The finance ministry on Tuesday said high-frequency indicators — including power consumption, inter-and-intra-state mobility, manufacturing capacity utilisation, business expectations and consumer confidence — in January point at a “sustained and strengthening economic recovery”.
In its latest monthly economic report, the department of economic affairs said the Budget announcements, which have focussed on elevated spending in areas with high-multiplier effect, along with structural reforms and the policy push under the Aatmanirbhar Bharat initiative will bring the economy back on to a “strong and sustainable growth path” in FY22.
The International Monetary Fund has forecast a 11.5% real GDP expansion for India in FY22 and 6.8% in FY23. With this, India is set to return as the world’s fastest-growing major economy, beating China.
Highlighting encouraging trend across some gauges, the report said GST mop-ups in January have hit a record. Manufacturing and services PMI remain in expansionary zone while augmented credit growth, surging FDI and FPI flows and private placement of corporate bonds are providing critical financial cushion to the real recovery.
The report also highlighted a “convergence across three windows (economic survey, Budget and monetary policy review) of policy intervention” that “lays to rest any ambiguity on the growth agenda of the government”.
The Economic Survey pitched for growth through counter cyclical fiscal policy emphasising that growth alone is the answer to sustaining the public debt burden of the country. The Budget for 2021-22 implemented the counter cyclical fiscal policy by raising the target of fiscal deficit to 6.8% of GDP, more than double the FRBM target.
“With the expanded borrowing programme mostly meant for funding the enhanced capital outlay, the Budget has set in place the multiplier impact on growth to support the prescribed fiscal glide path tapering to 4.5% of GDP in 2026,” it said.
Similarly, the monetary policy committee statement issued last week has kept the already low policy repo rates unchanged and maintained its accommodative stance on growth, extending deeper into 2021-22.
Source: The Financial Express
Despite a price rise in innerwear by 16% from November onwards, the demand for innerwear has gone up by 20% for November - December 2020 period vis-a-vis the same period in 2019.
Leading innerwear and athleisure companies like Rupa, Dollar Industries NSE 1.92 % say that the demand has remained strong as people are staying at home resulting in more usage of inner-wear.
Talking to ET, Vinod Kumar Gupta, managing director, Dollar Industries said "We have increased prices thrice since the beginning of November as yarn prices went up by.
There may be another round of price increase in February too, though the industry players are yet to make a decision. Athleisure and casual wear are selling well. Innerwear in the economy range is selling more."
"Our production level has already touched the pre-Covid level and we are of course on a growth path as well. Q4 is always heavy for us and we look forward to a growth of around 10 per cent in this financial year. We have also set a target of touching upon a number of Rs 2,000 crore by end of March 2025 thereby with a CAGR rate growth of around 10-12 per cent each year,” Gupta added.
K B Agarwala, managing director, Rupa & Co said that the demand has gone up as the pipeline had dried up during the pandemic. "Once the restrictions were withdrawn, we saw demand going up significantly as there was very little stock in the market. We have witnessed 20 per cent growth in the period November - December," he said.
Rising yarn and fabric prices remain a concern to the industry. Akshay Salot owner at Virchand Goverdhan, which is into manufacturing and trading of fabrics said "The fabric prices for cotton in various varieties have gone from the range of 20% to 50% depending on the yarn price increase, some times on a weekly basis, on a month on month basis it is practically 60% in some cases.
The yarn prices and fabric prices are going up every day. "There is no certainty of prices. This has made international buyers worried about inconsistent prices," he said.
Along with covid pandemic, this can really mean international buyers are on verge of cancelling orders if we don't revert on the prices of a month back," Salot said.
Source: The Economic Times
The Union Government recently announced in the Union budget 2021-22 that it will be launching seven Mega Investment Textile Parks (MITRA) – with integrated facilities – in three years.
Notably, every state having textile industry is eager to get a park under this scheme.
Various trade bodies in different states have urged the Government to set up textile park under this scheme in their respective states.
Union Law and Justice Minister Ravi Shankar Prasad recently assured he would make sincere efforts to persuade the textiles ministry to set up a textile park in Bihar.
Now moving a step further, the Madhya Pradesh Government has proposed 1,000 acres of industrial land for such a park in Ratlam.
As per a report of Times of India, Rohan Saxena, ED, The Madhya Pradesh Industrial Development Corporation (MPIDC) said, “The selection of the site will be on a competitive basis. Given the location and connectivity of Ratlam to the Delhi-Mumbai Expressway, the location well suits the requirement of the textile park.”
It is pertinent to mention here that the setting up of a textile park will help in generating local employment and giving a thrust to economic development of the region.
“There are many states in the race to grab the park as it will initiate mega economic development.
Most important parameters for selection are location and skill availability in that geographical location.
The Government should suggest a location that should be less than an hour from the airport for smooth transit and to attract global buyers and related stakeholders,” says Akhilesh Rathi, Chairman,
The Madhya Pradesh Textile Mills Association.
Prior to this, a leading trade body of Gujarat had also strongly raised voice for one of the parks under this scheme MITRA. It will be interesting to see which of the seven states get these parks.
Source: Apparel Online
The budget has laid the foundation for high growth over this decade, chief economic adviser Krishnamurthy Subramanian said. In an interview with ET, he said the fiscal policy should be counter-cyclical.
The Economic Survey called for fiscal relaxation. Does the budget go far enough in that direction?
The survey has called for counter-cyclical fiscal policy, not for fiscal irresponsibility, and actually, it’s underlined. The budget, not only on fiscal side, is a far-reaching one as it lays out the ingredients for sustaining the recovery into the coming year as also laying the foundation for high growth over this decade.
Firstly, infrastructure spending. In the second half of the year, the two months remaining, we have spent the entire budget estimate and we top it by about 4%. In FY22, we are increasing by almost 34%. So… both in terms of percentage of GDP and actual rupees spent, this is the highest public capital expenditure ever.
Second, healthcare spend. It affects productivity of labour and labour supply. There is almost 135% increase in the healthcare spend.
Third, this budget might go down as one of the seminal ones in terms of financial sector reforms – the privatisation of public sector banks, the DFI (development financial institution), bad bank, higher FDI in insurance and the public sector enterprise policy.
If you contrast the Asian financial crisis versus the global financial crisis, after the global financial crisis, we only did revenue expenditure. We, in fact, shrank capital expenditure and there were no reforms.
Demand increased because of the revenue expenditure, but neither capex happened nor reforms. As a result, the supply did not respond. When you have demand increasing without a supply side response, runaway inflation is what you get. And that is what indeed happened.
In contrast, after the Asian financial crisis, capital expenditure increased significantly and reforms were done.
As a result, both demand and supply increased and that is why we got growth of 8%+ from 2003 onwards without inflation. This is what we’ve done now, but on a much higher scale.
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The budget talks about a new fiscal framework. So, are we moving away from a fixed target?
We have to understand the difference between pro-cyclical and counter-cyclical fiscal policy.
Any economy has oscillations – there are ups and downs. When fiscal policy is pro-cyclical, it actually exacerbates those troughs.
When fiscal policy is counter cyclical, it mitigates those peaks and troughs. When the peaks and troughs are mitigated, macroeconomic uncertainty goes down, which is extremely important for investment to happen from the private sector.
Counter-cyclical fiscal policy creates expectations in the same way as inflation-targeting creates expectations of inflation.
India’s fiscal policy has not been counter-cyclical. Other countries follow them religiously.
Details can be worked out and can and will be worked out. But the essential principle has to be that fiscal rules have to enable counter-cyclical fiscal policy, not make it pro-cyclical.
You have a whole chapter on ratings agencies. Some private economists have expressed concerns about a downgrade. Have you reached out to them?
