Finance Minister Nirmala Sitharaman on Tuesday explained the government’s priorities to the Reserve Bank of India’s (RBI’s) central board during their first meeting after presentation of the Union Budget 2021-22.
The finance minister addressed the 587th RBI central board meeting and informed the members about key initiatives in the Budget and the priorities of the government, RBI said in a statement.
Complimenting the finance minister on the Budget, the board members made various suggestions for consideration of the government, it added.
“The board in its meeting reviewed the current economic situation, global and domestic challenges and various areas of operations of the Reserve Bank, including ways for strengthening grievance redress mechanism in banks,” it said.
The meeting on Tuesday was chaired by RBI Governor Shaktikanta Das through video conferencing.
The government’s nominee directors on the board — Financial Services Secretary Debasish Panda and Economic Affairs Secretary Tarun Bajaj — also attended the meeting.
Finance minister holds customary meeting with the board members of the RBI and the Securities and Exchange Board of India (Sebi) after Budget presentation every year.
Earlier this month, the finance minister presented a Rs 34.5 trillion Budget for 2021-22 in the backdrop of the coronavirus pandemic.
The Budget laid emphasis on increasing capital expenditure (capex), raising allocation for healthcare capacity building and development of agriculture infrastructure, among others, expected to have a multiplier effect on the economy.
Hit hard by the pandemic, fiscal deficit — the excess of government expenditure over its revenues — is estimated to hit a record high of 9.5 per cent of the gross domestic product (GDP) in the current financial year against Budget Estimates of 3.5 per cent. It was due to increased capex and including government’s dues to the Food Corporation of India.
Earlier this month, Das said the central bank will be able to manage the high quantum of government borrowings at Rs 12 trillion for the next fiscal in a “non-disruptive” manner.
Source: The Business Standard
Input duty reimbursement for exporters of garments and made-ups under the new RoDTEP scheme may be lower than the rates under the previous RoSCTL scheme if the government finds it difficult to meet the needs of all other entitled sectors with the available resources, officials said.
Last year, the Textiles Ministry had extended the Rebate of State and Central Taxes and Levies (RoSCTL) on export of garments and made-ups, which offers reimbursement of input taxes at 6 per cent or more of the exported value, till a time the Remission of Duties and Taxes on Exported Products (RoDTEP) was implemented. It was said that the rates were likely to remain the same under RoDTEP.
“The problem is that with the limited budget for RoDTEP, at around ₹13,000 crore annually, it will be very difficult to provide the RoSCTL rates to the textile sector as it would take up around ₹7,000 crore. The government will be left with less than half the amount for all other sectors,” the official said.
Also read: RoDTEP: Centre examining first part of GK Pillai panel report to see if caps needed
There is a big demand from exporters to expand the budget for the RoDTEP scheme as with the amount being currently considered, many believe it will not be possible to compensate exporters for all the input taxes paid. Initially, the Finance Ministry had said that a provision of ₹50,000 crore will be made for RoDTEP but with the present resource crunch, it may be reduced to less than a third of that.
“The RoDTEP is a duty refund scheme which provides refund of all taxes and duties hitherto not refunded through any other mechanism. If it is a refund scheme, the refund should not be limited to the budget constraints,” according to exporters’ body FIEO.
FIEO has asked the government to provide whatever budget is needed to enable the export sector to get the rightful claim based on the parameters of rates fixation. “We have to bear in mind that India hardly has many options to support exports after losing special and differential treatment. RoDTEP, being a WTO compatible measure, should provide rightful competitiveness to exports not marred by the budget constraints,” FIEO officials said at a recent press interaction.
Rates being finalised
The RoDTEP will be effective from January 1, 2021, although the rates are still being finalised, as the popular Merchandise Export from India Scheme (MEIS) stands withdrawn from December 31, 2020. A WTO panel had ruled that MEIS was incompatible with multilateral trade rules as it could not be directly correlated to the input taxes paid by exporters.
The garments and made-ups sector, which were under primary focus at the WTO, switched over to the RoSCTL scheme from the MEIS much earlier in April 2019 and it was decided that it would be merged with the RoDTEP scheme for all exporters once it was announced.
“The Textiles Ministry has been making a case for retaining the RoSCTL rates of reimbursement for garments and made-ups under the RoDTEP as well but it looks difficult,” the official said.
Although the MEIS scheme had a budget of over ₹50,000 crore, it is being trimmed for the RoDTEP scheme as the government has to also provide for the Production Linked Incentive (PLI) scheme for the identified sectors which is aimed at promoting domestic manufacturing.
Source: The Hindu Business Line
In recent times, every industry has experienced changes in their day-to-day business functions due to the pandemic. Although some businesses faced challenges in regards to lack of investment in digital processes, many others took this as an opportunity to increase their focus on new-age technologies such as AI and edge. With these new investments, bringing the continuity of their business back on track became an easier task to accomplish.
While 2020 was definitely a year for change, even amidst this uncertainty India remained the most digitally matured country in the world. In fact, digital adopters in India, ones who have a mature digital plan, investments and innovations in place, grew to 55.3% in 2020 from 33.5% in 2018.
This is a testimony to the impact that technology transformation has on the future and success of a business.
The message for enterprises is clear: adapt or fall behind
Adapting is exactly what many midsize and enterprise companies are doing. The report also shows that 94.7% of businesses in India have fast-tracked some digital transformation programmes this year, and 92.3% are reinventing their business model.
These companies would need flexible providers, a supply chain that can cope with a sudden ramp-up and internal resources to manage these unexpected changes to routine business processes.
Additionally, midsize to enterprise companies need to vanquish some embedded foes, as most businesses have faced barriers to digitisation. The big hurdles here include data privacy and cybersecurity concerns, the inability to extract useful information from data and lastly, lack of economic growth in the country. Given the many pressures on today’s leaders, it is critical to consider support measures. Here’s how your business can alleviate barriers to adaptability:
• Create a consistent company-wide culture without silos. Given that less than a third of leaders surveyed for the same report communicate with the C-suite to select suitable projects, the need for ownership for the process is apparent. Having strong digital leadership alone is not enough. Silos, even in the C-suite, need to be addressed so that the responsibilities of digital transformation does not rest solely with a chief data officer.
• Commit to reinforcing agile practices. While the move to remote work has rebooted this conversation, it’s now time to really focus efforts on collaborative and quick solutions to challenges. Senior business leaders should be able to lean on scalable IT infrastructure that can respond to uncertain events—ranging from pandemics to natural disasters and outages.
• Focus on AI and Edge computing. Greater focus on digital investment will help companies corral and process the data they are gathering and uncover key insights. Being mired in data is no longer an option.
Every enterprise of tomorrow undeniably needs to be prepared for the uncertain.
During the process of preparing a disaster plan, it is also important to upgrade/adopt newer technologies that will support rapid growth of your business in case of disruptions.
Hence, it is not wrong to say that the growth of a business is directly proportional to the pace of technology advancement.
One thing that is for sure is that digital transformation ensures an adaptable competitive advantage now and in the future.
Source: The Financial Express
Tamil Nadu recently announced its new Industrial Policy 2021 to attract investments worth about ₹10 trillion and generate employment for two million by 2025.
The policy also aims to raise the contribution of the manufacturing sector to 30 per cent of the state's economy by 2030. The state also announced its Micro, Small and Medium Enterprises (MSME) Policy 2021.
The Industrial policy 2021 aims to achieve an annual growth rate of 15 per cent in manufacturing, state chief secretary Rajeev Ranjan said.
The MSME Policy aims to attract investments worth ₹2 trillion in the sector by 2025 and create additional employment opportunities for two million people.
Advisor to the state government and former chief secretary K Sharnmugam said manufacturing contributes 25 per cent to the state's gross domestic product and the sector achieved a compounded annual growth rate (CAGR) of 13 per cent between fiscals 2014-15 and 2019-20.
"Our endeavour is to make Tamil Nadu a strong hub for global manufacturing. The State is focusing on improving infrastructure and reducing the cost of doing business by developing dedicated industrial parks," he was quoted as saying by media reports from the state.
Some of these specialised areas include electric vehicle and bulk drug parks in Manalur, medical devices parks at Oragadam and Chengalpattu, mega textile parks in Dharmapuri and Virudhunagar, and defence and aerospace parks in Sriperumbudur and Sulur.
The Tiruppur Exporters’ Association (TEA) welcomed both the policies, saying these will pave way for industrial growth in the state. TEA president Raja M Shanmugham thanked the government for keeping textiles among the focus sectors.
Source: Fibre2Fashion News
Tamil Nadu is on top compared to all other Indian states as far as textile and apparel export is concerned. The state had export numbers of US $ 6,766 million in 2019-20.
As per the data released by the Ministry of Textiles (MoT), export of Gujarat was US $ 4,901 million, while that of Haryana and Maharashtra were US $ 3,035 million and US $ 3,987 million, respectively, during 2019-20.
