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

06-11-2019 74.95 (+0.25)

06-11-2018 88.35

06-11-2017 79.50

New York Cotton Futures (Cents/lb) As on 08.11.2019 (Change from

previous day)

Dec 2019 64.17 (+0.48)

Mar 2020 65.44 (+0.17)

May 2020 66.66 (-0.03)

08th November

2019

Govt plans to extend NPOP organic certificate to textile, cosmetic, AYUSH products

Commerce ministry raises issue of DRI notices to exporters over IGST with FinMin

Can think of taking 'further decision' if firm indication given on 'core interests':

MEA on RCEP

Apparel industry expects uptick in exports in last two quarters

Global demand for polyester to remain weak: ICRA

China says it agreed with US to roll back existing tariffs in phases

Cotton and Yarn Futures

ZCE - Daily Data (Change from previous day)

MCX (Change from previous day)

Nov 2019 19420 (+50)

Cotton 12980 (-110) Dec 2019 19310 (0)

Yarn 21065 (-30) Jan 2020 19400 (+30)

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2 CITI-NEWS LETTER

-------------------------------------------------------------------------------------- Govt plans to extend NPOP organic certificate to textile, cosmetic, AYUSH products

Commerce ministry raises issue of DRI notices to exporters over IGST with FinMin

Can think of taking 'further decision' if firm indication given on 'core interests': MEA on

RCEP

Government to open up national procurement portal to private companies for bulk

buying

CBIC to communicate with taxpayers using document identification number

Moody's lowers India's outlook to 'negative' from 'stable'

India, US optimistic about inking trade deal before year-end: Senior Indian diplomat

Apparel industry expects uptick in exports in last two quarters

Global demand for polyester to remain weak: ICRA

View: Staying out of RCEP is not in India’s economic interests

‘Technology vital for MSMEs to join global value chain’

Flawed strategy

Apparel industry is becoming organised with GST implementations: Cantabil CFO

Poor demand shuts 20 textile mills around Surat

The art of walking away from a deal

Raymond to demerge lifestyle unit

------------------------------------------------------------------------------ China says it agreed with US to roll back existing tariffs in phases

Global debt load surges to new all-time record high of $188 trn: IMF chief

Zilingo-VITAS partnership to bring digitisation to Vietnam

Bangladesh: Highest taxpaying corporations: 57 businesses to get Tax Cards Thursday

Armenian PM opens new clothing factories in Yerevan

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

NATIONAL

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

GLOBAL

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3 CITI-NEWS LETTER

NATIONAL:

Govt plans to extend NPOP organic certificate to textile, cosmetic, AYUSH

products

(Source: Economic Times, November 07, 2019)

To boost export of organic products, the government plans to extend its existing

certification to textile, cosmetics and ayurveda, yoga, naturopathy, unani, Unani, sidha

and homeopathy (AYUSH) products, agri-export promotion body APEDA Chairman

Paban K Borthakur said on Thursday.

At present, organic foods are certified through the National Programme for Organic

Production (NPOP) of Agricultural and Processed Food Products Export Development

Authority (APEDA) under the Commerce Ministry and the Participatory Guarantee

System for India of the Agriculture Ministry.

"NPOP, launched in 2001, is the world's largest organic certification programme. As a

step further, NPOP now proposes to enter into organic AYUSH products, organic textiles

and organic cosmetics," Borthakur said after inaugurating the global trade fair on organic

products 'Biofach India' in Greater Noida, Uttar Pradesh.

Since 2006, the NPOP has been recognised by the European Union and Switzerland. India

has a similar agreement with the US, he said.

As a result of these agreements, Indian organic products are being exported to these

countries without the need for re-certification, he said in a statement. Noting the NPOP

has laid the foundation of organic movement in the country, the APEDA chairman said it

has played a key role over the years to establish the credibility of India's organic sector in

national and international trade.

"NPOP now spans over the entire organic agriculture production scenario and is offering

certification services for practically all possible activity starting from crops, livestock,

aquaculture, processing and niche segments like mushrooms and sea weeds," he said. In

order to further boost export of organic products from the country, Borthakur said the

APEDA is targeting to get the recognition for India's NPOP from many more countries

including Canada, Japan, Korea and Taiwan.

Compared to international trade of about USD 97 billion, Indian market seems to be very

small, but it is growing very fast, he said. India exported 6.14 lakh tonnes of organic food

products valuing Rs 5,151 crore in 2018-19 to countries such as the US, European Union,

Canada, Switzerland, Australia, Israel, South Korea, Vietnam, New Zealand and Japan,

he added. According to APEDA, India produced around 2.67 million tonnes of certified

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4 CITI-NEWS LETTER

organic products in 2018-19. The production is not limited to the edible sector but also

extends to organic cotton fibre and functional food products.

Total area under organic certification process (registered under National Programme for

Organic Production) was 3.56 million hectare till March 2019. This includes 1.94 million

hectare cultivable area and another 1.49 million hectare for wild harvest collection.

Among states, Madhya Pradesh has covered largest area under organic certification

followed by Rajasthan, Maharashtra and Uttar Pradesh.

During 2016, Sikkim had achieved a remarkable distinction of converting its entire

cultivable land (more than 76,000 hectare) under organic certification. As per the

industry estimates, India's organic agricultural products market is about Rs 8,500 crore

and exports account for nearly 60 per cent. Biofach India is being organised jointly by the

NurnbergMesse India and APEDA. More than 6,000 delegates are participating in the the

trade fair-cum-exhibition.

Home

Commerce ministry raises issue of DRI notices to exporters over IGST with

FinMin

(Source: Economic Times, November 07, 2019)

The commerce ministry has taken up the issue of Directorate of Revenue Intelligence

(DRI) notices being sent to 1,000 exporters for alleged violation of Goods and Services

Tax with its finance counterpart, an official said.

The commerce ministry has stated that the "overzealous revenue collection" move by DRI

(Directorate of Revenue Intelligence) was against exporters. The ministry has demanded

integrated goods and services tax (IGST) exemption for inputs used in exports between

October 2017 and January 2019, the official said.

In a letter to the Department of Revenue, the commerce ministry said that the demand of

giving retrospective IGST exemption to exporters could be taken up by the GST Council,

chaired by the finance minister and comprising state ministers. "This department is of the

view that enthusiasm of exporters should not be killed by overzealous revenue collection

based on technicalities where revenue does not accrue in principle. You may consider

placing these concerns before the GST Council for early resolution," the ministry has said.

It has also stated that as on date, imports made under the advance authorisation scheme

on both pre and post export basis are exempted from payment of IGST.

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5 CITI-NEWS LETTER

Exporters have raised concerns regarding litigation and penal action by DRI with regard

to pre-import condition under the scheme. DRI had sent notices to exporters for claiming

post import IGST exemption between October 2017 and January 2019. During the period,

this exemption was allowed only for pre-import of inputs. But the exemption was allowed

both for pre and post import from January 15 this year. The commerce ministry is seeking

implementation of this notification from October 2017 itself.

