Over 200 residents of 30 villages on Tuesday staged a protest at sea for over two hours against commissioning of a textile processing park at Annapanpettai near Chidambaram in the district. The agitators claimed the park coming up at Periyapet would lead to severe pollution resulting in irreparable damage to environment and affect the livelihood of farmers and fishermen in 30 villages near the site. The park’s water requirement would be met by sinking borewells. A few villages have already been affected by depleting groundwater levels and the commissioning of the park would aggravate the situation. The effluents from the park would also be released into the sea. This would affect marine ecology of the coast, a spokesperson of SIPCOT Area Community Environmental Monitor (SACEM) said.
According to SACEM, textile units in Erode and Coimbatore regions had been looking for a suitable place for disposing effluents. Air and water pollution had already reached a point of saturation and the release of effluents from the textile park would aggravate the situation. The villagers raised slogans against the State government and urged it to scrap the project immediately. The textile park is being set up by Southern India Mills Association, at a cost of Rs.500 crore.
SOURCE: The Hindu
The Textile Association (India) – Delhi Unit is organising a two day conference on October 26 and 27, 2015 at the PHD Chamber of Commerce & Industry, New Delhi. “Through the conference, the TAI – Delhi Unit is making its contribution to the PM's 'Make in India' campaign and the governments' vision to power-drive the textile sector,” a TAI press release stated. The conference will be inaugurated by Kalraj Mishra, cabinet minister of MSME and Santosh Gangwar, minister of state for textiles (independent charge) and SK Panda, textiles secretary. “At the conference, India's top textile professionals will discuss about various ways and means with which we can add impetus to the growth of the textile sector,” the press release added. Key issues to be discussed include; how to facilitate investment, foster innovation, enhance skill development, protect intellectual property and build best-in-class manufacturing infrastructure. Other topics like manufacturing competitiveness, raw material availability, manpower resources, key growth constraints, potential areas for investment, unconventional markets, etc too will be discussed.
According to TAI, the conference offers a unique opportunity of building presence at a platform covering the leadership of the entire Indian fibre to fashion retail value chain. The sub sectors represented will include leading fibre producers, textile and apparel manufacturers, exporters, accessory manufacturers, fashion and home textiles retailers and brands. There will also be representatives from buying and sourcing offices, machinery manufacturers, banks, PE players, logistic companies, and IT service providers to this sector.
SOURCE: Fibre2fashion
The Gujarat government had imposed 5% VAT on narrow fabrics during the State Budget in February-2015 which is manufactured mainly in two big centres, Surat man-made fabric (MMF) hub and Ahmedabad. In Surat alone, there are aound 300 small and bigh manufacturers of narrow fabrics. Following representation made by the industry association on Monday, the Gujarat government likely to abolish the 5% value-added tax (VAT) on narrow fabrics manufactured in Gujarat. The decision was conveyed to the industry association led by South Gujarat Textile Processors Association (SGTPA) president Jitu Vakharia during a meeting with Minister of State for Finance, Saurabh Patel at Gandhinagar.
Vakharia said that narrow fabrics in other states do not attract any sort of VAT. The VAT was applicable to the fabrics manufactured in Gujarat. There was a growing concern that the manufacturers in Gujarat will lose their business due to the five percent tax. They had made representation to the state government to abolish the tax. Narrow fabrics is being used in apparel industries, orthopedical industries, electronic industries, car industries to name a few. Some of the applications of narrow fabrics are elastic tapes for gents and ladies undergarments, shoe elastic, saddlery tapes, sling tape or webbing, tapes for luggage industries and bandage tape. As per an estimate, around Rs 150 crore worth of narrow fabrics is supplied to various garment manufacturing hubs across the country per annum.
