The Textile Ministry is working towards reducing the industry’s dependence on imported machine tools and is reaching out to engineering organisations to step in to meet the gap in domestic machinery production and demand, Textiles Minister Smriti Irani has said.
The Minister said the production-linked incentive (PLI) scheme for the textile industry was almost ready but the National Textile Policy was taking time as labour and agriculture reforms were earlier being awaited and now the policy needed to strike a balance between government’s allocation of resources and the industry’s preparedness to take that allocation and convert it into opportunity.
The challenge for the textile industry in India was that most of the required machine tools were imported, Irani said at a media event on Thursday. The Textiles Ministry, under the guidance of Principal Scientific Advisor, K Vijay Raghavan, had reached out to IITs across the country, particularly Chennai, to highlight to them what the machinery needs of the industry were. “We are hoping that we can encourage more and more engineering institutions to come forward,” she added.
Machine tool making
Another challenge facing the sector was that machine tool making did not fall within the Textile Ministry administratively, Irani said. “Irrespective of administrative mandate, we as a government will ensure that we will converge efforts to ensure that those machines are made in India,” she said.
On the PLI scheme for the textile industry, the Minister said that it was almost ready. “We have done much of our groundwork and the scheme is almost ready,” she said. The objective of the scheme is to create global champions in MMF apparel and Technical Textiles by providing incentive from 3 per cent to 15 per cent on stipulated incremental turnover for five years.
Responding to questions on why there had been a delay in the finalisation of the National Textiles Policy, the Minister said the policy could not have been conclusive when other things were developing.
She expressed satisfaction that prominent reforms in agriculture and labour had happened but added that the new policy needed to find a balance between government’s speedy allocations and the industry’s preparedness to take that allocation and convert it into opportunity.
Source: The Hindu Business Line
Six out of 10 active Indian companies will be eligible for the new pre-packaged bankruptcy scheme that enables quicker debt resolution, a top government official said. The reason: Out of 1.3 million active companies in the country, about 60% fit in the definition of micro, small and medium enterprises (MSMEs) that are incorporated.
Rajesh Verma, secretary in the ministry of corporate affairs (MCA), said much of the preparatory work needs to be done by the time a pre-pack bankruptcy case is admitted by the tribunal; for this, the company management has to bring a lot to the table.
The finance ministry on Wednesday said in a tweet that the government has decided on a minimum payment default threshold of ₹10 lakh for initiation of pre-pack insolvency resolution process.
It means an MSME that has not met its payment obligation of ₹10 lakh could either on its own initiate a pre-pack bankruptcy resolution scheme with approval from lenders, or lenders representing 66% of the debt of the business could initiate the process. Proprietorships are not covered by the scheme.
The advantage of the pre-pack bankruptcy resolution scheme, introduced on Monday, is that a major part of the work is done informally, including preparation of the turnaround plan for the business.
The idea behind the pre-pack scheme, a new chapter added to India’s four-year old Insolvency and Bankruptcy Code (IBC), is to offer an alternative way of turning around small businesses. Unlike the general provisions for larger companies, this does not displace the existing management. The intention is to ensure that the scheme does not lead to any disruption in the operations of the business given that MSMEs have special characteristics and informal business relationships.
“It is in our interest to keep the business as a going concern and protect it from disruption of any type, which could raise the risk of employment losses. MSMEs are the backbone of the supply chain and the economy," said Verma.
He added that a lot of safeguards have been built into the scheme to prevent any abuse. Even for voluntary initiation of pre-pack bankruptcy, the existing management has to have a special resolution—three-fourth shareholder approval—followed by approval of 66% of creditors.
While the scheme is available to incorporated MSMEs, a large number of small businesses in the country, which are not incorporated, are outside its scope.
Given their large numbers, designing a bankruptcy resolution scheme for them would need huge infrastructure in terms of tribunals and manpower capable of handling these cases.
“It is expected that the incorporation of pre-packaged insolvency resolution process for MSMEs in the IBC will alleviate the distress faced by MSMEs due to the impact of the pandemic and the unique nature of their business, duly recognizing their importance in the economy," said a statement issued by the ministry of corporate affairs.
The finance ministry said in a tweet that the scheme offers quick and cost-effective bankruptcy resolution, which ensures minimum business disruption, value maximization and preservation of employment, while reducing the burden on the National Company Law Tribunal.
Source: The Mint
The Central government on Wednesday set a payment default of ₹10 lakh as the trigger for bankruptcy proceedings of small businesses under the new simplified scheme called pre-packs.
The finance ministry said in a tweet that this would be the minimum threshold of payment default for micro, small and medium enterprises (MSMEs) under the pre-pack scheme.
“Pre-pack for MSMEs is a hybrid corporate rescue process, which blends elements and virtues of both formal and informal insolvency proceedings. A resolution plan is negotiated between the debtor and its creditors before commencement of formal proceedings," the ministry said in a series of tweets.
This threshold of payment default is much lower than the ₹1 crore threshold otherwise applicable under the Insolvency and Bankruptcy Code (IBC) for initiating bankruptcy proceedings in the case of non-MSME businesses.