The export figure of Karnataka was US $ 2,386 million, while for Uttar Pradesh, Delhi and Punjab figures were US $ 2,853 million, US $ 2,332 million and US $ 1,509 million, respectively.
Being at the bottom, it’s worrying for Punjab. In fact, in the previous two years too, the state’s performance has been dismal as compared with the other states.
Punjab’s apparel and textile players are of the view that Union and State Government are responsible for state’s poor export numbers.
It is pertinent to mention here that Ludhiana and Jalandhar are the main hubs of the state. The state also boasts of textile giants like Vardhman group, Oswal Group and Trident, amongst others.
Known for knitted garments, the state produces almost every product in textile value chain be it cotton, fibre, yarn, fabric, garments, home furnishing, etc.
Source: Apparel Online
Since its constitution on November 27, 2017, the Fifteenth Finance Commission’s Terms of Reference evoked concerns from some states owing to its mandate for the use of population data from census 2011 instead of 1971.
There were also issues like creation of non-lapsable defence fund and use of certain parameters for performance incentives that induced debates in the span of its operation. Besides, it was the first Commission to submit its report in times of a global pandemic that had slowed down economic growth and made the assessment of revenues difficult.
The Action Taken report on the Commission’s recommendations was laid in Parliament on February 1, 2021, with of most of the recommendations being accepted by the government of India.
The Commission, in its final report, recommended vertical devolution of 41%, making only the required adjustment of around 1% due to the changed status of the erstwhile state of Jammu and Kashmir into the new Union Territories of Ladakh and Jammu and Kashmir, the logic being that the resources for these UTs will now be provided by the Union government.
The Commission felt that this level of vertical transfers will allow appropriate fiscal space for the Union as well as help states to meet their demands of unconditional resource transfers from the Union.
For horizontal distribution of revenues, it carefully tried to balance the principles of expenditure needs, equity and efficiency with appropriate weights while deriving the devolution formula.
The weightages assigned to population (15%), area (15%) and forest and ecology (10%) represented the ‘need’ criterion, while ‘income distance’ (45%) represented the ‘equity’ criterion.
In addition, it gave appropriate weightage to tax and fiscal efforts (2.5%) and demographic performance (12.5%) as ‘efficiency’ criterion to allay the fears of the more efficient states in the country.
The use of the demographic performance criterion ensured that states which have done well in terms of demographic management and other human development areas are not penalised.
Overall, the Commission managed to maintain the stability and predictability of resources to states with its scheme of devolution.
At the same time, the formula also remained fairly progressive to achieve the equity objective.
Like all other Commissions in the past, this Commission also recommended grants-in-aid which fell into five broad categories: (1) revenue deficit grants, (2) grants for local governments, (3) grants for disaster management, (4) sector-specific grants and (5) state-specific grants. Similar grants have been recommended by Commissions in the past. Grants in their very nature tend to be targeted, focusing on the specific sectors they are designed for. Some of these grants have been linked with performance-based criteria to promote these sectors in furtherance of national goals.
Also, attaching performance criteria to grants may enhance transparency along with accountability, providing necessary feedbacks on improving formulation and implementation of policies, thereby leading to better monitoring of expenditures. The Commission recommended grants aggregating to Rs 10,33,062 crore, which is 6.74% of gross revenue receipts to states.
It also recommended a revenue deficit grant of Rs 2,94,514 crore to 17 states, over a period of five years (2021-26). This saw an increase of over 50% from the Fourteenth Finance Commission, wherein these grants were provided to only 11 states. The revenue deficit grants try to account for cost disabilities and fiscal capabilities of states, which may not have been fully addressed by the horizontal devolution formula.
The Fifteenth Finance Commission has recommended grants of Rs 4,36,361 crore from the Union government to local bodies for 2021-26.
This is an increase of 52% over the corresponding grant of Rs 2,87,436 crore by its predecessor for the period 2015-20.
These grants derive their basis from the 73rd and 74th constitutional amendment Acts, and empower the local governments that are closest to the people at the grassroots level.
The sets of efficiency requirements recommended by the Commission for availing local bodies’ grants are quite different.
It may be noted that efficient and smooth functioning and accountability of local bodies has been plagued by (a) absence of timely recommendations of State Finance Commissions, (b) lack of readily accessible accounts and its auditing and (c) inadequate revenue mobilisation especially for municipalities.
Finance Commissions in the past have also drawn attention to these issues; however, the success has been limited. The Fifteenth Finance Commission has imposed these as entry-level conditions for availing local bodies’ grants.
Another distinguishing feature of these grants is their focus on national priorities of sanitation, solid-waste management and improvement of air quality, particularly in the million-plus population cities. In addition, channelising the health grants through local bodies is an important initiative for achievement of the goal of universal healthcare coverage.
The Commission’s recommendation for setting up of ‘mitigation funds’ at both the national and state levels, in line with the provisions of the Disaster Management Act, is both well-timed and necessary. This fund should be used for those local-level and community-based interventions that reduce risk and promote environment-friendly settlements and livelihood practices.
The Commission’s recommendations on defence and internal security, development of incubation centres, new measures for enhancing resource mobilisation during these tough times and its focus on streamlining the extra-budgetary borrowings make it unique and futuristic in its approach.
In this spirit, and in this time, the objective of the Fifteenth Finance Commission was not only to fulfil the traditional mandate of allocating revenues across levels of government, but also to put in place and reinforce the structures, habits and building blocks to increase our adaptability as a nation, a union of states, and a partner in a more sustainable global trajectory for human development. The Commission’s recommendations will go a long way in strengthening the pillars of fiscal federalism in the country.
Source: The Financial Express
The Tamil Nadu government is eyeing an annual growth rate of 15 per cent in the manufacturing sector, and targeting investments worth Rs 10 lakh crore and jobs for 20 lakh people by 2025. This was revealed on Tuesday, when Chief Minister Edappadi K Palaniswami unveiled the Tamil Nadu Industrial Policy 2021 and State MSME policy.
As many as 28 MoUs, for a total investment of Rs 28,053 crore, were signed at the event, which highlighted how the State is wooing investments even when the world is battling the Covid-19 outbreak. The new investments, if realised, would generate 68,775 jobs.
The investments are in various sectors, including electric vehicles, wind energy, auto components, city gas, and textiles. During the event, the Chief Minister also laid foundation stones for 10 new industrial parks and estates, and inaugurated projects worth Rs 3,469 crore. In total, 46 projects, with an investment of Rs 33,465 crore and providing jobs to 2,19,714 people, were launched on Tuesday.
‘Policies aimed at boosting new sectors’
SPEAKING on the occasion, Palaniswami said the new industrial and MSME policies are aimed at boosting new sectors, such as food processing, and giving incentives to those creating jobs for transgender persons and per sons wi t h disabilities. He also released a postal stamp to commemorate the golden jubilee of SIPCOT. He also launched the SIPCOT Industrial Innovation Centres at Sriperumbudur and Hosur, which were set up at Rs 20 crore each.
Through them, the State intends to accelerate the adoption of technology in industrial projects with a focus on Industry 4.0, advanced manufacturing and future mobility. Besides this, the CM laid the foundation for four new industrial parks of SIPCOT- Manapparai (1,077.04 acres of land; Rs 500 cr investment), Maanallur (691.587 acres; Rs 250 cr investment), Oragadam (476.12 acres; Rs 375 cr investment), and Dharmapuri (1,733.40 acres; Rs 480 cr investment).
These parks will cater to the requirements of the automobile, auto components, food processing, general engineering, e-vehicle manufacturing and textiles sectors, and create jobs for more than one lakh people. Palaniswami also laid the foundation for two plug-and-play flatted factories with 250 modules at the Ambattur and Guindy Industrial Estates. The CM also inaugurated the new TICEL Bio Park at Coimbatore.
The state-of-the-art facility will be the tallest building in the city. It was constructed on a sprawling 10 acres of land, with an investment of over Rs 85 crore, and has a built-up space of 2.29 lakh square feet. Foundation stones were also laid for the formation of six new TANSIDCO industrial estates spread over 280 acres and set up at Rs 200 crore in Chengalpattu district, Periya Seeragapadi and Umayalpuram in Salem district, Alangudi in Pudukkottai district, Periyakolapadi in Tiruvannamalai district, and Rasampalayam in Namakkal district.
Besides, the CM inaugurated coir clusters set up at Rs 1,811.92 lakh, including Noyyal Coir Cluster in Erode district. These will produce geo textiles, coir pith blocks and tufting matting, and provide direct employment to 600 people and indirect employment to 1,500 others. He also gave away awards to outstanding MSME entrepreneurs in the categories of best entrepreneur, quality & export, woman entrepreneur, agro-based industry, and to banks that gave more credit.
