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

11-06-2019 76.85 (+0.50)

12-06-2018 100.65

11-06-2017 87.00

New York Cotton Futures (Cents/lb) As on 13.06.2019 (Change from

previous day)

July 2019 66.58 (+0.01)

Oct 2019 66.40 (+0.94)

Dec 2019 65.91 (+0.87)

13th June

2019

Commerce Minister reviews free trade pacts

Irani announces incentives for knitwear sector

Industrial growth at 6-month high of 3.4 per cent in

April

Vietnam: Imported fabric increases sharply

Cotton and Yarn Futures

ZCE - Daily Data (Change from previous day)

MCX (Change from previous day)

June 2019 21480 (+280)

Cotton 13855 (+255) July 2019 21590 (+270)

Yarn 21190 (+180) Aug 2019 21580 (+260)

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2 CITI-NEWS LETTER

-------------------------------------------------------------------------------------- Commerce Minister reviews free trade pacts

Irani announces incentives for knitwear sector

Industrial growth at 6-month high of 3.4 per cent in April

Consensus eludes RBI-appointed Jalan panel on economic capital framework

Roll out of simple GST returns deferred to Oct; trial to start next month

India aims to have $350-bn textile sector by 2025: CII

CII articulates 10 big reform ideas to leap-frog growth

Gap Inc. And Arvind Limited Join Together To Reduce Apparel Industry's

Water Use And Drive Water-Saving Innovation

Arvind Subramanian's growth estimates omit productivity, quality: CII

Weaving project investments suffer sans PAC meetings

International Exhibition of Home and Textiles to be held in Feb 2020 in

Kazakhstan’s Almaty

GSP move: India must take US to the WTO

12 textile units violate emission norms, receive closure notices

Modi 2.0: Codes on wages, safety to be first push for labour reforms

Will Jaypore, TG Apparel be a good fit for Aditya Birla Fashion and Retail?

------------------------------------------------------------------------------- US retail imports will continue to grow in summer: NRF

Vietnam: Imported fabric increases sharply

China accused of mislabelling products ‘made in Vietnam’ to dodge Donald

Trump’s tariffs

VN’s textile industry strives to find new markets

PTI govt withdraws zero-rated status for major exporters

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

NATIONAL

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

GLOBAL

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3 CITI-NEWS LETTER

NATIONAL:

Commerce Minister reviews free trade pacts

(Source: Amiti Sen, The Hindu Business Line, June 12, 2019)

Commerce & Industry Minister Piyush Goyal has reviewed India’s free trade agreements

(FTAs) with partner countries such as Japan, South Korea, Sri Lanka and the 10-

member ASEAN to identify problem areas for the Indian industry and the opportunities

they could offer.

“The Minister reviewed in details the impact of the existing FTAs on the Indian industry

and the extent to which the partner countries had gained from it. The idea was to

explore if there are ways in which concerns of the Indian industry could be addressed

and what should negotiators look out for in future pacts,” a government official

told BusinessLine.

While the BJP-led government did not sign any new FTA in its first stint in the last five

years, Indian industry has been complaining about the ones signed in the past as they

gave access to products from competing countries to Indian markets at preferential

interest rates. Indian exporters, on the other hand, have not been able to utilise the

FTAs well because of lack of awareness, complicated rules of origin requirements and

other technical issues.

“Many sectors such as steel, electronics, chemicals, textiles and agricultural items like

spices and vanaspati have been hit due to the existing FTAs and overall trade deficit

with partner countries have also gone up,” the official said.

It is important for India to come to grips with what its position on FTAs should be as

there are a number of proposed pacts in the pipeline including long-pending ones with

partners such as the EU, Australia and the Regional Comprehensive Economic

Partnership (RCEP).

“The Indian industry is not totally opposed to FTAs. For instance, there are sectors such

as textiles that want an FTA with the EU. A balanced view needs to be taken by the

government on the matter,” the official said.

Goyal, who took charge as the Commerce & Industry Minister recently, is yet to discuss

in details the challenges that the proposed RCEPpose for India. “A clarity on RCEP and

what India is ready to offer all members including China in terms of market access has

to emerge. Once there is clarity, Indian officials can take a firm stand at the

negotiations,” the official said.

Home

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4 CITI-NEWS LETTER

Irani announces incentives for knitwear sector

(Source: Millenium Post, June 12, 2019)

Textiles Minister Smriti Zubin Irani conducted a stakeholders' meeting for knitting &

knitwear sector development on Wednesday at Udyog Bhawan, New Delhi. The

announcements made during the meeting included Rs 50 cr sanctioned for the knitwear

sector. Under the SAMARTH scheme, training of 1 lakh workers has been approved for

the knitwear industry over and above Rs 50 cr in the Budget All pending cases of TUFS

will be cleared expeditiously from the Office of the Textile Commissioner.

Home

Industrial growth at 6-month high of 3.4 per cent in April

(Source: Economic Times, June 12, 2019)

The previous high in industrial growth was recorded at 8.4 per cent in October 2018.

India’s industrial output surged unexpectedly to a six-month high in April as it

expanded by 3.4%, bringing some relief to policy makers gearing up to present the

budget in July. Retail inflation inched up to a seven-month high in May but remained

within the RBI’s comfort zone, leaving room for more rate cuts.

Official data released by the statistics office on Wednesday showed industrial output

accelerated in the first month of FY20 from 0.4% in the preceding month but slower

than 4.5% in April 2018.

Experts Advise Caution

Retail inflation moved up to 3.05% in May compared with the revised figure of 2.99%,

up from 2.92% estimated earlier, in April, remaining below the Reserve Bank of India’s

target rate of 4%. The Reserve Bank of India last week cut the policy rate by 25 basis

points for the third time in a row and shifted its stance to ‘accommodative’, hinting at

scope for further reductions as part of efforts aimed at reversing a growth slump. India’s

GDP slowed to a fiveyear low of 6.8% in FY19 and getting growth back on track will be

one of finance minister Nirmala Sitharaman’s prime objectives when she presents the

budget on July 5.

Food inflation, which has been accelerating since December last year, rose to an 11-

month high in May, driven largely by the prices of vegetable and pulses.

Vegetable inflation at 5.5% was also at an 11-month high while pulses saw inflation after

a gap of 29 months. The government has already moved to contain the price of pulses by

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5 CITI-NEWS LETTER

releasing additional buffer stocks. Prices of fruit and vegetable will likely track progress

of the monsoon, which started a week late and has been interrupted by Cyclone Vayu,

scheduled to make landfall on Thursday, according to the weather office.

