MARKET WATCH 20TH FEB 2021

NATIONAL

INTERNATIONAL

SRTEPC appeals Tx Secy to include MMF chain in RoDTEP Scheme

Mr. Ronak Rughani, Chairman Synthetic & Rayon Textiles Export Promotion Council (SRTEPC) in a meeting with Mr. Upendra Prasad Singh, Textiles Secretary, appealed that the entire MMF textile chain be included under the RoDTEP Scheme and that the rates need to be fixed at the earliest.

In a meeting with Textiles Secretary, the SRTEPC delegation led by Mr. Rughani and comprising of Mr. Dhiraj Shah, Vice Chairman; Mr. Sri Narain Aggarwal, immediate past Chairman and Mr. S. Balaraju, Executive Director, SRTPEC, suggested to factor the MEIS benefits under the RoDTEP Scheme and also requested that the Textile Merchant Exporters be treated on par with Manufacturer Exporters.

SRTEPC Chairman asserted that to realize its full potential the Government will have to give the MMF textile the necessary boost in form of benefits and incentives.

Representing the Indian MMF textile sector, the SRTEPC Chairman made certain suggestions which he believed would give the MMF textiles a fillip.

Some of the points suggested by the SRTEPC Chairman were focus on branding, rationalising GST on MMF textile segment, cover the entire MMF textile value chain under the PLI Scheme and relax the threshold limit of turnover, fibre neutrality and ECGC to cover both pre-shipment and post shipment credit.

The SRTEPC Chairman emphasized that with the able support of the Government in form of benefits and incentives, the Indian MMF textile industry would be a name to reckon with in the global market.

Mr. Rughani said that in the global market MMF textiles have been leading over cotton and although in India the scenario was different it has been gradually changing and MMF textiles is slowly gaining an important position in the Indian textile basket.

He also remarked that the pandemic has affected exports and MMF textile industry has also been hit by it although, the SRTEPC Chairman said that member exporters have successfully ventured into the manufacture/export of PPE items which has been in demand during this crucial period. He also informed that India is the second largest manufacturer of PPE items.

In his presentation Mr. Rughani apprised Textiles Secretary about SRTEPC, its inception and activities & programmes; global textile scenario of MMF textile sector; importance of Indian MMF textile sector, export performance of the MMF textile sector and its main export markets; the current challenges being faced by the MMF textile industry due to the pandemic, etc.

Source: Tecoya Trend

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Finance Ministry seeks timelines from ministries for implementation of Budget announcements

The finance ministry has reached out to ministries and departments asking for timelines for implementation of key budget announcements, mindful that the feelgood factor can disappear quickly if execution is delayed.

Prime Minister Narendra Modi is keen that most decisions be implemented before April 1, a senior government official said.

“Execution will be the key and that will be the big focus,” said the official who did not wish to be identified.

Since extensive deliberations were held with all stakeholder ministries and departments prior to formulation of the budget, there should not be any issues in expediting implementation, the official said.

Aggressive asset monetisation and privatisation of state-run entities, setting up a development finance institution, and increasing the foreign investment limit for  pensions and insurance to 74% are some of the measures that need some effort.

Modi has begun webinars that will focus on identifying issues coming in the way of implementing the budget announcements. He held one on Thursday with the power and renewable energy sector.

The budget presented on February 1 by finance minister Nirmala Sitharaman has topped up a strong fiscal stimulus with multiple reforms to give a leg-up to the economy coming out of the pandemic-caused slump.

Most experts have flagged the need for targeted execution of the budget announcement s, especially the high capital spending plan and multiple reforms. The budget bumped up capital spending to Rs 5.54 lakh crore in FY22 from the revised estimate of Rs 4.39 lakh crore for the current year.

Key public service announcements that require sustained implementation include Jal Jeevan Mission (Urban) to provide 2.86 crore households tap water, urban Swacchh Bharat Mission, gas distribution in 100 more cities and the healthcare package.

Economic stimulus measures that need to be followed up are vehicle scrappage policy, setting up of seven textiles parks and the capital budget.

The reforms include a single code for the securities market, setting up of a new bad bank, company law reforms, strengthening of the National Company Law Tribunal framework, tax administration reforms, a new fiscal framework and wide-ranging changes in the power sector such as the dismantling of distribution monopolies.

Source: The Economic Times

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GST Council may take up rationalising tax rates, slab merger in next meet

The next Goods and Services Tax (GST) Council meeting in March will likely take up rationalising tax rates and mergers of multiple slabs to bring them close to being revenue-neutral and make the indirect tax regime simpler.

The meeting, whose date is yet to be set, will come at a time when the 15th Finance Commission has recommended merging the 12 and 18 per cent tax rates.

On Wednesday, Prime Minister Narendra Modi expressed the government’s resolve to bring natural gas under GST. However, officials said any such proposal depended on the approval of the states because some of them including Andhra Pradesh are opposed to the idea.

“The next GST Council meeting will take place n March. We will discuss with the Council members and try to take up the issue of slab mergers and correcting the inverted duty structure in the meeting,” said a senior Central Board of Indirect Taxes and Customs (CBIC) official.

Besides the merger of the 12 per cent and 18 per cent slabs into a standard rate, the 15th Finance Commission, headed by N K Singh, has suggested a rationalizing GST into a three-rate structure, comprising a 5 per cent merit rate and 28-30 per cent de-merit rate.

“We realize that our GST rates are lower than the revenue-neutral rate. The Council will take a final call  on what the rationalized slabs should be. The aim will be to make the structure clean, besides improving revenues. The potential of monthly GST revenue collection is ₹2 trillion,” said the official.

GST revenues touched a record high of ₹1.19 trillion in January and ₹1.15 trillion in December on the back of improved economic activities and enforcement.

In the view of the 15th Finance Commission, the effective tax rate under GST stands at 11.8 per cent according to the International Monetary Fund and 11.6 per cent according to the Reserve Bank of India.

These rates are considerably lower than 14 per cent, the average revenue neutral rate (RNR) required for a smooth transition from the value-added tax regime without any revenue loss.

While GST’s potential is to generate revenue at 7.1 per cent of GDP, at present it is 5.1 per cent, which translates into a revenue loss of ₹4 trillion, the Commission report notes.

Source: The Business Standard

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Finance Minister Nirmala Sitharaman interacts with top industry captains of Tamil Nadu

Union Finance Minister Nirmala Sitharaman on Friday held an informal meeting with top industrialists of Tamil Nadu to elicit their views on the budget she presented on February 1.

TVS Motor  NSE -0.93 % Chairman Venu Srinivasan, MRF Ltd Chairman M Mammen, India Cements Ltd Vice Chairman N Srinivasan, former

Ashok Leyland  NSE -4.67 % Chairman R Seshasayee and Apollo Hospitals MD Sunita Reddy were among those who took part in the meeting, sources said.

This is the first time she is meeting industry captains in Tamil Nadu after presenting the budget.

However, the meeting was out of bounds for the media, and the points discussed were not known.

Industry sources said the FM listened to the views put forth by the industrialists during the interaction. The India Cements Ltd Managing Director N Srinivasan said he thanked the FM for presenting an 'outstanding'  budget that would spur growth.

"The budget will spur growth. I told her that during this calendar year itself, all the industries, including manufacturing, will be running towards full capacity", Srinivasan told. The official Twitter handle of the FM's office shared images of the Minister interacting with the industrialists. Earlier in the day, BJP Tamil Nadu unit President L Murugan received Sitharaman and presented a 'Vel' to her as part of welcoming her to the state.

"Vel" refers to a spear-like weapon that is traditionally associated with Lord Muruga.

Source: The Economic Times

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Good News! Shahi Exports reimburses deducted salary

Yet again proving its worth, India’s number one apparel exporter Shahi Exports has set a benchmark in Indian apparel export industry.

The company has refunded the salary amount it had deducted during the lockdown to all its employees.

What’s noteworthy is that the company did it well in advance – living up to the commitment for which Shahi Exports has always been known.

Earlier, the company had said that this amount will be refunded with the salary of March/April 2021; however, the same was given to the employees with the salary of January.

Shahi Exports has taken this step at a time when several big exporters are still not giving full salary to their employees.

“It was like a big gift for us as we got the deducted amount back. All employees are happy with this step and their motivation is very high,” told a senior employee of the company on the condition of not disclosing his identity.

He further added that around 5 to 10 per cent salary was deducted depending on various parameters.

Apparel Resources had approached Shahi Exports for details in this regard, but the company didn’t reply to the mail.

Apparel Resources could not get the information on how much it cost the company, but it is expected to be a huge amount as Shahi Exports has thousands of professionals across all its units.

It is pertinent to mention here that so far very few companies have come forward to support their employees and refunded the deducted amount of salary. Recently leading multinational buying house Asmara International had also taken such a step and refunded the deducted salary to their employees.

Source: Apparel Online

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Global merchandise trade growth may not be sustainable, says WTO

The World Trade Organization (WTO) said the high rate of global merchandise trade growth (in volume) during the fourth quarter of 2020 is unlikely to sustain in the first half of 2021 since key indicators appear to have already peaked.

This may have repercussions on exports from India which have started recovering of late, say experts.

According to the latest Goods Trade Barometer of the WTO, the growth rate remained strong in the fourth quarter of 2020 after trade rebounded in the third quarter from a deep Covid-19-induced slump.

The barometer's current reading of 103.9 is above both the baseline value of 100 for the index and the previous reading of 100.7 in last November. This signals a marked improvement in merchandise trade since it dropped sharply in the first half of last year.

All component indices are either above trend or on trend, but some already show signs of deceleration while others could turn down in the near future, WTO said.

Furthermore, the indicator may not fully reflect resurgence of Covid-19 and the appearance of new variants of the disease, which will undoubtedly weigh on goods trade in the first quarter of 2021, according to the WTO.

The WTO said prospects for 2021 and beyond are increasingly uncertain due to the rising incidence of Covid-19 worldwide and the emergence of new variants.

“Recovery will depend to a large extent on the effectiveness of vaccination efforts,” it said. Devendra Pant, chief economist at India Ratings, said weakness in the global demand will have an impact on Indian exports.

“Weak export performance last year will have some impact on growth in 2021. Absence of a strong global demand is one of the factors for weak growth performance of the economy in the past few years,” he said.

Pant said it will be challenging for the Indian economy to sustain higher economic growth in the absence of a strong global demand.

