Sutlej Textiles & Industries recently began commercial production of its greenfield green fibre project to manufacture polyester staple fibre (PSF) by recycling of pet bottles. The project set up at Baddi, Himachal Pradesh, has a capacity to manufacture 120 metric tonnes (MT) per day of raw white, black and dope-dyed recycled PSF, the company announced.
Sutlej Textiles and Industries produces a range of textile products that extends from yarns and fabrics to home furnishing.
Apart from Baddi, it has manufacturing units at Bhawanimandi in Rajasthan, Kathau in Jammu & Kashmir and a home textile fabric division at Daheli in Gujarat.
Source: Fibre2Fashion News
Cotton prices have gained over 10 per cent so far this year following the firm trend in the global cotton trade. Cotton production globally is projected to touch a four-year low and imports by China are estimated higher. The Centre’s decision to impose a ten per cent duty on imported cotton is seen as supporting domestic price.
Ajay Kumar, Director, Kedia Commodities, said the demand for cotton from yarn exporters has been strong as the cotton prices are low in India compared to global markets has made Indian exporters competitive in overseas market.
Chinese export
The most active March contract on MCX gained by ₹80 to ₹22,230 a bale while the April and May contracts traded firm at ₹22,560 and ₹22,860.
“We have bagged a major order for yarn export to China and used the MCX platform to lock in cotton prices as the domestic prices have been rallying steadily in last few months and have the potential to wipe out margins,” said Sanjay Agarwal, CEO of Sai Enterprises.
Arrival of the new crop in the market was about 250 lakh bales as of January-end from the season’s start in October. The Cotton Corporation of India and other government procuring agencies have about 170 lakh bales of cotton as of January-end. The Cotton Association of India has estimated cotton supply at 380 lakh bales including the carry forward stock of 120 lakh bales and imports of six lakh bales. Overall demand is pegged to increase to 330 lakh bales against 25 million bales logged previous year due to pandemic impact.
Source: The Hindu Business LIne
The 15th Finance Commission Chairman NK Singh on Monday called for setting up a Fiscal Council like institution to better manage the debt trajectory of the Centre and states. He also highlighted the "substantial" increase in the proportion of cess and surcharge in Gross Tax Revenue (GTR) in the past 10 years, saying only if a Constitutional amendment is introduced to include a portion of it into the divisible pool, then states' could get a share of the revenue earned under that head.
Speaking about the fiscal challenges, Singh said apart from the issue of consolidated roadmap or debt trajectory, two other issues continue to be dominant in the fiscal space.
These are "lack of a fiscal institution in India by way of Fiscal Council or any other institution. Fact that we are one of those countries which have some kind of fiscal architecture, but does not have independent fiscal institutions is a factor that needs to be kept in mind".
The second issue is since the world in general, investors and rating agencies focus not only on the debt trajectory of the central government but of the general government (centre and states together), there is a need for an institutional framework, which will cover both these as partners.
On the issue of cess and surcharge, Singh said the proportion of cess and surcharge in 2010-11 was 10.4 per cent of GTR. It increased to 19.9 per cent in BE of 2020-21. If we take out the 3 percentage points of GST compensation cess, then 10.4 per cent has gone up substantially to 16.5 per cent.
"I see no viable solution except a Constitutional amendment. If that Constitutional amendment is introduced, recognising some proportion of Cess and surcharge ... to the divisible pool, it will certainly allow greater flexibility to the successive Finance Commissions subsequently to be able to calibrate a framework," he added.
He also said that it should not be the situation that the finance commission raises the devolution to the states and then the Centre increases cess and surcharge, thereby neutralising the impact of higher devolution. Cess and surchage do not form part of the divisible pool of tax revenue that goes to the states.
"It should not be a cat and mouse game that every finance commission raises the devolution number and it then neutralised simultaneously by an increase in cess and surcharge leaving the states where they were, nor the opposite way. I think fiscal federalism needs greater continuity and must be embedded in greater trust. The behaviour of this will be a touchstone for reinforcing the broad parameters of federal trust," Singh added.
The 15th Finance Commission has recommended that the states be given 41 per cent of the divisible tax pool of the Centre during 2021-22 to 2025-26, which is at the same level as was recommended by the 14th Finance Commission. Finance Commission is a constitutional body that gives suggestions on Centre-state financial relations.
As per the Commission, the GTR for the 5-year period is expected to be Rs 135.2 lakh crore. Out of that, the divisible pool (after deducting cesses and surcharges and cost of collection) is estimated to be Rs 103 lakh crore. States' share at 41 per cent of the divisible pool comes to 42.2 lakh crore for the 2021-26 period.
