• CCI AD FROM 5th April 2021




Textile industry to stop child labour as importing countries act tough

The Cotton Textile Export Promotion Council has stressed the importance of eradicating child labour in any form of employment across the value chain, mainly importing countries preparing a country-specific restriction list of products that use child labour.

The US government recently issued a restricted import of goods and has included Indian cotton seeds, cotton, thread/yarn, besides other commodities based on some published reports.

The United States Department of Labour has advised Indian companies to monitor and ensure that no child or forced labour is employed within their organisation or supply chain.

The textile industry, including Texprocil, Employers Federation of Southern India, Ethical Trade Initiative and The Southern India Mills’ Association, recently organised a Virtual National Seminar on “Eradication of Child Labour” attended by stakeholders across the country from the textile value chain.

Manojkumar Patodia, Chairman, Texprocil, said there is an urgent need for eradicating child labour employment and de-listing cotton seeds, cotton, thread and yarn from the restricted list.

Siddhartha Rajagopal, Executive Director, Texprocil, said the industry has initiated various steps and preparing dossiers by engaging a third party agency study, collecting data from the Department of Labour and NGOs, adopting a code of conduct and strictly adhering to labour laws to eradicate child labour.

Sanjay Kumar, Executive Director cum Secretary, Carpet Export Promotion Council, said it has made registration mandatory for all carpet looms and adopt a specified code of conduct to eradicate child labour apart from introducing various welfare facilities.

Dr K Selvaraju, Secretary-General, Southern India Mills Association, said the labour employment Code recommended by it would facilitate the textile manufacturing unit to protect itself from any criticism from the NGOs and other stakeholders.

SIMA has established a Sustainability Cell that helps textile mills for auditing and certifying an employment code, apart from assisting the mills in compliance, he said.

SIMA has also developed a draft Code on the eradication of child labour for the employer’s compliance, he added.

Source: The Hindu Business Line

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Elections promise no relief for Tiruppur’s stressed textile industry

It’s about 6pm and the workers at SJ International, a textile firm that specialises in embroidery, have just completed their ‘April 1’ prayers to herald in the new financial year. There is an eerie silence in the small factory as the swanky looking machines from Japan, extending from one end of the room to the other, have been switched off since the company has just one order and the machines can only be used when embroidering over 10 pieces of clothing at one go.

“There is nothing we can say. Just take a look at the switched off machines and you will understand our position,” said Kumar, the manager of this establishment. Orders have been hard to come by. The company only provides value added services to the larger exports business, but poor order books have cast a shadow of uncertainty in Tiruppur’s once thriving textile business.

Five years ago, the cost of embroidery on one piece was ₹40 and the salary of an operator was ₹7000. Now the cost of embroidery is ₹20, but the salary of the operator has more than doubled to ₹15000, Kumar said, listing out one of the many challenges of this textile town.

As we walk out, we stumble upon a poll-pamphlet promising ₹1500 per family per month, a washing machine, one government job, a solar stove and other attractive offers if All India Anna Dravida Munnetra Kazhagam (AIADMK) comes to power. Similarly, the loudspeakers used for campaigning by the Communist Party of India candidate, who is in alliance with the Dravida Munnetra Kazhagam (DMK), can be heard for several hundred meters in the bylanes of the Appaji Nagar, where several small and medium size units operate.

Elections in the state have brought with it no hope for an industry that has taken one blow after another since demonetisation in 2016, introduction of goods and services tax (GST) and then the Covid-19 outbreak last year. The latest of the challenges for the industry are the surge in Yarn prices that have gone up by as much as ₹60-70 per kg, hurting orders and margins.

“We are just not getting Yarn as suppliers say they do not have any even if we are willing to pay a higher price. The delays add to pressure on delivery targets, and we are forced to shell out more for freight cost,” Ravi Kumar, an entrepreneur who runs a medium size textile unit said.

The city of Tiruppur has thousands of small and big textile companies who specialise in knitwear and readymade garments. The first knitwear unit in this parched district was set up in 1925 and by the 1940’s it started to turn into a large hub for textiles. Coimbatore, one of the three centres (including Bombay and Ahmedabad) in India that was referred to as ‘Manchesters’ is just 40 kms away.

Though Tiruppur focused on the domestic industry till about the 1980’s, the fortunes of this small town took a turn for the better since then as it began exports, first to Italy.

Legend has it that popular Italian brand Verona first came to this town in 1978 through Mumbai (then Bombay) to buy white T-shirts.

Today there are hundreds of internationally reputed brands whose base for production is Tirupur like Nike, Tommy Hilfiger, Adidas, Ralph Lauren, Polo, GAP and Primark among scores of others.

