citi-news letter - citi india · mr. dawood said, “we are looking into the withdrawal of the mfn...
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Cotlook A Index - Cents/lb (Change from previous day)
14-02-2019 79.65 (+0.25)
13-02-2018 87.35
13-02-2017 85.65
New York Cotton Futures (Cents/lb) As on 18.02.2019 (Change from
previous day)
Mar 2019 70.31 (+0.18)
May 2019 71.96 (+0.25)
July 2019 72.93 (-0.14)
18th February
2019
Import duty hike may not hamper India-Pak cotton trade
Exporters seek govt support to offset losses in case US withdraws GSP
benefit
'India Size' garments may hit the shelves soon
5,000 Bangladesh garment factory workers protest demanding higher
wages, all fired
Thailand counting on Indian support for RCEP | Bangkok Post: business
Cotton and Yarn Futures
ZCE - Daily Data (Change from previous day)
MCX (Change from previous day)
Feb 2019 20120 (-40)
Cotton 15750 (+15) Mar 2019 20410 (-40)
Yarn 24855 (0) Apr 2019 20700 (-40)
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2 CITI-NEWS LETTER
-------------------------------------------------------------------------------------- Import duty hike may not hamper India-Pak cotton trade
India hikes customs duty to 200 per cent on all goods imported
from Pakistan
India yet to inform Pakistan on MFN status revocation, says
trade advisor to Imran Khan
Exporters seek govt support to offset losses in case US
withdraws GSP benefit
FIEO suggests series of measures to boost exports
India can play key role in Nepal's bid to expand global trade: UN
official
Important changes made in GST rules
'India Size' garments may hit the shelves soon
Small biz exports hit by GST refund delay
Indian Inc's Q3 results: Few companies pulled down earnings
growth
------------------------------------------------------------------------------------------------
5,000 Bangladesh garment factory workers
protest demanding higher wages, all fired
Thailand counting on Indian support for RCEP | Bangkok Post:
business
Vietnam’s M&A market forecast to mark a banner year in 2019
Indian Embassy Holds Roadshow to promote Terry Towel Expo
Stretchable multi-functional fibre
----------------------------------------------------------------------------------
NATIONAL
---------------------
GLOBAL
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3 CITI-NEWS LETTER
NATIONAL:
Import duty hike may not hamper India-Pak cotton trade
(Source: Parshant Krar, Economic Times, February 18, 2019)
Traders assuage the possibility of reciprocal hike in duty by Pakistan
While the withdrawal of Most
Favoured Nation (MFN) status
by India and the 200 per cent
hike on goods imported from
Islamabad has put an end to
the import of cement from
Islamabad, ginned cotton and
cotton yarn exports to the
neighbouring country may
remain impervious of the
current turmoil. A shortage in domestic output and the favourable cotton market
provided by India will keep Pakistan a key buyer of Indian cotton.
“Cotton export is unaffected so far and we don’t expect Pakistan to pose hurdles as their
cotton industry requires raw material from India. India is the most accessible and price-
lucrative market for them,” Atul Ganatra, president of the Cotton Association of India,
told ET. He said that Pakistan is expected to import around one-million bales of cotton
from India in the current financial year.
Traders assuage the possibility of reciprocal hike in duty by Pakistan on the purchase of
cotton from India. “It will be detrimental for Pakistan as it faces a shortage in domestic
output of the natural fibre and growth of its textile industry will be hampered,” Ganatra
said. Exporters believe that the cotton export to Pakistan will continue even in the event
of increase in duty as the consignments would be routed via ports in Dubai and Singapore.
“It has happened in the past, but we don’t see the possibility of such a step by Pakistan as
it will raise the cost of raw material for their local industry,” he said.
Cotton purchase by Pakistan has grown in recent years due to the growth of the local
textile industry and price advantage due to geographical proximity with India.
“Consignments from India through road route are available within two weeks to
manufacturing plants in Pakistan, while it may take up to twomonths if they are shipped,”
a cotton exporter based in Amristar said.
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4 CITI-NEWS LETTER
Wary of turmoil in relations between the two countries, exporters are expecting a
temporary slump in flow of consignments for a few days. “ Traders are going slow and
may keep a tab on the situation for a week to see if the situation escalates,” Pradip Jain,
president of the Khandesh Cotton Gin/Press Association said. Most Indian textile makers
feel that the cotton trade will survive the prevailing situation. The cotton yarn export to
Pakistan has been unaffected. “Cotton yarn exports will remain untouched as Pakistan
gets most affordable fine count cotton yarn from India,” an executive of Vardhman Group,
India’s leading cotton yarn maker said.