Home

Can think of taking 'further decision' if firm indication given on 'core

interests': MEA on RCEP

(Source: Economic Times, November 07, 2019)

India on Thursday said if it gets a "firm indication" that its core interests will be

accommodated in the RCEP trade deal then it can think of taking a "further decision" on

the issue.

The assertion by the Ministry of External Affairs came two days after Commerce and

Industry Minister Piyush Goyal indicated that India is open for negotiations if the

member countries of the Regional Comprehensive Economic Partnership (RCEP) come

up with a better offer which can address concerns and provide greater market access for

domestic industries.

He, however, had said that for the present, it is the final decision of the government that

India will not join the China-backed mega free trade agreement. Asked about India's

stand on RCEP, MEA Spokesperson Raveesh Kumar said India's concerns and requests

are available with the other 15 RCEP members.

"We have negotiated with a very clear view of our interests. We negotiated hard. If we get

a firm indication that our core interests will be accommodated, at that stage, we can think

of taking any further decision in this matter," he told reporters at a briefing. Prime

Minister Narendra Modi in Bangkok on Monday had said that India will not join the RCEP

deal as negotiations failed to address New Delhi's "outstanding issues and concerns".

As many as 16 countries -- 10 nation bloc ASEAN and its six trading partners including

India -- were negotiating the mega free-trade pact RCEP. Responding to media reports

on government considering revoking the Overseas Citizen of India (OCI) card of author

and journalist Aatish Taseer, Kumar said he was not aware of the specific case.

"How do you scrutinise an OCI card. You apply for an OCI card and there are certain

conditions you fulfil and documents you have to submit....But yes there are certain

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6 CITI-NEWS LETTER

conditions under which an OCI card is liable to be cancelled. I can't comment on

individual cases," he said.

Home

Government to open up national procurement portal to private companies

for bulk buying

(Source: Economic Times, November 07, 2019)

The government plans to open up the national online procurement portal Government e-

Marketplace (GeM) to government contractors and private entities but only for bulk

buying.

Officials said the government plans to expand the mandate of the GeM to include these

two categories. Currently, GeM allows only government departments and public sector

units to buy from the portal.

“The Cabinet’s approval is needed this expansion. The final decision has not happened. A

draft cabinet note is being made,” said one official. Separately, there is a thinking to

change the structure of GeM and make it a public limited company, the official added.

At present, the National Public Procurement Portal is Section 8 Company registered

under the Companies Act, 2013, for providing procurement of goods & services required

by Central & State Government organizations. The marketplace is also working on an

online seller and buyer rating mechanism which will allow sellers to avail working capital

loans where the cost of capital is linked to the performance and rating of sellers.

“This will help the sellers in general and the MSMEs in particular to access easy credit

and do better business with the government. In addition, GeM is contemplating the

creation of EMD pool account for making it easy for sellers to comply with the EMD

requirements while responding to bids,” the commerce and industry ministry said in a

statement. The portal has already integrated the GeM Pool Account with seven public

sector banks for timely payments to vendors and is in the process of creating a

standardised bid document for various contacts devised by the ministries, in order to

shorten the procurement cycle.

As per GeM CEO Talleen Kumar, the gross merchandise value (GMV) on GeM portal has

crossed Rs 36,000 crore and nearly 40,000 buyer organisations are registered on this

procurement portal. There are over 2.95 lakh sellers/service providers on GeM. Average

time taken for seller registration has come down from 20 days to 2 days. More than 3,000

startups are already registered on GeM and they have received orders amounting to Rs

522 crore till date. Kumar said the marketplace also working with the rural development

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7 CITI-NEWS LETTER

ministry, state government emporia and development commission, Handicrafts, to on

board self-help groups and artisan clusters on the platform, Kumar said.

The commerce and industry ministry launched the GeM on August 9, 2016 in place of

Directorate General of Supplies and Disposal (DGS&D) with the objective of creating an

open and transparent procurement platform of commonly used goods and services for all

government departments, ministries and agencies. It aims to streamline procurement by

the central and state governments, which put together, is estimated at Rs 5-7 lakh crore

each year.

Home

CBIC to communicate with taxpayers using document identification number

(Source: Financial Express, November 08, 2019)

The CBIC circular said no search authorisation, summons, arrest memo, inspection

notices and letters issued in the course of any enquiry would be issued without DIN being

duly quoted prominently in the body of such communication.

The indirect tax department (CBIC) will quote a computer-generated document

identification number (DIN) for its communications with taxpayers starting Friday. The

system, which is expected to bring transparency and shield taxpayers from harassment,

has already been implemented by the direct tax department.

The CBIC circular said no search authorisation, summons, arrest memo, inspection

notices and letters issued in the course of any enquiry would be issued without DIN being

duly quoted prominently in the body of such communication.

However, the circular clarified that an official can issue communications without a DIN if

there are are technical difficulties or when the communication is required to be issued at

short notice. But such communications would also need to be regularised within 15

working days of its issuance, it said.

Any specified document issued without the electronically generated DIN would be treated

as invalid and deemed to have never been issued, the circular added. “From now on, any

communication from GST or Customs or central excise department without a computer

generated DIN, would be treated as invalid and shall be non est in law or deemed to be as

if it has never been issued,” revenue secretary Ajay Bhushan Pandey said. He added that

the DIN system would be extended to other communications by the end of next month.

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8 CITI-NEWS LETTER

CBIC head Pranab K Das said: “This measure would create a digital directory for

maintaining a proper audit trail of such communications. Now, all such specified

communications with DIN would be verifiable on the online portal cbicddm.gov.in.”

Tanushree Roy, director- GST at Nangia Andersen Consulting, said the circular would

help the taxpayers verify the genuineness of the communication along with creating a

digital directory for maintaining a proper audit trail of such communication.

Home

Moody's lowers India's outlook to 'negative' from 'stable'

(Source: Money Control, November 08, 2019)

The outlook partly reflects government and policy ineffectiveness in addressing economic

weakness, which led to an increase in debt burden from already high levels, the rating

agency said

Moody’s Investors Service on November 7 changed its outlook on India’s ratings to

"negative" from "stable", citing increasing risks that the country’s economic growth will

remain lower than in the past.

The outlook partly reflects government and policy ineffectiveness in addressing economic

weakness, which led to an increase in debt burden from already high levels, the rating

agency said.

India’s economy grew only 5 percent year-on-year (YoY) between April and June, its

weakest pace since 2013, as consumer demand and government spending slowed amid

global trade frictions.

The international ratings agency said it estimates that the country’s growth slowdown is

in part long-lasting while backing its other ratings for India.

Home

India, US optimistic about inking trade deal before year-end: Senior Indian

diplomat

(Source: Economic Times, November 07, 2019)

India and the US are "quite optimistic" that they will ink a trade deal before the end of

this year, a senior Indian diplomat has said.

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9 CITI-NEWS LETTER

Manoj Kumar Mohapatra, Minister (Commerce) in the Embassy of India in Washington,

said here on Wednesday that Commerce and Industry Minister Piyush Goyal will visit the

US next week during which he will hold discussions over the trade deal.

"We have held several discussions with the US Trade Representative office and

Ambassador Robert Lighthizer for the trade talks," Mohapatra said at an event held in the

Consulate General of India, New York.