Of course. There is engagement not only with ratings agencies, but with other international agencies as well. It is a continual one. We have made all the economic arguments. Economic rationale is very strong.
Compared to the beginning of pandemic, we are in a stronger position. In the budget, we’ve provided for growth and a chapter in the survey makes it very clear growth leads to debt sustainability.
On growth estimates, is the government being conservative or is the Economic Survey more bullish?
The thought has been primarily to under-promise and over-deliver. It’s quite likely that our fiscal deficit will be lower than what has been mentioned. When you under-promise and over-deliver, it generates enormous credibility.
Given this strong emphasis on growth, can India tolerate slightly higher inflation?
The policies that we’ve implemented, working on both supply and demand, follow the template that we had after the Asian financial crisis – focusing on reforms, focusing on capital expenditure. So you have both – an increase in aggregate demand and increasing aggregate supply, which can enable growth without having to have a situation of high inflation.
One likely disruption that is out there is financial markets being out of sync with fundamentals. How do you see it?
If you look at the post-budget market response, that is not a disconnect. That is actually reflecting the fundamentals because stock markets basically reflect future growth.
The budget creates not only the prospect for growth in the coming year but also lays out important foundation for future years.
The post-budget rally is reflecting what we’ve clearly highlighted in the survey, that India has actually shown its maturity in its policymaking. Policymaking can often be myopic. In contrast, in responding to Covid-19, India has actually been mature – taking some short-term pain for long-term gain.
Whether it’s the Covid management or demand-supply policies, reforms, people are putting their money where their mouth is.
There is no question that there is liquidity, especially given the fiscal and the monetary part, but at the same time investors finally put their money where their mouth is. There is global liquidity that is looking for returns and India now I think offers that high return.
Many private economists have spoken about a K-shaped recovery, with only select sections of the economy growing. There is criticism that the budget has not done much for stressed sectors.
I have two responses to this. Firstly, if you will recall on the 31st of August, when the Q1 GDP numbers came, when we spoke about the V-shaped recovery in macro-economic indicators, that V-shaped recovery itself was doubted almost across the board. Now, we are glad that has actually transpired.
Second, the part that I have already said is that compared to revenue expenditure, capital expenditure creates a lot more sustained increase in demand and supply. For instance, take the vaccination programme. I’ve said this before – vaccination can be a vaccine for the economy, especially to the services sector.
Because once people get vaccinated, they can travel, do some of the contact-based services that they have been avoiding. That will really bring back the aggregate demand. Finally, economics is all about how to do the best with scarce resources.
When you actually have, let’s say, ₹100 to invest and have two choices, one, which is basically where you invest ₹100 and get ₹98 from it, and another where you invest ₹100 and you get ₹245 in that year and ₹450 over the lifetime of that investment.
For our personal investment, we’ll obviously choose the latter. It’s the same fiduciary responsibility to basically treat the taxpayers’ money as our own and do the same thing. That is what the fiduciary responsibility and that’s what Dharma also is. That’s what has been done.
Source: The Economic Times
Leading apparel company VF Corporation will eliminate all single-use plastic packaging, including polybags, by 2025.
The company has announced its 2025 Sustainable Packaging Goals. The company’s global packaging goals are an example of how it can leverage its scale for significant impact. In just one year, it could potentially eliminate as many as 100 million polybags from its packaging waste.
Given the magnitude of plastic packaging waste in today’s world, the focus on sustainable packaging is a critical component of VF’s global sustainability strategy.
Apart from eliminating all single-use plastic packaging, VF’s Sustainable Packaging Goals also target all remaining packaging will be reduced, originated from sustainable sources, and designed for reuse or recyclability.
All single-use plastics in product packaging will be 100 per cent recycled and bio-based content or a combination of the two by 2023.
All paper-based packaging will be recycled content (minimum 80 per cent, where performance allows), third-party certified virgin content, or a combination of the two by 2023.
VF will commit to leadership in crucial industry coalitions and policy initiatives to build circular packaging infrastructure that will enable its 2025 pledge.
All non-essential, single-use plastics for which there is a viable product alternative will be eliminated from VF’s offices, throughout its direct operations, and from all company-sponsored events by 2023.
Jeannie Renné-Malone, VP, Global Sustainability for VF said, “With a portfolio comprising some of the world’s most iconic apparel and footwear brands, we recognise we play an important role as environmental stewards and can serve as a catalyst for industry movements that drive positive change.”
All VF-owned distribution centres will be zero waste by 1 April 2021. VF also seeks to implement sustainability best practices in its internal and external sponsored events.
The company is committed to working with retailers and industry peers to support the development of collection platforms and recycling technology.
Various brands of the company do have their specific targets like its icebreaker® brand has an ambitious goal to be plastic-free by 2023, eradicating synthetics from its entire product collection within 3 years.
Similarly, Timberland® brand has outlined a vision for its products to have a net positive impact by 2030.
By designing 100 per cent of its products for circularity, the brand will work towards zero waste. And, by sourcing 100 per cent of its natural materials through regenerative agriculture, the Timberland® brand will contribute to its net positive impact on nature.
Source: Apparel Online
The Commerce and Industry Ministry is trying to prepare a roadmap and a scoping paper to quickly start review of respective free trade agreements with Japan and ASEAN, Union minister Piyush Goyal said on Tuesday.
The Commerce and Industry Minister said that review of a free trade pact with Korea is underway.
"With Japan and other ASEAN (Association of South East Asian Nations) countries, we are trying to prepare the roadmap and scoping paper so that we can start the reviews quickly," he told reporters here.
When asked about the proposed mini trade deal with the US, Goyal said "we have" to wait for the new USTR (United States Trade Representative) to come in and they have to hear from the new administration about the deal.
"We also have certain thoughts about it. It's only after we engaged with the new US administration, that we can comment on that," he said.
The two countries are negotiating a trade package to iron out certain issues and promote two-way commerce.
"We believe that India has comparative advantages to look at greater engagement with developed countries like the US, the UK and the EU. The US just had a change in the administration and we are waiting for the new USTR to be confirmed.
"Once the new USTR is in office, we will start a dialogue with them to look at how we can expand our business and international engagement with them both on market access, and tariffs...," he added.
About a proposal submitted by India and South Africa for relaxing certain provisions in intellectual property (IP) agreement of the WTO (World Trade Organisation) with a view to contain the COVID-19 pandemic, the minister said about 100 countries have already supported the proposal and there is some resistance from the developed world.
"We are working along with other countries to try and come to a common position," he said.
India and South Africa have submitted a proposal suggesting a waiver for all WTO members on the implementation, application and enforcement of certain provisions of the TRIPS Agreement in relation to the prevention, containment or treatment of COVID-19.
The Agreement on Trade-Related Aspects of Intellectual Property Rights or TRIPS Agreement came into effect in January 1995. It is a multilateral agreement on intellectual property rights such as copyright, industrial designs, patents and protection of undisclosed information or trade secrets.
The minister also hoped that that the WTO would quickly put in place the appellate body of the dispute settlement system and the benefits of S&DT (special and differential treatment) will continue for perpetuity or for a longer period of time.
The S&DT allows developing countries to enjoy certain benefits including taking longer time periods for implementing agreements and binding commitments, and measures to increase trading opportunities for them.
He hoped that various negotiations that are going on a plurilateral basis move to multi-lateral negotiations such as on e-commerce.
About the ongoing talks on fishery subsidy, Goyal said these subsidies should be based on "polluter pays" principle so that developing world like India has a policy space and "we can continue to give support at least proportional to the support that the developed world is giving, for a significant period of time".
On the country's exports, he expressed hope that economic activities in the developed world will pick up quickly and the country will continue to record positive growth in exports.