SOURCE: Yarns&Fibers
Depreciating value of the Indian rupee against the dollar has increased India’s competitiveness in apparel exports to developed countries, thanks to relatively lower decline in currencies of its competitors, including China, Vietnam and Bangladesh. After the Chinese currency, yuan, was first devalued on August 10, the rupee recorded its sharpest depreciation among its competitors. While Indian rupee depreciated 4.63 per cent to 66.83, the yuan (renminbi) fell 2.51 per cent to 6.37 against the dollar as of Monday since August 10. Among other competing countries, the Vietnamese dong slumped 2.96 per cent to 22,468 against the dollar on Monday from 21,823 on August 10. Bangladesh would not get these advantages, as its currency appreciated by a negligible 0.06 per cent to 77.73 on Monday against the dollar from 77.78 on August 10. “Indian apparel will be more competitive. The quantum of competitiveness, however, would depend upon relative currency movement of the major apparel exporters such as China, Bangladesh and Vietnam,” said Rahul Mehta, president, Clothing Manufacturers’ Association of India (CMAI). Overseas buyers will immediately start re-negotiating terms of existing contracts. Also, according to industry sources, drafts of new contracts also mention renegotiation clause if the rupee depreciates beyond two-three per cent.
An ICRA study says the depreciation in the rupee would benefit apparel exporters. As the yuan also depreciated and given that China enjoys a dominant position in international export markets, India would see an increased pricing competition, which will affect the profitability of Indian exporters. Falling rupee to benefit Indian apparel, fabric exporters “Given that the rupee has depreciated more than that of other competing countries, and India’s share in overall trade is relatively small, we expect the export volumes may not be impacted severely. Fabric exports, on the other hand, are geographically well diversified as against other segments in textile exports. Given the fragmented nature of the fabric industry, the Indian exporters will require to pass on the benefits of depreciated rupee by way of lower dollar price,” said the study. Domestic cotton exporters would see improved competitiveness, as India is the second largest exporter of the natural fibre after the United States. Nevertheless, as China is the largest market for both cotton and cotton yarn exports from India, the higher devaluation of China’s yuan will require Indian exporters to offer lower dollar prices for these products to maintain competitive prices in yuan terms.
R K Dalmia, the chairman of Cotton Textiles Export Promotion Council (Texprocil), said considering the infrastructural disabilities, cascading effect of un-rebated taxes, high cost of inputs and preferential benefits granted to the competitors, the government should continue giving export benefits to Indian exporters for some more time. The emergence of mega trade agreements being promoted by the US and the European Union among themselves and among other key trading partners like Korea, Vietnam and Japan pose fresh challenges to countries like India. Therefore, it would be best if India takes an integrated approach rather than an ad-hoc approach while negotiating new FTA or re-negotiating old ones.
SOURCE: The Business Standard
Amid the global financial turmoil, Indian economy would grow at the highest rate and also remain an attractive investment destination, Chief Economic Advisor Arvind Subramanian said on Tuesday. "India stands out. Whatever projections you are seeing, as a highest growing country among all the major economies, India will remain a relatively attractive investment destination," he said, in his presentation before a meeting chaired by Prime Minister Narendra Modi. Talking to reporters, Subramanian said he highlighted, in his presentation, the key events contributing to the global financial turmoil and "why challenges are a potential opportunity for India going forward". Referring to the problems in China, he said the slowdown there will have a "very less" impact on India.
SOURCE: The Business Standard
Moody’s Investors Service on Tuesday said Indian economy would grow at 7 per cent in the current fiscal on the back of slow recovery in industrial output and investment. It further added that country’s current account deficit may remain low supported by declining oil prices. “We have also reduced our projections for India to 7 per cent in 2015 and 7.5 per cent in 2016, from 7.5 per cent and 7.6 per cent based on high frequency indicators suggesting that the recovery in industrial output and investment is slow, and bank credit growth still subdued,” it said.Moody’s also lowered growth forecasts for many Asia Pacific (APAC) sovereigns, citing that subdued global growth, exacerbated by weaker demand from China. India’s economy grew at 7 per cent in the June quarter of the current fiscal. The government expects economy to grow at 8-8.5 per cent in the fiscal ending March 2016. It said for a number of economies in the region, the fall in oil prices has helped to reduce current account deficits. Moody’s said India’s current account deficit (CAD) has narrowed significantly from 4.8 per cent in 2012 to 1.4 per cent in 2014. “We expect this trend to continue, supported by lower oil import costs.”