Meanwhile, the import of cement from Pakistan has come to abrupt end along the Wagah
Attari border. “ The 200 per cent increase in import duty has put an end to cement trade
as it has doubled the cost of 50 kg bag to Rs 500 now. The trade will no more be viable
and it is the end of cement trade,” DK Trading, a Amritsar-based cement trader said.
Home
India hikes customs duty to 200 per cent on all goods imported from
Pakistan
(Source: Kritka Suneja, Economic Times, February 17, 2019)
The new tariff of 200% is higher than India’s average bound rate for
agricultural products of 113.5% and that for non-farm goods of 34.6%.
India on Saturday hiked the customs duty on all goods imported from Pakistan to 200%
with immediate effect, a day after it revoked the most favoured nation (MFN) status that
it had given its neighbour in 1996.
“India has withdrawn MFN status to Pakistan after the Pulwama incident. Upon
withdrawal, basic customs duty on all goods exported from Pakistan to India has been
raised to 200% with immediate effect. #Pulwama,” finance minister Arun Jaitley tweeted
on Saturday.
The punitive action has followed the Pulwama terrorist attack that killed about 40 Central
Reserve Police Force (CRPF) personnel on Thursday.
“Central government is satisfied that the import duty leviable on all goods originating in
or exported from the Islamic Republic of Pakistan...should be increased and that
circumstances exist which render it necessary to take immediate action,” the government
said in a notification.
The move is likely to hit Pakistan’s exports to India which were $381 million in the
AprilNovember period compared with $489 million in all of FY18. India’s major imports
are fruits and nuts, gypsum, sulphur, finished leather, ores, mineral oils and cement.
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5 CITI-NEWS LETTER
The new tariff of 200% is higher than India’s average bound rate for agricultural products
of 113.5% and that for non-farm goods of 34.6%. The MFN applied rates are 32.8% and
10.7%, respectively for farm and non-farm products.
India’s move is in accordance with its domestic Foreign Trade (Development And
Regulation) Act that allows it to prohibit, restrict or regulate the import or export of
goods. It also conform to the global trade norms which do not require any country to
furnish any information the disclosure of which it considers contrary to its essential
security interests and allow countries any action which they consider necessary for the
protection of their essential security interests.
Home
India yet to inform Pakistan on MFN status revocation, says trade advisor to
Imran Khan
(Source: The Hindu, February 17, 2019)
Pakistan can raise this issue at different forums including the World Trade Organisation,
Advisor to Prime Minister Imran Khan on Commerce Abdul Razak Dawood said.
India has not informed Pakistan that it was withdrawing the Most Favoured Nation
status to it, a senior Pakistani official said February 17, after New Delhi took strong
economic action against Islamabad following the Pulwama terror attack.
India on February 15 announced the withdrawal of the MFN status for Pakistan, following
the deadly terror attack on CRPF personnel in Pulwama in Jammu and Kashmir, and
hiked the customs duty by 200% on goods Two days after India made the announcement,
Advisor to Prime Minister Imran Khan on Commerce Abdul Razak Dawood said New Delhi has
not informed Islamabad about withdrawing Pakistan’s MFN status, Geo News reported.
Mr. Dawood said, “We are looking into the withdrawal of the MFN status by India. We
can speak to India about this issue”. Pakistan can raise this issue at different forums
including the World Trade Organisation as both countries are members of the global trade
body, he added.
India granted the MFN status to Pakistan way back in 1996. Under the MFN pact, a WTO
member country is obliged to treat the other trading nation in a non-discriminatory
manner, especially with regard to customs duty and other levies.
India’s decision would significantly hit Pakistan’s exports to India, which stood at $488.5
million (around ₹3,482.3 crore) in 2017-18 as it would drastically increase the prices of
its goods.
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6 CITI-NEWS LETTER
“India has withdrawn the MFN status to Pakistan after the Pulwama incident. Upon
withdrawal, basic customs duty on all goods exported from Pakistan to India has been
raised to 200 per cent with immediate effect,” Finance Minister Arun Jaitley said in a
tweet on February 16.
The two main items imported from Pakistan are fruits and cement, on which the current
customs duty is 30-50% and 7.5%, respectively.
Slapping an import duty of 200% effectively means almost banning the imports from
Pakistan, official sources said in New Delhi.
Items which Pakistan exports to India include fresh fruits, cement, petroleum products,
bulk minerals and ores, finished leather, processed minerals, inorganic chemicals, cotton
raw, spices, wool, rubber product, alcoholic beverages, medical instruments, marine
goods, plastic, dyes and sport goods.
The total India-Pakistan trade has increased marginally to $2.41 billion in 2017-18 as
against $2.27 billion in 2016-17. India imported goods worth $488.5 million in 2017-18
and exported goods worth $1.92 billion.
