citi-news letter · 2019-02-01 · 2017-18 from the 6.7 per cent estimated earlier, mainly driven...
TRANSCRIPT
Cotlook A Index - Cents/lb (Change from previous day)
30-01-2019 83.55 (+0.20)
29-01-2018 90.90
30-01-2017 84.25
New York Cotton Futures (Cents/lb) As on 01.02.2019 (Change from
previous day)
Mar 2019 74.00 (-0.40)
May 2019 75.58 (+0.99)
July 2019 76.76 (-0.26)
01st February
2019
Diamond and textile sectors pin hopes on budget today
Government revises FY18 GDP growth to 7.2% from
6.7% earlier
GST collections top Rs 1 lakh cr in January
CPI inflation for industrial workers rises to 5.24% in
December
Cotton and Yarn Futures
ZCE - Daily Data (Change from previous day)
MCX (Change from previous day)
Feb 2019 21020 (+30)
Cotton 15965 (-30) Mar 2019 21280 (-20)
Yarn 24745 (0) Apr 2019 21560 (0)
www.citiindia.com
2 CITI-NEWS LETTER
-------------------------------------------------------------------------------------- Diamond and textile sectors pin hopes on budget today
Expectations from Interim Budget 2019: 5 things to know
Government revises FY18 GDP growth to 7.2% from 6.7% earlier
GST collections top Rs 1 lakh cr in January
CPI inflation for industrial workers rises to 5.24% in December
Niti Aayog calls adverse job report a draft, ex-stat head says no,
it’s final
Emulating Chile on start-ups
India has an opportunity to grow amid US-China trade war: BK
Goenka, Welspun Group
Indian Govt to Launch its Own National Artificial Intelligence
Centre in July
Ikea launches textile collection inspired by India
Decks Cleared For Mega Silk Cluster In Mysuru
------------------------------------------------------------------------------------------------ Vietnam's garment export up 6.7 pct in January
Amended FTA with China to be finalised in mid-Feb
Sanctions Squeeze Myanmar's Economy
Power-packed line-up in Munich
Pakistan: Paying lip service to textile industry revival
--------------------------------------------------------------------------------------
NATIONAL
---------------------
GLOBAL
www.citiindia.com
3 CITI-NEWS LETTER
NATIONAL:
Diamond and textile sectors pin hopes on budget today
(Source: Times of India, February 01, 2019)
Diamond and textile sectors in the city are eagerly waiting for packages for them in the
interim Union budget 2019-20 to be presented on Friday.
Gems and Jewellery Export Promotion Council (GJEPC) has sought reduction of import
duty on cut and polished gemstones from 7.5% to its earlier level of 2.5% in the interim
budget. Also, the GJEPC has sought reduction of import duty on gold from 10% to 4% to
allow a level-playing field for Indian gems and jewellery manufacturers to stay in
competition with their counterparts in Italy, China and Thailand.
GJEPC regional chairman Dinesh Navadiya said, “The industry is hoping that the Central
Government will provide some relief to gems and jewellery sector in the interim budget.
We have urged change in income tax regulations to enable foreign mining companies to
sell rough diamonds through special notified zone (SNZ). If this is allowed, then we are
setting up a SNZ in Surat, which will directly cater to Surat market.”
Navadiya added, “We have suggested that the diamond mining companies auctioning
their goods at SNZ be allowed for presumptive taxation to increase the ease of doing
business in India.”
The textile sector on the other hand has demanded a slew of demands relating to Goods
and Services Tax (GST) and import duty reduction on polyester fibres.
Federation of Indian Art Silk Weaving Industry (FIASWI) chairman Bharat Gandhi said,
“The industry has been making continuous representation to central government to allow
utilization of input tax credit (ITC) to power loom sector. Tax to the tune of Rs600 crore
is lying unutilized in the accounts of the weavers.”
Gandhi said, “The man-made fabric industry in India, especially in Surat, is facing a big
challenge from import of cheap silk and polyester fabric from China, Vietnam,
Bangladesh. There is a demand to exclude Vietnam and Bangladesh from the most
favoured nation (MFN) status and impose 10% import duty on their goods.”
Home
www.citiindia.com
4 CITI-NEWS LETTER
Expectations from Interim Budget 2019: 5 things to know
(Source: Live Mont, January 31, 2019)
The government will unveil its budget for the 2019-20 fiscal year on Friday. The
government is expected to woo rural and urban middle-class voters via farm relief
measures and tax cuts.
