Cotlook A Index - Cents/lb (Change from previous day)

15-01-2019 82.45 (+0.30)

15-01-2018 92.35

16-01-2017 81.60

New York Cotton Futures (Cents/lb) As on 17.01.2019 (Change from

previous day)

Mar 2019 72.29 (+0.93)

May 2019 74.55 (+0.83)

July 2019 75.92 (+0.21)

17th January

2019

RBI Governor to meet industry chambers on Thursday

Coffee-table book India Series: The Textile Story unveiled

Ministry of Skill Development and Entrepreneurship

awards 33 young entrepreneurs

Special zones approved to move textile units outside Surat

Industrial parks in Ethiopia to generate $30 billion by 2025

Cotton and Yarn Futures

ZCE - Daily Data (Change from previous day)

MCX (Change from previous day)

Jan 2019 20900 (+160)

Cotton 15755 (+255) Feb 2019 21160 (+150)

Yarn 24745 (0) Mar 2019 21460 (+210)

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2 CITI-NEWS LETTER

-------------------------------------------------------------------------------------- RBI Governor to meet industry chambers on Thursday

Coffee-table book India Series: The Textile Story unveiled

Vibrant Gujarat: PM Narendra Modi to inaugurate India’s biggest trade

show in home state Gujarat

Dull exports growth due to global, domestic challenges: FIEO

Ministry of Skill Development and Entrepreneurship awards 33 young

entrepreneurs

Why India is losing out to neighboring Bangladesh in textile exports

Special zones approved to move textile units outside Surat

Export uncertainty

Govt eases procedure for startups to seek tax exemption on investments

from angel funds

1 step forward, 2 steps back. Is GST going the VAT way?

Don’t dilute e-commerce FDI rules, traders’ body tells government

RBI eases ECB norms, lifts sector-wise limits

------------------------------------------------------------------------------------------------ Hundreds of Bangladesh garment workers sacked

China’s lunar probe sees first cotton seed sprout on Moon

Industrial parks in Ethiopia to generate $30 billion by 2025

Pakistan: Govt asked to abolish duty withdrawal on cotton import

Turkmenistan eyes to supply carpets to international markets

--------------------------------------------------------------------------------------

NATIONAL

---------------------

GLOBAL

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3 CITI-NEWS LETTER

NATIONAL:

RBI Governor to meet industry chambers on Thursday

(Source: Economic Times, January 16, 2019)

Reserve Bank of India (RBI) Governor Shaktikanta Das will meet industry chambers on

Thursday to understand their issues and concerns.

After his taking over as 25th Governor of the RBI last month, he has been holding

consultations with various stakeholders including banks, non-banking financial

companies and micro, small and medium enterprises.

"Will meet the apex chambers/associations of industry and commerce tomorrow (17th

January)," Das said in a tweet.

The meeting comes ahead of the sixth bi-monthly monetary policy statement for 2018-19

scheduled to be announced on February 7.

Industry has been pitching for the rate cut amid falling inflation and factory output.

Continued decline in food prices pulled down retail inflation to an 18-month low of 2.19

per cent in December 2018. Another set of official data showed that the wholesale

inflation also eased to an eight-month low of 3.80 per cent in December on softening fuel

and food prices.

The inflation based on the Consumer Price Index was 2.33 per cent in November and 5.21

per cent in December 2017.

The RBI, which mainly factors in retail inflation, has been tasked by the government to

maintain the inflation near 4 per cent.

The factory output based on movement in the Index of Industrial Production (IIP)

slumped to a 17-month low of 0.5 per cent in November on account of contraction in the

manufacturing sector, particularly consumer and capital goods.

Home

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4 CITI-NEWS LETTER

Coffee-table book India Series: The Textile Story unveiled

(Source: Millenium Post, January 16, 2019)

The book was unveiled in New Delhi by Union Minister Smriti Z Irani

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5 CITI-NEWS LETTER

Trendsetter Marketing Pvt. Ltd., a publishing house pioneering the production of coffee-

table books, has unveiled its new publication, India Series: The Textile Story. This new

coffee-table book provides an elaborate glimpse into India's vibrant textile industry,

with particular emphasis on its present-day relevance in securing livelihoods and

generating revenue for the national exchequer. India's textiles, handicrafts and

handlooms form an important industry vertical that is not only the backbone of India's

indigenous livelihoods but also garners deep appreciation from global markets.

Traditional Indian designs, prints, materials, crafts, among others, have built a unique

niche. Over time, this indigenous and deeply fragmented industry, spread across the

country's length and breadth, has been consolidated under the Ministry of Textiles and

its several ancillary organisations. The journey of textiles from being a traditional

practice to becoming a synchronised industry has been facilitated by the Ministry, its

various organisations and their timely implementation of policies.