He added that the ministry is planning to roll out the next foreign trade policy on April 1.
On FDI, he said there are no plans to relax norms in the multi-brand retail sector.
Source: The Economic Times
Vertical integrated company KPR Mill, Coimbatore has reported its third quarter (FY21) results and it was robust quarter driven by strong demand for textile products.
The revenue of the company in this period grew 21 per cent in year-over-year (Y-o-Y) basis to Rs. 929.6 crore, with textile division (87 per cent of sales) posting 19 per cent Y-o-Y growth.
With the support of healthy order book and sustained demand for casualwear products, apparel volumes jumped 12 per cent Y-o-Y to 22.6 million pieces.
The average realisation/piece also firmed up 9 per cent to 163/piece, translating to value growth of 22 per cent Y-o-Y to Rs. 369 crore (40 per cent of sales).
The export order book at the end of third quarter of the current fiscal was healthy at Rs. 600 crore and revenue from yarn and fabric division (44 per cent of sales) grew 16 per cent Y-o-Y to Rs. 412 crore.
It is also pertinent to mention here that the company has expansion plans in garmenting division of worth Rs. 250 crore.
As on Q3, FY21, it has outstanding debt worth Rs. 556 crore and cash balance worth Rs. 350 crore.
Source: Apparel Online
Cotton Association of India (CAI), in its January 2021 estimate, has retained its cotton crop estimate for the 2020-21 season, beginning October 1, 2020, at 360 lakh bales of 170 kg each. India's domestic consumption is expected to reach its normal level this year after the disruptions and labour shortage on account of the lockdown due to COVID-19 pandemic.
The total cotton supply during the months of October 2020 to January 2021 is estimated by the CAI at 386.25 lakh bales of 170 kg each, i.e. 410.39 lakh running bales of 160 kg each, which comprises the arrivals of 255.25 lakh bales of 170 kg each during the months of October 2020 to January 2021, import of cotton estimated at 6.00 lakh bales upto January 31, 2020 and opening stock at the beginning of the cotton season on October 1, 2020 estimated by the CAI at 125.00 lakh bales of 170 kg each.
Further, the CAI has estimated cotton consumption during the months of October 2020 to January 2021 at 110.00 lakh bales of 170 kg each, while the export shipment of cotton estimated by the CAI upto January 31, 2021 is 29 lakh bales. Stocks at the end of January 2021 are estimated by the CAI at 247.25 lakh bales.
The CAI Crop Committee has estimated the total cotton supply till the end of the cotton season 2020-21 i.e. upto September 30, 2021 at 499 lakh bales of 170 kg each.
The total cotton supply consists of the opening stock of 125 lakh bales at the beginning of the season on October 1, 2020, crop for the season estimated at 360 lakh bales, and imports estimated by the CAI at 14 lakh bales (compared to 15.50 lakh bales in the previous cotton season 2019-20).
Domestic consumption has now been estimated by the CAI at 330 lakh bales of 170 kg each, i.e. at the same level as estimated in the previous month. There is an increase of 80 lakh bales in the cotton consumption compared to the previous crop year’s consumption estimate of 250 lakh bales, as the consumption is expected to reach its normal level this year.
The CAI has estimated exports for the ongoing season at 54 lakh bales of 170 kg each, as against 50 lakh bales estimated for the previous cotton season. The carry-over stock at the end of the cotton season 2020-21 is estimated by the CAI at 115 lakh bales as against 107.50 lakh bales at the end of the previous cotton season 2019-20.
Source: Fibre2Fashion News
The Odisha government on Tuesday announced that with a view to giving independent focus and effort to Handicraft sector and considering the similarities between Handloom and Handicraft sector, the Handicraft sector was separated from the Industrial Department and merged with the Handlooms, Textiles and Handicrafts Department.
Also, the MSME sector was carved out from the Industries Department creating Micro, Small and Medium Enterprises (MSME) Department.
For Handicraft sector, total of 552 numbers of posts were earmarked and separated from the MSME Department. However, the officers/ staff continued to work for both Handicraft and MSME sector and they remained under the overall control of MSME department.
As per the arrangement, the activities and schemes of handicraft sector were implemented under the supervision of HT & H Department although the implementing manpower was under the administrative control of MSME Department.
Their transfer, posting, disciplinary power etc. remained with MSME Department. As a result, difficulties are faced in smooth implementation of handicraft schemes and programmes.
To remove these difficulties, the creation of a separate cadres for handicraft sector, namely Odisha Handicrafts Services (Method of Recruitment and Conditions of Service) Rules, 2021 and Odisha-Subordinate Handicrafts Services (Method of Recruitment and Conditions of Service) Rules, 2021 for recruitment and management of Officers of Group A and B, were under active consideration of the State Government in Handlooms, Textiles and Handicrafts Department.
Now, the State Government announced formulation of the new cadre Rules – “Odisha Handicrafts Services (Methods of Recruitment and Conditions of Service) Rules, 2021” for recruitment and management of Group-A and B Officers who will work under the administrative control of the HT & H Department. The cadre will consist of posts of Assistant Director, Deputy Director, Joint Director, Additional Director and Director.
This was one of the priorities of the Department under 5T that has been successfully achieved.
Source: Kalinga News
Pencilling in a GDP growth in third and fourth quarters, SBI Research on Wednesday revised its contraction forecast for the current fiscal year to 7 per cent.
The agency had earlier forecast a 7.4 per cent contraction in 2020-21 GDP numbers. In April-September, the economy contracted 15.7 per cent but the second half may see a surprise 2.8 per cent growth, if the SBI analysis turns out to be correct.
Soumya Kanti Ghosh, group chief economic adviser at State Bank of India NSE -0.76 % (SBI) said of the 41 high frequency leading indicators, 51 per cent are showing acceleration which should help the economy turn around to the green from the third quarter with a 0.3 percentage point growth which is likely to surprise positively when the final numbers are out.
In April-June, the Indian economy contracted by a record 23.9 per cent, but dramatically improved to -7.5 per cent in the second quarter. In 2019-20, the economy had grown 4 per cent and in the current fiscal year, it is on course to tank by 7 per cent.
The consensus is -7.5-8 per cent with the NSO pegging it at -7 per cent and RBI at -7.5 per cent.
"We now expect GDP decline for the full year to be around -7 per cent compared to our earlier prediction of -7.4 per cent. Also, Q4 growth will also be in positive territory at around 2.5 per cent," Ghosh said, adding promptly that the projections are conditional to the absence of any rise in infections.
"We retain our GDP forecast for FY22 at 11 per cent (RBI has pegged it at 10.5 per cent and the economy survey at 11.5 per cent and the budget did not offer a GDP estimate), but with the caveat that 11 per cent will be the floor below which it cannot fall," he said.
Corporate results so far also reinstate the fact that third quarter would be much better than the previous one. The corporate GVA of 1,129 companies has expanded by 14.7 per cent in October-December compared to 8.6 per cent in second quarter (of 3,758 companies ex- telecom)
On the fiscal gaps, it said 9.5 per cent may be on the higher side. Excluding off-balance sheet liabilities, fiscal deficit will be 8.7 per cent gross tax collection estimate based on revised 2020-21 numbers and collections till December show tax collections will have a degrowth of 8.9 per cent in March quarter on a sequential basis. But in 2021-22 collection may top the budget estimate of Rs 22.17 lakh crore, or 9.9 per cent of GDP.
Meanwhile, cash balances of the Centre has declined from the peak Rs 3.4 lakh crore to around Rs 2.3 lakh crore as on February 8.