During his US trip, Goyal will visit both Washington and New York. "We will be

continuing our trade talks. We are quite committed that before the closing of this year, we

will be having an agreement which will be giving a boost to further our trade relationship,"

Mohapatra said. Highlighting the strong India-US relationship and the potential for

bilateral ties in the area of trade to increase substantially, he said, "Both the sides are quite

optimistic that the trade deal would be inked before the end of the year."

Mohapatra was speaking at the launch of the North East New York Regional Chapter of

the Indian American International Chamber of Commerce, where Federal

Communications Commission Chairman Ajit Pai was the Chief Guest. He said currently

the Indo-US bilateral trade stands at about USD 150 billion and "this is increasing by 10

per cent every year". With the Narendra Modi government targeting to make India a five

trillion dollar economy by 2024, Mohapatra said the “next-generation” cooperation

between the two countries will be in areas such as Artificial Intelligence and data mining.

He also underscored the strong defence cooperation between the two largest democracies.

India's exports to the US in 2018-19 stood at USD 52.4 billion, while imports were USD

35.5 billion. India received FDI worth USD 3.13 billion from the US in 2018-19, higher

than USD 2 billion in 2017-18.

In September, US President Donald Trump said that America will soon have a trade deal

with India to boost economic ties between the two nations. "I think very soon. We are

doing very well. (US Trade Representative) Robert Lighthizer who is right here

negotiating with India ... I think, very soon we will have a trade deal," Trump had said in

response to a question by PTI ahead of his bilateral meeting with Prime Minister

Narendra Modi on the margins of the high-level UN General Assembly session. "We will

have a larger deal down the road...but we will have a trade deal," Trump had said. India

is demanding exemption from high duties imposed by the US on certain steel and

aluminium products, resumption of export benefits to certain domestic products under

their Generalised System of Preferences (GSP), greater market access for its products

from sectors, including agriculture, automobile, auto components and engineering. The

US, on the other hand, wants greater market access for its farm and manufacturing

products, dairy items and medical devices, and cut on import duties on some information

and communications technology (ICT) products.

Home

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10 CITI-NEWS LETTER

Apparel industry expects uptick in exports in last two quarters

(Source: Vinay Umarji, Business Standard, November 08, 2019)

Apparel exports to the largest market US showed a steep decline of 13 per cent in April-

August 2019 as compared to that in April-August 2018

After tepid growth in last few months, apparel industry is expecting revival in exports on

account of festive, spring and summer orders in the West.

As per data from Apparel Exports Promotion Council (AEPC), readymade garments

(RMG) exports had fallen by 2.44 per cent to stand at $1.26 billion in dollar terms in

August 2019 compared to the said month last year and fell again by 2.17 per cent in

September 2019 to $1.07 billion. As a result, cumulative RMG exports in dollar terms

during April-September, 2019-20 have stood at $7.8 billion registering a marginal growth

of 2.06 per cent.

Further, apparel exports to the largest market US showed a steep decline of 13 per cent in

April-August 2019 as compared to that in April-August 2018. The exports to other major

markets including Germany, UAE, Spain, France and UK have also declined.

However, according to industry representatives, given India's strength in predominantly

cotton fabric based garments, the spring and summer shipment in the remaining two

quarters of October-December 2019 and January-March 2020 are likely to see an uptick.

"Europe is going slow and the US growth has not been as buoyant as expected. However,

spring and summer is India's strength and this could lead to some growth in the

remaining two quarters," said Sivaramakrishnan Ganapathi, managing director of

Gokaldas Exports Ltd., one of the largest garment exporters in India.

As such, the remaining two quarters tend to perform better than the first two, said

Prashant Agarwal, joint managing director of Wazir Advisors, a leading apparel and retail

consulting firm. "It is now that order booking is really good with lot of exporters,

especially medium players are totally booked. If you compare with last year, overall

buying would be a bit low," said Agarwal.

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11 CITI-NEWS LETTER

According to Clothing Manufacturers Association of India

(CMAI)'s analysis of financial filings of select apparel

manufacturers and fashion brands & retailers for the first quarter

of fiscal 2019-20, most companies showed an increase in their

operating revenue.

"Growth in operating profit margins (OPM) for majority

of companies was very high. The increase in OPM percentage of

fashion brands & retailers is mainly because of a change in

regulation in Ministry of Corporate Affairs," the industry body

stated.

Ganapathi added that when compared to last year, the overall

growth in apparel exports is expected to be flat for the industry in

general. Meanwhile, Agarwal pegged the growth in Q3 to be

around 4-5 per cent, similar to last year.

Home

Global demand for polyester to remain weak: ICRA

(Source: Sutanuka Ghosal, Economic Times, November 07, 2019)

The current global demand outlook for polyethylene terephthalate (PET)/polyester

remains broadly weak given the uncertainty surrounding the trade war between the USA

and China and the overall slowdown in economic growth among major consumer

markets, according to an ICRA note released on Thursday.

However, over the long-term, global growth in polyester consumption is expected to be at

a CAGR of about 6 per cent. Contrary to the global scenario, the current domestic

polyester industry continues to grow at a healthy rate driven by growing demand for

synthetic fibres and plastic-based packaging products. The basic building blocks of

polyester are mono-ethylene glycol (MEG) and purified terephthalic acid (PTA), which

are derivatives of ethylene and Paraxylene (PX), respectively. While the prices and

margins for PX and MEG have been declining due to excess capacities, those for PTA and

PET chips continue to remain firm supported by a healthy demand environment.

Commenting on the margins for producers in the polyester chain, Mr. K. Ravichandran,

Senior Vice-President & Group Head, Corporate Ratings, ICRA, said, “The global PX

demand is expected to grow at a CAGR of 6 per cent over 2019-2024; however the global

supply additions are expected to exceed the demand growth. Outlook for the Asian PTA

market looks positive amid limited new capacity, despite uncertainties around demand

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12 CITI-NEWS LETTER

from downstream polyester and textile sectors. In the case of MEG, there has been a steep

decline in prices in FY2020 mainly due to build-up of China port inventory, higher

production, and start-up of new capacities in the USA. Further MEG capacity additions

are expected in Asia and the USA in H2 2019; however, operating rates at new capacities

are expected to remain low. Owing to different dynamics across different fiber

intermediates, integrated producers are well positioned to face the ongoing uncertainty

and standalone producers could be impacted by the fluctuations in margins.

Commenting on the integrated margins for polyester producers in India, Ms. Anubha

Rustagi, Senior Analyst, ICRA said, “Integrated polyester margins have softened in H1

FY2020, primarily due to weakness in PX and MEG margins. Continued weakness in

MEG prices along with the steady domestic demand for PET chips is expected to offset

the firm PTA prices and keep the polyester margins steady in the near term. Further, a

shift in the margins from PX to PTA and downstream polyester applications will allow the

integrated producers to withstand any price-led uncertainty owing to the current trade

tensions between the USA and China.”