This book has been published in coordination with some leading industrial chambers

functioning in the ambit of Indian textiles – they include, Confederation of Indian

Textile Industry (CITI), Export Promotion Council for Handicrafts (EPCH), Apparel

Export Promotion Council (AEPC), The Clothing Manufacturers Association of India

(CMAI) and Welspun.

The book, India Series: The Textile Story, was unveiled by Union Minister for Textiles,

Smriti Zubin Irani, at Udyog Bhawan, New Delhi. The unveiling was attended by

eminent dignitaries of various textile industry chambers, including – O P Prahladka,

Chairman, EPCH and Rakesh Kumar, Executive Director, EPCH; Padma Shri Dr A

Sakhtivel, Vice Chairman, AEPC and Gautam Nair, Member, Executive Committee,

AEPC; D L Sharma, Vice Chairman, CITI and Dr S Sunanda, Secretary General, CITI;

and Rahul Mehta, President, CMAI. Following the unveiling, a round-table conference

was organised at Press Club of India, New Delhi, where dignitaries spoke of India's

burgeoning textile industry and its implications on the future of the national economy.

Padma Shri Dr A Sakhtivel, emphatically mentioned that "there is no better time to be in

India than now" as "the Indian textiles industry has evolved!" O P Prahladka of EPCH

expressed deep gratitude while appreciating the Ministry of Textiles for implementing

timely policy changes and providing adequate support to overcome challenges and steer

towards greater success. Appreciating the publication, Rakesh Kumar, EPCH, remarked

that "the production is timely as India is waiting to take rapid strides in global textile

markets and we now have a book that has documented our trajectory for reference to the

outside world". A humble representation of a vast industry that sustains close to 100

million Indian lives, this book encapsulates textiles as the pinnacle of India's indigenity

and prized diversity.

Home

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6 CITI-NEWS LETTER

Vibrant Gujarat: PM Narendra Modi to inaugurate India’s biggest trade

show in home state Gujarat

(Source: Financial Express, January 16, 2019)

The Government of Gujarat will be focussing on Exports, Trade and Investment Potential

at Vibrant Gujarat 2019. The VGGTS will house some of the major pavilions such as

Automobiles, Agro and Food Processing, Oil and Gas, E Mobility, Chemicals and

Petrochemicals, Banking and Finance, and Pharmaceuticals.

India’s biggest trade fest Vibrant Gujarat Global Trade Show with 2 lakh square meter of

Exhibition Area and Stalls for Vibrant Gujarat 2019 is all set to begin.

In what has become the highlight of the Vibrant Gujarat Global Summits held biennially,

Vibrant Gujarat Global Trade Show 2019 (VGGTS) will begin from 17 January and will

last till 22 January 2019 in Gandhinagar.

The exhibition will be inaugurated by the Prime Minister on the first day of the show’s

commencement. It must be noted that till the 20th of January, the exhibition is reserved

mostly for delegates taking part in Buyer-Seller Meets and Reverse Buyer-Seller Meets

along with media and academia. Those interested can visit the exhibition from the second

half the 20th of January.

The main goal of the exhibition aims to get multi-sector B2B engagements, wherein there

will be, inter alia, Buyer – Seller Meets, Reverse Buyer – Seller Meets, Vendor

Developments Programmes, Business Networking, Technology Assessment and Strategic

Partnerships under one roof. The estimates say that over 1500 overseas and domestic

buyers will be visiting the VGGTS 2019. Moreover, the Vendor Development Programme

is also being organized to nurture “stronger synergies” between MSME and Large Scale

Enterprises including PSUs.

The business through Buyer Seller Meet and Reverse Buyer Seller Meet is expected to

reach nearly Rs. 2000 crore. Nearly 1.5 million visitors and about 3000 International

Delegates from over 100 countries are expected to visit the Exhibition. Attractions like a

replica of Statue of Unity, Bullet Train simulator, Farm-to-Fabric Pavilion and Fashion

Show with a focus on ‘Make in India’ and Khadi await the visitors at the Trade Show.

Gujarat Chambers of Commerce & Industry (GCCI) is also supporting the fashion show

which will be held at picturesque Sabarmati Riverfront on the evening of 19th January.

Other high points for the visitors include a tableau of Innovation and Technology, in

particular Robotics and Laser Cutting. Most countries will participate in this and also

Service Sectors including Medicare and Health, Audio Visual Services, ITES and

Communication, are expected to participate.