INDUSTRY HAILS NEW POLICIES
Chennai: The industry has welcomed the new industrial policy and said that it looked at enhancing the inclusiveness, transparency and flexibility through the newly-formulated schemes of subsidies and incentives meant to attract investors into the State. The Madras Chamber of Commerce & Industry (MCCI) said they were happy many of their suggestions were adopted.
MCCI president, Srivats Ram, said the policy has an online planning permission and building option for firms on government industrial parks. There are incentives for setting up industrial parks, logistics parks, skill development centres and for firms greening their manufacturing set-ups. Meanwhile, the Tamil Nadu Small and Tiny Industries Association said the policy got updated at the right time as the market had started picking up after the pandemic. TANSTIA president, S Anburajan, said the move to set up an Estate Infrastructure Corpus Fund will enhance MSME performances.
Interim Budget on February 23
The Interim Budget for 2021-22, to be presented by Deputy Chief Minister O Panneerselvam on February 23, is likely to have some new announcements although the general convention is not to have any new initiatives
Source: The New Indian Express
West Bengal has set a target to double the state's textile industry to ₹70,000 crore over a period of three to five years. The state has also decided to set up a task force to implement the target, West Bengal Industrial Development Corporation (WBIDC) chairman Rajiva Sinha said. The state has also received a proposal for a ₹550-crore poly-fibre manufacturing unit in Haldia.
State finance minister Amit Mitra told an interactive session that the potential of export from West Bengal is far more than what has been is tapped. Textile export from the state is around 2.7 per cent of the total export from the country, he said. In the next three to five years, it should go up to 10 per cent, he hoped.
The readymade garments sector in Kolkata's Metiabruz itself is worth ₹15,000 crore, and has the potential of growing up to ₹25,000 crore in the next few years, he said. The minister emphasised on hosiery export to Europe, South East Asia and the United States.
The work for the Nungi textile hub near Kolkata has already started and it will attract an investment of ₹440 crore, he said. The first spinning mill in Howrah would come up at Jagdishpur, he added.
Source: Fibre2Fashion News
Arvind Fashion Ltd (AFL), that runs stores of Calvin Klein, Tommy Hilfiger and Sephora, finds India to be the most lucrative market in Asia as it holds a kitty of over 100 cities and small towns for fashion retail business.
According to Shailesh Chaturvedi, the newly-appointed managing director of AFL, the company has given him the mandate to expand and grow its brands in smaller towns this year.
“Most countries in this part of the world offer one-city business. Indonesia just has Jakarta. Philippines has Manila. Australia has only Melbourne, Sydney and Brisbane,” said Chaturvedi. Having worked in Hong Kong at casual apparel rival Benetton in 2005-06, he compared and said, “India, on the other hand, has large consumption centers in smaller cities for both online and offline retail. It offers 100-plus cities to do business in, like China.”
This insight on India comes even as AFL is raising Rs 200 crore to strengthen its balance sheet this year. In the fiscal, the retailer pruned its portfolio of brands and exited some, including Gap, The Children’s Place and Hanes in a bid to cut losses.
In July, Walmart-owned Flipkart had picked up about 27% stake in AFL’s newly formed subsidiary Arvind Youth Brands, which owns denim label Flying Machine.
The casual and denim player, however, expects full business recovery by mid-year paced by the ongoing vaccination drive. It registered 80% recovery in the third quarter ended December driven by good festive season and winter sales.
“We want to penetrate small cities and Tier 3 and 4 towns as we noted growth in our business in these markets over last year. Covid-19 has not hit these markets,” Chaturvedi told ET.
AFL, owned by Ahmedabad-based textile manufacturer Arvind Ltd, started operations in 1993. Currently, the BSE-listed company is present through 1,200 exclusive brand outlets, 14,000 multi-brand outlets and 3,400 large format stores.
Source: The Economic Times
It’s been a cracker of a results-season. If the headline numbers don’t seem impressive, it is due to several exceptionals and base effects.
In reality, a big rebound in revenues, driven up by better volumes and price hikes, together with some even bigger cost-cutting, has resulted in strong bottom lines.
The restoration of supply chains and the return of workers to factories clearly enabled production teams to meet the festive, wedding and also pent-up demand.
With infections falling and the vaccine having arrived, it is not surprising earnings estimates for both FY22 and FY23 have been bumped up. It is not only the top-rung—the Asian Paints and HDFC Banks of the world—that are expected to do well, but others too. Analysts point out that in a disrupted environment, they are gaining market share at the expense of the unorganised sector; that is evident from the robust GST collections.
Moreover, they have been able to cut costs, and while not all of it may result in a permanent saving, a fair share could. So salaries would be restored and increments re-started as the business picks up. However, at the same time, companies are attempting to make do with smaller teams and more temporary staff; of late, several manufacturing firms have rolled out VRS schemes. Even as the total wage bill of the private sector saw only a modest increase in H1FY21, net of IT and BFSI companies, it actually shrank.
Consequently, given how the unorganised sector has been hit badly, it would be imprudent to believe companies across the board are going to be able to sustain revenue growth or margins at the current pace.
For one, the rising prices of commodities—especially crude oil—will start to pinch, and not everyone will be able to take price increases to pass on the higher input costs. In fact, demand for a host of consumer goods could peter out once the demand from the more affluent households has been satiated; analysts point out that lockdowns necessitated purchases of homes and also a range of goods.
While the sales of affordable homes could well retain momentum, whether this holds for more expensive residential properties remains to be seen.
We can’t lose sight of the fact that a very large number of urban households—and thousands of small enterprises—have been badly impacted by the pandemic and this would affect consumption, at least in the near term. The muted sales of two-wheelers are evidence that these have become unaffordable for many after the price increases.
For consumption demand to grow meaningfully or even to hold up post FY22, we need to see large-scale investments in new ventures so that many more new jobs are created.
The government is supporting the housing, infrastructure and manufacturing sectors, and the several projects and schemes should throw up employment opportunities for both blue- and white-collar workers. For the moment, though, the private sector is not expected to chip in for various reasons.
While the IT services and start-ups sectors are hiring in large numbers, and this would, no doubt, support consumption, investments are needed to build a strong consumer universe. There is no doubt the economy has made a strong and quick comeback, but to confuse this with a sustainable one would be premature.
Source: The Financial Express
Indian Commerce Minister Piyush Goyal said on Wednesday he will engage with the new U.S. Trade Representative's office on a trade deal after a previous attempt to seal a limited accord failed.
Negotiators from both countries struggled to conclude a 'mini' trade package for months as both New Delhi and Washington sparred over a range of issues, including tariffs. Goyal said he would make a new start with the new U.S. administration.
"I will also engage with the new USTR to try and put together a fresh package. I think the old one is now off the table," Goyal said at a U.S.-India Business Council event.
Goyal said India had taken series of measures to liberalise its economy and hoped for new investments from U.S. firms.
"One specific ask of the U.S. to increase the FDI limit in insurance has been accepted," Goyal said.
In its federal budget, India lifted caps on foreign investment in its vast insurance market as part of steps to help revive an economy that has suffered its deepest recorded slump as a result of the pandemic.
Goyal said both countries were working in healthcare sector, among areas of collaboration, citing its success in tackling the pandemic.
"We are working with the U.S. administration also, exchanging ideas, working on broad contours of greater engagement even on the healthcare sphere."
As the world's biggest vaccine maker, India is set to play a key role in the production of COVID-19 shots.
Differences between India and the United States have remained on a large set of issues related to e-commerce and data storage rules.
Goyal said India was concerned about the behaviour of big tech companies, including U.S. firms and would want to protect policy space, including data privacy.
"We are concerned about big corporations holding a lot of data of our citizens, often using them for cross-businesses or across their different sectors," Goyal said.
Source: The Economic Times
The industrial policy 2021 provides a higher set of incentives to companies looking to relocate from other countries, and incentives to the sunrise sectors.
Investment proposals from companies having relocation plans may be provided a higher set of incentives on a case-to-case basis, including a transport subsidy of ₹10 crore. For companies wishing to invest in the sunrise sectors, the policy provides a higher set of incentives, along with a larger training subsidy, research and development reimbursements and patent and certification costs.
The policy has identified aerospace and defence applications, agro and food processing (except edible oil industries), electronics system design and manufacturing, electric vehicles, electric vehicle cell and battery manufacturing or any green-fuel technology such as hydrogen fuel, biotechnology, petrochemicals and speciality chemicals as the sunrise sectors.
The policy states that a special incentive package will be provided to the developers of private industrial parks. The State shall continue to promote the existing focus sectors such as automotive, chemicals, heavy engineering, leather, textiles, financial services and software.
The existing policy for reservation of 20% of the land area in the Sipcot Industrial Parks for the micro, small and medium enterprises shall continue.
The government and its agencies shall develop integrated townships with social infrastructure in the new and existing growth centres and industrial complexes.
