India, Netherlands agree to boost bilateral ties

and the on Thursday reviewed bilateral cooperation in various fields, including political, economic and cultural ties, and deliberated on regional and multilateral issues, including cooperation at and other international fora.

The two countries held Foreign Office Consultations here. The Indian delegation was led by A. Gitesh Sarma, (West), (MEA) and the Dutch side was led by Johanna (Yoka) Brandt, General, Ministry of Foreign Affairs, according to an official statement by MEA.

"and the share a multifaceted relationship. Both countries used this opportunity to review the entire gamut of bilateral relations, including political, economic, commercial, scientific and cultural cooperation," it said.

The two sides also exchanged views on regional and multilateral issues, including cooperation at and other international fora," the MEA statement added.

15 Apr 2019 ioie business stadard

A survey finds support for both globalisation and import tariffs Free trade and globalisation are more popular in developing countries

IN JANUARY 2000, George W. Bush, then a presidential candidate, said: “If the terriers and bariffs are torn down, this economy will grow.” His eloquence did little for the cause of free trade. Tariffs have consistently retained broad global support despite the spoonerism.

GlobeScan, a consultancy, has regularly conducted surveys in several developing and developed countries. They measure support for trade barriers, globalisation and free markets. Since 2002, average global support for trade barriers has remained relatively stable at around two-thirds of respondents (see chart 1). Support for globalisation and the free market has been more variable, falling sharply during the financial crisis before recovering in recent years.

 

 

15 Apr 2019 IOIE The Economist

Export and import process of clothing products in India

The clothing industry in India dwells an important place in the economy of the country and supplies substantially to earnings of export. The clothing industry is the second largest provider of employment in India after agriculture. Clothing makes up around 17% of entire exports.

15 Apr 2019 IOIE Project Guru

Future scope for exports of garments from India

In accordance with the Multi-Fiber Agreement to be phased out in clothing industry trade has to be done over a period of 10 years. Therefore the agreement to phase out Multi-Fiber Agreement over a period of 10 years may not prove outright beneficial to India. India clothing industry may utilize the period of transition in modernizing its technology and upgrading the quality of its products. Nonetheless, Indian textile and clothing industry may still face a dark future due to competitive advantage in the global market (Mohan R and Chatterjee S, 1993).

Despite significant advantages, the Indian clothing industry faces considerable constraints in reaching its potential. India has rival benefits stemming from its big and similarly less labour cost a big domestic fabrics supply and the ability of the industry to manufacture a vast range of blazers. India has diverse and strong raw materials for manufacturing artificial and natural fibres. Future India has a large capacity in spinning and clothes and the clothing industry of India spans the entire supply chain.  The below tables shows the Major exports of Readymade garments from India:

Market Export % share in total exports
USA (Q) 11443 29.46
Germany (Q) 4629 11.9
UK (Q) 3568 9.19
France (Q) 2463 6.34
Benelux (Q) 1798 4.63

Major importers of readymade garments from India

Source: Vasudeva P K (2000), India and World Trade Organization: planning and development, APH Publishing, New Delhi

Clothing industry in India

The clothing industry in India can pat itself justifiably on its back for its achievements in a short life cycle. From few numbers of small units scattered for 2 decades back, now there are thousands of units, medium, small and big sophisticated and traditional. The output quality has improved tremendously with the design and fashion contents having improved over long years. The growth in exports in quantity and value terms can be outstanding and has outrun the whole growth of Indian exports (Mote V, 2000; Mishra V, 1997). The market had diversified blazer products and hence major markets are spread in India all over the globe. It is not nearly quota markets that during 1994 the quota countries account for 75 percent of the total exports in value which the balance 25 percent is going to non-quota countries.