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7 CITI-NEWS LETTER

So far, VGGTS 2019 will have 15 partner countries and countries such as France, South

Korea, Canada, Poland, Japan, Thailand, The Netherlands, Sweden, South Africa, UAE,

Uzbekistan, Norway, Czech Republic, Morocco and Australia will have their own

pavilions. Moreover, an elaborate Africa Pavilion will have more than 25 African countries

which will be representing the continent of Africa including two of the partner countries

– South Africa and Morocco.

Visitors can also see pavilions exhibiting flagship initiatives of Government of India that

include Ayushman Bharat, Digital India, Start-up India, Make In India, Sagarmala, and

Indradhanush at the Trade Show.

The Government of Gujarat will be focussing on Exports, Trade and Investment Potential

at Vibrant Gujarat 2019. The VGGTS will house some of the major pavilions such as

Automobiles, Agro and Food Processing, Oil and Gas, E Mobility, Chemicals and

Petrochemicals, Banking and Finance, and Pharmaceuticals.

Sectors such as Bio Technology, Ceramics, Ports, Transport and Travel, Tourism and

Hospitality, Logistics, Power and Renewable, Start-ups and Innovation, Textiles, Urban

Infrastructure, Water Treatment and Environment, Education, Skill Development and

Engineering are also included.

The State Government has also established an Exhibition Committee to look after the

preparations for the VGGTS 2019, which is being coordinated by S.J Haider, Principal

Secretary, Tourism.

Home

Dull exports growth due to global, domestic challenges: FIEO

(Source: SME Times, January 16, 2019)

Exporters' body FIEO on Tuesday said slow growth in exports in December was due to

uncertain global cues and domestic challenges.

Responding to the December exports data, FIEO President Ganesh Kumar Gupta said

that the data yet again have shown a marginal growth due to uncertain global cues and

challenges on the domestic front.

China’s exports contracted in December 2018 highlighting fragile global conditions, he

added.

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8 CITI-NEWS LETTER

However exports during the month was close to USD 28 billion with a growth of just 0.34

per cent, even when the weakening global economic outlook are showing no signs of

respite, said the FIEO Chief.

But during the month, the sectors which were showing high growth in the previous

months are now witnessing nominal growth or marginal growth such as the Petroleum

sector, Organic & Inorganic Chemicals, Plastic & Linoleum, Electronic goods and RMG of

all textiles.

All major labour-intensive sectors of exports like Gems & Jewellery, Engineering, Leather

& Leather products, Man-made yarns/fabs/made-ups, Handloom products, commodities

including most agri products are now in negative territory, viewed Gupta.

17 out of 30 major product groups were negative territory during December, 2018.

However on the imports front, the growth in December, 2018 was on negative side with -

2.44 percent mainly due to reduction in gold and pearls, precious & semi- precious stones

import.

Spin off effect due to global trade war has also impacted the country's trade impacting

both imports and exports, said Gupta.

The FIEO Chief once again reiterated his demand for urgent and immediate support

including augmenting the flow of credit and better fiscal support.

He exuded confidence that despite current growth trends the exporters will manage to do

well ending the fiscal with merchandise exports of USD 340-350 billion with the timely

and much needed support of the government.

Home

Ministry of Skill Development and Entrepreneurship awards 33 young

entrepreneurs

(Source: Yourstory, January 07, 2019)

The winners were spread across 43 categories, including healthcare,

hospitality, engineering systems, pharma, and bio.

The Ministry of Skill Development and Entrepreneurship (MSDE) has awarded 30

outstanding young entrepreneurs and three entrepreneurship ecosystem builders at the

end of its third edition of the National Entrepreneurship Awards (NEA). Each winner

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9 CITI-NEWS LETTER

received a cash prize of Rs 5 lakh, while each ecosystem-enabler bagged a cash prize of Rs

10 lakh.

The winners included 23-year old differently-abled Roshan Kahtoon, who has set up her

own bangle manufacturing unit; 33-year old Shruthi Reddy Sethi, who offers end-to-end

funeral management services; and 35-year old Tana Sumpaaged from Arunachal Pradesh,

who is running piggery farms and fisheries, and also helping local people, women,

housewives and unemployed youth with quality training and livelihood support.

YourStory’s 2018 Tech 30 startup PregBuddy was also one of the 33 winners. Bengaluru-

based PregBuddy provides a platform to the expectant mothers to get access to doctors,

hospitals, and also for sharing experiences with other expectant mothers through

vernacular support communities.

The winners, who received awards from Suresh Prabhu, Minister of Commerce & Industry

and Civil Aviation, were spread across 43 categories, including healthcare, hospitality,

engineering systems, pharma, bio, among others. All the entrepreneurs are first-

generation entrepreneurs and below the age of 40 years.