The report of the 15th Finance Commission was tabled in Parliament on February 2.
Singh also said that a "working relationship" between Finance Commission and GST Council would have to be worked out as both are constitutional entities.
GST Council is responsible for indirect taxation and Finance Commission suggests a Revenue Deficit grant for states.
"So, the working of the Finance Commission is integrally related to the decision-making process of the GST Council," he said.
Source: The Economic Times
inistry of Textiles and Ministry of Agriculture today signed an MoU to amplify sericulture activities in the country in the presence of Textiles Minister Smriti Irani and Minister of State for Agriculture Parshottam Rupala. The MoU will focus on establishing tree based agro-forestry models in sericulture and exploring possibilities of activities through Krishi Vigyan Kendras.
Ms Irani said, it will enhance training, boost technology and create sustainable livelihood for silk farmers or rearers. On the eve of International Women’s Day today, Ms Irani distributed Buniyaad Reeling Machines to women silk reelers with an aim to eradicate unhygienic and obsolete Thigh Reeling practice.
Source: All India Radio News
Finance Minister Nirmala Sitharaman on Monday said the fiscal measures taken by the government have resulted in positive growth of 0.4 per cent in the third quarter of the current financial year. The economy is estimated to contract by 8 per cent during 2020-21 due to the impact of the COVID-19 pandemic.
"The fiscal measures taken by Government during 2020-21 have been calibrated to sustain high spending in the economy and assist in its V-shaped recovery, resulting in a positive GDP growth of 0.4 per cent in third quarter of FY 2020-21," she said in a written reply in the Lok Sabha.
The minister further said that the gradual unlocking of the economy has eased supply-side disruptions enabling inflation to decline from 7.6 per cent in October, 2020 to 4.1 per cent in January 2021, mainly on account of decline in food inflation.
"Lower inflation has increased the real purchasing power of the people leaving more money in their hands to spend," she added.
Sitharaman said that the money to spend has further increased under PMGKY and ANB packages through direct benefit and in-kind (food; cooking gas) transfers, emergency credit to small businesses and wage increase for MGNREGA workers, among others.
With regard to lockdown, the minister said the government imposed a strict 21-days nationwide lockdown from March 25, 2020, to contain the spread of COVID-19 and ramp up the health infrastructure with a view to saving lives.
"Astute management of the lockdown and subsequent unlocking along with strengthened health infrastructure was accompanied by roll out of Pradhan Mantri Garib Kalyan Yojana (PMGKY) and Atmanirbhar Bharat (ANB) packages that besides saving lives also protected livelihoods and businesses. These measures, amounting to Rs 29.87 lakh crores - equivalent to 15 per cent of India's GDP, have boosted consumer confidence as their implementation advanced through 2020-21," she said.
The Consumer Confidence Survey, January 2021, of Reserve Bank of India shows that consumer confidence has beencreasing since May 2020 in respect of future expectations and since September, 2020 in respect of current expectations, she added.
Replying to another question, Sitharaman said, the Cabinet Committee of Economic Affairs (CCEA), in its meeting held on January 27, 2021 has accorded 'in-principle' approval for 100 per cent disinvestment of Government of India (GOI) shareholding in RINL also called Visakhapatnam Steel Plant or Vizag Steel along with RINL's stake in its subsidiaries/Joint Ventures through strategic disinvestment by way of privatisation.
While deciding the terms and conditions of the strategic sale, she said, legitimate concerns of the existing employees and other stakeholders are suitably addressed through appropriate provisions made in the Share Purchase Agreement (SPA).
"The State Government does not have any equity in Rashtriya Ispat Nigam Limited (RINL). However, the State Government is consulted in specific matters as and when needed and their support is also solicited in the matters that require their intervention," she said.
Strategic disinvestment of Government of India's equity will lead to infusion of capital for optimum utilisation, expansion of capacity, infusion of technology and better management practices, she added.
Source: The Economic Times
In a major step towards recycling, scientists at Sweden’s Lund University have found a way to convert cotton into sugar, which in turn can be made into spandex, nylon or ethanol. Every year, an estimated 25 million tonnes of cotton textiles are discarded around the world. In total, 100 million tonnes of textiles are thrown out. A lot ends up in landfills.
In Sweden, most of the discarded material goes straight into an incinerator and becomes district heating. In other places, it is even worse, as clothes usually end up in landfills.
“Considering that cotton is a renewable resource, this is not particularly energy-efficient,” says Edvin Ruuth, researcher in chemical engineering at Lund University. “Some fabrics still have such strong fibres that they can be re-used. This is done today and could be done even more in future. But a lot of the fabric that is discarded has fibres that are too short for re-use, and sooner or later all cotton fibres become too short for the process known as fibre regeneration.”
