensive impact on overall trade norms, with ease in trade and diffusion of export hubs among the government’s top priorities, a commerce department official pointed out.
Earlier this year, the Economic Survey pointed out that the five states of Maharashtra, Gujarat, Karnataka, Tamil Nadu, and Telangana account for a whopping 70 per cent of India’s exports. “The Centre plans to stop this ghettoisation of exports through incentives as well as channel digital technology to extend exports from rural and traditionally backward areas,” he added.
Domestic procurement push
A further push for adopting mandatory domestic procurement norms by the government may also be there in the policy. The Federation of Indian Chambers of Commerce & Industry had suggested back in February that state governments should also adopt these norms.
Currently, the Public Procurement (Preference to Make in India) Order 2017, that came into effect back in June last year, stipulates that only local suppliers will be eligible for all government goods purchases less than an estimated ~5 million. A further list of 90 items is currently being drawn up to be placed under the mandatory category in preferential procurement.
The current industrial policy was framed back in 1991, the government led by P V Narasimha Rao essentially junked the previous licence raj. But critics have said the policy was hastily prepared at a time when the economy was battling an economic crisis. Back then, large fiscal deficits had a spillover effect on the trade deficit culminating in a serious external payments crisis.