Aditi Nayar, principal economist at ICRA, however, said she expected merchandise exports to strengthen as vaccine roll out gathers pace across nations.

Exports from India picked up in December 2020 and January 2021 after decline in most months of 2020 due to Covid and slowdown in global demand before that. Exports grew 6.16 per cent in January and a moderate 0.14 per cent in December.

Source: The Business Standard

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Indian exports pick up as additional port opened

Indian rice exports gained momentum this week after an additional port was opened in the country's biggest rice-handling facility, potentially easing congestion.

Waiting periods at the Kakinada Anchorage Port had reached up to four weeks, compared with about a week normally, because of congestion at the port.

“From Saturday we have started using Kakinada deep water port,” said B.V. Krishna Rao, president of the Rice Exporters Association of India, adding that this will reduce waiting times and accelerate overall exports.

Mr. Rao said that exporters' resulting savings in demurrage fees could be passed on to farmers and overseas buyers.

India's 5% broken par boiled variety of rice eased to $395-$401 a tonne from last week's multi-year high of $402-$408.

Thailand's 5% broken rice narrowed to $540-$560 a tonne on Thursday, still near 10-month highs.

“There's muted demand and less supply in the country. There's not much demand from overseas either because our prices are higher than competitors',” one Bangkok-based trader said.

Vietnam's 5% broken rice fell to $505-$510 a tonne on Thursday as harvests in the Mekong Delta gathered pace, down from $510-$515 before the Lunar New Year holiday.

Traders said they are buying more rice from farmers in expectation of rising demand from importers, pushing domestic prices of un-husked paddy to a 10-year high of between 6,200 and 7,000 dong per kg.

Productivity of the winter-spring crop in the Mekong is relatively high, they added.

Domestic prices in Bangladesh rose by 35% in 2020 amid low supply and increased demand during the pandemic, according tothe United Nations' Food and Agriculture Organization.

The government has initiated imports of 2 million tonnes of rice and also lowered import duty on rice from 65.5% to 25%.

Source: The Hindu Business Line

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Indian ministry says petrochemical, polymer sectors to witness growth

The increased outlay for healthcare and the fund for vaccination in the budget will boost polymer consumption with requirements of syringes and other polymer based healthcare products, and in general, the requirement of petrochemicals and polymers, required in a range of sectors, will also increase and boost domestic demand with increased government spending.

The roll out of the production-linked incentive (PLI) schemes for key end-use sectors will boost petrochemical consumption in the country, the ministry of chemical and fertilizers said in a press release.

Among the sectors earmarked, seven sectors—including mobile phone manufacturing, auto and components, medical devices, textile products—use significant quantity of petrochemicals. The estimated outlay of ₹1.41 lakh crores augurs well for the petrochemical industry growth, the ministry said.

The massive emphasis on infrastructure spending is expected to result in additional consumption of petrochemicals like polymers and specialty chemicals. Also, Agriculture focused measure like doubling of outlay for micro-irrigation to ₹10,000 crores will further fuel demand for polymer based irrigation products and services.

The synthetic industry has welcomed increase in import duty on raw cotton. This will support farmers to get better remuneration on cotton production and also eliminate cheap imports coming from neighboring countries. As such India is surplus of cotton and rather than exporting cotton.

Industry also welcomes increase in basic customs duty on silk and silk products. Synthetic Industry will be able to substitute silk products silk products by supplying silk like products out of synthetic fibres.

On methylene diphenyl diisocyanate (MDI), duty has been increased from zero to 7.5 per cent. It is used in the production of polyurethanes for many applications, like spandex yarn. The revised custom duty will attract investments in India given the rising demand of polyurethanes and presence of no domestic players.

Source: Fibre2Fashion News

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Bihar clocks 10.5% growth rate in FY 2019-20: Economic Survey

Bihar recorded double digit growth rate in the financial year 2019-20, more than double the rate of growth at the national level then. The growth rate in Bihar in 2019-20 fiscal has been recorded at 10.5 per cent while it was 4.2 at the national level during the period, the Economic Survey 2020-21 introduced in the state legislative assembly during the day said.

The state had clocked 9.3 per cent growth rate in the fiscal 2018-19, the survey said, adding the increase in the succeeding  financial year was largely fuelled by the growth of services sector.

"Bihar recorded a double digit growth rate of 10.5 per cent in 2019-20 which is higher than the growth rate of Indian economy at 4.2 per cent in the same fiscal," Deputy Chief Minister Tarkishore Prasad said while talking to reporters after tabling the 15th Economic Survey in the assembly. Prasad, who also holds finance department, said that COVID-19 pandemic has affected the entire world and so has its negative impact on Indian economy and Bihar too.

The survey has 13 chapters with every chapter having a section on initiatives taken by the government during the pandemic, he said.

Among the three major sectors (primary, secondary and tertiary), the tertiary sector has recorded a noticeable increase in its share from 57.3 per cent in 2013-14 to 60.2 per cent in 2019-20, the FM said.

Within the tertiary sector, two sub-sectors which had noticeably increased their share in Gross State Value Added (GSVA) between 2013-14 and 2019-20 are - Road transport (from 4.4 to 5.9 per cent) and other services (from 10.5 to 13.8 per cent), he said.

Source: The Economic Times

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India, EU express hope to forge host of bilateral cooperation arrangements

India and the European Union (EU) on Friday expressed hope to forge a host of bilateral cooperation arrangements with a view to boost bilateral trade.

At a bilateral meeting with the EU, India shared structural reforms priorities of the country and various steps taken to revive economy hit by COVID-19 crisis.

During the 11th India-EU Macroeconomic dialogue held virtually, the EU informed about the economic challenges and outlook of their economy due to the adverse impact of the COVID-19 pandemic and their recovery plan.

“The dialogue concluded with the hope that both sides would be able to build stronger and deeper relations by entering into various bilateral cooperation arrangements which are of mutual interest to both sides,” an official statement said.

Both sides have been negotiating on the Bilateral Trade and Investment Agreement (BTIA) for many years but still not reached a consensus. The European Union is seeking greater market access for its automobiles, wines and spirits, and have raised concerns over high duties by India.

The Indian side, led by Economic Affairs Secretary Tarun Bajaj, shared fiscal policy response and medium-term fiscal strategy including financial/structural reforms priorities.

“India shared its policy response to COVID-19 crisis and steps taken to revive the economy from COVID-19 impact including well calibrated stimulus packages announced by the Government of India as also the vaccination-related efforts,” an official statement said.

The delegation from the EU was led by Maarten Verwey, director general (economic and financial affairs) of European Commission, who informed about the economic challenges and outlook of their economy due to the adverse impact of the COVID-19 pandemic and the recovery plan.

“India-EU relationship has evolved into a multifaceted partnership. Today, it covers all dimensions, political, economic, security, trade and investment, environment, research and innovation,” it said.

The 27-member EU is one of our largest trading partners, one of the largest investors in India and an important source for technology, innovation and best practices.

The dialogue also covered sharing of their experiences to enable both sides on various aspects such as collaboration in the G20 on finance track matters, including through G20 Framework Working Group deliverables, and international taxation of digital economy, it said.

Source: The Financial Express

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Indian Bank, IISc-run society join hands to fund start-ups and MSME

Indian Bank has entered into an MOU with the Society for Innovation and Development (SID), an initiative of Indian Institute of Science, Bengaluru for extending exclusive credit facility to Start-ups and MSMEs.

SID provides support to the MSME sector by providing joint research and development arrangements and technical & financial support for incubation and acceleration of high-end technology products under its department named “TIME2.”(Technology Innovation for Midsized Enterprises).

Under the MOU, SID will identify the start-ups and MSMEs based on their credentials and past experience and will refer the list of such members who require financial assistance to the Bank.

This initiative is a part of the Bank’s scheme “Ind Spring Board for financing Start-ups” and will empower Start-ups and MSMEs to realise their research efforts powered by financial support from the Bank and backed by incubation facility offered by SID.

The bank will extend loans of up to Rs 50 crore to these start-ups for working capital requirements or for purchase of machinery and equipment. As the name indicates, this initiative, which is mutually beneficial for both Bank and IISc, will be the spring board for start-ups to realise their ambitions.

Indian Bank had also recently launched “MSME Prerana” programme to empower MSME entrepreneurs through skill development and capacity building workshops in local languages.

Source: The Business Standard

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MSME credit grows 5.7 pc to Rs 19 lakh cr in Sept: Report

Findings from the TransUnion CIBIL-SIDBI MSME Pulse Report's latest edition indicate that under the government's Emergency Credit Line Guarantee Scheme (ECLGS), commercial credit enquiries surged 58 per cent year-on-year (YoY) in June 2020 and stabilised toward the end of the year, up around 13 per cent YoY) as of December, which is similar to pre-Covid-19 growth levels.

The total on-balance-sheet commercial lending exposure in India stood at Rs 71.25 lakh crore in September 2020, clocking a growth rate of 2.1 per cent YoY. For the MSME segment, credit exposure stood at Rs 19.09 lakh crore as of September, showing YoY growth of 5.7 per cent. This credit growth is observed across all the sub-segments of MSME lending.

Report analysis indicates that MSME loan originations growth, during January and February 2020, was over 30 per cent YoY. However, this growth rate reduced significantly in March and April months consequent to the Covid-19 lockdowns.

With the launch of the ECLGS, loan originations surged in June, growing at 115 per cent over June 2019 and continued to be high and close to pre-Covid-19 levels for the remainder of the year. This strong rebound in MSME loan originations was driven by the existing-to-bank (ETB) segment, the report said.

Borrowers, who have an existing commercial credit relationship with the lender, are defined as ETB.

This is primarily due to the design of the ECLGS, where the guidelines mandate lenders to extend 20 per cent of credit to existing borrowers. Consequently, the YoY growth in ETB loan originations crossed 200 per cent in the first month of the ECLGS infusion. Since then, this spike has tapered off, but ETB originations continue to stay buoyant. On the other hand, new-to-bank (NTB) originations are finding it hard to recover to pre-Covid-19 levels.

On the findings of the MSME Pulse, TransUnion CIBIL MD &CEO, Rajesh Kumar, said: "The resurgence in MSME credit growth, which is back at pre-pandemic levels, is a very promising indicator of economic recovery in our markets. Public Sector Banks (PSB) are the leading drivers of this resurgence as they have astutely wielded data analytics and credit information solutions to swiftly comply with the ECLGS guidelines and dexterously implement lending to MSMEs. Recent budget announcement have doubled the contribution to the MSME sector over last year, which shall further provide much needed financial support to the sector."