At the Department of Chemical Engineering in Lund where Edvin Ruuth works, there is a great deal of information about using micro-organisms and enzymes to transform the “tougher” carbohydrates in biomass into simpler molecules. This means that everything from biological waste and black liquor to straw and wood chips can become bioethanol, biogas and chemicals.
In the new research, scientists have succeeded in breaking down the plant fibre in cotton – the cellulose – into smaller components. However, no micro-organisms or enzymes are involved. Instead, the process involves soaking the fabrics in sulphuric acid. The result is a clear, dark, amber-coloured sugar solution.
“The secret is to find the right combination of temperature and sulphuric acid concentration,” explains Ruuth, who fine-tuned the ‘recipe’ together with doctoral student Miguel Sanchis-Sebastiá and professor Ola Wallberg.
Glucose is a very flexible molecule and has many potential uses, according to Ruuth. “Our plan is to produce chemicals which in turn can become various types of textiles, including spandex and nylon. An alternative use could be to produce ethanol.”
From a normal sheet, they extract five litres of sugar solution, with each litre containing the equivalent of 33 sugar cubes. However, you couldn’t turn the liquid into a soft drink as it also contains corrosive sulphuric acid.
One of the challenges is to overcome the complex structure of cotton cellulose.
“What makes cotton unique is that its cellulose has a high crystallinity. This makes it difficult to break down the chemicals and reuse their components. In addition, there are a lot of surface treatment substances, dyes and other pollutants which must be removed. And structurally, a terrycloth towel and an old pair of jeans are very different,” says Ruuth.
“Thus, it is a very delicate process to find the right concentration of acid, the right number of treatment stages and temperature,” Ruuth adds.
The concept of hydrolysing pure cotton is nothing new per se, explains Ruuth - it was discovered in the 1800s. The difficulty has been to make the process effective, economically viable and attractive. “Many people who tried ended up not utilising much of the cotton, while others did better but at an unsustainable cost and environmental impact.”
When he started making glucose out of fabrics a year ago, the return was a paltry three to four per cent. Now he and his colleagues have reached as much as 90 per cent. Once the recipe formulation is complete, it will be both relatively simple and cheap to use.
However, for the process to become a reality, the logistics must work. There is currently no established way of managing and sorting various textiles that are not sent to ordinary clothing donation points.
A recycling centre unlike any other in the world is currently under construction in Malmö, where clothing is sorted automatically using a sensor. Some clothing will be donated, rags can be used in industry and textiles with sufficiently coarse fibres can become new fabrics. The rest will go to district heating. Hopefully, the proportion of fabrics going to district heating will be significantly smaller once the technology from Lund is in place.
Source: Fibre2Fashion News
USA has imported 26.93 per cent more textile and apparel (volume-wise) from India in January ’21 than January ’20 – according to OTEXA data.
The country saw an influx of 683.16 million SME of textile and apparels in the first month of 2021 from India, of which textile products contributed 588.23 million SME (up 35.83 per cent) and apparel products shared 94.93 million SME (down 9.73 per cent).
Of total textile imports, the share of yarns, fabrics and made-ups was 91.97 million SME, 208.26 million SME and 348 million SME, respectively, and the respective surge was 27.84 per cent, 62.08 per cent and 24.50 per cent.
In terms of values, the total textile and apparel shipment has noted 2.78 per cent yearly increase to US $ 739.34 million in January ’21. Textile products witnessed a rise of 29.40 per cent to US $ 451.39 million, while apparels were down by 22.28 per cent to clock US $ 287.95 million.
Cotton apparel shipment to USA up in volumes, down in values –
When it comes to apparel shipment, cotton-made apparels contributed 74.45 million SME and experienced a surge of 7.57 per cent on Y-o-Y basis in January ’21.
However, the values of cotton apparel import by USA from India plunged 12.47 per cent to US $ 229.77 million, all because of lowering unit prices!
MMF apparels remained negative both in volumes and values –
On the other hand, India’s shipment of MMF apparels to USA tumbled heavily. The shipment was worth 51.91 million SME (down 44.08 per cent on Y-o-Y basis) and could tap just US $ 19.48 million, falling 42.33 per cent in January ’21.
Source: Apparel Online
The Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) on Sunday asked the government to allow import from India through Wagha border land route on zero-duty, exempting it from all types of taxes and duties, as import from Afghanistan and Central Asian States via Torkham land route would not end apparel industry’s raw material scarcity.