Given that 85-90 per cent of such cash balances belonged to states that was invested with the Centre, it is possible that states before the closing of accounts of 2020-21 want to spend the cash rather than preserving.
Source: The Economic Times
The report assessed the e-commerce growth in Q4 2020 and the sector-wise analysis. It has covered trends related to the overall e-commerce growth, D2C trend, and how it affects the industry in the post-Covid-19 world.
The report’s key highlights suggested that in the last quarter of 2020, e-commerce grew by 36 per cent and 30 per cent YoY in terms of order volume and value respectively. While the average order value declined by 5 per cent in Q4-2020 as compared to the same period last year.
According to the report, the growth accelerated in light of Covid-19 and the effects of lockdown led to a significant change in consumer habits. In contrast, offline retail continues to have single-digit growth.
Last year, the e-commerce industry reported 26 per cent order volume growth in Q4-2019 vis-a-vis Q4-2018.
Emerging segments
The report noted that personal care, beauty, and wellness (PCB&W), and FMCG & healthcare (F&H), were the biggest beneficiaries. They saw growth of 95 per cent and 46 per cent YOY respectively.
FMCG & Healthcare (F&H) is one of the fastest-growing categories, with value growth of 94 per cent in Q4-20 compared to the same period last year. The substantial value growth is supported by the 46 per cent order volume growth in Q4 2020.
The report stated that the electronics segment was buoyed by homebound consumers turning towards high-end products. The category witnessed a 12 per cent YOY increase in AOV in addition to 27 per cent YOY growth in volumes and continues to drive the highest share of the e-commerce value.
The lockdowns and reluctance to venture out resulted in many first-time online grocery shoppers. This has been an important category for mainstream e-commerce players like Flipkart and Amazon to actively focus and promote the grocery business.
Tier-2 continues to drive growth
As e-commerce companies start focusing on Tier 2 and Tier 3 cities, their contribution to the overall e-commerce pie has gradually increased over the last few years. These cities accounted for a whopping 90 per cent YOY incremental volume and value growth during the quarter in review.
Commenting on the report, Kapil Makhija, CEO, Unicommerce said, “The e-commerce industry has emerged as the backbone of the retail industry, and small and big players have realized the immense potential that e-commerce holds. The e-commerce volume growth continued to accelerate in the last quarter of the pandemic hit year.”
Source: The Hindu Business Line
The Directorate General of Foreign Trade (DGFT) under the Indian commerce ministry recently introduced an online system for traders who seek tariff rate quota (TRQ) for imports, a move aimed at promoting ease of doing business.
The TRQ mechanism allows import of a set quantity of specific products. Tariff quotas are used on a wide range of products, mostly in agriculture.
A DGFT trade notice said it has prepared a new online module, e-TRQ System, for processing applications. All applications now seeking TRQ for imports are required to submit their application online.
It added that licences for all TRQs would be issued electronically and TRQ licence data would be transmitted electronically to the customs authorities. No paper copies of the TRQ import license will be issued now.
Source: Fibre2Fashion News
Textile traders in Surat have extended their support to the nation-wide strike on February 26 called by the Confederation of All India Traders’ (CAIT) against irregular rules in the
GST law.
Textile traders said that the GST laws are becoming complicated with each passing day. The basic form of GST has been distorted by the
GST Council and has become a failed tax system for the taxpayers in general. Voicing protest against the distorted tax system is the only way to showcase the displeasure of the
trading community, said traders.“Traders’ community is totally exhausted with the frequently changing rules under the GST law. Instead of doing business, the traders are busy all day to resolve the GST issues arising out of the distorted system. We have called a meeting to discuss the bandh call announced by the CAIT,” said Manoj Agarwal, president of FOSTTA.
Devkishan Manghani, advisor, Southern Gujarat Chamber of Commerce and Industry’s (SGCCI) textile trade committee said, “Majority of the textile traders are supporting the nation-wide bandh called by CAIT against the GST rules. It is very difficult for the small traders to survive as they have to hire a tax consultant for GST filing.”
According to Manghani, the GST infrastructure has been revised more than 937 times in the last four years since it was first implemented in the country. The one nation, one tax slogan has completely fai led. Every day, there are new notifications issued by the GST Council, which is confusing the entire trade.
Source: The Times of India
Raymond Limited, an Indian textile and apparel company, has announced financial results for its third quarter (Q3) FY21, ended on December 31, 2020. Net revenue for the quarter slipped 32 per cent to ₹1,286 crore compared to revenue of ₹1,905 crore in the same period prior fiscal. Net profit for Q3 dropped to ₹22 crore (Q3 FY20: ₹195 crore).
“With markets and channels opening up and consumer sentiments getting back to track, we are seeing demand for our products & services getting better on a quarter on quarter basis and our sustained focus on operational efficiencies has yielded in a profitable quarter,” Gautam Hari Singhania, chairman and managing director at Raymond Limited, said in a press release.
EBITDA for the reported period was ₹157 crore (₹226 crore). While, profit before tax fell to ₹12 crore (₹60 crore).
Branded textile segment sales during Q3 FY21 stood at ₹603 crore, witnessing a good recovery of 70 per cent over previous year driven by pickup in wholesale and trade channels on account of festive and wedding demand and gifting sales, as company reported in the release.
Whereas, branded apparel segment sales was ₹211 crore, led by festive and marriage demand in October & November in the retail channels. Garmenting segment sales was ₹137 crore which includes revenue contribution from PPE sales and in bulk business, customers in US & Europe placed orders.
High value cotton shirting segment sales for Q3 FY21 was ₹86 crore.
Source: Fibre2Fashion News
Continuing with the positive growth, the country’s exports grew by 10.3 per cent to USD 683 million during the first week of February on account of strong performance by key sectors such as engineering and chemicals, an official said on Wednesday.
Imports too increased by a marginal 0.7 per cent to USD 72.5 million during the week, the official added. Trade deficit narrowed by 19.4 per cent to USD 610 million.
Engineering goods showcased the maximum growth and the outbound shipments witnessed multifold increase to USD 1.6 billion during February 1-8.
Exports of organic and inorganic chemicals stood at USD 617 million during the period. However, some sectors which recorded negative growth include meat, dairy and poultry products; oil meals; and fruits and vegetables.
Further, gold imports increased by 70.7 per cent to USD 391.9 million during the week. Imports of petroleum products dipped 29.5 per cent to USD 951.7 million.
Exports in December 2020 and January had recorded positive growth.
Source: The Financial Express
Exports this fiscal are likely to contract by about 7-8 per cent to around $290 billion despite a much steeper decline in the initial months of the lockdown due to a recent improvement in the situation, the Federation of Indian Export Organisations (FIEO) has estimated.
Impediments such as the delayed announcement of rates and reduced allocations under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme and a new provision of confiscation of consignments in case of misdeclaration under refund schemes, however, could hurt prospects if not sorted out at the earliest, say exporters.
“In the first nine months of the fiscal, exports were down by 17 per cent due to multiple factors including the lockdown, the world economy facing decline, serious problems with shipping companies and lack of containers.
However, we should still be finishing the year with exports worth $ 280 billion to 290 billion, compared to $ 314 billion the previous fiscal. This is no mean achievement and shows the resilience of exporters,” said S K Saraf, President, FIEO, at a press conference on Wednesday.
Upbeat on FY22 exports
In fiscal 2021-22, exports could post growth of about 10 per cent to about $340 billion-$350 billion if the US and the EU could deal with the pandemic situation, FIEO further projected.
Commerce & Industry Minister Piyush Goyal is scheduled to meet exporters on Thursday to discuss the five-year Foreign Trade Policy to be announced on April 1, pointed out Ajay Sahai, DG, FIEO. The exporters’ body will suggest schemes that are compatible with WTO norms, such as subsidies on R&D and remodelling the SEZ policy, he said.
