MARKET WATCH 23RD FEB 2021

NATIONAL

INTERNATIONAL

PM Modi to states: Synchronise budgets with Centre, use PLI scheme to attract investment

Calling for better coordination and policy framework between the Center and the states, Prime Minister Narendra Modi on Saturday asked states to synchronise their budgets with that of the Centre and take full advantage of the production linked incentive (PLI) schemes to boost manufacturing by tapping the private sector.

Addressing the Governing Council of the Niti Aayog, Modi said the Centre has introduced PLI schemes for various sectors providing an excellent opportunity to increase manufacturing in the country. He urged the states to take full advantage of this scheme as well as reap the benefits of reduced corporate tax rates. Among others, the meeting was attended by chief ministers of states.

The Centre has announced 13 PLI schemes in wake of the Covid-19 pandemic last year. The idea was to lure mainly large companies to ramp up manufacturing base and boost exports. The total incentives under the PLI schemes, covering sectors including telecom, electronics, auto part, pharma, chemical cells and textiles, stood at Rs 1.97 lakh crore over a five-year period. Various ministries are firming up proposals relative to the sectors they oversee.

“As a government, we also have to honour this (private sector) enthusiasm, the energy of the private sector and give it as much opportunity in the Aatmanirbhar Bharat campaign,” he said.

He stressed on the importance of making the states self-reliant and giving momentum to development in their budget. He announced that there would be a major increase in the economic resources of local bodies in the 15th Finance Commission. “States can always take a cue from the Union Budget.

The timeline between the Union budget and budget of states is very important,” he said. In general government budget, the combined annual spending by all states was higher than the Centre as a big chunk of central budget is also spent through the state government machinery. States together spent Rs 33.33 lakh crore in FY20 through their budget while the Centre spent Rs 26.86 lakh crore.

The PM said about Rs 65,000 crore are spent annually in the import of edible oils which should have gone to our farmers. Similarly there are many agricultural products that are not only produced for the country but can also be supplied to the world. For this, it is necessary that all states make their agro-climatic regional planning strategy, he said.

“Ease of living and ease of doing business will go hand in hand. Laws and regulations have to be amended for the brighter future of our nation,” Modi said.

Source: The Financial Express

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Efforts on to make 5,000 MSME clusters under SFURTI scheme: Nitin Gadkari

The government is making efforts to create at least five thousand MSME clusters under the Sfurti scheme, which will give steam to its Atmanirbhar Bharat initiative, Union minister for MSMEs Nitin Gadkari said on Monday.

Gadkari inaugurated 50 MSME clusters here under the scheme which essentially helps hand hold MSMEs part of the cluster.

SFURTI (Scheme of Fund for Regeneration of Traditional Industries) offers incentives such as skill development, capacity building, creation of facilities such as common facility centres, rehousing facilities and marketing and e-commerce assistance to local industries.

He said that of 371 clusters, only 80 are operational, and the ministry was working to fast track the approval process for such clusters.

“We are trying to digitalise schemes, and clusters haven’t taken off because of delays in approvals,” Gadkari said in response to a question from ET.

“This is just one scheme, there are several other schemes under the ministry and we will try to develop more clusters under these schemes,” he added.

Gadkari said that these clusters would help farmers and craftspeople be independent, adding to the government’s atmanirbhar initiatives.

Gadkari further said that the government is trying to develop crash barriers made of bamboo and deploy them alongside highways.

“I am extremely displeased with steel and cement companies which are cartelising to shoot prices up, I am now looking for alternatives,” he said.

Source: The Economic Times

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High yarn price! Rahul Gandhi writes to Smriti Irani

The issue of high yarn price is now getting more attention, at least in Tirupur!

Rahul Gandhi, Member of Parliament and Senior Congress leader wrote a letter in this regard to Ministry of Textiles (MoT) and urged Ministry to extend the support to apparel manufacturers.

Rahul has also shared letter of Tirupur Exporters’ Forum (TEF) with the MoT on this issue. TEF is an organisation of 200 Tirupur-based SME apparel exporters.

Tirupur-based apparel exporters got positive response on this initiative of Rahul Gandhi as senior officials like Sanjay Sharma, Joint Secretary, MoT; Jaikiran, Trade advisor; Balasubramaniam, Textile commissioner, Coimbatore approached the exporter’s representative and discussed the issue in detail.

“During my recent visit to Tirupur, I was informed that exporters are therefore struggling to fulfil their orders. They even requested for a suspension of yarn exports to stabilise input prices. I urge you to take necessary action to help them compete effectively in the global market,” he wrote to the MoT.

R. Sakthivel, Co-ordinator, TEF, thanked Rahul for this support and hoped that yarn price should come under control soon.

It is pertinent to mention here that TEF had earlier requested to help Rahul Gandhi in this regard (high yarn price) and told him that SME apparel exporters have become victims in the recent exorbitant hike of yarn price and are unable to finish the accepted orders from the buyers as well as to confirm/take new orders due to uncertainty in the yarn price and supply.

Almost since last three months, apparel manufacturers from across India are facing the heat of steep increase in yarn prices. Despite their many requests and efforts, the issue still hasn’t been resolved.

Source: Apparel Online

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India, Mauritius sign limited trade pact

India and Mauritius on Monday signed a Comprehensive Economic Cooperation and Partnership Agreement (CECPA). This marked India’s first trade pact with an African country.

Under the “limited” agreement, India will have preferential access to the Mauritius market for 310 products, while Mauritius will get access for 615 products. New Delhi will also have access to about 115 sub-sectors across 11 broad services sectors, including software, financial services and telecommunications. The agreement also has provisions for the unrestricted movement of skilled professionals.

The Indian Cabinet had approved the CECPA on February 17. The agreement is expected to come into effect from March. The agreement was signed in the presence of Mauritius’ Prime Minister Pravind Jugnauth and India’s external affairs minister S Jaishankar.

Bilateral trade between India and Mauritius grew 233% from $207 million in 2005-06 to $690 million in FY20. India’s exports to Mauritius jumped 232% from $199 million to $662 million during this period, while imports rose from just over $7 million to almost $28 million.

This will be the first trade pact since the Indian government’s launch of Atmanirbhar initiative last year. It is also expected to set the stage for similar agreements with other African nations, where China already has a strong foothold.

In goods trade, Indian exporters will get preferential treatment in food and beverages (80 tariff lines), farm products (25 lines), textiles and garments (27 lines), base metals and related articles (32 lines), electricals and electronics (13 lines), plastics and chemicals (20 lines) and wood and related articles (15 lines).

Similarly, Mauritius will get access in products, including frozen fish, speciality sugar, biscuits, fresh fruits, juices, mineral water, beer, alcoholic drinks, soaps, bags, medical and surgical equipment, and apparel.

Indian service providers will gain access to broad sectors, such as professional services, computer-related services, research & development, other business services, telecommunication, construction, distribution, education, environmental, financial, tourism & travel related, recreational, yoga, audio-visual services, and transport services, the Indian government had said in a statement last week.

Source: The Financial Express

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Pre-pandemic norms to resume for international meets

The Ministry of External Affairs (MEA) on Monday decided to resume accepting requests for political clearances for holding international conferences, workshops and seminars in both physical and virtual formats following the improvement in Covid-19 related situations in India.

The MEA on Monday issued a memorandum in this regard, ET has gathered. “In view of easing of easing of instructions on travel and assembly of people by the Government of India and state governments, requests for political clearances for holding international conferences, seminars and workshops in physical and virtual format have resumed,” a source told ET.

The government instructions restricting holding of all international conferences due to Covid-19 pandemic are no longer applicable, sources said. The conferences will continue to be governed by the same rules and regulations applicable prior to Covid-19 pandemic. Sources told ET that MEA brass had taken a conscious decision on going back to the pre-pandemic system of seminars, conferences and workshops and creating a positive atmosphere. “We have decided to take a forward-looking approach,” a source said.

The MEA had recently revised its guidelines to say that publicly-funded universities, professors and administrators will have to get prior approval from the ministry if they want to hold online international conferences or seminars that are centred around issues relating to the security of the Indian state or which are “clearly related to India’s internal matters”.

Source: The Economic Times

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Jharkhand govt to sign deal with textile company to provide jobs to locals

The state government will soon ink a memorandum of understanding with a Kerala-based apparel exporting company  to provide them with workforce.

The officials of Coimbatore-based KPR Mills and the state labour department are likely to ink the MoU in the upcoming week in presence of state labour minister Satyanand Bhokta.

Under the agreement, KPR Mills aims to recruit 12,000 labourers for its expanding production lines, including a new mill in Tirupur in Erode district. Most of its labour requirement will be women. In the first phase, nearly 2,000  women will be hired.

