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

03-07-2019 78.35 (+0.75)

02-07-2018 93.75

03-07-2017 83.55

New York Cotton Futures (Cents/lb) As on 05.07.2019 (Change from

previous day)

July 2019 66.23 (+2.48)

Oct 2019 65.76 (-0.23)

Dec 2019 66.04 (-0.05)

05th July

2019

US drags India to WTO over customs duty hike on 28 American goods

India, EU officials to meet next week to discuss trade issues

Indonesian, Thai ministers to meet Piyush Goyal next week

Will Tirupur get a helping hand from Budget?

India's first Design Development Centre 'Fashionova' launched in Surat,

Gujarat

Cotton and Yarn Futures

ZCE - Daily Data (Change from previous day)

MCX (Change from previous day)

July 2019 21430 (-90)

Cotton 14405 (+30) Aug 2019 21110 (-70)

Yarn 22100 (+40) Oct 2019 20460 (-20)

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2 CITI-NEWS LETTER

-------------------------------------------------------------------------------------- US drags India to WTO over customs duty hike on 28 American goods

India, EU officials to meet next week to discuss trade issues

Indonesian, Thai ministers to meet Piyush Goyal next week

DGTR developing web app for submission of info about anti-dumping

probes: Survey

Coming, DBT of minimum wages that will cover all

Union budget have something special for sectors like textiles and real estate

Will Tirupur get a helping hand from Budget?

Union budget: Centre urged to cut GST on service provided by CETPs

Budget 2019: Expectations from textile industry

Budget 2019: How government can enable e-commerce exports to boost

Make in India

Investment-driven growth model must have aggressive export strategy:

Survey

Port capacity augmentation top on govt agenda: Survey

India's first Design Development Centre 'Fashionova' launched in Surat,

Gujarat

700 brands from 32 countries exhibiting at HGH India

GHCL ranks among Best Workplaces for third consecutive year

------------------------------------------------------------------------------- Trade war: China says existing US tariffs should be removed for a deal

China, Bangladesh agree to advance cooperation under BRI

IMF board approves $6 billion loan package for cash-strapped Pakistan for 3

years

Pakistan: Sub-committee formed to identify problems of textile sector

Vietnam's cloth import rises 7.6 pct in H1

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

NATIONAL

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

GLOBAL

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3 CITI-NEWS LETTER

NATIONAL:

US drags India to WTO over customs duty hike on 28 American goods

(Source: Business Standard, July 05, 2019)

The US has alleged that the duties imposed by India appear to be inconsistent with two

norms of GATT

The US on Thursday dragged India to the WTO by filing a complaint against New

Delhi's move to increase customs duties on 28 American goods, alleging the decision is

inconsistent with the global trade norms.

According to a communication of the Geneva-based World Trade Organisation (WTO),

the US said that the additional duties imposed by India "appears to nullify or impair the

benefits accruing to the US directly or indirectly" under the GATT 1994.

The General Agreement on Tariffs and Trade (GATT) is a WTO pact, signed by all

member countries of the multi-lateral body, aims to promote trade by reducing or

eliminating trade barriers like customs duties.

The US has alleged that the duties imposed by India appears to be inconsistent with two

norms of GATT.

The US has stated that India does not impose these duties on like products originating

in the territory of any other WTO member nation.

"India also appears to be applying rates of duty to US imports greater than the rates of

duty set out in India's schedule of concessions," the communication said quoting the US

application.

The duties are inconsistent because "India fails to extend to products of the US an

advantage, favour, privilege or immunity granted by India with respect to customs

duties and charges of any kind imposed on or in connection with the importation of

products originating in the territory of other members...," the US has alleged.

As part of the dispute, the US has sought consultations with India under the aegis of the

WTO's dispute settlement mechanism.

"We look forward to receiving your reply to the present request and to fixing a mutually

convenient date to hold consultations," it said.

As per the WTO's dispute settlement process, the request for consultations is the first

step in a dispute.

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4 CITI-NEWS LETTER

Consultations give the parties an opportunity to discuss the matter and find a

satisfactory solution without proceeding further with litigation.

After 60 days, if consultations fail to resolve the dispute, the complainant may request

adjudication by a panel.

This case assumes significance as officials of both the countries would be meeting next

week here to discuss trade related issues.

The two countries are also at loggerheads at the WTO on other issues. The US has

challenged certain export promotion schemes of India, while India has challenged USA's

unilateral hike on customs duties on certain steel and aluminium products.

The US has rolled back export incentives from India under its GSP programme and New

Delhi has imposed higher customs duties on 28 American products including almond,

pulses, walnut, chickpeas, boric acid and binders for foundry moulds.

The other products on which duties were hiked include certain kind of nuts, iron and

steel products, apples, pears, flat rolled products of stainless steel, other alloy steel, tube

and pipe fittings, and screws, bolts and rivets.

The duties were hiked as retaliation to the US move to impose the highest customs

duties on certain steel and aluminium goods.

India's exports to the US in 2017-18 stood at USD 47.9 billion, while imports were at

USD 26.7 billion. The trade balance is in favour of India.

Home

India, EU officials to meet next week to discuss trade issues

(Source: Business Standard, July 04, 2019)

Senior officials of India and the European Union would meet here next week to discuss

trade related issues, including the long-stalled proposed free trade agreement, sources

said.

Chief negotiators of the free trade agreement are expected to deliberate upon ways to

resume the talks.

Negotiations for the pact, officially dubbed as the Bilateral Trade and Investment

Agreement (BTIA), have been held up since May 2013 and have witnessed many

hurdles.