In the case of large companies, if the payment default criteria is met, even one lender could initiate proceedings against the defaulter. However, in the case of MSMEs, the process can be started only by creditors accounting for 66% of the business’ debt. A voluntary initiation of pre-pack scheme would need 75% shareholder approval backed by creditors representing 66% of debt.
The government brought an amendment to IBC by way of an Ordinance on Monday to offer an alternative turnaround opportunity for small businesses facing stress due to the economic downturn caused by the pandemic. The scheme takes into account the special circumstances in which MSMEs function.
Source: The Mint
The International Monetary Fund has authorised a USD 650 billion expansion of the 190-nation lending institution's resources with the aim of providing more support for vulnerable countries as they battle the coronavirus pandemic.
IMF Managing Director Kristalina Georgieva on Thursday said the USD 650 billion increase in reserves is the largest in IMF history. The move will provide badly needed reserves for poor countries struggling with deep recessions caused by the pandemic and the need to obtain and administer millions of doses of vaccines, she said.
By comparison, to combat the global recession that followed the 2008 financial crisis, the IMF agreed to an increase of USD 250 billion in the IMF's reserves of what are known at the agency as Special Drawing Rights.
US Treasury Secretary Janet Yellen told the IMF panel that the SDR increase would provide a "much-needed boost to global reserves." She said it would be important for rich countries who do not need the increase in resources to supply that extra support to poorer nations.
The idea of increasing IMF reserves gained support when the Biden administration endorsed the plan in February, marking a reversal from the Trump administration which had opposed the effort.
Republican lawmakers in Congress have raised objections to the increase in IMF resources, saying the increase would benefit countries seen as US adversaries such as China, Russia and Iran.
The Treasury said that the United States retained the right to refuse to engage in any SDR transactions with any country whose policies run counter to US interests.
Officials have indicated that the first distribution of the increased reserves could begin in August after a detailed plan is submitted for approval by the IMF's board of directors in June.
The communique from the IMF's policy panel, made up of finance ministers representing the agency's membership, also endorsed efforts to mitigate the impact of climate change on the global economy. That represented another change from the Trump administration, which pulled the United States out of the Paris climate agreement, an action the Biden administration has reversed.
"In line with the Paris agreement, we commit strongly to addressing climate change through measures to accelerate the transitions to greener societies and job-rich economies while protecting those adversely affected," the IMF communique said.
Yellen, in her remarks, said that the IMF and the World Bank had key roles to play in supporting efforts to combat climate change.
"The United States is fully committed to working with international partners to tackle climate change," Yellen said in her remarks.
The meetings of the IMF and the World Bank were held virtually, as they have been since the pandemic struck with force in early 2020. But Georgieva said the plan is for the fall meetings of the two institutions to return to in-person gatherings in Washington, subject to success in curbing the pandemic.
The formal meetings are scheduled to conclude Friday with a session of the Development Committee, the policy panel for the World Bank. Yellen and Federal Reserve Chairman Jerome Powell are the the U.S. representatives to the sessions.
The IMF released an updated economic forecast this week predicting that the global economy would grow by 6 per cent this year, an upgrade from 5.5 per cent growth forecast in January. The better performance was attributed in large part to an acceleration in vaccinations and the USD 1.9 trillion relief program President Joe Biden pushed through Congress last month.
But the IMF communique cautioned, "The prospects for recovery are highly uncertain and uneven within and across countries" due to such factors as uneven access to vaccines and the lack of financial resources in many low-income countries.
Source: The Business Standard
Union minister Anurag Singh Thakur on Thursday said India is open for stronger trade and investment with the European Union (EU). Portugal's Minister of State for Internationalization Eurico Brilhante Dias called on Thakur ahead of the 5th Joint Economic Commission India-Portugal meeting in Delhi.
The meeting would discuss the ongoing negotiation process of trade and investment agreements between India and the EU, the Finance Ministry said in a series of tweets.
"Indian and Portuguese Prime Ministers share a special bond and both nations have strong ties. India welcomes and is open for trade and investment with the EU," Thakur, the Minister of State for Finance, said.
Portugal is a member of the EU that comprises 27 nations.
The negotiations between India and the EU on a free trade agreement have been stalled since May 2013, when both sides failed to bridge substantial gaps on crucial issues, including data security status for the IT sector. The negotiations were launched in June 2007.
The EU-India annual summit is expected to be held later this year.
Source: The Economic Times
Addressing a webinar organised by the Swarajya Magazine in association with Vedanta Resources earlier today (8 April), Union Textiles Minister Smriti Zubin Irani laid out her vision for India’s textile industry under the Atmanirbhar Bharat Abhiyan.
The minister began by stating that the prospects for the textile industry are bright and textile manufacturing opportunities in the country are aplenty. She highlighted that the Indian textile industry is now looking beyond the simple cloth and expanding to new sectors like technical textiles.
Technical Textiles
Irani said it is the first time in the history of the country that a concerted effort has been made by the government and the industry in the field of technical textiles.
The minister underlined that until recently, no manufacturing unit in India had manufactured end-to-end personal protective equipment or PPE suit. When Covid-19 hit and borders were closed, one thing that hindered the industry was the lack of machinery, and the government stepped in to help, the minister added.