Labour department officials said the company has agreed to pay its new workforce from Jharkhand a monthly remuneration of Rs 12,000 and take care of their food and lodging.

“The company approached us for manpower for its expansion projects. We have registered them with the state labour exchange,” state labour commissioner A Muthukumar on Sunday. Terming it unique and path breaking, Muthukumar said several companies cutting across various sectors have evinced interest for recruiting workforce from the state.

Notably, the incumbent state government led by chief minister Hemant Soren said it was working on a method whereby labourers going out of the state will be documented  for future monitoring of their financial conditions and well-being. It had also pledged to provide jobs to most of the returning migrants within Jharkhand.

Muthukumar said based on calls made by them to helpline numbers during lockdown, it was estimated that 4.5 lakh migrant workers returned to their homes last year. “Through the Jharkhand State Livelihood Promotion Society (JSLPS), we have been able to map the skills of 20,000 migrant workers. Now, our task would be to find them employers based on their skill sets,” he told TOI.

The. official also claimed that the department will organise period visits at the production units of the Coimbatore-based company to assess the condition and well-being of the workforce which will be hired.

Source: The Times of India

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After 9-month freeze, Centre starts clearing China FDI plans

The government has begun clearing foreign direct investment (FDI) proposals from China on a “case-by-case” basis, ending the freeze on such clearances that lasted around nine months. Over the last few weeks, approvals have started, although it is so far limited to “smaller cases”, government sources told TOI.

The sources made it clear that the large proposals would be take up later after a careful analysis of the situation. To help smoothen the process, the government has also set up a coordination committee comprising officers from the ministries of home, external affairs, commerce & industry and Niti Aayog, which looks at the issues.

“The committee is not like the Foreign Investment Promotion Board, which looked at all the cases,” explained a source. All FDI proposals from neighbouring countries are to be vetted by the ministry concerned, which will decide on it.

A similar system is followed in sectors such as telecom or insurance where proposals are still reviewed before they are accepted or rejected. In case of automatic approvals, companies have no obligation to seek prior permission from the government.

In April, the government had changed the rules to allow FDI from neighbouring countries only with its prior approval, even in sectors where “automatic” clearances were allowed. The move had hit Chinese investors hard given that they had emerged as a major source of flows in recent years, especially in the technology and digital space.

As a result, even transfer of one share required the Centre’s clearance. While the rule was changed after the Covid-19 outbreak, no consent was given as tension mounted at the Ladakh border, resulting in a pile-up of investments totalling over Rs 12,000 crore.

The stated objective was to keep a check on opportunistic takeover by Chinese entities from across the border with sources citing a clampdown in several countries across the world.

Although some approvals have come the recent hostility at the border — which resulted in India banning several Chinese mobile apps, including popular ones such as TikTok — has meant that the government is unlikely to move towards a business as usual approach with restrictions to be in place.

While the steps taken by the government made it clear that there can be no compromise on national security, the recent step of “limited opening up” suggests that it is also aware of the need to ensure that investments are not adversely impacted at a time when all efforts are being made to revive growth and create jobs.

Source: The Economic Times

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Tirupur exporters decide to write letters to PM Narendra Modi regarding high yarn price

The uncontrollably increasing yarn prices are now wreaking havoc on the Indian apparel and textile manufacturing industry.

After holding several meetings, the apparel exporters based out of Tirupur have now decided to write letters to PM Narendra Modi.

It’s worth mentioning here that the Tirupur Exporters’ Association (TEA) recently held a meeting with the association’s members and discussed the issue of increasing prices of yarn.

It was learnt in the meeting that the association will appeal to the Government to ban yarn exports to control prices in the domestic market.

Now that the yarn prices are continuing to shoot up, the knitwear manufacturing hub of India seems to be livid with the situation.

“We are all writing to PM addressing the yarn price hike issue and requesting Government to restrict yarn export or ban for some time. This abnormal hike will kill all of us,” told P. Thiruvasakamani, Director, TAS Textiles, Tirupur to Apparel Resources.

“We have formed a forum of 250 small and medium apparel exporters from Tirupur and we have taken up the issue with various Government offices including PMO. Our aim is to solve this issue as soon as possible,” commented Thiruvasakamani.

The exporters also request all the stakeholders to extend their support so that the yarn price can be streamlined.

Meanwhile, India Ratings and Research (IRR) has also come up with a big statement that China’s demand for India’s cotton has pushed domestic yarn prices higher and, accordingly, domestic yarn production increased in January 2021, led by a strong export and moderate domestic demand during December 2020.

IRR said that the cotton yarn prices increased 15 per cent on monthly basis and 30 per cent on yearly basis in January ’21.

Commenting on the issue, R. Sakthivel, CEO, Daffodil Fashions, Tirupur, said that the industry has landed up in this situation which was expected after coronavirus lockdown.

He added “International demand and price trend on fibre/yarn is supporting mills to utilise the opportunity. But, this is purely unethical. It is clearly understandable to all of us that the mills are utilising the demand and supply gap in a way that can be professional but not ethical. With the help of some mills as frontline warrior who don’t have base of regular customers and don’t have business ethics, the yarn industry is increasing or changing price any time based on their available stock. All other mills and associations are utilising the same and increasing the price on next month list by stopping PO acceptance,” averred Sakthivel.

Source: Apparel Online

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Faceless GST Assessment Being Weighed

The government is evaluating the introduction of faceless assessment under the goods and service tax regime, people aware of the development said.

The move will be along the lines of the facility for assessment of income tax and customs and is expected to make adjudication and scrutiny by the tax authorities more transparent while reducing chances of tax evasion.

“It will be a big change for GST…discussions within the department are going on,” a senior official said.

The new system is likely to take shape through a portal that will be independent of the existing GST portal and the GST Network, which act as facilitation portals for taxpayers.

“Any red flags, assessment notices and show-cause notices will come up on the new portal..the taxpayer’s response will be recorded electronically, without any face-to-face interaction,” the official said.

Notices by GST authorities to taxpayers are likely to be issues by a central processing cell akin to the Nationale – Assessment Centre for income tax, while assessment may be done at the jurisdictional level on a random basis, officials aware of the system said, asking not to be identified.

Taxpayers under the Centre’s jurisdiction can be assessed by any officer across the country, while those belonging to the states can be evaluated by any officer within the state, the person added.

“The whole idea is that assessment will not be done by one fixed officer who has interacted with the taxpayer in the past, at both the Centre and state levels,” the person said.

GST returns and reconciliation and audit statements are already filed online and recently a new feature of viewing returns filed by suppliers to a taxpayer has been enabled to check fraudulent input tax credit claims. With the new system, authorities will be able to digitally access all documents for assessment and further action, said experts.

“Adoption of faceless assessment in GST would benefit businesses by reducing the time spent in interactions with GST authorities and enable a complete chain of digital interactions. It would also reduce the pressures on the GST authorities,” said MS Mani, a partner at Deloitte India.

Faceless assessment has been extended to customs through the Turant Customs reforms, while faceless appeals were introduced as a next step in income tax last year. In the budget for FY22, the government proposed to make the income tax appellate tribunal faceless, which will remove personal interaction between the tribunal and appellant.

“Virtual assessments increase transparency accountability and quality of tax assessments in indirect taxes, improving the overall tax collections,” said Rajat Mohan, a senior partner at AMRG Associates.

Source: The Economic Times

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Is a ministry of fashion the need of the hour?

Last year, Bill Gates wrote in his blog GatesNotes that, by 2060, climate change could be just as deadly as the pandemic, and by 2100, it could be five times as deadly. “In the next decade or two, the economic damage caused by climate change will likely be as bad as having a Covid-sized pandemic every 10 years,” he said.

Not just Gates, but many other climate advocates, too, have stressed that the current global crisis can inform the response to the next one. The fact remains that, besides automobile and energy, fashion is one of the major polluting industries in the world that needs major attention, as it contributes to divergent forms of environmental pollution, including water, air and soil.

Simply put, overproduction of fashion items, use of synthetic fibres and agriculture pollution of fashion crops are a few factors that contribute to waste pollution. Take, for instance, polyester, one of the most popular fibres used in fashion, which is non-biodegradable. In fact, fast fashion, quick and affordable trendy wear, is a massive producer of waste that combines cheap labour and clothes.

If the fashion sector continues on its current trajectory, that share of the carbon budget could jump to 26% by 2050, according to a 2017 report from the Ellen MacArthur Foundation. The foundation also reports that more than $500 billion of value is lost every year due to clothing under-utilisation and lack of recycling.

World leaders have now slowly begun to realise the catastrophic future of climate change, especially when it comes to regulating the industry. US President Joe Biden announced America’s return to the international Paris Agreement to fight climate change with a safe global temperature, increased climate resilience and financial flows aligned with a pathway towards low greenhouse gas emissions and a climate-resilient development.