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5 CITI-NEWS LETTER

Further, senior officials from ASEAN are also likely to hold discussions with Indian

authorities on the proposed mega free trade agreement RCEP.

The Regional Comprehensive Economic Partnership (RCEP) bloc comprises 10 ASEAN

group members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore,

Thailand, the Philippines, Laos and Vietnam) and their six free trade agreement (FTA)

partners -- India, China, Japan, South Korea, Australia and New Zealand.

The talks assume significance as member countries are targeting to conclude the

negotiations by the end of this year.

RCEP negotiations, which started in Cambodian capital Phnom Penh in November

2012, aim to cover goods, services, investments, economic and technical cooperation,

competition and intellectual property rights.

A US official delegation will also meet officials here for trade-related issues. This will be

the first India-US meeting after America's decision to roll back export incentives under

their GSP programme.

Home

Indonesian, Thai ministers to meet Piyush Goyal next week

(Source: Dipanjan Roy Chaudhury, Kritika Suneja, Economic Times, July 05, 2019)

RCEP is a proposed regional economic integration agreement among the 10 Asean

countries and its six free-trade agreement partners—Australia, New Zealand, Japan,

China, South Korea and India.

Trade ministers of Indonesia and Thailand, accompanied by the Asean Secretary

General, will meet commerce minister Piyush Goyal early next week to hear India’s

concerns and expedite negotiations for the proposed Regional Comprehensive

Economic Partnership (RCEP).

This comes on the heels of Prime Minister Narendra Modi’s meetings with Southeast

Asian (Indonesia-Thailand-Singapore) leaders on the sidelines of the G20 summit in

Osaka on June 28-29, where the issue of concluding an agreement by the end of the year

figured prominently.

Over the past two years, key SE Asian leaders have raised the issue with Modi, who has a

favourable view of what would be the world’s largest trading bloc, ET has learnt. “The

minister will meet his counterparts from Thailand and Indonesia, but the agenda of the

meetings is yet to be firmed up,” a commerce and industry ministry official said. While

Thailand is the current Asean chair, Indonesia is the coordinator for RCEP. RCEP is a

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6 CITI-NEWS LETTER

proposed regional economic integration agreement among the 10 Asean countries and

its six free-trade agreement partners—Australia, New Zealand, Japan, China, South

Korea and India. Intense negotiations are slated for this year, with one meeting held in

Australia and another scheduled later this month in China. A ministerial meeting is

scheduled in China in August.

India’s textile and automobile industries are wary about competition from China. The

aluminium and copper industry associations have raised concerns over issues such as

the likely widening of India’s trade deficit with China due to an “alarming” spike in

imports and a potential threat to the ‘Make in India’ initiative. India registered a trade

deficit in 2018-19 with as many as 11 RCEP member-countries including China, South

Korea and Australia. The grouping has been negotiating the trade pact since November

2012. “These meetings could be a pressure tactic to keep India in the trade agreement as

China recently proposed an Asean-plus-three pact without India, Australia and New

Zealand,” said Biswajit Dhar, a professor at the Centre for Economic Studies and

Planning in the School of Social Sciences at Jawaharlal Nehru University. According to

Dhar, through Asean-plus-three, the other members are responding to India’s

negotiating strategy. “However, if they are not willing to discuss services, there is no

point of a deal,” Dhar said. “RCEP is an opportunity and India must sign it, keeping

adequate safeguards. Not signing RCEP means economic and strategic isolation in our

immediate backyard,” Prabir De, head of the India-Asean Centre at Research and

Information System for Developing Countries, told ET. India’s major proposals, which

RCEP countries have rejected due to their fears over migration and loss of jobs, include

a more business-friendly visa regime through a fee waiver on a common reciprocal basis

and a business travel card to facilitate the movement of professionals and tourists in the

region. The pact may boost India’s service exports by $2 billion-$10 billion, although it

won’t compensate for the higher amount of goods imported, according to one of three

government-appointed think tanks studying the agreement. India recently protected its

interests by managing to fight off patent provisions on generic medicines and seeds in

negotiations for RCEP. New Delhi’s concerns of a widening trade deficit, especially with

China, have prevented the deal from getting finalised, many members have said.

However, experts said India’s ability to extract concessions highlights the willingness of

other states to accommodate New Delhi’s demands to involve the country in a final

agreement.

Home

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7 CITI-NEWS LETTER

DGTR developing web app for submission of info about anti-dumping

probes: Survey

(Source: Business Standard, July 04, 2019)

The Commerce Ministry's trade investigation arm, DGTR, is developing a web

application for online submission of petitions and information related to anti-dumping

and countervailing probes, Economic Survey 2018-19 said Thursday.

The application would help the industry participate in these investigations which are

important trade remedial measures.

The Directorate General of Trade Remedies (DGTR) is an arm of the Commerce

Ministry which carries probe on alleged dumping of goods from other countries.

If it is established in the probe that dumping has caused material injury to domestic

players, it recommends anti-dumping duties to guard the interest of industry.

"DGTR is in the process of developing a web application for online submission of

petitions, information submissions, rejoinders etc. related to anti-dumping/

countervailing/ anti-circumvention investigations, for convenience of the industry...,"

the survey said.

India conducts anti-dumping investigations on the basis of applications filed by the

domestic industry with prima facie evidence of dumping of goods in the country.

The probe is a quasi-judicial process and is allowed under the World Trade Organisation

(WTO) rules. India is a member of WTO which frames laws for global exports and

imports.