Experts warned against reading too much into the numbers. “IIP definitely is much

better than we expected but a sudden change in direction in one month doesn’t make a

story. Most of the advance indicators that we generally look at have been

underperforming. It is very difficult to see whether these numbers would sustain for a

significant period of time,” said Indranil Pan, chief economist, IDFC Bank. “For April,

manufacturing PMI (Purchasing Managers’ Index) had actually gone down but

manufacturing numbers have actually gone up, so taking all this together, it is very

difficult to see whether these numbers would sustain for a significant period of time.” A

decline in core inflation, excluding food, fuel and light, and transport and

communications, to a 23-month low of 4.37% indicates that demand conditions have

weakened considerably. Even services inflation, a major driver of retail inflation in the

second half of FY19, has slowed. “Caution must be exercised as this cannot be

interpreted as a revival in consumption spending as the auto data released so far is not

encouraging,” CARE Ratings chief economist Madan Sabnavis pointed out. Passenger

vehicle sales fell 21% in May to an 18- year low.

RBI TO AID GROWTH

Economists said the central bank will likely continue with a policy that bolsters the

economy. “Ind-Ra believes RBI may continue to pursue policy that would be supportive

of growth,” said Sunil Kumar Sinha, principal economist, India Ratings. Although

impact of monetary policy is felt with a lag, India Ratings believes there is still a scope

for one more rate cut in FY20, Sinha said. “On the whole, the picture is not very

encouraging on the industrial production front,” he said. “Given the fluctuation in the

IIP growth data, it is difficult to believe that we are on our way or anywhere near to a

broad-based and sustainable industrial recovery.” The jump in growth was mainly on

account of an improvement in mining and power generation, government data showed.

Mining expanded 5.1% compared with 3.8% in the year-ago month. Power generation

rose 6% against 2.1% in the year earlier. However, the manufacturing sector, with a 77%

weight, remains an area of concern, growing by just 2.8%. Capital goods, often taken as

barometer for investment, slowed to 2.5% from 9.8% in April 2018. Reviving investment

is seen as vital to economic recovery. Manufacturing segments such as motor vehicles,

fabricated metal products, rubber and plastics products and paper products contracted.

However, foods products, apparel, wood products, printing or reproduction showed

double digit growth. Slower growth was recorded in infrastructure and construction

goods, and the consumer durable and consumer nondurable segments.

Home

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6 CITI-NEWS LETTER

Consensus eludes RBI-appointed Jalan panel on economic capital

framework

(Source: Business Standard, June 13, 2019)

One of the key mandates of the committee was to determine the level of surplus that the

RBI should hold

The Reserve Bank of India (RBI)-appointed committee to review the economic capital

framework of the central bank failed to arrive at a consensus during a meeting held here

on Wednesday, leading to a delay in finalising its report, a top official said.

The six-member committee headed by former RBI governor Bimal Jalan decided to

meet once again before submitting its report by the end of this month.

“There may be differences of opinion (among the panel members), but that’s being

discussed,” an official aware of the development said, requesting anonymity.

The committee, formed in December 2018, was supposed to submit its report by April 8,

2019, but it was later given a three-month extension. One of the key mandates of the

committee was to determine the level of surplus that the RBI should hold.

Wednesday’s meet was supposed to be the last one for the panel. However, there will be

at least one more round of meeting to be held later this month. The main difference of

opinion has arisen between the panel members and the government’s representative on

the panel — Economic Affairs Secretary S C Garg — over the transfer of the RBI’s

‘excess’ capital reserves, according to a source close to the central bank.

While most panel members were in favour of a phased transfer of the RBI’s capital

reserves to the government over the years, the government's view voiced by Garg is for a

one-time transfer, the source said.

The government is of the view that the capital reserves held by the RBI are among the

highest in the world “and is not being put to good use”, former Finance Minister Piyush

Goyal had said in December.

Goyal had also opined that the “excess” capital of the RBI could have been used “to

support the banks just as was done in USA during the financial crisis.”

Usually, the RBI, which follows a July-June calendar, transfers dividend to the central

government after closing its accounts in August. While transferring the dividend, the

central bank keeps a share of surplus towards various risks and reserves every year,

according to its economic capital framework.

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7 CITI-NEWS LETTER

The RBI needs adequate capital reserves for monetary policy operations, currency

fluctuations, possible fall in value of bonds, sterilisation costs related to open-market

operations, credit risks arising from the lender of last resort function and other risks

from unexpected increase in its expenditure.

The RBI has maintained the view that it needs to have a stronger balance sheet to deal

with a possible crisis and external shocks.

Capital transfer from the RBI to the government also assumes importance in the wake of

dwindling tax collections and the government's desire to keep the fiscal deficit at 3.4 per

cent of GDP in the Budget, the same level as was pegged in interim Budget for FY20.

Home

Roll out of simple GST returns deferred to Oct; trial to start next month

(Source: Business Standard, June 12, 2019)

To be implemented in phases, to be fully in pace by January next

Giving the industry a breathing time, the government has deferred implementation of

the simplified returns to October from earlier deadline of July and came out with clear-

cut phase-wise timelines for a transition.

Trial of parts of new returns will start from next month and the whole process would

replace the existing returns by January 2020.

Currently, there are two forms that every registered unit has to file either monthly

depending on their sales -- GSTR 1 for sale invoices and GSTR 3B which is summary of

purchases and sales.

GSTR 1 and GSTR 3B would be replaced by GST ANX-1 and GST RET-01 respectively.

There would be another form GSTR ANX-2 which would be for purchases.

GSTR 1 would be replaced by GST ANX-1 from October for large companies (having

turnover of more than Rs 5 turnover) and from January for others.

However, experts have cautioned about the capacity of GSTN portal to handle returns.

"What would also be interesting to see is how the GSTN portal behaves with the new

return format and its annexures," said Harpreet Singh, partner at KPMG.

Meanwhile, the GST Council is also planning to implement e-invoicing system. "It

remains to be seen as to whether the government would want the e-invoicing system to

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8 CITI-NEWS LETTER

be implemented simultaneously in a phased manner and how the same would be

integrated with the GST returns," Pratik Jain, partner at PwC India, said.

Abhishek Jain, partner at EY, said with a concrete transition plan, businesses would

now need to commence work on ERP system changes, business process changes for

aligning disclosures with the new return.