French legislator Brune Poirson, who was officially one of the three secretaries of state to the minister for ecological and inclusive transition, was unofficially in charge of fashion and has been known to ban brands from destroying an estimated $700 million worth of unsold goods annually, a common practice in the French fashion industry.

The Hong Kong Research Institute of Textiles & Apparel (HKRITA) has a garment-to-garment recycle system (G2G) for old clothes broken down into fibres and yarns to make raw material for knitted new clothes. This fibre-to-fibre recycling method is cost-effective and there’s no secondary pollution, ensuring that the life of the recycled material is prolonged in a sustainable way.

If responsible fashion is the call of the hour, nations might like to add an additional portfolio of ministry of fashion for better incentivised, locally-produced and technologically-advanced systems to tackle pollution. The ministry may set guidelines, scrutinise products, examine markets and assess demand and supply.

Brands are also now becoming conscious of how damaging fast fashion is for the environment and taking small steps in consciously building sustainable nations. The negative impacts that are rising inexorably point out how fashion creates waste across industries (logistics, animal farming, agriculture) and is not as disposable as one is made to believe.

Around 1 kg of cotton production, cultivated as part of the agricultural industry in India, uses more than 10,000 litres of fresh water. Cotton production uses 24% of the insecticides and 11% of the pesticides produced globally. “Every time we consume fresh conventional cotton, we use large quantities of water, insecticides and pesticides, which eventually seep into groundwater and waterways.

About 70 million trees are cut every year to produce plant-based fibre. Fashion uses 342 million oil barrels to make plastic-based fabrics like polyester and nylon; 23% of all chemicals produced worldwide are used for the textile industry.

Recycling or upcycling can instead use natural resources to create fresh material. Working locally reduces the carbon footprint of products that travel back and forth between production, packaging, warehousing, quality checking before they reach the store shelf or the consumer,” says Kriti Tula, co-founder of Doodlage, a Delhi-based sustainable fashion brand that uses upcycle factory waste to make limited-edition collections and recycled post-consumer waste and scraps to make new fabrics and garments.

Additionally, India has made significant strides in sustainable fashion as PM Narendra Modi’s ‘vocal for local’ empowers MSMEs. Khadi and Village Industries Commission (KVIC) gives a push to local manufacturing via the Aatmanirbhar Bharat programme. There are other sustainable Indian brands like Rewanta as well that support artisans by creating a positive demand cycle for khadi. Antaran, a direct implementation programme of Tata Trusts, aims to help artisans deal with markets directly.

Source: The Financial Express

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Modi's plan to make a Singapore in Gujarat has fallen flat

When Singapore set up an international financial hub in the late 1960s, the city-state was thinking both fast and slow — seizing an immediate opportunity, and opening a path to long-term economic development. Half a century later, India is attempting something similar in Prime Minister Narendra Modi’s home state of Gujarat. But without much thought going into what exactly it’s building, for whom and for what purpose, all it may get is a casino for the local rich.

For Singapore, the British pound’s 1967 devaluation was the moment of reckoning. For one thing, it raised the profile of Dick van Oenen, a Dutch trader who had made a “significant windfall” for both his employer — Bank of America — and for the newly independent city-state from that abrupt 14% change. But beyond the immediate cash, Singapore saw a broader canvas.

The pound’s tumble had made countries in the Sterling Area, mostly former British colonies, painfully aware that the sun had finally set on the empire’s currency: They needed to switch to the dollar to lend and borrow. The kind of rapid growth East Asia then imagined for itself could be more easily financed by inviting the rich overseas Chinese in Hong Kong, Taiwan, Manila and Jakarta to deposit their funds in dollars. Many of them had become extremely wealthy on assured cash flows from post-colonial monopolies and cartels in everything from gaming and racetrack-betting to flour-making and coconut-milling.

Channeling these regional savings into local investments and diversifying the Singapore economy was the longer-term impetus for starting a dollar-denominated banking hub, according to Oxford University historian Catherine Schenk. Bank of America’s local branch was the first to get the permission to open a separate set of books purely for international business.

India embarked on the project in 2007 with the ambitious goal of turning Mumbai, the country’s domestic financial capital, into an international hub after making the rupee fully convertible “by no later than the end of calendar 2008.” However, after a 14-year interlude that encompassed both the 2008 subprime crisis and a pandemic, there’s little enthusiasm left for financial globalization. Even trade liberalization, which looked irreversible in 2007, is being undermined by a misguided yearning for self-sufficiency. The venture was yanked away from Mumbai and taken to a patch of wilderness in Gujarat. Somewhere along the way, the original purpose was also lost.

All new stores need their early patrons. Had India pursued Singapore’s strategy, it would have begun by targeting nonresident Indians to keep some of their wealth with their banks’ branches in the Gujarat International Finance Tec-City — more popularly known as Gift City — luring them with simple products not available commercially in global markets, such as dollar-denominated sovereign Indian bonds. Corporate issuers would have followed. But banks are run by bankers, who need good schools and better pubs. Three high-rise buildings situated 10 kilometers (6.2 miles) from Gandhinagar — the capital of a state where alcohol is prohibited — offer neither.

Since a bank-led approach wasn’t feasible, minders of Modi’s favorite project turned toward capital markets, in the hope that with sufficient inducement brokers would book trades in Gift City without having to set foot there. As a result, the joyless place has spent years trying to become a marketplace for foreign currency-denominated contracts, hoping to capture some of the financial intermediation that now takes place in London, Singapore, Hong Kong or Dubai, but where the ultimate risk resides in India.

The Gujarat market offers a slew of tax breaks, but has very little customer liquidity. India’s two domestic exchanges — the National Stock Exchange of India Ltd. and BSE Ltd. — are providing costly incentives to intermediaries to trade with one another there. At least 85%-90% of trades at Gift exchanges are proprietary trades, the news website Morning Context recently reported.

Hedge funds aren’t coming. Everything they want for risk mitigation or speculation is available within a one-mile radius in Singapore. To arm-twist investors to come, India’s No. 1 stock exchange even picked a hissy fight with its long-term partner, the Singapore Exchange Ltd. The conflict has since died down, and there’s an agreement on setting up a pipe connecting NSE in Gift City with SGX after ensuring “member readiness.” Meanwhile, the city-state is still trading derivatives linked to Indian indexes and stocks with gusto:

Now comes another strategic wrong turn. Just last week, the central bank allowed resident individuals to open foreign-currency accounts in Gift City to invest in securities issued by overseas firms. This isn’t a step toward the original goal of capital-account convertibility.

India already permits all adults and minors an annual $250,000 quota for overseas remittances. Worse, if the money placed in Gift isn’t invested in 15 days, it returns home to a rupee account. Loose change of retail Indian cash parked temporarily in Gujarat is hardly going to entice a pedigreed global issuer to hawk equities or bonds there.

So who’s this for? Gift allows brokers to pool foreign customers’ money under omnibus accounts. Investors don’t need to register, only the brokers need to be satisfied that they’re legitimate. Even the U.S. Securities and Exchange Commission recently ticked off broker-dealers for not doing enough due diligence on omnibus-account customers to prevent money laundering.

The project’s regulator, which isn’t even one year old yet, will have to be on a serious watch against “round-tripping,” or local money escaping to evade taxes and then reentering as overseas investment.

Another plan is to bring trading in non-deliverable forwards — bets on the rupee that aren’t constrained by India’s capital controls because they’re settled in dollars — to Gift by luring overseas investors with tax breaks. This, too, puts the cart before the horse. Among emerging-market NDFs, rupee contracts are the second-most-popular after the South Korean won, with a 19% share of the $250 billion-a-day market, according to a 2019 Bank for International Settlements survey.

The price signals these offshore derivatives emit tend to become a headache for a central bank trying to manage a controlled home currency in times of balance-of-payment stress, like during the 2013 taper tantrum. Rather than wanting these potentially destabilizing flows to come closer home, India ought to be deepening the onshore rupee market in Mumbai instead. It should also be paying more attention to interest-rate derivatives, like Mexico and South Africa have.

In hosting an international financial center, Singapore stole a march over rival Hong Kong, where the bankers were initially against more competition. But it wasn’t tall buildings that made the experiment a success. A freely convertible currency, pragmatic regulation, a stable tax regime, rule of law and speedy dispute resolution played a huge role. (Good schools and pubs helped, too.)

Opening up after the pandemic, the Indian economy is awash in central bank-sponsored liquidity. What it lacks is capital, and the preconditions to establish a truly international financial center. Gujarat was never the right place to build a global mart. Bereft of any economic logic, Gift may only appeal to the local wealthy shopping for a bit of tax-free dollar riches.