“We had the Textile Ministry detailing the machine tool need of the textile industry, we had the External Affairs Ministry reach out to suppliers across the globe and then the Civil Aviation Ministry stepped up to ensure that the government flew down these machines to help meet the needs of the industry,” she said.
Irani said the government also ensured that there were adequate testing facilities.
“If you remember, in March we had just one lab, which was SITRA (or South India Textile Research Association) in Coimbatore. We then reached out to the Ministry of Defence and the DRDO and helped convert over eight additional labs in the country so that any and every organisation that could reorient could do so in every part of the country and there would be an easily accessible lab to test samples,” she added.
The Prime Minister has launched the National Technical Textiles Mission and dedicated over Rs 1,400 crore towards it, the minister noted.
“The production linked incentive scheme is particularly focused on MMF and technical textiles. It’s a Rs 10,000 crore bonanza so that those who are manufacturing in the MMF and technical textile industry can become globally competitive and leaders,” the minister said.
The government has mandated the use of technical textiles in 19 ministries.
Meeting The Machine Needs Of The Industry
Currently, most of the industry’s machine needs are met by imports.
The minister revealed that the Ministry of Textiles, under the guidance of Principal Scientific Advisor K Vijay Raghavan, has reached out to premier engineering institutions across the country, particularly IIT Chennai, to work on the indigenous production of machine tools needed by the textile industry.
“It is unfortunate that those machines are 80 per cent of the import burden in this particular segment. We are hoping that we can now encourage more and more of our engineering organisations to come forth,” Irani said.
She also highlighted the challenges the Ministry of Textiles is facing on this front.
“The challenge administratively is that machine tool making is not a part of the constitutional mandate of the Textiles Ministry. It is in these administrative gaps that the needs of the industry have been falling for a number of years now,” Irani noted.
Irani said that Textile Ministry recently enquired about a particular machine that the Central Silk Board needs and found out that it required 100 of these machines. She said that the ministry has already financed 75 of these machines for the Central Silk Board and another 25 are also being funded.
“Technology upgradation fund is available with the government of India. There is no dearth of funds. But what there is a dearth of is engineering companies that can meet the machine needs of our domestic textile manufacturers,” the minister added.
Strengthening The Handloom Sector
Irani said there was no current data on the number of people involved in the handloom sector and the government has done a census specifically dedicated to the handloom sector to fill this critical gap so that effective policies can be formulated.
The ministry, she said, has reached out to weavers and given them adequate identification cards. It is also ensuring that the weavers engage with the National Handloom Development Corporation where they can get 10 per cent subsidy for the yarn they purchase, the minister added.
“Additionally, we support them with market incentives, initiatives and engagements with foreign buyers. But I think what needs to be done and what we are hopeful of expanding on is the engagement with design institutions and the weaving community,” the Textiles Minister added.
Irani said the ministry is integrating the National Institute of Fashion Technology (NIFT) and its design ecosystem with weaver service centres.
“Across the country, out of the 28 weaver service centres, NIFT has already upgraded close to eight to ten of them. Our hope is that in the next one financial year, we complete all those weaver service centres,” she said.
According to the minister, the census in the weaving community showed that only 2 to 3 per cent of the community’s children were completing their education.
The Textiles Ministry, along with the National Institute of Open Schooling and Indira Gandhi National Open University is ensuring that the children in the community get an opportunity to complete their education. The government of India is taking care of 75 per cent of the fee so that more and more children can study, she said.
The ministry has onboarded over 1.5 lakh artisans, including weavers, onto the Government e-Marketplace or GeM so that governments and government-owned organisations can purchase products directly from them.
The minister also highlighted the government’s efforts to help weavers under the India Handloom Brand. She noted that the ministry has created partnerships between weaving clusters and big brands.
“We had Biba, which is a very well known female salwar-kameez brand tie up with a Pochampally cluster,” the minister said, giving an example.
Seven Mega Textile Parks
The minister said that the small textile parks functional in the country did not make production viable. The textile industry’s requirements for processing and packaging were fragmented throughout the country, she said, adding that the mega textile parks which will come up over the next few years will address this issue.
“The labour reforms that have been done in the Modi government are more than complementary for mega textile parks to come up. Most of the manufacturers in the textile industry were disintegrating their manufacturing units across the various states so that they could meet the labour regulations there,” Irani said.
“The industry desired that we want to do end-to-end manufacturing under one roof and hire nothing less than 3,000 to 5,000 people,” she noted, adding that the government has asked the states to meet infrastructure requirements.
Affordable electricity, labour reforms, land allocation, plug and play models with states are our priority engagements when we converse with states, she added.
National Textile Policy
The National Textile Policy is a work in progress, the minister said.
She noted labour and agriculture reforms had not been done by the government when the conversation on the issue began.
“Now these two historical reforms have been undertaken plus prospects such as PLI scheme have been pronounced. That is why you have a policy which is a work in progress,” Irani said, adding, “you could not have shared the policy and then post-facto said let’s wait for agriculture reforms, then wait for labour reforms”.