Home

India aims to have $350-bn textile sector by 2025: CII

(Source: Fibre2Fashion, June 12, 2019)

India, which is emerging as a global textile hub and aims to be a $350-billion industry

by 2025 from $137 billion now, needs to focus on man-made fibres to stay globally

competitive, according to Dilip Gaur, chairman of the Confederation of Indian Industry

(CII) national committee on textile and apparel. Gaur is also the managing director of

Grasim Industries.

India also needs to create trade barriers for China to prevent it from dumping cheap

textile products in the country, Gaur said at the recent CII Texexcel 2019, the National

Textiles 4.0 Summit in Mumbai.

The Indian textile industry should change its approach to move into the second growth

phase with focus on quality and other aspects and aim for exports of around $100 billion

from the current $40 billion, a news agency quoted textiles secretary Ajit B Chavan as

saying at the summit.

Companies should also look at reducing carbon footprints so that India can present

itself as a competitive manufacturing nation, said Prashant Agarwal, joint managing

director of Wazir Advisors.

Home

CII articulates 10 big reform ideas to leap-frog growth

(Source: Business Standard, June 11, 2019)

In the pre-Budget consultation meeting with Ms. Nirmala Sitharaman, Honorable

Finance Minister, the Confederation of Indian Industry (CII) articulated 10 big reform

ideas which have the potential to leap-frog growth. A simplified taxation regime is

pivotal for improving the revenue flows and help government stick to fiscal prudence

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9 CITI-NEWS LETTER

without crowding-out private investments. For this to fructify, a timeline for a Taxation

regime (Direct Tax) needs to be announced where the highest rate should be 18%, in

addition to removing all exemptions and not doing grandfathering, stated Mr Vikram S

Kirloskar, President, Confederation of Indian Industry (CII) at the meeting. In addition,

a 3-year roadmap for reducing the Income Tax Act document to 4-5 pages also needs to

be stated.

Further, in order to bring down the high tax rates on capital which at present is a major

deterrent for flow of capital, CII President suggested bringing down the Dividend

distribution tax to 10% from the present 20%. It should also be not taxed at the hands of

the investor. Stepping up investments, both public and private, is critical for boosting

our growth potential. In this context, the New Industrial Policy needs to be made more

potent in providing key directions in terms of continuity, consistency and certainty for

all policies governing industry, Mr Kirloskar highlighted.

On SEZs, CII President noted that its critical role in boosting investments. In this

context, he suggested that a new model of SEZs be developed based on the original

concept of SEZ which entailed 6 to 7 very large SEZs.

Moreover, these 'New-Age SEZs' must be in the coastal areas which could also be used

to bridge the East-West development divide.

In order to buttress consumption, it is essential to increase personal disposable income.

In this regard, this would be the right time to reduce personal income tax burden.

Hence, it is suggested that there should be zero tax till Rs 5 lakhs with a simple Return

to file, added Mr Kirloskar.

The Government could appoint czars like mission directors as was done in Aadhar to

take a total value chain approach for employment intensive sectors such as housing and

construction, agriculture and food processing, textiles and garments, tourism and

automobiles, with monitorable employment targets, CII President stated. In the same

vein, he added that with the stress on boosting productivity among enterprises,

additional incentives are needed for employment generation so that further investments

by large-scale industry are not entirely labour replacing.

Highlighting the sectors/areas, where concerted effort by the government is the need of

the hour, Mr Kirloskar said that Empowered Committees of State Ministers and the

relevant Central Ministers need to be instituted for addressing the development issues

in areas such as Agriculture, Education, Healthcare, Labour reforms and Environment

regulations. In addition, the land reforms also need to be overhauled by bringing in a

new legislation after stakeholder consultations. In addition, States need to adopt Model

Agriculture Land Leasing Act to allow for land aggregation and private sector

investment in agriculture, he further added.

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10 CITI-NEWS LETTER

There is a need to create and publish an approach for a unified regulator for the

financial sector. There are no specific advantages being derived from having multiple

regulators, whereas the benefits of a unified regulator are many, highlighted CII

President.

Mr Kirloskar reiterated the fact that growing exports are critical for pushing India into

the 8-10% growth trajectory. In this context, he stressed that it is important to overhaul

the entire system of Export Incentives and Exports Credit. All incentives need to be

WTO compatible, he added.

Home

Gap Inc. And Arvind Limited Join Together To Reduce Apparel Industry's

Water Use And Drive Water-Saving Innovation

(Source: Water Online, June 11, 2019)

Global apparel retailer Gap Inc. (NYSE: GPS) today announced a new partnership with

its longtime sourcing and franchise partner in India, Arvind Limited, to drive industry-

leading solutions that address global water scarcity. The apparel industry is one of the

most intensive users of water in the world and, in India, 54 percent of the population

faces high to extremely high water risk. The two companies will open a new innovation

center to promote the adoption of proven techniques and technology that reduce water

use by the textile manufacturing industry. Further, Arvind and Gap Inc. are also

investing in a new water treatment facility that will eliminate the use of fresh water at

Arvind’s denim mill in Ahmedabad, India. The facility will save three billion liters of

fresh water by the end of 2020 and preserve the local community’s vital freshwater

resources.

As water becomes increasingly scarce due to climate change and growing human needs,

the apparel industry is facing pressure to reduce its demand for fresh water. When it

opens in 2020, the new center will be an innovation hub for apparel companies,

manufacturing suppliers and vendors, sustainability experts, academics, and other

environmental stakeholders to advance and scale water stewardship across the apparel

sector. The 18,000-square foot space will feature: installations that showcase water

management best practices and recycling technologies; a library; lab space to develop

water management solutions as well as classroom training and conference space. Once

completed, the center will generate scalable solutions that can be replicated at other

mills and laundries.

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11 CITI-NEWS LETTER

Today, Arvind’s denim mill in Ahmedabad – the first mill in India to manufacture

denim – consumes eight million liters of fresh water per day. Once constructed, the new

water treatment facility will replace 100 percent of its freshwater use with reclaimed

water. Specifically, the new facility will use Membrane Bio Reactor (MBR) technology to

treat domestic wastewater drawn from the surrounding community without the use of

chemicals in the treatment process, resulting in a cleaner, more sustainable process. The

facility is currently under construction and is expected to be commissioned by

September. Beyond eliminating the use of fresh water at the denim mill, the facility will

also reduce business risk for Arvind, Gap Inc. and the other brands that source from the

mill due to local water scarcity challenges.