Commenting on the inadequacy of budgetary provisions for exporters, Saraf pointed out that just ₹ 13,000 crore under the RoDTEP scheme and another ₹ 2,500 crore for other schemes for exporters, which was much lower than payments of ₹ 55,000 crore to the export sector in earlier years.
“RoDTEP is supposed to be reimbursement of duties and taxes on exported products and is not actually a benefit or support. We don’t see any justification behind reducing the amount so much,” he said.
While FIEO had written to the FM seeking announcement of rates under the RoDTEP scheme (which has been implemented on January 1) by January 31 as the delay was causing problems in competitive pricing of exports, it had not yet happened.
Exporters are now hopeful that the rates for the 2,000 items that are included in the first part of the Pillai Committee (set up to fix RoDTEP rates) report already submitted would be announced by February 14 while the rest would be announced by February 28.
FIEO also wants the government to resolve uncertainty on the Customs provision of confiscation of goods on wrongful claims made for reimbursement or refunds announced in the Budget.
“It is not clear how wrongful claims should be determined and it gives huge power to people at field level who will be interpreting it. And the cost is disproportionately high. For the benefit of 2-4 per cent (of exported goods) that may have been wrongfully claimed, the shipment is being confiscated.
We must consider that if goods don’t reach buyers on time, the country’s image also takes a hit,” Saraf said.
Source: The Hindu Business Line
Northern India Textile Mills Association (NITMA) has demanded for quick notification on Anti-Dumping Duty (ADD) on Viscose Spun Yarn originating from Indonesia, Vietnam and China, as recommended by DGTR vide its notification on 30 December 2020.
NITMA is a leading trade body of textile mills working for the growth of textile industry.
Sanjay Garg, President, NITMA, said in a statement that cheap imports of the Viscose Spun Yarn are not in favour of Government’s ‘Make in India’ initiative and acts as big disincentive for the downstream industry from investment’s perspective, which restricts the growth and expansion of domestic industry.
The representation in this regard has already been sent to Ministry of Finance.
They are appealing for expeditious issuance of notification for levying ADD on Viscose Spun Yarn originating in or exported from Indonesia, Vietnam & China and imported into India to save domestic industry from cheap imports into the country as it has been causing considerable amount of injury to domestic manufacturers.
Source: Apparel Online
Apex exporters body FIEO on Wednesday asked the finance ministry to relook at a proposed “harsh and draconian” provision in Budget 2021 related to customs as it will hurt the exporting community and the country’s image as a reliable supplier of goods.
Federation of Indian Export Organisations (FIEO) President S K Saraf said certain provisions brought through the Finance Bill have “serious” bearing on exports. He said the proposed amendment in Section 113 of the Customs Act (which deals with confiscation of goods attempted to be improperly exported) needs a relook as it is “harsh and draconian”.
A sub-section is proposed to be inserted in Section 113, which states that goods would be liable for confiscation if products entered for exportation under claim of remission or refund of any duty or tax or levy make a ‘wrongful claim’ in contravention of the provisions of this Act.
“The word ‘wrongful claim’ is subject to various interpretations and will put exporters at the mercy of field formations even if the remission rates are wrongly calculated or dispute about classification of the product under a particular rate arises.
“The remission rates may be 2 per cent of the product value and for such a small benefit, the entire goods should not be confiscated. We request the government to kindly look into the newly created Sub-Section(ja) of Section 113 of the Customs Act,” he told reporters.
Saraf also said the Finance Bill has amended the Section 16 of the IGST Act withdrawing the facility of exports on payment of IGST (Integrated Goods and Services Tax) as originally envisaged in the law. Until now, till the changes are notified in the Act, exporters have the option to ship either under bond/LUT (letter of undertaking) or on payment of IGST.
Most of the exporters were availing the IGST payment facility as the mechanism of refund was entirely seamless without any transaction cost, he claimed.
If the IGST system was functioning seamlessly and was preferred option for the exporters, there was no need to dispense with such option, Saraf said adding if there are any challenges faced by the tax authorities, it should be discussed so that an amicable solution is found rather than dropping an “excellent” facility extended to the exporters while entering the GST regime.
“With this I feel that exporters probably are considered by the government as a drain on the economy.
Exports play a key role in economic development, but we find that the treatment meted out to exporters is rather sad and sorry,” he said.
He added that a large number of exporters both of goods and services are still awaiting for their claims for 2019-20 and 2020-21 (up to December 2020) both in respect of Merchandise Exports India Scheme (MEIS) and Services Exports India Scheme (SEIS).
“Their liquidity has entirely dried up. Many of them in the micro and small sector are not in a position to take new orders due to rising uncertainty and lack of liquidity at their disposal,” he said. Recently about 2,000 exporters are receiving notices from Directorate of Revenue Intelligence (DRI) and GST departments for import against Advance Authorization prior to exports, he said.
The FIEO President also demanded immediate announcement of rates under RoDTEP (remission of duties and taxes on export products ) scheme as exporters are not able to finalise their contracts.
Talking about exports, he said going by the current trend, the country’s exports may reach USD 285-290 billion by the end of 2020-21 as against USD 314 billion in 2019-20. In the next fiscal, if things come on track, Indian exporters should target USD 340-350 billion worth of exports, he said.
Source: The Financial Express
Germany’s exports plunged by 9.3 per cent last year as the coronavirus pandemic dragged down demand, the biggest drop since the financial crisis in 2009, official data showed Tuesday. Imports dropped 7.1 per cent, the Federal Statistical Office said.
That also was the steepest decline since 2009, when exports fell by 18.4 per cent and imports by 17.5 per cent.
The United States remained the single biggest destination for German exports despite a 12.5 per cent drop, taking goods to the tune of 103.8 billion euros (USD125 billion). China placed second with a minimal 0.1per cent decline to 95.9 billion euros and France third with 91 billion euros a 14.6 per cent fall.
China was the biggest single source of imports to Germany, with its total increasing 5.6 per cent to 116.2 billion euros.
The Netherlands and the United States were second and third, with declines of 9.6per cent and 5per cent respectively. Figures released last month showed that the German economy, Europe’s biggest, shrank by 5 per cent last year. That was a better outcome than long expected.
Last year’s figures left Germany with an export surplus of 179.1 billion euros its smallest since 2011, and the fourth consecutive decline. The statistics office said that exports in December were 2.7 per cent higher than a year earlier, and up 0.1 per cent compared with the previous month.
While there were significant year-on-year rises in December in exports to both China and the United States, exports to the U.K. dropped 3.3 per cent in the last month before the country left the European Union’s single market.
Transport between Britain and continental Europe was disrupted significantly in December as restrictions were applied following the discovery of a more contagious coronavirus variant in Britain. German imports from Britain dropped 11.4 per cent.
Source: The Financial Express
Globally fashion clothing has been moving out of cotton fiber to man-made fiber. On the contrary, Bangladesh apparel industry is known for cotton oriented fibers. But due to the global increase in the use of synthetic yarn, local spinning mill owners are choosing for investing more in this segment to cut their reliance on cotton yarn to stay competitive in the global market.
As part of the transformation, leading spinning mills, including Envoy, Matin Spinning of DBL Group, Maksons, Square, and Shasha Denim, are investing in synthetic yarn.
As a backward linkage sector for the export-oriented readymade garment (RMG) and textile industry, spinning mills have been facing a rough rivalry with imported fabrics and yarns for the last 4 to 5 years.
Mohammad Ali Khokon, President of the Bangladesh Textile Mills Association (BTMA) said that recently the demand for cotton-made yarn had fallen by 35% on the global market.