CAD is the difference between the inflow and outflow of foreign exchange. Oil prices have slumped by nearly 60 per cent over the past one year to around $45-46 per barrel, easing pressure on India’s huge oil import bill. “The risk of a weaker monsoon and potential for higher food price inflation narrowed the scope for more significant monetary easing in the first half of the year. Nonetheless, our expectation is that despite its slower than anticipated pace, the direction of recovery is positive, which is reflected in our 2016 forecast,” Moody’s said. The RBI has lowered interest rates by 0.75 per cent in three tranches so far in 2015, but industry has been demanding more rate cuts in view of declining inflation and slow growth.
In its report ‘Asia Pacific Sovereigns: Credit Profiles Resilient to Slowing Exports, Subdued Domestic Demand’, Moody’s said weak demand from China has dampened the export outlook for the region, while softer commodity prices weigh on some sovereigns’ export revenues, growth and fiscal balances. Moody’s said low APAC growth forecasts for this year and next illustrates a weaker outlook in the region and in other parts of the world. “Our 2016 forecast for China is a shade lower at 6.3 per cent, down from 6.5 per cent. But the slowing is most marked elsewhere in emerging Asia. We now see APAC excluding China, India and Japan growing 3 per cent this year and 3.2 per cent next, down from our forecasts of 3.6 per cent and 4 per cent,” it said. It said lower growth is negative, but sovereign credit quality remains intact and on average, it is still stronger than in most other regions and the risk of deflation is minimal.
SOURCE: The Financial Express
A government-industry meet on Tuesday, which discussed the slowdown in China and proposals to convert the neighbouring country’s economic woes into an opportunity for India, will be quickly followed up with a high-level commercial dialogue with China next week. During the six-day meeting starting September 14, the official Indian side led by commerce secretary Rita Teaotia is expected to take up concerns of the domestic industry including fears of “dumping” from Chinese companies following the recent yuan devaluation, besides the troubles faced by Indian companies in getting greater market access in China in sectors such as IT/ITeS, pharmaceuticals and farm products. India wants China to ensure greater transparency and simplification regarding procedures concerning inspection, registration and clearances of imports (into China) from India.
Citing India’s burgeoning trade deficit with China, New Delhi is also likely to strongly encourage China to offset this trade imbalance by investing in the Narendra Modi government’s ‘Make In India’ initiative. India is looking to push China to keep its word it (China) made last September (during Chinese President Xi Jinping’s India visit) to invest $20 billion over the next five years, including in industrial parks in India. A business delegation is also likely to join the official delegation to explore investment opportunities in China, to forge joint ventures, and to boost exports from India including project exports.
India’s trade deficit with China had hit an all-time high of $48.5 billion in FY15 (or four times India’s exports to China in the fiscal) from just $1.1 billion in FY’04. In April-June FY16, the trade deficit has already touched $12.3 billion. On the other hand, total FDI inflows from China to India during April 2000-June 2015 were just $1.1 billion (or a minuscule 0.4% of the total $258 billion worth total FDI inflows into India during the 15-year period), far below potential. Other issues that could come up for discussion include complaints from Indian exporters against “spurious drugs made in China, branded wrongly as Indian and sold in overseas markets to damage the reputation of Indian drug companies”.
China had promised to invest and develop two mega industrial parks in Gujarat and Maharashtra, besides investing in infrastructure in India. However, difficulties in obtaining the required land for these industrial parks has been the cause for delay, sources said. The industrial parks were meant to manufacture electronic products, power equipment, industrial machinery, apparel, active pharmaceutical ingredients and footwear, besides other value-added items. They were then to be exported to China and other markets to boost India’s exports and at the same time reduce the trade deficit with China. Also, despite promises at the highest political levels on removing barriers to enable Indian companies — especially in sectors that matters most to India (including pharma, IT/ITeS, farm products, media and entertainment, and auto components) — get better market access, there was not much response from the ground-level authorities in China to remove these obstacles, sources said. Exporters had said the yuan devaluation will not only affect India’s exports to China (as their realisation will be lesser) but also make Chinese products more competitive than competing Indian items such as manmade fibres, garments, gems and jewellery, steel and organic chemicals in the international market, further hitting India’s overall exports
SOURCE: The Financial Express
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 46.67 per barrel (bbl) on 08.09.2015. This was lower than the price of US$ 46.69 per bbl on previous publishing day of 07.09.2015.