Initially, 15% of the area of industrial parks exceeding 500 acres shall be reserved for social infrastructure. Subject to the applicable labour laws, flexibility in employment conditions — flexible working hours, 24x7 operations (3 shifts), employment of women in night shifts and flexibility in hiring contract labour — will be permitted.
Following the recommendations of the C. Rangarajan Committee, which looked into the impact of COVID-19 on the State’s economy, the government shall create an industrial ecosystem fund, with a corpus of ₹500 crore, to support small infrastructure projects and ecosystem creation.
A venture capital fund will be created with a corpus of ₹500 crore to support entrepreneurs undertaking ventures in the sunrise sectors. Manufacturing projects creating jobs for at least 50 persons will be eligible for incentives.
The projects will be categorised as ultra mega (with an investment of ₹5,000 crore), mega (investment ranging from ₹500 crore-₹5,000 crore), large (from ₹300 crore-₹500 crore) and sub-large (₹50 crore-₹300 crore).
“With the new industrial policy, we hope to see Tamil Nadu emerge as a leader not only in traditional industries like automotive and textiles but also in emerging sectors like electronics,” said Venu Srinivasan, Chairman, TVS Motor.
Srivats Ram, president, the Madras Chamber of Commerce & Industry, said the policy had widened the scope for eligibility for incentives by including a sub-large category, and there were greater incentives for lesser developed districts.
“The new industrial policy should help give a boost to the post-pandemic economy of the State and attract fresh investments into the State, generating employment and creating value.”
Source: The Hindu Business Line
Welspun India, an Indian home textiles company, has reported 27.7 per cent growth in its total income to ₹2,049.7 crore during the third quarter (Q3) FY21 that ended on December 31, 2020, compared to the income of ₹1,604.9 crore in the same quarter previous fiscal. Net profit for the quarter rose to ₹174.8 crore (Q3 FY20: ₹75.0 crore).
EBITDA (earnings before interest, taxes, depreciation, and amortisation) increased 75.3 per cent to ₹418.7 crore (₹238.9 crore), while total expenses were up to ₹1,800.8 crore (₹1,544.0 crore) in the third quarter.
“I am pleased with the all-round performance during the quarter. In tough times, the Welspun family has been at the forefront converting challenges into opportunities and 2020 was no different. We worked harder than ever before and our efforts are being recognised by clients & other stake holders,” BK Goenka, chairman, Welspun Group, said in a press release.
Revenue of home textiles segment during Q3 FY21 increased 27 per cent to ₹1,967.2 crore (₹1,549.0 crore). While, flooring segment’s revenue grew to ₹97.7 crore (₹21.8 crore).
During the quarter, Welspun’s plants at Vapi and Anjar operated at peak capacities, as release said. Bath linen sales volume grew 17 per cent YoY, whereas, bed linen sales volume grew 43 per cent. Rugs and carpets sales volume jumped 28 per cent
“We continue to pursue our differentiation strategy through branding and innovation, coupled with the thrust on digitalisation and e-commerce initiatives. We are well poised to meet the increasing demand emanating from the structural shift in the global home textile industry,” Goenka said.
Source: Fibre2Fashion News
Top fashion and lifestyle retailers Levi Strauss and Hennes and Mauritz (H&M) have said their India operations were among the most affected globally by the coronavirus pandemic.
India saw the world’s second-largest Covid-19 outbreak, necessitating back-to-back lockdowns and local shutdowns, which hit trade. Fashion was among the worst-hit segments. Retailers continue to grapple with low footfalls in high-street stores and malls despite the eventual easing of curbs.
Denim major Levi Strauss, which posted a sequential sales improvement globally in the fourth quarter and in the fiscal ended November 29, 2020, said in its results, “The most significant market impact was a $18-million reported decline in India, where the impacts of Covid-19 to shopper traffic remained severe, despite many stores being open during the fourth quarter.”
An email query to Levi Strauss remained unanswered till as of press time.
Swedish retailer H&M reported a decline of 22% in India net sales in the full year (December 1, 2019 - November 30, 2020) compared with 20% decline in the company’s net sales globally, according to its latest financial report.
A spokesperson for H&M said 2020 was an extreme year and “everyone has been affected by the Covid-19 pandemic. That’s the biggest reason why differences are seen from market-to-market”.
The spokesperson added that the company opened two new stores during the pandemic and launched its own digit loyalty programme and an exclusive global designer collaboration with Simone Rocha.
“We see immense potential in the market and will continue to improve our customer experience across channels,” the spokesperson said.
In September, global retailer Gap and Arvind Lifestyle Brands terminated their franchise business relationship in India, citing the pandemic as reason. "Due to circumstances post the corona pandemic, both companies agreed that a mutual termination was in both companies' best interest," Arvind had said in its regulatory filing at the time.
Arvind Fashion Limited (AFL)--another Arvind enterprise which runs stores of several international brands Calvin Klein, Tommy Hilfiger and Sephora--said the country's fashion retail segment should fully recover only by mid-year, paced by the vaccination drive.
Even though Covid-19 cases in India are on the decline and most of the brick-and-mortar outlets are operational, the pandemic-induced economic slowdown still weighs on the sales of many discretionary items.
Despite most companies reporting sequential growth, driven by festivals, winter sales and online shopping, several fashion retailers who were hoping for business at their offline stores to return to pre-pandemic levels by March, now expect full recovery to happen only in the second half of this year.
Source: The Economic Times
German sportswear manufacturer and retailer Adidas is planning to divest its Reebok brand, around 14 years after its acquisition. The decision is based on Adidas' assessment of strategic alternatives for Reebok, as part of the development of its new five-year strategy.
Adidas will report Reebok as discontinued operations from first quarter of 2021.
"Going forward, the company intends to focus its efforts on further strengthening the leading position of the Adidas brand in the global sporting goods market," Adidas said in a statement.
The company will unveil more details on the strategic business plan until 2025 at its virtual Investor and Media Day on March 10, 2021.
“The long-term growth opportunities in our industry are highly attractive, particularly for iconic sports brands,” said Adidas CEO Kasper Rorsted. “After careful consideration, we have come to the conclusion that Reebok and Adidas will be able to significantly better realise their growth potential independently of each other. We will work diligently in the coming months to ensure a successful future for the Reebok brand and the team behind it.”
As a result of the successful implementation of the turnaround plan "Muscle Up" initiated in 2016, Adidas was able to significantly improve Reebok's growth and profitability prospects, laying the foundation to unleash its full potential in the highly attractive global sporting goods market.
In Q3 2020, Reebok’s net sales fell 7 per cent to €403 million ($488 million), after a decline of 44 per cent the preceding quarter. In 2019, Adidas wrote down Reebok’s book value by nearly half, compared with 2018, to €842 million.
Source: Fibre2Fashion News
In March 2020, when a constantly mutating virus reared its head in India, people quickly bolted their doors and put on masks. Overnight, masks became the new t-shirt and a little-known industry came into the limelight.
As the year comes to a close, India’s mask industry has gone through many ups and downs. From being the hero of the story, masks now become the sidekick. Here’s how it played out:
In the spotlight
According to the All India Mask Manufacturers Association (AIMMA), the demand for medical masks started in January 2020 from overseas. “The numbers were in crores, the demand was unlimited,” says Anshumali Jain, president of AIMMA.
Prior to COVID, there were less than 25 mask manufacturers, only 5-7 with decent capacity. “Others were tiny, one machine shops,” Jain explains. But, when demand sky-rocketed, the industry expanded rapidly between January and April 2020, with manufacturers importing machines by air freight, and paying hefty prices.
The industry’s capacity grew from about 2 million pieces per day to over 20 million (for 3 ply masks), a whopping ten-fold increase! Similarly, for N-95 masks, the capacity increased from 0.5 million to 7 million pieces per day.
Source: Timesnownews.Com
Bolstered by revival in private consumption and government spending, India is set to exit the recession caused by the coronavirus pandemic in the third quarter of this fiscal, projected rating agency ICRA. The agency estimated Indian economy to record a rise of 0.7 per cent in Q3 FY21, after two very unfavourable quarters.
The forecasted growth in Q3 FY2021, while undoubtedly mild and uneven, is nevertheless welcome, as it signifies that the economy has exited the COVID-19 pandemic-induced recession, ICRA said in a statement on Tuesday. The GDP figures for the December quarter are scheduled to be released on February 26.
However, there is still a long way to go, as certain sectors are still feeling the pinch of the COVID-19-induced disruption, said Aditi Nayar, Principal Economist, ICRA.
"Encouragingly, almost all the non-agricultural lead indicators that we track recorded a continued, albeit uneven, improvement in volume terms in Q3 FY2021.
This pickup benefitted from the continued unlocking of the economy, uptick in consumption during the festive season, as well as higher central government spending.
Moreover, most of the tracked indicators rebounded to a growth on a YoY basis in that quarter, although this was on the low base of Q3 FY2020," Nayar said.
