Gujarat textile industry sees jump in export orders

Source: Financial Express, Jan 05, 2021

After an increase in purchases by domestic buyers, the textile industry in Gujarat is now witnessing encouraging export demand from Europe, USA, Australia and New Zealand.

The textile industry went through a tough period from April to July 2020 following the Covid-19. Now, however, demand is high on both the domestic and international fronts.

“From August, textile units started functioning again amid scattered orders from domestic buyers. By Diwali, most textile manufacturers got many orders from all across the country.

Not only were manufacturers able to exhaust unsold inventory, but also the entire textile value chain, especially in Ahmedabad and Surat, experienced unprecedented business opportunities,” Gaurang Bhagat, president of the Ahmedabad-based New Cloth Market, said.

He said that from December 2020, home textile, cotton and synthetic fabric manufacturers started getting exports orders too.

Bhagat, who is also the trade committee chairman of the Gujarat Chamber of Commerce & Industry (GCCI), claimed that some importers from the US, Europe, Australia and New Zealand have decided to source textiles from Indian suppliers instead of China, Pakistan and Turkey.

He said the industry is also benefitting from the textile exhibition FABEXA 2020, in which participants from 52 countries took part. Organisers were forced to hold the exhibition online, but the efforts seem to be translating into real business, Bhagat said.

Sanjeev Sancheti, CFO Welspun India, said that domestic textile players are getting extra export business as global brands are finding it risky to depend on suppliers from a single country due to the pandemic. “China being the dominant supplier is obviously losing some part of supply to India. This new situation is advantageous for smaller textile players.

Welspun, being a big company, already has long-term supply orders. However, we are expecting a significant upside in the flooring textile space,” Sancheti said. Anand Prakash, general manager of Ahmedabad-based Nandan Terry, said his company recently received export orders till June this year. “Retailers in Europe, US and other markets have run out of stock and need to create inventory for four to five months, which is a huge quantity. Suppliers in Pakistan and Turkey have capacity restrictions. In the case of China, there is a trust deficit due to the outbreak of coronavirus. Hence, the Indian textile industry is benefitting,” Prakash said.

High demand from developed nations benefits engineering exports

Source: The Economic Times, Nov 06, 2017

India’s engineering exports to its top 25 destinations registered a rise of 53.3% in September 2017 and 25.6% during April- September 2017.

Indian engineering exports are benefiting from an impressive turnaround in the demand in most of the developed economies, including the US which accounted for an annual growth of 91% in shipments in September this fiscal, along with several other key markets of the Europe, UAE and China, an EEPC India analysis has shown.

The US continued to be the top most exporting destination for India’s engineering products in September 2017, registering a huge expansion both on monthly as well as in cumulative basis during Apr-September 2017-18 over the same period last fiscal.

With Iran’s Chabahar port, India opens a diplomatic shortcut to Afghanistan

Source: Business Standard, Nov 07, 2017

India is in talks with Iran to begin interim operations at a port in southeast Iran, officials say, proceeding cautiously on developing the facility at a time when the Trump administration has laid an aggressive new approach toward Tehran.

India has committed $500 million to the Chabahar port that it is building as a way to bypass rival Pakistan and crack open a trade and transport route to landlocked Afghanistan, as well as the resource-rich countries of central Asia.New Delhi plans to send seven shipments of wheat to Afghanistan through Chabahar by the end of January. A first shipment arrived last week from India’s western Kandla port, after years of political wrangling with Pakistan, government officials in New Delhi and Kabul said. The wheat will be trucked from Chabahar to western Afghanistan.

GSTN eases process for exporters to claim refunds under Form GSTR1

Source: Business Standard, Nov 06, 2017

New Delhi: GST Network on Sunday said it has introduced a utility Table 6A in Form GSTR1 for exporters to claim refunds.

An exporter can claim refund of Integrated GST tax paid at the time of export by filling the details of shipping bill and tax paid GST invoice in his Form GSTR1 in the relevant month.”Table 6A of Form GSTR1 has been introduced on the GST portal,” GSTN said in a statement.

Customs duty on polyester fabric raised to 20%

Source: Business Standard, Oct 31, 2017

Chennai: The central government has decided to increase the basic customs duty on polyester fabric to 20 per cent, from 10 per cent, with effect from last Friday.

In the Goods and Services Tax regime, countervailing duty has been replaced with Integrated GST and Special Additional Duty (SAD) has been scrapped. Polyester fabric attracted 10 per cent basic customs duty, 12.5 per cent countervailing duty and four per cent SAD in the pre-GST regime.

After scrapping of the SAD and levy of five per cent GST on the fabric, the imported variety attracted 10 per cent basic customs duty and five per cent IGST. This was a significant drop and the domestic manufacturing industry had petitioned in alarm, to stop cheaper import, especially from China. The industry had represented to the government and the GST Council to increase the basic customs duty.

Non-major ports pip major ports in cargo growth in 5 years

Source: Business Standard, Oct 30, 2017

Bhubaneshwar:Non-major ports in the country have edged past major ports in cargo volumes growth over the past five years.

