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Turkey’s exports rose 11.8 percent in July, reaching $14.1 billion — the highest figure ever for the month of July, Turkish Exporters’ Assembly (TIM) data showed Wednesday.
Provisional export figures were announced by Trade Minister Ruhsar Pekcan and T?M Chairman ?smail Gülle at a meeting in the ministry in the capital Ankara.
The largest jump in exports was seen in the defense and aviation sectors, with a 38.3 percent rise. Following defense and aviation, the exports of boats and yachts saw an increase of 64 percent, while steel exports rose 60 percent.
According to TIM data, the country’s exports in the first seven months of 2018 increased by 7 percent to climb to $96.3 billion. Exports in the last 12 months rose 8.1 percent, reaching $163.3 billion.
The highest monthly figure was previously registered in 2014 when exports reached $13.3 billion. Thus, the July figures correspond to an increase of $761 million compared to the same month in 2014.
Moreover, Turkey saw records broken every month this year, except June. In addition, a $15 billion-barrage in exports was exceeded for the first time on a monthly basis in March.
Meanwhile, Turkey’s imports in July stood at 20.1 percent, falling 6.4 percent as the rate of exports meeting imports jumped to 70.1 percent from 58.7 percent.
On a sectoral basis, the automotive sector again registered the highest export numbers, leading the way at $2.8 billion, according to the T?M chairman, who said the figure corresponded to an increase of 13.8 percent year-on-year. The automotive sector was followed by ready-made and garment with $1.6 billion and chemicals with $1.5 billion.
According to TurkStat, exports hit an all-time high of $157.6 billion in 2014. They reached nearly $157 billion last year. The country wants to achieve a record $170 billion in exports by the end of this year.
In terms of markets, Turkey exported to 223 destinations in the world in July with Gülle noting Turkey increased exports to 170 of them. Again, Germany led the way, followed by the U.K., the U.S., Italy and Iraq.
Gülle added that increases in exports to countries such as Oman were up fourfold. Among others, exports to Libya increased threefold, while exports to Columbia, South Korea and India saw a two-and-a-half fold increase in July.
The European Union was again leader among country groups. Exports to the bloc were up 15 percent, reaching $6.9 billion in June, the T?M chairman said, adding that the share of the bloc in total exports stood at 48.7 percent.
He added an increase of 42.6 percent increase in exports to Africa where President Recep Tayyip Erdo?an paid an official visit on June 25-28. Exports to the continent reached $1.2 billion in July.
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With rains playing truant in parts of Gujarat, the State braces itself for a lacklustre kharif season, mainly in North and East-Central Gujarat and the Kutch region.
Overall sowing in the State has declined by about 12 per cent as on July 31 compared to last year. While the State has received overall rainfall of 450 mm — 54 per cent of the normal 831 mm — the districts of Kutch and North Gujarat have received rainfall in the range of 11-45 per cent.
The IMD has predicted no major rain activity for the next five days with only light to moderate rains at isolated places in parts of the State.
Even as the kharif sowing window closes by the end of July, the sowing in Kutch district stood at 1,02,000 hectares, which is 74 per cent lower from the same period last year.
Similarly, the sowing has taken a beating in the districts of North Gujarat, with Patan registering a decline of 14 per cent, Mehsana: 22 per cent, Banaskantha: 10 per cent, Ahmedabad: 45 per cent and Surendranagar: 19 per cent.
These districts have traditionally been growing cotton, groundnut, paddy, castor and millets, besides guar and vegetables. As per State Agriculture Department data, overall sowing for key kharif crops groundnut and cotton has fallen by 12 per cent and 3 per cent, respectively. However, farmer sources revealed that the sowing would be much lesser than the government data due to flood situations in Saurashtra earlier in July.
Notably, agriculture officers deployed at the district level revealed that groundnut and cotton farmers, whose farms were inundated in flood waters, have lost the kharif sowing time and they may not go for resowing of the same crop. Hence, they will now turn to guar, castor or pulses. This year, castor acreage stood at only 36,881 hectares, which is about 25 per cent of what was seen around the same time last year.
North Gujarat has been the castor heartland but this year the coverage has been dull at 15,200 hectares (48,500 ha).
In Saurashtra, groundnut has been sown on 11,76,600 ha (13,15,600 ha).