During April-October 2018-19, India’s exports to Pakistan stood at $1.18 billion, while
imports were $338.66 billion.
India mainly exports raw cotton, cotton yarn, chemicals, plastics, man-made yarn and
dyes to Pakistan.
At least 40 CRPF personnel were killed and five injured on Thursday in one of the
deadliest terror attacks in Jammu and Kashmir when a Jaish-e-Mohammad suicide
bomber rammed a vehicle with explosives into their bus in Pulwama
Home
Exporters seek govt support to offset losses in case US withdraws GSP benefit
(Source: Amiti Sen, The Hindu Business Line, February 17, 2019)
There are speculations that the popular scheme may be revoked soon for India
Indian exporters are apprehensive of losing their competitive edge in the US market,
especially in labour-intensive products, if Washington decides to withdraw the popular
generalised system of preferences (GSP) scheme, and have asked the Centre for support.
“In the recent Board of Trade meeting, several exporting sectors raised concerns over the
imminent withdrawal of the GSP benefit by the US. While some suggested that the
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7 CITI-NEWS LETTER
government should lobby further with the US government with the help of American
industry for its continuation, most wanted some alternative schemes devised by the
Centre to support exporters in case the benefits are revoked,” a government official
told BusinessLine.
India is the largest beneficiary of the US government’s GSP scheme, devised to promote
exports of developing countries, which allows duty-free access to about 3,500 items from
the country. In 2017, Indian exports to the US benefiting from GSP were worth $5.7
billion, of its total exports to the country worth $49 billion.
New Delhi’s eligibility for the scheme, however, came under cloud last year when the US
Trade Representative’s (USTR) office started a review process for India, Indonesia and
Kazakhstan. The eligibility review was initiated on the basis of complaints against
perceived trade barriers made by the US dairy industry and the medical equipment
industry.
Although there has been no official communication from the USTR on withdrawal of GSP
benefit to India, there are speculations based on media reports that the move could be
soon as Washington is unhappy with the recent tightening of Foreign Direct Investment
(FDI) rules on e-commerce by India.
“We have proposed to the government that in case the GSP benefits are withdrawn, losses
to exporters could be offset by giving some additional incentives to certain labour-
intensive sectors,” said FIEO Director-General Ajay Sahai.
According to industry body CII, continuation of GSP benefits will also help boost the
competitiveness of American manufacturers by lowering their costs. “Approximately two-
thirds of the US imports under GSP are raw materials, components, or machinery and
equipment used for manufacturing goods for domestic consumption or for exports,”
pointed out Sanjay Budhia, Chairman, CII National Committee on EXIM.
Home
FIEO suggests series of measures to boost exports
(Source: Business Standard, February 17, 2019)
Exporters body FIEO Sunday suggested a series of measures including outright
exemption from GST, interest subsidy for agri-sector, and more funds for MSME players
to boost outbound shipments.
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8 CITI-NEWS LETTER
With increasing protectionism in several countries, domestic exporters need incentives to
increase shipments, Federation of Indian Export Organisations (FIEO) President Ganesh
Kumar Gupta said.
"These support measures, if provided on time has the potential to take the country's
exports to USD 375 billion in 2019-20 and create lakhs of jobs. This fiscal, we will cross
USD 325 billion to USD 330 billion," he said on Sunday.
On Goods and Services Tax (GST), he said, it is necessary that an outright exemption
window may be provided to exporters as was in existence before the GST regime to
mitigate the liquidity problem.
"Though, the government has taken several measures to provide quick GST refunds to
exporters, but due to one reason or the other, substantial GST refunds remain outstanding
for long time causing acute liquidity problem which adversely affect our exports growth,"
he said.
There is a good potential for agricultural produce in overseas markets and, for that there
is a need to extend the interest subsidy scheme to the sector, he added.
Besides, the FIEO president sought more funds for improving trade related
infrastructure in states, incentives to promote shipments of value added branded
products, steps to increase trade with neighbouring countries like Nepal and Bangaldesh,
and benefits on sales to foreign tourists.
"To reduce transaction time and cost simultaneously increasing competitiveness, there is
a need to provide more facility to the MSME exporters in the forthcoming foreign trade
policy particularly of non-fiscal nature," Gupta said adding exemption from IGST under
advance authorization scheme.
Under this scheme, manufacturers are allowed to import inputs at zero duty but only for
the export purposes.
During the April-January period of the current fiscal, exports grew 9.52 per cent to USD
271.8 billion.
Several key sectors like gems and jewellery, rice, marine product, leather, tea, coffee and
cashew has recorded negative growth for the current period.
Since 2011-12, India's exports have been hovering around USD 300 billion. During 2017-
18, the shipments grew by about 10 per cent to USD 303 billion.