While congratulating all the 33 winners, Suresh Prabhu said the definition of

entrepreneurship is constantly evolving and with the change in fixed tenure jobs, the

nature of working environment is changing - more people are creating their job space

versus joining a certain industry.

He further added that the change in the market environment is no more a challenge, but

has become an opportunity for many. "The Government of India’s initiatives like Mudra

Yojana, Start Up India, the GeM portal, etc. are giving the best and most conducive

environment to our young entrepreneurs," the minister said.

The National Entrepreneurship Awards (NEA) were instituted by MSDE in 2016 to

encourage a culture of entrepreneurship across the country.

Minister of State, MSDE, Anantkumar Hegde said, " No entrepreneur is different from

another as each has to invest the same amount of passion, grit, and commitment in their

venture.

National Entrepreneurship Awards is a recognition of immense talent our youth has. I

would urge our youth to work hard, take risks, and write their own destiny. This is just

the beginning. There are immense opportunities in the country and the sky is the limit."

Home

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10 CITI-NEWS LETTER

Why India is losing out to neighboring Bangladesh in textile exports

(Source: T E Narasimhan, Business Standard, January 17, 2019)

The govt's serial failures to negotiate free trade agreements, and the industry's

dependence on duty drawbacks at the expense of innovation are causing the textile

industry to lose out to Bangladesh

India’s garment-making success has started to fray at the seams. Once a leading supplier

of apparel to western clothing lines, its exports have stagnated and remained at $17 billion

for the past three years. It is not that the demand has shrunk.

Instead buyers have moved to neighbouring Bangladesh, which is riding on free trade

agreements (FTAs) and lower wages to edge out competitors in international market.

During the time India saw a slide in exports, Bangladesh nearly doubled its shipments. In

the eight months till November in the current fiscal, India's exports .......

Home

Special zones approved to move textile units outside Surat

(Source: Nyooz, January 17, 2019)

This will encourage the mill owners to shift their units out of the city and enjoy the

benefits provided by the state government.” The textile mill owners are upbeat as the FSI

for industrial units in city areas is only 1.2, whereas they will be getting a total of 2.7 FSI

in the special nod areas located under the development plan of the Suda.Keeping in mind

the future development, provisions has been made to construct wider roads. In these

areas, Particulate Matter (PM10) levels is exceedingly higher than the national annual

average at 184 per micrograms per cubic meter of air (UG/M3) per annum.President of

SGTPA, Jitu Vakharia told TOI, “We are elated that CM Vijay Rupani has accepted our

proposal for shifting the textile mills out of the city and providing us with specialised

industrial zone with 2.7 FSI. To check the reservations suggested in the Suda DP 2035, a

local level consultative committee has been formed under the chairmanship of Suda

president and municipal commissioner, M Thennarasan.The SGTPA has urged the state

government to allocate 100 hectare land for developing new industrial area to facilitate

the shifting of textile mills located in the walled city, Ashwani Kumar Road, Katargam,

Varachha, Kadodara and Udhana areas.About 65 textile mills are operating in the city’s

residential areas including Khatodara, Udhana, Ashwani Kumar Road, Ved Road,

Bombay Market, Puna Kumbharia etc. Surat: The shifting of polluting textile dyeing and

printing mills outside the city limits could be a reality with the state government

approving specified shifting zones for the industrial units with the addition of few

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11 CITI-NEWS LETTER

provisions in the General Development Control Regulation (GDCR).While approving the

development plan (DP) for the Surat Urban Development Authority (Suda), the Gujarat

government has made special provisions for the shifting of the industrial units located

within the city to the outskirts in a specified shifting zone.The decision has come following

a strong recommendation by the south Gujarat Textile Processors Association (SGTPA)

and the state industries minister, Saurabh Patel for shifting the textile mills to the

outskirts.The textile mill owners wanting to develop their factories in the special nod

areas will get the base floor space index (FSI) of 1.8 free and chargeable 0.9 FSI based on

the jantri (annual land rates) rates.