Source: Swarajya
Conceding that India was in the grip of a serious public health crisis that had surpassed the first wave of the Covid-19 pandemic, Prime Minister Narendra Modi on Thursday urged state governments to test more even if that meant higher reporting of the infection. Armed with experience of managing the first wave, better health infrastructure and a locally manufactured vaccine, lockdowns should be avoided altogether, the PM told chief ministers at the virtual meet on Covid.
“In the last phase of the infection, we had to impose lockdowns because at that time, we did not have the infrastructure to control the infection: no PPE suits, not enough sanitisers, masks… we are no longer facing those shortages. So micro-containment zones should be the strategy,” he said.
Sounding a note of caution, the PM asked states to check the rise in cases on a war footing, while stressing that efforts must be strengthened in the next three to four weeks. “This time, people are becoming casual. The administration is fatigued and lax…we cannot afford this. Combating this wave needs to be done on a war footing,” he said.
The PM did not directly touch upon the complaint of several states that they were woefully short of vaccines. Instead, he urged young people to go out and spread the word about vaccination, especially among vulnerable groups. Announcing ‘teeka utsav’ (vaccination festival) from April 11 to 14, the PM also asked state governments to involve governors and all tiers of elected representatives in motivating people to follow Covid appropriate behaviour.
Referring to the first wave of Covid, he said that war was won when there was no vaccine. Calling vaccination a long-term exercise, he reiterated the importance of testing along with other Covid protocols such as mask and social distancing.
His comments on ‘teeka utsav’, that will start with Jyotirao Phule’s birthday and end with Babasaheb Ambedkar’s , caused Delhi Chief Minister Arvind Kejriwal (among the chief ministers to have a less than cordial relationship with the Lieutenant Governor) to chuckle and shake his head.
Maharashtra Chief Minister Uddhav Thackeray, who nearly failed to become an MLA in the mandated six month period of the constitution of the new assembly because of the hurdles placed by Governor Bhagat Singh Koshyari, is unlikely to accept the PM’s suggestion.
He asked states to tighten governance and streamline testing and vaccination while focusing on micro containment zones. “Those who want to do politics will do politics” he said as squabbles between the Centre and many states intensified over vaccine shortage. Several states have demanded more autonomy in the strategy of administering the vaccine while others said they just didn’t have enough stocks.
Health Minister Harvardhan claimed there was no shortage and charged that states had mismanaged even existing stocks: Punjab, Maharashtra and Delhi had been unable to cross even the 50 per cent mark of vaccinating senior citizens as part of the very first phase of insulating the most vulnerable from the infection. However, Odisha said it had been forced to close down 700 vaccination centres as it did not have the stocks; Telangana said it was badly short of the inoculation doses; and Maharashtra elevated the issue to a political one with Health Minister Rajesh Tope asking why the Centre was discriminating against Maharashtra.
Maharashtra, Chhattisgarh, Karnataka, UP and Kerala together account for 74.13 per cent of India's total active cases. Two chief minister – Mamata Banerji (West Bengal) because she was busy with elections; and Pinarayi Viajayan (Kerala) who tested positive for Covid on Thursday – did not attend the meeting.
Jharkhand Health Minister Banna Gupta said: "Around 18,27,800 vaccines have been administered as first dose, 2,78,000 vaccines as second dose. We have spoken to Union Health Minister and requested him to immediately provide us around 10 lakh (1 million) vaccines for first dose. We will get it either today or tomorrow (April 9). Around 83 lakh (8.3 million) people need to get first and second doses of vaccine. It means we will need around 1.60 crore (16 million) doses. We are getting it gradually. We do have vaccines available with us but there has been a shortage at some locations. So we have spoken to the Union Health Minister. We have stock for the next one to two days. We have made a request to the Union Home Minister and I am hopeful that he will provide us the vaccine."
The PM’s response to suggestions from several chief ministers - Chhattisgarh Chief Minister Bhupesh Baghel, Uddhav Thackeray and Arvind Kejriwal – to allow all people above 18 years of age to get vaccinated--was to first conclude the ongoing round.
The PM asked state governments to scrupulously collect mortality data as this would be an important input into granular analysis of the spread of the infection and help prevent it. But he added that testing was the key. “to contain the virus, we need to contain the human host” he said. The target must be 70 per cent of the population to be put through the RT PCR test. If the infection numbers appeared elevated, this was a sign of coming to grips with the problem, not a function of the performance of the state government, he said.
But the PM said, the most important element in defeating the infection was to ensure people did not lower guard, especially if they exhibited asymptomatic indications.
Source: The Business Standard
The textiles ministry has reached out to all engineering institutions to apprise them about the textile machinery needs of the domestic industry, Union Minister Smriti Irani said on Thursday.
The minister said they have also informed the institutions about the subsidy support that is available for the sector.
The ministry is also engaged with the department of heavy industries on the matter.
"We have now reached out to all engineering institutions to highlight to them what are the textile machinery needs of our industry," she said in a webinar organised by Swarajya Magazine.
She emphasised the need for the indigenisation of machinery in the country.