Khokon further added, “Most of the buyers have been preferring synthetic and mixed yarn-based fabrics for a couple of years. That is why we are investing more to produce this type of yarn.”
The BTMA President added that local spinning mills can meet about 80% of the demand of knit yarn and 40% of that for woven yarn while synthetic and mixed yarn are mostly imported from China.
A sister concern of DBL Group, Matin Spinning Mills recently decided to invest Tk1.86 billion to set up a special yarn unit to manufacture synthetic yarn.
MA Jabbar, Managing Director of DBL Group, said, “We are investing to increase synthetic yarn production in line with the demand in the global market. We also have plans to invest more in product diversification.”
The Matin Spinning special yarn unit will increase the company’s daily production capacity by 10 tones and the assessed turnover will grow by Tk1 billion per year, as per the Dhaka Stock Exchange website.
Comparable to DBL Group, Envoy Group will invest Tk1.25 billion in setting up a synthetic yarn unit. The new unit will produce 12 tons of yarn per day and will come into operation by October.
Kutubuddin Ahmed, Chairman of DBL Group, said the demand for synthetic yarn is rising worldwide, adding that its production cost is low and it is quite sturdy.
Kutubuddin further highlighted, “On the other hand, raw cotton prices have been unstable for the last few years in the world market and that is why cotton yarn production cost is increasing. So, we could not maintain profit margins by using cotton yarn.”
One of the top 10 spinning mills in the country, Maksons Group has said to invest around Tk100 million in three new spinning units in Mirsarai Economic Zone.
While a concern of Maksons Group, Metro Spinning Limited will invest Tk3.40 billion in a unit while Maksons Spinning Mills will dispense Tk2.54 billion and Tk3.48 billion into 2 other units, according to company insiders.
Mohammad Ali Khokon, also the Managing Director of Maksons Group, said, “We are going for a big investment to manufacture high-value diversified products so that we can stay competitive in the market.”
This is possibly to be the biggest investment plan by a Bangladeshi textile group amid the ongoing COVID-19 pandemic.
Square Textiles is to invest Tk300 million while Mozaffar Hossain Spinning Mills has already invested Tk2.50 billion to increase synthetic yarn production.
Shasha Denim has signed a deal with the Bangladesh Export Processing Zone Authority (BEPZA) to lease 8 plots in the Dhaka Export Processing Zone (DEPZ) area for future business expansion.
Khokon stressed the utility price hike had been squeezing spinning mills’ bottom line since 2018, putting the capital-intensive sector in trouble even before the pandemic struck. Further adding that the business is not going well at the moment due to the COVID-19 pandemic but the dip would not last forever.
Moreover, the pandemic came as a fresh blow to the sector, hindering production, swelling unsold stocks, and unsettling cash flow. But numerous textile mills have already cleared their stocks and fresh orders are coming from RMG makers.
Source: Textile Today
Consul General of Japan in Chennai, Masayuki Taga, on Wednesday met Chief Minister Y.S. Jagan Mohan Reddy and discussed possible avenues of collaboration between Andhra Pradesh and Japan.
Mr. Taga is in the State as part of a two-day visit. Opportunities in infrastructure financing and partnership with Japan in skill development came up for discussion among other things.
Industries Minister M. Goutham Reddy, meanwhile, chaired a round-table with senior officials from the State and apprised Mr. Taga on the potential avenues for collaboration.
The Minister said that the focus of the government was on attracting long-term investments, and said Japan was an important country for industrial partnership.
He said with its long coastline, infrastructure and logistics advantage, Andhra Pradesh could be a conduit for Japanese companies to venture into South Asian markets.
He also explained to the Japanese envoy about the concept cities proposed in Anantapur, Tirupati and Visakhapatnam, integrating residential, manufacturing, services, leisure and social infrastructure to form a self-sustaining ecosystem.
Special Chief Secretary Industries, Karikal Valaven, spoke about the existing strong partnership between Japan and Andhra Pradesh.
CEO, Andhra Pradesh Economic Development Board, J.V.N. Subramanyam, made a presentation explaining the steps taken by the government to reduce the cost and risk of doing business and also the potential for Japanese investors in key sectors like electronics, automobiles, pharmaceuticals and textiles and food processing.
He also spoke about the infrastructure push that was being given through development of industrial corridors, ports, fishing harbours and airports. Referring to the Japanese Industrial Townships proposed in the State, he also explained about the JIT planning in Srikalahasti.
He said A.P. had immense potential for investments and expressed interest for partnership in the areas of irrigation and improvement in livelihoods of people. He suggested that the model of the Japanese Institute of Manufacturing at Sri City be replicated to attain excellence in the manufacturing sector.
Principal Secretary, IT, Electronics and Communications G. Jayalakshmi and other officials were present at the meeting.
Source: The Hindu Business Line
Every 10 minutes, Australians dump 15 tonnes of clothing and fabric waste.
That adds up to 800,000 tonnes, or 31 kilograms per person, every year.
That's why discarded textiles are the next target of the federal government's war on waste.
The problem is both the amount of clothing and fabric Australians churn through, and the limited options available to divert them from landfill, Environment Minister Sussan Ley said.
"We all have to wear clothes but we are buying them at such a rate that we don't know what to do with them when they are too old, too worn or simply out of fashion," she said.
"Ninety per cent of our current textile waste ends up in landfill."
She announced on Tuesday the government would host a national roundtable on the issue, bringing together the fashion industry, retailers, reuse charities, fibre producers, researchers and waste management.
Retail giant Kmart and the Australian Fashion Council have already put their hands up to be involved.
Ms Ley also announced $350,000 would be allocated to Circular Threads, a group focused on reducing the amount of fabric headed to dumps.
Led by the Australasian Circular Textile Association, it will start by looking at technologies that can separate and re-purpose polyester and cotton components, and create re-manufacturing opportunities and jobs in Australia.
Addressing the landfill created by school and work uniforms is a good place to start, Ms Ley said.
"According to ACTA, parents who have just been purchasing school uniforms and tradies getting ready for the year ahead will contribute 12,000 tonnes of branded uniforms alone to landfill in the next twelve months ... the equivalent to dumping four million bricks or 7500 family sedans."
She lauded Sydney start-up Worn Up, which re-manufactures the raw material from discarded uniforms into new products including school desks and acoustic tiles.
But individually, Australians needed to make more conscious and ethical clothing choices, Ms Ley said.
"This doesn't have to mean people pay more."
"Making good fashion choices can be as simple as choosing timeless pieces for longevity, avoiding fast fashion, and shopping for pre-loved clothing wherever possible."
Source: Yahoo News
After the completion of the transition period of Brexit on December 31, 2020, EU and UK customers came under burden with unexpected duties and taxes on various products. Additional taxes are imposed for product returns, which affect the profit margins of retail companies, more so for e-commerce retailers. Hence UK-based big brands suspended sales to EU.
Courier charges between the two regions have also increased with potential additional administrative costs. Under new rules, anyone sending parcels from the EU to the UK needs to fill in forms including proof of origin and the reason for sending the package. Retailers selling to the UK must pay customs duties and fill out declaration forms, as well as register for value-added tax (VAT) in the UK.
Further, VAT relief on imported goods under £15 has also been abolished. Hence, some retailers and delivery firms are charging extra from customers to cover this cost. The charges depend on the country, whether the package is a gift or commercial goods, and its value. Goods under €35 which were previously exempt from VAT, are now taxable.
The UK companies have to pay a duty on import of products when outsourcing from non-EU countries with additional charges to export that products.
These products need to follow the complicated rules of origin to get a tariff-free status. Hence few big brands suspended their product exports/online sales to EU.