Home

Export uncertainty

(Source: The Hindu, January 16, 2019)

Predictions of a global slowdown do not augur well for India

The feeble growth in India’s merchandise exports in December (0.34 per cent) should be

seen against the backdrop of the world economy slipping into a slowdown. The signs are

unmistakable: China’s overall December exports fell 4.4 per cent from the same period in

the previous year, the sharpest monthly drop in two years. China’s imports contracted 7.6

per cent in the same month, the biggest fall since July 2016. China’s December trade

surplus with the US fell to just below $30 billion, from $35.5 billion in November. China’s

falling trade surplus is likely to be part of a larger trend of sluggish trade and economic

growth in advanced and emerging economies in 2019. According to the World Bank’s

recently released report Global Economic Prospects, growth among advanced economies

is expected to “drop to 2 per cent this year”, against an estimated 2.2 per cent in 2018,

owing to “slowing external demand, rising borrowing costs and persistent policy

uncertainties”, while emerging economies too, are expected to grow at just 4.2 per cent

(and India at just over 7 per cent). The latter, the report observes, have been impacted by

“substantial financial market pressures” and trade tensions. India’s rise in exports in

2016-17 and 2017-18 coincides with a sharp increase in world growth rates from 2.4 per

cent in 2016 to 3.1 per cent in 2017. While total exports have grown by 13.79 per cent in

April-December this year (goods exports by 10.18 per cent and services exports by 20.18

per cent), it remains to be seen whether this trend continues.

It is notable that the export increase in 2017-18 (about 13 per cent for goods and services

put together) came about in a year when the rupee was largely firm, in the range of 64-65

to the dollar. With import-dependent exports accounting for about 40 per cent of total

exports, the role of a weaker rupee in spurring exports should not be over-estimated. It is

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12 CITI-NEWS LETTER

hard to say whether a weaker rupee in 2018 acted as a major boost to all exports other

than services; this is despite the fact that the rupee depreciated more sharply than

competing currencies. Certain sectors performed well in April-November 2018, such as

chemicals, machinery and transport equipment, while textiles, agriculture, and gems and

jewellery did not. GST-related glitches seem to have impacted sectors such as textiles with

a large intermediary chain, despite the Centre’s efforts to sort these out.

It would seem that global growth is the biggest driver of exports. Even as India seeks to

negotiate trade pacts to its advantage, it should work towards improving its agri-products

exports, at a time when farmers are struggling with deflation. The agri-exports policy,

unveiled last month, has come at the right time. Its focus on doubling farm exports to $60

billion by 2022 by diversifying the basket of products and destinations could lift both the

trade numbers as well as livelihoods of millions.

Home

Govt eases procedure for startups to seek tax exemption on investments from

angel funds

(Source: Live Mint, January 16, 2019)

Various startup founders have recently claimed of receiving notices under Section 56(2)

(viib) of the Income Tax Act from the I-T department to pay taxes on angel funds raised by

them.

The government has eased the procedure for startups to seek income tax exemption on

investments from angel funds as part of efforts to address concerns of budding

entrepreneurs, official sources said.

Various startup founders have recently claimed of receiving notices under Section 56(2)

(viib) of the Income Tax Act from the I-T department to pay taxes on angel funds raised

by them.

“Commerce and Industry Minister Suresh Prabhu has approved a notification

pertaining to this clause to make allowances for angel investors. A formal notification to

this effect would be issued soon by the DIPP,” sources said.

To seek the exemption, a startup will apply, with all the documents, to the department

of industrial policy and promotion (DIPP). The application of the recognised

startup shall be moved by the department to the Central Board of Direct Taxes (CBDT)

with necessary documents.

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13 CITI-NEWS LETTER

“CBDT has been mandated to grant exemption approval to the startup for the purposes

of this clause or they can decline to grant such approval within a period of 45 days from

the date of receipt of application from the DIPP,” they said.

Earlier procedure of applying to an inter ministerial board of certification for approval

under this clause has now been done away with.

“Application procedure has been simplified by making application to CBDT through

DIPP,” they added.

The earlier requirement of startup to submit report from merchant banker specifying the

fair market value of shares has also been removed.

As per the revised procedure, a startup which is recognised by the DIPP would be eligible

to seek exemptions, subject to certain conditions.

Startups will have to provide account details and return of income for last three years.

Similarly, investors would also have to give its net worth details and return of income.

The government has earlier allowed startups to avail full tax concession on investments

up to Rs 10 crore from investors, including angel financiers.

The conditions also include that “investor should have returned income of Rs 50 lakh or

more for the financial year preceding the year of investment; and net worth exceeding Rs

2 crore or the amount of investment made/proposed to be made in the startup, whichever

is higher, as on the last date of the financial year preceding the year of

investment/proposed investment,” they added.

Section 56(2) (viib) of the Income Tax Act provides that the amount raised in excess of a

startup’s fair market value is taxed at 30 per cent as income of the firm from other sources.

Prabhu had taken up the issue up with the finance ministry.

Normally, about 300-400 startups get angel funding every year.

The government launched the Startup India initiative in January 2016 to build a strong

ecosystem for nurturing innovation and entrepreneurship.

Home

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14 CITI-NEWS LETTER

1 step forward, 2 steps back. Is GST going the VAT way?