15 Apr 2019 IOIE Project Guru

Government Legislations with respect to export and import of clothing in India

Indian Government has announced several measures to promote exports time to time. In order to promote import and export of clothing in India the government has strengthened the base of export production and improved the administration (Roy and Verma, 1999). In addition to that they also provide facilities for technological improvements and also help the Indian products to compete in international market. The government has also announced to have relaxation in imports to promote exports and also relaxes the process of getting inputs. Also government announced to devaluate rupee to encourage exports by making them cheaper and to discourage imports by making them costlier in the international market. With a view to promote industrial development in the country, the procedure of import of capital goods has been simplified by the government and so they have introduced EXIM scheme to provide additional incentives to exporters (Verma S, 2001; Shanbhag V and Nair A K G, 2000). They have also allowed the reputed exporters to open accounts in foreign currency in certain banks. Government have also decided to encourage the establishment of export blazers and trading blazers in the country. In addition to that government has also decided to give top priority to the development of Export Processing Zones (EPZ) and 100% Export Oriented Units for the purpose of export promotion. Government has also announced facilities for handicraft and handloom sector. Handicraft Export Promotional Council is authorized to import clothing goods for small manufacturers and to promote their exports. This council also works to promote export of handicrafts.

The EXIM policy has also facilitated the import of blazers, with obligations of export at concession duty rates in different groups of industry. If clothing industry gains a commitment of exports of 4 times the import value to be gained within 5 years, 18% concessional duty of import will be imposed on blazers imports. 28% concessional duty of import will be possible on commitments of exports by 3 times the imports value to be gained within 4 years. The regimes of quota controlled determine the major markets of exports for clothes exports of India.

15 Apr 2019 IOIE Project Guru

An overview of import and export in India

An overview of import and export in IndiaInternational trade barriers are slowly narrowing down and a new era of world trade is emerging global economy export and import trade will play a major role since interdependence between economics on several aspects is increasing (Nelson, 2000; Rai, 2007). But interdependence on trade and development aid between countries is viewed with caution by most developing countries as they believe that developed countries are always motivated to sustain their interests and under such situation interests of developing countries may get partly neglected. India being a developed country has to protect its national interests of development and therefore export import trade policy has to be designed and implemented accordingly. In the export and import policy approach of government towards various types of exports and imports is conveyed to different exporters and importers. Export import policy regulates exports and imports of a country. Buying goods and services from other countries is known as import while selling services and goods countries is known as export. Nowadays in the globalization era, no frugality in the world can retain shortcut from the remaining globe. In the economic development of all developing and developed economies import and export plays an important role.

India’s foreign trade policy has been followed by controls and regulations on import and export to protect domestic industry and trade. To protect domestic industry and trade from foreign goods high import duty has been levied on imported goods and again imports were regulated and controlled through license and import substitution production measures (Capela, 2008). Despite all the controls and regulations and import substitution measures India’s foreign trade deficit has been increasing and it reached at alarming heights during late 1980s when India resorted to large scale borrowing from international financial institutions to settle trade deficit crisis. The below table shows the value of exports and imports from India:

Year Exports Imports Trade Deficit
1980-81 6711 12549 5838
1985-86 10895 19658 8763
1990-91 32558 43193 10635
1991-92 44041 47851 3810
1992-93 53688 63375 9687
1993-94 69547 72806 3259
1994-95 65483 71248 5755

Table 1: Value of Exports and Imports from India

Source: Mohanan (1995), Globalization of economy: vision of the future, Gyan Publishing House, New Delhi

To regulate import and export in the desired direction it is very essential that governmental frames some rules and regulations for exports and imports. A developing country like India has to import capital goods, modern technology and other essential items. For making payments of these essential imports, exports have to be promoted so as to maintain balance between exports and imports (Levy, 2005). If imports are more than exports, then need for foreign debt will rise which is not desirable. For boosting exports government gives various incentives to exporters by offering export promotion schemes.

15 Apr 2019 IOIE Project Guru

Challenges involved in exporting clothes from India

Challenges involved in exporting clothes from IndiaClothing industry is one of the major sectors of trade in the entire globe. Clothing industry has been existed because of the efforts of liberalization of the Uruguay Round of GATT. To get most out of the emerging conducive international trade scenario Indian clothing industry should embark the challenges based on the following lines:

Prospects for exports would depend on the extent to which India would be interested in improving the quality of blazer products in view of increasing competition and increased emphasis being put on quality. Thus the clothing industry must focus on quality (Roy and Verma , 1999; Ramaswamy  and Gereffi and Gary, 1998).