Further, the textiles minister said the production-linked incentive (PLI) scheme for the sector and mega investment textiles parks (MITRA) are the two priority areas.
On PLI, she said, "We have done much of the groundwork and we are almost ready".
Source: The Outlook News
Indian textile makers are eyeing the Kenyan market for exportation of materials, looking to take advantage of the push by the country to increase consumption of locally-made clothes.
The textile material the Indian firms are looking to export to Kenya include fabrics for clothes, carpets, rugs and towels.
The Indian firms presented their bids to potential Kenyan apparel makers during the Reverse Buyer Seller Meet (RBSM) Wool and Woollen exhibition in New Delhi.
The three-day event which took place from March 25 to 27, saw Kenya’s fashion designers and sourcing agents interact with India’s wool and Woollen products manufacturers and exporters.
“The ultimate objective of the event was to strengthen “Brand India” image of Made in India Woollen/pashmina/GI products and blended textile products globally,” India’s Wool and Woollens Export promotion Council (WWEPC) chief executive officer (CEO) Anil Mehta said.
Kenyan fashion companies and importers that graced the event included Rialto Enterprises, Occasions and Days Limited, Sao Satorial Limited and Combiat Agencies.
Occasions and Days Limited CEO Monica Kanari said that they are eyeing partnerships with the Indian textile and apparel industry for a seamless source of quality fabrics for Kenya's textile industry.
Kenya has been pushing consumption of locally-made apparel to create jobs as well as reduce the annual forex stockpile spent annually in buying second hand clothes from abroad.
Under the manufacturing pillar of the government’s “Big Four” agenda, jumps-tarting the leather, textiles and agro-processing sub-sectors was seen as key in making quick gains in rebuilding Kenya’s industry.
Source: Business Daily
Jute mills have stopped taking export orders owing to capacity constraints, while shortage of raw jute and escalating prices have put the mills in a quandary.
The 90-odd jute mills across the country, of which 74 are in West Bengal, are already flooded with the Centre’s order of supplying jute sacks equivalent of 24 lakh bales (every jute bale produces 500 sacks). The mills have supplied sacks equivalent to 14 lakh jute bales.
Average price of raw jute touched Rs 8,100 per quintal on Thursday, an increase of Rs 500-600 a quintal in a span of two days. Prices were at Rs 7,500-7,600 a quintal on Tuesday.
The jute commissioner’s stock limit of holding not more than 500 quintals at a time has led to lower inventory, higher logistics cost and increased production cost, mill owners said.
“Such a situation has caused the millers and the jute commissioner to lock horns,” one mill owner said.
Export orders from Europe, East & South East Asia, West Asia, Africa, South America, North America and the Caribbean Islands started increasing mostly during the last quarter of FY21.
Jute products valued at Rs 1,823.37 crore were exported between April and December last fiscal. Had mills been able to accept all the orders in the last quarter, exports in FY21 would have gone much beyond the Rs 2,423.45 crore figure achieved in FY20. Total exports of jute products in FY21 (final figures not yet compiled) are still on course to cross the FY20 figure.
“We have stopped taking orders,” Sanjay Kajaria, former chairman of the Indian Jute Mills Association said. He said that since order flows are beyond the mills’ capacity, the Centre has announced a Rs 2,500-crore package for not only modernisation of jute mills, but for opening a few closed jute mills and enabling increased cultivation of better quality raw jute.
Source: The Financial Express
Despite an upward trend witnessed by the textile industry during last year, the Punjab government failed to keep up cotton production resulting in a decline of 34% compared to last year.
According to experts, textile exports increased by 7.8% during the first six months of the current financial year which led to earnings of $7.4 billion but the industry had to import cotton worth 321 million during the same period.
The country is currently facing a historic shortage of cotton due to the reduction in the main cash crop cultivation.
The State Bank of Pakistan in its report on the agricultural sector has revealed that the area under cotton cultivation has been steadily declining up to its lowest level ever, 2.2 million acres, since 1982. The negligence of the authorities has waned farmers off the country’s main source of foreign exchange for the past many years.
According to experts, cotton production in Punjab and Sindh declined by 34% and 38% respectively.
“Up to February this year only 5.6 million bundles of cotton were collected compared to 8.5 million in 2020,” the experts said while pinpointing the dearth of the fibre through data. Cotton is a Kharif crop that is sown during March-May and is then fed by the monsoon rain in June-July.
Cotton cultivation is currently ongoing in different districts of Punjab and the government has set a target of growing cotton on at least four million acres this year. To entice farmers, the provincial government has also announced a subsidy on cotton seeds, fertilizers and pesticides.
Chaudhry Muhammad Khalid, a farm owner, told The Express Tribune that he used to grow cotton on 25 acres but plans to double the plantation area this time.
“If the government continues to incentivise cotton cultivation, he will further increase the crop area for cotton next year onwards and reduce plantation area of other crops,” Chaudhry underlined.
He stated that the cotton production suffered owing to criminal neglect by authorities in the shape of substandard seeds, expensive fertilizers and pesticides coupled with challenges posed by climate change.
Another farmer, Mohammad Farooq, said that if the government provides subsidies on agricultural products and machinery to the growers the high production would end the need for cotton import from United States, Brazil, Africa or India.