In addition, product returns by the EU customer to the UK brand and the UK customer to the EU brand face extra duties and taxes, apart from the duty paid while shipping the product.
According to the UKFT (UK Fashion & Textile Association), Brexit may increase in freight levels after reopening of the retail stores in the region. For online stores, the costs got increased with use of Mastercard plans and additional fees incurred for customers using a UK card to buy a product from an EU retailer.
The UK fashion industry and retail sector may face more challenges due to the government’s abolition of its VAT (Value-Added Tax). It may incur additional charges for showcasing their products at the trade shows arranged in the EU region.
According to international members at the Road Haulage Association (RHA), Britain’s exports to the EU plunged by 68 per cent in January 2021, after the end of the transition period.
Businesses and hauliers have adapted new trading arrangements, including new systems for companies and officials in the British province of Northern Ireland. Some businesses have struggled with new customs declarations and health certificates.
Source: Fibre2Fashion News
The government, through Presidential Ordinance, must abolish all duties and taxes and allow duty-free import of cotton yarn which is the raw material of value-added textile sector in order to sustain and achieve milestone in enhancement of exports.
The government should also place ban on export of cotton yarn of 30 single or below till June 2021 ensuring availability of quality yarn to facilitate export sector to complete their export orders without hassle and unrest. In view of shortage of wheat and sugar, the government had allowed to import wheat and sugar and also banned their export to cater the national needs.
Consequently, without discrimination, in order to overcome the scarcity of yarn in the Pakistan, as government previously allowed for import of pharmaceuticals, it is also most crucial to allow import of cotton yarn from neighbouring country through Wagah border as the quality yarn is not available and prices are also multiplied to manifolds.
Likewise, anti-dumping duties on goods imported meant for re-export by Export Oriented Units and Manufacturing Bond should also be abolished.
Moreover, to turn vision of the Prime Minister for enhancement of exports into reality and to control the declining trend in exports, the government should freeze the special tariffs of 7.5 cents for electricity and $ 6.5 for gas for at least next three years and provide uninterrupted and quality electricity and gas providing level playing field and competitive environment to enhance their export efficiency and materialize all exports orders.”
This was demanded by the Value-Added Textile Associations - Zubair Motiwala, Chairman, Council of All Pakistan Textile Associations (CAPTA), Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum, Riaz Ahmed, Central Chairman Pakistan Hosiery & Manufacturers Exporters Association, Tariq Munir, Zonal Chairman (SZ), Farrukh Iqbal, Senior Vice Chairman PHMA (NZ), Ijaz Khokhar, Former Chairman, Pakistan Readymade Garments Manufacturers & Exporters Association, Haroon Shamsi, Former Chairman, Towel Manufacturers Association and Zia Alamdar, Former President, Faisalabad Chamber of Commerce & Industry in an online meeting held with Abdul Razak Dawood, Advisor to Prime Minister on Commerce & Textile, today.
The value-added textile sector has emphasized that the vision of Prime Minister Imran Khan for industrialization, increasing exports, creating trade surplus, generation of employment opportunities and earning precious foreign exchange shall become possible only when raw material - cotton yarn and uninterrupted supply of utilities is ensured on special tariffs approved for export-oriented industries.
The Value-added Textile Exporters are highly worried over the unavailability of cotton yarn - which is basic raw material in the local market despite huge export orders are available with the value added textile.
On the demand of textile exporters, Government, previously, considered removing the Regulatory Duty only.
Sense of severe unrest and uncertainty prevails as exporters feel it “discriminatory” because in the case of cotton, the Government had allowed complete duty-free import.
Removal of Regulatory Duty has supported the value-added textile sector to some extent whereas, the situation necessitates and demands to also remove the Customs Duty to fully support the value-added textile sector to complete their export orders which they have materialized for the next several months.
The gravity of situation demands the Government to immediately abolish Customs duty on import of cotton yarn by passing through a Presidential Ordinance, in the interest of export and the country.
The associations also expressed severe concern on the recent announcement of the federal government regarding discontinuation of gas to the industrial captive power plants which depicted a bleak picture in eyes of foreign buyers across the globe, particularly of US & EU who become doubtful as to how the Pakistani exporters will complete export orders?
The buyers have also communicated that since there will be no gas and orders cannot be completed, therefore, they are thinking to divert the export orders given to Pakistani exporters to other countries.
The associations’ representatives lamented that 225 CPPs of Industries in Sindh were closed abruptly. The Government later clarified that the announcement was related to energy efficiency benchmark.
The associations reacted that the CPPs of industries were more efficient and productive as compared to CPPs of utility companies. More than a decade back the export industries invested in CPPs on the offer of the then Government when the utility companies were failed to provide required quality electricity and there were load-shedding problems.
Now the sitting Government is asking to close the CPPs and take electricity from utility companies which is totally contradictory. The Associations stated that the utility companies neither have the required quantum of electricity to supply to industries nor have the adequate infrastructure available for the purpose, thus, the Government must refrain from such unwise move which will bring disastrous effects on industries and exports.
Abdul Razak Dawood, Advisor to Prime Minister on Commerce & Textile gave patient hearing to the issues and problems confronting to the Value-Added Textile Industry and assured that he will take up the matter with the Prime Minister and Cabinet and the Government will consider and resolve some of the issued highlighted in the meeting.
Value added textile export industry contributes around 62% in total exports, provide highest urban employment particularly to female workforce and supports approx. 40 allied industries.
In view of its significant importance in the economy and free market mechanism, the Government must consider the appeal of value-added textile sector for duty-free import of cotton yarn to ensure availability of cotton yarn of good quality.
Such state of affairs demands the government to remove 5% custom duty on import of 30 single yarn and below count and the exporters, manufacturers and importers, shall be given full liberty to import yarn from any country till the scarcity of cotton yarn is controlled and required quantity of yarn is available in abundance in all Pakistani markets to complete the export order smoothly.
Source: Business Recorder
GIZ, a German-based organisation, has expressed interest in providing more technical assistance to the country’s textile education sector and creation of skilled human resources in it.
A three-member delegation, led by UGC member (administration) Professor Muhammad Alamgir and GIZ’s project manager Christian Bachmann, expressed interest to start a new project while conducting a meeting in this regard Monday, said a press release here.
The company has proposed a new project called ‘Higher Education and Leadership Development for Sustainable Textiles in Bangladesh (HELD)’. The proposed three-year project is expected to start this year to assist the Government of Bangladesh in implementing the Sustainable Development Goals 2030 Development Policy, the release added.
UGC Secretary (additional responsibilities) Ferdous Zaman, Additional Director of Planning and Development of the Commission Durga Rani Sarkar and Deputy Director Roxana Laila were present, among others.
The project, worth about Taka 300 million (three million euros), would help in the expansion of higher education and building skilled human resources in the textile sector in Bangladesh.
It will also develop research in the textile and ready-made garments sector of the country and enhance the skills of the managers engaged in the sector.
Source: The Independent News
Over 65 chief executive officers (CEOs) recently wrote to British prime Minister Boris Johnson calling for greater protection for shop workers in England and Wales.
Verbal abuse and violence have been increasing for some time but a survey by the British Retail Consortium (BRC) found this has accelerated as a result of COVID safety measures.
The letter calls for legislation to make assaulting shop workers a separate offence, the same as in Scotland, according to a BRC press release.
The CEOs of 65 leading retailers and industry bodies requested Johnson to take urgent action to tackle violence and abuse towards retail workers.
The letter called for treating the issue with the seriousness it deserves and improve protection for employees by creating a new statutory offence of assaulting, threatening or abusing a retail worker.
This legislation would toughen sentences for those who are violent or abusive towards shop workers, deter future perpetrators and ensure shop workers feel safer at work, the press release said.