Home
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9 CITI-NEWS LETTER
India can play key role in Nepal's bid to expand global trade: UN official
(Source: Business Standard, February 17, 2019)
India can play a key role in Nepal's bid to expand its international trade being a close
neighbour of the landlocked Himalayan nation, a top UN official has said.
India is already a major trading partner of Nepal with free movement of goods, services
and labour, UN Under-Secretary-General and High Representative for Least Developed
Countries, Landlocked Developing Countries and Small Island Developing States
(LLDCs) Fekita 'Utoikamanou said.
"India is part of South-South cooperation which is playing an increasingly important role
in addressing the persistent development challenges of vulnerable groups of countries
including LLDCs through trade, technology transfer, development finance, infrastructure
development and collective solutions to address emerging challenges such as climate
change," she said.
"The Motor Vehicles Agreement of 2015 between Bangladesh, Bhutan, Nepal and India
(BBIN) aims to facilitate the movement of cargo across their borders," Fakita said.
Several railways infrastructure projects in Nepal have been undertaken with India's
assistance, she pointed out.
India can also help Nepal by improving trade facilitation through improved simplification
and harmonisation of border crossing procedures, she told PTI in the backdrop of the
recently-concluded UN Conference on LLDC.
"This can help reduce delays at the borders and trade costs. Both India and Nepal have
ratified the WTO Trade Facilitation Agreement and their enhanced implementation of the
agreement will help to achieve improved trade facilitation," Fakita said.
The LLDCs are amongst some of the most vulnerable countries, she said.
"It is one of the three groups of countries that my office has been created to serve and
advocate for.
"Some 90 per cent of the world's trade is carried by sea. Their location makes LLDCs
isolated from major centers of economic and trade activity and lack economies of scale,"
Fakita said, adding these factors make it expensive for LLDCs to conduct trade, attract
investment and achieve sustainable development.
The UN Office of the High Representative for LLDC and Small Island Developing States
(UN-OHRLLS) is ensuring effective follow-up, implementation, monitoring and review
of the implementation of the Vienna Programme of Action, she said.
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10 CITI-NEWS LETTER
"It is supporting Nepal as an LLDCs in its efforts to implement the priority areas of the
Vienna Programme of Action that include fundamental transit policy issues,
infrastructure development and maintenance, international trade and trade facilitation,
regional integration, structural economic transformation and means of implementation,"
the diplomat added.
Home
Important changes made in GST rules
(Source: TNC Rajagopalan, Business Standard, February 18, 2019)
Merchanting trade, when an Indian buys goods from a foreign country and then sells these
to a buyer in another country, without bringing the goods into India, will not attract GST
A number of important changes in the goods and services tax (GST) laws have taken effect
from the beginning of this month. Some of these relate to import and export. Merchanting
trade, when an Indian buys goods from a foreign country and then sells these to a buyer
in another country, without bringing the goods into India, will not attract GST.
Further, sale of goods when still in a Customs bonded warehouse would also not attract
GST — this would be paid upon clearance of such goods by the buyer. High seas’ sale
transactions also would not attract GST. These situations ...
Home
'India Size' garments may hit the shelves soon
(Source: Economic Times, February 17, 2019)
In March, the government will launch an exercise to measure a group of people to prepare
a comprehensive 'India Size' chart
You may soon be able to walk into a shopping mall and try on clothes with the 'India Size',
tailored to suit the body measurements of the country's populace. The government will
also begin collating information for "trend forecasting" for textiles this month, using
commercial intelligence to determine what could be in vogue in the near future, a move
bound to exert major influence on global fashion trends, a top official said.
In March, the government will launch an exercise to measure a group of people to prepare
a comprehensive 'India Size' chart, which can be adopted by the country's apparel
industry.
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11 CITI-NEWS LETTER
"We want that we should have Indian size for two things. It can boost our retail market.
South Asian size will also get fillip, plus our own diaspora which is outside, we will become
influence drivers for foreign companies also. We are actually rolling out the exercise in
March itself," Textiles Secretary Raghvendra Singh told .
He said the government is trying to complete the "sizeable" project as soon as possible, so
that a standardised size chart can be prepared for the ready-to-wear industry, based on
body measurements of the domestic population.
The project approved earlier by the government will entail measuring of 25,000 male and
female Indians in six cities across six regions of the country: Kolkata (East), Mumbai
(West), New Delhi (North), Hyderabad (Central India), Bengaluru (South) and Shillong
(North-East). Using 3D whole body scanners and computers that will extract hundreds of
measurements from scan.
Providing well fitting garments in the absence of standardised size chart is proving to be
a big challenge for the domestic textile and apparel industry, which is projected to reach
USD 123 billion by 2021 and holds 5th position in apparel imports.