The reasons quoted by industry experts for gradual decline of the blazer in the share of clothing industry in the global market include reluctance to meet the international quality specifications, inability to specialize in one segment and missing delivery schedule. Thus the government needs to ponder over reasons for decline in blazers in clothing industry’s share in the global market.

The Multi-Fiber Agreement was a fully and completely expressed to secure developed producers of country by prohibiting blazers exports from industrialized to developing countries. The Multi-Fiber Agreement also provides temporary security to developed organizations country to develop the alterations that is important to rival against less producers of cost from developed countries (Deshpande , 2009; Prasad, 1997). The Multi-Fiber Agreement has not only offered an efficient framework for expanding the developed country manufacturers of blazer with secured position and, it has also gained some preferential access of quota to leading markets in developing countries.

India is strategic to be a superpower of manufacturing of blazer in 2005. Its clothing and textile industry is preparing for quota removal by investing to expand capacity. Potential problems however are those current Indian labors laws make it easier to manage smaller separate factories than one large factory. India has good design, availability of raw materials, the English Language and less labor cost and its legal system provides protection for workers rights. India exports around $8 billion worth of blazer worldwide each annum slightly more than half of which has gone to the United States. Problems include poor infrastructure especially access to port facilities and electricity, high power of cost, less productivity, poor roads, random corruption and strikes (Khanna  1991; Gokhle  and Vijaya Katti, 1995).

Too many exporters and retailers are thus chasing too few customers. Quality, compliance and time schedules have become accepted norms. Poverty and cheap labor is no longer an asset because there always will emerge new clothing export countries, where Indian workers can earn more than other countries.  Also it is no longer enough to produce good clothes and ship it on time as there are more than enough suppliers able to meet these minimum standards.

15 Apr 2019 IOIE Project Guru

Government Hikes Import Duties On Agricultural, Steel Products

Government has increased import duties on some agricultural and steel products that are imported from the U.S. in retaliation against Washington's new global tariffs on steel and aluminium, according to a government note seen on Thursday.

Last month, India had given a list of products to the WTO that it said could incur higher tariffs.

15 Apr 2019 IOIE NDTV PROFIT

Exports Slip 6.8% In July; Gold Imports More Than Halve

After rising for the first time in 18 months in June, exports shrank again in July, contracting 6.84 per cent due to decline in shipments of engineering goods and petroleum products.

Gold imports, which till recently was a matter of concern for the government, more than halved to $1.08 billion in the month.

Merchandise exports totalled $21.69 billion in July as against $23.28 billion in the same month last year.

Declining exports as well as in imports narrowed the trade deficit in July to $7.76 billion as against $13.09 billion in the year-ago period.

Exports have been falling since December 2014 due to weak global demand and slide in oil prices.

As per the data released by Commerce and Industry Ministry, imports in July were at $29.45 billion, down 19.03 per cent from $36.37 billion in the same month a year ago.

Gold imports dropped over 64 per cent to $1.08 billion, from $2.97 billion in July 2015.

Import of the precious metal has been declining sharply due to measures like higher customs duty and gold schemes.

Gold used to be the second most imported item in the country after petroleum.

Government data revealed that imports of petroleum, crude and related products were down 28 per cent in July, while that of coal, coke and briquettes shrunk by about 7 per cent.

In value terms, imports of fertilisers were down by 25 per cent at $708 million in July.

Cumulative value of merchandise exports for April-July 2016-17 was $87 billion as against $90.27 billion last year, a decline of 3.62 per cent.

Overall imports in the four month period of the fiscal stood at $113.99 billion, down 16.33 per cent year-on-year.

Trade deficit for April-July was estimated at $27 billion, lower than $46 billion in the corresponding period last fiscal.

The decline in exports reflects the contraction in global trade and leading exporting countries like China also witnessed similar declines, FIEO President S C Ralhan said.

"The decline in exports of engineering goods, leather and textiles is a major concern as these are employment intensive sectors of exports," he said.