"The outliers that continued to contract in Q3 FY2021 included sectors such as aviation, reiterating that the contact-intensive portion of the economy will take longer to recover," she further pointed out.
Government expenditure will play a major role in India's economic revival, ICRA noted.
After recording a YoY decline of 14.2 per cent in Q2 FY2021, Government of India's non-interest revenue expenditure increased 22.9 per cent in Q3 FY2021. Moreover, for the 19 state governments - Andhra Pradesh, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Jharkhand, Karnataka, Kerala, Madhya Pradesh, Mizoram, Nagaland, Odisha, Punjab, Rajasthan, Sikkim, Telangana, Tripura, Uttar Pradesh and Uttarakhand - revenue expenditure marginally rose by 0.4 per cent last quarter after contracting 14.3 per cent in Q2 FY2021.
"ICRA expects that the revival in central government spending supported the Indian economy's exit from the recession in Q3 FY2021," Nayar said.
Centre's capital expenditure and net lending increased by a significant 117.7 per cent in Q3 FY2021, in contrast to the contraction of 39.1 per cent in Q2 FY2021, ICRA mentioned. The capital outlay of the aforementioned 19 state governments continued to contract, although the pace of the YoY decline narrowed to 14.1 per cent in Q3 FY2021 from 41.8 per cent in the previous quarter, it added.
Regarding private consumption, consumer confidence only saw a modest growth, due to weaker recovery in the informal and contact-intensive sectors, as evinced in the Reserve Bank of India's (RBI) Consumer Confidence Survey.
"In contrast, healthy kharif output and crop procurement continued to buoy rural farm sentiment. Moreover, the migration of labour back to urban areas is expected to have restarted remittances and added to the consumption of the non-farm part of the rural economy, ICRA stated.
Overall, consumer durables production increased by a healthy 6.4 per cent in Q3 FY2021, in contrast to a contraction of 9.8 per cent in Q2 FY2021, while the growth in consumer non-durables rose to 2.5 per cent from 0.4 per cent, respectively, ICRA said.
The contraction in capital goods narrowed to 1.1 per cent from 12.8 per cent, respectively, suggesting that gross fixed capital formation recovered further in Q3 FY2021 despite the subdued momentum of new project announcement and completion.
ICRA expects the gross value added (GVA) at basic prices to have risen by 0.7 per cent in Q3 FY2021, in contrast to the 7.0 per cent contraction in Q2 FY2021, led by industry (to +2.1 per cent from -2.1 per cent) and services (to -1.1 per cent from -11.4 per cent), with a steady performance of agriculture, forestry and fishing (to +3.5 per cent from +3.4 per cent).
"In our assessment, the formal part of the Indian economy has shrugged off the pandemic blues and is gaining traction at the cost of the smaller and less formal segment.
This is hastening the process of the formalisation of the economy and contributing to a consolidation in favour of the larger and more reputed players in certain sectors. While the informal and contact-intensive sectors will certainly heal more gradually, the lack of adequate proxies constrains a deeper analysis of the state of their recovery,"
Source: Business Today
India’s gross domestic product (GDP) is now being strongly expected to witness record growth in the third and fourth quarters of fiscal 2020-21 due to various reforms undertaken by the government in the last ten months, according to the PHD Chambers of Commerce and Industry (PHDCCI), which recently said out of the 10 indicators of Quick Economic Trends (QET) of economic and business activity tracked, nine have performed positive.
The Indian economy shrunk by a record 23.9 per cent in the June quarter and saw a contraction of 7.5 per cent in the second quarter.
"On the back of various reforms undertaken by the government in last 10 months along with a demand boosting and investment inducing Budget, the expectations of a positive GDP growth in Q3 and Q4 FY 2020-21 are becoming strong," PHDCCI added.
The industry body said that economic and business indicators such as unemployment rate, stock market, goods and services tax collections, manufacturing PMI, forex reserves, railway freight, merchandise exports, exchange rate, and passenger vehicle sales have shown positive sequential growth in January as compared with December 2020, according to a news agency report.
Source: Fibre2Fashion News
Clothing businesses saw their last big days in February 2020, before the outbreak of the pandemic; which, never ran optimum until now. The Falgun and Valentine’s Day commenced their factories full-blown. Though the biggest events like Pohela Boishakh and Eid-ul-Fitr are yet to come, the February fests have already sat on to bring customers.
Monsoor Ahmed, Secretary of the Bangladesh Textile Mills Association (BTMA) said that “Every year, local spinners and weavers can sell Tk 25,000 crore worth of yarn and fabrics during the Pohela Boishakh and Eid-ul-Fitr festivals. Last year, we missed a huge amount of business as most of the factories were closed during the two big festivals in March and April.”
Though the pandemic threat has not been eradicated thoroughly, the business insiders hope that the vaccination program will build confidence and let people come out of their homes like before.
Ahmed expects as much as Khalid Mahmood Khan, one of the founders of Kay Kraft, who says, “It is expected that people will start coming out from their homes.”
Kay Kraft running 25 outlets countrywide, started facing slackened turnovers from March 2020.
Another business leader Biplob Saha, the Managing Director of Bishwarong said that business is recovering slowly but it is yet to be optimum. Missing out on two main profit-making opportunities last year hit them hard.
On the other hand, the Managing Director of Sadakalo, Azharul Hoque Azad said, “The students and teachers constitute a major segment of customers of those goods. So, the sales of clothing items might not be as good as we are expecting now.”
There are a couple of other challenges standing in front of the local brands and retailers. One is the sparing tendency of people in fear of COVID-after uncertainty and another is the online or virtual platform of modern businesses. Many brands, even small retailers found it more profitable marketing through digitalization as online purchasing has gained popularity over the years.
The local clothing market is more than 10,000 crore and the local garment market is about $14 billion.
Azad said, “It is true that the sales of clothing items will increase this year but not to the level of pre-COVID times.”
The Chairman of Little Star Spinning Mill, Khorshed Alam expressed that he has reached the pre-COVID production level already, which is a sign of revival.
He said, before COVID-19, his factories yielded 15,000 to 17,000 pounds of yarn daily for the local market. Now he produces the same every day; though, it fell to 8,000 pounds a day during the pandemic.
Source: Textile Today
MOTIF and The Mills Fabrica are joining forces in collaboration with Alvanon to hold a 3-day conference ‘ReWire: Sustainability 2021’ from 24 to 26 February.
The conference is aimed at explaining the fashion industry how sustainability makes sense for good business wherein representatives from renowned companies such as Bolt Threads, H&M Foundation, Kering, PUMA, Ellen MacArthur Foundation, Tesco and more will share your opinions and will call all agents of change to contribute to the endeavour.
Alvanon calls on all sustainability enthusiasts from across the fashion supply chain to take part in this event, spanning multiple time zones across the world, all focused on sharing and innovating for impact.
According to Alvanon, this is a gathering by doers for doers, not just dwelling on issues but examining existing and promising solutions, as well as the practical steps and actions that the industry can and need to take, NOW.
The conference will also aim to set the ecosystem standards straight, scope out innovation clusters while clearing out the hype, and shine a light on a pathway towards circularity.
This event will be highly educational and social through content & features which will be unveiled regularly between now and event day.
The conference will kick off on 24 February with agenda ‘Setting the Ecosystem and Standards Straight’, while the agenda will be ‘Innovation and Hype in the Land of New Materials’ and ‘Digitising a Pathway Towards Circularity’ on the next two days.
Janice Wang, CEO of Alvanon, commented, “To make this industry SUSTAINABLE, we need to give ACCESS to all our colleagues so that they can make decisions whilst understanding the compromises and consequences, whilst understanding that we are in flux and whilst adapting to a practical and challenging environment,” adding, “ReWire: Sustainability 2021 is the start of a learning journey about sustainability – the PRACTICAL dos, don’ts, choices, compromises, experiments, processes and new technologies.”
Source: Apparel Online
The Central Board of Indirect Taxes & Customs (CBIC) has claimed that it has unearthed over 9,000 fake GST Identity Numbers (GSTIN).
The government had initiated a drive against fake identity numbers in the second week of November. “As on February 13, the Department has made 3,046 cases and unearthed about 9,294 fake GSTINs,” M Ajit Kumar, Chairman of CBIC, said in a communication to the Department.
GSTIN is a 15-digits unique alphanumeric identity assigned to each registered assessee. First two digits represent the code of State (each State and UT has been assigned a code like 07 for Delhi, 33 for Tamil Nadu, 28 for Andhra Pradesh and so).
Next comes the 10-digits alphanumeric combination which is PAN (ABCDE1234F). The 13th digit is based on the number of registration in a particular State. The 14th digit is Z by default while 15th digit is checksum digit which can be a number or letter.
Undue advantage
Kumar said the recent action and result showed that certain unscrupulous elements have tried to take undue advantage of the laws, procedures and reduced compliance measures designed for honest taxpayers under the GST regime to further their own profit at the cost of the nation. This, “apart from having a huge impact on revenue, also puts the honest taxpayer at a tremendous disadvantage in a highly competitive market place,” he said.