Cotton sowing, however, has maintained its pace with 25,54,311 ha (26,35,700 ha). Saurashtra is the largest cotton growing region with 18,39,500 ha under the fibre crop.
Tirupur Exporters’ Association (TEA), the largest knitwear/readymade garments cluster in India, has appealed to the Tamil Nadu government not to ban polybags supplied to garment units as the decision may hit the exporters’ business in a big way.
Tirupur Exporters’ Association (TEA), the largest knitwear/readymade garments cluster in India, has appealed to the Tamil Nadu government not to ban polybags supplied to garment units as the decision may hit the exporters’ business in a big way. The state government has, on June 25, issued an order banning the ‘use and throwaway plastics’ from January 1, 2019.
While welcoming the state government’s decision to ban usage of plastics from January next year, the association noted that in the banned plastic items’ list, the polybag used for packing of the garments to the exports as well as in the domestic markets has also been included. This would cause a big impact on the garment manufacturing units.
In his appeal to the chief minister of Tamil Nadu, TEA president Raja M Shanmugham said the point of contention is that the garment industry would totally come to a standstill as they don’t have any other alternative for packing of the garments. Moreover, there will also be a cascading effect on downstream activities of garment sector.
According to him, in the garment sector, the polybag is used for packing of each and every garment and these polybags are recycled. More importantly, as there are no environmental issues in the usage of polybag, the environment conscious countries are also insisting to use polybags for packing garments.
Referring an importers specification, Shanmugham said that one of the overseas importers has given a polybag specification mentioning that individual garment polybag shrouding should be made from minimum 20 micron (80 gauge) LDPE (low-density polyethylene) and master (set) or ‘blister’ polybag shrouding should be made from minimum 25 micron (100 gauge) LDPE.
Cotton textile exporters on Tuesday urged the Goods and Services Tax (GST) Council to allow accumulated “Input Tax Credit” (ITC) on fabrics available with weavers as on July 31 for adjusting GST payment on outward supplies – both domestic and export.
Although the GST Council, on July 26, recommended to allow refund of unutilised ITC to taxpayers in the textiles sector, the notification had, however, also stated that the accumulated credit lying unutilised as on July 31, 2018 will lapse
This will lead to serious problems for the textiles sector as the costs will go up on the available stocks as on July 31, 2018,” Cotton Textiles Export Promotion Council (TEXPROCIL) Chairman Ujwal Lahoti said in a statement.
According to Lahoti most of the dyes and chemicals, packing materials, fibre and yarn used by the textiles sector attract 12 per cent to 18 per cent GST, whereas the rate on fabrics is only 5 per cent leading to accumulated ITC on account of inverted duty structure. The “Section 54” of the CGST Act allows “refund of unutilized Input Tax Credit shall be allowed where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies,” the statement said. While the government’s intention is to bring down the cost of products by providing the refund of accumulated ITC, it appears the government took the decision to make accumulated credits till July 31 null and void due to some technical reasons, Lahoti said. “Fabric manufacturers have paid the GST on all their inward supplies – both goods and services and have legitimately taken the Input Tax Credit and, therefore, these Input Tax Credits should not be denied on fabrics by making them null and void,” he added.
The recent reduction in GST (Goods and Services Tax) rates has been hailed by analysts as being positive for markets and for sectors whose tax rates have been reduced. However, a closer inspection of facts indicates that ground realities may not turn out to be as rosy as the street would hope for from the GST cut.
“The GST rationalisation is being viewed by markets as a positive surprise,” said Jagannadham Thunuguntla, senior vice-president and head of research (wealth), Centrum Broking.
“As the tax rates on more than 100 products have been reduced, (equity) markets were positive of the news,” explained V K Vijayakumar, chief investment strategist at Geojit Financial Services, on why markets viewed the tax cuts in a positive light.
The GST Council, in their 28th meeting on July 21, 2018 had made changes to the tax framework, pruning tax rates, easing the compliance rates for Small and Medium Enterprises and providing input credit refund to the textile sector.
After the recent GST rationalisation, only 35 goods are in the highest tax bracket of 28% GST. When GST was implemented on July 1, 2017, there were 226 goods in the 28% category, which means about 191 goods have seen reduction in the GST rate, which is a huge relief for consumers.