At present, India's apparel industry uses size charts which are tweaked versions of sizes
of other countries, so returns of the garments are in the range of 20 per cent to 40 per
cent and increasing with the growth of e-commerce with the main reason for returns being
poor garment fit.
A large percentage of shoppers face difficulty in finding clothes that fit perfectly according
to their body measurements, as there is no standard size chart at present.
Moreover, there are differences in anthropometric built of people in different
geographical regions across the country. Once ready, the standardised size chart will
impact various other sectors like automotive, aerospace, fitness and sport, art and
computer gaming, where insights from this data can produce ergonomically designed
products, which are suited for the domestic population.
Till date 14 countries have successfully completed national sizing surveys: the US,
Canada, Mexico, the UK, France, Spain, Germany, Korea, China and Australia.
Home
Small biz exports hit by GST refund delay
(Source: Glenwood Guardian, February 17, 2019)
Exports by were adversely affected by a delay in refund of upfront goods and services tax
(GST) and input credit, which put pressure on their working capital requirements, a study
published by the Reserve Bank of India () said. According to the study, micro, small and
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12 CITI-NEWS LETTER
medium enterprises () saw a slowdown in credit even before and declined further during
the phase. In contrast, implementation does not seem to have had any significant impact
on credit.
MSME credit and especially microcredit — including loans by banks and NBFCs — show
a healthy rate of growth in recent quarters. According to the report, bank credit to MSMEs
increased on an average by 8.5 per cent in the first quarter of FY19.
The findings of the staff study are significant considering that the trade deficit has
widened. Numbers released last week show that merchandise exports growth eased 370
basis points (100bps = 1 percentage point) to 14.3 per cent year-on-year in July, compared
with 18 per cent in June. On the other hand, import growth soared 930bps to 28.8 per
cent in July. MSMEs contribute nearly 40 per cent of the shipments from India despite
accounting for only 30 per cent of gross domestic product (GDP).
Gems and jewellery, carpets, textile, leather, handlooms and handicrafts items are export
items that are highly labour-intensive and depend heavily on cash for working capital
requirements and payment towards contractual labourers, the report said.
“MSME exports showed only mild weakness post-October 2016 (demonetisation period)
but decelerated sharply during April and August 2017 (GST implementation period) with
only a temporary recovery during the post-GST implementation period,” it said. In
contrast, non-oil, non-MSME exports growth showed healthy growth after
demonetisation but also suffered a dip during April-July 2017, it added.
Given the difficulties faced by MSMEs in debt repayments after demonetisation, the RBI
announced a series of measures to provide some relief, it said. “The prudential norms
were relaxed (on November 21, 2016) by providing an additional 60 days for repayment
of dues, beyond what is applicable for loans to be considered as sub-standard for running
working capital account, for accounts with a sanctioned limit of Rs 1 crore or less,” it said.
The relaxation was extended (on December 28, 2016) by providing additional 30 days for
repayment of dues, it said. “On December 29, 2016, the RBI advised banks to use the
facility of providing an additional working capital limit to their MSME borrowers to
overcome the cash flow mismatches. This was a one-time measure valid up to March 31,
2017,” it said.
Home
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13 CITI-NEWS LETTER
Indian Inc's Q3 results: Few companies pulled down earnings growth
(Source: Narendra Nathan, Economic Times, February 18, 2019)
Experts say that even the fourth quarter results are likely to be weak as companies are
unlikely to take big decisions before the general elections.
Over the past year, the stock market
did not perform well as the expected
earnings revival did not happen. The
third quarter results show that the
revival is still a distant dream. While
aggregate revenues of Rs 1,969
companies that have declared results
grew 17%, their aggregate net profit
fell 37%. “The overall top line growth
was as expected, and even the bottom line growth for most sectors was in line with
expectations. However, the aggregate bottom line growth disappointed because of
negative surprises in a few sectors,” says Pankaj Pandey, Head, Research, ICICI Direct.
Experts say that even the fourth quarter results are likely to be weak as companies are
unlikely to take big decisions before the general elections. Also, China’s rapid slowdown
will hurt the global economy and, thus, India. “As no major uptick is expected in the fourth
quarter, the earnings downgrades may continue in the coming days,” says Mihir Vora,
Director and CIO, Max Life Insurance.
Let’s analyse individual sectors in detail.
Auto
Tata Motors’ consolidated year-onyear (y-o-y) net loss of Rs 26,901 crore has hurt the
entire auto sector’s growth. Slowdown in Chinese operations and write down of JLR
investments have led to this huge loss. Other auto companies like Maruti Suzuki also
reported weak numbers due to margin contraction, triggered by adverse commodity
prices and foreign exchange rates. “While there will be a slight improvementin margins
due to the fall in commodity prices, the overall weakness in the auto sector may continue
for some more quarters. Its revival will also depend on the coming monsoon season,” says
Kishor P. Ostwal, CMD, CNI Research
Earnings downgrade to continue
Estimates will be cut as the fourth quarter results are also likely to be weak.