On studying trends at a geographic level, a significant increase is observed in the growth of loan originations in the urban, semi-urban and rural regions which were subjected to less stringent and shorter lockdowns. Metro cities which experienced stricter lockdowns showed muted growth. It is observed that MSME credit disbursals in metro cities were most impacted during April and May 2020. However, these have bounced back in June 2020 after the ECLGS implementation.

The report covers an analysis based on the CIBIL Rank, which is an indicator of the credit risk associated with MSMEs. CMR assigns a rank to the MSME based on its credit history data on a scale of 1-10, CMR 1 being the best possible rank and CMR 10 being the riskiest rank for MSMEs.

In MSME Pulse report, CMR transition is monitored for borrowers over a one-year period starting September 2019 to September 2020 for rank buckets of CMR 1-3, CMR 4-5, CMR 6-7 and CMR 8-10. It is observed that 36 per cent of borrowers who were in CMR 1-3 bucket in September 2019 downgraded to lower rank buckets by September 2020 and 15 per cent of the borrowers who were CMR 4-5 in September 2019 upgraded to a higher rank bucket by September 2020.

Further study on CMR downgrades across sectors reveals that rank deterioration is relatively lower for MSMEs that are focused on consumer staples or necessity sectors like auto, infrastructure and FMCG and higher for MSMEs where consumer discretionary spends are highest - sectors like hospitality, commercial real estate and textiles.

Looking across segments, it is observed that the Small and Medium segments have been least impacted due to the economic slowdown as these have seen the lowest rise in the CMR downgrade compared to the Micro segment of MSMEs.

Source: SME Times

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India on track to economic recovery in fiscal 2021-2022: S&P

India is on track to an economic recovery in fiscal 2021-2022, according to S & P Global Ratings, which recently said in a report titled 'Cross-Sector Outlook: India's Escape From Covid' that consistently good agriculture performance, a flattening of the COVID-19 infection curve and a pick-up in government spending are all supporting the economy.

India needs to quickly and thoroughly vaccinate most of its 1.4 billion people for the recovery to happen, it said.

"The emergence of yet more contagious Covid-19 variants with the potential to evade vaccine-derived immunity present a major risk to this recovery. As does the possibility of early withdrawal of global fiscal stimulus," said the report.

However, near-term prospects are positive. With a sustained decline in national confirmed Covid-19 cases allowing for a gradual relaxation of formerly stringent epidemic control measures, high frequency economic indicators continue to show improvement.

S & P said the Indian government's budget will also support the recovery with higher than previously expected expenditures for fiscals 2021 and 2022.

"India's improving growth prospects are critical to its ability to sustain the higher deficits associated with its more aggressive fiscal stance," the report said.

The economy still faces important risks as it transitions from stabilisation to recovery. "We estimate that India faces a permanent loss of output versus its pre-pandemic path, suggesting a long-term production deficit equivalent to about 10 per cent of GDP," said the report.

But the pace of recovery varies widely. Airports are still struggling with most flights grounded. Utilities are faring better, bolstered by regulated, contracted or availability-based returns that protect their operating cash flows despite an earlier fall in unit demand. "We believe counterparty credit risks and receivable delays pose the biggest risk for utilities (including renewables) while benign funding conditions assuage liquidity risk."

Likewise, a faster-than-expected earnings recovery has lowered downside risk for rated corporates. An increase in commodity prices and a revival of domestic demand after lockdowns were eased have driven upside earnings surprises.

"In our view, a sustained earnings rebound is key for ratings to stabilise. Roughly one quarter of ratings are still on negative outlook. In the other hand, proactive refinancing by speculative-grade corporates has materially reduced refinancing risk in 2021," the rating agency said.

S & P said finance companies' performance has been a mixed bag and polarisation between Indian finance companies can persist, it added.

Source: Fibre2Fashion News

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Forex reserves down by $249 million to $583.697 billion

The country's foreign exchange reserves fell by $249 million to $583.697 billion in the week ended February 12, RBI data showed on Friday.

In the previous week, the reserves had declined by $6.24 billion to stand at $583.945 billion. It had touched a record high of $590.185 billion in the week ended January 29, 2021.

In the reporting week, the decrease in reserves was mainly due to a fall in the foreign currency assets (FCAs), a major component of the overall reserves.

FCAs decreased by $1.387 billion to $540.951 billion, weekly data by the Reserve Bank of India (RBI) showed.

 Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves.

After falling for two consecutive weeks, the gold reserves rose by $1.26 billion to $36.227 billion in the week ended February 12.

The special drawing rights (SDRs) with the International Monetary Fund (IMF) rose by $10 million to $1.513 billion.

However, the country's reserve position with the IMF declined by $132 million to $5.006 billion in the reporting week, as per the data.

Source: The Business Standard

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View: For India to be a global supply hub, investment from sub-MNC smaller firms is vital

In the middle of a global pandemic, India is drawing record levels of foreign direct investment (FDI). While laudable, India’s FDI levels still lag the high water marks of other developing economies such as China, Brazil and Russia. One critical factor to attract major investments from the largest multinationals is to have a “plug and play ecosystem” of their trusted global suppliers.

These smaller firms are more risk averse than their larger partners, and more sensitive to issues like infrastructure quality. To attract investments from these crucial suppliers, India’s reform agenda must adapt to accommodate their specific business needs – which often differ from larger firms.

Over the last six years, India has improved its ranking in the World Bank ‘Doing Business’ index from 142nd place in 2014 up to 63rd place in 2020. While the Doing Business index is the best tool of its type, it is imperfect. Even in some areas where India has improved, the specific measurement parameters used by the World Bank hide imperfections.

For instance, while getting an electric power connection is easier in Delhi and Mumbai (the two cities studied for the report), across India power outages and uneven voltage are endemic, hampering businesses that cannot afford backup generation. In trading across borders, India has taken steps to facilitate goods trade such as allowing electronic submission of files. But the government regularly increases customs duties and expands local production rules – steps that are not a part of the Doing Business design.

Much of the unfinished reform agenda are the items of particular importance to smaller businesses. Large firms can deploy resources and wait for projects to gestate if procedural delays come up. For smaller firms, contract enforcement is the most important security tool. The ease of establishing a new  entity can be a make-or-break exercise. And access to quality inputs like water, electric power and sanitation are crucial, as these smaller firms are less likely to have the capital to invest in proprietary systems.

India’s trade policy has been slow to adapt to the requirements of suppliers. Low trade barriers are critical to move input goods into a market for production. A recent report on ‘Drivers and Benefits of Enhancing Participation in Global Value Chains’ directly links tariffs with global supply chain linkages. Here, India is actually withdrawing from the world somewhat.

Due to high trade deficits, India has been steadily re-establishing higher customs duties on dozens of product lines annually, including in the Union Budget this month. While these new taxes on foreign made products could offer short term relief to local manufacturers, it could become quite short sighted if these moves deter investors from placing global production in India.

India has certainly achieved notable success in attracting FDI. Just counting new equity, India has attracted nearly $63 billion in the 12 months up to November 2020. This is the first time in the nation’s history that FDI has crossed $60 billion in a 12-month period.

But this topline number hides two facts. First, a sizeable portion of these inflows is linked to a single company, Reliance Jio, which has secured over $14 billion in foreign investment in the last year. While the RBI does not release how much of the $63 billion is attributed to the investments in Jio, the link is quite clear. And second, this total is behind the recent high water marks of other emerging markets. China has averaged $200 billion annual FDI for the last 15 years. Brazil crossed the $60 billion mark six times in this period. Russia hit $76 billion in 2008.

The agenda to attract a larger pool of global suppliers does not entirely lie with New Delhi. Many of the required reforms to help smaller firms start and operate successfully lie with India’s 28 states. For instance, states have primary control over factors like electric power, water, sanitation, and most business permits.

To become a global supply chain hub, India’s states must play a powerful role. The central government is trying to prod states into action. After a three year gap, India has issued a new set of states’ business rankings under the ‘Business Reforms Action Plan’. Additionally, the central government has started to link these state level business reforms to a state’s ability to increase their local borrowing limits. India’s ability to take advantage of current shifts in global value chains away from China will require coordinated action between New Delhi and progressive state leaders in this fashion.

India’s desire to attract a wide array of global manufacturers is shared by many competing markets like Vietnam, Malaysia, Indonesia, among others. Attracting big investments is conceptually easier to understand when it is in terms of an automobile production facility, consumer durables factory, or food production plant. But smaller suppliers are the crucial underbelly to supply chains. India’s ability to attract investment from these risk averse firms with less capital will cement India’s place as a global manufacturing superpower. The reform agenda for these firms is somewhat different than for larger firms – but well worth undertaking.

Source: The Economic Times

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15 Indian states complete ease of doing business reforms

The number of Indian states successfully completing the Ease of Doing Business (EoDB) reforms has increased to 15, the government said recently. Three more states—Gujarat, Uttar Pradesh and Uttarakhand—have reported completing the reforms stipulated by the department of expenditure. The EoDB is a key indicator of the investment-friendly business climate.

On receipt of recommendation from the department for promotion of industry and internal trade (DPIIT), the department of expenditure has granted permission to these three states to raise additional financial resources of ₹9,905 crore through open market borrowings.

Earlier, Andhra Pradesh, Assam, Haryana, Himachal Pradesh, Karnataka, Kerala, Madhya Pradesh, Odisha, Punjab, Rajasthan, Tamil Nadu and Telangana had completed such reforms, an official release said.

These 15 states have been granted additional borrowing permission of ₹38,088 crore.

Improvements in EoDB will enable faster future growth of the state economy. Therefore, the government had in May 2020 decided to link grant of additional borrowing permissions to states that undertake the reforms to facilitate ease of doing business.

Till now, 18 states have carried out at least one of the four stipulated reforms and have been granted reform linked borrowing permissions.

Out of these, 13 have implemented the ‘one nation one ration card’ system, 15 have done ease of doing business reforms, six have done local body reforms and two states have undertaken power sector reforms.

Total reform linked additional borrowing permission issued so far to the states stands at ₹86,417 crore.

Source: Fibre2Fashion News

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Cotton exports may increase 30% as global market surges

India’s cotton exports may increase by about 30 per cent for the current crop year (October 2020-September 2021) as rising global prices have made the fibre competitive.