This effort brings together two major industry players. Arvind’s textiles manufacturing

in India date back to 1931 while Gap Inc.’s global supply chain operates across more

than 30 sourcing countries.

“The world is facing a water crisis, and Gap Inc. is committed to finding meaningful,

scalable ways to reduce our water use. Traditionally, manufacturing apparel has been a

water intensive, water wasting process,” said Art Peck, president and chief executive

officer, Gap Inc. “This partnership with Arvind Limited is an important step towards

changing that, and we look forward to collaborating across the industry to accelerate the

transformation to more efficient and sustainable water use practices.”

“Arvind is committed to eliminating the use of fresh water from its textile production

operations. We have made significant investments in water reduction and recycling

activities over the past two decades,” said Punit Lalbhai, Executive Director, Arvind

Limited. “Gap Inc. is our key strategic customer and this partnership is valuable for us

to achieve our water goals collectively. The partnership will also help in expanding scope

of water savings to the broader industry through Center of Excellence.”

In 2018, Gap Inc. unveiled a new sustainable manufacturing goal to conserve a total of

10 billion liters of water by the end of 2020. Through product design innovation and

partnering with fabric mills and laundries, the company has saved more than 5.7 billion

liters of water. And because cotton is an extremely water-intensive fiber, Gap Inc. began

sourcing cotton from the Better Cotton Initiative (BCI) in 2016 to support the

improvement of cotton farming practices globally. The company recently announcedit

will source all cotton for its family of brands from sustainable sources by 2025. Helping

communities improve access to clean water and sanitation is another core focus. In

2017, Gap Inc. and the U.S. Agency for International Development (USAID) launched

the Women + Water Alliance in India, a partnership to improve and sustain the health

and well-being of women and communities touched by the apparel industry.

Arvind’s sustainability strategy, Fundamentally Right, revolves around an input

management approach with the goal to make all key inputs 100 percent sustainable.

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12 CITI-NEWS LETTER

Water is one key input, and Arvind plans to eliminate the use of fresh water from its

textile production by the end of 2020. Currently, 65 percent of the company’s water use

is from recycled sources. Once completed, the new treatment facility is expected to help

the company achieve 90 percent from recycled sources. Arvind also has the largest

sustainable cotton farm operation in India for a textile mill.

About Gap Inc.

Gap Inc. is a leading global retailer offering clothing, accessories, and personal care

products for men, women, and children under the Old Navy, Gap, Banana Republic,

Athleta, Intermix, Janie and Jack, and Hill City brands. Fiscal year 2018 net sales were

$16.6 billion. Gap Inc. products are available for purchase in more than 90 countries

worldwide through company-operated stores, franchise stores, and e-commerce sites.

For more information, please visit www.gapinc.com.

About Arvind Limited

Arvind is a U.S. $1 billion textile company with a focus on textiles, advanced materials,

environmental solutions and omni-channel commerce. Arvind Limited is an integrated

solutions provider in textiles with strong fibre to fashion capabilities for a global

customer base. It is also a design powerhouse implementing innovative concepts and

generating intellectual property. It ranks amongst the top suppliers of fabric worldwide.

The company strives every day to create opportunities beyond conventional boundaries

and believes that the possibilities are endless.

Home

Arvind Subramanian's growth estimates omit productivity, quality: CII

(Source: Economic Times, June 12, 2019)

Subramanian, who stepped down last year, has said India's economic growth rate has

been overestimated by around 2.5 percentage points between 2011-12 and 2016-17

Joining the debate on overestimation of the GDP, industry chamber CII on Wednesday

said growth estimates shown by former CEA Arvind Subramanian have omitted

productivity and quality and are based on only volume.

In a research paper, Subramanian, who stepped down last year, has said India's

economic growth rate has been overestimated by around 2.5 percentage points between

2011-12 and 2016-17 due to a change in methodology for calculating GDP.

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13 CITI-NEWS LETTER

Subramanian's paper titled 'India's GDP Mis-estimation: Likelihood, Magnitudes,

Mechanisms, and Implications', published at Harvard University, also comes at a time

when concerns have been raised in various quarters about the official economic growth

numbers. Commenting on the paper, CII Director General Chandrajit Banerjee said the

Indian economy is a complex one and cannot be captured by just a few indicators. "The

growth estimates shown by former CEA omits productivity and quality and takes only

volume into account. GDP data has to take a more robust and comprehensive approach

where all growth drivers are included," Banerjee said.

For instance, agriculture, which is one-sixth of the Indian economy, has not been

included in the study. Moreover, the service sector, which accounts for more than 50 per

cent of GDP, has been inadequately represented.

Specifically, IT and telecom sectors which have been the most dynamic parts of the

economy in the recent years have been missed out while many infrastructure sectors like

rural roads that have posted double-digit growth for several years are missing in the

report, Banerjee said.

Home

Weaving project investments suffer sans PAC meetings

(Source: Times of India, June 13, 2019)

New investments in the powerloom sector in country’s biggest man-made fabric (MMF)

industry has been affected with the textile commissioner’s office not holding Project

Approval Committee (PAC) meeting for the last 16 months. According to the Federation

of Gujarat Weavers Welfare Association (Fogwa), the PAC meeting is considered as an

important one and should be held once every month. All the projects regarding new

investment in the powerloom sector are approved in the PAC meeting. However,

without even a single meeting held for so long, new investments and employment

opportunities are getting stuck and delayed.

President of Fogwa, Ashok Jirawala said, “Project investments to the tune of over Rs

2,000 crore has been affected in the textile sector sans PAC meetings. We have asked

the new textile commissioner to hold PAC meeting every month so that projects under

TUFS scheme get approved on time powerloom sector can take benefit from it

Home

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14 CITI-NEWS LETTER

International Exhibition of Home and Textiles to be held in Feb 2020 in

Kazakhstan’s Almaty

(Source: Money Control, June 12, 2019)

The Central Asia Trade Exhibitions will organize its 17th International Exhibition of

Home textiles, Curtains and Carpets. The Exhibition is to be held from February 29 to

March 3, 2020 in “Atakent” exhibition center, Almaty. Almaty is Kazakhstan's largest

metropolis.

Central Asia Hometextile provides a huge platform for business networking and give

plenty of marketing information to the attendees.

To build a business development, this exhibition will allow the professionals in

establishing their business contacts in countries like Kazakhstan, Russia, Belarus,

Turkey, Turkmenistan, China, Poland, Ukraine, Uzbekistan and from other countries

are participating in this event.