In rupee terms, the price of Indian Basket decreased to Rs 3108.69 per bbl on 08.09.2015 as compared to Rs 3116.09 per bbl on 07.09.2015. Rupee closed stronger at Rs 66.61 per US$ on 08.09.2015 as against Rs 66.74 per US$ on 07.09.2015. The table below gives details in this regard:
|
Particulars |
Unit |
Price on September 08, 2015(Previous trading day i.e. 07.09.2015) |
Pricing Fortnight for 01.09.2015 (Aug 13 to Aug 27, 2015) |
|
Crude Oil (Indian Basket) |
($/bbl) |
46.67 (46.69) |
46.03 |
|
(Rs/bbl |
3108.69 (3116.09) |
3024.17 |
|
|
Exchange Rate |
(Rs/$) |
66.61 (66.74) |
65.70 |
SOURCE: PIB
Prime Minister Narendra Modi today urged India Inc to seize the opportunities thrown up by global turmoil and invest more within the country. On Tuesday, at a specially convened review meeting to discuss the global economic scenario and its impact on India, Modi asked the private sector to substantially increase its investments in the domestic economy and create more jobs within the country. The board-room type meeting, rather than a government affair, was attended by India’s top industrialists, including Reliance Industries Chairman Mukesh Ambani, Tata Group Chairman Cyrus Mistry, ITC Chairman YC Deveshwar, and Aditya Birla Group Chairman KM Birla. The heads of the three apex industry chambers — FICCI, CII and Assocham — were also present. Finance Minister Arun Jaitley, who briefed the media after the meeting, said the Prime Minister wants India to utilise the opportunity from subdued global growth to strengthen its domestic economy. Modi’s remarks come at a time when economic growth is being fuelled by a ramp-up in public investments, with the private sector unwilling to take risks due to the lack of demand and legal hurdles over land acquisition and labour reforms. It also comes in the backdrop of the economy getting buffeted by the challenges of subdued global growth and weak demand in China.
Enabling environment
Modi assured the industry representatives that an enabling environment would be created for domestic investments. However, India Inc should take equal responsibility in pumping in investments and creating more jobs in the country, Modi added. “We are now concentrating on several steps, including increasing investments in infrastructure, improving the ease of doing business in India and attracting more global investments into India,” Jaitley said. India was “integrated” with the global economy and hence it was feeling the impact of recent global developments, he added. However, India has been relatively less affected because of its strong fundamentals, he said. Expressing a similar view, Jayant Sinha, Minister of State for Finance, said that the recent global developments would impact the India only in the short term. The steps planned by the government would help improve India’s competitiveness in the global markets, he added.
On its part, India Inc is understood to have stressed on the need for monetary easing and the need to allow the rupee to depreciate to preserve domestic price competitiveness in global trade. A suggestion was also made for early enactment of a bankruptcy law. PTI quoted FICCI’s Suri as saying that the talks centered on how to push investments, boost infrastructure, promote start-ups and lower the cost of capital. “We have requested that cost of capital be reduced, infrastructure development be expedited and tax incentives be provided to budding entrepreneurs,” Suri said. “The news agency quoted CII President Sumit Mazumder as saying it was “acknowledged that on ‘Ease of Doing Business’ we have not reached their 100 per cent, but we have made some progress.”