Sectors that will benefit from GST cut
There are some specific sectors that will benefit from the GST rate reduction. Consumer sector (paints and varnish), light electrical (refrigerators, freezers, vacuum cleaners, and TV upto 68 cms), auto, fertilizers, sugar, textiles and footwear and hotels. “Companies in these sectors saw a positive reaction in their stock prices,” said Hemang Jani, head – advisory, Sharekhan by BNP Paribas, about the street’s specific reaction to the sectors benefiting from this move.
Sectors that will not benefit from GST cut
Equally, too, there are sectors that will not benefit from the move. Air conditioners, digital cameras, dish washing machines and TVs above 68 cms will not benefit from the tax rate reduction.
Concerns from GST reduction
In fact, if one were to dig just a little deeper, there are several points of concern from the GST reduction. Both from the economic, as well as, sectoral point of view.
The recent move could result in a revenue loss of Rs 10,000 – 15,000 crore (to the exchequer), said analysts.
“The fall in tax revenues due to the tax cuts, is an area of concern,” said Vijayakumar.
“Most companies would be passing on the GST reduction (that is, the reduction in taxes to consumers,” said Jani, “Thus where would be the improvement in profit margins profits,” he asks.
Even if the beneficiary companies pass on the tax cuts to consumers in the form of reduced prices, this may not necessarily be a good thing. “The higher demand (due to reduced rates) can build inflationary pressures and with the risk of a higher fiscal deficit, can push up interest rates in the economy quicker than expected,” said Suman Chowdhury, President-ratings at Acuité Ratings and Research.
Such macroeconomic headwinds need to be observed carefully as they can impact the profitability of mid- and small-caps over the next few quarters despite the strong buoyancy in demand. In fact, besides macro economic woes from India, the beneficiary companies will have other concerns that may affect any paybacks from the GST cuts.
Take textiles for example. The industry has gone on record that they will reduce prices by 5% from August. “But we have to factor in competition. The (textile) industry in Vietnam and Bangladesh are doing better than their counterparts in India,” said Vijayakumar. China is slowly ceding space due to higher costs caused by rising wages. Rupee depreciation is beneficial to textile exporters. But these factors will take a long time to play out.
Besides, most of the beneficiary sectors are in the mid- and small-cap sectors, where traditionally variables like crude oil and other input prices are major challenges.
“The average price of crude, this year, is higher than it was last year,” said Jani. Also, though some commodity input prices like palm oil and copra have corrected it’s still early days to factor in their impact.
According to Dhananjay Sinha, head of research, economist & strageist, Emkay Global Financial Services, there are several economic hurdles that may yet affect these companies. These hurdles include, hardening interest rates, higher inflation, and eventually an increase in taxes. “The concern is that some of these negative symptoms are already visible,” he said.
So what are the takeaways from the perspective of the equity markets vis-à-vis the GST reduction? Tax revenues, time and some global factors are the key.
“Markets will be watching the GST collection figures for the coming three to four, till the festive time, quite closely to assess the real impact of GST rationalisation,” said Thunuguntla. The equity markets are tracking whether the average GST collection would cross Rs 1 lakh crore per month, a key trigger.
“Overall, markets can still remain volatile, given global developments of trade conflicts and narrowing excess liquidity and tightening domestic liquidity, which have collectively caused meltdown in the broader market,” said Sinha.
The Lagu Udyog Bharati, which is present in 346 districts in the country representing the micro, small and medium-scale enterprises (MSMEs), has urged the government to fix the turnover criteria at Rs. 50 lakh to define micro units.
G. Krithiha, secretary of the Lagu Udyog Bharati, Coimbatore, has said in a press release that according to the new definition by the government, businesses with revenue of Rs. 5 crore will be called micro enterprises, those with sales between Rs. 5 crore and Rs. 75 crore will be identified as small-scale, and units with revenue between Rs. 75 crore and Rs. 250 crore will be medium-sized companies.
Under the new definition, there is no distinction between manufacturing and trading units. Further, by fixing the revenue at Rs. 5 crore for micro units, several industries with less than Rs. 5 crore revenue might not be able to register at all. The turnover of a company keeps changing every year. A firm might do Rs. 4 crore turnover in the first year and Rs. 7 crore the next year. The classification will have to be changed then and this will lead to confusions.
Globally, MSMEs are defined based on turnover and employment and it is 12 years since the previous definition came into force. So, the Lagu Udyog Bharati welcomes the efforts by the government to change the definition. But, it should reduce the minimum revenue for each category, she said.