Organizing company has invited all Indian stakeholders to participate in this exhibition

with a hope of a fruitful cooperation for strengthening trade and economic relations

between our countries.

For every existing company in the market, the Central Asia Trade Exhibitions always

provides great opportunities and advantages. It has an ample of experience in holding

leading industry exhibitions in the main cities of Kazakhstan, Astana and Almaty.

Annual international venues are created for professionals various areas.

Sectors like Home Textiles, Advertising and Promotional Products, Housewares and

Household Appliances, Furniture and Woodworking, Sport, Hunting and Fishing,

Machinery and Equipment, Plastics, Safety, Electrical Engineering are included in it.

With the support of the Ministers, Akimats, Branch Unions and Associations this

exhibition is being arranged.

Almaty is a major commercial and cultural centre of Kazakhstan, as well as its most

populous and most cosmopolitan city. The city generates approximately 20 per cent of

Kazakhstan's GDP (or USD 36 billion in 2010).

Home

GSP move: India must take US to the WTO

(Source: RV Anuradha, Financial Express, June 12, 2019)

The government of India has indicated that the fiscal impact of this withdrawal, which

would impact approximately $5.6 billion of India’s exports, is not significant.

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15 CITI-NEWS LETTER

The Generalized System of Preferences (GSP), accorded by the US to imports from India

since 1976, stood terminated as on June 5, 2019. The government of India has indicated

that the fiscal impact of this withdrawal, which would impact approximately $5.6 billion

of India’s exports, is not significant. Perhaps it is indeed not when seen against the

overall exports to the US, valued at $230 billion. But the issue is not one of mere

numbers, but one of legal principles as the systemic impact of US’s brazen unilateral

actions. It is also of the impact that the move would have on exporters of several goods

such as jewellery, building materials, solar cells and processed foods, which will face

increases of upto 10% in the US tariffs, not all of which exporters can absorb by

increasing prices of products in their struggle to remain competitive. Spillover effects in

terms of downsizing in export firms, diversification, exploring newer markets, and all

the accompanying uncertainties therefore seems inevitable.

To begin with, there is no right or entitlement that India, or any other developing

country, has to GSP benefits from any developed country. GSP is a voluntary exercise of

preferential market access that developed countries have the discretion to provide.

However, the laws of the World Trade Organization (WTO) provide very clear legal that

a country that chooses to administer GSP needs to adhere to. This includes the legal

requirement that GSP shall be available for all developing countries on a non-

discriminatory basis, and they need to be accorded on a non-reciprocal basis, i.e., such

preferences cannot be given or restricted on the ground of equivalence of some benefit

from a developing country.

The US has unabashedly also confirmed that the GSP benefits to India has been

terminated solely on account of its unilateral assessment that India does not provide

“equitable and reasonable market access” to it. This is an admitted violation of the

mandate that GSP needs be based on the principle of non-reciprocity. The object of US’s

trade concerns against India include requirements under Indian law for certification of

dairy products, norms on pricing for medical devices, and India’s laws on patenting

which apply, in the view of the US, strict criteria for grant of patents for products and

also allow for compulsory licensing. Each of these is a legitimate exercise of sovereign

legislative and policy choices by India. The US has also expressed concerns on

imposition of high tariffs by India in various sectors, including automobile, textiles,

pharmaceuticals and distilled spirits, which, again, are all within the realm of India’s

WTO’s commitments.

In other words, India’s actions are all WTO-consistent domestic policy actions. The US,

however, perceives these as limiting market access, and instead of playing by the

multilateral rules, which would require trade negotiations on a reciprocal basis, it is

resorting to leveraging the one tool that it is mandated to provide on non-reciprocal

basis, i.e., GSP benefits.

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16 CITI-NEWS LETTER

The US action is an extension of its recent approach of unilateral action and strong-arm

tactics to extract concessions. In a measured response, the government of India has

indicated that, like the US, it too believes in maintaining its national interest and

addressing development imperatives. It has also indicated the hope of arriving at a

mutual resolution of the issues.

While amicable solutions are always the desirable objective in international relations,

the approach with the US cannot be pegged on this expectation alone. In fact, there is no

better example than the US itself that has used a combined strategy of bilateral dialogue,

coupled with unilateral action, and most interestingly, recourse to the beleaguered

WTO’s dispute settlement system.

This is the second time that the US has hit India with its unilateral measures. The first

time was a year back when, on June 1, 2018, the US imposed tariffs of 25% on steel and

10% on aluminium imported into the US. India has initiated a WTO dispute against this,

as have several other WTO members. Some of these countries such as EU and China

also imposed retaliatory tariffs on certain imports from the US, against which the US

has initiated WTO disputes. While India announced retaliatory tariffs against the US

several months back, it has been deferring the imposition of such tariffs.

It is strategically important for India to raise a challenge against US’s GSP termination

before the WTO. There are three reasons for this: (a) India is on a strong legal footing

with regard to such a challenge; (b) the GSP issue is one of systemic significance within

the framework of multilateral trade rules, and one country cannot be allowed derail the

fundamental planks on which it stands; and (c) contesting a country’s action through

dispute settlement, and simultaneously holding bilateral negotiations, are not

antithetical to each other, and can often help a country leverage its advantages better.

The author is Partner at Clarus Law Associates, New Delhi

Home

12 textile units violate emission norms, receive closure notices

(Source: Mukesh Tandon, Tribune News, June 12, 2019)

The Central Pollution Control Board (CPCB) has served closure notices on 12 industrial

units — eight in Panipat and four in Ganaur (Sonepat) — for violating emission norms.

It has also directed the Managing Director (MD), Uttar Haryana Bijli Vitran Nigam, to

disconnect the power connections of the 12 units.

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17 CITI-NEWS LETTER

The CPCB teams, constituted on the direction of the National Green Tribunal (NGT),

had inspected industrial units in Panipat, Ganaur and Kundli in March and April. On

their radar were textile and dyeing units. The teams collected samples and tested them

to assess the adequacy of pollution control measures under the Environment

(Protection) Act, 1986.

One of the units in Panipat, Pan Overseas, is owned by district BJP president Pramod

Vij.

The other units in Panipat that have been served notices are Raj Overseas, Pan Foods (a

division of Kayem Food India Private Limited), Aggarwal Processor Private limited

(formerly known as Aggarwal Loomtex), Shiva Furnishing and Textile World and

collected samples from these industrial units.