Between 2012-13 and 2016-17, cargo at non-major ports witnessed a spike of 25 per cent compared with 18 per cent registered by major ports. Total cargo handled by major ports rose from 545.60 million tonnes (mt) in FY13 to 647.40 mt in FY17. Non-major ports in the same period logged higher growth as cargo volume expanded from 387.9 mt to 484.8 mt.

In 1981, the share of non-major ports to overall traffic volumes was less than 10 per cent but by the end of FY16, their share had ramped up to 43 per cent.

Antwerp Port ‘ready’ to make India call, again

Source: LiveMint.com, Oct 10, 2017

Mumbai: Antwerp Port Authority, the entity that runs Europe’s second largest port on the river Scheldt, will consider lending its expertise in strategic planning, development and management to a greenfield port in India, where it could even make a small equity investment when the right opportunity arises.

“What we are doing in other parts of the world, we can do that, whenever asked, in India,” Marc Van Peel, President, Antwerp Port Authority, told BusinessLine during a meeting at the imposing new port house, Zaha Hadidplein, named after the late Iraqi-British architect and designer, Zaha Mohammad Hadid.

A much-needed relief for exporters

Source: Business Standard, Oct 09, 2017

After the Goods and Services Tax (GST) Council meeting on Friday, exporters must be feeling relieved, happy and thankful. They have to now recover quickly from the blows and compete hard to take advantage of the opportunities that have opened up due to the smart recovery of global economy and trade this year.

Exporters will start getting refund of the Integrated GST (IGST) paid on the products exported in July and August from October 10 and October 18, respectively. It appears the refund of input tax credit on account of exports without payment of IGST may be delayed. We have to wait for the notifications. However, any refunds will certainly help exporters get over their problems of working capital shortage.

European Union pushes for adoption of a Free Trade Agreement

Source: The Economic Times, Oct 07, 2017

NEW DELHI: India and European Union on Friday adopted a comprehensive action plan (through a joint statement) to combat international terrorism including criticising terror act by Rohingya terrorists besides sending a clear message to China by emphasising on UNCLOS for resolving all maritime territorial disputes.

The EU on its part pushed for adoption of a Free Trade Agreement to push trade partnership with the continent being India’s single biggest trading partner as a bloc. Europe that has come under series of terror attacks for past couple of years decided to expand scope and ambit of counter-terror partnership at the 14th edition of India-EU summit here.

GST Council set to consider measures to help exporters

Source: LiveMint.com, Oct 03, 2017

New Delhi: In a move to support exporters recovering from a prolonged contraction, the GST Council headed by finance minister Arun Jaitley is set to consider new measures for a quick refund of taxes paid by them.

Measures for the swift processing of refund claims, which will be taken up at a meeting of the council on Friday, will improve the liquidity of exporters.

An official privy to the discussions in the council said on condition of anonymity that the indirect tax body will consider the report of a panel led by revenue secretary Hasmukh Adhia which examined ways to avoid blocking exporters’ funds. The panel set up by the council had sought exporters’ views in August.

Exporters are likely to be allowed refunds without waiting for the invoice details of raw materials and other purchases, but based on the summary of all transactions and details of exports made.

Exporters have made a series of demands including exemption of imported raw materials from GST rather than having to pay tax first and claiming a refund later. They say they are losing their competitive edge and are facing a liquidity crunch due to delays in GST refunds and upfront payment of GST on inputs for exports.Exports constitute around 20% of India’s gross domestic product (GDP and a decline in overseas shipments could aggravate a slowdown in the economy, which grew 5.7% in the June quarter, the slowest pace in three years. All taxes that go into exported products are refunded by the government to make these products competitive in global markets.

The countervailing duty (CVD), and special additional duty (SAD) levied on imports under the earlier tax system have now been replaced by integrated GST (IGST) on imports. While exporters earlier used to get advance authorization and did not have to pay taxes for import of inputs for export purposes, now they pay IGST, which locks up their working capital due to absence of a quick refund mechanism. Extension of the last day for filing GST also delays refunds to exporters.

“Steps that will quicken the processing of refunds without actually compromising the basic design of GST would be easier to implement,” said Abhishek Jain, partner, indirect taxes, EY.

The problems faced by exporters under GST regime had been expected, international trade expert T.N.C. Rajagopalan said.

“The GST Council needs to streamline the refund mechanism especially for the merchant exporters, advance license holders and export-oriented units at the earliest,” Rajagopalan said.

The Federation of Indian Export Organisations (FIEO) said in a representation before finance minister Jaitley last week that most exporters didn’t have the financial wherewithal to pay GST liabilities for three months without being refunded.Exporters may be provided GST refund based on GSTR-1 (the return relating to supplies) and GSTR-3B (a summary of transactions) so that the cash flow to export sector is maintained, FIEO said.

The lobby group also urged the finance ministry to introduce an e-wallet for exporters in which based on the preceding year’s exports and an average GST rate, e-currency is credited to exporters’ account. “Like a running account, money may be debited from the e-wallet when duty-paid supplies have to be undertaken and the amount may be credited when the proof of exports is made available,” FIEO said.