“Farmers in India are given subsidy on electricity; their production cost is lesser than ours while the yield per acre is even higher due to improved seed quality. If Pakistani farmers are given these facilities, they can help the country become self-sufficient.”
Punjab Department of Agriculture Director General (Extension) Dr Anjum Ali urged farmers to use approved cotton seed varieties such as IUB 13, MNH 886, BS 15, Niab 878 and FH 142 for better yields and pest resilience.
“Punjab government is providing approved varieties of seeds for an area over 200,000 acres at Rs1,000 per bag. It also offers a subsidy of Rs4.4 billion for insecticides to exterminate whitefly,” he added. H
e said that about 4 million acres of cotton crop are expected to yield an average of 17 maunds per acre. Pakistan is the fourth-largest producer of cotton in the world and 80% of its total production comes from Punjab. Dr Anjum Ali underlined that the use of unapproved and illegal seeds has significantly reduced the production of cotton.
“On the direction of Punjab Agriculture Minister Syed Hussain Jahanian Gardezi, a campaign has been launched to apply seed medicine before sowing cotton in the next season for added resilience to pests and diseases,” the director-general revealed.
However, a progressive farmer Amir Hayat Bhandara was wary about the specifics of the offered subsidies. “We don’t know which whitefly insecticide has been put on subsidy by the government. There’s a communication gap between the farmers and the government which has led to a lack of interest towards cotton growing,” he explained.
“The Economic Advisory Council does not even include a single farmer,” Bhandara lamented.
Source: The Tribune
After the independence, Bangladesh started its journey with the export of $348.40 million mainly dominated by jute, jute goods and tea.
The apparel industry, the largest contributor to the national exports, was not on the list but in courses of time it took the lead.
When Bangladesh is celebrating the golden jubilee of its birth, the apparel exports stood at $28 billion, which is 83% of total exports.
As per the data of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), in the fiscal year 1983-84, Bangladesh’s apparel exports were only $31.57 million, which was 3.89% of total exports of $811 million.
However, after the independence, Bangladesh’s exports were $348.40 million of which 90% or $313 million came from jute and jute goods.
After the jute and jute goods, tea and frozen foods were the two largest export earners. It contributed about 7.25% to the total exports.
In course of time, jute and tea exports lost their glory and the apparel industry RMG, which employed over 4 million workers mostly rural women.
In its long journey, the exports earnings from the RMG sector stood at $27.95 billion as of the fiscal year 2019-20, which is 83% of the country’s total exports of $33.67 billion.
In the FY19, apparel exports were $34.13 billion and it contributed 84.21% to the national exports but recorded a decline in FY20 as the Covid-19 pandemic hit the sector badly.
Journey of RMG Sector
The journey of RMG exports started primarily in 1978 but it was not 100% export-oriented.
On 28 July 1978, Reazuddin, the owners of Reaz Garments established in 1960 as a small tailoring outfit, exported 10,000 pieces of Reaz Shirt to French buyer Holander France.
The journey of the full-fledged export-oriented RMG industry started in 1978 by M Noorul Quader, who set up the first readymade garment industry in 1978. HE is the pioneer of the Bangladesh RMG sector.
Quader set up Bangladesh’s very first 100 percent export-oriented Ready Made Garment factory Desh Garment in Kalurghat, Chittagong.
On the 4th of July 1978, that landmark joint venture agreement was signed with South Korean company Daewoo Corporation and the journey began.
Quader took 130 people to South Korea for training and the selected trainees returned home after a six-month training period to form the nucleus of the RMG sector’s technology and its core human resource base.
Desh Garment began its journey with the first shipment of just 1.2 lakh pieces of boy’s shirts to a German company called MNR.
In the journey of Bangladesh’s 50 years, to build the country’s economy and pave ways to a developing country status, the RMG sector played an important role.
It helped to reduce the poverty rate at a time when there was not truly a manufacturing industry after independence.
“Soon after independence, a new entrepreneur class emerged who invested without calculating the risk. For the economic development they played a significant role,” Dr. Zahid Hossain, former lead economist of the World Bank, Dhaka told Textile Today.
We did not have raw materials and backward linkage for the apparel sector. Despite having such constraints, we are the second-largest exporter of apparel goods, said the economist.
Besides, we have now a backward linkage industry such as textile, garment accessories and packaging and knitting and dyeing. The “apparel industry” is our great achievement in the golden jubilee of our independence and the credit goes to our young and resilient entrepreneurs, said Zahid.
“Today’s apparel sector is a great achievement of independence, which is contributing to the national economy and providing the highest number of jobs mostly for the rural women,” BGMEA President Dr. Rubana Huq told Textile Today.
As of Fiscal Year 2019, Bangladesh exported apparel goods worth over $34 billion to 167 countries and the sector employed 40 lakh people. The apparel industry invested about $20 billion, which created jobs for 25 lakh women, the business leader explained to present the contribution of the sector.
If the apparel industry did not develop, these rural and underprivileged women could not get opportunities to involve economic activities on a larger scale, said Rubana.