Spinning mills across India are gradually moving towards a higher share of man-made

fibre vis-à-vis cotton in their fabric blends to cushion their profitability against increasing

cotton prices. However, there is further potential for increase in demand for man-made

fibre as the domestic average is still much lower than the global average of 70 per cent

share of man-made fibre in blended fabrics. Domestic prices for polyester staple fibre

(PSF) increased in FY2019. However, the prices have weakened in H1 FY2020. While the

prices have weakened due to softening of feedstock prices, the PSF margins remain

healthy due to stable domestic demand. The spread between the domestic prices for

Indian cotton fibres and the polyester fibres recovered in Q1 FY2020, but has since

softened in FY2020 owing to weakening of cotton prices during the period from an

increase in cheap cotton imports along with lower yarn exports to China.

Home

View: Staying out of RCEP is not in India’s economic interests

(Source: Pravin Krishna & Arvind Panagariya, Economic Times, November 08, 2019)

Earlier this week, India announced that it was dropping out of the Regional

Comprehensive Economic Partnership (RCEP). Its exit came amid a wide array of

assertions from commentators — with some claiming that India’s past trade agreements

had harmed its economy and that RCEP would do worse, others going further to demand

a return to the inglorious days of ‘selfsufficiency’, and yet others insisting that the

withdrawal reflected the weakness of the government against the efforts of protectionist

lobbies. What were the actual outcomes under India’s past trade agreements? Did they

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13 CITI-NEWS LETTER

hurt the Indian economy? What lessons do they hold for India with respect to RCEP or

other future trade deals?

No Push, No Shove

During 2000-11, India signed 14 preferential trade agreements (PTAs), 10 of which were

bilateral agreements with individual countries (which included Japan, South Korea,

Malaysia and Singapore) and four were plurilateral agreements (including with the

Association of Southeast Asian Nations (Asean) and the Southern Common Market

(Mercosur) in South America). What will likely come as a surprise to most is the fact that

the effects of these agreements on trade have been modest. Thus, while India’s imports

from its 10 bilateral partners added up to 13.3% of its overall imports in 2007, that

number actually fell slightly to 11.8% in 2017. Similarly, exports to these 10 partners

added up to 13.7% in 2007, and stayed nearly the same at 14% in 2017. India’s imports

under the Asean pact, its most significant plurilateral agreement, inched up from 9.6% in

2007 to 10.2% in 2017, while exports expanded modestly faster from 9.5% to 12%.

What about trade deficit? Many analysts have

erroneously derided India’s trade agreements by

pointing to increased bilateral trade deficit in dollar

terms. They miss the obvious point that a significant

rise in all nominal magnitudes must accompany the

approximate doubling of India’s economy over the

relevant years.

When we examine the size-corrected appropriate

measure — the share of the trade deficit contributed

by India’s agreements — it turns out that India

actually improved its bilateral position vis-à-vis its

free trade agreement (FTA) partners during 2007-17.

Furthermore, it is not the case that large parts of the

Indian economy have come under stress because of

intensified import competition under these

agreements. During 2007-17, the sectors in which imports under trade agreements had

grown faster than overall imports from all trading partners by even just 25% accounted

for only 6-7% of overall imports.

Admittedly, liberalisation under many of these agreements was ‘phased in’ and, in some

cases, is yet to be completed. But the argument that India’s agreements have already

strained its economy, and that they offer a cautionary tale against future agreements,

finds no support whatsoever in data.

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14 CITI-NEWS LETTER

What about RCEP? First, the positives. RCEP covers over three billion people

& over 20% of global GDP.

Access to this market on a ‘frictionless’ duty-free basis would have provided tremendous

advantages to India’s exports. In the absence of trade barriers on its imports (imposed by

itself) and its exports (imposed by partner countries), India would have had an excellent

opportunity to integrate itself into regional and global value-chains, where India’s

participation has been low. India would have been more easily able to attract foreign

direct investment (FDI) and to also take over production in sectors that China is now

vacating.

Your Call is on Hold

Finally, RCEP would have been an easier agreement for India to sign, as compared to any

potential agreements with the US or the EU, because its focus was on trade liberalisation.

In contrast, agreements such as the Trans-Pacific Partnership (TPP) pose a greater

challenge, since they require concessions over a range of contentious non-trade issues,

such as environmental and labour regulations, intellectual property (IP) protection, and

the operations of State-owned enterprises.

On the flip side: India’s trade deficit with China is large. It accounts for about 40% of its

overall deficit. Signing RCEP would have exposed India to risk of surging imports from

China and an even wider deficit. However, if these were India’s primary concerns it could

have negotiated hard for expansion of market access in the Chinese market in areas of its

comparative strength, such as pharmaceuticals and IT services. On the import side, it

could have sought exclusions of especially sensitive sectors and a more gradual

liberalisation schedule. This would have allowed India to simultaneously exploit greater

market integration with Asia, while giving itself time and economic space to adjust.

Where do we go from here? Statements by commerce minister Piyush Goyal that he now

proposes to turn west to the US and EU may be read to imply that he plans to abandon

RCEP permanently. As eternal optimists, we do not believe this interpretation and view

India’s current decision as a bargaining tactic aimed at extracting further concessions

from other RCEP members and cutting a more favourable deal for India. It is unlikely that

Prime Minister Narendra Modi would walk away from his ‘Act East’ policy and leave India

wholly disadvantaged.

(Krishna is professor of international economics and business, Johns Hopkins

University, Washington DC, US, and Panagariya is professor of economics, Columbia

University, New York, US)

Home

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15 CITI-NEWS LETTER

‘Technology vital for MSMEs to join global value chain’

(Source: Times of India, November 08, 2019)

MSMEs have to reinvest themselves by focusing on technology, improving productivity

gains and upgrading the skill levels of its workforce so that they can join the global value

chain, experts from trade and industry said here. They said micro, small and medium

enterprises (MSMEs) in India have to address the technology issues if they want to be a

part of the global value chain.

“India is a leader in technology but unlike big corporations, MSMEs are yet to deploy

them and gain competitive edge. Besides technology, productivity gains are very low. For

competing on the global stage, we have to raise the bar,” said Dileep Baid of Exports

Promotion Council for Handicraft.

He cited example of textiles industry where the wastage of fabric can be as high as 18%

during the whole value chain and said it is even higher for handicrafts industry.

Assem Kumar, general secretary of Garment Exporters Association of Rajasthan, who also

spoke at the MSME event organized by FICCI-Rajasthan, concurring the views said that

there is enough scope for enhancing productivity by thinking innovatively.

Drawing attention to the evolving global trade situation, immediate past president of

Carpet Exporters Promotion Council Mahavir Sharma said that the MSMEs have to

remain alert to the new situation

Sharma said, “If India does not join the Regional Comprehensive Economic Partnership

(RCEP), some sectors like gem and jewellery and apparel will have to realign their

strategies and that’s why MSMEs have to remain efficient and nimble-footed to adjust to

any new scenario.” The event was inaugurated by governor Kalraj Mishra.

Home

Flawed strategy

(Source: Business Standard, November 07, 2019)

Regional FTAs are out, but bilateral ones are as tough

The government’s decision to stay out of the Regional Comprehensive Economic

Partnership (RCEP), which includes 15 other countries, including the manufacturing hubs

of East Asia as well as Australia and New Zealand, is being justified as being part of a

strategy of remaining open to trade while ensuring that Indian manufacturers are not

exposed to unfair co-operation from China.