(Source: Harsha Jethmalani, Live Mint, January 16, 2019)

Tax experts say India has kept finding ways to complicate

things. The Kerala GST cess takes things from bad to worse

By doubling the goods and services tax (GST) eligibility

limit, India’s version of GST has inched closer to the global

format. However, tax experts say India has kept finding ways

to make things complicated, with the recent introduction of cess for Kerala taking things

from bad to worse.

Although for a limited period, the move defeats the purpose of GST, because this

mammoth tax change was introduced so that multiple cesses could be done away with.

“Re-introduction of cess sets a bad precedent. It may be for a noble cause, but instead of

levying cess, the Centre could have funded the cause directly,” said Anita Rastogi, indirect

tax partner at PwC India. The council allowed flood-hit Kerala to levy a calamity cess of

1% on intra-state sales for a maximum period of two years.

A moot question is if this takes us back to the days of VAT, or value added tax, which also

started off with noble intentions before getting muddled. Drawing parallels with earlier

tax regime, Saloni Roy, senior director at Deloitte India, said, “When VAT was introduced

in 2004, its purpose just like GST was to have a unified tax system across the country. But

after a while, states started drifting away. For example, some states like Haryana, Uttar

Pradesh and Gujarat had additional tax on certain items which others didn’t. My concern

with bringing back cess is that, are we going back to where we started from?”

Another important decision taken at the GST Council’s 32nd meeting was the extension

of composition scheme to services providers. Services providers with a turnover

limit of up to ₹50 lakh are now allowed to avail of the composition scheme at a rate of

6%.

While the objective here is to encourage more businesses to come under the GST ambit,

tax experts fear that introduction of a new tax rate makes the law more complex and could

lead to non-compliance. Currently, businesses under the composition scheme are taxed

under various slabs of 1% (manufacturers), 2% (traders) and 5% (restaurants).

“They have extended the composition scheme for service providers, aimed at widening

the tax base, but at a new tax rate of 6%. Anyway, we had three different tax rates for

goods providers who have opted for this scheme and this complicates the law even further.

The more the complex law, more difficult it is to comply. A simple law leads to more

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15 CITI-NEWS LETTER

compliance and increased revenue to the government—this is tried and tested globally in

countries where GST/VAT is practised,” added Rastogi.

At a time when GST revenues are falling behind the required target, there is increasing

worry that the added complexity will act as a deterrent for taxpayers. Thanks to the half-

hearted approach, India’s GST has miles to go before it becomes a good and simple tax.

Home

Don’t dilute e-commerce FDI rules, traders’ body tells government

(Source: The Hindu, January 16, 2019)

To accede to their demand not good for trading community

The Confederation of Indian Traders on Wednesday urged the government not to heed to

the demands by e-commerce companies and agencies from the U.S. to water down or

delay the implementation of the recently-announced foreign direct investment (FDI)

rules in e-commerce.

“As a body that represents seven crore small businesses and 40,000 trade federation, we

strongly oppose any changes,” Praveen Khandelwal, national general secretary of CAIT,

said at a press conference. “To accede to their demand is not good for the trading

community.” This comes against the background of reports of intense lobbying by the e-

commerce companies to ensure that the FDI rules are amended. The rules mandate that

no entity in which an e-commerce company has stake can sell its wares on that e-

commerce company’s portal.

Any vendor who receives 25% or more of its inputs from an e-commerce group company

cannot sell on that e-commerce portal. These rules, which are to be implemented from

February 1, are expected to adversely impact Flipkart and Amazon, who have considerable

stake in vendors operating on their respective platforms.“We want the government to

institute a thorough probe into the business activities of these players in the last 2-3

years,” Mr. Khandelwal added. “They should be strictly penalised if any violation found.”

Mr. Khandelwal said that any move to dilute the rules or push back the implementation

date would be met with stiff resistance from the trading community and also a nationwide

agitation to protest this. The CAIT also called for the implementation of these FDI norms

to apply to domestic players as well in order to ensure a level-playing field and promote

competition.

Home

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16 CITI-NEWS LETTER

RBI eases ECB norms, lifts sector-wise limits

(Source: The Hindu Business Line, January 16, 2019)

Allows $750 m/fiscal under the automatic route; expands list of eligible

borrowers

To further improve the ease of doing business in India, the Reserve Bank of India has

drawn up a new external commercial borrowing (ECB) framework allowing all eligible

borrowers to raise up to $750 million per financial year under the automatic route,

replacing the existing sector-wise limits. The central bank has also expanded the list of

eligible borrowers and recognised lenders.

To curb volatility in the forex market arising out of dollar demand for crude oil purchases,

the framework provides a special dispensation to public sector oil marketing companies.