Here are some expectations from Interim budget
1
Farm relief package itself could run to at least 1 trillion rupees ($14.04 billion)
2
Set to earmark about 1.8 trillion rupees for food subsidies in the fiscal year
3
Expected to waive premium for taking insurance policy for food crops
4
Proposal for waiving interest on crop loans for farmers who pay on time
5
Target of about $11 billion from state asset sales in FY 2019-20
6
An anticipated corporate tax rate cut to 25% from 30% may be put on hold until after the
elections
7
Higher tax exemptions for the middle class and for small businesses anticipated
8
Discount of 2 percentage points on loans for businesses with annual sales of less than 50
million rupees; government to compensate banks for the costs
9
40 billion-rupee capital infusion for public-sector general insurers
10
www.citiindia.com
5 CITI-NEWS LETTER
Budget allocation for health is likely to increase by 5 percent from a year ago
11
Better digital infrastructure in rural areas
12
Abolition of the angel tax to boost start-ups
13
Exemption from GST for spectrum and licence fee payouts, reduction in spectrum fees
and cuts in import duty on telecom equipment (currently at 20 pct)
14
Reduction of goods and services tax (GST) on electric vehicles and batteries
Home
Government revises FY18 GDP growth to 7.2% from 6.7% earlier
(Source: Business Standard, January 31, 2019)
The CSO has also released the Second Revised Estimates of National Income,
Consumption Expenditure, Saving and Capital Formation for 2016-17
The government Thursday revised the economic growth rate upwards to 7.2 per cent for
2017-18 from the 6.7 per cent estimated earlier, mainly driven by performance of farm
sector.
"Real GDP or GDP at constant (2011-12) prices for 2017-18 and 2016-17 stand at Rs 131.80
lakh crore and Rs 122.98 lakh crore, respectively, showing growth of 7.2 per cent during
2017-18 and 8.2 per cent during 2016-17 (from earlier estimate of 7.1 per cent)," the CSO
said.
For the current fiscal, in May, the CSO in its advance estimate had projected a growth rate
of 7.2 per cent.
The 2017-18 growth is lowest in four years. The previous low at 6.4 per cent was recorded
in 2013-14.
www.citiindia.com
6 CITI-NEWS LETTER
"The First Revised Estimates for 2017-18 have been compiled using industry-
wise/institution-wise detailed information instead of using the benchmark-indicator
method employed at the time of release of Provisional Estimates on 31st May, 2018," said
the Central Statistics Office (CSO).
The CSO has also released the Second Revised Estimates of National Income,
Consumption Expenditure, Saving and Capital Formation for 2016-17.
The statistics office further said growth in the Gross Value Added (GVA) during 2017-18
was 6.9 per cent, down from 7.9 per cent in the previous fiscal.
During 2017-18, the GVA growth rates of primary (comprising agriculture, forestry,
fishing and mining and quarrying), secondary (manufacturing, electricity, gas, water
supply and other utility services, and construction) and tertiary (services) sectors have
been estimated as 5 per cent, 6 per cent and 8.1 per cent as against a growth of 6.8 per
cent, 7.5 per cent and 8.4 per cent, respectively, in the previous year.
As regards the per capita income, the CSO's first revised estimate said it was Rs 1,04,659
and Rs 1,14,958 for 2016-17 and 2017-18, respectively.
Gross Capital Formation (GCF), a barometer of investment activities, at current prices
has been estimated at Rs 55.27 lakh crore for 2017-18, compared to Rs 47.41 lakh crore
during 2016-17.
Giving reasons for variations in growth figures between provisional estimates (released
in May 2018) and first revised estimates of GVA, CSO said it is based on updated figures
on new data related to crop production and financial data.
Home
GST collections top Rs 1 lakh cr in January
(Source: Business Standard, January 31, 2019)
GST collections in January crossed Rs 1 lakh crore-mark after a gap of 2 months,
the Finance Ministry said Thursday.
"The total gross GST Revenue collected in the month of January, 2019 has today crossed
Rs 1 lakh crore. This has been a significant improvement over collection of Rs 94,725 crore
during last month and Rs 89,825 crore during the same month last year," the ministry
tweeted.
This is the third time in current fiscal that GST collections have crossed the Rs one lakh
crore-mark. Previously in April and October, the collections had surpassed this milestone.
www.citiindia.com
7 CITI-NEWS LETTER
"Robust Economy: Gross GST Revenue in Jan 2019 crossed Rs 1 lakh crore... This has
been achieved despite huge reduction in tax rates for various items benefitting poor,
farmers & middle class," Finance Minister Piyush Goyal tweeted.
GST collection stood at Rs 1.03 lakh crore in April, Rs 94,016 crore in May, Rs 95,610
crore in June, Rs 96,483 crore in July, Rs 93,960 crore in August, Rs 94,442 crore in
September, Rs 1,00,710 crore in October, Rs 97,637 crore in November and Rs 94,725
crore in December 2018.
The ministry said the increase in GST mop up in January has been achieved despite
various tax relief measures implemented by the GST Council.
In the 10 months (April-January) of the current fiscal, the government has mopped up
over Rs 9.71 lakh crore from Goods and Services Tax (GST). The 2018-19 budget had
estimated annual GST collection at Rs 13.48 lakh crore, which means a monthly target of
Rs 1.12 lakh crore.
The monthly average GST collection in last fiscal (July 2017 - March 2018) was Rs 89,885
crore.
PwC India Partner & Leader, Indirect Tax, Pratik Jain said it comes as a welcome relief
for the government, particularly after some dip in the last month.
"This again underlines that collections are increasing steadily as compliances are getting
simplified, rates are getting reduced and administration is getting sharper. It's clear that
overall collection for the entire year would be significantly lower than what was
budgeted," Jain said.
Deloitte India Senior Director M S Mani said: "The collection figures are impressive as
they come on the back of rate reductions; if the same pace is maintained, the revenue
targets would be close to being achieved."
These numbers indicate that rate reductions result in increased revenues and compliance
- we are moving closer to the targeted GST collections for the fiscal, Mani said.