During the period from April 2018 to March 2019, DGTR had initiated 24 anti-dumping

(both fresh and review) investigations, and issued final findings in 50 such cases.

In 2018-19, it started five countervailing duty probes, while one safeguard measure

investigation was also finalised during the period.

Home

Coming, DBT of minimum wages that will cover all

(Source: The Hindu Business Line, July 03, 2019)

Cabinet okays new code on remuneration; proposed Bill to be introduced in Parliament

The Union Cabinet on Wednesday approved the re-introduction of the Code on Wages

Bill. This will make minimum wages applicable for both formal and informal sectors,

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8 CITI-NEWS LETTER

enable transfer of wages through the direct benefit transfer mechanism and bolster the

system for redressing the grievances of labourers.

The Bill was introduced during the 16th Lok Sabha and the Standing Committee had

also given its report. However, it could not be passed, and hence, it lapsed. This

necessitated fresh approval by the Cabinet before re-introduction in the Lok Sabha. The

proposed Bill aims to merge four central laws — the Payment of Wages Act, 1936, the

Minimum Wages Act, 1948, the Payment of Bonus Act, 1965 and the Equal

Remuneration Act, 1976. The new Bill is expected to be introduced during the ongoing

session of Parliament.

According to sources, the proposed Bill will provide for all essential elements relating to

wages, equal remuneration, and bonus. The provisions relating to wages will be

applicable to all employments covering both organised and unorganised sectors. The

power to fix minimum wages continues to be vested in the Central and State

governments in their respective spheres.

The proposed legislation will enable the appropriate government to determine the

factors by which the minimum wages shall be fixed for different categories of employees.

The factors shall be determined taking into account the skills required, the arduousness

of the work assigned, geographical location of the workplace and other aspects which

the appropriate government considers necessary.

Key provision

One of the important provisions relates to timely payment of wages and authorised

deductions from wages, which are presently applicable only to employees drawing wages

up to ₹18,000 per month. Under the new Bill, this will be made applicable to all

employees irrespective of the wage ceiling.

The Bill also talks about payment of wages by cheque or through digital or electronic

mode or by crediting it in the bank account of the employee. However, the appropriate

government may specify the industrial or other establishment, where the wages are to be

paid only by cheque or through digital or electronic mode or by crediting the bank

account of the employee.

Home

Union budget have something special for sectors like textiles and real estate

(Source: Sri Ramachandra Murthy, Ap-Herald, July 04, 2019)

Even though the Union Budget is to be presented only on Friday, July 5, and there’s a lot

of confidentiality maintained as far as Indian budgets go, some clues are available from

answers the Finance Minister has given in the Rajya Sabha. Furthermore members of

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9 CITI-NEWS LETTER

Parliament asked questions and Nirmala Sitaraman has submitted a written response to

one such question on the economy by an MP in the Rajya Sabha.

Reportedly one of the key takeaways from the Finance Minister’s reply to the question is

the seriousness being attached at the top levels of the Indian government to the issues of

encouraging investments, particularly in sectors that can create more employment.

Meanwhile the budget therefore may have something special for sectors like textiles and

real estate, considered largest employers in the country. Currently the government has

been holding discussions with experts from diverse fields to gather their opinions on

what all can be done to kick-start the economy and the minister has also referred to the

five-member cabinet committee on investment and growth chaired by the Prime

Minister that has been constituted to address the issues.

Moreover on the issue of willful defaults, the reply placed in the Rajya Sabha by Finance

Minister Nirmala Sitaraman says Rs 1.5 trillion worth of loans have been classified as

“willful defaults" in FY19 by the state run banks, with the SBI accounting for as much as

Rs 46,158 crore of this amount. PNB and Bank of india stand second and third in terms

of loans defaulted from their books.

Home

Will Tirupur get a helping hand from Budget?

(Source: The New Indian Express, July 05, 2019)

Our textile industry stands next to agriculture, providing employment to 110 million

people directly and indirectly.

Tamil Nadu’s textile hub, Tirupur, has been slowly bleeding from the blow inflicted by

China’s tilt to Bangladesh, Vietnam and Ethiopia. The wound hurts more because of

India’s excessive dependence on China for the past three years and its dwindling

presence in Europe. The Tirupur Exporters’ Association, India’s leading

knitwear/readymade garment export cluster, has been clamouring for an agreement

that is compatible with the WTO in place of incentives like the Merchandise Exports

from India Scheme (MEIS) given to exporters. Its recent appeal to the Centre to

diversify global reach must be taken seriously to stitch the sector back together.

For readymade garments, the industry has been urging the Centre to work towards

inking Free Trade Agreements with the EU, the UK and the Eurasian Economic Union,

and trade deals with Canada and Australia. The sector feels the pinch as India is

competing with Bangladesh, Vietnam, Cambodia, Ethiopia, Myanmar and Sri Lanka,

apart from China, currently the world’s largest garment exporter. Many of them export

duty-free to the EU because they are either in the least developed country bracket, are a

signatory of Free Trade Agreements or come under the US Generalised System of

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10 CITI-NEWS LETTER

Preferences (GSP) list. While Bangladesh enjoys duty-free status while exporting to

Europe, India and Vietnam pay 13-15% in import duties. Yet, Vietnam has the advantage

of better efficiency (90%) than India (50%). Labour is cheaper in Bangladesh and

Vietnam. So, India has slipped to the fourth choice for any importer, after China,

Bangladesh and Vietnam.