Source: The Business Standard

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India, S Africa Question Joint Statement Initiatives at WTO

India  and  South Africa have questioned the consistency and legal status of the ongoing joint statement initiatives on issues such as ecommerce and investment facilitation at the World Trade Organization (WTO), the first ever such submission by any member country.

Citing the Marrakesh Agreement, which established the multilateral trade watch-dog, the two said that such “open agreements” are “neither multilateral nor plurilateral” and this approach was legally inconsistent with the fundamental principles and procedures of the pact.

The paper is scheduled to come up for discussion at the WTO next week.

“The agreement does not provide for the WTO to provide any forum for negotiations other than such multilateral negotiations,” they said in the submission.

The submission comes ahead of a ministerial conference likely this year wherein the proponents of the e-commerce joint statement initiative (JSI) aim to deliver “substantial progress”.

India and South Africa said the only way for the proponents to continue with these initiatives is to seek consensus amongst the entire WTO membership or pursue such pacts outside the multilateral trade body through regional or free trade agreements.

“The submission seeks to call the bluff of the JSI proponents who want to short-circuit the multilateral rules,” said an official.

As per the joint submission, the proponents appear to suggest that when offered on a most favoured nation (MFN) basis, no consensus is required for bringing in these new rules into the WTO, which as per the submission “is legally inconsistent with the fundamental principles and procedures of Marrakesh Agreement”.

“The proponents of JSIs have confused amendment to rules and modifications to schedules, and the proposed introduction of new agreements into the WTO to bypass the requirements of the Marrakesh Agreement. However, new agreements are not amendments to schedules,” India and South Africa said.

The two said that in the event of a conflict between a provision of the Marrakesh Agreement and a provision of any of the Multilateral Trade Agreements, the provision of Marrakesh Agreement shall prevail to the extent of the conflict.

Source: The Economic Times

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How India became a PPE manufacturing hub

For Gautam Nair, MD and CEO of Matrix Clothing, the year 2020 was the toughest in his 41 years of doing business. An exporter of knitwear apparel to countries across the world, Nair’s first quarter was a complete washout.

His factories in Gurgaon and Jharkhand were closed in the months of April and May. However, during this time, Nair got a call from the textile secretary requesting him to use his capacities to make PPE (personal protective equipment) kits.

Nair was among a few key manufacturers in the textile space who got personal calls from the textile ministry to undertake the manufacturing of PPE kits. There were apprehensions about manufacturing an entirely new range of products, and then there were the logistical issues like sourcing the yarn from Ludhiana which would then be spun in Coimbatore.

The industry cited concerns regarding moving the product from one location to another during the pandemic when the country was in a lockdown.

Smaller manufacturers like Amitabh Kharbanda of Noida-based Sunlord Apparel, who manufactured about 500 PPE kits in total, says, “There was a sharp learning curve in terms of meeting quality standardsin the initial days, testing took close to three weeks”. However, the bigger manufacturers with greater backward integration were able to pivot into manufacturing masks and PPE overalls quickly.

One of the key challenges was to educate people, including factory owners and workers, on what a PPE kit was and its purpose. There were several hits and misses on meeting quality standards with many manufacturers unable to meet the criteria initially.

The Union textiles ministry and industry chambers organised Zoom calls with industry representatives to demonstrate what a PPE kit should be and educate them about quality standards. Nair, for instance, got several calls from the ministry every day, checking in to see if he needed support on procedural bottlenecks or technical know-how.

PPE samples were sent to Coimbatore for testing in the early days when there was only one testing centre. “They (the ministry of textiles) said they will pay for the transport, the ministry of textiles organised passes for transit,” says Nair.

Rahul Mehta of the Clothing Manufacturer Association of India says: “The ministry (textiles) tried to step in and clear every bottleneck, from personally calling key manufacturers to ensuring that they did not hit any roadblocks. The ministry and the government showed a lot of dynamism.”

Officials from Welspun India talk about the calls from the prime minister’s office and the Gujarat chief minister’s office asking them to set up a manufacturing facility for masks and overalls. The company is largely into home textiles, so they had to set up a separate facility almost overnight to manufacture N-95 masks, respirators and overalls. They began with crude, fabricated, in-house equipment until the imported equipment to manufacture the gear could arrive.

The government enabled all the permits, “an entire ecosystem was built”, from knowledge transfer, sessions on R&D, setting up of testing facilities in every state—and all these things happened within no time. India is now producing close to 500,000 PPE suits daily and over 600 companies are certified to manufacture PPEs.

Several stakeholders worked seamlessly to accomplish this stellar feat of India becoming the second largest manufacturer of PPE body overalls in the world (next only to China). Getting factories up and running and importing equipment to manufacture the PPE kits required permissions to come through, and textile ministry officials hand-held the companies through the process.

At a time when the country was under a lockdown and movement was restricted, the ministry reached out to consulates in countries where equipment had to be imported from, arranging passes for smooth transit of the PPE gear.

Permissions to open factories to manufacture the PPE gear came through seamlessly in the first week of April. A single window procurement agency, Hindustan Lifecare Ltd, set guidelines on how to manufacture PPE kits after reports of faulty PPE kits flooded the market. The agency procures the kits from the manufacturers and distributes them.

According to a report by Invest India, a government agency for investment promotion and facilitation, the global PPE kits market is worth $52 billion (Rs 3.8 lakh crore) and India is a $1 billion (Rs 7,300 crore) market. Medical textiles is a relatively new industry for India. This market too was largely dominated by China.

 In the initial days, when the factories had to be opened during the peak of the pandemic, villagers had to be convinced to allow workers from there to join work in the factories. A lot of convincing went into getting workers into the factories–several factories got workers to stay on the shop-floors to allay fears that they would bring the virus back home.

Matrix Clothing, however, is not planning to continue manufacturing PPE kits, as other orders resume and markets across the globe open again. As players like Matrix withdraw from the medical textiles space, it is now up to the government and textile manufacturers to establish a sustained record in terms of deliverability and quality of medical textiles.

China, according to the General Administration of Customs, saw its textile exports jump by 30.4 per cent in 2020 on the back of demand for face masks and PPE. Vice-president M. Venkaiah Naidu in January said that India’s apparel industry must aim to capture a double digit share in global fabric exports from the current level of 5-6 per cent. For this to happen, he called for upskilling of textile and apparel workers and adoption of latest technologies. Budget 2021-22 calls for setting up of seven mega textile parks to boost exports and jobs. India has set a stellar example of what it can accomplish if industry and government work in tandem. Letting go of this momentum would be a waste.

Source: India Today

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Centre focused on promoting rural industries, aims to take annual turnover to Rs 5 lakh crore: Rajnath

Master artisans and craftsmen can contribute big time to the country's economy and the central government's aim is to take the rural industries' annual turnover of about Rs 80,000 crore to Rs 5 lakh crore within the next two to three years, Union minister Rajnath Singh said on Sunday while inaugurating the 26th edition of 'Hunar Haat' here.

More than 600 artisans and craftsmen from over 31 states and Union Territories are participating in the Minority Affairs Ministry's 'Hunar Haat' being held at the Jawaharlal Nehru Stadium here on the theme of "Vocal for Local" from February 20 to March 1. The official inauguration, however, was held Sunday.

The artisans and craftsmen have a very important role in contributing to the country's economy and GDP, Defence Minister Singh said.

"This is the irony that our rural industries did not get the kind of encouragement they should have. But our government is focused on promoting rural industries," he said.

"The turnover of rural industries per year is approximately Rs 80,000 crore and our government aims to take this turnover to Rs 5 lakh crore within the next two to three years," he said.

Hailing the 'Hunar Haat' initiative of the Minority Affairs Ministry, Singh said it would go a long way in achieving the objective of 'Aatmanirbhar Bharat'.

Singh said the 'Hunar Haat' brings together indigenous artisans and craftsmen from across the country

"This Haat is a beautiful exhibition of our traditional art and craft and more importantly our cultural mosaic," he said.

Artisans and craftsmen from states such as Andhra Pradesh, Assam, Bihar, Chandigarh, Chhattisgarh, Delhi, Goa, Gujarat, Haryana, Himachal Pradesh, Jammu and Kashmir, Ladakh, Kerala, Puducherry, Tamil Nadu, Telangana, Uttar Pradesh and West Bengal, are participating in 'Hunar Haat' to display and sell their products.

Exquisite indigenous handmade products products such as brass products, wooden and clay toys, ajrakh block print, blue art pottery, pashmina shawl, khadi products, Banarasi silk, wooden furniture, Chikankari embroidery, Chanderi silk, Lac bangles, Rajasthani jewellery, jute products from West Bengal are available for sale and display at the 'Hunar Haat', an official release said.