Two thirds of respondents in the survey reported an increase in the number of incidents of physical violence against staff during the current lockdown. All retailers who reported a rise in verbal or violent attacks said that the enforcement of COVID restrictions was the key factor.
One leading retailer reported 990 incidents of violence or abuse in the first week after face coverings became compulsory in shops.
"The BRC has repeatedly called on the Government?to take action and protect our colleagues from harm. Every day over 400 retail staff are attacked, threatened, or abused in their place of work. Over 150,000 in 2019, and these numbers have been rising during the pandemic. Those attacked are our friends, our family, our colleagues. This cannot go on,” BRC chief executive Helen Dickinson said.
Source: Fibre2Fashion News
Kenya is currently negotiating a free trade agreement (FTA) with the United States of America. This is in line with the Fourth Schedule of the Constitution, which vests functions on foreign affairs, foreign policy, and international trade with the national government.
The timing of the negotiations could not have been more opportune given the expected expiry of the African Growth Opportunity Act (Agoa) in September 2025.
If Agoa expires without a tangible preferential trade agreement in place, the only way Kenya, as a developing country, can continue trading with the US is through the Generalized System of Preference (GSP), in accordance with the General Agreement on Tariffs and Trade (GATT) 1994 or under Most Favoured Nation (MFN).
Over 90 percent of the tariff lines under GSP qualify for duty-free preferences under Agoa’s eligibility provisions. However, if Kenya’s trade with the US was to be governed by GSP, the country would be unlikely to sustain or improve her export volume into the US since GSP only promises preferential market access for 4,800 product lines, which is not necessarily duty-free.
Indices on revealed comparative advantage by World Bank and United Nations Conference on Trade and Development (UNCTAD) indicate Kenya enjoys bilateral comparative advantage with the US in agricultural products like tea and mate, fruits and vegetables, livestock and livestock products, coffee and coffee substitutes, sugar confectionery, cereals, spices, tobacco, hides and skins, margarine, jute and textile fibre, and concentrates of base metals.
Thirty percent of these products are Kenya’s frontier products, offering opportunity for product diversification and export promotion.
The country has the highest total factor productivity (TFP) in textiles, garments, non-metallic, basic metals, and machinery subsectors. As a measure of how efficiently resources into production process are converted to final goods and services, TFP is important in signalling sectors where government incentives and trade policy should be directed.
Under Agoa and the GSP, 78 percent of US exports face duty-related barriers while entering Kenya. Instituted in 1971, the GSP aims at supporting the trading environment in developing countries through, among others, supporting infant industries to improve productive capacity for long-term industrialisation and development. The US is among 13 countries that grant GSP preferences to developing countries like Kenya.
The Kenya-US FTA negotiations are aimed at creating a liberal, facilitative, and competitive investment environment. Investment negotiations are focused on four pillars covering promotion, protection, facilitation, and liberalisation.
Under the FTA, it is expected that investment restrictions will be lessened, creating incentives to US firms to target Kenyan sectors with the highest total factor productivity for foreign direct investment.
Given these are Kenya’s nascent sectors targeted to drive manufacturing, and food security and nutrition as enshrined in the Big Four Agenda, Kenya can consider pushing for simplification of procedural requirements under article XVIII(b) of GATTs 1994 on balance of payment measures to protect the sectors at intermediate and final goods level while considering slight liberalisation at the inputs stage where the country has constraints in endowment of raw materials.
A Kenya-US FTA would allow for a reciprocal bilateral trade, thus reducing tariff barriers. To reasonably support sectors facing the risk of enhanced competition, an exclusion criterion detailing what US goods and services should be allowed into the Kenyan market is necessary.
The criterion should factor in tariff lines classified as sensitive under East African Community’s (EAC) Common External Tariff (CET) and the Economic Partnerships Agreement between the EAC and the European Union (EU).
Further, products from the highly subsidised US agricultural sector should be excluded from liberalisation in the trade agreement.
Kenya stands to benefit from technology, knowledge, and intellectual property transfers in sectors like services, agriculture, and manufacturing. Negotiators need to promote access to the US market for Kenya’s frontier products through more flexible rules of origin than it is currently under Agoa.
Among the frontier products that need promotion include milk products, iron and steel products, pharmaceuticals, and paper articles.
To safeguard the EAC market while expanding the US market share, Kenya needs to inform the EAC Council of Ministers of the intention to have a free trade agreement with the US for consent.
To come up with an FTA that does not limit the potential of Kenya’s agricultural and manufacturing sectors to embrace foreign market-oriented production as envisioned in the country’s National Export Development and Promotion Strategy, the Big Four Agenda, and Vision 2030, there is need to draw lessons from other FTAs that the US has had with developing countries like Kenya.
The US-Jordan FTA is a good case study for drawing lessons. The 18-year-old FTA created over 50,000 new jobs within the first few years, attracted trade and foreign direct investments, and contributed to average annual GDP growth rate of seven percent to Jordan.
Under the FTA, Jordan exports more to the US than it imports. Jordan’s private sector representatives, especially chambers of commerce, manufacturers associations, consumer associations, and the academia played an important role in ensuring the FTA reflected the private sector’s needs. Like Jordan, Kenya needs to continue engaging the private sector to further inform the negotiations.
Source: Business Daily
Uzbekistan cotton exports plunged 65.35 per cent to $78.87 million in 2020 compared to $227.61 million in 2019. The drop to $5.98 million was first observed in March from $12.00 million in January.
The cotton exports remained low throughout the year except September at $10.38 million, according to Fibre2Fashion's market analysis tool TexPro.
Uzbekistan planned to ban raw cotton exports to push companies into investing in added value production of finished and semi-finished products such as textiles and fashion.
Government funding and support for cotton clusters had encouraged foreign and domestic companies to implement a more fully integrated supply chain.
Uzbekistan cancelled state regulation of cotton production, price, and mandatory sale from the 2020 harvest season. A decree to this effect was signed by president in March.
Cotton producers got the right to choose their zoned varieties, while a certified seed delivery system got maintained. The government cancelled to produce and sell cotton. Setting the purchase price of raw cotton was also cancelled.
According to the decree, in regions where there were no cotton clusters, voluntary cooperation of farms was organised with the participation of cotton-ginning enterprises, whose main tasks was to join use of machines, equipment, vehicles and factories by members of the cooperative.
From March 15, a new credit mechanism for production and processing of raw cotton was introduced. Commercial banks would provide loans for the purchase of raw cotton for up to 12 months for the collection of cotton and the final calculation. The use of concessional loans and the lack of free distribution of funds have led to a 15-20 per cent reduction in cotton production.
It was possible to freely use loans and freely choose service companies. The structure of agricultural expenditures was diversified, with an emphasis on areas such as science and seed production.
The Uzbek government estimated that ending the boycott, which was supported by more than 300 apparel manufacturers and retailers, could let the country earn extra $1 billion in a year alone by selling cotton and textiles on western markets.
In April 2020, Uzbek government urged to lift the ban on cotton exports of country to fight against the loss due to Covid-19 pandemic, but the cotton campaign said that only complete eradication of forced labour along with civil society reforms such as registering NGOs that monitor worker rights would prompt it to lift the boycott.
Many Chinese firms were approaching Uzbekistan as it could provide high quality raw cotton, cheap labour, power that costs 3 cents per kWh.
In September 2020, Pakistan and Uzbekistan signed a memorandum of understanding (MoU) to set up of a joint working group on trade and economic affairs for promoting economic partnership.
The agreement would help both the nations identify areas for trade enhancement, promotion of inter-governmental projects in different sectors and improve connectivity.
Source: Fibre2Fashion News