SOURCE: The Hindu Business Line
The burgeoning Bangladesh readymade garment and knitwear sector has set a goal to reach $50 billion export by 2021. While this appears quite a daunting task, but industry sources claim it is doable provided the government and its concerned ministries make determined efforts to help achieve it as textile manufacturing sector and readymade garment industry (also the knitwear segment) are in fact inseparable and rolled into one. While talking about investment in textile, RMG and knitwear industries, one has to remember a few relevant factors. The value addition in the RMG (woven) sector is relatively low - only over 20 percent and in knitwear sector, it is high, nearly 90 per cent. The $50 billion target for garment exports by 2021 has some visible problems which needs government's undivided attention. For example, the rules of origin are important factor for sustaining the flow of exports. RMG's low value addition is being accepted by the European Union - largest importer of their garments. Other major and rising markets are still okay. But the 2021 export target was fixed considering the industrial restructuring in China as rising wages there making them uncompetitive. China is concentrating on high value garment providing an opportunity to cheaper countries like Bangladesh and Vietnam. This is both an opportunity and challenge for Bangladesh.
China has provided duty-free access to its market of all types of goods from Bangladesh which has resulted in picking up exports to China. But rules of origin (RoO) have posed a problem for the woven garments because it has envisaged 40 per cent value addition for such goods. Knitwear sector, however, with its high value addition has no problem. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the concerned government agencies are trying to negotiate with the Chinese authorities for a favourable decision. Analysts feel that while a receptive Chinese government may temporarily overlook the rigid RoO factor, it is unlikely to work for long. Besides, as the worldwide economic recession is showing no signs of improvement anytime soon, other sophisticated and developed markets may impose stringent RoO to safeguard their interest. This leaves Bangladesh with the only option: to try and increase value addition, which the industry owners are aware of. In fact, this realization has prompted many of them to expand their production capacities of spinning, weaving and finishing segments.
According to Bangladesh Textile Mills Association (BTMA) Secretary, during FY2014-15, the import of textile machinery has accelerated by 54 percent and as many as 26 new textile mills in spinning, weaving, dyeing and finishing were established. The increase in value addition input has tremendous advantages. For example, if a garment exporter imports fabrics from, say China, it requires 30-40 days for their arrival which adds to the lead time for shipment of finished goods. Industry sources say, if they get fabrics locally, their shipment time could be reduced to 32 to 45 days. Successful garment exporters are trying to increase their production capacity by installing new machines in their factories. For example, Mahmud Mahin, a garment manufacturer from Narsigdi was quoted by a newspaper as saying that he has expanded his yarn, dyeing and weaving capacity by investing Tk 1.35 billion (Tk 135 crore). He said that he have a lot of work order from buyers and that's why, he have gone for capacity expansion. Like him, many other successful garment owners are doing the same for higher productivity and shortening lead time. However, BTMA and BGMEA leaders claim they can find the required funds for needed industrial expansion but without dependable power supply, they are lost and meeting their garment export target could be in difficulty. As factories located in the rural areas can't depend on REB (Rural Electrification Board of Bangladesh) because of its low-quality supply and hence factory owners are dependent on expensive power generators to run their heavy machines. Country's need is 30,000 mw but government and private sector together produce about 10,000 mw - leaving a huge gap.
SOURCE: Yarns&Fibers
China's exports declined in August, signalling weak demand in regions such as Europe and adding to growth pressures facing the world's second-largest economy. Overseas shipments fell 5.5 per cent from a year earlier in dollar terms, the customs administration said. The reading was slightly above the median forecast of a 6.6 per cent decline by economists surveyed by Bloomberg, and compared to an 8.3 per cent drop in July. Imports fell 13.8 per cent, widening from an 8.1 per cent decrease and leaving a trade surplus of $60.2 billion. The data highlight tepid demand around the world and sliding prices for inputs to China's factories and their shipments abroad. Steps to boost growth include five rate cuts since November and the People's Bank of China's unexpected yuan devaluation last month.
"China is set to miss its export growth target for this year, and there will be no help from the external demand side for economic growth," said Liu Xuezhi, a macroeconomic analyst at Bank of Communications Co in Shanghai. "China's modest yuan devaluation has yet to show any effect on exporters." Shipments to the European Union declined by 7.5 per cent in August from a year earlier, while exports to the US slipped one per cent. Weak exports mean China must do more to stabilise growth, Liu said. "The government is already trying hard to boost infrastructure spending, and that will be more important than exports for overall growth," he said. Exports fell 1.4 per cent in the first eight months from a year earlier and imports declined 14.5 per cent. That compares with the government's goal of a 6 per cent increase in total trade this year.