According to trade experts, including Cotton Corporation of India (CCI) Chairman and Managing Director (CMD) PK Agarwal, exports could be between 65 and 70 lakh bales (of 170 kg each) compared with 50 lakh bales the previous year.

Agarwal sounded bullish on export prospects with CCI holding huge stocks of the fibre. “Export demand is good and overall Indian exports could be around 65-70 lakh bales this (crop) year,” said the CCI CMD.

“We will easily export over 65 lakh bales in the current global market scenario,” said Rajkot-based raw cotton, spinning waste and yarn trader Anand Poppat.

The bullishness on cotton exports, after traders pruned their projections to 54 lakh bales last month, follows cotton prices in New York topping 89 cents per pound (₹45,924 a candy of 356 kg).

Cheaper cost

In contrast, Shankar-6, India’s benchmark cotton for export market, is quoted at ₹44,600-45,100 a candy. Cotton futures for delivery in April were quoted at ₹22,200 a bale (₹46,489 a candy) on MCX.

“Indian cotton is still the cheapest in the world,” Agarwal said adding that there was good demand from countries such as Pakistan, Bangladesh, Vietnam and China among others. “Bangladesh is the biggest buyer of Indian cotton. Turkey and Indonesia are other buyers. Pakistan also needs cotton as its crop is lower this year,” Poppat said.

However, trade between Pakistan and India came to a halt after the Pulawama blast in February 2019. But Islamabad can still get the commodity from Dubai or other Gulf destinations, indirectly.

Indian shippers are offering cotton at least 10 per cent lower than the prices quoted on New York Mercantile Exchange.

Lower US crop

Brownfieldagnews website quoted a US national cotton council official as saying that cotton prices are projected to rule strong this year on demand recovery. Global economy is recovering at a faster pace and mills are buying more cotton.

Agarwal said a lower US crop is also seen as a positive for the Indian exporters.

Though the USDA has maintained its crop production prospects in the US, traders expect a cut next month, thus buoying the price.

Poppat said at least 30 lakh bales have been exported by January-end and another 2-3 lakh bales could have been exported so far this month.

On its part, CCI expects to ship a good amount of cotton this year through open market and global tenders.

“We expect our share in India’s total exports could be around 10 lakh bales this year,” Agarwal said.

Procurement operations

CCI, under the Centre’s procurement scheme at minimum support prices (MSP), has purchased 91.8 lakh bales accounting for nearly 25 per cent of the projected crop this year.

The Committee on Cotton Production and Consumption (CCPC) has estimated this year’s production at 371 lakh bales compared with 365 lakh bales last year. The Cotton Association of India (CAI), a body of traders, has retained its production estimate at 360 lakh bales. India holds an advantage with high carryover stocks of over 110 lakh bales from last year. CCPC has projected the carryover stocks from last season at 125 lakh bales, while CAI has pegged it at 113.50 lakh bales

Agarwal said that CCI has sold 20 lakh bales so far and the corporation currently has 70 lakh bales stocks with 63 lakh bales from the current season.

The CCI CMD said the public procurement will be coming to an end as the arrivals have tapered off and the market prices are ruling at ₹6,000-6,200 per quintal, above the MSP of ₹5,515.

According to traders, farmers have begun to hold back their produce expecting further rise in prices.

In Gujarat’s Rajkot district, one of the primary growing regions, raw cotton or kapas was quoted at ₹5,850 a quintal on Thursday, while prices in Punjab markets ranged between ₹5,700 and ₹6,000.

According to the Ministry of Agriculture and Farmers Welfare, kapas arrivals across the country were 2.84 lakh bales during February 15-18, lower than 3.91 lakh bales during February 8-11.

Rajkot trader Poppat said one hurdle in cotton exports could be the persisting container problem. “It continues to affect shipments,” he said. However, traders and exporters expect the situation to improve from April onwards.

Source: The Hindu Business Line

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Cash-strapped states threaten Modi's double-digit economic growth goal

Prime Minister Narendra Modi’s plan to boost capital expenditure to help India regain the fastest-growing major economy title risks being derailed by the nation’s cash-strapped states, which are cutting back on such spending.

The nation’s 28 states, which account for about 60% of total government expenditure on infrastructure and asset creation, are hamstrung by declining tax revenue and the cost of fighting the Covid-19 pandemic. Also, unlike the Central government, states don’t have the flexibility to borrow more to maintain spending as that would lead to a fiscal deficit blowout.

“While central expenditure growth has picked up significantly over the last three months, states continue to compress expenditure to maintain fiscal balance,” said Samiran Chakraborty, an economist at Citigroup Inc. “This may dampen the overall growth.”

Modi’s government this month proposed boosting capital expenditure by 26% to Rs 5.54 trillion ($76 billion) next fiscal year starting April, hoping the multiplier effect of such spending will result in a world-beating double-digit expansion for the economy that’s headed for its biggest contraction this year.

The Reserve Bank of India estimates that every one rupee spent by the federal government will lead to an increase in gross domestic product by Rs 3.14, while similar spending by states will boost output by Rs 2. But states aren’t spending enough, according to an analysis by QuantEco Research economist Yuvika Singhal.

Capital expenditure of 17 key states contracted 23.5% in the nine months to December from a year ago, possibly leading to a shortfall of as much as Rs 1.8 trillion in the current year’s spending aim, Singhal said.

That gap can knock off Rs 3.6 trillion from economic output. Whereas, additional spending by the federal government in the current year would add just Rs 84,800 crore despite a higher multiplier effect.

A cut by states may “dampen” some of the impact of the federal stimulus measures and “act as a drag on revival of investment and overall growth,” the RBI said in a report in December.

Source: The Business Standard

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INTERNATIONAL

Japan economy shrinks for 1st time since 2009

Japan’s economy shrank last year by 4.8 per cent for the first time in more than a decade due to the impact of the novel coronavirus pandemic, but the contraction was less than expected and it ended the year on a strong note, thanks to a rise in exports and government support. Analysts, however, caution the near-term outlook could be bumpy as fresh virus restrictions dampen domestic consumption.

The country is still closed to tourists six months before the postponed Olympics are scheduled to start.

The contraction was better than forecast in a Bloomberg survey of analysts because of a strong October-December performance, which saw the economy expand by 12.7 per cent from the previous quarter on an annualised basis.

But observers told a global newswire the economy will not likely receive the much-needed boost from the summer’s postponed 2020 Olympics, even as organisers insist the event will go ahead even if the pandemic is not fully under control.

With doubts over whether foreign spectators will be allowed to attend and plans for athletes and officials to stay isolated during the Games, there will not be much chance for spending, said Anwita Basu, head of country risk for Asia at Fitch Solutions.

“The growth outcome of zero spectators and Games not being held would be roughly the same,” she told the newswire.

Anti-virus measures and other delay-related costs have added 294 billion yen ($2.8 billion) to the event’s price tag, which has ballooned to at least 1.64 trillion yen -- making Tokyo 2020 potentially the most expensive Summer Olympics in history.

Source: Fibre2Fashion News

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Circular economy in RMG: Reducing and reusing waste is the way to go

Globally, one garbage truckload of textiles is landfilled or incinerated every second and less than 1 percent of fibres used in garment manufacturing are converted into new wearable clothing. This is due to the linear economy in the textile industry which is characterised by a one-way system: resources are converted into manufactured products which are sold for use and eventually discarded.

The very nature of the fashion industry, requiring companies to adapt rapidly to emerging trends and changes in consumer demand, renders it damaging to the environmental quality of the planet.

In order to combat the inefficiencies built into this one-way system, experts have presented an ambitious vision of a new circular economy in the textile industry which limits waste and environmental pollution by keeping products in use through recycling.

With younger generations more concerned about global challenges and environmental issues, consumption behavior is also likely to change gradually with consumers willing to pay more for sustainable goods. According to thredUP's 2020 Resale Report, resale grew 25 times faster than the retail sector in 2019, indicating that consumer preferences have started to shift towards second-hand products.

As second-hand fashion emerges, business models in the fashion world will have to eventually make way for durable clothing and attractive resale strategies. 

The Bangladeshi garment industry has already announced to the world that it is ready to embrace the idea of the circular economy in textile manufacturing. A partnership between the Global Fashion Agenda (GFA), Reverse Resources, P4G and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA)—known as the Circular Fashion Partnership—has been initiated to reduce waste and depletion of natural resources caused by textile manufacturing through supporting the development of the recycling industry in Bangladesh.

The Circular Fashion Partnership, which has currently united more than 30 international brands such as H&M, Marks & Spencer, OVS, Bershka, C&A, Kmart Australia, garment manufacturing companies and recycling firms in Bangladesh, can prove to be the epitome of sustainability in fashion for other leading garment-producing nations such as Vietnam and Indonesia.

The Global Fashion Agenda, a Denmark-based sustainability forum that is leading the new initiative, has outlined two workstreams for the project: the first workstream involves production of new garments made from recycled waste, and the second workstream involves the implementation of a Circular Fashion Stock Marketplace for overstock garments that have piled up as a result of cancelled orders during the Covid-19 crisis in Bangladesh. This initiative will also play a crucial role in developing countries to help pursue effective strategies in achieving the Sustainable Development Goal 12: responsible consumption and production.

Moreover, through facilitating the transition to a circular economy in the global market for textiles, the partnership has the potential to decrease carbon, water footprint and waste to landfills by 15 percent. According to Reverse Resources, a tracking and trading platform for textile waste working to promote the concept of circular economy, it is possible to replace 40 percent of waste materials from garment manufacturing with recycled fibres by 2030.

The firm pointed out that several inefficiencies in the industrial waste management system arise because factories mix up waste, causing the value of waste to drop. Moreover, waste is manually sorted and traded by multiple middlemen, forcing recyclers to pay almost 30 percent more than the fair price.

In terms of the global share of the apparel market, Bangladesh has a mere 6.8 percent compared to the 30 percent controlled by China, the world's largest apparel exporter. However, almost 45 percent of the total textile produced each year in China is wasted.

In regard to Bangladesh's current position in the global market, Miran Ali, director of BGMEA, suggested that the country already offers brands the greenest factories in the world which is a heartening development for the apparel sector, and if we were to now also bring them a way to recycle some of the wastage, then our offer package would undoubtedly get that much better.