Shree Balaji Woolen Mills and Great Eastern Processors, both in Panipat, were found

non-operational during inspection.

The teams found out the units did not have permission from the Central Ground Water

Board (CGWA) to extract groundwater nor did they maintain any record of extraction of

groundwater.

In Sonepat district, the CPCB has served notices on Sidhi Vinayak Apparels, BCL

Fabrics, Colour Zone and GEE AAR Thread. Samples collected from the four units failed

to meet the prescribed limits as laid down under the Water (Prevention and Control of

Pollution) Act.

Textile most polluting industry: CPCB

The Central Pollution Control Board has said the textile industry is the most polluting

one. “Textile industries are identified as one of the grossly polluting industries which

have been discharging effluents directly or indirectly into land or water, having potential

threat to cause adverse effect on land and the ambient water quality,” it has said in its

order.

Home

Modi 2.0: Codes on wages, safety to be first push for labour reforms

(Source: Business Standard, June 12, 2019)

The National Democratic Alliance (NDA) government in its previous tenure had

proposed combining 35-odd labour laws in four codes

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18 CITI-NEWS LETTER

Union Home Minister Amit Shah on Tuesday chaired a meeting with his Cabinet

colleagues to discuss amendments to labour laws.

Labour and Employment Minister Santosh Gangwar told reporters after the meeting

that amendments to labour laws in the form of four codes were one of the areas of

discussion. Apart from Gangwar, Finance Minister Nirmala Sitharaman, Commerce and

Railway Minister Piyush Goyal and Oil Minister Dharmendra Pradhan attended the

meeting, which concluded in about two hours.

Sources said the government will push for passing two codes — the Code on Wages and

the Code on Occupation Safety Health and Working Conditions — as a priority before

taking up the other two codes.

The other two codes — the Code on Industrial Relations and the Code on Social Security

— may be taken up later after further consultations with industry and trade unions, the

sources said.

The government has readied the Cabinet note for the Code on Wages, a senior labour

and employment ministry official said. One major proposal in the code is to mandate

statutory national-level minimum wage for different geographical areas to ensure that

states do not fix a minimum level of income below the floor.

The National Democratic Alliance (NDA) government in its previous tenure had

proposed combining 35-odd labour laws in four codes.

However, none of the Bills could be converted into a law.

The NDA government has a majority in the Lok Sabha but not in the Rajya Sabha, which

may be a key stumbling block for it. However, it expects to get a majority by the end of

2021, by when it can push for the labour law amendments which are contentious to

labour unions.

“The code on wages and the code on occupational safety health and working conditions

will be taken up on priority. We have had broad consensus on these two codes across the

board,” said a source privy to the discussion. Further, the labour and employment

ministry is actively considering ways to implement the report of an expert committee

chaired by V V Giri National Labour Institute fellow Anoop Satpathy which was

submitted to the government in February.

The panel has suggested the national-level minimum wage for a worker in the country at

Rs 9,750 a month (Rs 375 per day), based on a new methodology; the current minimum

wage level is Rs 4,576 a month. Alternatively, it proposed a national minimum wage at

various

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19 CITI-NEWS LETTER

regional levels, depending on local conditions, in the range of Rs 8,892- Rs 11,622 a

month (or Rs 342-Rs 447 a day) and suggested an additional house rent allowance for

urban workers.

Home

Will Jaypore, TG Apparel be a good fit for Aditya Birla Fashion and Retail?

(Source: Money Control, June 12, 2019)

By virtue of taking over Jaypore and TG Apparel, Aditya Birla Fashion and

Retail (ABFRL) is moving into ethnic wear, a fast-growing and promising market in the

Indian context.

However, considering the heavy upcoming spends on brand building and store

infrastructure set-up, it may take a while for any sign of profitability to be visible from

these acquisitions.

How does ABFRL benefit?

Foray into ethnic wear

While ABFRL has been active in the women’s wear space (through Pantaloons), Jaypore

and TG Apparel’s acquisitions would help the company strengthen its presence in the

ethnic category. In men’s wear, the company, as of now, doesn’t have too many ethnic

offerings.

Owing to a high number of festivities and marriages in the country every year, demand

for such products is fairly steady (growing in double digits, according to the

management), even if there is some degree of seasonality.

New segments

Inclusion of new product lines such as jewellery, home, textile and art -- traditional and

contemporary -- products in ABFRL’s portfolio would help it reach out to a new set of

customers. This also provides cross-selling opportunities since ABFRL’s core products

(under the brands - Van Heusen, Allen Solly, Peter England, Louis Philippe and

Pantaloons) may be under the same roof as well.

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20 CITI-NEWS LETTER

Better access to export markets

Jaypore sells its products in more than 60 countries worldwide. This, by itself, is a large

market for ABFRL to capitalise on.

Outlook

Though the move will help ABFRL drive its top-line growth, in our view, significant

investments will have to be undertaken to penetrate the target markets. These would be

in areas like store additions, inventory management, marketing and dealer margins.

This may necessitate a new round of borrowings amid the ongoing debt repayment

drive. Flat revenue in the case of both the acquired companies for the last three financial

years is also a cause of concern. Competition from established brands such as TCNS

Clothing, Manyavar, Biba and numerous other local/unorganised players across

geographies will also persist. Thus, ethnic wear margins may be pretty low in initial

years. To some extent, this, in turn, may offset the strong set of numbers that the

Madura segment -- a cash cow for the company -- is capable of delivering and improving

operational metrics in the Pantaloons segment.

Since TCNS Clothing’s revenue

base and store network are

significantly higher than Jaypore’s,

it is not surprising to see it

command rich valuations compared to Jaypore. Nevertheless, prima facie, it appears

that the EV/FY19 sales multiple of nearly 3 times for Jaypore is pretty demanding.

Initial impressions suggest that TG Apparel, in all likelihood, may not be as profitable as

Jaypore. Hence, it is being acquired at a considerably lower valuation multiple.

Keeping the above-mentioned factors in mind, we believe the disruption in ABFRL’s

short-term cash flows (because of these deals) can be neutralised once economies of

scale and size are visible from Jaypore’s and TG Apparel’s online and brick-and-mortar

verticals. ABFRL’s stock trades at a steep 40 times its FY21 projected earnings. Though

the scope for an appreciable upside is restricted, the possibility of a sharp price

correction is unlikely, too. Nonetheless, investors may still want to keep the company on

their checklist.