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16 CITI-NEWS LETTER

This is, as a broad-brush strategy goes, not hard to defend. There is much that is

problematic about Beijing’s approach to international trade, and if the RCEP did not build

in the appropriate controls ...

Home

Apparel industry is becoming organised with GST implementations: Cantabil

CFO

(Source: Shivani Phaugat, Economic Times, November 07, 2019)

The goods and services tax (GST) system has been a milestone decision for the country, but

its effects are going to linger a bit longer in the textiles and apparel industry. I believe that,

on-going implementations will result in making it the biggest booster to the country’s

economy in the coming decades, explained Shivendra Nigam, CFO, Cantabil Retail.

In an interview with ETCFO’s Shivani Phaugat, Shivendra Nigam the CFO of Cantabil

Retail India Ltd shared his views on their strategy for coping with the economic slowdown,

consumption trends, corporate tax, the lingering effects of GST in organising

the industry and how offline stores still have an upper hand against the e-commerce

industry.

Cantabil Retail India a fashion brand is into designing, manufacturing, branding and

retailing of apparels.

Q: How has the slowdown affected you? Are you giving any offers to deal with

it?

Shivendra Nigam: In our industry, inventory management is the most crucial part in

retail and considering the current scenario of slowdown, the requirement of efficient

management has become more critical. The companies at present might be facing the

challenge of inventory piling up due to lesser spending by consumers in the past few

months.

To tackle the slowdown, we have completely aligned our production and procurement of

materials with budgeted sales. This has helped us in avoiding any downward impact on

our cash flows and thus has not affected us.

Q: Where do you see the next big trend of growth coming within

consumption?

Shivendra Nigam: We see immense potential in tier-2 and tier-3 cities for fashion retail

with young aspirant generation coming up. They are keen on spending in affordable

brands. We have a target audience of growing middle class and believe in offering “quality

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17 CITI-NEWS LETTER

products at competitive price”. So, we clearly see the next big growth from these cities and

towns.

Q: Where do you see the maximum growth come — from online or offline

stores? What do you think modern retailers should do against the backdrop

of rising influence of e-commerce?

Shivendra Nigam: I see online stores as fashion portals that have made consumers more

aware about the latest fashion and trends available in the market. This in turn has proven

to be an added advantage for offline stores. Despite the online penetration, offline stores

are still the first choice of consumers for fashion and we believe that there is good

potential for growth in the segment.

Further the e-commerce challenge can be handled better by enhancing the customer’s

shopping experience with zero compromise on basics like quality and competitive pricing.

I believe that the touch and feel factor while shopping in fashion retail along with basics

will prevail as an advantageous factor.

Q: As a CFO in the apparel/retail sector what are the real challenges that you

face?

Shivendra Nigam: The apparel industry has largely been an unorganised sector and is

still a work in progress of becoming organised. Cantabil is an organised player and has

been regularly adopting and implementing various statutory regulations with a complete

set of professional mechanism.

Some of my challenges include voluminous transactions, keeping pace with rapid changes

in regulatory norms and GST implementations.

The specific challenge in the GST comes in claiming inputs as most of the vendors are not

organised, so getting them organised and to be compliant on a monthly basis is the key

challenge for us.

Q: There was a lot of fan fair when the Corporate Tax was reduced. Will you

be shifting to this new tax regime or continue with the old one?

Shivendra Nigam: We are paying taxes in Book Profit under Minimum Alternate Tax

(MAT) provisions of the Income Tax Act. The company will continue to pay taxes under

MAT for this financial year and will get the benefit of tax cut under MAT. With the

continued rapid growth of the company, we are expecting to fall under normal tax

provisions in coming years.

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18 CITI-NEWS LETTER

Q: Demonetisation and GST have had a major impact on textiles and apparel

industry. Do you believe that the effects are over?

Shivendra Nigam: The textiles and apparel industry have largely been a part of the

unorganised sector and are currently in the process of being revamped to a more

organised sector. Demonetisation and GST system have been milestone decisions for the

country and it is going to take a bit longer for the textiles and apparel industry to settle

down completely. But I believe that the overall GST implementation will definitely result

in being the biggest booster to the country’s economy in the coming decades.

Q: What sort of technology trends do you see coming up in the apparel/retail

industry?

Shivendra Nigam: I follow the philosophy of organised brick and mortar retail where

customers spending quality time while shopping. The sector needs technologies that can

help customers make their shopping experience smooth and quick. I see technological

solutions like digital price tags, automated payouts and self-check outs come up as the

next big thing for the industry.

Q: What are your capex plans? Will you continue to open more stores?

Shivendra Nigam: Canatbil has a significant presence in tier-1 cities and majority of our

expansion plans are targeted towards tier-2 and tier-3 cities. Expansion in these towns is

cost effective and less competitive as not many brands are available in these markets.

For this we are planning to open up 70-75 new stores in the next one year as a part of our

growth strategy. The strategy will include both company owned stores as well as asset

light franchise models. The company has planned to spend in the range of approx Rs 1500

per square feet on capex in company owned stores, considering the design and size of the

stores.

Home

Poor demand shuts 20 textile mills around Surat

(Source: Fibre2Fashion, November 07, 2019)

Fall in demand and decline in production rate is severely affecting textile dyeing and

processing mills around Surat. Around 20 of the nearly 350 mills there have closed in the

last three months. And those running are functioning at 50-70 per cent capacity. The

trend is being attributed to reduced purchasing power, changed taste from polyester and

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19 CITI-NEWS LETTER

government.

Owners were expecting demand to rise during the festive season, but daily production has

gone down to 3 crore metres per day, which at 100 per cent capacity, is 4.5 crore metres

per day.

Those mills that downed shutters recently include around three each from Sachin and

Pandesara, two to three in Surat and two in Kadodara. Of the remaining 325 mills,

operational workforce capacities have been reduced to 65 per cent labourers only,

according to a report in a top English-language daily.

According to president of South Gujarat Textile processors Association (SGTPA) Jitu

Vakhariya, most of the units are working in single shift with two weekly holidays. Once

closed down, it is very costly and difficult to restart a unit. Therefore, many processors

have not closed down their units, but cut down its capacity by half, he said.

He said some of the owners are operating only half of their machines and stopped the

second shift as production costs have also increased by 15-25 per cent due to rise in labour

and raw material costs.

On the other hand, less production per day results in lower efficiency, more fuel

consumption at times and even more cost per unit, he added.

Another processor, who runs three units—two in Sachin and one at Palsana—said

purchasing power has reduced to a great extent in the last one year. Customers who once

purchased bulk of 30,000 metre material of a quality have now reduced the off take to

10,000-15,000 metres. This slump is mainly due to reduced demand of polyesters.

The mill owner has lower quantity of job work now compared to a year ago when he used

to get job work for 2 lakh metre of material at the start of the festive season. Now, the flow

has reduced to 1 lakh metre only.