Conventionally, GST collection data for a month is released on first day of the subsequent
month. However, for the month of January, the full details of the revenue mopped-up will
be released on February 2.
Home
www.citiindia.com
8 CITI-NEWS LETTER
CPI inflation for industrial workers rises to 5.24% in December
(Source: The Hindu Business Line, January 31, 2019)
Retail inflation for industrial workers increased to 5.24 per cent in December 2018 as
compared to 4 per cent in the year-ago period.
“The inflation measured by monthly CPI-IW (consumer price index-industrial workers)
stood at 5.24 per cent for December 2018 as compared to 4.86 per cent for the previous
month and 4 per cent during December 2017,” a Labour Ministry statement said.
According to the statement, food inflation in December stood at (-) 0.96 per cent against
(-) 1.57 per cent in November and 4.32 per cent in the year-ago month.
The All-India CPI-IW for December declined by 1 point and was pegged at 301. On 1-
month percentage change, it dropped by (-) 0.33 per cent between November-December
2018 when compared with a fall of (-) 0.69 per cent for the corresponding months of 2017.
It said the maximum downward pressure to the change in current index came from the
food group, contributing (-) 1.38 percentage points to the total change.
Onion, banana, coconut, lemon, brinjal, cabbage, chillies green, carrot, cauliflower,
french beans, spinach, peas, potato, radish, tomato, sugar, cooking gas and petrol are
responsible for the decline in index.
However, it said the decline was checked by fish, poultry (chicken), tea (readymade), ESI
(Employees’ State Insurance) premium and repair charges (bicycle), putting upward
pressure on the index.
Centre-wise, Munger Jamalpur, Tripura and Doom-Dooma Tinsukia reported the
maximum drop (6 points each), followed by Ranchi Hatia, Lucknow and Kanpur (5 points
each).
Among others, a 4-point fall was observed in 3 centres, 3 points in 7 centres, 2 points in
16 centres and 1 point in 13 centres.
On the contrary, Salem recorded a maximum increase of 6 points, followed by Jalpaiguri
(5 points). Among others, a 2-point increase was observed in 4 centres and 1 point in 12
centres. In the remaining 15 centres, indices remained stationary.
The indices of 36 centres were above the all-India index and below the national average
in 41 centres. The index of Chandigarh centre remained on a par with the all-India index.
Home
www.citiindia.com
9 CITI-NEWS LETTER
Niti Aayog calls adverse job report a draft, ex-stat head says no, it’s final
(Source: The Indian Express, February 01, 2019)
Lack of good quality jobs and a large informal sector is adding to our economic woes, Niti
Aayog CEO Amitabh Kant said.
The National Sample Survey Office’s (NSSO) job survey for 2017-18 that records a surge
in the unemployment rate to over 6 per cent, a 45-year high, and which the Government
is sitting on, set off a firestorm Thursday.
While Niti Aayog called it a “draft report,” former acting National Statistical Commission
(NSC) Chairman P C Mohanan, who resigned earlier this week because the report wasn’t
released, rebutted the claim and told The Indian Express that this was the “final report”
and it needed no further approval.
Niti Aayog Vice Chairman Rajiv Kumar, at a press conference Thursday, said the quarterly
employment data sets for the July-December 2018 period (two quarters) are still being
processed and the government would release the employment survey report by March
“after collating quarter-on-quarter data”.
However, Mohanan said: “This (NSSO Periodic Labour Force Survey) was the final report.
As per procedure, National Statistical Commission approves the report. We approved the
report and no authority has to give any further approval. NSSO reports used to be released
and all analysis takes place after the release,” Mohanan told The Indian Express after Niti
Aayog’s press conference.
The country’s unemployment rate surged to over 6 per cent in 2017-18, the highest since
1972-73, according to the survey, said an official who was part of the deliberations for the
survey’s approval in December. The findings of the survey were first reported by Business
Standard on Thursday.
Home
Emulating Chile on start-ups
(Source: The Hindu, Jnauary 31, 2019)
Accelerator’ to attract start-ups from across the globe
The State may shortly get a start-up accelerator programme modelled along the lines of
the one in Chile for attracting start-ups from across the globe. Finance Minister T.M.
Thomas Isaac has earmarked ₹10 crore for a similar programme under the aegis of
the Kerala Technology Innovation Zone (KTIZ).
www.citiindia.com
10 CITI-NEWS LETTER
Two less-heralded IT destinations – Chile and Estonia – were the surprise mentions in
the Minister’s speech. He marvelled at how Chile’s accelerator programme, launched in
2010, managed to attract global start-ups. .
Claiming that the Left Democratic Front government had far exceeded its promise in the
election manifesto in terms of creation of IT infrastructure, Dr. Isaac went on to promise
creation of 1.16 crore sq ft of IT space in two years in addition to the 50 lakh sq ft the
government claimed to have created in the past three years.
Jobs to be doubled
He promised to double IT jobs from the existing one lakh by the end of the government’s
term.
The total outlay for the IT sector stood at ₹574 crore, out of which ₹139 crore has been
earmarked for the Kerala State IT Mission, the nodal agency.