“We appreciate PM Imran Khan for taking serious note of cotton shortage and its skyrocketing prices in the country, instructing the Ministry of Commerce to take necessary measures, including cross border trade of cotton yarn, to keep the momentum of value-added exports,” said PRGMEA Central Chairman Sohail A Sheikh in a statement.
Sohail A Sheikh said that the apparel sector is in trouble because of cotton shortage and its high prices in local market, as the cotton rates found no respite from an unabated spike with the industrial input trading at season’s highest rates because its depressed local production continued to widen demand and supply gap.
“Apparel sector is now reluctant to book new orders, as it is no more competitive due to record high rates of cotton yarn,” he added. He said that Adviser on Commerce, Textiles and Investment Abdul Razzaq Dawood had assured the apparel sector of allowing cotton yarn imports from India through Wagha border but now the government is considering permitting imports just from Afghanistan and Central Asian States, which would have no significant impact on cotton shortage.
Central Chairman PRGMEA said that importing yarn from other countries was not only expensive but would also take one to two months to reach Pakistan. “Yarn can be available to us on time from Wagha border and fulfillment of export orders will also be possible on time in this way,” he added.
He said that in order to promote the export of value-added textile industry, the government would have to take important steps to increase the production area and production of cotton. He said that it was a matter of concern that the production of cotton in Pakistan was reduced to only 5.5 million bales. The country’s textile sector consumes around 12 million bales of cotton per annum but production has fallen short of the requirement over the past one and a half decade. With low production, the country needs to import cotton in an effort to bridge the demand-supply gap.
Furthermore, Pakistan produces short-to-medium staple cotton, whereas long and extra-long staple cotton is imported for manufacturing finer yarn for its subsequent transformation into high value-added textile products.
PRGMEA Central Chairman also urged the government to impose a complete ban on export of cotton yarn up to 30 counts till the sufficient raw material is available to the industry. It will be positive for the apparel industry to convert it into value-added goods, exporting them in the international market instead of raw cotton yarn, he added.
Sohail Sheikh applauded the government’s incentives and support to the apparel exporters, who succeeded in enhancing textile exports by more than 8 percent to $8.8 billion in the seven months of the current fiscal year which should continue in future. He also pointed out that in time decision of the government to open the industrial sector played a major role in stabilising the economy in addition to keeping the jobs intact of the millions of workers.
“Again we need to take a timely decision of allowing the duty-free imports of yarn from land route of Wagha to keep the growth pace intact amidst severe shortage of raw material,” he added.
Source: The Nation
The textile testing service provider Hohenstein has developed its own molecular detection systems to screen cotton or textiles for presence of genetically modified organisms (GMOs) along the entire value chain. Hohenstein is also one of the five laboratories in Europe, accredited for testing textiles for GMOs in accordance with the ISO/IWA 32:2019 protocol.
The protocol was developed by the International Organisation for Standardisation (ISO) as an International Workshop Agreement (IWA) on the initiative of Global Organic Textile Standard (GOTS), Organic Cotton Accelerator (OCA) and Textile Exchange. The aim is to be able to apply an official, standardised GMO testing protocol for textiles from organic cultivation. According to this, all organic cotton must be free of genetic engineering, whereas conventional cotton permits the use of genetic engineering. In mid-February 2021, the initiators of the ISO/IWA 32:2019 protocol published an overview of the 14 testing laboratories worldwide that are permitted to carry out tests in accordance with the protocol's requirements, including the German testing service provider Hohenstein.
However, the Hohenstein experts have also developed their own molecular biological detection systems in order to be able to test genetically modified cotton at all critical points along the entire value chain - from raw cotton to yarns and fabrics to finished end products. The screening thus allows complete traceability throughout the entire textile chain with clear yes/no statements about GMO-free cotton or textiles. As a member institute of the Oeko-Tex Association, Hohenstein also screens textiles for genetically modified organisms as part of the Standard 100 by Oeko-Tex certification. If the requirements are met, the articles can be advertised here with the claims "organic cotton", "biological cotton" or "GMO not detectable".
Manufacturers, brands and retailers, but also certification organisations, benefit from complete analytical evidence all the way to the end product. Consumers can be confident that no genetically modified cotton could be detected in the articles they buy. This is because up to now most organic certifications either do not include any obligatory laboratory tests at all or only random sample tests on cotton seeds.
The testing involves shredding the sample and breaking down the cotton fibres mechanically and enzymatically. The genetic material (DNA) is isolated from the fibre and purified in a multi-stage process. A genetic modification exists if specific target sequences (marker genes) are present in the DNA. These can be detected by molecular biology. Control reactions are used to detect unmodified cotton DNA and to exclude false-negative results.