Our textile industry stands next to agriculture, providing employment to 110 million

people directly and indirectly. The total textile exports amount to $38 billion, with a

4.3% share in the GDP. India’s share in global garment exports is 5.2%. It is high time

the Centre delves into the possibility of inking trade deals that would save the sector

from being ripped apart, and exporters hope that Friday’s Budget would provide them

some relief.

Home

Union budget: Centre urged to cut GST on service provided by CETPs

(Source: Times of India, July 04, 2019)

Textile dyeing units in Tirupur have urged the Union government to reduce GST on

service provided by CETPs (common effluent treatment plants) from 12% to 5% in the

coming budget. The CETPs were meant for implementation of zero liquid discharge

(ZLD) norm in the apparel industry as they would treat effluents sent from the dyeing

units and send recycled water to the dyeing units.

In a memorandum submitted to the Union finance minister Nirmala Sitharaman, Dyers

Association of Tirupur president S Nagarajan said, "Considering the important role

played by CETPs in environmental protection and water conservation, tax was exempted

for their service in both occasions in 2005 and 2011 respectively. But when GST was

introduced, 18% tax was imposed on the service, and it was later reduced to 12% but we

have been insisting the government to make it 5%." He said, "12% service tax levy on

members of CETPs are non-refundable. Because of this, the processing cost in the

dyeing units was increased by 3% to 4%, and subsequently increased the cost of

garments manufactured in Tirupur, in comparing to countries like Bangladesh,

Vietnam, Sri Lanka and Pakistan, where there is no ZLD system in place."

Home

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11 CITI-NEWS LETTER

Budget 2019: Expectations from textile industry

(Source: Deccan Herald, July 04, 2019)

"As the previous government comes into power for the second time, the ambiance is

strife with intrigue as to what new announcements would be made. With the onset of

budget looming around the corner, many reforms are said to upli the very framework of

a business that one conducts business in, "Monica Oswal, Executive Director, Monte

Carlo said.

The interim budget hadn’t brought great cheers to the textile segment- Finance Minister

Piyush Goyal had initially proposed Rs 5,831.48 crore budgetary allocations for the

textile ministry for 2019- 20. This came as 16.01 percent lower than the current fiscal,

worrying the textile players. One can hope that the recent budget would bring more

financial allocations to bolster the industry, " Oswal added

Home

Budget 2019: How government can enable e-commerce exports to boost

Make in India

(Source: Sachin Taparia, Financial Express, July 04, 2019)

Budget 2019-20: The reasons for India’s low share in e-commerce exports are multiple

but thankfully none that can’t be addressed if taken up in mission mode.

Budget 2019 India: The global exports via e-commerce is an annual market opportunity

of $450 billion. This includes all goods that are directly sold to a consumer from a seller

located outside their country and the order is placed via the internet. Currently, around

75,000 sellers or exporters are able to retail their goods via e-commerce.

To put things in perspective, out of this $450 billion available e-commerce exports

opportunity, India did a meagre $1.2 billion in 2018-19. The reasons for India’s low

share in this fast-growing market are multiple but thankfully none that can’t be

addressed if taken up in mission mode with a great sense of urgency.

E-commerce exports have the potential to be grown by a magnitude of 10 in the coming

five years translating into $12 billion worth e-commerce exports by 2024. This 10X

growth can be achieved by growing volumes in the existing and new categories that

contribute maximum to e-commerce exports such as home décor and furnishings,

medicinal and Ayush products, apparels and textiles, beauty and cosmetics, office and

stationery products, leather, handloom and handicraft, gems & jewellery, and toys &

sporting goods. In order to achieve this 10x growth, focus on the following areas in this

year’s budget is important.

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12 CITI-NEWS LETTER

RBI should permit inward remittance of around 50 per cent of invoice value at

the time of export, thereby allowing exporters the flexibility to sell goods at a

premium based on product demand or at a lower price in case of stock

liquidation.

RBI should also permit the realisation of exports proceeds up to a period of 24

months from the date of export.

A mission mode project should be launched with deep engagement with EPCs

and exporters participation in the identified categories mentioned above.

The government should set up an E-commerce Exports Center of Excellence that

enables exporters to quickly get onboard on e-commerce for selling their

products.

Roll out of an e-commerce exports service by India Post that provides Business to

Consumer international speed post delivery times at one-third of the current

prices. The product must entail a shipment pick up service, post offices in top 50

exporting districts having a dedicated e-commerce desk staffed with trained

personnel and integration with APIs of the US Post, Royal Mail and other

destination countries such that an exporter or a consumer and can track their

shipment end to end.

The government should provide subsidies or incentives to exporters for

advertising their products by around 50 per cent that would help them grow their

exports.

The Ministry of Commerce needs to assume a leadership role and work with the

industry and the various government departments like RBI, India Post, CBIC and the

various Export Promotion Councils.

The budget should announce e-commerce exports as a priority sector which will give it a

major boost. This is one sector which can take Make in India to the next level as we will

make more of what we have an expertise in. It will help bring new foreign exchange and

create a large number of jobs. If the workers in Moradabad stay in Moradabad and work

in an export unit and not have to move to Delhi NCR, it is a great thing.

Sachin Taparia is the founder and chairman at online community platform

LocalCircles.

Home

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13 CITI-NEWS LETTER

Investment-driven growth model must have aggressive export strategy:

Survey

(Source: Subhayan Chakraborty, July 05, 2019)

The onus of rescuing economic growth has been placed squarely on exports, since the

share of consumption in gross domestic product (GDP) remains constrained

Any investment-driven growth model must have an

aggressive export strategy, the government said in

its Economic Survey of 2018-2019.