In 2019, BGMEA formed the RMG Sustainability Council (RSC) as a means to advocate for sustainability in the manufacturing process. One of the key concerns of the RSC has been to reduce the negative impact of garment production on the environment. In this regard, the Circular Fashion Partnership, if successful, can be a revolutionary project that will not only help advance RSC's visions but also position Bangladesh as a leader in ethical fashion practices.

However, it is important to point out that such largescale transitions are often accompanied with challenges. For countries like Bangladesh which primary rely on low-wage labour, it is also important to analyse the labour-market impacts of the circular economy model. The transition to a more circular economy relies on establishing clothing as a durable product as opposed to a disposable one. Instead of creating multiple lines and collections every year, in a circular economy, fashion companies will focus more on designing and producing clothes of higher quality. For Bangladesh, which is the lifeline of fast fashion, this may imply lower amounts of production and thus translate to fewer working hours or job losses in some sectors.

Moreover, the circular economy requires further digitisation and technological development in the textile industry, which makes the overall impact on the labour market outcomes more complex. This reaffirms the need for the Bangladeshi garment industry to move away from its comparative advantage in low-cost labour and towards a higher value-added production process.

Source: The Daily Star

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14 labs can test for GM cotton as per GOTS/OCA protocol

In a significant development which will help organic cotton stakeholders test their products for GM cotton, 14 laboratories from China, Germany, India, the Netherlands and Portugal have qualified to conduct GMO testing as per the ISO IWA 32:2019 protocol, developed by the Global Organic Textile Standards, the Organic Cotton Accelerator and Textile Exchange.

An overview of the laboratories that can currently conduct GMO testing as per the ISO IWA 32:2019 method has now been jointly published by GOTS, OCA and Textile Exchange, which constitutes an important milestone on the journey towards the widespread use of this standardised protocol.

In 2019, Global Organic Textile Standards (GOTS), the Organic Cotton Accelerator (OCA) and Textile Exchange partnered to develop the ISO IWA 32:2019 protocol to create a common language among laboratories worldwide to screen for the potential presence of genetically modified (GM) cotton along the organic cotton value chain.

Following that project, the partners set out on a new initiative to bring much-needed clarity regarding the laboratories that perform testing against the international ISO reference protocol and carry out qualitative GMO testing in cottonseed, leaf, fibre and chemically unprocessed fibre-derived materials.

The global ISO IWA 32:2019 proficiency test initiative is a collaboration between GOTS, OCA and Textile Exchange with technical support from Wageningen Food Safety Research.

The joint project has reached a significant milestone: fourteen laboratories from China, Germany, India, the Netherlands and Portugal have successfully passed the proficiency test. An overview of the laboratories that can currently conduct GMO testing as per the ISO IWA 32:2019 method has now been jointly published by GOTS, OCA and Textile Exchange, which constitutes an important milestone on the journey towards the widespread use of this standardised protocol.

While GMOs are excluded from organic systems, organic isn't a claim of absolute freedom from contamination or GMOs' presence in organic products. It is a claim that GMOs are not deliberately or knowingly used and that organic producers take far-reaching steps to avoid GMO contamination along the organic cotton value chain, from farmers to spinners, to brands. To manage this, it is essential that organic cotton stakeholders can reliably test their products for the potential presence of GM cotton.

The ISO IWA 32:2019 is a globally accepted reference protocol that was developed to screen for the potential presence of genetically modified (GM) cotton. The protocol provided the organic cotton sector with an essential tool for taking all reasonable precautions to prevent GM cotton in their organic cotton produce. Since the publication of this globally accepted reference protocol, qualitative GM cotton screening as per the ISO IWA 32:2019 is mandatory within the GOTS and OCS (Organic Content Standard) supply chain and OCA’s Farmer Engagement and Development programme.

The sector now recommends using the ISO IWA 32 protocol throughout the organic cotton value chain as the only recognised method for GMO testing. Therefore, the global ISO IWA 32:2019 proficiency test initiative's success is vital in building confidence among the industry.

Commenting on the global ISO IWA 32:2019 proficiency test initiative, OCA's programme officer, Mathilde Tournebize, said: "As a global platform, we are committed to increasing the clarity and reliability of GMO screening for the organic cotton sector. The first results of the global proficiency test initiative have given us an overview of the laboratories that can be contacted to conduct such tests. We're hopeful that as we see more laboratories implementing the ISO IWA 32:2019 worldwide, several rounds of proficiency tests will help us all chart the labs that can be contacted to reliably conduct GMO tests.

We are proud to be working in partnership with both GOTS and Textile Exchange as we are united in our belief that this proficiency test will contribute to standardising GMO testing along the organic cotton value chain. Our ambition is to reach out to more laboratories and geographies to increase the widespread use of the ISO IWA 32:2019 protocol."

Rahul Bhajekar, managing director at GOTS, added: "I am glad to see a high level of interest from laboratories across the world and results showing competence from producing and buying countries. We shall continue to further advance this collaboration with like-minded organisations to further develop the standardisation of GMO testing in cotton fibre products. We remain committed to ensuring that GOTS goods are free from GMOs."

Amish Gosai, South Asia manager at Textile Exchange, said: "The success of standardised testing methods depends on adaptability and uniformed results. Labs achieving a successful outcome in the proficiency test indicate both lab performance and the effectiveness of this method. We are glad to see that this initiative shows that the global ISO IWA 32 testing method gives consistent outcomes, and we look forward to more labs joining the next round of the proficiency test."

The ISO IWA 32:2019 proficiency test initiative is looking to add more laboratories for the next round of proficiency test, which will be organised, once sufficient demand has been reached. The ISO IWA 32 protocol is also currently in the process of being converted to an International Standard by the ISO TC 34 / SC 16 / JWG 12 'Molecular biomarkers of agricultural fibres'. GOTS, OCA and Textile Exchange are participating in the working group to ensure that the organic cotton sector interests are represented.

Source: Fibre2Fashion News

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Textile exports increase 8.23pc to $8.765bn in 7 months; 10.79pc in January

The exports of textile commodities witnessed an increase of 8.23 percent during the first seven months of the current fiscal year as compared to the corresponding period of last year.

The textile exports were recorded at $8765.739 million in July-January (2020-21) against the exports of $8099.095 million in July-January (2019-20), showing growth of 8.23 percent, according to latest data of Pakistan Bureau of Statistics (PBS).

The textile commodities that contributed in positive trade growth included knitwear, exports of which increased from $1831.758 million last year to $2175.021 million during the current year, showing growth of 18.74 percent.

Likewise, the exports of yarn (other than cotton yarn) increased by 4.63 percent, from $16.286 million to $17.040 million whereas, exports of bed wear increased by 16.38 percent from $1392.020 to $1613.509 while the exports of towels increased by 19.91percent, from $444.685 million to $533.207 million.

The exports of tents, canvas and tarplin grew by 48.95 percent, from $49.611 million to $73.897 million; ready made garments by 5.48 percent, from $1680.897 million to $1773.054 million; art, silk and synthetic textile by 0.45 percent, from $199.790 million to $200.687 million while exports of made up article (excluding towels and bed wear) increased by 18.01 percent, from $378.680 million to $446.878 million.

Meanwhile, the commodities that witnessed negative growth in traded included raw cotton, exports of which declined by 96.27 percent, from $15.885 million to $0.593 million; cotton yarn decreased by 23.97 percent, from $639.770 to $486.426 whereas the exports of cotton cloth also decreased by 8.63 percent, from $1188.990 million to $1086.333.

On year-on-year basis, the textile exports increased by 10.79 percent during the month of January 2021 as compared to the same month of last year.

The exports during January 2021 were recorded at $1323.324 million against the exports of $1194.463 million.

On month-on-month basis, the exports from the country witnessed decrease of 5.54 percent during January 2020 when compared to the exports of $1400.269 million in December 2020.

It is pertinent to mention here that the country’s merchandize exports increased by 5.53 percent during the first seven months of the current fiscal year (2020-21) as compared to the corresponding period of last year.

The exports of the country during July-January (2020-21) were recorded at $14.242 billion against the exports of $13.496 billion during July-January (2019-20), according to the latest PBS data.

The imports during the period under review also increased by 6.92 percent by growing from $27.316 billion last year to $29.205 billion during the first seven months of current fiscal year.

Based on the figures, the country’s trade deficit increased by 8.27 percent during the first seven months as compared to the corresponding period of last year. The trade deficit during the first seven months of the current fiscal year was recorded at $14.963 billion against the deficit of $13.820 billion last year.

Source: The Business Recorder

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Dubai-based online fashion company Namshi debuts in Qatar

Dubai-based e-commerce firm Namshi.com recently opened its platform to the Qatari market. It is the first e-commerce player to launch in the country after the historic regional agreement to normalise relations among the Gulf Coordination Council (GCC) countries. Namshi is started accepting pre-orders from Qatari customers via its website and app.

Namshi will offer rapid delivery to Qatar, just like its services in other GCC countries—Saudi Arabia, the United Arab Emirates (UAE), Kuwait, Bahrain and Oman.

Namshi has experienced exponential growth in recent times, with a 50 per cent rise in business and a 33 per cent increase in new customer acquisition since the pandemic, according to media reports from the Middle East.

Namshi’s collection includes over 800 brands, including global names, in-house labels and limited-edition collections.

Source: Fibre2Fashion News

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Driving growth in textile sector

THE textile industry is central to Lesotho's economy. With 45 000 workers, it is the largest private sector employer in the country.

It accounts for 92 percent of manufacturing jobs, most of which are held by women. The more than 40 factories generate 43 percent of Lesotho's exports.

The sector's contribution to the economy however goes beyond formal jobs and exports.

The survival of many economic activities, both formal and informal, is tied to the sector.

Textile workers are the lifeblood of the taxi industry, retail shops as well as catering and accommodation businesses. There are also other formal and informal businesses that feed off the sector.

Yet despite this apparent significance the economy remains largely dominated by foreign investors.

Only two of the 40-something textile factories are locally owned.

This trend which has been sustained for the past three decades is however slowly changing as more locals enter the sector. Although the new entrants remain relatively small, there are strong indications that local investors are willing to invest in their growth.

One of those locally owned factories is Afri-Expo Textiles which started in 2016.

Located in Ha Tikoe Industrial Park, Afri-Expo is a reflection of what is possible with determination and courage. It started at a time when the prevailing narrative was that Lesotho's textile sector was dying. The markets were dry and wage disputes were wreaking havoc across the sector.

Galloping production costs were squeezing margins.