More and more consumers are turning to organic cotton and are happy to accept higher prices for it. This is because the cultivation of organic cotton requires the renunciation of genetically modified seeds as well as chemical pesticides and fertilisers. Nevertheless, genetic modifications are found time and again in textiles that are actually labelled with the relevant organic labels. The conceivable causes of contamination of organic cotton by genetic modifications are complex and extend along the entire value chain.
Source: Fibre2Fashion News
Electronics and textile exports such as masks contributed to the spike in outbound shipments, as demand for work-from-home supplies and protective gear against the virus outbreak soared during the pandemic.
Exports spiked 60.6 percent on-year in the January-February period, well above analysts' expectations, while imports rose 22.2 percent, official data showed Sunday.
The latest figures stand in stark contrast to last year's fall of around 17 percent in exports and 4 percent drop in imports.
The country struggled to contain the spread of Covid-19 early on, with consumers staying home and businesses seeing a slow return to operations.
The customs administration said comparison to last year is also likely to have bolstered the latest figures, saying in a statement that the "low base is one of the reasons for the larger increase this year."
On Sunday, official data showed that electronics exports rose 54.1 percent, while textiles including masks rose 50.2 percent.
China's overall trade surplus came in at $103.3 billion, its customs administration said.
Meanwhile, the country's trade surplus with the US -- a key point of contention during the trade war pursued by former president Donald Trump -- doubled from the same period last year to $51.3 billion.
Chinese authorities started combining January and February trade data last year, while it battled the coronavirus outbreak.
This is in line with how some other indicators are released, to smooth over distortions from the Lunar New Year holiday, which can fall in either month.
Off-season
China's foreign trade data remained strong despite the "off-season", the customs authority said Sunday.
Trade was also high due to a recovery in production and consumption in major economies such as Europe and the United States amid the coronavirus pandemic, as well as improvements in domestic consumption.
Although business activity usually falls during the Lunar New Year period when workers return to their hometowns, official appeals to avoid travelling this year to keep the Covid-19 outbreak in check supported production, the customs administration added.
"Many enterprises in major foreign trade provinces such as Guangdong and Zhejiang maintained production during the Lunar New Year," it said. "Market demand is expected to rebound further."
Some companies have also been stocking up on goods such as integrated circuits, iron ore and crude oil imports.
"Global electronics demand has risen strongly due to the global shift to remote working and online shopping," said Rajiv Biswas, Asia-Pacific chief economist for IHS Markit.
This had driven demand for electronics products such as laptops, mobile phones and wearables, he said.
Meanwhile, the strong import growth also reflected a "normalisation of consumer spending" in China, he told AFP, after a severe slump due to lockdowns.
Analysts have warned the demand boom for protective equipment supporting Chinese exports could fade as pandemic controls improve globally, although this may not happen too soon.
"The pandemic might have already changed people's behaviour... I think this kind of demand will still be in place for some time," said ANZ Research senior China economist Betty Wang.
But Chinese authorities cautioned Sunday that, given global uncertainties, there is "a long way to go towards steady growth in foreign trade".
Source: The Hindustan Times
The states are expected to rake up the issue of a huge shortfall in GST payments till the first quarter of 2022-23 at the GST Council meet scheduled this month.
The council may not take a call on the rationalisation of tax slabs or address the inverted duty structure on sectors such as textiles, footwear, and fertilisers.
Rather, the issue of compensation is expected to be raised by the states as the 15th Finance Commission has estimated the shortfall in the payout to them will be in the order of Rs 7.1 lakh crore for the period April 2020 to June 2022.
A senior finance ministry official said the council may not take a call on these issues as the model code of conduct was in force because of the assembly polls in five states. Also, the council would like the revenue to stabilise after the pandemic and take an informed decision.
At the upcoming meeting — the dates are yet to be finalised — the GST Council is likely to stick to only administrative matters and discuss the recommendations of various committees, the official added.
Sources said the GST compensation cess fund will not be sufficient to meet the obligation of the Centre to the states. The Council has to decide whether or not to extend the current arrangement to make up the shortfall with debt.
“From our projections of collections from GST compensation cess, it turns out that the compensation cess fund will have an amount of only Rs. 2.25 lakh crore by that time, from the collections of 2020-21 to Q1 2022-23,” the Finance Commission report said.
The Commission indicated “the shortfall in the requirements of compensation till Q1 2022-23 will be met by extending the levy of GST compensation cess till the year 2025-26. In the interim, the transitional requirements of liquidity of the states could be met from borrowings, either by the Union or by the States.”
“We are not including or quantifying the debt implications of the borrowings under the proposals. The fiscal deficit and debt path worked out by us excludes the borrowing that the States may do under any arrangement worked out between them and the Union, consequent upon decisions in the GST Council,” it added.