Home

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21 CITI-NEWS LETTER

GLOBAL:

US retail imports will continue to grow in summer: NRF

(Source: Fibre2Fashion, June 12, 2019)

Imports at Unites State’s major retail container ports are expected to continue to grow

this summer as retailers stock up inventory to get ahead of higher tariffs, according to

the monthly Global Port Tracker report released by the National Retail Federation

(NRF) and Hackett Associates.NRF is the world’s largest retail trade association.

“With a major tariff increase already announced and the possibility that tariffs could be

imposed on nearly all goods and inputs from China, retailers are continuing to stock up

while they can to protect their customers as much as possible against the price increases

that will follow,” said NRF vice president for supply chain and customs policy Jonathan

Gold in a press release by NRF. “Tariffs are taxes paid by American businesses and

consumers, not foreign governments. Retailers will continue to do everything they

possibly can to mitigate the impact of tariffs on consumers, but if we see further

escalation in the trade war, it will be much more difficult to avoid higher price tags on a

wide range of products. It’s time to stop using American families as pawns in

negotiations for better trade deals.”

The Trump administration increased 10 per cent tariffs on $200 billion worth of

Chinese goods to 25 per cent in May, with the increase applying to imports that arrive in

the US after June 15. The administration has also proposed to implement new 25 per

cent tariffs on $300 billion worth of Chinese goods and recently removed India and

Turkey from the Generalized System of Preferences programme, which allows certain

items to be imported duty-free. In addition, the administration announced a 5 per cent

escalating tariff on all imports from Mexico, but those goods travel by truck or train and

don’t effect cargo numbers at US seaports.

“One must wonder who the Trump administration is trying to punish with its growing

enthusiasm for tariffs,” Hackett Associates founder Ben Hackett said. “The tariffs are

offsetting much of the savings from tax cuts, and if this continues there could be tough

months ahead.”

US ports covered by Global Port Tracker handled 1.75 million twenty-foot equivalent

units in April, the latest month for which after-the-fact numbers are available. That was

up 8.4 per cent from March and up 6.9 per cent year-over-year. A TEU is one 20-foot-

long cargo container or its equivalent.

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22 CITI-NEWS LETTER

May was estimated at 1.88 million TEU, up 3 per cent year-over-year. June is forecast at

1.86 million TEU, up 0.3 per cent; July at 1.93 million TEU, up 1.1 per cent; August at

1.95 million TEU, up 3.3 per cent; September at 1.89 million, up 0.9 per cent, and

October at 1.95 million TEU, down 4.4 per cent. The August and October numbers

would be the highest monthly totals since the 2 million TEU record set last October as

retailers rushed to bring merchandise into the country ahead of expected tariff

increases.

Imports during 2018 set a record of 21.8 million TEU, an increase of 6.2 per cent over

2017’s previous record of 20.5 million TEU. The first half of 2019 is expected to total

10.6 million TEU, up 3 per cent over the first half of 2018.

Global Port Tracker, which is produced for NRF by the consulting firm Hackett

Associates, covers the US ports of Los Angeles/Long Beach, Oakland, Seattle and

Tacoma on the West Coast; New York/New Jersey, Port of Virginia, Charleston,

Savannah, Port Everglades, Miami and Jacksonville on the East Coast, and Houston on

the Gulf Coast.

Home

Vietnam: Imported fabric increases sharply

(Source: Saigon Online, June 12, 2019)

According to Mr. Vu Duc Giang, Chairman of Vietnam Textile and Apparel Association

(VITAS), the core reason for the garment industry having to increase fabric imports is

due to the current situation in some localities of being "allergic" to the textile industry,

especially dyeing.

The Ministry of Industry and Trade reported that Vietnam imported 21 commodities

worth over US$ 1 billion, accounting for 80.3 percent of the total import turnover in the

first five months of the year; in which some items increased compared to the same

period last year such as electronic components, machinery, fabric, iron and steel,

plastics, etc.

It noted that, fabrics exported from China to Vietnam have increased sharply,

accounting for 57.3 percent of total fabric import turnover of the country. Therefore,

Mr. Vu Duc Giang proposed three recommendations to promote the domestic fabric

industry.

Firstly, industrial parks to invest in textile and dyeing industry have to be quickly

established. Secondly, the Ministry of Industry and Trade must be the mainstay in the

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23 CITI-NEWS LETTER

strategy of building the supporting platform with the textile industry. Finally, it is

necessary to have transparency to create a legal foundation.

Thus, the textile and garment industry would be rapidly independent on imported raw

materials in general and the fabric sector in particular to improve the value added in

exports and take the advantages of free trade agreements.

Home

China accused of mislabelling products ‘made in Vietnam’ to dodge Donald

Trump’s tariffs

(Source: The Sun, June 12, 2019)

China has been accused of mislabelling products as being ‘Made in Vietnam’

in order to dodge Donald Trump’s tariffs.

Vietnamese customs officials said that “dozens” of products have been identified as

having been subject to the fraud.

Donald Trump has railed against China’s trade surplus with the US, imposing new

tariffs on billions of dollars worth of goods in an attempt to redress the imbalance.

The tariffs have sparked a trade war, with the Chinese government imposing retaliatory

tariffs worth comparable amounts on exports from the US.

Chinese firms are now thought to be exporting goods including textiles, farm products,

tiles, honey, iron, steel, and plywood via Vietnam, where a Vietnamese certificate of

origin can be applied for.

In one instance, a Vietnam-based firm was found by US customs officials to be

importing Chinese timber products, relabelling them, and then exporting them to the

US.

How did the spiralling US-China trade war start?

Donald Trump ran for president on a pledge to “Make America Great

Again”, and is looking to fulfil it by attempting to redress China's trade

surplus with the US.

He wants to bring more production back to America and recover some of the country's

lost manufacturing jobs.

Before the 2016 election Trump accused Beijing of “raping” US workers.

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24 CITI-NEWS LETTER

The Chinese Premier Xi Jinping does not want to be seen to back down.

From July 2018, both sides began levying new tariffs worth hundreds of billions of

dollars on exports from each other's economies.

A ceasefire of sorts began in December 2018, when the two sides agreed to pause tariff

hikes and start trade negotiations.

Despite numerous rounds of talks, no agreement has yet been reached, and in May the

US raised tariffs from 10 to 25 per cent on $200bn dollars woth of goods.

China responded with its own fresh tariffs on $60bn worth of US exports, causing stock

markets to tumble.