Telecom
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14 CITI-NEWS LETTER
With Reliance Jio’s onslaught continuing, there is no end to the woes of other telcos. Due
to the fall in the net profit of Bharti Airtel and losses of Vodafone-Idea, the industry’s net
loss rose to Rs 4,982 crore from Rs 1,074 crore, y-o-y. “Since the competition in the
telecom sector is continuing, the situation may remain the same for one more year,” says
Pandey.
BFSI
Lenders like Axis Bank showed 131% y-o-y and 113% quarter-on-quarter (q-o-q) rise in
net profit, triggered by high net interest income and recovery of loans earlier marked as
bad debt. There is some improvement in the public sector banks (PSBs) as well: SBI
reported a net profit of Rs 4,709 crore compared to a net loss of Rs 1,887 crore a year ago.
However, other PSBs continued reporting losses. Overall, 38 banks reported a net profit
of Rs 1,513 crore compared to a loss of Rs 5,277 crore a year ago. Huge fall in HDFC’s net
profit due to one-off items, and poor performance by tier-2 NBFCs led to a 12% cut in
aggregate net profit of NBFCs.
Oil and gas
The sector reported poor results. “While upstream firms suffered due to the fall in crude
prices, downstream companies did not gain due to the contraction in refining margins.
Their results will be under pressure in the fourth quarter as well,” says Pandey. Cut in
their marketing margins, forced by the government, is another reason why companies like
IOC saw a 91%, y-o-y, fall in net profit. Net profit of HPCL and BPCL crashed 87% and
77%, respectively. However, these firms are slowly recouping their marketing margins.
IT and pharma
Barring Infosys, whose net profit fell 30%, y-o-y, and 12%, q-o-q, due to one-off items,
other big IT players continued to do well. The sector also benefitted from rupee
depreciation. The sector is expected to do well because of the strength of the US economy.
However, the US Food and Drugs Administration-related issues continue to plague the
pharma industry.
Hospitality
With a 46% rise in net profit, the hospitality industry did well in the third quarter. “Since
room occupancy has improved further, the sector is expected to report better numbers in
the fourth quarter,” says Pandey.
Chemicals
This industry has been performing well, mostly because of the issues facing the Chinese
chemicals sector. “The shift from coal to gas by the Chinese chemicals industry is time
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15 CITI-NEWS LETTER
consuming and may stretch up to 2025, making the Indian chemicals sector a promising
story over the long-term,” says Ostwal.
Home
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GLOBAL:
5,000 Bangladesh garment factory workers protest demanding higher
wages, all fired
(Source: The New Indian Express, February 16, 2019)
One worker was killed and more than 50 were injured in clashes during the protests in
the Ashulia, Dhaka, Gazipur and Savar areas.
DHAKA: More than 5,000 Bangladesh workers who demanded higher wages have been
fired by factory owners, and hundreds face police charges in the world's second-largest
garment export industry after China, an activist said Thursday.
Kalpona Akter of the Bangladesh Center for Worker Solidarity said the firings came after
thousands of workers took to the streets earlier this month in and around Dhaka, the
nation's capital.
But an industry leader said Thursday that the dismissed workers were involved in
vandalism or other crimes, or were laid off when factories closed because of business
losses.
One worker was killed and more than 50 were injured in clashes during the protests in
the Ashulia, Dhaka, Gazipur and Savar areas.
In November, the government increased the monthly minimum wage for garment
workers to 8,000 takas (USD 96) from 5,300 takas (USD 63). But workers weren't
satisfied after having demanded more, along with the implementation of other benefits
declared by the authorities. Unions and advocacy groups have demanded up to 16,000
takas (USD 193) as a minimum salary, but factory owners say they are under tremendous
pressure to meet prices demanded by global brands.
The industry exports about USD 30 billion worth of garments a year, mainly to Europe
and North America.
Akter said hundreds of workers are facing looting and vandalism charges and some have
also been accused of attempted murder. More than 50 workers were arrested and many
others have fled their rented homes in the industrial zones, she said.
"We came to know at least 5,000 workers have been sacked, but the actual figure by this
time could be about 7,000," she said. "Many workers are being harassed."
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17 CITI-NEWS LETTER
The president of the Bangladesh Garment Manufacturers and Exporters Association said
he did not know the exact number of workers who have lost their jobs, and no innocent
people were facing any legal trouble.