In October, the GST Council extended the compensation cess beyond June 2022, though it did not specify how long it will continue after the transition period of five years.
The commission has recommended a three-slab structure for GST. The government wants to merge the 12-per-cent- and the 18-per-cent slabs to a middle point of around 15 per cent for long, but has been waiting for the revenue to stabilise.
The Opposition has criticised the Modi government for a complicated GST structure as it has four slabs of 5 per cent, 12 per cent, 18 per cent and 28 per cent. Added to that, the government charges a cess on demerit and luxury products that come under the 28-per-cent-bracket.
Recently, the Commission has recommended merging the 12-per-cent and 18-per-cent slabs. The Commission chaired by N.K. Singh has suggested the rationalisation of the GST into a three-rate structure, comprising a 5 per cent merit rate, the 28-30 per cent de-merit rate and the rate after the merger of the 12-per-cent and 18-per-cent slabs.
Source: The Telegraph News
With the world economy slated to grow around 6 percent this year according to Oxford Economics, the U.S. could play a central role, The Wall Street Journal (WSJ) reports.
That more central role in the global comeback would be in contrast to the U.S. recovery from the 2008 financial crisis.
WSJ writes that this shows the "unusual nature" of COVID-19 compared to past crises, and how flexible the American economy is.
Some of the ingredients propelling the likely growth include the rollouts of vaccines, the recently-passed $1.9 trillion aid package, easy money from the Federal Reserve and pent-up savings, as American households are sitting on around $1.8 trillion in savings over the past year.
The U.S.'s expected larger role would be the first time since 2005 that the country is expected to make a larger contribution to global growth than China. China powered the economic growth in the wake of the 2008 crisis, with the U.S. experiencing the slowest growth since the Great Depression.
But because the U.S. economy is around a third larger than China's, the recovery is expected to be larger if they both grow roughly at the same rate, which analysts say is likely.
The U.S. contracted 3.5 percent last year and is expected to grow 7 percent this year, while China grew 2.3 percent last year and is expected to grow 8 percent this year, reports from Goldman Sachs say.
According to economists with J.P. Morgan, the U.S. could surpass its pre-crisis trend growth rate by the middle of the year. China, they say, has already gotten back to the pre-pandemic trajectory but won't exceed it.
The presence of the digital economy could help soften the blow, though, Karen Webster wrote a year ago as the pandemic was just beginning. The increase in things like live-streaming, gaming apps and eCommerce all helped to keep the world going amid the presence of the virus.
Source: Pymnts.com
China and India should stop “undercutting” each other, shed mutual “suspicion” and create “enabling conditions” by expanding bilateral cooperation to resolve the border issue, Chinese Foreign Minister Wang Yi said on Sunday.
Calling the boundary dispute as not the “whole story” of the China-India relationship, Wang said that both countries were friends and partners but they should shed suspicion at each other.
Answering a question at his annual press conference on the current state of India-China relations following the tense standoff in eastern Ladakh since May last year and how Beijing viewed the relationship going forward, he said it is important that both countries manage their disputes properly and expand bilateral cooperation.
“The boundary dispute, an issue left from history, is not the whole story of the China-India relationship.
“It is important that the two sides manage disputes properly and at the same time expand and enhance cooperation to create enabling conditions for the settlement of the issue,” Wang said at an online press conference held on the sidelines of the annual session of the National People’s Congress, China’s Parliament.
In his lengthy answer, Wang, who is also a State Councillor, did not touch upon the recent disengagement of troops from the most contentious north and south banks of the Pangong Lake area in eastern Ladakh after the 10th round of military-level talks between the two sides.
Wang’s comments on the border issue came days after he held a 75-minute telephonic conversation with External Affairs Minister S Jaishankar during which the latter emphasised that the disengagement of troops at all friction points is necessary to bring peace and tranquillity on the border and for the development of bilateral relations.
Also on Friday, India’s Ambassador to China Vikram Misri met Chinese Vice Foreign Minister Luo Zhaohui and called for completing the disengagement of troops from all areas in eastern Ladakh, saying that it would help restore peace and tranquillity at the border and provide conditions for progress in bilateral ties.
In his remarks, Wang pointed out that the world expects both China and India to safeguard the common interests of the developing countries and advance multipolarity in the world.
The similar national conditions of the two countries also mean that they share the same or similar positions on many major issues, he said.
“Therefore,” Wang stressed, “China and India are each other’s friends and partners, not threats or rivals.”
The two sides need to help each other to succeed instead of undercutting each other. We should intensify cooperation instead of harbouring suspicion at each other, he said.