In 1984, Tirupur exported 104 lakh pieces of clothing, valued at ₹9.69 crore which has reached ₹22,715 crore till February 2021, data shows. Tiruppur accounts for 52% of India’s knitwear production and earns revenues of around ₹50,000 crore per annum just from textiles (both exports and domestic market).

The lockdowns in European countries have also impacted demand as they account for the majority of Tirupur’s exports.

The first lockdown in India also saw the departure of around 30% of the nearly 800,000 labourers to their hometowns and majority of whom are yet to return.

“We have asked the government to construct permanent housing for migrant workers so that they also have a sense of belonging here. That could help us mitigate our labour crisis,” S Sakthivel of the Tiruppur Exporters Association (TEA) said.

Compounding the crisis for the industry, there is uncertainty on the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme since it is a new Financial Year. Under this scheme, duties on taxes levied at the central, state and local levels such as electricity and VAT on fuel will be refunded to exporters.

Both the AIADMK and DMK have promised everything from monthly salaries to government jobs and all kinds of freebies but nothing for this industry, which is clearly struggling currently.

Source: The Hindustan Times

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‘India well-armed to combat downside risks posed by surge in Covid cases’

The Finance Ministry, on Monday, expressed confidence of ‘combating any downside risk’ arising out of the second wave of Covid.

“As the vaccination drive continuously upscales in India and guided by the learnings of India’s successful management of pandemic during its first wave, India is now well-armed to combat any downside risk posed by the recent surge in Covid-19 cases. With the end of a challenging FY21, the crest of a brighter and self-reliant FY22 awaits India,” said a monthly report prepared by the Economic Affairs Department of the Finance Ministry.

This report has come at a time when India recorded one lakh-plus Covid positive cases. At the same time, Maharashtra has announced mini lockdown, apart from shutting down key services centres such as malls, cinema halls and dine-in restaurants till April 30. Many other States have also imposed or are planning restrictions. All these are posing a big question on the overall economic recovery. However, the monthly report has tried to shrug off such an apprehension.

According to the report, instrumental in this resilience will be a strong revival in investment growth, supported by the AtmaNirbharBharat Mission and a massive boost to infrastructure and capital expenditure provided for in the Budget 2021-22. “The wheels of India’s capex cycle have been set into motion, the signs of which were imminent in the second half of the year,” it said.

Loss of momentum

Noting that manufacturing PMI indicates loss of momentum in March compared to February, the report highlighted the fact that the manufacturing sector conditions continue to improve sharply, outpacing the long-run series average, with firms scaling up production and witnessing upturn in sales.

Public attitude more “infectious” than COVID-19

It highlighted the positive development such as further strengthening in demand conditions, and these “could be clearly seen in auto sales and power consumption”. Monthly GST collections attained all-time record levels since its inception during March. The growth momentum in rail freight traffic remains upbeat, port cargo traffic has been growing Y-o-Y and domestic aviation will pick up further. The digital payment upsurge, too, continues unabatedly, powered by resumption of economic activity, financial inclusion through Aadhar enabled Payment Systems, and behavioural shift to digital payments,” it said.

On the second wave of Covid, the report said India has been able to delay the onset of the second wave – the gap between the first peak to start of second wave has been 151 days in India – while it was much lower in other countries. At this juncture of onset of second wave, as the report claimed, India is well prepared to combat the scourge of the virus. It is well-equipped with adequate testing and health infrastructure and economic activity has adapted to the pandemic.

This prospect is further bolstered by the fast roll-out of vaccination. “India is emphasising on a five-fold strategy to curb the tide of new cases – exponential increase in testing, effective isolation and contact tracing of those infected, re-invigoration of public and private healthcare resources, ensuring of covid appropriate behaviour (CAB), and targeted approach to vaccination in districts reporting large numbers,” the report said.

Source: The Hindu Business Line

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Recovery ‘resilient’ despite rise in Covid-19 cases: Finance Ministry

The economic recovery remains “resilient” with sustained improvement in a majority of high-frequency indicators, including record GST collections and exports, despite a surge in Covid-19 cases in recent weeks, the finance ministry said on Monday.

The assertion comes amid mounting fears of a fresh set of restrictions, especially in key states like Maharashtra, that could potentially cause substantial disruption in economic activities. Also, some gauges, such manufacturing PMI and industrial output, have faltered of late.

In its economic report for March, the department of economic affairs stressed “further strengthening in demand conditions”, as reflected in auto sales and power consumption. Monthly GST collections hit as much as Rs 1.24 lakh crore in March, while exports jumped over 58% from a year earlier, albeit aided by a favourable base.