The visitors will also get to enjoy traditional delicacies from every region of the country at the "Bawarchikhana" section. it said.

The people will also enjoy different cultural and musical programmes being presented by renowned artists of the country at the 'Hunar Haat' in New Delhi.

Artists such as Vinod Rathore (February 21); Nizami Brothers (February 24); Sudesh Bhonsle (February 26); Kailash Kher (February 27); Shibani Kashyap (March 1) and others will present their programmes at the 'Hunar Haat'.

On the occasion, Minority Affairs Minister Mukhtar Abbas Naqvi said the 'Hunar Haat', which is a "perfect platform" to promote indigenous products of artisans and craftsmen, has provided employment and employment opportunities to more than five lakh artisans, craftsmen and artists.

The Union Ministry of Minority Affairs will provide employment and employment opportunities to 7,50,000 artisans and craftsmen through 75 'Hunar Haats' which will be organised by completion of 75 years of the country's independence in 2022.

Naqvi said the 'Hunar Haat' is available on virtual and online platform http://hunarhaat.org and on the Government e-Marketplace (GeM) portal where the people can buy products of indigenous artisans and craftsmen.

Lok Sabha MP Meenakshi Lekhi was the Guest of Honour at the inauguration. Minority Affairs Ministry Secretary P K Das and other senior officials were also present on the occasion.

Source: The Economic Times

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CM Uddhav Thackeray gives Maharashtra 10-15 days before lockdown decision: 10 updates

Amid increasing cases of coronavirus in Maharashtra, Chief Minister Uddhav Thackeray has given a stern warning to the people of the state and said there will be a total lockdown if people don't start wearing face masks.

CM Thackeray said that 'lockdown will start from tomorrow evening wherever needed'.

"Lockdown will not start all of a sudden. We aren’t putting a stop to any development works. Lockdown will start from tomorrow evening wherever needed," the Maharashtra CM said.

Here's your 10-point development to this big story:

1. CM Uddhav Thackeray said that he was monitoring the residents for the next 10 to 15 days and if the Covid-19 norms were flouted, he would be forced to reimpose a lockdown in the state.

2. Calling the coronavirus situation in Maharashtra "serious", CM Thackeray informed that the coming eight days will decide whether there will be a lockdown in the state as daily Covid cases continue to rise.

3. In a video address, the Maharashtra Chief Minister said it would take "8 to 15 days" to ascertain if the current upsurge in daily Covid-19 cases is a fresh wave of infections. He also warned people to follow coronavirus protocols to avoid lockdown.

4. "Do we need a lockdown? If you behave responsibly, we will know in the next eight days. Those who don't want a lockdown, will wear a mask. Those who want a lockdown, will not wear one. So wear a mask and say 'No' to the lockdown," Thackeray added.

"Whether this is a second wave or not, we will understand this in the coming 8 to 15 days," the CM said.

5. With the reference to the state government's campaign against coronavirus 'my family, my responsibility', the chief minister introduced a new slogan "I am responsible".

"The new slogan 'I am responsible' conveys that people must be responsible for themselves. People must make sure that they are wearing a mask, keeping social distancing and washing their hands," he stated.

6. Meanwhile, a night curfew has been imposed and a week-long complete lockdown has been announced in the Amravati district of Maharashtra.

Speaking to news agency ANI, Amravati District Collector Shailesh Naval said, "A curfew will be imposed in Amravati Municipal Corporation and Achalpur Municipal Council limits from 8 pm on 22 February to 6 am on 1 March."

7. Mumbai Police Commissioner also took to microblogging site Twitter and informed the citizens that Mumbai Police too would be active on the field tracking people not following rules.

"Dear Mumbaikars, @MumbaiPolice is now authorised to issue challans to offenders not wearing a mask too. Every time we fined you for not wearing a helmet or seatbelt it was always to remind you the value of your life & safety. Same for masks. Please take care. You matter to us," the Commissioner tweeted.

8. Meanwhile, politicians have canceled their programmes today in response to CM Thackeray's appeal. Supriya Sule has pushed ahead her public engagements. Uday Samant, minister of higher education, has cancelled programmes as well.

9. On Sunday, Maharashtra Minister Vijay Wadettiwar told ANI, "In view of rising Covid-19 cases in districts like Nagpur, Amravati and Yatvmal, the Maharashtra Government is thinking of imposing a night curfew in the districts. A meeting will be chaired by the Chief Minister soon to make a decision."

10. Maharashtra reported 6,971 fresh Covid-19 cases and 2,417 recoveries in the last 24 hours. As per the state health department, the total number of Covid-19 cases in Maharashtra reached 21,00,884. The number of active cases stands at 52,956 in Maharashtra.

Source: The Mint

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INTERNATIONAL

Textiles rebate could lead to more decent jobs and grow local sector

The government recently published an innovative, landmark and developmental rebate on imported textiles. The outcome of intensive though collaborative negotiations between government, labour, retailers, clothing manufacturers and textile manufacturers, it is helping to break an acrimonious, decades-long deadlock in the value chain.

The rebate offers to unlock growth in the downstream value chain (clothing manufacturing) while simultaneously — and counter-intuitively for a rebate on upstream inputs — supporting and growing the upstream value chain (textile manufacturing). The keystone in its architecture is that the rebate is a conditional reward for local procurement.

The well-worn value chain debate over decades has been as follows: downstream producers and retailers wanted to improve their fortunes and reduce their costs by removing duties on textiles that are not produced in the country. But upstream textile producers correctly argued that differentiating between the duties of locally available and non-available textiles in the tariff book would deindustrialise the domestic textile manufacturing industry and kill jobs: huge tariff loopholes would be created for fraudsters to exploit to illegally import all forms of textile products — not only those that are not locally made.

There has been merit to both positions. But no progress could be made while the matter remained an apparent and vexing trade-off between sectors and jobs. That is until our value chain came together through the Retail, Clothing, Textile, Footwear & Leather (R-CTFL) Masterplan, which provided social partners with a platform to negotiate and leverage a broader range of tools and commitments to offset risks from such a rebate.

Masterplans are based on social dialogue. Their foundational belief is that collaboration between government, business and labour in industries can unlock growth and usher in a new dawn for SA’s industrialisation, employment, inclusivity and decent work.

Their method is a process of getting social partners to agree on common visions and mutual interests, and then to negotiate, explore, and find consensus on ways to achieve those interests, and finally to play a more central role in proactively shaping and implementing the plans.

Within the R-CTFL Masterplan social partners have coalesced around the fact that we share a collective task to achieve more inclusive and jobs-rich growth on the back of increased localisation, competitiveness and decent work. This does not mean everything is always “kumbaya”. Disagreements and distance still exist on issues. But our futures are intertwined and we must try to find solutions where we can. It is an incremental process but the new rebate shows it has definitely started.

On the ground we are hearing praise for the masterplan among retailers and manufacturers, and excitement for the boldness of this rebate. But a few recent detractors in the media have voiced criticisms. They may not understand the rebate and the industry properly or are grinding ideological axes. Or they may simply be trying to create alarm for self-serving purposes to benefit off the supposed impending crisis they are marketing. One doomsday-crier in the media, Donald McKay, laments the rebate as “the most complex piece of trade legislation in the country” and then conveniently offers his help to potential customers to deal with it (“The tangled warp and weft of the textile industry”, February 16).

Despite complaints suggesting the rebate covers a complicated and vast array of fabrics, it is actually not applicable to all fabrics used to make all clothing. It is specifically and deliberately intended for woven fabrics used to make woven articles of clothing.

There are few local textile factories left in SA that can produce retail-relevant woven fabrics, and those mills can only supply a small slice of the very large volumes and variations of total demand. To protect those mills and their jobs and grow their capacity and number over time, the rebate proposes that sufficient supply from those local mills should be procured through offtakes following which industry can be rewarded with cheaper imports of such fabrics. Over time, changes will be made to the rebate, which will incentivise further local textile production and sourcing, supported by investment in the sector and competitiveness enhancement.  

Other false concerns have been raised that the rebate prevents exports and somehow prejudices SMMEs. But exporters still have other options, including using other existing textile rebates specifically intended for exports. In addition, the overwhelming majority of members of manufacturers that have signed onto the masterplan and will benefit from this rebate are SMMEs.

Finally, some media critics have bemoaned that the rebate is linked to labour compliance and bargaining councils. In fact textile rebates have long been linked to labour compliance. For good reason. Rebates are concessions offered by the state to private companies and the state is allowed to place expectations on voluntary applicants, including that they meet particular standards.