Without directly referring to the eastern Ladakh standoff, Wang said, the right and wrongs at what happened at the border area last year are clear, so are the stakes involved.
We are committed to settling the boundary dispute through dialogue and consultation. At the same time we are resolved to safeguard our sovereign rights,” he said, reiterating China’s stance on the border standoff.
Wang said it falls on both sides to solidify the existing consensus, strengthen dialogue and communication and improve the various management mechanisms to jointly safeguard the peace and tranquillity in the border areas.
On how China looks to move forward its relations with India after the border standoff, Wang said, in the year ahead we hope India will work with China to truly deliver on the important common understanding reached by our leaders that the two countries are not threats to each other but opportunities for each other’s development.
Both sides should consolidate existing consensus, strengthen dialogue and communication, improve the control mechanism and jointly safeguard peace in the border areas, he said, expressing hope that India will meet China halfway in the new year to benefit both peoples.
Together we can bring greater benefits to the 2.7 billion people in China and India, make greater contributions to the advent of the Asian Century, he said.
He said the China-India relationship is essentially about how the world’s two largest countries get along and pursue development and rejuvenation together.
As two ancient civilisations, next door to each other and as two major emerging economies with each over one billion people, we have broad common interests and tremendous potential for cooperation, he said.
At home, both countries face the historic mission of bettering lives, accelerating growth, Wang added.
The border standoff between the Indian and Chinese armies erupted on May 5 last year following a violent clash in the Pangong Lake area and both sides gradually enhanced their deployment by rushing in tens of thousands of soldiers as well as heavy weaponry.
Subsequently, 20 Indian soldiers were killed in a fierce hand-to-hand combat on June 15 in the Galwan Valley, an incident that marked the most serious military conflicts between the two sides in over four decades. Eight months after the confrontation, China admitted that its four soldiers were killed in the fight.
Source: The Print
We feel proud that Bangladesh has been ranked 41st among the world’s largest economies in recent time. The country has qualified to graduate to become a developing country by meeting, for the second time, the criteria set by the Economic and Social Council’s Committee for Development Policy (under the United Nations).
The ready-made garment (RMG) sector which accounts for 83 percent of the country’s exports and employs around four million people (mostly women) has contributed greatly to the overall economic development of the country. With a 6.4 percent share in the global apparel market, Bangladesh is the second-largest apparel exporting country in the world after China.
There is no denying the fact that the trade benefits the European Union (EU) has been providing to the country have flourished the local RMG industry significantly.
For Bangladesh, Europe is the largest trading bloc and accounts for more than 60 percent of the country’s exports (of which more than 90 percent are apparel items). Major export destinations in the EU include Germany, France, Spain, the Netherlands and Italy.
For low and lower-middle-income countries, the EU offers Standard GSP which means a partial or full removal of customs duties on two-third of tariff lines. As a least developed country under the EBA (Everything But Arms) facility, Bangladesh enjoys duty-free, quota-free access to the block for all products except arms and ammunition.
Let’s see what kinds of problems apparel exporters are facing at present. Bangladesh’s apparel industry is in badly need of a skilled labor force compared to its competitors like Vietnam. So, the scope to move up the value chain is being hampered.
Both Bangladesh and Vietnam are competing for neck and neck in the RMG market. That challenge from the Southeast Asian country has come in the form of price competitiveness and quality.
Furthermore, the EU has extended duty-free access to Vietnam, eliminating the competitive edge that the country held over its biggest rival in the trade. Now, the country has obtained the same privilege as Bangladesh thanks to the signing of a free trade agreement (FTA) with the EU.
“We are going to face tough competition,” said Mustafizur Rahman of the Centre for Policy Dialogue (CPD).
Bangladesh will face even tougher competition when the duty benefits come to an end in 2027. The country’s exports to the EU will then face 12 percent duty but Vietnam will continue to ship to the bloc at zero duty.
“So, we need to lobby with the EU either for the signing of an FTA or continuation of the duty benefit,” Rahman added.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Rubana Huq said, “With the gradual removal of the tariff on Vietnam’s exports, the price competition will be stronger.”
According to an international study, apparel workers in Bangladesh work for 60 hours per week while they toil for 47 and 46 hours in Cambodia and India respectively.
The country must integrate its economy regionally through platforms like the South Asian Association for Regional Cooperation (SAARC) and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) to expand its market within the region.
Bangladesh must enhance its marketing and negotiation capacity to receive the work orders being shifted from China. We are now missing out on the opportunity.
Besides ensuring adequate wages for the garment workers, workplace safety and compliance issues must be addressed immediately to remain competitive in the global apparel market. However, the country has made good progress in ensuring safe workplaces and building compliant factories since the two major industrial disasters—Rana Plaza Collapse and the Tazreen fire incident.