The Centre’s capital expenditure jumped as much as 104.4%, year on year, between October 2020 and February 2021, reversing a 11.6% drop in the first half of FY21, the report said.

The growth momentum in rail freight traffic remains upbeat, port cargo traffic grows from a year before, and domestic aviation picks up further. The digital payment upsurge too continues unabatedly, the report highlighted.

The agricultural sector remains the bright spot of the economy, with grain production hitting 303.3 million tonnes in 2020-21, beating record production levels for a fifth straight year. “MGNREGS has acted as a strong pillar to insulate the rural economy by generating all time high employment of 383.8 crore person days during 2020-21, 44.7% higher compared to previous year,” the report said.

Nevertheless, certain other indicators lost momentum. Manufacturing PMI has hit a seven-month low in March (although it still remains strong). Core infrastructure sectors output contracted by as much as 4.6% in February. Loan growth, while inching up, still remains low at about 6%. After rising in December, output of industrial production declined by 1.6% in January, with a major decline in capital goods (-9.6%) and consumer non-durables goods (-6.8%).

The report highlighted that the fiscal position of the Centre has improved in recent months due to a revival in the economic activities. From April 2020 to February 2021, the Centre’s fiscal deficit stood at Rs 14.05 lakh crore, which is 76 per cent of revised estimate for 2020-21. Net tax revenue of the Centre for FY21 is set to overshoot the RE despite 41% higher income tax refunds this year, it said.

Consequently, an amount of Rs 45,000 crore has been released as additional devolution to states in FY21, an increase of 8.2% over RE.

The report says, as the vaccination drive continuously upscales and guided by the learnings of the country’s management of the pandemic during its first wave, India is “well armed to combat any downside risk posed by the recent surge in Covid-19 cases”. Instrumental in this resilience, will be a strong revival in investment growth aided by the Atmanirbhar Bharat initiative and a massive boost to infrastructure and capital expenditure.

“The wheels of India’s capex cycle have been set into motion, signs of which were imminent in the second half of the year. With the end of a challenging FY 2020-21, the crest of a brighter and self-reliant FY 2021-22 awaits India!,” it said.

Source: The Financial Express

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India, UAE and Israel’s trilateral trade could reach USD 110 billion by 2030: Top diplomats

The trilateral trade between India, Israel and the UAE can propel to a high of USD 110 billion by 2030 by tapping into their mutual strengths, top diplomats and members of the business community have said.

The comments were made at an event organised by the International Federation of Indo-Israel Chambers of Commerce (IFIICC) on Sunday to discuss the ongoing business collaborations being pursued through IFIICC’s leadership across sectors. ”The international business potential backed by Israeli innovation, UAE’s visionary leadership and strategic partnership of both nations with India could be USD 110 billion by 2030,” Ambassador Ilan Sztulman Starosta, Head of the Israeli mission in Dubai, said in a press release issued by IFIICC.

Echoing similar sentiments, Ambassador of the UAE to India and Founding Patron of IFIICC, Dr Ahmed Abdul Rahman AlBanna, said, “UAE and India’s bilateral trade is projected to grow from USD 60 billion in 2020 to USD 100 billion by 2030. UAE is a gateway to the world and this trilateral with India and Israel could benefit the world.”

Dr Aman Puri, Consul General of India to Dubai, said, “The Indian business community in the UAE could significantly leverage the strengths of this trilateral to boost economic growth of all nations.”

The post-Abraham accords phase normalising Israel’s ties with the United Arab Emirates, and Bahrain has generated a lot of interest in this trilateral partnership with several events organised by various organisations, including leading banks.

Ran Tuttnauer, Honorary President of IFIICC in Israel and Chairman of Israeli Manufacturers Council at Manufacturers Association of Israel (MAI) participated in the event virtually from Tel Aviv. Tuttnauer stressed that “international business through the UAE in collaboration with India using Israeli Innovation will be the future.

IFIICC was launched on December 14 last year and is looking to set up offices globally, drawing the support of the Indian diaspora, the largest in the world. ”Innovation and collaboration can help usher in a new, post-pandemic era of sustainable economic growth,” Merzi Sodawaterwala, Founder and Chairperson of IFIICC, said.

Kamal Vachani, Honorary President of IFIICC for the UAE and Group Director & Partner of Al Maya Group, noted that the innovation and economic prospects of this trilateral are endless.

The European business school (ESCP) in a seminar organised recently also highlighted the global potential of trilateral ties between Israel, the UAE and India. The seminar held last month was organised in cooperation with Mumbai-based S P Jain Institute of Management and Research (SPJIMR).