It allows them to raise ECB, with an overall ceiling of $10 billion, for working capital

purposes with a minimum average maturity period (MAMP) of three years under the

automatic route without mandatory hedging and individual limit requirements. The list

of borrowers has been expanded to include all entities eligible to receive FDI.

Additionally, port trusts, units in SEZs, SIDBI, Exim Bank and registered entities engaged

in microfinance activities can also borrow under this framework.

Maturity period

While the minimum maturity period for the ECB will be three years, the framework allows

manufacturing companies to raise up to $50 million per financial year with a maturity

period of one year. Further, if the ECB is raised from a foreign equity holder and utilised

for working capital, general corporate purposes or repayment of rupee loans, the maturity

period will be five years. This probably has been done to encourage foreign shareholders,

especially in Indian airlines, to support their Indian partners. This could help Jet Airways

deal with its current financial crisis.

As per the policy, call and put option, if any, cannot be exercised prior to the completion

of the minimum average maturity.

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17 CITI-NEWS LETTER

GLOBAL:

Hundreds of Bangladesh garment workers sacked

(Source: Agence- France Presse, January 16, 2019)

Move comes after strikes and clashes

Bangladeshi garment factories have sacked hundreds of workers after more than a week

of strikes and clashes over wages, police and trade unions said on Wednesday.

Protests, which began earlier this month, died down this week after the government

agreed to raise salaries, but many returned to work on Wednesday to discover that they

had been laid off. A top union leader said at least 750 workers at various companies in the

manufacturing hub of Ashulia had found notices hanging on factory gates informing them

of their dismissal. “This is unjust. The owners are doing it to create a climate of fear so

that no one can dare to stage protests or demand fair wages,” the leader said.

‘400 fired’

Police and a senior factory manager gave a lower total of around 400 workers fired for

damaging equipment during the strike — with more than half from one Ashulia plant

called Metro Knitting and Dyeing.

Metro Knitting’s manager Atiqul Islam said that the company has reported nearly 300

workers to police for smashing the factory’s CCTV cameras and computers. “Some 10,000

apparel items made for export also went missing,” he added. So far, 12 arrests have been

made for vandalism during the unrest, local police said.

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China’s lunar probe sees first cotton seed sprout on Moon

(Source: The Hindu, January 16, 2019)

China sent several seeds to Moon in its spacecraft Chang’e-4, and cotton was the only seed

to germinate so far.

A cotton seed carried to the Moon by China’s recent Chang’e-4 probe has sprouted, the

first for any biological matter to grow on the Moon.

Images sent back by the probe showed that a cotton sprout had grown well, though no

other plant was found growing, the Xinhua news agency reported.

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On January 3, China’s robotic spacecraft Chang’e-4 landed on the far side of the moon, a

first in the human history of space exploration.

The 1.3-tonne lander, which made a soft landing on the Moon, carried the seeds of cotton,

oilseed rape, potato and arabidopsis, as well as eggs of the fruit fly and some yeast, to form

a simple mini biosphere, according to a team led by scientists from Chongqing University

in southwest China.

Plants have been grown on the International Space Station before but never on the Moon.

The ability to grow plants on the Moon will be integral for long-term space missions, like

a trip to Mars which would take about two-and-a-half years.

It would mean that astronauts could potentially harvest their own food in space, reducing

the need to come back down to Earth to re-supply, the BBCreported.

The plants are kept in a sealed container on board the Chang’e-4 lander. The crops will

try to form a mini biosphere — an artificial, self-sustaining environment.

The lunar mini biosphere experiment on the lander is designed to test photosynthesis and

respiration — processes in living organisms that result in the production of energy.

The whole experiment is contained within an 18 cm tall, 3 kg canister that was designed

by 28 Chinese universities, the BBC said.

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Industrial parks in Ethiopia to generate $30 billion by 2025

(Source: John Green, The Exchange, January 16, 2019)

Ethiopia has invested in setting up industrial parks to drive economic growth through

industrialisation

Six textile and garment oriented industrial parks that Ethiopia is currently busy setting

up, are expected to generate $30 billion worth of exports by 2025.

The country continues its rigorous quest to build industrial parks, which is part of the

initiative to make the East African nation a manufacturing hub of Africa, and a middle-

income country.

Multinational engineering and construction company China Communications

Construction Company (CCCC) has been involved heavily in the establishment of the

industrial parks, collaborating with the Ethiopian government in its line of infrastructure

development to better the country’s ease of doing business and attract potential investors.

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Antex Group Chinese textile company in Zhejiang province in China was the first firm to

enter the Adama Industrial Park and has already commenced its operations in the

manufacturing sector.

