FW
To attract more investment, garment and textile makers of Bangladesh have urged the ruling government to reduce tax at source to 0.3 per cent for the next fiscal year from the proposed 1.5 per cent as the cost of production has been increasing year-after-year.
BGMEA president Siddiqur Rahman has said that if this is not possible, they would want that source tax should remain stagnant at the exiting 0.6 per cent for the sake of growth of export oriented industries. This would also create more jobs. BGMEA, Bangladesh Knitwear Manufacturers along with Exporters Association (BKMEA), Bangladesh Textile Mills Association (BTMA), and some other platforms related to the sector had jointly organized the press conference to voice their concern over the proposed 1.5 per cent source tax. The government plans to reduce corporate tax for the garment sector to 20 per cent from the existing 35 per cent. But Rahman demanded tax be set at 10 per cent.
He also urged the government to keep all the materials, purchased from the local market beyond the purview of value-added tax to make export more competitive. For the sake of market diversification and higher export growth, the apparel manufacturers sought an incentive of 2 per cent on the value of freight on board of garment items bound for European markets and 5 per cent incentive for new destinations. Subsequently, Rahman suggested framing the tax policy in such a way that entrepreneurs are able to forecast the tax regime for the next three to five years.
In the proposed budget, tax at source increased to 1.5 per cent from 0.60. This will hinder the growth of the sectors. And as a result of the proposed tax at source, the Textile and RMG sector would be the worst hit. As production cost has increased due to the compliance issues, the risk factor of RMG sector has already increased by 30 to 35 per cent. Considering all aspects, most RMG factories would not be able to survive, Rahman felt. The proposed budget has increased tax on chemicals from 3 per cent to 5 per cent, which will ultimately discourage investments, said AH Aslam Sunny, first VP, BKMEA. If the government continues to impose tax burden one after another on the industry people, it will be very difficult for the industry to grow further.
The launch of this year’s London Technology Week, Europe's largest festival of technology, is set to bring together some of UK's leading fashion technology designers for a first of its kind fashion technology showcase. London based fashion designer Brooke Roberts has been commissioned by London & Partners, the Mayor of London's promotional company, to curate the exhibition which will be displayed at the launch of London Technology Week 2016. The installation will include a 3D printed wearable garment designed by Modeclix, the world's first holographic intelligent mannequin from Headworks and a behind the scenes look at London Fashion Week using 360 degree video and content curated by creative communications agency Village.
The showcase will also feature a number of other cutting edge fashion technologies including: Bruise Suit, Brooke Roberts, Infi-Tex clothing, InMoov Robot and London Fashion Week 360 Film by Village.
London hosted its first London Technology Week in 2014 and last year's festival saw 220 events, attracting over 43,000 attendees from around the world. This year's launch event will convene leading figures from the technology and wider business community, focussing on London as hub for the convergence of technology with traditional industries.
The shortfall in cotton production 2015-16 season in Pakistan has forced leading buyers in textile and commercial sector to make import contracts for 300,000 cotton bales with traders in South Africa, India and US for prime cotton grade (PIMA) during May-June 15, 2016.
According to senior member of Karachi Cotton Association (KCA), exporter, importer and ginner Ghulam Rabbani, they expect to import more than 1.5 million bales of various qualities amounting to $24.3 billion till end this year.
Rabbani said that country's demand for raw cotton has gone up to around 14.5 million bales (of 175 kg each), while the production this year due to short supply of water and pesticides besides use of un-certified seed was expected to be 12.1 million bales end season. In last crop season 2015, the country achieved only 13.8 million bales against a target of 14.90 million cotton bales. Textile and spinning sector has to bear load of the imports.
They are expecting a shortfall of more than three million bales, unlike Pakistan, India is expecting a better cotton crop led in part by an increase in cultivation of genetically modified cotton and a rise in the acreage. Among the leading producers of cotton, India is seen as an emerging force in the global market as production continues to outpace domestic demand.
Sri Lanka will benefit from the new trade deals to be signed with India, China and the European Union. The EU had banned Sri Lankan fishing exports from January 2015 due to irregular fishing practices. This ban is likely to be lifted. Sri Lanka is also trying to get back GSP Plus preferred tariff concessions for exports to the EU. The facility was suspended in 2010 due to issues involving labor rights, civil and political rights. If it is restored, exporters of apparel will get more access to the EU.
GSP Plus is a special incentive arrangement for sustainable development and good governance, which is one of three non-reciprocal, preferential import regimes for developing countries under the EU’s Generalised System of Preferences. The Economic and Technology Cooperative Agreement (ETCA) trade pact with India may be in effect by next year and a Free Trade Agreement (FTA) with China may also be inked soon.
Sri Lanka is a signatory for many bilateral and multilateral trade agreements, beneficial in enhancing commercial relationships and facilitation of trade and investment by reducing or eliminating tariffs, import quotas, export restrictions and other trade barriers. Trade agreements often include investment guarantees and can also help to minimise trade deficits.
Japanese international trading house Marubeni Corp has teamed up with the US based clothing and textile management consultants, Werner International to rehabilitate a textiles factory in Angola to produce denim and knitwear products. The move is part of a long-term plan by the Angolan government to restore its clothing and textile sector, which was severely damaged by the country's civil war, which lasted from 1975 to 2002.
The country wants to diversify its economy away from oil. Government figures for 2015 said oil accounted for more than 95 per cent of export earnings and 52 per cent of government revenues, making Angola vulnerable to the fall in global oil prices over the past 18 months.