Government IT Parks in Thiruvananthapuram, Kollam, Kochi, Thrissur and Cherthala
have been given a combined allocation of ₹84 crore and the Cyberpark in Kozhikode
₹23 crore.
The KSITL, the government agency for IT Infrastructure facilities and implementing
Kerala Fibre Optic Network Project, has been allocated ₹148 crore.
The International Centre for Free and Open Source Software, an autonomous
organisation set up by the State government, has been allocated ₹6 crore and the Centre
for Development of Imaging Technology ₹7 crore.
The budget also allocated ₹70 crore for the youth entrepreneurship development
programme of the Kerala Startup Mission.
Home
India has an opportunity to grow amid US-China trade war: BK Goenka,
Welspun Group
(Source: Zeebiz, January 31, 2019)
BK Goenka, Chairman Welspun Group & President ASSOCHAM, during an interview
with Swati Khandelwal, Zee Business, said India can grow by 8-9 per cent if a stable
government comes to power after the election is over.
Edited Excerpts:
www.citiindia.com
11 CITI-NEWS LETTER
Q: India is being considered as a bright spot at World Economic Forum
(WEF) and several people want to bet on India but need a stable policy for it.
Do you think that we are ready to attract those investments from foreign
companies?
A: India is the fastest growing economy and is growing at a rate of about 7.5 per cent at
present. And, India has an opportunity to grow its economy amid the ongoing trade war
between the US and China. Post-election, if we have a stable government and policy than
we will have a chance to grow the economy at the rate of 8-9 per cent.
The forum is talking about China, the US, sustainability, digital platform and the way in
which whole technology is moving across the world and I feel India is positioned well on
the three things. If we talk about sustainability, then we have progressed in solar and
renewable power and hope that we can progress more on the subject. Similarly, India has
an opportunity to utilise the trade issue between China and the US to propel its growth.
Q: At the time when the interim budget is around the corner, I will like to
know about India Inc. expectations from it.
A: It is a difficult task to talk about the budget as it is going to be a vote on account and
that’s why I don’t feel that it is going to be a detailed budget.
Q: Do you think that it is a right time when RBI should announce a rate cut
in upcoming policy, if yes, then to what levels?
A: I feel, it should go for a rate cut at least when inflation is under a control. I as an
ASSSOCHAM President and other bodies of the industry has met the governor last to last
week on the issue. I feel that a rate cut will be announced as the overall situation is quite
conducive at present.
Q: What are Welspun Group’s projection and plans for this year and next
year? Have you met the target of the year and what are your expectation on
the bottom line and top line?
A: We are into different verticals like textiles, pipes, and infrastructure, and we have
grown by at least 10-25 per cent in every vertical. Our textile business will report a double-
digit growth of about 10 per cent and the pipe business will grow by around 15 per cent.
Infrastructure was a new addition to our business and it will report good growth, which
can be double to the growth that it achieved in the last financial year.
Q: Provide your outlook and targets for the next financial year?
A: I am sure that we will get a stable government after the elections are over as it will bring
supporting policies. It will be beneficial for the industry. We have a special focus on
www.citiindia.com
12 CITI-NEWS LETTER
infrastructure and hope that we will be able to maintain the growth that we have achieved
in this financial year.
Home
Indian Govt to Launch its Own National Artificial Intelligence Centre in July
(Source: Indian Web 2, January 31, 2019)
Central government of India is planning to launch a National Centre for Artificial
Intelligence (AI) and make it operational by July as the work has begun for a launch, said
a report by Business Standard.
Called as the National Artificial Intelligence Centre, the unit is likely to cost around Rs
400-450 crore and will be part of the Ministry of Electronics and Information Technology
(MeitY), and will work in collaboration with other entities of the department such as the
National Informatics Centre (NIC) and the Centre for Development of Advanced
Computing (C-DAC), said the report citing senior government officials.
The report said the AI unit will be for citizens and will help in setting up data platform,
skilling, reskilling and research platforms, thereby helping to solve legal, regulatory and
cybersecurity challenges.
“The panels gave us a lot of fodder to think on, and suggested setting up of a national AI
centre,” a senior government official told Business Standard. “The centre will try to
innovate in AI for government applications. It will look at how AI can be used in health
care, education, and agriculture from a public systems delivery perspective.”
Policy think-tank NITI Aayog had released a discussion paper in June last year on the
“National Strategy for Artificial Intelligence”. It had identified five areas — health care,
agriculture, smart cities, education and transportation — that would gain the most from
AI. The paper highlighted the barriers to adoption but came under criticism for not
providing any roadmap for implementation.
The government has been contemplating with the idea of taking help from the technology
and already has a smaller centre working on AI under the NIC. It now wants a national
centre that could work more with academic institutions to understand how AI can help in
governance. “AI can’t grow without data. NIC has two centres — one on AI and one on
data analytics. C-DAC has also done phenomenal work on languages. Our interest is to
see how this can be used for governance applications,” the senior government official said
to Business Standard.
www.citiindia.com
13 CITI-NEWS LETTER
In February last year, India’s IT ministry had also constituted four committees to
thoroughly study on various aspects of Artificial Intelligence for citizen use.