Trade talks between the two sides continue

Vietnamese foreign minister Pham Binh Minh reacted furiously to revelations of the

practice, saying: “It will sabotage Vietnamese brands and products and it will also affect

consumers.

“We could even get tariff retribution from other countries, and if that happens, it will

hurt our economy.”

The Vietnamese government added that more stringent checks would be put in place on

exports to the US, Europe, and Japan.

Home

VN’s textile industry strives to find new markets

(Source: Vietnam News, June 12, 2019)

The textile sector faces a number of challenges as it seeks new markets

including increased trade stress.

HÀ NỘI — Việt Nam’s textile and garment industry is striving to achieve export turnover

of more than US$40 billion in 2019, a year-on-year increase of 14-15 per cent.

Data from the Ministry of Industry and Trade (MoIT) showed that since the beginning

of the year, the textile industry has achieved positive results. Compared to the same

period last year, the industry has grown by more than 12 per cent.

The industry has posted growth in production of costumes (up 8.8 per cent), fabric

made from natural fibres (3.9 per cent), synthetic fibres (19.5 per cent) and casual

clothes (8.7 per cent).

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25 CITI-NEWS LETTER

So far this year, textile and garment export turnover is estimated at $9.43 billion, an

increase of 9.8 per cent from the same period last year.

According to Lê Tiến Trường, general director of the Việt Nam National Textile and

Garment Group (Vinatex), Việt Nam’s garment export industry is growing. Orders to

Vietnamese enterprises have increased by 8-10 per cent over the same period in 2018.

Trường also emphasised the initiative of textile enterprises in seeking new markets. A

market tour by Vinatex and 10 other large businesses in May 2019 to seek importers in

Canada – a member of the Comprehensive and Progressive Trans-Pacific Partnership

(CPTPP) – shows the determination of industry leaders to increase Việt Nam’s market

share abroad.

“Meetings with importers have been taking place, and a number of importers with

revenue of up to 1 billion Canadian dollars such as VF, Atlantic Sportwear and Giant

Tiger have contacted Vietnamese textile enterprises,” Trường said.

In April, the International Exhibition of Textile and Garment Industry - Fabric &

Garment Accessories in HCM City served as another opportunity for textile enterprises

to expand their market. With more than 1,000 international suppliers attending from 24

countries, the exhibition helped businesses get information about the latest production

technologies and find ways to meet the needs of domestic and international buyers.

Việt Nam’s textile and garment is appreciated by foreign partners for both its quality

and order fulfilment time.

Cao Hữu Hiếu, Vinatex’s managing director, said that medium and large textile

enterprises in Việt Nam have worked to meet social responsibility and Green Label

criteria from partners.

However, the sector also faces of a number of challenges. For example, increased trade

stress is affecting service prices.

In addition, strong exporting countries consider Việt Nam a rival to curb. In order to

continue growing at the same rate, enterprises need to innovate with specific solutions.

They must develop a competitive tool set including focusing on technological

innovation, saving energy and improving the productivity of synthetic factors through

solutions such as automation.

It is necessary to link businesses through common information, artificial intelligence

and big data, Hiếu said.

Home

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26 CITI-NEWS LETTER

PTI govt withdraws zero-rated status for major exporters

(Source: The Tribune, June 12, 2019)

Despite the hue and cry by the five major zero-rated export sectors of the country, the

Pakistan Tehreek-e-Insaf (PTI) government has withdrawn the zero-rated facility,

saying that the move will streamline revenue flow and prevent leakages.

While announcing the federal budget for fiscal year 2019-20, the government withdrew

the Statutory Regulatory Order (SRO) 1125(I)/2011, which offered zero-rated sales tax

on inputs and products of five major export-oriented sectors ie textile, leather, carpets,

sports goods and surgical instruments.

“The objective behind the move is to resolve the problem of delay in refund payments.

The zero-rating created a loophole and the benefit was being availed by unintended

beneficiaries and non-exporters,” said Minister of State for Revenue Hammad Azhar

while presenting the budget for 2019-20. “The reduced rates for finished goods are also

harming revenues.”

In order to streamline revenue flow and prevent leakages, he proposed some measures

including scrapping the SRO 1125, thus restoring sales tax at the standard 17% on the

five zero-rated sectors.

He also said the rate of sales tax on local supplies of finished articles of textile, leather

and finished fabrics may be raised to 17%. However, the retailers opting for real-time

reporting would be given a relaxation and will be charged 15% tax, he added.

He stressed that zero-rating of utilities would be withdrawn and the refund of sales tax

to these sectors would be automated, thus ensuring that the tax paid on inputs was

immediately refunded.“Refund Payment Orders (RPOs) will be immediately sent to the

State Bank for payment,” he said.

He proposed a reduced tax rate of 10% on ginned cotton, which is presently exempted.

“This decision is against the textile policy which the PTI government presented before

general elections,” said Pakistan Hosiery Manufacturers and Exporters Association

(PHMA) Chairman Jawed Bilwani while criticising the budget. “Exporters reject the

government’s decision on withdrawing the SRO 1125.”

Stating figures, he lamented that the withdrawal of zero-rated facility for the five export

sectors would push down exports by 30%.

He was of the view that the discontinuation of the zero-rated status would deal a blow to

the export industries, lead to flight of capital, mass unemployment and huge foreign

exchange losses.

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27 CITI-NEWS LETTER

He expressed concern that after implementation of the decision, the exporters’ liquidity

would get stuck with the government as it did not have efficient system to refund

exporters’ money on time.

“Exporters ship their products thrice a year because it takes four months from the

production of garments to shipment,” Bilwani said. “If the government is going to

charge 17% tax, 54% of their money will get stuck with the government in these three

cycles, which will cause liquidity crunch for the exporters.”

“This is how the discontinuation will cause plethora of problems for the export

industry,” he said. He pointed out that this could also result in capital flight to foreign

countries, which could trigger a spike in unemployment in the country.

“The government is taking these steps to meet IMF conditions,” the PHMA chairman

said. “Pakistan is a sovereign country and the government should take decisions in its

own interest and not give in to external pressure.”

The government already owed the exporters billions of rupees, how would it be able to

pay new refunds, Bilwani asked.

An amount of Rs200 billion of exporters in tax refunds, customs duty rebate,

withholding tax refund, Duty Drawback of Local Taxes and Levies and Duty Drawback

of Taxes are stuck with the government.

“The withdrawal of zero-rating will definitely lead to the shutdown of small and medium

export industries,” he said.

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