Under the GST regime, Section 31 of the CGST Act, 2017 mandates the issuance of an invoice or a bill of supply for every supply of goods or services (except if the value of the supply is less than ₹200, subject to specified conditions).
There is no format prescribed for an invoice. However, invoice rules make it mandatory for an invoice to have the name, address and GSTIN of the supplier, among other things.
One can check the genuineness of GSTIN by going to a portal (https://www.gst.gov.in) and looking for the taxpayer.
There he can punch in the GSTIN/UIN (unique identity number) after which details such as name, address and date of last 10 returns filed will appear. Apart from the name and address, even if return filings are irregular or no return is filed, one can say that the given GSTIN is fake.
Rajat Mohan, Senior Partner with AMRG & Associates, said the fake GSTIN menace has reached an all-time high. Other than severely impacting tax collections, it also pushes the government to introduce deterrents in the tax regime creating unease of doing business for all the taxpayers.
“Online tax matching, payment of 1 per cent tax in cash, limit of 5 per cent on ITC, strengthening of penalty proceedings, rampant searches and seizures, Aadhaar authentication, physical verification at the time of registration are some of the broad changes introduced in the tax regime to control tax evasion,” he said.
Identification of fake GSTIN was a daunting task in the past. However, with AI and big data analytics it has become effortless. “Fake GSTIN could be specifically identified using big data analytics and connecting numerous data points available with the government, which includes information available with GSTN, Income Tax Department, MCA, transport authority, FASTAG, online payments in wallet etc,” Mohan said.
Source: The Hindu Business Line
The traditionally warm relationship between India and the UAE built on mutual trust, respect, civilizational bonds and cultural moorings has grown stronger over the years.
The robust flow of bilateral investments and an annual bilateral trade of about US$ 60 billion ensures that the UAE is India's third-largest trade partner and is also a major exporter of crude oil to India.
The UAE, in the coming years, is expected to make more investments in the key sectors of Indian economy.In the food sector, the UAE has already confirmed US$ 7 billion worth investment.
This is expected to benefit 20 million farmers and create 200,000 new jobs.
The UAE's investment in logistics, highways, ports, airports, renewable energy, defence and petrochemicals is bound to grow in the coming years while there has been a greater outflow of FDI from India to Dubai.
Many Indian entrepreneurs and start-ups wanting to set up their base and expanding to other markets have invested in Dubai. Dubai has 3,000 start-ups with 200 Indian nationalities and Indians form 30 percent of Dubai's start-up community.
Indians also rank first in investments in Dubai's real estate sector. Dubai Land Department (DLD) data shows 5,246 Indian nationals invested in Dubai's real estate sector in 2019 pumping in more than Dh.10.89 billion.
The UAE has come up with a number of new initiatives to further attract Indian talent and investors in the recent past - the latest being citizenship offered to innovators, artists, doctors, scientists and investors and their families.
Together in Performance
World Bank data confirms that the GDP of the UAE has grown from US$104 billion in 2000 to US$421 by the end of 2019. It means UAE's economy has grown four times during the past 20 years accounting for the world's highest per capita income at US$43,470. The UAE currently has 79,000 high-net-worth individuals, 3,400 multimillionaires and 12 billionaires. Meanwhile, India's GDP grew from US$468 billion in 2000 to US$2,869 billion by the end of 2019 becoming the world's fifth-largest economy. The country is currently chasing the target of a US$ 5 trillion economy.
Helping Each Other in Crisis
There are 3.3 million Indians living in the UAE and the country has consistently acknowledged the constructive role played by them in the nation-building exercise.
Covid-19 provided another opportunity for both India and the UAE to come closer and extend a helping hand to each other.
"UAE’s assistance to India comes in recognition of the profound and brotherly ties our two countries have shared throughout the years", the UAE ambassador to India Ahmed Abdul AlBanna had said. Interestingly, in May last year the UAE sent 7 tons of medical supplies to India to fight the pandemic.
Looking Towards Future
The normalisation of ties between the UAE and Israel augurs well for India. The synergy and collaboration between the three nations would bring greater fruits in the future especially in the areas of scientific research, IT, AgriTech, food security, healthcare and sustainability.
As Indians constitute 30 of the UAE population, and the UAE's eagerness to invest more in India, the two countries are set to go places with Israel now joining the league.
Dubai - The Centre of Attraction
As the UAE and India come closer and collaborate than ever before, the centre of attraction, of course, is Dubai. It is the most preferred city for investors from India because it has a sound business ecosystem. High on technology and huge on infrastructure Dubai ranks top among other countries in happiness index. Strategically located, it has positioned itself as the place to grow one's business through a series of investor-friendly measures. Experts say the UAE-India trade has the potential to go up to US$ 100 billion annually.
Investment grows better and faster in the fertile soil of trust, they say. If one is to go by this dictum, there has not been a better time or place than Dubai to those who are in search of a right ecosystem to invest their money.
Source: The Economic Times
China became the main trade partner of the European Union (EU) in 2020, with exports and imports both increasing despite the Covid-19 pandemic, Eurostat said.
According to the EU's statistical service, the bloc's imports from China throughout the year 2020 grew by 5.6 per cent year-on-year to 383.5 billion euros (US $465 billion), and exports grew by 2.2 per cent to 202.5 billion euros, Xinhua news agency reported on Tuesday.
At the same time, the trade in goods with the United States, which had topped the EU's trade partners list until early 2020, saw substantial decline in both ways.
The EU also witnessed higher trade volume with the rest of the world in December 2020, up by 6.6 billion euros from the same month in 2019, a first year-on-year increase since it was hit by the pandemic.
The single market suffered a decrease of 9.4 per cent in exports of goods and 11.6 per cent decrease in imports in 2020. With industries largely affected by the containment measures last year, energy recorded by far the sharpest drop among all sectors, followed by food and drink, raw materials and chemicals.
The Eurostat release on Monday coincided with China's official data published in mid-January, which showed the trade with the EU grew by 5.3 per cent to 4495.77 billion yuan, or nearly 600 billion euros, in 2020.
While China's total goods imports and exports expanded 1.9 percent year on year to 32.16 trillion yuan (about US $5 trillion) in 2020, hitting a record high, the surge in trade with the EU was more than double the average growth rate.
The result fully speaks for "the strong resilience and importance of China-EU economic and trade cooperation," said Zhang Ming, head of the Chinese Mission to the EU, at a webinar last month with the European thinktank, Friends of Europe.
Source: The Business Standard
The textile dyeing industry is experiencing a global skills gap, now reaching crisis point, as younger people fail to enter the profession, according to a new survey from the Society of Dyers and Colourists.
Lack of knowledge is now harming textile production, and adding to coronavirus woes, agreed a majority of over 100 respondents from 14 countries.
The SDC, the international dyeing and coloration membership organisation and training provider, has highlighted growing concerns – and a need for more, ongoing workplace education to counter these issues, as agreed by an overwhelming 87%.
Findings state that a third of global employers involved in dyeing and finishing are unable to recruit the talent that they need, with a further 55% of participants claiming that there is a lack of transferable scientific knowledge within the industry.
A total of 77% agreed there was a skills crisis and 53% believed this was already at crisis point. Reasons for this were cited as young people having negative perceptions of the industry, or wanting to be designers rather than dyers, alongside a lack of knowledge of the chemistry behind the processes, as well as poorly promoted opportunities in dyeing.
Suggestions for deepening the international talent pool included more online learning made available globally, dedicated support from governments, and a bridging of the skills gap by working together to promote apprenticeship roles.
If the gap is not closed, respondents believe that industries will disappear worldwide, quality of finished products will be compromised, and knowledge and expertise will be lost permanently.
Graham Clayton, CEO of the SDC, commented: “We have been hearing anecdotally that there is a serious skills gap in the dyeing and coloration industry, and our new research proves that not only is this true, but that the situation is much worse than originally imagined.”
“The results of our survey are worrying, but it is also evident that the industry is willing to collaborate and work proactively to ensure that a deeper crisis is avoided – and this is something that the SDC is certainly committed to supporting.”
Research was carried out in December and involved employers as well as dyeing and coloration employees at all levels, the SDC says. The full report and research findings can be found in the latest white paper from the Society and Dyers and Colourists by downloading it via the link at the foot of this article.
The SDC is a provider of colour education, offering a range of internationally recognised coloration courses and qualifications. Founded in 1884, the SDC became a registered charity in 1962 and was awarded a Royal Charter in 1963. The SDC remains the only organisation in the world able to award the Chartered Colourist status.
Source: Innovation in Textiles News
Egyptian MP Enas Abdel Halim confirmed that 30 per cent of the country's textiles factories have closed as a result of the recession and deteriorating economic conditions in the country.