The net export of services during April-June was $16.2 billion, marginally lower than $16.49 billion recorded in the corresponding period last year.

Taking merchandise and services together, overall trade deficit for April-July is estimated at $10.8 billion, which is 63.38 per cent lower from $29.5 billion year-on-year.
 

15 Apr 2019 IOIE NDTV Profit

Ending India's Trade Privileges May Hit American Consumers: US Lawmakers

A US plan to end preferential duty-free imports of up to $5.6 billion from India could raise costs for American consumers, two US senators have told their country's trade office, urging a delay in adopting the plan, and seeking more negotiations.

If President Donald Trump presses ahead with his plan to end the Generalized System of Preferences (GSP) for India, it could lose the status in early May, Indian officials have said, raising the prospect of retaliatory tariffs.

India is the world's largest beneficiary of the GSP, dating from the 1970s, but trade ties with the US have widened over what Trump calls its high tariffs and concerns over New Delhi's e-commerce policies.

"While we agree that there are a number of market access issues that can and should be addressed, we do remain concerned that the withdrawal of duty concessions will make Indian exports of eligible products to the United States costlier," the senators, John Cornyn and Mark Warner, wrote.

"Some of these costs will likely be passed on to American consumers".

In their Friday letter, the co-chairs of the Senate's India caucus of more than 30 senators called for withdrawal to be delayed until the end of India's 39-day general elections, which began on Thursday, with results expected on May 23.

Allowing for talks to continue beyond the elections would underscore the importance of the trade ties, presenting an opportunity to resolve market access issues and improve the overall US-India relationship for years to come, they added.

 

If the United States scraps duty-free access for about 2,000 product lines, it will mostly hurt small and medium businesses in India, such as makers of engineering goods.

Despite close political ties, trade between India and the United States, which stood at $126 billion in 2017, is widely seen to be performing at nearly a quarter of its potential.

Trade relations suffered in the past few months after India adopted new rules on e-commerce reining in how companies such as Amazon.com Inc and Walmart Inc-backed Flipkart do business.

Last June, India said it would step up import duties varying from 20 percent to 120 percent on a slew of US farm, steel and iron products, angered by Washington's refusal to exempt it from new steel and aluminium tariffs.

 

A US plan to end preferential duty-free imports of up to $5.6 billion from India could raise costs for American consumers, two US senators have told their country's trade office, urging a delay in adopting the plan, and seeking more negotiations.

If President Donald Trump presses ahead with his plan to end the Generalized System of Preferences (GSP) for India, it could lose the status in early May, Indian officials have said, raising the prospect of retaliatory tariffs.

India is the world's largest beneficiary of the GSP, dating from the 1970s, but trade ties with the US have widened over what Trump calls its high tariffs and concerns over New Delhi's e-commerce policies.

"While we agree that there are a number of market access issues that can and should be addressed, we do remain concerned that the withdrawal of duty concessions will make Indian exports of eligible products to the United States costlier," the senators, John Cornyn and Mark Warner, wrote.

"Some of these costs will likely be passed on to American consumers".

In their Friday letter, the co-chairs of the Senate's India caucus of more than 30 senators called for withdrawal to be delayed until the end of India's 39-day general elections, which began on Thursday, with results expected on May 23.

Allowing for talks to continue beyond the elections would underscore the importance of the trade ties, presenting an opportunity to resolve market access issues and improve the overall US-India relationship for years to come, they added.

If the United States scraps duty-free access for about 2,000 product lines, it will mostly hurt small and medium businesses in India, such as makers of engineering goods.

Despite close political ties, trade between India and the United States, which stood at $126 billion in 2017, is widely seen to be performing at nearly a quarter of its potential.

Trade relations suffered in the past few months after India adopted new rules on e-commerce reining in how companies such as Amazon.com Inc and Walmart Inc-backed Flipkart do business.

Last June, India said it would step up import duties varying from 20 percent to 120 percent on a slew of US farm, steel and iron products, angered by Washington's refusal to exempt it from new steel and aluminium tariffs.

1 COMMENT

But it has since repeatedly delayed adopting the higher duties.

15 Apr 2019 IOIE NDTV Profit