Established in 1819, the ESCP Business School (Ecole Superieure de Commerce de Paris) is considered to be the world’s first business school.

Source: The Financial Express

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US questions India’s RoDTEP scheme at WTO

The US has raised questions at India’s Remission of Duties and Taxes on Exported Products (RoDTEP) scheme and asked about its operational status and farm products covered under it.

At a meeting at the World Trade Organization last week, Washington inquired about the scheme’s guidelines and eligibility of agricultural products in its ambit.

India implemented the RoDTEP from January 1, 2021 as a replacement of the Merchandise Exports from India Scheme (MEIS) after losing a dispute to Washington in 2019. The US had claimed that MEIS was non-complaint with the global trade norms. The government has said the scheme is facing teething troubles which could be resolved soon.

“The US also wanted an explanation of this scheme, including specific duties and taxes are eligible for refund for agricultural products such as rice,” said a Geneva-based official.

The RoDTEP will reimburse the input taxes and duties paid by exporters, including embedded taxes, such as local levies, coal cess, mandi tax, electricity duties and fuel used for transportation, which are not exempted or refunded under any other existing scheme.

At the meeting, the US and Australia also raised questions at India’s tariffs on cotton, and support to sugar and biofuels.

The US argued that India's minimum support price for cotton has increased by 40% and government purchases of cotton have reached record levels. Washington had in 2018 said that India had provided market price support for cotton in excess of its WTO limits.

Though Australia said that India's new 10% tariff on imported cotton, levied in February, is within its bound rate or the maximum rate that can be applied under India's WTO commitments, it was concerned about the impact of this higher duty on Canberra’s cotton producers and exporters.

Australia, Canada, Russia, and the US also quizzed India on the quantitative restrictions it imposed on pulses with some arguing that the measures were in place for more than three years and hence, inconsistent with WTO rules.

Source: The Economic Times

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India imposes anti-dumping duty on flexible slabstock polyol imports from Saudi Arabia, UAE for 5 years

India has imposed anti-dumping duty on imports of flexible slabstock polyol originating in or exported from Saudi Arabia and United Arab Emirates, ranging between $101.8 and $235.02 per metric tonne, for a period of five years.

The Central Board of Indirect Taxes and Customs issued a notification to the effect on Monday, following recommendations of the Directorate General of Trade Remedies which suggested imposition of definitive anti-dumping duty on imports, in order to remove injury to the domestic industry.

“The designated authority in its final findings has come to the conclusion that the product under consideration has been exported to India from the subject countries below its associated normal value, thus resulting in dumping,” the Board said citing DGTR’s findings.

It added that the domestic industry had suffered material injury due to dumping of the product from Saudi Arabia and United Arab Emirates and ‘material injury’ had been caused.

“The anti-dumping duty imposed under this notification shall be levied for a period of five years,” the Board said.

Flexible slabstock polyol is a key raw material for making polyurethane products. It is used to make slabstock foam and polyurethane foam mattresses.

In international trade parlance, dumping happens when a country or a firm exports an item at a price lower than the price of that product in its domestic market.

Dumping impacts price of products in the importing country and adversely affects margins and profits of manufacturing firms.

According to global trade norms, a country is allowed to impose tariffs on such dumped products to provide a level-playing field to domestic manufacturers.

The duty is imposed only after a thorough investigation by a quasi-judicial body, such as DGTR, in India.

Imposition of anti-dumping duty is permissible under the World Trade Organization (WTO) regime. India and Vietnam are members of the Geneva-based organisation, which deals with global trade norms.

The duty is aimed at ensuring fair trading practices and creating a level-playing field for domestic producers vis-a-vis foreign producers and exporters.

Source: The Economic Times

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Archroma, NED join hands to promote textiles research

Archroma, a global leader in specialty chemicals towards sustainable solutions, has announced that it has signed a memorandum of understanding with NED University of Engineering & Technology (NED) in Pakistan. The memorandum will pave way for cooperation initially for a five-year period.

The partnership will explore innovations in upscaling textile research with futuristic visualization enabling textile industry in Pakistan to align itself with the fast pace of global advancements.

Another important aspect of this collaboration will be research in other fields of engineering i.e. chemistry, civil and industrial. Both partners will hold joint sessions to prepare students for challenges of the industry through in-house training sessions, developmental projects, research in textile applications and process innovative methodologies by pioneering value additions.

The Archroma Center of Excellence in Karachi will play a vital role wherein NED faculty members will be able to work in the textile applications lab to cater to their need based tailor made programs and students will continue internship placement programs.

Source: The Business Recorder

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