At the same time buyers were leaving in droves to cheaper producers in other countries whose governments were offering generous incentives to existing and potential investors in textile.

Yet Teboho Kobeli, Afri-Expo's managing director, says he was not fazed by the gloom associated with the sector. Kobeli says his decision to go against the grain was based on his knowledge of the sector.

He has vast experience in the clothing business.

'The truth is that most of what we have been told about textiles in Lesotho is not true. I suspect it is meant to scare locals from getting into the sector,' he says.

'The business is sustainable if you do it well. Everyone wears clothes. You wear them from the day you are born to the day you die.'

'The market is there but you just have to tap into it by making the right products and having the right skills.'

That bravery is beginning to pay off in ways Kobeli never imagined.

Today the factory employees about 600 workers with a monthly production capacity of 10 000 units.

Kobeli says the company is struggling to meet the huge demand from buyers.

That is why he has roped in Sekhametsi Investment Consortium to provide the financial muscle and expertise to grow the company. Last year Sekhametsi bought a 30 percent stake in Afri-Expo for M10 million.

Kobeli says the long-term goal is to establish factories in the ten districts and employ 10 000 people.

'AGOA (African Growth and Opportunity Act) is coming to an end soon and it's likely that most foreign investors will leave the country. The disaster can only be avoided if Basotho participate in the textile sector at ownership level,' Kobeli says.

AGOA is the trade facility for poor countries to export textiles to the United States duty-free.

Agoa expires in 2024 and there is uncertainty over its renewal. Some foreign-owned textiles are said to be already getting ready to jump ship when AGOA expires. Afri-Expo is one of the few companies that is unlikely to be affected by AGOA's ending.

'Lesotho is sitting on a time bomb that only Basotho can defuse by starting their own factories to create employment. There is no doubt that the foreign investors will leave. What is however certain is that we have the means and skills to fill that void as locals,' Kobeli says.

The company is focusing on the regional market which is less susceptible to the whims of the United States' lawmakers. Kobeli says the regional market has served the company well.

'With Sekhametsi's help we can grow the business and increase our production.'

Palo Kotelo, one of the two Sekhametsi representatives on the Afri-Expo board, says the investment fits well with the consortium's growth strategy.

'We see the potential in this business but we are also looking at ways to create sustainable jobs for Basotho. We are pleased by the direction that the company is taking,' Kotelo says.

'It is time for Basotho to control their destiny by investing in the key areas of their economy. No country has ever developed by relying solely on foreign investment. The real drivers of any economy should be the locals.'

The factory focuses on the Cut, Trim and Make business which is at the very bottom of the textile manufacturing chain.

The plan, Kobeli explains, is to move up the value chain to make its own products.

That would allow the factory to put an additional 30 percent mark-up on its products.

But to do that Afri-Expo has to conquer several hurdles.

For instance, the factory in Ha Tikoe has become too small for the company's operations. Storage and working space have become a problem.

'We are crammed in this area. We cannot increase production unless we get a larger factory,' he says.

The other problem is a laundry to wash denim garments, the factory's main products.

Lesotho has small textile laundries that cannot meet the market demand.

Afri-Expo has to send its products to a laundry in Durban.

'It's costing us money because we have to transport the garments to Durban. We also lose time while waiting for the products to come back.'

At times some of Kobeli's products are stuck in Durban for months because the laundry is overwhelmed.

Using the laundry in Durban also comes with logistical challenges at the borders.

It also makes Afri-Expo's products more expensive.

Kobeli says they are now working on establishing a laundry that will serve not only Afri-Expo but the whole industry.

'With our own laundry we can increase our margins by 25 percent. We can hire more people and increase our productions because we are able to accept more orders.'

Source: MENAFN

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EC sets course for sustainable EU trade strategy

The European Commission (EC) has set out a course for an open, sustainable and assertive EU trade strategy for the coming years. The new strategy will strengthen the capacity of trade to support the digital and climate transitions. It includes a series of headline actions which focus on delivering stronger global trading rules and contributing to the EU’s economic recovery.

Reflecting the concept of open strategic autonomy, the strategy builds on the EU’s openness to contribute to the economic recovery through support for the green and digital transformations, as well as a renewed focus on strengthening multilateralism and reforming global trade rules to ensure that they are fair and sustainable. "Where necessary, the EU will take a more assertive stance in defending its interests and values, including through new tools," the EC said in a statement.

"Addressing one of the biggest challenges of our time and responding to the expectation of its citizens, the Commission is putting sustainability at the heart of its new trade strategy, supporting the fundamental transformation of its economy to a climate-neutral one," the statement added.

Responding to current challenges, the EU trade strategy prioritises a major reform of the World Trade Organization (WTO), including global commitments on trade and climate, new rules for digital trade, reinforced rules to tackle competitive distortions, and restoring its system for binding dispute settlement.

"The challenges we face require a new strategy for EU trade policy. We need open, rules-based trade to help restore growth and job creation post-COVID. Equally, trade policy must fully support the green and digital transformations of our economy and lead global efforts to reform the WTO.

It should also give us the tools to defend ourselves when we face unfair trade practices. We are pursuing a course that is open, strategic and assertive, emphasising the EU’s ability to make its own choices and shape the world around it through leadership and engagement, reflecting our strategic interests and values,” said EC executive vice-president and commissioner for trade Valdis Dombrovskis.

The new strategy will contribute to achieve the European Green Deal objectives. It will also contribute in removing unjustified trade barriers in the digital economy to reap the benefits of digital technologies in trade. By reinforcing its alliances, such as the transatlantic partnership, together with a stronger focus on neighbouring countries and Africa, the EU will be better able to shape global change.

In tandem, the EU will adopt a tougher, more assertive approach towards implementation and enforcement of its trade agreements, fighting unfair trade and addressing sustainability concerns. The EU is stepping up its efforts to ensure that its agreements deliver the negotiated benefits for its workers, farmers and citizens, EC said.

EC has framed the new EU trade strategy based on a wide and inclusive public consultation, including more than 400 submissions by a wide range of stakeholders, public events in almost every Member State, and close engagement with the European Parliament, EU governments, businesses, civil society and the public.

Source: Fibre2Fashion News

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Sterling hits $1.40 for first time in nearly 3 years on vaccine hopes

Sterling hit $1.40 against the dollar for the first time in nearly three years on Friday, as analysts continued to bet Britain's quick pace of vaccinations will lead to an economic rebound from the country's worst crash in output in 300 years.

At 0857 GMT, the pound was at $1.4005 against the dollar, up 0.2% on the day. That level was its highest since April 2018.

The pound is the best performing G10 currency this year, up 2.3% against the dollar as investors bet that Britain's quicker pace of vaccinations will lead to a recovery from the worst annual fall in economic output in three centuries.

"My sense is the vaccine currency label attached to the pound is in part behind the move through $1.40," said Neil Jones, head of FX sales, financial institutions at Mizuho Bank.

The pound has also gained more than 3% against the euro this year, with analysts attributing the single currency's weakness to the pound as reflective of other European countries' relatively slower vaccine rollout. On Friday it traded 0.2% lower to the euro at 86.74 pence.

On Monday, UK Prime Minister Boris Johnson is expected to announce the government's next steps in fighting the coronavirus, which may include plans to take Britain out of its third national lockdown.

"The apparent success of its vaccine campaign notwithstanding, we think that the UK government would err on the side of caution," said Valentin Marinov, head of G10 FX research at Credit Agricole in London.

"In turn, this could disappoint FX investors who have been aggressively adding to their GBP longs in anticipation of a more rapid opening up of the UK economy and have pushed the currency into overbought territory."

Speculators increased their long positions on sterling - bets the currency will increase in value against the dollar - to their highest levels since March 2020 in the week up to last Tuesday, CFTC data shows.

Towards the end of last year, speculators held short positions on the pound as Britain and the EU raced to sign a post-Brexit trade deal.

At $1.40, the pound is about 6% shy of $1.4860 - the level it held a day before the result of the 2016 Brexit referendum was announced.

The currency's fall in the wake of the Brexit vote made imports more expensive, pushing up inflation. Now, the pound's strength could hurt export-heavy companies that form Britain's FTSE 100 index, which earn a majority of their revenue in dollars.

British retail sales tumbled in January as non-essential shops went back into lockdown, official data showed. Retail sales volumes slumped by 8.2% compared with December, a far bigger fall than the 2.5% decrease forecast in a Reuters poll of economists and the second largest on record.

"The Brexit issue has disappeared and we're now focusing on COVID-19 and how hard the UK economy has been hit," said Niels Christensen, chief analyst, research and risk solutions at Nordea Markets, noting Britain has been hit hardest among OECD countries.

"We are now looking at a more positive outlook for the UK economy. And even though expectations of a rate cut from the Bank of England have not completely disappeared, the risk for that has definitely diminished."

Christensen added that an unwinding of short positions from the end of last year has also benefited sterling.

Money markets as of 1057 GMT on Friday showed no expectations of negative rates from the Bank of England as far out as August 2022.

Source: The Business Standard

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China's cotton imports rise 16.8% in 2020

Total cotton imports by China increased by 16.8 per cent year-on-year to 2.16 million tonnes in 2020, according to the country's General Administration of Customs. Cotton imports declined during the first half of the year due to the impact of COVID-19 pandemic, but imports soared in the second half as production resumed and consumption recovered.

In the first six months of 2020, China's cotton imports decreased by 23.7 per cent year-on-year to 900,000 tonnes, the official data showed.

However, cotton imports surged 88.1 per cent to 1.26 million tonnes during July-December 2020, the customs data showed.

Source: Fibre2Fashion News

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UK economy shows signs of stabilisation after new Covid-19 lockdown hit

Britain's economy has stabilised after a new Covid-19 lockdown last month hit retailers, and business and consumers are hopeful the vaccination campaign will spur a recovery, data showed on Friday.

The IHS Markit/CIPS flash composite Purchasing Managers' Index, a survey of businesses, suggested the economy was barely shrinking in the first half of February as companies adjusted to the latest restrictions.

A separate survey of households showed consumers at their most confident since the pandemic began.

Britain's economy had its biggest slump in 300 years in 2020, when it contracted by 10%, and will shrink by 4% in the first three months of 2021, the Bank of England predicts.

The central bank expects a strong subsequent recovery because of the COVID-19 vaccination programme - though policymaker Gertjan Vlieghe said in a speech on Friday that the BoE could need to cut interest rates below zero later this year if unemployment stayed high.