“The sector not only ensured the employment of the women but also it economically empowered them and gave them a social identity with dignity.”
All these achievements were possible due to the government’s continuous policy support and incentives, which made the exporters competitive in the global markets.
“Continuous government policy and fiscal support was the growth driver of the sector. From the very beginning, the sector was enjoying duty-free benefits and cash incentives, which made the manufacturers more competitive in the global markets” Abdus Salam Murshedy, former President of BGMEA.
After the independence, we have two crore export items jute and tea. There was no such manufacturing industry which could create employment for the economically vulnerable country. But the apparel exports contributed lots, said Salam, also managing director of Envoy Textile.
Paths to reach target were not rosy
In its journey for the last three decades, the apparel industry faced several challenges but it handled those with care and became a successful case to the globe.
During the late 1990s, the elimination of child labor from the apparel industry was a threat but with a concerted effort, Bangladesh was successful to do that.
“In reaching today’s status of compliant RMG sector, the path was not covered with roses rather filled with challenges and obstacles,” former BGMEA Senior Vice President Faruque Hassan told Textile Today.
The elimination of child labor was a threat for us but with the help of the International Labour Organization (ILO), local and international non-government organizations (NGOs) and global brands, government policy support and the willingness of entrepreneurs we have been successfully removed it, said Hassan, also managing director of Giant Group.
The sector became child-labor-free by the end of 2004.
Another crucial challenge and obstacle was the withdrawal of the Multi-Fibre Arrangement (MFA) quota, which left the exporters in tougher competition in the global markets. MFA quota was over for Bangladesh in 2005.
“The MFA quota opened a new window for Bangladesh in global textile and clothing exports. But the withdrawal left us in competition,” said Shahidulah Azim, a former Vice President of BGMEA.
Though it was said that the sector would not survive after the withdrawal of the MFA quota it remained competitive even after the erosion of the facilities, said Azim.
“We have the comparative advantage of the then cheap and available workforce, cash incentives against export, and a new entrepreneurial class who focused on skills development.”
As a result, Bangladesh is the test case of success in the apparel industry and the second-largest exporters of clothing goods after China said Azim.
The toughest challenge for the sector emerged soon after the collapse of the Rana Plaza, which raised the question about workplace safety and compliance issues. It was also addressed successfully and now the sector is the world’s safest one.
“After the unprecedented collapse, the sector faced pressures from buyers and international rights group to improve workplace safety and structural safety, Atikul Islam, the then BGMEA president told Textile Today.
With the help of global retailers and government policy support, we have improved our safety standards to an international level and installed sophisticated fire safety equipment, said Islam.
Now, the safety standard of the RMG sector is certified by Accord and Alliance, two platforms of the global retailers, and the sector is the safest one in the globe, he added.
The industry has also worked on making a favorable carbon footprint for itself. At present, Bangladesh has more than 108 Leadership in Energy and Environmental Design (LEED) certified green garment factories, which is the highest in the world. The country is also home to the highest number of platinum-rated garment factories globally. As many as 26 Bangladeshi factories have achieved the highest certificate provided by the US Green Building Council (USGBC) with seven out of the top 10 LEED-certified factories worldwide situated there. Also, more than 500 RMG factories have been registered with the USGBC for LEED certification.
In this regard, Rubana Huq said, “In the coming days, the RMG sector will uphold its leading role as the sector is entering into a new era. The sector people are building green factories and introducing the latest technology.”
However, the country’s apparel sector is going through a tough time as the Covid-19 pandemic hit the sector badly.
Though there was an improvement in the recent week, the infection rate surged suddenly, which made the exporters fearful about the future of business.
In combating the economic fallout of the ongoing pandemic, the government has provided financial support and loans but it is not enough as claimed by the sector people.
In face of the sudden rise and prevailing global situation, the sector people are calling for further financial support to remain in business.
However, the sector people opined that the opportunities of the RMG sector are not tapped to its fullest. To this end, the sector needs more support to come out of the present situation.
“If we could cash the opportunity to its fullest, today’s RMG industry could have been better than that of today. We are at a stage now where more opportunities are waiting for Bangladesh,” said Rubana Huq, Managing Director of Mohammadi Group.
The establishment of Padma Bridge opened opportunities for decentralization of industry, while the development of infrastructure is paving more ways for investment, said Rubana.
Moving towards value-added products is a great opportunity ahead for us and we are moving in this direction. For this government support is needed as it was always, she added.
Besides in recent years, the sector has been increasing R&D to produce design in-house. In recent years, the apparel value chain has been going all-out with automation. Whereas, Bangladesh RMG is labor-intensive. It is high time for manufacturers to adopt more and more automation.
As automation needs higher investment, govt. economic incentives and packages are inevitable to make the apparel sector automation-centric.
Also, the industry leaders opined that amid COVID-19 disruptions, a strong locally sourced supply chain proved vital to sustaining in the long run.
Not to mention, having a robust backward linkage industry is a must to the post-COVID era.
Source: Textile Today
The Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) has appealed Prime Minister Imran Khan to issue directives for the forensic audit of the yarn producers to break cartel of cotton mafia in line with the actions taken by the PTI government against sugar lobby because cotton mafia has so far proved to be stronger than the sugar mafia in the country.