"Some of the workers were involved in vandalism, looting and other crimes," association
President Siddiqur Rahman told The Associated Press. "They will damage our factories,
they will destroy very expensive equipment, they will smash our vehicles and beat our
officials. Should not we report it to police? If you are the owner what would you do?"
He said the industry has a shortage of workers.
"Why should I sack my workers if my business is good, if I make money? We have huge
bank loans, we have many other liabilities, why would an owner fire their workers without
any genuine reasons?"
He said the situation is now under control.
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Thailand counting on Indian support for RCEP | Bangkok Post: business
(Source: Bangkok Post, February 18, 2019)
Thailand is looking for India's support to help settle talks and conclude the Regional
Comprehensive Economic Partnership (RCEP) by the end of this year.
Chutima Bunyapraphasara, the acting commerce minister, said that at the fourth India-
Asean Expo and Summit, scheduled for New Delhi during Feb 22- 23, she will meet with
Indonesian Trade Minister Enggartiasto Lukita, Asean secretary-general Paduka Lim
Jock Hoi and Indian Minister of Commerce and Industry Suresh Prabhu to discuss Indian
support to conclude the RCEP this year.
The talks will also focus on a backlog of issues, including the market access package on
the exchange of goods and service items. Other issues on the agenda are trade obstacles,
the rule of origins, and e-commerce and intellectual trade competition.
"Thailand is ready to host the meeting on the backlog issues so that the RCEP negotiations
can be concluded within this year," Ms Chutima said.
The RCEP was launched in November 2012 with the aim of establishing deeper economic
cooperation between the 10 members of Asean and Australia, China, India, Japan, New
Zealand and South Korea, with a focus on trade in goods, services and investment. If
signed, the agreement will create an economic bloc with a combined population of 3.5
billion and trade volume of US$10.7 billion, accounting for nearly 30% of global trade.
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The fourth India-Asean Expo and Summit will also conduct business matching between
the Thai and Indian private sectors, including construction/logistics, electronics and
rubber tyres. In 2018, bilateral trade between Thailand and India amounted to US$12.46
billion, a rise of 20.2% from the year before.
Exports from Thailand represented $7.6 billion, with key shipments including plastic
pellets, chemicals, automotive and auto parts, gems and jewellery, and machinery and
parts.
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Vietnam’s M&A market forecast to mark a banner year in 2019
(Source: Vietnam Net, February 17, 2019)
Experts have been upbeat about Vietnam’s merger and acquisition (M&A) market this
year, fueled by the government’s continued initiatives to relax the foreign ownership
ceiling and the country’s adoption of new trade deals.
Seck Yee Chung from global law firm Baker & McKenzie said Vietnam’s M&A value,
especially in the retail, consumer goods, and food and beverage (F&B) sectors, will rise in
2019 as more foreign investors look to increase their investment and further expansion
within the local market.
The amount of M&A and investment activities in the market indicate many trends, in
particular, reflecting confidence in the market, Chung said, noting M&A activities in 2018
did not outpace 2017, which had two high-profile public company deals in the beverage
sector. However, M&A activities in the retail, consumer goods and F&B sectors remain
higher than other sectors.
Specifically, he said, within the consumer goods industry, convenience stores and mini-
marts in Vietnam remain one of the fastest growing segments in the industry and it is
expected to see continued investment.
“We have seen and can expect an increase in foreign investment into privatized state-
owned enterprises due to the continued initiatives to relax the foreign ownership ceiling,
which has been integrated into the government’s desire to divest its ownership in big
players in the consumer goods market,” Chung said.
Echoing Chung, Vice Chairman of the Vietnam Association of Foreign Invested
Enterprises Nguyen Van Toan, is also optimistic about the M&A market in 2019 thanks
to recent positive developments.
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19 CITI-NEWS LETTER
According to Toan, M&A deals hit US$9.9 billion last year, making a record disbursement
of foreign direct investment (FDI) of US$19.1 billion in the year. This shows foreign
investors’ increasing confidence in Vietnam as well as achievements in state divestment
and privatization.
Big push underway
Toan forecast Chinese enterprises will shift their investment strategies by pouring more
capital into building plants in Vietnam to take advantage of its integration commitments
within ASEAN and other free trade deals, which will contribute to pushing up M&A
activities.
Chung also believed Vietnam will gain from the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP) in various ways, from lowered tariffs
to exports to increased confidence in the Vietnamese market.
“The adoption of the CPTPP would result in a reduction of tariffs on consumer goods,
such as certain milk and dairy products and textile products, leading to a potential overall
increase in the growth of these consumer goods, thereby increasing incentives to invest
and driving M&A activities in the areas,” he explained.
In addition, Chung said, there are some positive trends from a regulatory perspective
which may further build confidence for investors in M&A deals in the retail, consumer
goods and F&B sectors, which include the government’s increasing willingness to engage
in state divestment; regulations to ease some of the requirements for foreign-invested
traders; and the drafting of the Securities Law aiming to ease foreign ownership
limitations and conditions.