The onus of rescuing economic growth has been

placed squarely on exports, since the share of

consumption in gross domestic product (GDP)

remains constrained by a high level of savings, the Survey said. Goods exports rose 8.8

per cent in 2018-19, after a 10 per cent rise in the previous year.

However, it mentioned weak exports growth in 2019-20 as a key downside risk to the

economy, taking note of continuing heightened US-China trade tensions. The Survey

sounded a stark warning that prospects of export growth remain weak for 2019-20 if

status quo is maintained. The World Economic Outlook in its April 2019 issue had

projected growth in world output at 3.3 per cent in 2019, down from 3.6 per cent in

2018.

Rupee devaluation

The Survey pointed out that the desired export growth required to deliver the 8 per cent

real GDP growth rate may require a depreciation in the real effective exchange rate. "But

we emphasise export growth stemming from increases in productivity rather than

currency depreciation," the Survey countered. However, the government stressed that a

higher growth rate for exports has been seen in Rupee terms due to the depreciation of

the currency, while that of imports declined in 2018-19.

In view of the demand by industry to re-assess India's existing free trade agreements

(FTA), the Survey noted that India's imports from FTA nations have been on the rise,

accounting for 52.0 per cent of India’s total imports. On the other hand, exports

continue to trail. Outbound trade with trade partners accounted for 36.9 per cent of

total exports.

The high-level advisory group, formed to boost exports and headed by ex-member of the

prime minister's economic advisory council Surjit Bhalla, had suggested making impact

assessment studies for industry a pre-requisite for all trade negotiations. India has

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14 CITI-NEWS LETTER

signed 28 bilateral and multilateral trade agreements with various countries and nation

groupings.

East Asia model

The Survey also continued to focus on manufacturing-led growth in east-Asian

economies such as Japan, South Korea and most importantly China. Chief Economic

Advisor Krishnamurthy Subramanian borrowed from his predecessor Arvind

Subramanian’s idea of pushing labour-intensive manufacturing investment to

simultaneously boost productivity, job creation and exports.

In two such key sectors — textiles and leather — the government has indicated further

structural reforms.

The latest survey again called for drastically raising India’s share in global exports

through a targeted plan of pushing up market share in major markets.

In the latest ‘virtuous cycle’ of economic growth, the government has stressed the need

for India's exports to GDP ratio to rise fast.

Home

Port capacity augmentation top on govt agenda: Survey

(Source: Business Standard, July 04, 2019)

Terming port development crucial for economy, the Economic Survey 2018-19 Thursday

said the government has accorded topmost priority for capacity augmentation of the

sector through initiatives like Sagarmala.

Ports handle around 90 per cent of EXIM Cargo by volume and 70 per cent by value.

"Port sector development is very crucial for the development of any economy...In order

to meet the ever increasing trade requirements, expansion of Port Capacity has been

accorded the highest priority with implementation of well-conceived infrastructure

development projects like sagarmala, project Unnati etc," the Economic Survey, tabled

by Finance Minister Nirmala Sitharaman in Parliament, said.

As per the Port Performance Benchmarking & Performance Index published by Logistics

Data Bank for February, 2019, Gateway Terminals India is in the top performing

category and International Container Transhipment Terminal, Kochi in the low

performing category, the survey said.

Towards facilitating Ease of Doing Business, the shipping ministry has identified

various parameters for reducing dwell time and transaction costs at the major ports,

which include elimination of manual forms, accommodation for laboratories to

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15 CITI-NEWS LETTER

participating government agencies, direct port delivery, installation of container

scanners, e-delivery orders, radio frequency identification-based gate-automation

System, etc, it added.

These initiatives have already been implemented at Jawaharlal Nehru Port Trust and

are being taken up at other major ports, the survey pointed out.

Stressing that "shipping plays a pivotal role in India's trade dynamics", it said, "As on

January 31, 2019, India had a fleet strength of 1,405 ships with dead weight tonnage

(DWT) of 19.22 million (12.74 million GT) including Indian controlled tonnage, with

Shipping Corporation of India (SCI) having the largest share of around 30.52 per cent.

Of this, around 458 ships of 17.58 million DWT (11.26 million GT) cater to India's

overseas trade and the rest to coastal trade".

India had a fleet strength of 1,400 vessels with gross registered tonnage (GRT) of 12.68

million in 2018, as compared to fleet strength of 1,371 vessels with 12.35 million GRT at

the end of December 2017.

About the Inland Water Transport, the survey said India's first inland waterway

multimodal terminal (MMT) at Varanasi was inaugurated in November last year by

Prime Minister Narendra Modi and the first container consignment on Ganga, which

had sailed from Kolkata, was received at Varanasi MMT on the same day.

"The main focus of MMT is to promote inland waterways as it is cheap and environment

friendly. To enhance the access and establish alternative connectivity to the North East

through Indo-Bangladesh Protocol route, dredging works between Ashuganj and

Zakiganj, and Sirajganj and Daikhawa in Bangladesh through 80:20 sharing (80 per

cent by India and 20 per cent by Bangladesh) have been awarded," it said.

In October 2018, a Standard Operating Procedure of MoU on Passenger and Cruise

service on the Coastal and Protocol routes between India and Bangladesh has been

signed to enhance bilateral movement of passengers /tourists.

The cargo traffic on National Waterways was 55 million tonnes in 2017-18 and has

increased by 31 per cent in 2018-19.