Apparel exporters said poor services offered at Chittagong port is another major cause of concern for them.
Lead-time has been decreased drastically amid the fierce competition of the apparel business, they said, adding that retailers and brands have now reduced lead-time to 70 days from 90 days.
China, Vietnam, Cambodia and India can supply goods to retailers and brands at a shorter lead-time. But Bangladesh can’t do that at a fast speed due to lower productivity, port congestion and poor infrastructure.
Though Bangladesh is focused on less complex products, it has the potential to further strengthen its relative position if production capabilities evolve and quality can be improved, while ensuring social and environmental compliance standards, as per the international study.
Even though some 40 percent of exports in 2018 were on higher ticket price fashion items, the apparel industry here is heavily reliant on “basic” low ticket price production. The industry has embraced a lot of reforms since the 1980s but investment has been less in the production of value-added garment items. Consequently, the country has remained a prominent manufacturer of basic or semi-high-end garment items.
The apparel sector functions on very low-profit margins often eroded through increasing taxes, rising charges for fuel and power, greater expenditure on transportation and wages. These issues discourage foreign investment in the apparel sector.
Vietnam, which made the foray into the apparel business after Bangladesh, has become a major player in the global high-end garment segment investing in research and development in design and product quality.
According to media reports, about 70 percent of European clothing retailers skip out on using the ‘Made in Bangladesh’ line in the tags. Such practice undermines the aptitude of the country’s garment makers.
Industry insiders said the poor image of the country has compelled the European apparel companies to avoid the ‘Made in Bangladesh’ label. The same retailers use the countries of origin for others though.
However, since labeling the country of origin or the country of export is mandatory under the Tariff Act of 1930 in the US, all American retailers use the ‘Made in Bangladesh’ line in the tags.
The EU has also taken initiatives to impose a carbon tax on imported goods causing worries among the exporters of readymade garments as well as textile, leather, plastic, and agricultural products.
In late 2019, the EU announced its signature program the Green Deal stating that it wants to implement to reach carbon neutrality by 2050. As part of the program, the EU is going to levy a carbon tax on imports from non-EU countries.
Imposing a carbon tax would hurt Bangladesh’s exports because buyers in the EU would not shoulder responsibility for bearing that extra cost by themselves.
Based on a study, the BGMEA has said that if the duty-free trade benefit for the country comes to an end in the EU when it graduates to a developing country, local RMG exporters will incur a loss of USD 4 billion.
The loss will amount to USD 3.2 billion If the Standard Generalized System of Preferences (GSP) cannot be availed, said the study. It’s a matter of grave concern that Bangladesh’s exports to the EU will face the worst impact after a rise in the country’s status.
However, the EU has offered a three-year grace period (till 2027) on the EBA facility following graduation.
The BGMEA study said, “While all competitors are offering further price discounts, any imposition of tariff on Bangladeshi goods may proportionately erode competitiveness.”
Currently, 15 countries hold standard GSP status in the EU market while eight ones have GSP Plus status and 48 LDCs EBA status, according to the European Commission’s website.
The GSP Plus, a special incentive arrangement for sustainable development and good governance, decreases tariffs to zero for vulnerable low and lower-middle-income countries implementing 27 international conventions on labor rights, human rights, environmental protection and good governance.
The EU has already granted GSP Plus status to many countries after graduation.
Economists opined that to attain GSP Plus status in the EU, Bangladesh must improve in four core areas— environmental protection, labor rights, curbing corruption and human rights.
Moreover, Bangladesh will have to ratify the 27 UN Conventions for the EU trade facility.
Bangladesh has ratified almost all major conventions except the International Labor Organization’s Minimum Age Convention.
A country has to fulfill two criteria set by the EU to be awarded the GSP Plus status. Firstly, Products that qualify for GSP Plus must be in the top seven largest exports from the country (where apparel is the largest in Bangladesh). Secondly, the three-year average export of that product cannot exceed 6.5 percent of the total import of that product into the EU.
In this regard, the BGMEA study suggested lobbying with the EU.
The country’s apparel exports already constitute nine percent of the total apparel imports into the EU. Analysts have said that given the importance of the apparel sector to the Bangladesh economy, apparel diplomacy is urgently required to negotiate with the EU and convince them to extend the threshold to 12-13 percent. In absence of a satisfactory outcome, the future development of the country will be severely endangered.
However, we shouldn’t solely rely on negotiating favorable GSP terms with our traditional markets, the US and the EU, when we achieve developing country status. Because non-traditional markets offer a fantastic opportunity for expansion of the RMG business.
Source: Textile Today