Home

The art of walking away from a deal

(Source: Karthik Nachiappan, Live Mint, November 07, 2019)

On Tuesday, India’s largest dairy cooperative Amul sent a public thank you note to Prime

Minister Narendra Modi. In its latest ad, the evergreen Amul girl was seen leading a happy

farmer couple carrying pails of milk. The punch line: ‘Firm PM, farm PM.’ The occasion:

India’s decision to stay out of the Regional Comprehensive Economic Partnership or

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20 CITI-NEWS LETTER

RCEP, a 16-nation mega regional trade agreement signed in Bangkok on Monday. Of

course, Amul has a stake in RCEP’s success or failure, for it has always opposed the trade

deal.

Some critics claim Narendra Modi’s jettisoning of RCEP jeopardizes, if not kills, New

Delhi’s intent to transform India into a $5-trillion economy while signalling India’s

unwillingness to make necessary reforms to make industries more competitive.

Others claim that Modi’s move, coupled with America’s absence, effectively cedes regional

space to China. Downsides from the deal, they claim, are geopolitical in that it dents

India’s credibility with Asean (Association of Southeast Asian Nations) members who,

fearing Chinese domination, were standing by for India’s grand entry to rescue them.

A select few argue that joining RCEP would have realized India’s longstanding desire to

connect domestic firms to global value chains, particularly in Southeast Asia. This would

have, ostensibly, transformed India into a global manufacturing behemoth.

Most of these claims are risible since they do not sufficiently interrogate or internalize the

distributional implications of signing the RCEP, particularly to Indian firms and

industries who could be materially harmed. Trade agreements are generally compromises

where countries exchange market access in areas where they have competitive

advantages: in India’s case this was clearly services where a trade surplus exists with most

countries.

But RCEP did not move the needle here for India; concessions offered by other countries

in terms of accepting Indian professionals, specifically from the IT (information

technology) and software industry, was negligible. Neither was Delhi moved by liberal

interpretations of regulating data within RCEP negotiations, signalling its preference for

national control in this area, which was largely opposed by other RCEP countries.

In fact, India was particularly concerned over an RCEP that could potentially entrench

the market dominance of foreign technology companies without any recourse to small

and medium sized technology companies in the Indian market.

Pail of anxieties

Services aside, India’s anxieties largely centered on necessary tariff concessions as a RCEP

member; estimates suggest New Delhi would have had to cut duties by 90% over the next

15 years on goods including manufacturing and agriculture, from China and advanced

economies like Australia, New Zealand and Japan.

Moreover, there were doubts over whether sufficient exemptions could be secured for

India’s dairy products within RCEP; without a workable buffer period, a notable feature

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21 CITI-NEWS LETTER

of WTO agreements, Indian farmers and dairy producers (such as Amul) would have faced

cheap dairy imports from Australia and New Zealand.

Given India’s economic quandaries, RCEP would have only widened the gaping trade

deficit India holds with China and other RCEP countries that now stands at $104 billion,

with China making up more than half of that at $53 billion.

In 2018, 35% of India’s imports were from RCEP countries while only 20% of India’s

exports went the other way. Between 2010 and 2018, India’s imports from the Asean grew

from $5 billion to $22 billion, and from South Korea from $8 billion to $12 billion. In the

short to medium term, at least, RCEP imports to India would have risen, placing

considerable pressure on Indian firms.

The China factor

The claim regarding India’s strategic balance with China and that India’s assent to RCEP

would have somehow helped constrain China within a regional ambit belies the fact that

China is far more embedded, economically and socially, within Asean. This would

necessarily make it difficult, if not impossible, to constrict Beijing.

It is not clear how India would allay this situation. In 2019, Asean became China’s second-

largest trading partner, displacing the United States which held that position from 1997.

In 2018, trade between China and Asean countries stood at $588 billion, a legacy of

regional value chains.

How India will hold China accountable across a region, where Chinese trade and

investment patterns dominate is largely not explained. If anything, through RCEP, India’s

trade deficit with China, currently around $53 billion, could rise further constricting the

bilateral space where it has to work out trade quandaries with Beijing while more Chinese

goods enter the Indian market. A multilateral trade pact could possibly constrain India’s

hand bilaterally vis-a-vis China.

The India-China question also probably featured in RCEP discussions on the ratchet

obligations from which India wanted a reprieve. As per ratchet rules, once a country signs

a trade agreement with another country, which includes reduction of tariffs on

merchandise goods, it concedes the right to raise tariffs again or impose trade-restrictive

measures as dictated by national interest.

Under an RCEP with a ratchet provision, India would have had to effectively freeze tariffs,

notwithstanding effects on firms and citizens; in other words, no import caps on China or

other RCEP partners, should the Indian market get flooded with imports.

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22 CITI-NEWS LETTER

Such worries heightened anxieties of certain parts of Indian industry that have been wary

of RCEP. Multiple industry groups registered their misgivings over RCEP to government

officials. These calls appear to have found resonance.

About India’s ‘defensiveness’

Sadly, the claims chastising India’s rejection of RCEP are and have always been par when

describing India’s multilateral behaviour. Inexplicably, scholars and critics alike place

stiff expectations and benchmarks when India negotiates international rules and then

excoriate India for advancing core interests or rejecting an agreement that does not fulfil

those interests, as was the case with RCEP.

India has generally been portrayed as an obstructionist negotiating international rules.

Scholars point to instances when India has rejected rules that others have agreed to or

stymied multilateral negotiations without sufficient cause. This so-called prickly

defensiveness has apparently restrained India’s multilateral ambitions, denting its

credibility as a ‘responsible’ state working to help address problems like climate change,

nuclear proliferation and trade protectionism.

The problem with such myopic views is that they are not representative of all multilateral

issues, and they set a benchmark, like consenting to a particular rule or negotiating with

a broader mindset, which is used to judge how India behaves in the multilateral arena.

Broadly, RCEP allows us to step back and consider how India negotiates international

rules and what factors shape why India signs certain rules and rejects others.

My research indicates that Indian negotiators are neither innately defensive nor do they

arrive intending to thwart, disrupt or obstruct negotiations. Almost all states enter

multilateral negotiations with a brief or a set of interests they seek to clinch without

conceding much in return. Defensiveness is de rigueur. Negotiations are characterized by

attrition, where compromises and breakthroughs are made on the margins. India’s

‘defensiveness’ has to be understood in this context.

Commentaries on India’s multilateral behaviour overstate the degree of defensiveness or

measure India’s behaviour against a standard that is, in many ways, unachievable. What

most analysts misread or neglect to consider is that the international context around

global governance has changed. We live in an era of interdependence. And rising

interdependence will leave India little choice but to engage on multilateral issues that

affect its development and security.

As India further embeds itself within the international economy and international order,

it is vital for analysts to map this interaction and interrogate whether and how integration

shapes India’s multilateral positions.

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23 CITI-NEWS LETTER

A rule shaper

Given interdependence, I argue that India’s approach towards international rules, a key

component of its multilateral behaviour, is sober, rational, and driven by institutional

capacity and interest groups which shape the positions taken at negotiations.

When Indian negotiators possess a robust understanding of the problem, like carbon

emissions or weak tobacco regulations, and have adequate support from specific interest

groups, India will be inclined to shape a particular international agreement and ratify it.