Home

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16 CITI-NEWS LETTER

India's first Design Development Centre 'Fashionova' launched in Surat,

Gujarat

(Source: Business Standard, July 04, 2019)

India's first Design Development Center 'Fashionova' was launched in the Textile city

Surat recently to promote the city in the field of the fashion design sector.

The main objective of this studio is to provide a strong platform to all those who have a

flair of the apparel business. It fulfills, on a large scale, all business needs from co-

working space, technicians, expert advises to cognitive workshops and exposure to the

industry. Surat is renowned for its textile and the city had to be dependent on Mumbai

or Delhi for unique and latest design trends. This design development center will bridge

this gap.

"There are many fashion institutes in the country, but our objective is not just to teach

fashion design. We are focused on promoting creativity and want to provide them

market assistance also where they can sell their creative design and earn money", said

Anupam Goyal, Founder, Fashionova Design Development.

Fashionava Design Development Centre has been started at Udhana area of the city with

all state-of-the-art machinery and other facilities. It was inaugurated in the presence

Paris-based-designer Neona Skane, Bollywood celebrity designer Salim Asgarally,

CHASA IDT Director Chandrakala Sanap and Surat industrialists.

"This is the first of its kind of design development center in India and it will achieve new

heights in the near future", he added.

It is to mention that Fashionova has been named in the Start-up scheme of the

Government. The new center will fulfill the needs of new designs of the city and all types

of brands will be able to connect with emerging designers of the country.

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700 brands from 32 countries exhibiting at HGH India

(Source: Fibre2Fashion, July 04, 2019)

As many as 700 brands and manufacturers from 32 countries are exhibiting at the

ongoing HGH India in the Bombay Exhibition Centre, Goregaon. The 8th edition of

India's largest trade show for home textiles and home décor is setting new benchmarks

in the industry, bringing new brands, manufacturers, innovation, design and products

under one roof.

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17 CITI-NEWS LETTER

The three day exposition was inaugurated by Shantamanu, development commissioner,

handicrafts along with Arun Roongta, managing director of HGH India and other

dignitaries from the industry. HGH India is a trade show which is helping the home

industry integrates products across segments.

"In the last eight years of operation, HGH India has displayed clear, increasing progress.

Their focus, much like ours has always been on the artisans, craftsmen, carpet weavers

and handicraft workers. Trade shows like this help in providing exposure to them and

watching the biggest names of the industry together on one unified platform, helps them

understand the kind of opportunities available. While HGH stands for Home Décor,

Gifts and Houseware, for me it stands for Higher, Go Higher,” Shantamanu said.

Among the many highlights of the exhibition, is the presence of international brands

from Turkey, Europe, US, UAE, the UK and over 75 exhibitors from China brought

through the Zhejiang Broad International Convention & Exhibition Co. Ltd. among

others. There is also a strong presence of well-known Indian brands showcasing a wide

range of innovative products in the home textiles, home décor, houseware, and gift

space.

"We at HGH India are overwhelmed with the response in spite of the delayed start. I

would like to thank all the exhibitors and retailers for their unanimous support in

helping us keep the show alive for the benefit of the entire industry. HGH India’s 8th

edition is a testimony to the entire home product industry’s trust in the trade show and

we are confident that it will be another successful year for all our patrons, accelerating

the growth of the home textile, home décor, houseware and gift industries," said

Roongta.

Home

GHCL ranks among Best Workplaces for third consecutive year

(Source: Business Standard, July 04, 2019)

GHCL has been certified as one of the best workplaces by the Great Place To Work

Institute and has been ranked among top 100 workplaces in India for the third

consecutive year. GHCL, ranked 82nd is a well-diversified group with ascertained

footprints in Chemicals, Textiles and Consumer Products Segments.

Home

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18 CITI-NEWS LETTER

GLOBAL:

Trade war: China says existing US tariffs should be removed for a deal

(Source: Business Standard, July 04, 2019)

The leaders of the two countries agreed last weekend to relaunch trade talks that had

stalled in May after US officials accused China of pulling back from commitments

Existing US tariffs will have to be removed if there is to be a trade deal between Beijing

and Washington, China's commerce ministry said on Thursday.

The leaders of the two countries agreed last weekend to relaunch trade talks that had

stalled in May after US officials accused China of pulling back from commitments made

in the text of a pact negotiators had said was nearly finished.

Trade teams from both countries are in contact, commerce ministry spokesman Gao

Feng told a regular media briefing.

To get talks restarted, US President Donald Trump had agreed not to put tariffs on

about $300 billion in additional Chinese imports and ease curbs on Chinese tech giant

Huawei.

The United States now has tariffs of 25 per cent on $250 billion of Chinese goods,

ranging from furniture to semiconductors.

China welcomes the US decision not to slap new tariffs on its goods, Gao said, when

asked how long the trade truce can last.

Home

China, Bangladesh agree to advance cooperation under BRI

(Source: Business Standard, July 04, 2019)

China and Bangladesh on Thursday agreed to advance their cooperation under the

multi-billion dollar Belt and Road Initiative (BRI) as Prime Minister Sheikh Hasina held

wide ranging talks with her Chinese counterpart Li Keqiang to further consolidate the

bilateral ties and signed several agreements.

On her first visit to China after her re-election, Hasina, who was accorded a red carpet

welcome, held talks with Chinese Premier Li during which a consensus was reached to

step-up cooperation under the BRI, official Chinese media reported.