Why should companies that shirk labour compliance and treat workers illegally be allowed to benefit from state dispensations? Why would we want our state to aid and abet entities that defy the rule of law?

Surely even determined critics must be able to agree that the rebate is better than the zero-sum game of a decades-long deadlock. This scheme may not be a blanket reduction or rebate on textile duties. But textbook solutions informed by econ 101 neoliberalism have shuttered factories and shattered workers’ lives and often do not solve real-world complex problems.

Instead, our social partners have assessed the competing needs of the value chain and found an innovative and impasse-breaking common ground that is appropriate to the realities faced by the industry. It opens substantial new ground and we think offers the chance to increase competitiveness, repatriate production to SA, create more local decent garment manufacturing jobs and eventually stabilise and grow the local textile sector.

The R-CTFL social partners should be congratulated for their boldness. We will work together to implement the rebate, and if challenges emerge we will collectively try to solve them in the spirit of the R-CTFL Masterplan.

Source: The Business Day

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Swedish IKEA sees potential in Philippine-made products

Will IKEA sell Philippine-made products? According to Georg Platzer, IKEA’s Southeast Asia development manager, the products have “potential” to be sold at IKEA stores globally.

Georg Platzer said to ABS-CBN news that Filipinos are talented in breading which has the potential to work very well with IKEA’s textile line and took note of other Philippine-made products including local kitchen bamboo products. “Of course I hope that one day we will also find products in IKEA all over the world produced by Philippine artisans and designed by people from Sweden together with very talented people here in the Philippines,” Georg Platzer said.

He explained that this was already discussed last year and he is personally not giving up on lobbying for this. “I love the country, I see what’s happening here. I see potential.” Adding that it’s still in the future but talks have already started and he remains very positive.

IKEA Philippines previously announced that local Filipino firm Rags2Riches (R2R) would become the Swedish furniture-makers sewing partner and R2R will have a spot in the new Philippine store with Filipino artisans to customize textile products.

Source: Business in Asia News

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Opportunities abound for SA textile sector

Clothing and textile value chains all over the world are recognised for their capacity to generate large-scale employment with relatively low barriers to entry and short skills acquisition periods.

According to SA’s Bureau for Food and Agricultural Policy, farm-level cotton production can create one permanent job for every additional hectare of cotton planted. Exporting to the EU at preferential rates under the EU-Southern African Development Community (SADC) Economic Partnership Agreement provides additional incentives for garment production in countries such as SA.

But potential not realised is an opportunity, and ultimately income, lost. Based on Cotton SA’s last end-of-year market report, local 2020 cotton production was 26,800 tonnes, making up less than 10% of the 300,000 tonnes of cotton content sold annually by local retailers. There would seem to be a real opportunity to develop new production capacity and importantly jobs in the domestic textile industry. Significant progress has already been made thanks to SA’s clothing and textile sector master plan.

With a view to reaping the benefits of this plan, an EU-funded study was undertaken in April 2020 to explore the potential contribution of partnerships between local and EU businesses in the wool and cotton value chains in SA. The study shared the sector’s progress in securing domestic sustainability and traceability and underscored the need for early processing capacity to uplift the industry and benefit multiple downstream and upstream enterprises. If experience is anything to go by, to generate additional processing capacity in a comparatively short time will require a good deal of new investment.

One approach to raising investment could be to create innovative channels through which manufacturers access soft loans or venture partnerships. This and other stimulant options appropriate to the sector are recognised in the National Planning Commission’s most recent Economic Progress Towards the National Development Plan Review (December 2020), which emphasises the “need for industrial dynamism in job-creating sectors” and that “capital must be actively raised for labour-absorbing investments”.

The review says that SA needs to build capacity in critical areas that facilitate international trade, including inspections, the setting of phytosanitary standards and the capacitation of standards-setting bodies. It also says that SA needs to deepen its commercial and diplomatic presence in, as well as its intelligence on, key trade partners. Notably, the EU remains the country’s biggest trade and development partner.

The EU’s commitment to the region underlies the facilitation of significant dialogue in many trade-related areas, including dedicated and ongoing discussions between local and EU companies on opportunities and impediments in the clothing and textile sector.

The establishment of sector-specific networks would be of great benefit. In the EU, for example, the European Enterprise Network (EEN) has set up sector support desks that allow for SME engagement at the sector level. In addition, the EEN’s textile desk hosts an annual Fashion Match expo to facilitate partnerships and identify opportunities.

The EU was able to support local representation at the virtual edition of the Torino Fashion Match 2020 in Italy, the second time SA has participated. Cape Wools SA spoke on its adoption of sustainable production practices in a well-received presentation. I am optimistic that the demand by EU retailers and, linked to this, the export opportunities for sustainably produced fibres to the EU, might well be the key to new investment in and job creation through the beneficiation of natural fibres in SA.

Development finance institutions such as the European Investment Bank are well positioned and positively disposed towards investment in the sector and SA would benefit by putting into place mechanisms that will allow it to tap more effectively into these support opportunities. While the global Covid-19 pandemic certainly dropped obstacles in the path of growing the sector, it has also clearly reinforced the importance of near-sourcing and quick response as vital competitive attributes to meet consumer demand.

More broadly perhaps, to reinvigorate its textile sector SA is faced with a number of choices, each of which present their own particular opportunities and challenges. These include how it positions itself within the African Continental Free Trade Area (AfCFTA). Additionally, and regardless of how SA pursues economic recovery and growth, it will need to continue to reassure potential investors and funders by providing policy certainty on broad economic and political issues, including land expropriation, broad-based BEE and — in this case — textile-specific issues.

EU and SA businesses and investors have the opportunity to explore investment and partnership drives that will translate into real business-to-business engagements through the EU-SA Partners for Growth project. Let us make optimal use of our joint trade arrangements and project initiatives to facilitate linkages with development funders, technology partners and export markets.

Source: Business Day

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S Africa's R-CFTL value chain Masterplan brings hope to Msinga factory

The South African retail-clothing, textile, footwear and leather (R-CTFL) value chain masterplan has brought optimism to many women in rural Keates Drift in Msinga, KwaZulu-Natal, the government claimed recently. The area, one the poorest in South Africa since its shoe factory closed 26 years ago leaving 3,000 families without any source of income, is slowly building its way up in the clothing and textile sector.

To reduce unemployment and poverty in the area, Lelly Mntungwa, 42, started empowering the community through job creation and skills capacitation and established Msinga Clothing Factory in 2016 to further her ambition, according to the country’s department of trade, industry and competition.

Mntungwa said the Health and Welfare Sector Education and Training Authority (HWSETA), which was responsible for all its training and skills development requirements, came to her rescue in 2019 and they could implement skills training in Msinga.

“HWSETA has now aligned with government (R-CTFL) value chain masterplan by giving the rural communities a chance to participate in skills programmes especially in clothing and textile. Skills transfer is a sustainable gift that can empower people to become income generators and survive during difficult situations,” she said.

HWSETA has also identified 19 cooperatives that have 800 youth and women in rural areas across South Africa to enhance their skills in clothing and textile, so that they are able to manufacture for retail stores.

She said government is also encouraging retail stores to source products locally and invest in the clothing and textile sector through the masterplan.

Stakeholders in the sector have since committed to growing the market for local CTFL producers.

Retailers in the country made a commitment to a target to grow local CTFL share of sales to 65 per cent to support R69 billion domestic CTFL procurement that delivers total R-CTFL employment of 333 000 workers including 165 000 CTFL manufacturing jobs.

DTIC also afforded Mntungwa a training opportunity in China to be trained in clothing and textile skills at the Minjiang University in Fuzhou.

Msinga Clothing Factory, which employs 100 women, is now making garments for the Foschini Group, Mr Price, and Ackermans and Mntungwa has since been nominated by HWSETA to mentor other projects in the rural areas of South Africa.

Source: Fibre2Fashion News

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Youngone making massive investment in man-made fibre

Youngone Corporation, a global conglomerate based in Korea, has made massive investments in man-made fibre (MMF) for clothing in its factories in Bangladesh as artificial materials are now dominating the fashion industry, according to Kihak Sung, chairman and chief executive officer of the company.

Youngone, famous for its outerwear and MMF products, recently started manufacturing polyester fabrics at three factories covering 40,000 square metres each at the Korean Export Processing Zone (KEPZ) in Chattogram.

Besides, Japanese engineers will install some new machinery at one of the factories soon, Sung told The Daily Star in a recent interview.

Sung decided to invest in MMF products due to their rising demand in the international market.

Currently, 95 per cent of all the fibres produced by the company is MMF that is used by its own factories and other local manufacturers for a variety of apparel items.

So far, $65 million has been invested in the three factories while another $120 million will be invested to operate five in total.