In the same month of 2018, month PM Modi launched India’s first AI research centrefor
social good followed by announcement made by tech giant Adobe to establish an AI Lab
in Hyderabad. In the same month Maharashtra govt. has also announced to bring India’s
first artificial intelligence center in alliance with Canadian government. In September
2017, Karnataka state government had too announced that Bengaluru will soon
have India’s first multi-faceted artificial intelligence and robotics centre to established in
IIIT-Bengaluru campus.
Home
Ikea launches textile collection inspired by India
(Source: V Rishi Kumar, The Hindu Business Line, January 31, 2019)
Swedish home furnishing company Ikea, which opened its first India store in Hyderabad
about six months ago, has introduced a textile collection named Änglatarar (angel tears),
to celebrate Indo-Swedish design aesthetics and synergies.
The collection was brought together by two in-house designers, Akanksha Deo and Paulin
Machado, seeking to represent true collaboration between the two textile-loving
countries.
Mia Olsson, Country Communication and Interior Manager, Ikea India said, “The
collection is an interesting interplay of both ‘cool’ and ‘earthy’ tones such as Indigo and
red, against a neutral base of white. The colours have been carefully selected and carry a
deeper meaning with both countries’ rich heritage and history.”
“We have had the privilege of visiting thousands of homes in India and we believe these
will look beautiful in every home.” she added.
John Achillea, Hyderabad Store Manager, IKEA India said, “Änglatarar is a tribute to
India. We have been sourcing textiles from India for over 30 years now and what better
way to celebrate our unique and vibrant relationship than offering a completely ‘made in
India’ collection for our customers.”
Sunny Jaglan, MD, Sunny International Ltd said, “The collection was made more
interesting by the equal involvement of Ikea designers on the factory floor with our co-
workers. Their presence made the scenario lively and focused on us.”
www.citiindia.com
14 CITI-NEWS LETTER
The Ikea management, which had estimated that about seven million customers would
visit its Hyderabad store in the first year, may end up with about 5 million if the pattern
of the first six months is anything to go by, according to the Hyderabad store head.
Home
Decks Cleared For Mega Silk Cluster In Mysuru
(Source: Star of Mysore, January 31, 2019)
Bengaluru: The State Cabinet yesterday approved a proposal to establish a mega silk
cluster near Yelwal.
In a communication, released by District in-Charge and Higher Education Minister G.T.
Devegowda, the cluster will be developed by the State as well as the Union Government
at a cost of Rs.49 crore. The new cluster will be a boon for the region to expand the silk
market and also to create job opportunities.
The silk clusters in Mysuru will be one of the six silk clusters to be set up across the
country under the revised National Handloom Development Programme. The proposed
mega textile cluster will come up near Hootagalli on the outskirts of the city.
The move was mooted in the Union Budget 2014-15 and the project will receive Rs.50
crore by way of Central Grant and 10.12 acres of land has been identified to set up the
cluster at Belawadi. The land will be handed on lease to Chamundeshwari Mega Silk
Cluster. Now that the Cabinet has cleared the silk cluster proposal, it has to be ratified in
the Assembly. Once launched, it would be among the first of the five industry-specific
clusters sanctioned for Mysuru.
Being a labour-intensive industry, the launch of textile cluster is expected to help generate
additional employment in the region, besides fuelling local economy by spanning
ancillary industries to support the cluster.
Mysuru and its surrounding regions are known for sericulture, and the famed Mysore Silk
has been accorded the Geographic Indication tag in view of its uniqueness. Similarly, the
area is renowned for cotton. Though cultivated extensively in H.D. Kote region, the bulk
of it is supplied to textile units in Tamil Nadu. But once the textile cluster takes shape,
local farmers will have a market closer home which will be beneficial to them as it will
obviate the need for transportation.
Home
--------------------------
www.citiindia.com
15 CITI-NEWS LETTER
GLOBAL:
Vietnam's garment export up 6.7 pct in January
(Source: Xinhua, January 31, 2019)
Vietnam gained nearly 2.7 billion U.S. dollars from exporting garments and textiles in
January, posting a year-on-year increase of 6.7 percent, the Vietnam Textile and Apparel
Association said on Thursday.
Specifically, turnovers of Vietnamese garments and textiles, including T-shirts, jackets,
dresses and fabrics, exported to China surged 23.9 percent, and to Japan rose 7.6 percent.
Vietnam, which is among the world's five biggest exporters and producers of garments
and textiles, posted garment and textile export turnovers of over 30.4 billion U.S. dollars
in 2018, up 16.6 percent from 2017.
However, Vietnam had to spend more than 12.9 billion U.S. dollars importing cloth last
year, up 13.5 percent, the association said, noting that most of local cloth has yet to satisfy
quality requirements of the country's key garment export markets.
Home
Amended FTA with China to be finalised in mid-Feb
(Source: Irshad Ansari, The Express Tribune, January 31, 2019)
ISLAMABAD:In order to improve Pakistan-China trade relations, amendments to the
FTA will be finalised in mid-February dialogue between the two sides.
It is expected that in early March, both the countries will sign an amended FTA.
According to sources, Pakistan has prepared a draft document for amendments to the
FTA, which has been shared with Chinese officials. They said according to the draft, duties
and taxes on the import of goods from China, which were made locally in Pakistan as well,
would be reviewed. On the other hand, Pakistan will seek relaxation in duties and taxes
from China in order to increase the export of different products, including rice, textile and
more than a dozen other goods.