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19 CITI-NEWS LETTER

After the talks, Li and Hasina witnessed the signing of bilateral cooperation agreements

in different sectors ranging from aid for the Rohingyas, economic and technical

cooperation, investment, power, culture, tourism and water conservancy.

China agreed to provide 2,500 tonnes of rice to the forcibly displaced Rohingyas from

Myanmar, Foreign Secretary Md Shahidul Haque told Bangladesh's state-run

BSS news agency.

In his talks with Hasina, Li stressed that China stood ready to better synergize the BRI

with Bangladesh's development strategy and speed up mutually beneficial cooperation

in various fields.

He called on the two sides to work together to build the Bangladesh-China-India-

Myanmar (BCIM) economic corridor in a bid to connect the market covering nearly

three billion people.

The reference to the BRI and the BCIM by Li is regarded significant from India's point

of view.

Under the BRI, China has been routing most of its investments through its multi-billion-

dollar global project aimed at financing and building infrastructure projects, especially

in developing countries to enhance its influence across the world.

The BRI investments were criticised by the US as debt trap especially after Sri Lanka

handed over its Hambantota port as debt swap to China in 2017.

The controversial USD 60 billion China-Pakistan Economic Corridor (CPEC) and BCIM

are the components of the BRI, which was mooted by Chinese President Xi Jinping in

2013. While the CPEC regarded as the flagship project of the BRI took off, the BCIM

failed to make headway.

India has protested to China over the CPEC as it is being laid through Pakistan-occupied

Kashmir.

China lately is making efforts to revive the BCIM.

After a long gap, Xi raised the BCIM project during his meeting with Prime Minister

Narendra Modi at Bishkek on the sidelines of the Shanghai Cooperation Organisation

summit early this month.

The 2800-km BCIM corridor proposes to link Kunming in China's Yunnan province

with Kolkata, passing though nodes such as Mandalay in Myanmar and Dhaka in

Bangladesh before heading to Kolkata.

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20 CITI-NEWS LETTER

With an estimated USD 31 billion investments, China has emerged as a major investor

in Bangladesh - mainly in the infrastructure and energy sectors - raising concerns in

India over growing Chinese influence in the region.

The rapid expansion of Chinese investments in Bangladesh were regarded as the second

highest by Beijing after the USD 60 billion CPEC.

During his talks with Hasina, Li also expressed expectation to discuss feasibility of joint

study on the free trade agreement, increase import of Bangladeshi high-quality products

meeting the needs of the Chinese market, promote balanced development of trade, and

facilitate bilateral investment and personnel exchanges.

China will continue to provide assistance within its capacity for Bangladesh's

development, Li added.

Hasina said both sides are committed to peace, stability, mutual benefits, and

settlement of disputes by peaceful means.

She said Bangladesh was advancing the goal of "Sonar Bangla" at present, reiterating

that her country was willing to actively participate in the joint construction of BRI,

accelerate the building of the BCIM, press ahead regional connectivity, beef up

cooperation on trade, investment, service and infrastructure, so as to jointly embrace an

even better future, Xinhua news agency reported.

Hasina began her visit on July 3 by taking part in Summer Davos meeting held at the

Chinese city of Dalian.

She is also scheduled to meet Xi before winding up her visit on Friday.

China in recent years has ramped up its investments in Bangladesh especially after the

visit of Xi in 2016.

China's investments in Bangladesh included the construction of 6-km long bridge across

the Padma river, as the Ganga is known in the country, costing about USD 3.7 billion

and the USD 2.5 billion power plant at Payra near Dhaka.

Home

IMF board approves $6 billion loan package for cash-strapped Pakistan for

3 years

(Source: Business Today, July 04, 2019)

The programme will require "decisive fiscal consolidation" and a multi-year plan to

strengthen Pakistan's notoriously weak tax system as well as large scale reforms that are

likely to pile pressure on the government of PM Imran Khan

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21 CITI-NEWS LETTER

The International Monetary Fund Executive board approved a three-year, $6 billion

loan package for Pakistan on Wednesday to rein in mounting debts and stave off a

looming balance of payments crisis, in exchange for tough austerity measures.

Board approval will allow immediate disbursement of around $1 billion, with the

remainder to be phased in over the period of the programme, subject to quarterly

review, the IMF said, highlighting the need for Pakistan to agree to tough conditions for

the coming three years.

Just as important as the package itself, approval will also unlock an additional $38

billion from Pakistan's international partners over the programme period.

"Pakistan is facing significant economic challenges on the back of large fiscal and

financial needs and weak and unbalanced growth," IMF First Deputy Managing Director

David Lipton said in a statement.

The programme will require "decisive fiscal consolidation" and a multi-year plan to

strengthen Pakistan's notoriously weak tax system as well as large scale reforms that are

likely to pile pressure on the government of Prime Minister Imran Khan.

Khan came to power last August, inheriting an economy plagued with problems. But he

was initially deeply reluctant to turn to the IMF, which has provided more than 20

bailout packages to Pakistan over the decades.

However, despite securing billions of dollars in loans from friendly countries including

China, Saudi Arabia and the United Arab Emirates, mounting economic headwinds

forced his government to turn to the fund.

With foreign exchange reserves shrinking to only $7.3 billion, less than the equivalent of

two months' worth of imports, and the budget deficit set to top 7% of gross domestic

product this year, Pakistan faces tough economic medicine to tackle problems that have

been years in the making.

Dominated by agriculture and textiles and with a large informal sector that pays no tax,

the economy has struggled to develop export industries and successive governments

have spent heavily to defend an overvalued exchange rate.