Being the largest foreign investor in Bangladesh's garment industry, Youngone plans to invest $1 billion over the next few years depending on the country's situation.

However, Sung did not mention any specific timeframe for the investment.

Youngone has already invested around $600 million in Bangladesh, Sung said.

The company is also investing in a solar power development project in an effort to bring 40 MW capacity of clean energy to the KEPZ.

Once complete, it will be the world's largest rooftop solar power project.

But like other companies, Youngone was also badly affected by the Covid-19 fallout.

The company lost about 45 per cent of its yearly export revenue due to order cancellations and was forced to halt production for nearly nine weeks amid all the economic uncertainty.

After numerous negotiations, the rate of cancellation was reduced to 15 per cent. On the other hand, the company's Vietnam operations continued to run smoothly.

Sung, who started his business in 1974 and set up a garment factory with only 450-500 workers in South Korea in 1976, has been doing business in Bangladesh since 1980, when he set up a factory at Agrabad in Chattogram.

"So this year is the 41st year of doing business in Bangladesh, which is my second home and the country is deeply ingrained in my heart," Sung told The Daily Star at his Gulshan residence during a short visit to Dhaka.

Although, he could not remember what his initial investment was back in 1980, he did say that exports were short of $100 million when his newly built factory at the Chattogram Export Processing Zone (CEPZ) was inundated by a massive flood, cyclone and tidal bore in April, 1991.

His single-storied factory building was inundated in the cyclone and more than 300,000 pieces of garment items made for Nike and Marks & Spencer were totally damaged.

It was that time when Sung could have left the country due to the irrevocable losses.

However, he was moved by his workers and decided against pulling out of Bangladesh.

Without being told to, his workers cleaned the damaged garment items in hopes that they could still be exported and it was this hope that guided Sung's decision.

"It moved me very much and that's why we decided to stay in this country. We then built a multi-storied building above the flood level after I raised funds from the Korean stock market to manage the difficult financial situation," Sung said.

Now, the company's annual revenue is about $2.5 billion and Sung aspires to increase it considerably.

This is why he has been heavily investing in innovative textile and garment production.

Currently, Youngone has business operations, particularly textile and garment, in Bangladesh, the US, Vietnam, Korea, Ethiopia, Uzbekistan, El Salvador and Switzerland.

Sung could not immediately say how many factories are under his corporation but did say that there are five groups of companies in Bangladesh that have more than 60,000 employees combined.

The company's biggest offshore operations are in Bangladesh though and Sung has been developing the KEPZ Corporation to invest more progressively in the country.

Youngone is the main supplier of down jackets—a soft but very warm outerwear made from MMF and real feathers—in Korea and it is also the main supplier of The North Face products globally.

The retention value of quality down jackets in Bangladesh is more than 75 per cent and Youngone is the main producer of this special kind of jacket for cold climates. The product is largely manufactured in Bangladesh.

Sung went on to say that Bangladesh's graduation from a least developed country (LDC) to a developing one will erode its trade competitiveness by more than 10 per cent on exports to EU markets.

Bangladeshi companies need to improve their productivity by at least 50 per cent as well as reduce costs and lead time to compete in the international market before the country loses its trade benefits.

Bangladesh should use Vietnam as a benchmark for how smooth business operations in a country should run, he added.

For instance, even a few years ago, there were 7,000 Korean companies, mainly textile and garments related, in Shandong province of China but most of those factories were relocated to Vietnam as it offered good business conditions and administrative support.

Bangladesh can learn from Vietnam on how to attract more foreign direct investment, said Sung, who also served as chairman of the Korea Federation of Textile Industries (KOFOTI) and president of the International Textile Manufacturers Federation (ITMF), the world's oldest textile organisation based in Zurich, Switzerland.

Sung said he started his business at age of 27 after the completion of his graduation from Seoul National University and serving in Korean army.

The company chose to come to Bangladesh in the 80's mainly to export locally produced outwear to Sweden to enjoy the country's quota free benefits.

That year, three Korean companies invested outside of Korea. One went to Sri Lanka, another to Honduras and Youngone in Bangladesh.

Of these three, only Youngone is still doing business while the others have shut down entirely. Sung recalled how one of his female staffers joined in 1977, who is now working at his Vietnam factory.

About the rise of the garment industry and performance of Bangladesh's economy, Sung said he has witnessed remarkable development in the sector.

Although many foreign investors have left Bangladesh, Sung believes that this country has enough potential to grow further.

He said Noorul Quader, owner of Desh Garments, is a big name in the local industry as he sent many executives to Korea for training.

After a long career as a businessman, Sung decided to place the responsibility of leading the company on the shoulders of his daughter Rae Eun Sung.

His daughter has been working as the head of operations in Youngone Corporation and is president and chief executive officer of Youngone Holdings.

Source: The Daily Star

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British PM Boris Johnson addresses G7 with Covid-19 pandemic in focus

British PM Boris Johnson told G7 leaders on Friday that the battered world economy needed to be rebuilt after the Covid-19 pandemic with an ambitious plan to tackle climate change that would create millions of new jobs. The pandemic has killed 2.4 million people, tipped the global economy into its worst peacetime slump since the Great Depression.

“Jobs and growth is what we're going to need after this pandemic,” Johnson told the opening of the G7 leaders’ meeting - Joe Biden’s first as US President.

Johnson welcomed newcomers Biden and Mario Draghi, Italy's new prime minister. But the “mute curse” which has stilted video calls for millions of businesses interrupted the G7 leaders meeting. As Johnson began the meeting, a German voice suddenly interrupted him.

“Can you hear us Angela," Johnson quipped, chuckling. "I think you need to mute."

Source: The Business Standard

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Garments that grow with your children: Protecting the planet one step at a time

The company Petit Pli, based in London, has developed a concept of clothing able to follow the growth of your children. These clothes, made of recycled plastics, will be able to dress them from the age of nine months to four years old. Energy Observer Solutions met up with Ryan Mario Yasin, founder of this brand which focuses on a sustainable and responsible approach.

To offset the non-sustainability of the textile industry, Petit Pli has invented a revolutionary concept: Clothing that unfolds as your children grow, so that the same garment fits them from nine months through until four years of age, which amounts to seven different sizes in a normal range of kids clothing and hence massive savings that benefit both your pocket and the environment!

Textiles, the world’s second most polluting industry

Textiles are the second most polluting industry in the world, producing a staggering 10 per cent of greenhouse gas emissions. The fast fashion championed by the prêt-à-porter giants have created a new normal of fashion collections every two months, prompting us to overconsume. In London, the company Petit Pli has developed a clothing concept capable of adapting to children as they grow. Between one and four years of age, a child grows an average of eight centimetres every year. A single Petit Pli garment can be gradually unfolded so that it grows with your child to provide the perfect fit.

Aeronautic-inspired technology for eco-friendly kids’ clothing

The founder of Petit Pli, Ryan Mario Yasin, a graduate in aeronautical engineering, formerly designed folding origami-style satellites before taking inspiration from this concept to develop cleverly constructed folding clothing. In this way, the same garment can be worn by the same child between the ages of nine months and four years, instead of purchasing seven garments in seven different sizes. But that’s not all at Petit Pli. The clothing also comprises recycled plastic, thus contributing to the recycling of waste. Is this a sustainable solution for the future of clothing?

This weekly segment “Protecting the planet, one step at a time” gives the floor to the NGO Energy Observer Solutions, which carries out reports all over the world.

Energy Observer is the name of the first hydrogen-powered, zero-emission vessel to be self-sufficient in energy, advocating and serving as a laboratory for ecological transition. Criss-crossing the oceans without air or noise pollution for marine ecosystems, Energy Observer sets out to meet women and men who devote their energy to creating sustainable solutions for a more harmonious world.

Source: Molay Mail

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Finland offers new solutions to textile industry challenges

Finland recently claimed it is leading the revolution towards sustainable materials and business models in global textile business. The country offers groundbreaking solutions and knowhow at every level of the sustainable textile ecosystem, from waste handling, treatment, sales and usage, collection and recycling to identification and waste handling, it said.

The currently available raw materials cannot meet the constantly growing demand for fibers and textiles. At the same time, on a global scale, an estimated 92 million tonnes of textile waste is produced every year of which 75-85 per cent is either burned or ends up in landfills.

Leading Finnish firms experts like Rester, NordShield, Emmy, Spinnova and Infinited Fiber Company offer innovations across the textile ecosystem, the government said in a press release.

“By replacing primary raw materials with recycled components or using, for example, wood-based textile fiber, and by keeping already existing materials in the economy as long as possible, we have the opportunity to impact the huge global system and value chains,” said Marika Ollaranta, head of the Bio and Circular Finland programme of Business Finland, Finland’s trade, investment and travel promotion and innovation funding organisation.