Prime Minister Boris Johnson is due on Monday to announce the next steps in England's lockdown but has said any easing of restrictions will be gradual.

Official data for January underscored the impact of the latest lockdown on retailers.

Retail sales volumes slumped by 8.2% from December, a much bigger fall than the 2.5% decrease forecast in a Reuters poll of economists, and the second largest on record.

"The only good thing about the current lockdown is that it's no way near as bad for the economy as the first one," Paul Dales, an economist at Capital Economics, said.

The smaller fall in retail sales than last April's 18% plunge reflected growth in online shopping.

BORROWING SURGE SLOWED IN JANUARY

There was some better news for finance minister Rishi Sunak as he prepares to announce Britain's next annual budget on March 3.

Though public sector borrowing of 8.8 billion pounds ($12.3 billion) was the first January deficit in a decade, it was much less than the 24.5 billion pounds forecast in a Reuters poll.

That took borrowing since the start of the financial year in April to 270.6 billion pounds, reflecting a surge in spending and tax cuts ordered by Sunak.

The figure does not count losses on government-backed loans which could add 30 billion pounds to the shortfall this year, but the deficit is likely to be smaller than official forecasts, the Institute for Fiscal Studies think tank said.

Sunak is expected to extend a costly wage subsidy programme, at least for the hardest-hit sectors, but he said the time for a reckoning would come.

"It's right that once our economy begins to recover, we should look to return the public finances to a more sustainable footing and I'll always be honest with the British people about how we will do this," he said.

Some economists expect higher taxes sooner rather than later.

"Big tax rises eventually will have to be announced, with 2022 likely to be the worst year, so that they will be far from voters' minds by the time of the next general election in May 2024," Samuel Tombs, at Pantheon Macroeconomics, said.

Public debt rose to 2.115 trillion pounds, or 97.9% of gross domestic product - a percentage not seen since the early 1960s.

The PMI survey and a separate measure of manufacturing from the Confederation of British Industry, showing factory orders suffering the smallest hit in a year, gave Sunak some cause for optimism.

IHS Markit's chief business economist, Chris Williamson, said the improvement in business expectations suggested the economy was "poised for recovery."

However the PMI survey showed factory output in February grew at its slowest rate in nine months. Many firms reported extra costs and disruption to supply chains from new post-Brexit barriers to trade with the European Union since Jan. 1.

Vlieghe warned against over-interpreting any early signs of growth. "It is perfectly possible that we have a short period of pent up demand, after which demand eases back again," he said.

"We are experiencing something between a swoosh-shaped recovery and a W-shaped recovery. We are clearly not experiencing a V-shaped recovery."

Source: The Business Standard

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Lulu opens first all-female staff store in Jeddah

Lulu Group has inaugurated its first ever all-women staff store. As part of its 200th store-launch initiative, Lulu Express in Jeddah, Saudi Arabia is being managed by a team of 103 trained women led by Maha Mohammed Alqarni, general manager of the newly launched store. Lulu is a multinational conglomerate that operates a chain of hypermarkets.

“We have always tried to give training and employment to the youth and especially the skilled women of this region. It’s our commitment to the visionary policies of the leadership to empower the women workforce,” said Yusuffali MA, chairman of Lulu Group. 

“Apart from introducing innovative shopping options and product ranges, we are also proud that this new initiative to empower women will go a long way in opening new opportunities and career options for the youth in general and women in particular,” he added.

“I am extremely happy to be part of Lulu Group’s first ever store that is fully managed by women. This is such a great honour for me to represent the growing community of Saudi women who are playing an active role in the progress of the country’s economic activities and aiming to share their skills,” said Alqarni.  

“At present, we employ 3,000 Saudi nationals including 800 women in all the hypermarkets across the Kingdom in various positions and our aim is to encourage more women in our organisation, thereby ensuring Saudi women’s economic participation,” said Shehim Mohammed, director of Lulu Group Saudi Arabia.

Located near King Abdul Aziz University, in a retail space of 37,000 square feet, the new express store, which is also the 20th in Saudi Arabia, is home to a wide variety of globally sourced products such as grocery essentials, fresh food, health and beauty, household and much more.  

In the midst of the pandemic, Lulu has played a crucial role and ensured uninterrupted supply of food and non-food products, while maintaining the highest standards of hygiene, health and safety of both its customers and employees. Enhanced sanitisation programmes and social distancing norms are being adhered as per industry protocols.

Source: Fibre2Fashion News

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Cotton: Handling the White Gold Crisis of Pakistan

Last week the fortnightly report of the Pakistan Cotton Ginners Association (PCGA), revealed that cotton production fell by 34 percent to 5.6 million bales in the current fiscal year 2020-21, the lowest cotton production in 30 years. For a country whose exports are almost 60 percent textiles, it made for grim reading in the media.

According to a study conducted by the University of Agriculture Faisalabad, Pakistan’s cotton production has generally been static since 1990-91, and 2004-05 and 2014-15 were the only years when we reached a high of around 14 million bales.

Between 1983 to 1984 Pakistan’s cotton yield improved from 223 to 450 kilogram/hectare, and we have not gone below this until 2020 when our cotton yield was 445 kg/ha. What’s more, for the first time since Pakistan’s inception, India’s yield has gone above ours at 479 kg/ha compared to our 445 kg/ha (see Figure 1.1).

(Source: USDA)

As for the acreage, research shows that among the top cotton growers of the world, acreage has decreased over the last 20 years, as the focus has gone towards other cash crops and within textiles towards value-added goods. In Pakistan, the overall cotton area this decade has declined by 28 percent from 3.07 million hectares to around 2.22 million hectares.

Almost 1.5 million farmers grow cotton out of which 75 percent is grown in Punjab while the rest is grown in Sindh. Since 2010, the cotton-growing area in Punjab has declined by 37 percent (from 2.44 million hectares to around 1.55 million hectares).

India is among the few countries that have seen an increase in acreage, mostly as a result of giving low Minimum Support Price guarantees to farmers. It is the intended reversal of such policies through the Modi government’s Farm Bill, which led to the farmer protests in India that we have witnessed for the past three months.

Why should the government be worried?

Low cotton production matters because the country loses valuable foreign exchange from importing cotton for its textile products. Currently, the country imports close to 3 billion dollars of cotton. While that is the direct loss to the country – indirect losses easily add up to $9 billion including from the lost lint production and other contributors such as loss in seed, feed meals, oil, etc.

However, just as significant and what is less commonly understood by the general public is the role the cotton-producing areas play in increasing the welfare of the rural population.

The poorest segments of the society – often women and children do cotton picking and the cotton season gives them cash income. In essence, playing a similar role to the government’s flagship Ehsas program, for example, out of this year’s imports close to 100-200m dollars would have gone to these laborers. These incomes have a multiplier effect and sustain the rural economies also.

Shahid Sattar, Executive Director APTMA explained to GVS that this multiplier effect of an increase in cotton production will have a direct impact of $ 1 billion per 1 million bales and a 7 times multiplier impact on the fiscal flows in the economy. In essence, if we import $3 billion of cotton, it potentially sets the economy back by $21 billion due to the multiplier impact. Apart from the bad economics of the import effect – having to import cotton because of lower local availability has a huge human security angle also.

Low productivity issues

Following India, Pakistani policymakers tend to be focused on the factors behind reduced acreage in the country, however, they ignore yield. The informal introduction of Biotech seeds 15 years ago has been blamed for allowing backcrossing, weak gene expression, and growing ineffectiveness against bollworms, particularly pink bollworms. This has led to a poor or almost no increase in yield in the country.

One of the major reasons why pests attack Pakistani crops is that the seed Pakistani farmers use, such as the old BT cotton like Ballgrad-1, is not resistant to pests and diseases. It is currently not being used anywhere in the world and has been termed outdated, as the world has shifted to advanced pest-resistant GMO seeds increasing their yield.

Secondly, out of the 24 well-known pest diseases, Pakistan has 22 of them. Every year, almost 4 million bales of cotton are wasted due to these; along with this, the low technology available in Pakistan to fight pests leads to more crop wastage, further decreasing productivity.

Furthermore, Pakistan has also seen a movement by farmers towards sugarcane farming. From FY10 to FY18, the area of sugarcane crop has increased from 0.94 million hectares to 1.34 million hectares up by 42 percent. Sugarcane crop is subsidized through protective prices such as the 40% customs duty on the import of sugar which was imposed. However, sugarcane farming has an economic comparative disadvantage to cotton farming.

Lastly, Pakistani ginned bales contain up to 10% trash, the world average is only 2 to 3 percent. Contamination is one of the foremost issues, where untrained cotton pickers from field to low ginned quality standards all add to cotton fetching lower value in the market. This increases processing costs and results in low-quality products being produced in the market.

Quick and ready solutions

Solutions being floated by analysts include that in the short term government should work on the possibility of directly importing seed from places where the climate is similar to Pakistan. Farmers should be trained in proper farming techniques and be taught the use of technology to implement proper fertilization and disease control processes.

The government should set up state-of-the-art laboratories and greenhouses for fast-tracking seed development and approval. Educational campaigns are needed to educate farmers on isolating cotton crops from rice and sugar cane to avoid fungal attacks as it is currently a large factor in lower yields.

In the medium to long term, suggestions include a variety of development systems, seed production structures, zoning, corporate farming, crop protection, and input cost, and lastly technology transfer. The solution lies not with increasing the acreage but increasing the yield.

On 19th February, Federal Minister for National Food Security and Research Syed Fakhar Imam said that the government has taken some steps following the bad year cotton has had this year. He said that the government will provide subsidies on cotton seeds, fertilizers, and whitefly pesticides, which will be distributed among the farmers through the provincial governments.

He explained that the government has taken three important steps towards the improvement of cotton crops, the first one being the aforementioned subsidy.

The government is going to make use of technology and agricultural research, and eliminate the role of middlemen in the agriculture sector. To create awareness among farmers, a web portal will be set up to provide accurate information to the farmers about agricultural research, so they can know in time which sprays should be applied or which disease has occurred in which area.

Thirdly, the government is cracking down on the fake seed companies to make sure seed provision is properly regulated, and substandard quality is removed from the market. For this, 200 companies have been registered as official seed providers.

The import vs. local production paradox

Local cotton is actually more expensive (estimated 5-10%) for the local textile manufacturer to use – but despite this most manufacturers use it to avoid using imports due to the latter requiring greater working capital needs amongst other factors.