India was a rule shaper on two big international agreements—Framework Convention on

Tobacco Control (FCTC) and the Uruguay Round Trade Agreement. On tobacco control,

Indian health officials saw multilateral negotiations as an opportunity to reinforce India’s

new tobacco control law—the Cigarettes and Other Products Act that tightened domestic

laws around tobacco production, distribution and use. India’s desire to negotiate a robust

FCTC would not have materialized had the health ministry and tobacco control groups

not collaborated to draft India’s first comprehensive tobacco control bill before FCTC

negotiations. India’s tack at FCTC negotiations mirrored the strong positions taken at

home. In 2005, India became the eighth country to sign and ratify the framework

convention.

Similarly, India played a useful role working between developing and developed countries

to help pass the Uruguay Round Trade Agreement in 1994. Before the round, Indian trade

negotiators sensitized themselves to the constraints Indian firms faced while exporting

goods abroad, particularly textiles, agriculture and services. Negotiations emerged as an

opportunity to secure additional market access and boost India’s improving trade

position.

Aware of domestic industrial inefficiencies, Indian negotiators strove to extract sufficient

protections for domestic firms before the Indian market would have to be opened for

competition. In return, the pound of flesh extracted from India was liberalization in

services and intellectual property rights, areas where India was not keen to concede.

Having secured gains from reduced tariffs and guaranteed market access with exemptions

strewn in for firms to adjust over time, India relented.

In conclusion

That said, negotiating international rules is an onerous endeavour that requires

considerable institutional capacity within the government, which India has generally had,

contrary to views touting India’s foreign policy incapacity.

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24 CITI-NEWS LETTER

Adequate capacity exists when it comes to understanding what India’s core interests

toward an international rule are, positions to craft and defend during negotiations and

the decision to either ratify or reject the rule.

Instead of deducing capacity from the size of the foreign service or the seemingly complex

nature of issues diplomats confront, it pays to measure and analyse institutional capacity

by empirically tracking the intentions and actions of institutions.

Observing how ministries and officials function and adapt helps assess India’s

institutional capacity vis-à-vis foreign policy. Negotiating rules, like climate change and

tobacco control and RCEP, entails dealing with multiple national agendas over what

provisions should be in the multilateral agreement.

Rules that emerge out of this fractious process reflect countless trade-offs and bargains

which requires considerable diplomatic capacity to navigate; occasionally, negotiations

break down leading to India withdrawing or abstaining.

What fundamentally matters in these cases is whether Indian officials grasp the politics

around negotiations and how countries prefer to shape the agreement by inserting India’s

interests and preferences to generate a viable multilateral treaty. Simply put, India’s

negotiating approach is exigent, rational and sober. Going ahead, we can expect this

rationalist bent to sustain as India negotiates new international rules.

Karthik Nachiappan is a research fellow at the Institute of South Asian Studies, National

University of Singapore, and author of the book, Does India Negotiate, published by

Oxford University Press.

Home

Raymond to demerge lifestyle unit

(Source: The Hindu, November 07, 2019)

Move will simplify group structure, says the company

Raymond Ltd. has announced the demerger of its lifestyle business into a separate entity

that will be listed through a mirror shareholding structure, the company said on

Thursday. Every shareholder of Raymond Ltd. will be issued shares of the new company

in the ratio of 1:1. The move will create a clear demarcation of lifestyle and other

businesses leading to the simplification of the group structure, the firm said.

The new company will have the businesses of branded textiles, branded apparel and

garmenting while the existing company will retain real estate projects, Thane land bank,

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25 CITI-NEWS LETTER

B2B shirting business, engineering businesses of auto components and tools and

hardware, denim and FMCG businesses.

Ahead of the announcement, the firm’s sharesclosed with a gain of 6.94% at ₹673.70 on

the BSE.

Raymond Ltd. also announced the allotment of equity shares and compulsorily

convertible preference shares (CCPS) worth ₹225 crore and ₹125 crore respectively to

JK Investo Trade (India) Ltd (JKIT), an associate company, against the infusion of net

proceeds of JKIT land sale that was announced in October 2019. The allotment was done

at ₹674 per equity share. The total of ₹350 crore will be used to repay debt thus

deleveraging the balance sheet of Raymond Ltd. The decisions are subject to approval of

the shareholders.

Gautam Hari Singhania, CMD, Raymond Ltd., said, “As we continue to build capacities

for enhanced performance and delivery across verticals, demerging the core lifestyle

business is an affirmative step towards that direction and this will also simplify the group

structure We remain resolute to take right steps to enhance value creation for our

shareholders.”

Sanjay Bahl, group chief financial officer, Raymond Ltd., said, “In line with our stated

strategy of asset monetisation, the infusion of net proceeds of JKIT land sale in Raymond

Ltd. will help us in debt reduction leading to better operational efficiencies.” “As our

balance sheet will get leaner, it will lead to a better profitability at the group level. The

demerger of the lifestyle business will enable the demerged company and the resulting

companies to have focussed strategy and specialisation for sustained growth and the

ability to attract investors for better access to capital,” Mr. Bahl said.

Sanjay Behl, CEO, lifestyle business, Raymond Ltd., said, “With a large network of over

1,500 stores across more than 600 towns and cities, Raymond Lifestyle Business offers

an integrated play in the textile, apparel and garmenting segments both in domestic and

global markets. With this demerger, lifestyle business will be well positioned to capitalise

on the emerging opportunities through newer capabilities across the entire value chain of

‘Fibre to Fashion.’”

Home

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26 CITI-NEWS LETTER

GLOBAL

China says it agreed with US to roll back existing tariffs in phases

(Source: Bloomberg, November 08, 2019)

The amount of tariff relief that would come in the first phase, set to be signed in the coming

weeks, would depend on the content of that agreement, spokesman Gao Feng said

China and the US have agreed to roll back

tariffs on each other’s goods in phases as they

work toward a deal between the two sides, a

Ministry of Commerce spokesman said.

“In the past two weeks, top negotiators had

serious, constructive discussions and agreed

to remove the additional tariffs in phases as

progress is made on the agreement,” spokesman Gao Feng said on Thursday.

“If China, US reach a phase-one deal, both sides should roll back existing additional tariffs

in the same proportion simultaneously based on the content of the agreement, which is

an important condition for reaching the agreement,” Gao said.

An interim US-China trade deal is widely expected to include a US pledge to scrap tariffs

scheduled for December 15 on about $156 billion worth of Chinese imports, including cell

phones, laptop computers and toys. If confirmed by the US, such an understanding could

help provide a road map to a deal de-escalating the trade war that’s cast a shadow over

the world economy. China’s key demand since the start of negotiations has been the

removal of punitive tariffs imposed by US President Donald Trump, which by now apply

to the majority of its exports to the US.

“The question right now is what the two sides have actually agreed on — the market’s

focus has shifted to how the US may react to China’s tariff remarks tonight or in coming

days,” said Tommy Xie, an economist at Oversea-Chinese Banking. “Investors are still

cautious and the advance in the yuan is still limited. The currency could rally to 6.9 if the

US confirms the news on the lift of tariffs.”