The $60 billion China Pakistan Economic Corridor, launched in 2015, had promised a

new beginning. Its infrastructure projects were intended to become a new foundation

for growth, but they also required heavy imports of capital equipment, widening the

trade deficit.

According to IMF forecasts, real GDP growth is expected to slow to 2.4% in the current

fiscal year to June 2020, down from 3.3% in the year just ended.

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22 CITI-NEWS LETTER

The IMF's terms call for a "flexible market-determined exchange rate" to help correct an

unsustainable current account deficit and make industries more competitive, while

trying to expand the tax base in a country where only 1% of the 208 million population

file returns.

The central bank, which controls the currency, has hiked interest rates to 12.25% and

slashed the rupee to historic lows against the dollar, but this has piled more pressure on

households facing inflation running at almost 9%.

In addition, in a bid to cut public debt, the government has set ambitious tax and

revenue plans, despite failing to meet the previous year's targets and hiked prices in the

creaking energy sector, where mounting debt backlogs have acted as a growing drain on

government resources.

The programme also calls for expanded social spending to protect the most vulnerable.

However, the combined package of belt-tightening measures has prompted anger from

opposition parties, which say the government hesitated too long before turning to the

fund. They have pledged a campaign of protests this month.

Home

Pakistan: Sub-committee formed to identify problems of textile sector

(Source: The Nation, July 05, 2019)

FBR will deliver a comprehensive presentation with regard to the procedures of tax

returns and its flaws in next meeting of NA body

The National Assembly Standing Committee on Finance on Thursday formed a sub-

committee to identify the problems being confronted by the local textile sector due to

zero rating on export and other taxation charges regarding exports, imports and local

industries.

The meeting of the Standing Committee on Finance, Revenue and Economic Affairs of

the National Assembly was held under the chairmanship of Asad Umar, MNA. While

talking about the refund problems being faced by the exporters, the Committee

recommended the FBR to arrange a detailed briefing about the criteria of refunds and

role of newly created refund’s company in FBR. The Committee decided to appoint a

four members sub-committee under the convenership of Faiz Ullah, MNA. Sub-

Committee comprises of the following: Raza Nasrullah, MNA Member, Aisha Ghaus

Pasha, MNA Member, Ms. Nafisa Shah, MNA, Member.

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23 CITI-NEWS LETTER

The Sub-Committee will submit its recommendations to main Committee within thirty

days. The Committee recommended that Federal of Board of Revenue (FBR) will deliver

a comprehensive presentation with regard to the procedures of tax returns and its flaws

in its next meeting.

The Committee noted the problems being faced by the real estate sector due to

uncertainty about the implementation of property value with regard to DC rates,

increase in FBR value and recommended the Advisor on Finance & Revenue to

coordinate with provincial governments in order to address the anomalies in that

regard. The Committee also directed the FBR to issue a clarification about increase in

FBR’s property rates at the earliest. The Committee was of the view that single

assessment mechanism should be introduced to define the property rates in the country.

The Committee deferred the agenda regarding work plan assigned by the Special

Committee on Agricultural Products to Uplift the Agriculture Development in the

country and directed that Fakhar Imam or any other member of the said Committee

may be invited in the next meeting of the Committee.

The Committee expressed its grave concern over the unsatisfactory and incomplete

presentation of FBR on the Automatic Exchange of information, data received from

Organization for Economic Co-operation and Development (OECD). The Committee

directed that Chairman FBR should brief the Committee in that regard in its next

meeting.

The Committee unanimously recommended that Competition Commission of Pakistan

(CCP) will be invited shortly to explain the reasons of sharp price increase in cement,

flour, sugar, domestic airfare and automotive industry in the county.

The meeting was attended by MNAs Raza Nasrullah, Faiz Ullah, Makhdoom Syed Sami-

ul-Hassan Gillani, Sardar Nasrullah Khan Dreshak, Jamil Ahmed Khan, Faheem Khan,

Dr. Ramesh Kumar Vanwani, Chaudhry Khalid Javed, Ali Pervaiz, Dr. Aisha Ghaus

Pasha, Ms. Nafisa Shah and Ms. Hina Rabbani Khar besides the senior officers of

Ministry of Finance, EAD, FBR, SBP, SECP, ZTBL, Ministry of Law, Ministry of National

Food Security & Research.

Home

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24 CITI-NEWS LETTER

Vietnam's cloth import rises 7.6 pct in H1

(Source: Xinhua, July 04, 2019)

Vietnam spent over 6.7 billion U.S. dollars importing cloth in the first half of this year,

posting a year-on-year increase of 7.6 percent.

Its largest import market of cloth was China, tailed by South Korea and Japan,

according to the Vietnamese Ministry of Industry and Trade on Thursday.

Between January and June, Vietnam imported 826,000 tons of cotton worth over 1.5

billion U.S. dollars, down 1.3 percent in volume and 2 percent in value.

The country also poured more than 1.2 billion U.S. dollars into importing 535,000 tons

of yarn in the same period, up 6.6 percent and 8.6 percent, respectively.

In 2018, Vietnam spent 12.9 billion U.S. dollars on importing cloth, up 13.5 percent;

over 3 billion U.S. dollars on cotton, up 28.5 percent; and 2.4 billion U.S. dollars on

yarn, up 32.7 percent.

Vietnam reaped 30.4 billion U.S. dollars from exporting garments and textiles last year,

up 16.6 percent against 2017, mainly to the United States, Japan and China, according

to the country's General Statistics Office.

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