 (Source: APTMA).

It is also worth noting the fact that the solution is not to stop industries from having the choice to import. On government-imposed duties on importing cotton, Secretary APTMA said, “This policy, which was announced on the last day of the PML-N’s government, proved to be the last nail in the coffin of the cotton industry. 125 out of 400 textile mills have been shut in the last four years. The export deficit has reached 1.5 billion dollars a year.”

Textiles sector

However, when we think of the bigger picture of Pakistan’s exports – for the textile sector the growth solution revolves around investing in the value-added products sector, as Pakistan’s rest of the world’s competitors are doing. A study commissioned by Pakistan Business Council (PBC) shows that in 2017, Pakistan’s garment exports were only 5 billion dollars, accounting for only 1.1% of global garment exports.

This means that Pakistan is not exporting value-added products. According to Statista, by 2019, Pakistan is not even in the top 9 countries exporting garments to the world, despite being in the world’s top five largest cotton-producing countries. (see Figure 1.3)

(Source: WTO)

Furthermore, even though India is the world’s largest producer of cotton, Bangladesh’s share in textile value-added exports is significantly higher than that of India or Pakistan. This is because Bangladesh has had a policy that has concentrated on producing more value-added products rather than cotton itself and worked on increasing its yield rather than acreage.

Recently, public policy expert Hasaan Khawar argued in a recent article for the Global Village Space, looking at how Pakistan can increase its exports, that it was critical to focus on value-added sectors across the board. So long as the country focused on its primary sector alone it is tantamount to remaining poor.

Bangladesh is proving to be a prime example in this region of a country whose focus on the value-added sector has seen its exponential growth. Yes, Pakistan has benefitted from increased textile orders during COVID, but this is because it is primarily producing low value-added products that saw an increase in demand from the West as consumers sat at home and wore basic clothing like tee shirts. Pakistan cannot rely on this scenario for too long.

(Source: Business Recorder)

Source: GVS News

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G7 leaders want to counter 'non-market' policies to ensure free trade

G7 leaders on Friday said they would seek a collective approach to counter "non-market oriented" policies and practices, including engaging with China through the G20. "With the aim of supporting a fair and mutually beneficial global economic system for all people, we will engage with others, especially G20 countries including large economies such as China,” the G7 said after a virtual leaders' meeting.

“As leaders, we will consult with each other on collective approaches to address non-market oriented policies and practices, and we will cooperate with others to address important global issues that impact all countries.”

President Joe Biden will re-introduce himself and the US to world leaders at a pair of international conferences on Friday, calling on industrialized democracies to partner in confronting the pandemic and climate change in a sharp departure from his predecessor’s foreign policy.

In remarks to the Group of Seven and a speech to the Munich Security Conference, Biden will portray collective action as essential, too, in great-power confrontations with China and Russia, pivoting from former President Donald Trump’s “America First” approach to global affairs. Trump antagonized allies in order to secure more favorable trade deals and reduce the US military footprint, ties Biden seeks to swiftly repair.

In his first major foreign policy speech as president, Biden cast China as the “most serious competitor” of the United States.

His peer from the UK, Johnson, said the G7 — as “like-minded liberal free-trading democracies” — stood together on issues such as condemnation of the coup in Myanmar and the detention of Alexei Navalny in Russia. The G7 of the United States, Japan, Germany, United Kingdom, France, Italy and Canada has a combined gross domestic product of about $40 trillion — a little less than half of the global economy. Biden will argue that democracies must fight to preserve their institutions in the wake of foreign interference in their elections.

Source: The Business Standard

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Hyosung’s 100% Recycled creora® regen Spandex Grabs Denim Industry Attention

With sustainability, traceability and transparency at the top of the denim industry’s agenda, mills and brands are seeking fiber technology solutions to help them create the most responsibly made, eco-friendly denim products.

While still unable to gather in person at trade shows for the time being, Hyosung will present its latest sustainable fiber developments to the tightknit denim community during Kingpins24 FLASH virtual event taking place February 23-24, 2021.

Among its sustainable fiber solutions, Hyosung will highlight its GRS-certified, 100% recycled creora® regen spandex made from reclaimed waste, which has been in demand since its launch in 2020.

“Because we make our creora® regen spandex from 100% reclaimed waste, we are helping our customers make a fully sustainable denim product,” said Mike Simko, Hyosung Global Marketing Director-Textiles.

Hyosung’s creora® regen spandex has caught the attention of Tejidos Royo a leading denim innovator and manufacturer committed to sustainability.

“What is really exciting for us in working with Hyosung is that they have the textile solution that will allow us to make denim fabric made from 100% recycled content”, said Jóse R. Royo, Sales Director, Tejidos Royo.

Hyosung will also share developments with its 3D Max creora® spandex, which allows denim products to have dual performance features – ultra-stretch and excellent recovery that lasts over time.

According to Simko, denim made with 3D Max creora® spandex eliminates the need for stretch polyester and the fabric can be treated for environmentally friendly laser washing to create distressed looks.

In addition to its 100% recycled regen creora® spandex and 3D-Max creora® spandex Hyosung will present the following eco-friendly, multi-function fibers:

MIPAN regen aqua X: recycled cool-touch nylon with UV protection

Regen askin: recycled cool-touch polyester with UV protection

Regen aerolight: recycled lightweight polyester with high-performance moisture management

A pre-recorded livestream video between Miguel Sanchez, technology leader at Kingpins, José R. Royo, sales director of Tejidos Royo, and Mike Simko, global marketing director of Hyosung Textiles will be available to view on Wednesday, February 24 at 1:20 PM ET by registering for free at Kingpins24 FLASH: https://kingpinsshow.com/shows/kingpins24-2/.

Source: Textile World

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India, Singapore can work together in fintech, e-commerce, smart manufacturing: Goyal

India and Singapore can work together in areas such as e-commerce, fintech, smart manufacturing and healthcare where the country offers a large market, Commerce & Industry Minister Piyush Goyal has said.

“Our working together in these areas can truly transform India’s own effort to give the best to our people,” Goyal said at the India-Singapore CEO Forum organised by the Department for Promotion of Industry and Internal Trade (DPIIT) and FICCI on Thursday. The India-Singapore CEO Forum was launched in November 2018.

The members of India- Singapore CEOs Forum also agreed to work towards resolving regulatory issues and processes affecting bilateral trade and investment between the two countries, according to a release issued by FICCI.

The Minister said he was looking at expanding Singapore-India ties resting on three Bs — Buddhism, Bollywood and Business.

Bilateral benefit

Singapore’s Minister-in-charge of Trade Relations S Iswaran emphasised on greater engagement between businesses on both sides. He pushed for 3 Ds — Development, Diversification and Digital Economy — for building a partnership that will benefit the two economies.

Singapore and India are already working together in cyber security and disaster relief and education and skill development can be taken up as pillars where India can learn from Singapore’s experience, Goyal said. This is a partnership that will help India to become Aatmanirbhar and also give opportunities to the country for increasing its global footprint, a release from the Commerce & Industry Ministry said.

India recognised the significance of Singapore as an important member of the ASEAN grouping and considered it as its spring board to the region, the Minister said. The country is India’s largest trade partner among ASEAN countries.

Goyal said Singapore Exchange’s tie-up with the GIFT city, which was India’s first operational smart city, was a welcome development as it would boost international investments into the country.

Source: The Hindu Business Line

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UK to continue GSP benefits for Bangladesh till 2027

Bangladesh would continue to enjoy the generalised system of preferences (GSP) on trade until 2027, i.e., till three years after it graduates from the least developed country (LDC) status, according to British high commissioner in Dhaka Robert Chatterton Dickso, who recently said the two countries will find out a mechanism to maintain a trade regime beneficial for both after 2027.

Dickso was speaking to journalists at his residence on the outcome of the first-ever UK-Bangladesh Trade and Investment Dialogue held in Dhaka recently, according to Bangla media reports.

The GSP includes quota-free and duty-free market access to the United Kingdom for all products other than arms and ammunition.

The UK is the third largest export destination of Bangladesh and the country maintains a positive trade balance with the UK.

The major exportable items include readymade garments, frozen food, IT engineering, leather and jute goods and bicycle.

Source: Fibre2Fashion News

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India, Australia can work together on open, secure Indo-Pacific: Aus PM

After holding talks with Prime Minister Narendra Modi, Australian Prime Minister Scott Morrison on Friday said both the Comprehensive Strategic Partners can work together on common challenges including COVID-19 and a secure and prosperous Indo-Pacific.

"Great to talk to my good friend PM Narendra Modi again. As Comprehensive Strategic Partners, we can work together on common challenges including COVID-19, the circular economy, oceans and an open, secure and prosperous Indo-Pacific. We also discussed progress of our media platform bill," Scott Morrison tweeted.

Taking to Twitter, Prime Minister Modi on Thursday said he had discussed regional issues of common interest with Morrison and reiterated their commitment to consolidating New Delhi and Canberra Comprehensive Strategic Partnership.

"Spoke with my good friend PM Scott Morrison today. Reiterated our commitment to consolidating our Comprehensive Strategic Partnership. Also discussed regional issues of common interest. Look forward to working together for peace, prosperity and security in the Indo-Pacific," PM Modi tweeted.

The talks between the two leaders ahead of before the Quadrilateral Security Dialogue or Quad is scheduled to hold its third ministerial meeting.

The meeting between the foreign ministers of the group that includes India, Australia, Japan and the US will "provide an opportunity to continue the useful exchange of views from their last meeting in Tokyo" on October 6, 2020, the External Affairs Ministry said in a brief statement.

The foreign ministers will "exchange views on regional and global issues especially practical areas of cooperation towards maintaining a free, open and inclusive Indo-Pacific region", the statement said.

Indo-Pacific region is largely viewed as an area comprising the Indian Ocean and the western and central Pacific Ocean, including the South China Sea. China's territorial claims in the South China Sea and its efforts to advance into the Indian Ocean are seen to have challenged the established rules-based system.

In July last year, Prime Minister Modi and Morrison held virtual bilateral summit during which they announced the elevation of bilateral ties to a "comprehensive strategic partnership".

During the summit, they upgrade their 2+2 dialogue featuring their foreign and defence secretaries to the ministerial level, sign the Mutual Logistics Support Agreement (MLSA) and another pact on cooperation in the field of mining and rare earth minerals.

Source: The Business Standard

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