The sources said in a bid to finalise amendments to the FTA, Pakistani officials from the
trade, finance and textile ministries,FBR and the Board of Investment, including officials
from other ministries and divisions concerned, will visit China next month, where a
www.citiindia.com
16 CITI-NEWS LETTER
dialogue will be held and duties and taxes on Chinese exports to Pakistan may possibly go
up.
They said there was a massive gap in the trade balance between the two countries.
Pakistan’s annual trade deficit with China has gone above $12 billion.
Home
Sanctions Squeeze Myanmar's Economy
(Source: US News, February 01, 2019)
YANGON, MYANMAR — ALONG the cobblestone streets inside Bogyoke Aung San
Market, the sprawling colonial-era shopping center that draws both local shoppers and
international tourists, Zat is one of hundreds of vendors trying to entice shoppers. The
bazaar offers goods and services ranging from antiques to clothing, from handicrafts to
trading money on the black market.
The 30-year-old Zat says business at his family-run art shop has dropped sharply in the
past year. Not long ago his shop would sell as many as seven paintings a day, he says.
Today Zat says his family is lucky to sell one painting a day as customers are no longer
interested in art depicting politician and Nobel Peace Prize laureate Aung San Suu Kyi,
formerly a top seller at his shop.
Once an international icon of democracy who spent nearly 15 years under house arrest by
the then-ruling military junta, Aung San Suu Kyi today draws criticism for her apparent
inaction to the government's persecution of the Rohingya Muslim minority, refusal to
acknowledge military massacres and defense of government prosecutions of journalists.
"Some artists are still making pictures of her, but mostly now they've stopped," Zat says.
The dwindling consumer appetite for portraits at Zat's shop is part of a larger economic
slowdown in the country, one tied to Western criticism and sanctions over the Myanmar
government's alleged role in violence committed against the Rohingya and other ethnic
minorities.
Investment and tourism from Western countries has significantly dropped in the past
year, and looming future sanctions from Europe threaten the country's lucrative textile
industry. Western sanctions against Myanmar may not have their intended consequences,
observers say: The government is recalibrating its economic policies for a more regional
approach, with a familiar patron of the past, China, poised to play an increasingly
important role.
www.citiindia.com
17 CITI-NEWS LETTER
Both the U.S. and the European Union have leveled sanctions on Myanmar, a
predominantly Buddhist country of 52 million people with more than 100 ethnic groups.
Violence that began in 2016 in the country's western state of Rakhine has since pushed
nearly 700,000 Muslim Rohingya to flee to neighboring Bangladesh in what U.N.
investigators allege as the military's continuing practice of genocide.
Myanmar's government has played down Western criticism in a bid to reassure investors
of the potential of Myanmar's economy. Last autumn, however, the director of the
country's investment directorate acknowledged that he had sorely underestimated the
impact of Western action on the country's economy.
"I thought the government could easily resolve the problem," Aung Naing Oo, director
general of the Directorate of Investment and Company Administration, said in
September. "But two years later as a consequence of such events you can see FDI (foreign
direct investment) in Myanmar is declining."
Investors from the West that were once in a wait-and-see pattern have since backed away,
say several officials familiar with Myanmar's economy. Approved FDI in the first four
months of the 2018 financial year, which began last April, reached just $1.34 billion, down
from $3.14 billion during the same period a year before, according to DICA.
"The majority of Western countries have been trying to abandon us for some time because
of the sentiment of those issues," says Hanta Myint, chairman of the economic committee
for Aung San Suu Kyi's ruling National League for Democracy, referring to the country's
treatment of the Rohingya.
Tourism Woes
Prior to the Rohingya crisis, Myanmar's government projected that by 2020 the country
would annually attract 7.5 million visitors. But now given the recent growth rates of the
economy – now pegged at just 2 percent annually -- the country is not likely to reach 2
million, according to a report by the Australia-based Centre for Aviation.
The number of European tourists, one of the largest constituents of that sector, are down
by as much as half, says Thet Lwin Toh, chairman of the Union of Myanmar Travel
Association. "Although a potential destination, Myanmar has (suffered from) a negative
media impact, especially from the situation in Rakhine," he says. "The country's image is
declining."
Occupancy in hotels at popular tourist destinations such as Mandalay, Inle Lake and the
Bagan archaeological zone have plummeted to as little as 20 percent, he says.
www.citiindia.com
18 CITI-NEWS LETTER
In September, Southeast Asian online travel guide Travelfish suspended its research into
Myanmar as the situation in Rakhine has made the publication's continued support of
Myanmar "unconscionable," the site announced.
"A withdrawal will not only risk a slowdown or even a stop of current capacity building
activities (in the garment industry), but most likely close the potential for new
interventions," says Filip Lauwerysen, executive director at Eurocham Myanmar and
secretary general of the European Business Organizations Network. Currently, 47 percent
of Myanmar's garment exports are bound for the European Union, according to
EuroCham Myanmar.
Lauwerysen says it is now virtually impossible to sell Myanmar as an investment
destination. "The brand capital of Myanmar has been completely wiped off."