The think-tank on e-commerce policy, in its meeting on Monday, recommended allowing the micro, small and medium enterprises (MSMEs) to follow inventory-based models for selling locally produced goods through an online platform.
Several working groups were made by the Commerce Ministry to make recommend representations to a task-force on e-commerce policy which further made recommendations to the think-tank.
The second meeting of the think-tank which has representation from industry association and e-commerce companies, was held in the national capital. The think tank, set up by the Commerce Department, includes companies like Ola, Snapdeal, Makemytrip, Urban Clap and Justdial and industry bodies like FICCI, FISME, CUTS, CAIT etc. It was headed by Commerce Minister Suresh Prabhu.
The draft presented in the meeting will be further fine-tuned before it is sent for inter-ministerial consultations.
The think-tank recommended that MSMEs following inventory based models may also be allowed up to 49% foreign investment.
Currently, e-commerce platforms are allowed only to follow marketplace model where 100% FDI is allowed. However, the government has so far not permitted any FDI in inventory-based models.
Presently, the MSMEs with revenue of less than Rs 20 lakh a year are not subject to GST if they sale offline. However, they have to pay GST if they sell goods on online platforms.
In the meeting it was suggested that the GST procedures for e-commerce should be simplified by allowing centralized registration instead of local registration.
There was recommendation that relevant GST provisions should be modified in order to create a level-playing field between online and offline delivery of goods and services for the purpose of GST.
Meanwhile, Commerce Secretary-Designate Anup Wadhawan said “The task force has given its recommendations. The government will continue to hold discussions based on it.”
Wadhawan added that the draft policy on e-commerce would be finalised soon. “We don’t want to continue with the vacuum in the e-commerce policy space.”
He added that the draft e-commerce policy will be in keeping with the recommendations of the Justice Srikrishna Committee report on data privacy. Wadhawan will take over as Commerce Secretary on August 1.
The draft personal data protection Bill 2018, submitted by the Justice B.N. Srikrishna-headed expert panel on Friday proposed that critical personal data of Indian citizens be processed in centres located within the country.
Addressing a press conference after the meeting, Wadhawan said, “We will come up with a policy that will promote the free flow of business as well as address security and privacy concerns. The policy will be in line with the Srikrishna Committee recommendations.”
In the meeting, the members recommended a national regulator for e-commerce to regulate the e-commerce sector, including the alleged abuse of FDI rules through hefty discounts by e-tailers like Amazon and Flipkart, among others.
Foreign e-commerce firms operating in India could even be asked to store consumer data locally within two years.
As per suggestions of the working groups, a separate wing in the Directorate of Enforcement will be set up to handle grievances related to implementation of FDI rules.
While the extant FDI policy bars e-tailers from giving discounts themselves, the traders have been raising issues of these e-commerce players of flouting the rules.
The working groups on e-commerce sought to make this restriction even more explicit.
It suggested restriction be imposed on e-commerce marketplaces to not directly or indirectly influence the price of sale of goods and services and that this curb will be extended to group companies of the e-commerce marketplace.
The working groups have suggested that bulk purchase of branded goods such as electronic products (especially mobile phones), white goods and branded fashion products by related-party sellers which lead to price distortions in a market place would be prohibited.
Another suggestion mandates that home-grown card network RuPay — owned by 10 local and foreign banks — be included as a payment option for all online transactions. The move will enable RuPay to compete with global payment firms like Visa and MasterCard.
For the draft e-commerce policy, the task force has strongly recommended data localization, it has suggested a two-year sunset period for the industry to adjust before localization rules becomes mandatory. It has also suggested direct and indirect tax incentives as well as according infrastructure status to data centres to encourage domestic data storage.
Meet Smitha Srinath who propagates saris in traditional weaves and designs
Smitha Srinath always had a passion for handloom saris. “I was initiated into textiles by my parents, who loved handlooms. My mother and grandmother would always buy such saris and have discussions about the style it was weaved in or designed. So, subconsciously, I inculcated a love for handlooms and also learnt about Korvais, Madurai Sungadis and so on,” explains Smitha.
Soon, she started receiving her own collection of Kanjeevaram or pochampallis. “I have an eye for design and colour,” adds the lady, who started curating handloom saris and had her first trunk sale nine years ago. She then started Maya, which sells only handloom saris in cottons and silks.