The financial squeeze has also prompted the Angolan government to open talks with the International Monetary Fund (IMF), which it wants to help finance an economic growth programme. The IMF said it would be supporting a comprehensive policy package to accelerate the diversification of the economy, while safeguarding macroeconomic and financial stability.
Marubeni and Werner International's work dovetails with this strategy. The Japanese company is working on a contract worth around JPY25bn (US$229m) by Angola's ministry of geology, mining and industry to get the facility in Dondo, central Angola, back into operation. Werner International is presently training the management of the start-up.
Thailand is interested in trade engagements with India. The two countries are facilitating the private sector by liberalising policies. The major sectors of interest between India and Thailand are energy, automotives, electronics, food, rubber, software, chemicals, textiles, spa, real estate, gems and jewelry.
Thailand is waiving taxes and rules and processes to facilitate investments. Supply and production chain and linkages will be developed to enhance trade and investment opportunities between the two nations. Industry on both sides is being urged to explore more avenues for cooperation and capitalise on the strengths of each other to take the economic and strategic partnership forward. Both are important regional partners linking South and Southeast Asia. Business linkages have grown stronger over the years with connectivity improving. Today there are approximately 150 flights a week between India and Thailand. The actual inflow of FDI from Thailand into India from April 2000 to August 2014 was close to $179 million.
The total value of exports from Cambodian’s garment and footwear industry increased sharply this first quarter by 39.1 per cent to some $2 billion compared to about $1.5 billion in the same period last year, according to figures released by the Ministry of Commerce.
The ministry’s figures, also indicated that the European Union (EU) remained the largest market for the country’s garment and footwear exports. The total value of exports to the EU, in this first quarter, was about $717.8 million, followed by $419.2 million to the United States, $41.7 million to Canada and $34.6 million to Japan. Exports to other global markets amounted to $65.9 million.
Seung Sophari, Spokesperson for the Ministry of Commerce, said the increase in exports to the EU was due to the preferential treatment given to Cambodian garment and footwear products. Though there is no preferential trading agreement with the US, negotiations are ongoing between both countries. The ministry spokesperson, however, expressed concern of rising labor costs which she said did not match up with current productivity. According to Sophari this could threaten the industries, especially the garment sector. Cambodia’s garment industry is regularly plagued with strikes and protests. Advocacy groups are urging clothing brands to take action to ultimately end low wages.
The EU has banned some substances that are found in gloves, leather, paper-based food contact materials, liquid crystal display panels and textiles. By June 17, 2016, suppliers must submit notifications of five such substances of very high concern. Some of these substances are: propanesultone, benzotriazol, perfluorononan, and nitrobenzene.
Suppliers of any articles that contain one or more of such substances in concentrations greater than 0.1 per cent or in quantities totaling over one ton per year should inform their downstream suppliers of any available safety information on the substances concerned. The obligation applies to articles manufactured in or imported into the EU.
Businesses exporting articles to EU customers should check to see if their articles contain any of the substances mentioned above, and if so to ensure that a notification is submitted accordingly.
There are only two situations when a notification will not be required: one is that the producer or importer of an article can exclude the exposure of humans and the environment to the substance during normal or reasonably foreseeable conditions of use of the article, including its disposal. In this situation, appropriate instructions have to be provided to the recipient of the article. The second is that the substance has already been registered by a manufacturer or importer in the EU for that use.
Colombia and Cuba have expanded their trade relationship. Tariffs will be eliminated on more than 2,000 Colombian products, including agricultural goods, construction materials and textiles.
Bilateral commercial ties between the two countries already exist, valued at only $70 million last year, and represented mostly Colombian exports to Cuba. That figure would rise as Cuba moves to develop its agriculture and tourism sectors. Colombia wants more Cuban products such as medicines.
Cuba is a part of World Trade Organization for two decades and international trade in goods and services accounts for about 45 per cent of the island’s 77 billion dollar economy. Cuba hasn’t signed any full-scale free trade agreements. It has partial agreements with a number of countries and regional trade organizations. As a member of Aladi, a Latin American association designed to foster economic integration, Cuba receives discounts on tariffs for products it exports. And it has pacts with most Latin American countries, most notably Mexico, Venezuela, Chile, Bolivia, Peru and Ecuador.
Cuba is working to ease trade restrictions with the US and permit the free movement of people. Cuba has begun permitting its own people to expand private businesses and is wooing foreign investors. The country is interested in increasing commerce with other countries.
India’s cotton production for the 2016-17 seasons is expected to be about 350 lakh bales. Exports may be 60 lakh bales. But a lot depends on the monsoon. Though a good monsoon has been predicted, there has been damage to the crop in the previous season due to whitefly attacks and the pink bollworm and this could impact crop size.
The acreage was around 118 lakh hectares in the season of 2015-16 and there could be a minor correction this season. Domestic prices have risen on tighter supplies and higher prices for the staple in international markets. Price of lint (processed cotton) has touched Rs 42,000 per khandi as against Rs 33,000. Raw cotton is Rs 6,500 a quintal. Low output as compared with the previous year has pushed up prices, as a result of which those who had the funds purchased raw cotton from the markets and sat on the processed lint waiting for the price to rise. Finally, as a shortage was created, the rates began increasing to Rs 42,000 a khandi of lint.
The main buyers for Indian cotton include Bangladesh and Pakistan. The landed cost of Indian cotton for buyers in Pakistan and Bangladesh is at 75 cents per pound compared with around 73 cents for Brazilian cotton.