For the first eight months of the year, shipments to the US and Association of Southeast Asian Nations rose, while exports to Hong Kong, Japan and Brazil dropped more than the overall slide. The chemical explosion in the northern port city of Tianjin weighed on shipments in August, though the impact may be short- lived, analysts at Goldman Sachs Group Inc led by Song Yu wrote in a report ahead of the data. China's benchmark Shanghai Composite Index swung from a loss of 2.3 per cent to close 2.9 per cent higher Tuesday. The offshore yuan strengthened to 6.4646 against the greenback as of 4:20 pm in Hong Kong. The trade surplus widened from $43 billion in July.
Growth doubts
"China's growth is losing steam," said Zhao Yang, chief China economist at Nomura Holdings Inc in Hong Kong. Zhao expects the currency devaluation to have only a "minor" impact on trade volume. China's exports may rise about 2 per cent this year while imports may slide about 10 percent, according to a State Information Center and China Development Bank report published by Shanghai Securities News last week. Several PBOC interest rate cuts and stock-market volatility point toward "increasing misgivings over whether China actually retains the capacity to meet its projected economic growth targets," the European Union Chamber of Commerce in China said in its 2015-2016 position paper released Tuesday.
Imports have declined for 10 months straight, underscoring the impact of a prolonged property investment downturn and falling commodity prices. Imports from commodity exporters Australia and Brazil both declined by more than 20 per cent in the first eight months of the year. Factories are buying less coal, aluminum, steel and copper, and Chinese consumers are also curbing some purchases. The number of cars imported fell by 25.6 per cent from a year earlier in the first eight months. "The government needs to stimulate domestic demand through aggressive fiscal stimulus, particularly through policy banks investment in infrastructure projects," Nomura's Zhao said.
SOURCE: The Business Standard
British Minister of State for Trade and Investment Francis Maude today arrived in India on a four-day visit to discuss ways to deepen commercial ties between the two countries. "Lord Maude will focus on deepening commercial ties between the countries and will highlight how the UK's unique offer to India compliments Prime Minister Narendra Modi's aspirations for India," British High Commission said in a statement. The minister would meet Indian leaders, government officials and business people during the visit to strengthen economic relations between India and the UK. "Our government is committed to an enhanced partnership with India," the statement said quoting the British Minister.
In the national capital, he will attend the India-UK Business Convention where British and Indian CEOs would gather. He would hold discussions with top Indian investors in the UK like Wipro, GENPACT, TCS, Tech-Mahindra to boost trade and investment between the countries. In Mumbai, he will meet top industrialists including Cyrus Mistry and Indiabulls' Sameer Gehlaut, it said adding he will also visit Cipla's laboratory facility and deliver a lecture at IIT Bombay. The bilateral trade between the countries stood at $14.33 billion in 2014-15. India has received $22.32 billion FDI from the UK during April 2000 and June 2015.
SOURCE: The Economic Times
Belarusian President Alexander Lukashenko said that Belarus is interested in developing all-round cooperation with India. Lukashenko made the remarks while meeting with Indian Minister of State for Commerce and Industry Nirmala Sitharaman in Minsk, the national capital of Belarus. "Trade and economic ties are the basis of the relations between Belarus and India, and the vigorous cooperation between key ministries of Belarus and India will have an impact on all-round bilateral relations," Xinhua quoted Lukashenko as saying. Both sides also exchanged ideas over promoting cooperation in sectors such as manufacturing, mechanical engineering, pharmaceutics, potash mining, IT and education. According to Lukahenko, Belarus was considering the possibility of setting up a large industrial center in India for production, sale and maintenance of equipment. Lukahenko also encouraged Indian pharmaceutical companies to enhance their presence in Belarusian market. Nirmala Sitharaman, the visiting Indian official, said Indian companies are ready to buy potash fertilisers and invest more in the Belarusian potash industry, while saying India is also interested in sending Indian students to study in Belarusian universities. The two-way trade between Belarus and India totaled more than $400 million last year and exceeded $300 million in the first six months of this year.
SOURCE: The Economic Times