“My first sale was with just a few saris. Later, as it grew in numbers, I started dabbling in silks and discovered that some of the designs, weaves and colour combinations were dying. That is when I started travelling to meet weavers in the South, working with them and reviving some of the traditional combinations and weaves,” adds Smitha.
Showing us a silk sari, she says, “This one has a Ganga-Jamuna border. It comes with a double-sided pallu. Hence, the sari can be worn on both sides. We have revived these saris.”
Then she shows us a dark blue sari saying, “It is called MS-Blue (dedicated to MS Subbulakshmi). It has a Korvai border in pure zari and has half diamond designs.”
In a time of modern designs and colours, bringing out saris in traditional weaves and colours came with their sets of challenges. “Initially, when people came to Maya, they would ask for contemporary saris. I would be shocked as all I had were old designs in ancient colours and nothing modern. Now, they know what they get from Maya,” smiles Smitha, who adds that she is seeing a revival in handlooms as many women aged 20 years and above pick up such saris.
She works with weavers in Arni, Rasipuram and Kanchipuram to name a few. “I visit them often and we work together to bring out saris in cottons, silk cottons and silks. “The trend in colours too has changed to bright yellows, pinks and oranges. So, when I ask the weavers for a midnight blue or a snuff colour, they look at me in disbelief saying that such colours have long been buried. Persuade them a bit and they are game for it.”
Smitha studies the history of handlooms and updates herself about our past heritage.
“We have a rich history in textiles and handlooms. People feel that they are expensive. But I feel that if the demand grows, so will the production and that will surely bring down the pricing.”
To propagate handlooms, Smitha organises various exhibitions. Her next will be at Raintree on August 3 and 4. The cottons start at ?600.
To shop for her collection online you can log on to weavemaya.com and Smitha can be contacted on 9845404242.
Vietnam’s garment-textile export turnover is expected to hit 18.5 billion USD in the second half of 2018, bringing the year’s export value to 35 billion USD, 1 billion USD higher than the target set for the year, heard a press conference in Hanoi on July 30.
According to CEO of the Vietnam National Textile and Garment Group (Vinatex) Cao Huy Hieu, enterprises need to build production and business strategies, focusing on using technologies in production, calling for investment and improving the quality of labourers.
Garment firms were also advised to increase investment for design, and fostering original design manufacturing to increase added value for their products. They should also make great efforts to increase labour productivity, Hieu added. To reach double-digit growth in the year, Vietnamese garment-textile firms should adapt to the market situation in tandem with expanding sales domestically and diversifying products, he stressed.
The country’s garment-textile export turnover hit 16.5 billion USD in the first six months of 2018, up 16.49 percent compared to the same period last year. Notably, garment items contributed 12.86 billion USD to the total, up 15.27 percent year-on-year. Meanwhile, the revenue from fabric overseas shipments reached 787 million USD, a yearly rise of 31.83 percent.
Strong export growth was reported in most traditional markets for Vietnam’s textiles, including the US, the EU, the Republic of Korea (RoK), China, ASEAN and member nations of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
Items with good growth in the period were fabrics, T-shirts, jackets and dresses.
Vietnam is among the world’s five biggest garment-textile exporters and producers. Experts said Vietnam has many opportunities to expand in the field thanks to free trade agreements. The signing of the European Union – Vietnam Free Trade Agreement in 2018 is hoped to help Vietnam’s textile and garment industry make deeper inroads into this market. In 2017, the garment-textile sector raked in 31.2 billion USD from exports, a year-on-year rise of 10.23 percent.-
Ten major Chinese viscose producers which together make up an estimated 50 per cent of the world’s supply have released a new joint 3-year roadmap for the sustainable development of the viscose manufacturing industry in China.
In partnership with two Chinese textile trade associations, the roadmap requires its members to adopt a new framework to help clean up the sector through the adoption of industry best practise and alignment with international manufacturing standards such as the ZDHC wastewater discharge guidelines, or the completion of a Higg Index FEM 3.0 self-assessment. Other required standards include being certified to the STeP by Oeko-Tex standard at level 1 or above. The new roadmap stipulates that all viscose cellulosic raw materials should be certified to either FSC or PEFC traceability standards as well as the local environmental standard BG/T 14463 for viscose staple fibre production.