Citing Myanmar's worsening global trade relationships and the lingering impact of the
Rohingya crisis, the World Bank last year downgraded overall economic growth half a
percentage point to 6.2 percent for this fiscal year. Consulting firm Fitch Solutions Macro
Research, meanwhile, is revising downward its expectation for construction growth this
year, from 18.5 percent to 10.3 percent for the same reasons.
The loss in interest from Western investors comes as a blow to the large majority of the
population who still do not have access to basic services like banking or electricity.
"In particular it's Western investment – the sort of investment we were really optimistic
about like … law firms, banks, financial institutions, customer services firms, McDonald's
and Starbucks. A lot of those have not come," says Sean Turnell, special economic
consultant to Aung San Suu Kyi.
Looking East
In a bid to replace lost foreign investment from the West, Myanmar is turning to countries
such as China to fill the void. In October, Reuters reported that Myanmar signed an
agreement with China's state-run investment firm CITIC Group to begin work on a $1.3
billion deep-sea port in Rakhine State. Myanmar has also pledged to push forward the
building of the China-Myanmar economic corridor under China's One Belt, One Road
Initiative.
"Overall, we are now receiving some investment from ASEAN countries, especially China
and South Korea," says Hanta Myint. "China in particular is trying to move into the
country and now they are sending their scouts here."
Officials from the government did not respond to several interview requests, but the
strategy is similar to what the country used when ruled by the junta – selling natural
www.citiindia.com
19 CITI-NEWS LETTER
resources to China to lessen the impact of Western economic sanctions imposed for years
of rights abuses.
With fewer Western investors coming to Myanmar, the private sector also is turning to
regional neighbors, says May Myat Mon Win of Chatrium Hotel, who also is vice chairman
of the Myanmar Tourism Federation.
"Tourism is practicing a 'Look East' policy to remedy the situation in the short term. We
are trying to attract regional customers and regional travelers are increasing."
Home
Power-packed line-up in Munich
(Source: Innovation in Textiles, January 31, 2019)
More than 1,000 suppliers exhibited their product and trend developments
in Munich this week. © Munich Fabric Start
The international textiles and fashion industry kicked off the 2020 Spring/Summer
season in Munich this week. More than 1,000 fabrics, additionals, denim and sportswear
suppliers exhibited their latest product and trend developments in 1,800 collections at
the MOC Munich and in the Zenith Area.
They were complemented by a growing number of service and sourcing providers, as well
as young brands and start-ups that present their philosophies and the ideology of
forward-looking process solutions, as well as solutions for resource-saving material
sourcing and their areas of application. “This dynamic and mutually inspiring exhibitor
structure brings about one of the most important international trade fair platforms for
sourcing materials and in-depth networking and, hence, for linking fashion with
technology with a view to shaping the future,” organisers report.
Highlights
“In terms of trend concepts for 2020, this future is characterised by emotionality,
empathy and community. This is expressed by What Is Love as a source of inspiration –
passionate, playful, pragmatic. Spring/Summer 20 indulges in a rich choice of fabrics, in
innovative silhouettes, in philosophical wealth but also in tongue-in-cheek kitsch and –
last not least – a new lightness at heart, which is never entirely uncritical.”
The latest collections were complemented by a growing number of service
and sourcing providers. © Munich Fabric Start
www.citiindia.com
20 CITI-NEWS LETTER
The ReSOURCE segment is Munich Fabric Start’s enhanced sourcing platform flagging
up new dimensions of sustainability for an innovative and future-oriented production.
This is how a forum initiated and supported by experts was established that offers
comprehensive sustainability solutions. Boasting over 500 articles, ReSOURCE
showcased the latest developments in sustainable fabrics and findings.
In the spacious Design Studios atelier setting renowned European design studios and
trend offices exhibited their latest prints, patterns and designs for Spring/Summer 20.
With its Sourcing area, Munich Fabric Start caters to the increasing demand for
operational closed production cycles. The spectrum of services offered here by the
internationally established manufacturing companies included not only Cut-Make-Trim
(CMT) solutions and high-end solutions but also comprehensive services like A-Z process
solutions including sourcing processes.
Seminars, workshops and talks on the latest developments in the denim
industry, about consumer needs, blockchain, sustainability and techno
denim all featured at the show. © Munich Fabric Start
“With Munich Fabric Start we have laid the foundation in the past for a future-proof trade
fair format thereby creating an optimum point of departure and platform for being able
to respond to current market developments with the flexibility demanded time and
again,” commented Wolfgang Klinder, Managing Director Munich Fabric Start.
Innovation
Keyhouse has developed from the dynamism of companies cooperating on future themes,
start-ups, experimental research projects of leading colleges and universities, as well as
projects for unconventional resourcing into a think tank for progressive fashion
technology. Its current focal themes included the extended area for installations related
to sustainable innovations.
The development of new technologies, the efforts made for developing sustainable
products and assuring transparent processes and supply chains were recognised by
Munich Fabric Start with the HighTex Award. “With Sustainable Innovations, the
HighTex Award as Innovation Award of Munich Fabric Start as well as dynamic
interactions and a strong line-up of high-calibre lectures and seminars we are providing
a unique preview of future-proof materials and manufacturing processes at the
Keyhouse,” said Frank Junker, Creative Director Munich Fabric Start.