Home

Global debt load surges to new all-time record high of $188 trn: IMF chief

(Source: Business Standard, November 08, 2019)

That is up from the previous record of $164 trillion in 2016, according to IMF figures

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27 CITI-NEWS LETTER

The global debt load has surged to a new all-time record equivalent to more than double

the world's economic output, IMF chief Kristalina Georgieva warned Thursday.

While private sector borrowing accounts for the vast majority of the total, the rise puts

governments and individuals at risk if the economy slows, she said. "Global debt -- both

public and private -- has reached an all-time high of $188 trillion.

This amounts to about 230 per cent of world output," Georgieva said in a speech to open

a two-day conference on debt.

That is up from the previous record of $164 trillion in 2016, according to IMF figures.

While interest rates remain low, borrowers can use debt to make investments in

productive activities or weather a bout of low commodity prices.

But it can become "a drag on growth," she said.

"The bottom line is that high debt burdens have left many governments, companies, and

households vulnerable to a sudden tightening of financial conditions," she cautioned.

Corporate debt accounts for about two thirds of the total but government borrowing has

risen as well in the wake of the global financial crisis.

"Public debt in advanced economies is at levels not seen since the Second World War,"

she warned. And "emerging market public debt is at levels last seen during the 1980s debt

crisis."

She called for steps to ensure "borrowing is more sustainable," including making lending

practices more transparent and preparing for debt restructuring with "non-traditional

lenders" -- an apparent reference to China, which has become a major creditor to

developing nations including in Africa.

Home

Zilingo-VITAS partnership to bring digitisation to Vietnam

(Source: Fibre2Fashion, November 07, 2019)

Singapore-based global fashion-technology platform Zilingo wrapped up a successful

venture at the Vietnam Hanoi Textile & Garment Industry Expo (HanoiTex), where it

presented its proprietary production software to help factories to increase efficiency and

reduce defects by accessing production real-time data and actionable performance

reports.

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28 CITI-NEWS LETTER

Attended by 195 companies from the textile and garment industry across 14 countries

including China, Korea, Germany, the US and the UK, HanoiTex is regarded as a leading

platform for thought leaders to showcase their innovative solutions and products.

Zilingo's participation comes on the back of strong ties with the Vietnam Textile and

Apparel Association (VITAS) and was invited by Hoang Ngoc Anh, acting secretary

general of the association, to share how the former can harness its own smart technology-

led solutions to bring factories in Vietnam forward to join the digital revolution and

maintain their position as major players in the fashion industry, according to a press

release from Zilingo.

"As we scale our presence in Vietnam, we look forward to leveraging our platform to bring

more Vietnamese factories into the digital age while connecting Vietnamese sourcing to

global fashion brands in the West. The role of technology should be used to create

inclusive growth. With Zilingo's suite of tools and services, fashion businesses will be

better equipped to compete in a global marketplace," said Cian O'Dowd, head of

expansion, Zilingo.

This is part of Zilingo's plans to launch in Vietnam as a key market to empower fashion

businesses with unprecedented access to a transparent supply chain solution with access

to software, financial services and marketing services.

Home

Bangladesh: Highest taxpaying corporations: 57 businesses to get Tax Cards

Thursday

(Source: Belal Muntasir, The Dhaka Tribune, November 07, 2019)

The Board on Wednesday published a gazette notification in this regard

The National Board of Revenue (NBR) to award 57 companies the National Tax Cards for

their highest tax payments for the last fiscal year.

The awards will be given in 14 categories on Thursday.

The Board on Wednesday published a gazette notification in this regard, announcing the

names of the corporations.

Apart from the best taxpaying businesses, another 74 individual taxpayers and 10 entities

will also receive the prestigious cards.

The card holders of all categories will be invited in different state programs, enjoy CIP

lounge at airports, preference in booking transport tickets and privileges in getting

hospital cabins for the next one year.

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29 CITI-NEWS LETTER

The award giving program will be held at Officers Club in the capital.

The 57 companies

Banking: Islami Bank Bangladesh Limited is the highest taxpayer in banking category this

year.

Besides, Standard Charted Bank , National Bank, The Hongkong and Shanghai Banking

Corporation, Brac Bank, Pubali Bank, Southeast Bank and United Commercial Bank will

also receive the tax cards for their record income tax payment.

NBFIs: Infrastructure Development Company, Investment Corporation of Bangladesh,

IDLC Finance and Bangladesh Infrastructure Finance Fund.

Telecommunication: Grameen Phone is the only company from telecommunication

sector to receive the card this year.

Engineering: Bangladesh Machine Tools Factory, Khulna Shipyard, BSRM Steels to get

the awards in engineering category.

Food: Nestle Bangladesh, Olympic Industries, Square Food and Beverage were selected

for awards in the food and others categories.

Energy: Titas Gas Transmission and Distribution, Meghna Petroleum and Gas

Transmission Company were picked up from the Energy sector.

Jute: Akij Jute mills, Janata Jute Mills and Super Jute Mills are to receive the cards.

Spinning and Textile: Seven companies were listed in this category. They are

: Coats Bangladesh, Badsha Textiles, ACS Textiles, Noman Terri towel Mills,

Apex Textile Printing Mills, Envoy Textile and Fakhruddin Textile Mills.

Drug and Chemical: Unilever Bangladesh, Square Pharmaceuticals, Incepta

Pharmaceuticals, Reneta Limited are the top companies in drug and chemical categories.

Print and Electronic Media: Mediastar limited, East West Media Group, Transcraft

limited and Mediaworld Limited will be awarded the prestigious cards.

Real Estate: Three companies – Rangs Properties, Equity Property Management, Bay-

Development – were selected from real estate sector.

RMG: Seven Companies – Young One High-Tech Sports Wear, Rifat

Garments, GMM Composite Knittin, Ha-Meem Denim, Thats It Sports wear,

Pacific Jeans and 4H Fashions – are going to receive the cards for their

outstanding contribution in tax payment.

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30 CITI-NEWS LETTER

Leather: Bata Shoe, Apex Footwear, Atlas Footwear are the highest taxpayers in leather

category.

Others: British-American Tobacco Bangladesh, American Life Insurance, Sadharan Bima

Corporation andToma Construction were also picked up for the cards.

Home

Armenian PM opens new clothing factories in Yerevan

(Source: Fibre2Fashion, November 07, 2019)

Armenian Prime Minister Nikol Pashinyan recently inaugurated new clothing factories in

Yerevan. Three factories of Alex Textile, Sartex and Asa Garment will be housed in a single

facility, which will employ around 1,000 now. The number of those employed will reach

3,000 in the near future. The factories will produce jackets, leather garments and

knitwear.

Pashinyan said the government is prepared to support the sector’s development,

according to an official press release.

Sartex was jointly founded by Italy’s Sartis and Armenia’s Alex Textile and is engaged in

production of clothes of MaxMara, Moncler, Peuterey, Dolce&Gabana, Dainese and other

brands. Director of the company Mkhitar Aghabekyan said they want the Made in

Armenia label become a quality guarantor.

Alex Textile is cooperating with a leading Chinese producer of garments. The whole range

of the output will be marketed abroad. In 2020, Alex Textile is expected to open a

homemade textile and towel production facility and another clothing factory in Artashat.

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