The firm manufactures sportswear, underwear, swimwear as well as fashion wear,

exporting its products to Europe, the United States and Australia.

The company which has investments as well in Vietnam, Spain and the United Kingdom

plans to venture in the hospitality sector and tourism in Ethiopia extending its reach in

the country.

The company was hailed for strengthening the export sector of Ethiopia, having created

over 1,500 employment opportunities for the Ethiopian youth.

Jimma Industrial Park and Adama Industrial Parks are projected to provide over 40,000

employment opportunities collectively, the former inaugurated early December 2018.

Hawassa Industrial park, once fully operational should reap $1 billion in revenue for

Ethiopian government from textile and garment exports.

Ethiopia’s textile and Garment sector export revenue during the Ethiopian Fiscal Year

2016/17 ended with an 89.3 million US dollars earning out of a planned 271 million US

dollars during the Fiscal Year.

Insufficient supply of manufacturing inputs, delay in commissioning of several industries

contributed to the underachievement as highlighted by Assefa Tesfaye, Corporate

Communications Director at Ethiopia Ministry of Industry (MoI).

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Pakistan: Govt asked to abolish duty withdrawal on cotton import

(Source: The News International, January 17, 2019)

Domestic lint and cotton rates are likely to decline considerably following the Economic

Coordination Committee’s withdrawal of tax and duty on the import of cotton.

However, the ECC did not abolish 40 per cent Regulatory Duty on the import of sugar,

said the cotton stakeholders while talking to The News on Wednesday. The unsold stock

of 17.5 million bales (worth more than Rs50 billion) is lying with the ginners besides a

huge stock which is lying with the growers for disposal, said Amanullah Qureshi, former

chairman of PCGA.

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Three stakeholders involved in the cotton trade, including the growers and the ginners,

are experiencing extreme helplessness while the only beneficiaries are the textile millers.

The millers would have to make deals with the ginners at desired rates under the threat

of importing the cotton on comparatively low prices from China, India or Afghanistan,

the ginners observed.

Anxiety has prevailed among the growers and the ginners after the ECC approved the

withdrawal of four per cent customs duty, additional customs duty and five per cent sales

tax on the import of cotton with effect from February 1 till June 30, 2019, to ensure

sufficient supply of cotton to the industry.

Pakistan Cotton Ginners Association chairman Mian Mehmood Ahmed said that the ECC

decision was likely to affect the cotton production in 2019-20, which has a target to

produce 15 million bales due to uncertain, unguaranteed procurement and disposal of

cotton bales. The country has suffered a huge loss of Rs500 billion in the past years due

to less production of cotton, said the financial experts.

Cotton stakeholders observed that under these circumstances, allowing the cotton import

would be tantamount to slaughtering the growers and ginners who heave a sigh of relief

after the cotton prices were increased considerably.

The cotton ginning industry has fiercely opposed the duty-free import of Indian cotton,

saying it will have destructive effects on Pakistan’s economy. PCGA chairman Mian

Mehmood Ahmed said that the ECC had determined winding up cotton trade from the

country and the ECC had become the club of sugar millers.

The withdrawal of import duty/tax is not fair and a biased decision. The ECC is only

protecting the sugar mills because the 40 per cent Regulatory Duty on sugar import had

not been withdrawn, giving an edge to the millers to sell sugar at their desired rates.

They saw no justification of withdrawal of tax/customs duty at the cost of Pakistan’s

farmers, arguing that the import of fibre via land or sea was not in the interest of the

national economy.

They demanded Prime Minister Imran Khan not to notify the ECC decision of allowing

tax/duty-free cotton import. Grower Fiazul Hassan Butha said that cotton harvest had

dropped 30 per cent last year and if appropriate measures were not taken, the situation

could deteriorate further which would affect the local output.

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Turkmenistan eyes to supply carpets to international markets

(Source: Huseyn Hasanov, The Trend, January 16, 2019)

The DOMOTEX 2019 exhibition was recently held in Hanover, Germany, where a

delegation from Turkmenistan’s Ministry of Textile Industry took part, Trend reports

referring to the Turkmen Foreign Ministry.

The organizer of the event, which was attended by about 1,400 organizations from more

than 60 countries, is Deutsche Messe AG, an exhibition and fair company.

A series of meetings with interested companies and representatives of the business

community were held on the margins of the exhibition, where opportunities for

cooperation to supply carpets made in Turkmenistan to international markets were

discussed.

One of the advantages of the Turkmen carpets is their high density, which ranges from

200,000 to 400,000 or more nodes per square meter, making the carpets’ ornaments

clear and expressive.

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