The future is now. Brave and blue
With this statement Bluezone kicked off 2019 and with B.L.U.E.C.H.A.I.N 4.0 gave a clear
signal for more transparency, resource-saving process solutions and conscious
www.citiindia.com
21 CITI-NEWS LETTER
consumption. With its Ready Made Solutions (RMS), the Bluezone caters to an
increasingly important demand for manufacturing and sourcing. Relevant lines were
exhibited by SC Ready Garment Technology, Lotus Garments, Denim Authority, and
Pagada.
The development of new technologies were recognised by Munich Fabric
Start. © Munich Fabric Start
Other highlights included the Futuristic Customization Gallery, a joint project by denim
specialists MYR from Italy and Fimatex, as well as the presentation of the Capsule
Collection developed by PG Denim in cooperation with Jonathan Christopher, the Denim
Award winner 2018. “The current Bluezone was fully booked yet again. Boasting a
spectacular portfolio of the best brands and most innovative products we are therefore
organising one of the best denim shows worldwide. In Munich the future of denim is
happening now,” said Sebastian Klinder, Managing Director Munich Fabric Start.
Home
Pakistan: Paying lip service to textile industry revival
(Source: BluePrint, January 31, 2019)
The recent disclosure by the Minister of Science and Technology, Dr. Ogbonnaya Onu,
that the textile industry sub-sector required very urgent revival to increase its
contribution to the nation’s Gross Domestic Product (GDP) sounded like a broken record.
Speaking through his Permanent Secretary, Mr. Bitrus Nabasu, at the 6th International
Conference and 9th Annual General Meeting (AGM) of the Textile Researchers
Association of Nigeria (TRAN) held in Abuja, Dr. Onu stressed that in view of its
underperformance, the industry needed more intervention from both the public and
private sectors.
He assured that the Muhammadu Buhari-led administration was placing much emphasis
on reviving the textile sub-sector. He noted that it was painful “if one remembers that the
textile sector was the mainstay of the Nigerian economy in the 80s, providing jobs with a
turnover of over N8.9bn which represented more than 20 per cent of our Gross Domestic
Product”. In his address, the Director-General of the Raw Materials Research and
Development Council, Dr. Hussaini Ibrahim, said the textile subsector when revived, is
capable of providing up to 700,000 direct jobs to Nigerians.
He said the desired revival of the lost glory of the industry “rests on the pro-activeness of
the stakeholders at both the upstream and downstream of the value chain.” Since the
www.citiindia.com
22 CITI-NEWS LETTER
collapse of the industry in the 80s, the sector has been running the gauntlet, as it were,
especially since the nation returned to democratic governance in 1999.
The administrations of Obasanjo and Yar’Adua made commitments to revive the sub-
sector but they had nothing to show for their intentions. In particular, the Jonathan
administration instituted a N100bn Intervention Fund in 2010 for the Cotton, Textiles
and Garment (CTG) industries to revive the textile sub-sector. But the initiative suffered
the same fate.
Then a year ago, the present federal government also set aside N51bn in the 2017 budget
to promote the development of the CTG industries. The fund was intended to boost the
government’s efforts at economic diversification and massive job creation as well as
increase the patronage of made-in-Nigeria apparels.
The Minister of Trade and Industries, Aisha Abubakar, said as part of efforts to promote
the development of the sector, the federal government had decided to dedicate three out
of the six special economic zones created last year to the textile and garment sector. She
explained that the government was working hard to support the industry through massive
investment in infrastructure, noting that this would assist in bringing down the price of
cotton.
The industry passed through various phases of growth and until the 1980s, it was one of
the most vibrant in the world. Between 1985 and 1991, the sector recorded an annual
growth of 67 per cent and it employed about 25 per cent workers in the nation’s
manufacturing sector.
There were 180 textile companies, providing over one million direct and indirect jobs. It
also accounted for over 60 per cent of the textile industry capacity in West Africa. Some
of the textile companies that enjoyed the boom then included Kaduna Textile Ltd (KTL),
Arewa Textiles Plc, United Nigerian Textile Plc, Supertex, Nortex Nigerian Ltd and
Finetex Nigerian Ltd. Others were Gaskiya Textiles Mill, Kano Textile Ltd, Aba Textiles,
Zamfara Textiles Ltd, Asaba Textiles Ltd, African Textile Mill Plc, Tofa Textiles and
several others.
The collapse of the industry was driven largely by smuggling, failed government policies,
high cost of doing business arising from high-priced raw materials, energy costs, and a
plethora of challenges which plagues the investment climate in Nigeria.
As at the dawn of the millennium, only about 25 textile companies were functional in the
country with widespread concerns that even those functioning were barely managing to
survive as the operating environment became, to put it mildly, utterly unfriendly.
The current capacity utilisation in the industry is only 30 per cent of installed capacity
and this development has allowed for the thriving of imported, mostly smuggled
www.citiindia.com
23 CITI-NEWS LETTER
counterfeited textile products, into the country. In view of the impact the sub-sector can
make on the socioeconomic development of the country, we urge the federal government
to show more serious commitment towards reviving the sub-sector.
It should address all the challenges that led to the collapse of the job-spinning industry.
Critical among them is constant power supply. Any initiative to breathe life into the
moribund mills should be pursued to its logical conclusion.
Home
--------------------------