“Finnish innovations offer revolutionary solutions that cover the whole life cycle of a textile. Governments, consumers and the industry itself are waking up to the challenges of a very single-use oriented industry, but more work is needed to build awareness and change mindsets and behaviour to make the cycle more sustainable, while also maintaining the level of quality and reasonable costs.”

Rester collaborates closely with Southwest Finland’s municipal waste management company LSJH in a project that brings together the private and public sectors in textile waste handling.

From waste handling to a textile’s physical features, NordShield’s patented technology enables natural antimicrobial treatment of textiles, free of heavy metals.

Spinnova and Infinited Fiber Company have come up with innovative ways of making fiber out of wood pulp and discarded textiles, while Emmy Clothing Company has created a transparent resale-as-a-service for clothes, which makes it possible for all actors in the ecosystem to participate in prolonging a textile’s life cycle.

Responding to the growing issues of textile waste, new textile recycling regulations will come into force in the EU in 2025. However, Finland aims to start the process already by 2023.

Rester, together with LSJH, is opening a textile refinement plant in Paimio, Finland, that will refine end-of-life textiles into raw material fibre that can be used in new products. The plant could become one of the biggest textile refinement plants in Northern Europe, making Finland one of the Nordics’ recycling hubs, the government said.

The plant’s two production lines will process post-consumer textiles from households and pre-consumer textiles from the business-to-business sector. At its launch, the plant will process 12,000 tonnes of end-of-life textiles annually. The plan is to scale up the volume in the future to double the capacity.

Finnish firm Spinnova makes fibre directly from wood pulp or pulp made of side streams without dissolving and the use of harmful chemicals. The manufacture of sustainable textile fibre made with Spinnova’s method generate nil waste or side streams, nil microplastics and has minimal carbon dioxide emissions and water use.

Finnish biotechnology company Infinited Fibre Company is known for technology that can turn discarded textiles into a premium regenerated textile fibre, called Infinna. Infinna has the soft and natural look and feel of cotton and it offers a circular alternative to less sustainable conventional textile fibres that rely on virgin raw materials. The company was recently listed on the 2021 Global Cleantech 100 list.

Infinited Fiber Company is also leading the European Union-funded New Cotton Project, a consortium of brands, manufacturers, suppliers, innovators and research institutes that is breaking new ground by demonstrating an entirely circular model for commercial garment production.

This is a world first in the fashion industry. Over a three-year period, textile waste will be collected, sorted and regenerated into Infinited Fiber Company’s unique, cellulose-based textile fibers which will be used to create different types of fabrics for clothing designed, manufactured and sold by global brand Adidas and companies in the H&M Group.

Finnish biotechnology company NordShield has created natural-based anti-microbial technology that works against bacteria, fungi and viruses. It is free of heavy metals and instead harnesses the ancient power of Nordic forests. In its various forms, the technology can be applied to textiles and fibres as well as medical devices, plastics and even skin.

The recently launched NordShield® BioLayr is a durable antibacterial solution for making consumer textiles anti-microbial. The NordShield® Brilliant technology can be applied to a variety of products, such as for sanitizing hands, feet, surfaces and even community face masks.

Emmy Clothing Company is a leading Nordic online marketplace for pre-owned premium clothing. The webstore enables consumers, apparel retailers and fashion brands to easily and efficiently resell, discover and buy high-quality fashion, with complete transparency regarding quality, availability and delivery options.

Source: Fibre2Fashion News

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JUKI introduces new economical brand JIN

JUKI, the Japanese leader in sewing technology, has introduced a new economical sewing and cutting tech brand called JIN.

It’s worth noting here that JUKI is renowned tech supplier in the sewing industry and produces high-end premium sewing machines.

The launch of economical products has come at a time when the apparel manufacturing industry is looking for affordable yet impactful technology in COVID-19 times.

The new brand consists of products such as M1 Series; Motors and Devices; NA-11/NA-11 UT; Cutting Room Solution; and Machine Movement Trolley.

One of the core launches is the M1 Series, which is an advanced overlock/safety sewing machine and responds to various kinds of sewing materials and processes, producing delicate soft-to-the-touch seams while further reducing operating noise as well as increasing durability.

As far as lockstitch machine is concerned, JUKI has come up with NA-11 and NA-11 UT which are direct drive, single needle, top and bottom feed machines. NA-11 UT comes with an automatic thread trimmer.

Source: Apparel Online

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More 'Brexit' companies shift to Netherlands as uncertainty persists

The year 2020 witnessed 78 ‘Brexit’ companies moving to the Netherlands, despite foreign investment in the country declining by a quarter due to the pandemic, according to the Netherlands Foreign Investment Agency, which recently said the number was the same as in 2019, lifting the total number of such companies since the 2016 Brexit referendum to 218.

The Netherlands has attracted companies in trading and finance, medicine and agriculture, as well as logistics and distribution looking to secure their European operations as Britain departed the European Union.

Amsterdam is already poised to be Europe’s number one corporate listing venue this year and in January, data showed it displacing London as Europe’s biggest share trading centre.

The 2020 arrivals are expected to generate a combined 6,000 jobs and €544 million ($654.98 million) of investments in the first three years, the agency said in a statement.

They include British companies, but also businesses from America and Asia that are shifting European operations, it said.

“Not only are the amount of contacts continuing to grow, the number of Brexit companies that have opted for the Netherlands is also increasing,” it said. “In effect, the uncertainty of recent years has not disappeared.”

Source: Fibre2Fashion News

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Bangladesh among likely 'the fastest growing' economies in 2021

Bangladesh and Vietnam out of six Asian frontier markets are expected to remain among the fastest-growing world economies in 2021.

The Washington-based International Institute of Finance (IIF) has made this update on its outlook for frontier Asian economies, assessing their key risks recently.

According to Wikipedia, a frontier market is a term for a type of developing country's market economy which is more developed than that of a least developed country, but too small, risky, or illiquid to be generally classified as an emerging market economy. Such a market also carries too much inherent risks.

Globally, 27 nations belong to this category.

The IIF said robust domestic demand and competitive manufacturing sectors, coupled with rebounding exports, will be the main growth drivers this year.

It, however, said economic slowdown has kept inflation in check, allowing for expansionary monetary policies with central banks cutting interest rates and taking additional measures to inject liquidity.

Bangladesh's inflation in 2021 may remain above the target, the think tank predicted.

"We expect inflation to remain close to the authorities' respective targets in 2021, under the assumption that oil prices stay subdued and food prices broadly stable."

Inflation in Vietnam is projected to be somewhat below 4.0 per cent due to weak demand while Bangladesh's rate is slightly above the target.

Asian frontier markets have provided significant fiscal support to cushion the Covid-19 blow, the IIF cited.

Bangladesh has also supplied more than Tk 1.0-trillion stimulus to boost the domestic economy, it mentioned.

"We project budget deficits in three countries, including Bangladesh, to be large in 2021 for extra pandemic relief and recovery expenditure, stable capital spending and subdued tax revenue collection".

With already narrow fiscal buffers, the IIF sees significant external financing needs and growing pressure on debt sustainability.

"In Bangladesh and Vietnam, the risk of debt distress is low. There, we expect debt as a share of GDP is expected at 40 per cent and 57 per cent respectively, by the end of the year."

Renewed lockdowns in major trading partners and origins of tourist arrivals to the region, and slow vaccination are the key downside risks, the outlook said.

Both Bangladesh and Vietnam have been more resilient than many emerging markets (EMs) and non-Asian frontier markets (FMs) to Covid-19 shocks, it added.

Bangladesh and Vietnam are among the few that were able to maintain growth in 2020, with Vietnam successfully containing the pandemic.

The IIF said cumulative rate cuts are currently one of the highest in the region.

Sri Lanka is another frontier economy in Asia (250bps since the end of 2019) followed by Vietnam (200bps) and Bangladesh (125bps).

The central banks of these countries also implemented a QE (quantitative easing)-type government bond purchase programme, according to the IIF outlook.

External positions remain manageable in Bangladesh and Vietnam, with the latter's position strongest for current account surplus, an appreciating exchange rate and significant reserve accumulation.

The IIF said Bangladesh's current account deficit is relatively small. Remittance was surprisingly strong in 2020 as lockdown and social distancing measures might have helped migrant workers to remit money back home.

But a significant resurgence of the pandemic in recent months might affect income prospects, it feared.

Frontier Asian countries experienced smaller economic contractions compared to other EM and FM regions, likely due to favourable demographics and structural reforms implemented in the past.

Nevertheless, risks remain from the resurgence of Covid-19 globally as well as the country-specific factors, the IIF observed.

Source: The Financial Express Bangladesh

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