Abdel Halim said the remaining factories had reduced production by 50 to 70 per cent.
She explained that Egypt had about 1,260 spinning, weaving and dyeing factories registered in Mahalla, but now only 320 factories are operating, employing 120,000 workers.
The MP warned the government against neglecting this issue, while calling for the Minister of Trade and Industry, Nevin Jama, to be questioned in parliament about the recent deterioration in the textile sector.
Egypt's unemployment rate rose to 9.6 per cent in the second quarter of 2020 compared with 7.5 per cent a year earlier, due to the coronavirus pandemic, the statistics agency CAPMAS revealed in August.
Source: Middle East Monitor News
The more I read about the department of trade, industry and competition’s new textile import rebate regime the more alarmed I become. On the face of it, the rebate works like any other rebate. You can import goods that attract duty and not pay the duty if you use them to manufacture some qualifying item.
So far, so good, except the list of tariff codes eligible for the rebate covers the entire section XI of the Customs & Excise Tariff Book (textile and textile items).
The tariff book has 98 chapters, broken up into 22 sections. Section XI covers chapters 50 to 63. These 13 chapters contain 1,010 tariff codes, of which 825 attract a duty of more than zero. These 825 tariff codes are the ones that concern us. Their duties range from 7.5% to 45%, so the value of the rebate can prove to be rather significant.
If you import something under these tariff codes then manufacture something classified in chapters 61 and 62 (articles of apparel and clothing accessories), you are over Hurdle One. Unfortunately, there is a long series of hurdles still to cross to actually see any benefit.
Hurdle Two: The market you sell into
You can only sell items made with the imported raw materials if the International Trade Administration Commission (Itac), or its equivalent in the other Southern African Customs Union (Sacu) countries, are satisfied you will only supply to retailers that will sell the goods in the country where they are manufactured. There are 274 tariff codes in these two chapters, of which 264 attract a duty.
Unless you buy all your raw materials locally, or you pay the duties, you will not be allowed to export. In 2019, we exported R5.9bn worth of product through these chapters. We also imported R4.8bn from the other Sacu countries. Given that this rebate only applies to raw materials imported into Sacu, an interesting opportunity is presented to countries such as Mauritius and Madagascar, which supplied R1.9bn and R1.3bn worth of apparel into SA in the same period, respectively, and also enter the Sacu region duty-free.
Let’s pause a moment and consider this. If you import the raw materials into Sacu and you benefit from the rebate, you can only sell the finished product in the country you manufactured in. You cannot make the item in Lesotho and bring it into SA. However, you can manufacture the whole garment in Mauritius (in fact any Southern African Development Community country outside Sacu) from Chinese raw materials and export into the Sacu region duty-free.
The Itac report into this investigation says these export restrictions are “to deepen the value chain in Sacu”, which is astonishing given that the rebate does exactly the opposite and in fact breaks the value chain. But the insanity doesn’t end here.
Before the rebate permit will be issued, the manufacturer must produce orders from retailers in the country of manufacture.
But not just any retailer will do. You are also only allowed to sell to retailers “that have made local procurement commitments in terms of the retail, clothing, textiles, footwear and leather (R-CTFL) master plan and have signed the master plan or do in future and that have concluded the necessary off-take agreements”.
Hurdle Three: Reciprocal off-take agreements
If you want to access the rebate you not only need to also be purchasing from the local suppliers by way of an off-take agreement; you may not reduce the value and volume you buy from the local textile mills if you wish to hang on to your rebate. In other words, any imports can only be in addition to what can be supplied by the local mills.
Given that you are making clothing from the textiles you purchase, it’s not clear what happens if you want a particular design that is not available locally. Do you need to just keep buying volumes of other designs to ensure you don’t reduce your off-take? Do you just not do the new design (don’t worry though, it turns out you only need to worry about SA fashion preferences, because you can’t export if you use the rebate).
Never fear. In return for the off-take agreement, the textile mills are not allowed to increase their prices beyond inflation. Within two weeks of the implementation of the rebate, producers of the applicable textiles have to submit off-take claims to the off-take resolution team (ORT — not to be confused with the airport, where very little is also happening, except for the washing of SAA planes that may never fly again). Two weeks after this, off-take agreements have to be concluded between retailers and the textile mills.
If any disputes arise in resolving these agreements this is referred to the ORT, which is made up “a representative of each of the National Clothing Retailers Foundation of SA, the Southern African Clothing and Textile Workers Union, and the department of trade, industry and competition, and from the woven textile sector.”
The off-take agreements must be signed off by the respective manufacturers of clothing. All these commitments are then sent to the ORT, which collates all this information so it now knows how much each retailer is committing to each mill and how much, in total, each mill has to supply.
Itac will only begin issuing permits when 90% of the off-take requests have been resolved.
If there are no continued orders for fabrics that are subject to the off-take agreement, the retailer and clothing manufacturer must “explore appropriate options in an attempt to meet or exceed commitments contained in the relevant off-take agreement”. I kid you not.
Hurdle Four: No predefined period for the rebates
To actually get the rebate you first need to register with Sars as a rebate user. Once that is done you apply to Itac for your rebate permit and Itac has at least 14 days to assess your application.
If it decides to issue you with a permit you will be told what period the permit is valid for, which could be shorter than the period you asked for at the discretion of Itac. In other words, if you need a permit to use the rebate for six months and Itac decides you really only need three months, your permit will expire after three months.
Hurdle Five: The rebate permits cannot be transferred
The rebate permit can only be used by the applicant. If you are nearing the end of the rebate period on your permit and you realise you won’t use all the volume allocated to you, you cannot trade this permit to anyone else. It will simply expire.
Hurdle Six: Extending the permit
Note hurdle 4. If you are getting close to the end of the period of your permit and you realise you won’t make the deadline, but you think you can still use the permit later on, you can approach Itac, but you must do this before the permit expires. You also have to motivate to Itac why you need the extension, and it’s entirely up to the commission if you get it or not.
Hurdle Seven: The bargaining council
Importers of fabric under this rebate must be “clothing manufacturers with compliance certificates from the National Bargaining Council for the Clothing Manufacturing Industry”. This immediately removes many of the smaller producers.
If you are a textile mill importing raw material that you will add value to — such permissible value-adding options being described in excruciating detail — you, too, must belong to the bargaining council and can only sell your fabric to clothing manufacturers that belong to the bargaining council and have signed up to the master plan.
Hurdle Eight: Ease up on the outsourcing
“Clothing manufacturers would be allowed to outsource a maximum of 50% of their production.” Design houses can outsource 100% of their production. Design houses and manufacturers are then defined in detail. Outsourcing can only happen if a number of complicated conditions are met.
Hurdle Nine: All the other stuff
1. You have to meet regularly with the department’s project management office, not be confused with the ORT, where you will be told how to increase your consumption of yarn and fabric.
2. You have to be successful. If your economic performance doesn’t improve you can’t keep getting the rebate.
3. You have to create jobs (easily done when all the experienced people lose their jobs in Lesotho and arrive in SA).
4. The retailer’s purchase order is described in some detail and if it doesn’t contain all the requisite information it is not acceptable.
5. An undertaking must be made that if you get the rebate you will still keep buying at the committed volumes from local mills.
6. Your statutory auditors have to confirm your improvement in performance, jobs created, extra production and changes in cost because of the rebate. Thank god they don’t ask for export improvement, because that is now not allowed.
Hurdle 10: You can face criminal charges if you don’t comply
“If it is established that non-compliance took place, appropriate steps will be taken. These steps will be taken in terms of the International Trade Administration Act and the Customs and Excise Act and can include criminal charges, withdrawal of the permits or permits concerned.”
Source: BusinessDay News
Nassimi’s newest fabric gets its name by combining the words “supple” and “preen.”
The Supreen performance fabric marries cutting-edge woven and coated technology to create a unique liquid-barrier textile while also offering a luxurious look and a supple hand.
“Preen” references the preening of an aquatic bird, keeping its plumage waterproof and tidy, the company said.
The composite material is constructed of a proprietary silicone blend that is virtually impermeable to any liquid, reactively repelling liquids and preventing future stains. No matter the length of time from the original spill, Supreen resists liquid permeability, ensuring that stains do not soak through the fabric.
“With an impermeable liquid barrier, stain resistance, bleach cleanability and impressive breathability, we are thrilled to introduce Supreen and look forward to seeing how designers and manufacturers leverage its innovation in contract environments and beyond,” said Iwan Nassimi, executive VP of Nassimi.
The inaugural launch of Supreen will include three new textile in a color palette of deep jewel tones and classic neutrals. The Supreen Winter 2021 Collection includes a textural weave with subtle dimension, a soft, delicately heathered design, and a small-scale geometric pattern with dynamic texture. More innovative patterns will be added to the collection in the coming months.