However, in order to remain an attractive destination for foreign investors, Chung
suggested the government should continue to embrace Industry 4.0 and prioritize making
digital tools and services available to businesses besides cutting regulatory red tape to
lessen unnecessary burdens for investors and entrepreneurs.
Besides, Nguyen Thi Viet Nga from the Academy of Finance recommended legal
regulations should be streamlined as there are no full details for M&A in Vietnamese
documents and laws, causing difficult for state agencies to manage and prevent local firms
from finding suitable partners.
Serving as brokers for M&A deals, securities, financial and audit companies should
enhance their roles in the deals as their human resources, professionalism and
information have remained insufficient, Nga added.
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Indian Embassy Holds Roadshow to promote Terry Towel Expo
(Source: Muscat Daily, February 17, 2019)
MUSCAT - The Indian Embassy in Muscat, as part of its endeavour to promote
business relations between India and Oman, last week organised a roadshow to promote
Vibrant Terry Towel Global Expo & Summit 2019 (VTTGES).
The roadshow also facilitated business interactions between visiting Indian delegation
and stakeholders in Oman.
Eng Redha Juma al Saleh, member, Board of Directors of the Oman Chamber of
Commerce and Industry, was the chief guest on this occasion.
Eng Saleh stressed on the immense potential for further increase in trade between India
and Oman.
Rakesh Adlakha, deputy chief of mission, in his welcome remarks referred to the
historical trade links between the two countries and invited Omani businessmen to attend
VTTGES 2019. Representatives of Textile Development Foundation (TDF), Solapur, gave
a detailed presentation on VTTGES 2019, which will be held from September 25 to 27 in
Solapur, Maharashtra.
Solapur, known as ‘The Towel City of India’ for its crafty terry towels and bath linen being
manufactured at reasonable costs, possesses a rich blend of culture, interesting
mythology and a thriving cottage and small-scale industry. The unique design of Solapur’s
terry towels and bath linen is protected and recognised ‘Geographical Indication’ under
the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
‘VTTGES 2019 and Make in Solapur’ organised with the support of Ministry of Textiles,
Government of Maharashtra will bring together all stakeholders from ‘yarn to fabric’ viz
cotton growers, manufacturers, traders, exporters and importers both domestic and
international, and consumers to a unique platform to harness export opportunities of
towel manufacturers for their foray into national and international markets.
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Stretchable multi-functional fibre
(Source: Printed Electronics World, February 18, 2019)
Fiber-based electronics are expected to play a vital role in next-generation wearable
electronics. Woven into textiles, they can provide higher durability, comfort, and
integrated multi-functionality. A KAIST team has developed a stretchable multi-
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functional fiber (SMF) that can harvest energy and detect strain, which can be applied to
future wearable electronics. For more information see the IDTechEx report on E-Textiles
2018-2028. With wearable electronics, health and physical conditions can be assessed
by analyzing biological signals from the human body, such as pulse and muscle
movements. Fibers are highly suitable for future wearable electronics because they can be
easily integrated into textiles, which are designed to be conformable to curvilinear
surfaces and comfortable to wear. Moreover, their weave structures offer support that
makes them resistant to fatigue. Many research groups have developed fiber-based strain
sensors to sense external biological signals. However, their sensitivities were relatively
low. The applicability of wearable devices is currently limited by their power source, as
the size, weight, and lifetime of the battery lessens their versatility. Harvesting
mechanical energy from the human body is a promising solution to overcome such
limitations by utilizing various types of motions like bending, stretching, and pressing.
However, previously reported, fiber-based energy harvesters were not stretchable and
could not fully harvest the available mechanical energy.
Professor Seungbum Hong and Professor Steve Park from the Department of Materials
Science and Engineering and their team fabricated a stretchable fiber by using a
ferroelectric layer composed of P(VDF-TrFE)/PDMS sandwiched between stretchable
electrodes composed of a composite of multi-walled carbon nanotubes (MWCNT) and
poly 3,4-ethylenedioxythiophene polystyrenesulfonate (PEDOT:PSS). Cracks formed in
MWCNT/PEDOT:PSS layer help the fiber show high sensitivity compared to the
previously reported fiber strain sensors. Furthermore, the new fiber can harvest
mechanical energy under various mechanical stimuli such as stretching, tapping, and
injecting water into the fiber using the piezoelectric effect of the P(VDF-TrFE)/PDMS
layer. Professor Hong said, "This new fiber has various functionalities and makes the
device simple and compact. It is a core technology for developing wearable devices with
energy harvesting and strain sensing capabilities."
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