Supreen is currently available exclusively through a handful of fabric distributors including: Anzea Textiles (division of Stinson), Burch Fabrics, Carnegie Fabrics, Coral Inc, Designtex, Fabricut Contract, Justin David Textiles, KB Contract, Knoll Textiles, Paul Brayton Designs, Reliatex, Samelson-Chatelane, United Fabrics, Woeller and Wolf Gordon Inc.
Source: Home Textiles Today
For the first time, Switzerland has climbed to the top of UNCTAD's Business-to-Consumer (B2C) E-commerce Index 2020. The index scores 152 nations on their readiness for online shopping, worth an estimated $4.4 trillion globally in 2018, up 7 per cent from the previous year. Singapore and Hong Kong are the only non-European economies in the top 10.
Europe remains by far the most prepared region for e-commerce, according to the index, but "wide gaps with countries with the lowest level of readiness need to be addressed by tackling weaknesses in those nations to spread the benefits of digital transformation to more people," UNCTAD said in a press release.
The index scores countries on the basis of access to secure internet servers, reliability of postal services and infrastructure, and the portion of their population that uses the internet and has an account with a financial institution or a provider of mobile money services.
In 2019, 97 per cent of the Swiss population used the internet. Switzerland has replaced the Netherlands at the top of the index.
The 10 developing countries with the highest scores are all from Asia and classified as high-income or upper-middle-income economies. While at the other end of the spectrum, least developed countries occupy 18 of the bottom 20 positions.
The two largest B2C e-commerce markets in the world, China and the United States, rank 55th and 12th respectively in the index. Although both countries lead in several absolute measures, they lag in relative comparisons.
For instance, internet penetration in the United States is lower than in any of the economies in the top 10, while China ranks 87th in the world on this indicator. As for online shopping penetration, the United States ranks 12th while China takes the 33rd slot.
“The e-commerce divide remains huge,” said Shamika N Sirimanne, director of UNCTAD’s division that prepares the annual index. “Even among G20 countries, the extent to which people shop online ranges from 3 per cent in India to 87 per cent in the United Kingdom.”
Also, in Canada, the United States and 10 European nations, more than 70 per cent of the adult population makes purchases online. But that proportion is well below 10 per cent in most low- and lower-middle-income countries.
“The COVID-19 pandemic has made it more urgent to ensure the countries trailing behind are able to catch up and strengthen their e-trade readiness,” Sirimanne said. The index, she said, underscores the need for governments to do more to ensure more people can avail of e-commerce opportunities.
“Otherwise, their businesses and people will miss out on the opportunities offered by the digital economy, and they will be less prepared to deal with various challenges,” she added.
Source: Fibre2Fashion News
Two global federations have launched a new initiative aiming to address the problems related to audit and standard fatigue in textile and clothing industries, sources said.
International Apparel Federation (IAF) and International Textile Manufacturers Federation (ITMF) unveiled their joint initiative-Standards Convergence Initiative or SCI-last week to accelerate reduction of audit and standard fatigue, they added.
The launch of the joint initiative took place during a side session at the five-day OECD Forum on Due Diligence in the Garment and Footwear Sector which began on February 01.
IAF, the world's leading federation for apparel manufacturers, (SME) brands, their associations and the supporting industry from more than 40 countries, brought its members together to jointly create stronger, smarter and more sustainable supply chains.
ITMF, founded in 1904, is an international forum for the world's textile industries.
The SCI will serve as a global industry-wide platform to discuss and develop a strategy as well as the tools to accelerate the reduction of audit and standard fatigue in the clothing and textile industries, the two groups said in a statement.
"The auditing conduct of standard holders, along with brands, retailers and other buyers' decisions determines if we are moving firmly in the direction of less unnecessary overlap of audits and standards."
Therefore, one of the first steps of the SCI, in collaboration with the International Trade Centre (ITC), is to create transparency in the conduct of the main standard holders, brands and retailers and third party standard holders, measuring to what extent they are contributing to the reduction of audit and standard fatigue, the statement added.
When asked, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Dr Rubana Huq said they always wanted standard audit procedure for all the factories because it is very difficult to cater to different audits which costs money.
Every audit costs a lot of money ranging from $2,000 to $5,000 and they are literally checking almost the same thing, she added.
Citing the data that showed overlapping of same issues by different auditors, she said if these can be combined, it could be a great issue. "IAF has been working with it."
Dr Rubana also said it is important for Bangladesh to align with the initiative to reduce the cost, hassle and time. "Bangladesh will align with IAF and try to negotiate all necessary steps to eliminate multiple audits."
Talking to the FE, Shahidullah Azim a former BGMEA leader, said on an average, four audits have been done in his factory annually by different auditors where the majority of issues are the same.
"It is unnecessary as I need to pay $4,000 to $5,000 for each audit," he said, adding that it also needs much time.
If a unified standard for audit is set, it would be helpful for the factories to reduce its costs especially during the pandemic that hit hard the industry, he noted.
Source: The Financial Express Bangladesh
The Union Cabinet on Wednesday approved signing of a comprehensive economic cooperation agreement, a kind of a free trade pact, between India and Mauritius which is aimed at liberalising norms to boost two-way commerce. The Cabinet meeting chaired by Prime Minister Narendra Modi approved the signing of the Comprehensive Economic Cooperation and Partnership Agreement (CECPA) between India and Mauritius, an official statement said.
The pact would cover 310 export items for India, including foodstuff and beverages, agricultural products, textile and textile articles, base metals, electricals and electronic items, plastics and chemicals, wood and its articles.
Mauritius would benefit from preferential market access into India for 615 products, including frozen fish, speciality sugar, biscuits, fresh fruits, juices, mineral water, beer, alcoholic drinks, soaps, bags, medical and surgical equipment, and apparel.
In such an agreement, two trading partners cut or eliminate duties on a host of products besides liberalising norms to promote services trade.
A mutually convenient date would be finalised for signing of the agreement, after which it will be implemented. It would be India's first such trade pact with an African nation.
The pact would cover trade in goods, rules of origin, trade in services, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures, dispute settlement, movement of natural persons, telecom, financial services, customs procedures and cooperation in other areas.
The bilateral trade between the countries has been dipped to USD 690 million in 2019-20 from USD 1.2 billion in 2018-19. While India's exports in 2019-20 aggregated at USD 662 million, the imports stood at USD 27.89 million.
India exports petroleum products, pharmaceuticals, cereals, cotton and electrical machinery, apparel and clothing accessories to Mauritius. The island nation's exports to New Delhi include iron and steel, pearls, precious/semi-precious stones and optical, photographic and precision instruments.
Mauritius was the second top source of foreign direct investment (FDI) into India in 2019-20. India received USD 8.24 billion (about Rs 57,785 crore) foreign inflows from that country in the last fiscal.
Source: The Economic Times
Investors from Uzbekistan’s Namangan province recently announced to invest in the textile sector Pakistan’s of Punjab province. Full Uzbek technical assistance will also be offered to Pakistan to raise cotton production. The announcement came during Punjab governor Chaudhry Sarwar’s visit to Uzbekistan with a business delegation.
A delegation of Uzbek agronomists will soon visit Punjab, according to Pakistani media reports.
The delegation members included Gohar Ijaz, head of the All Pakistan Textile Mills Association (APTMA), and Fawad Mukhta, chief executive officer of the Fatima Group of Industries.
Ahsan Bashir, president of the Uzbekistan-Pakistan Trade and Cultural Centre in Lahore-Rohail Ikram visited Namangan province of Uzbekistan on the invitation of Governor of Namangan Shavkat Abdurrazakov.
The Pakistani delegation visited the Uzbekistan Business Forum and met experts in textiles, health, agriculture and trade. Matters regarding increased cooperation and trade between the two countries were discussed.
Accompanied by the delegation, Ch Sarwar also called on Governor of Namangan-Shavkat Abdurrazakov at his Secretariat during which Governor Abdurrazakov appreciated the role of Pakistan in establishing peace and eradicating terrorism from the region. Upon the invitation of the Punjab Governor, he also agreed to pay a visit to Pakistan soon.
Source: Fibre2Fashion News
India and Russia have agreed to work closely on key issues at the UN Security Council, in keeping with the special and privileged strategic partnership between the two countries.
The Ministry of External Affairs (MEA) said both sides held bilateral consultations in Moscow on Tuesday on issues which are on the agenda of the UN Security Council (UNSC).
It said the Indian delegation at the director general-level meeting briefed the Russian side on India's priorities during its UNSC tenure.
"Both sides agreed to work closely together on key issues on the UNSC agenda, in keeping with the special and privileged strategic partnership," the MEA said in a statement.
India began its two-year tenure as a non-permanent member of the UNSC on January 1.
In August, India is scheduled to serve as the president of the powerful UN body.
The MEA said the two sides appreciated the intensive ongoing bilateral contacts on matters relating to the UN, including with respect to a wide range of issues on the UNSC agenda.
Last week, India held similar discussions with China.
Source: The Economic Times