In an open letter to the PM, it was pointed out that the textile manufacturers have increased the rates of yarn by more than 40% in a very short span, creating artificial shortage on the excuse of lower production of cotton in the country despite declining prices of cotton in the international market, hitting the apparel sector exports badly.
Central Chairman PRGMEA Sohail Sheikh said that the Imran Khan's government will have to take serious steps to break the textile industry cartel, giving it strong message that no cartelization would be allowed to manipulate prices in future and if they commit such crime they have to face the full brunt of law.
He asked the Federal Board of Revenue (FBR) and Federal Investigation Agency (FIA) to conduct raids on the warehouses of yarn dealers who have been hoarding a huge quantity of yarn to create artificial shortage and manipulate the rates in connivance with the manufacturers, taking advantage
of record low produce of cotton in Pakistan.
PRGMEA Chief Coordinator Ijaz Khokhar said that arrival of low-cost cotton yarn from neighboring country through land route, on the approval of ECC, could have broken this powerful textile cartel, shaking the monopoly of yarn producers to fix the rates artificially very high.
Moreover, the deferment of cabinet to allow yarn import via Wagah has not only damaged the clear stance of the government's zero tolerance against all kinds of mafias like sugar, flour, petroleum and IPPs but also sent a wrong message to the international buyers that Pakistan is facing yarn shortage
and authorities are not allowing raw material import. So, Pakistan value-added textile export industry cannot fulfill the new orders timely due to short and expansive raw material.
PRGMEA Central Chairman Sohail Sheikh said that another major factor which has been affecting the exporters is the sharp depreciation of dollar against rupee, as the exporters had already offered their annual prices to the buyers at the parity of Rs.162 per dollar.
He added that the third major factor which is hitting the exporters hard is sharp hike in sea freight charges which have gone up by at least 700 percent. In this case, it is clear cut message to the government that in the coming months it is feared that the country may face the declining of apparel exports, resulting into layoffs especially in apparel sector.
PRGMEA demands the government to allow import of cotton yarn from all around the world, exempted from all types of taxes and duties, for at least six months to arrest the commodity crisis that continues to hit the local market.
Globally, the prices of cotton have dropped significantly but the commodity is still costlier in Pakistan. Announcement of ECC proposal to allow import of cotton yarn from India had temporarily helped reduce the cotton yarn rates in the local market, but the cancellation of trade with the neighboring nation again escalated the commodity rates.
"The value added textile exporters are facing financial crunch, as their cost of manufacturing has jumped because of dollar depreciation against rupee from 164 to 153 and increase in prices of cotton yarn by more than 40%, besides 700% rise in sea freight charges," he said.
"Now all the stakeholders put the ball in the court of commerce ministry to give them the way out how to sustain the value-added textile exports. Therefore, it is direly needed that quick decision should be made to save the value-added textile industry which contributes more than 52 percent in overall textile exports," he said.
He recalled that Prime Minister Imran Khan had committed to hold exclusive meeting with the apparel sector. "Now we request him to call a meeting at the earliest so that ground realities of the apparel sector could be highlighted in details in one-on-one meeting."
Source: The Nation
The official data of the apparel import by USA says, the country has fallen by 8.70 per cent in February ’21 on Y-o-Y basis. The country imported US $ 5.39 billion worth of garments in February this year as against US $ 5.91 billion in the same month of 2020.
However, volume-wise, USA saw a yearly increase of 3.20 per cent in its apparel import and the growth has been recorded after 17 months (on Y-o-Y basis).
USA imported 2,069.78 million SME of garments in the 2nd month of 2021, as compared to 2,005.80 million SME in the same month of 2020.
There was a drastic drop in the unit prices of the imported apparels as the prices declined to US $ 2.60 per SME in Feb. ’21 as against US $ 2.95 per SME in Feb ’20.
The apparel export destinations such as Pakistan, China, Bangladesh, Egypt, etc. noted growth in volume-wise apparel shipment to USA, while China and Pakistan upped their shipment on value-terms as well.
India, Vietnam and Indonesia declined in both value-wise and volume-wise apparel export to USA.
Source: Apparel Online
With a belief that products and materials can last much longer, IKEA, a Swedish designer of ready-to-assemble furniture, and Mud Jeans, a Dutch denim company, have worked together to give recycled denim a new life by using it to develop Klippan sofa covers. The new Klippan sofa cover is a limited collection which will be sold in 9 European markets.
“Klippan sofa is an iconic IKEA product. By offering new sofa covers made from recycled materials, we can help customers to renew their sofa and reuse materials,” Piotr Jakubiak, deployment leader at new business and innovation deployment, IKEA of Sweden, said in a press release. “We are happy to work together with Mud Jeans to make the Klippan sofa cover with recycled denim. This simple action will give new life to the sofas and worn jeans.”
According to IKEA’s release, in Europe, approximately 500 million pairs of jeans are sold every year. On average, each European has 7 pairs of jeans, and 2 out of them are never worn. After use, most of the jeans end up in landfill or are incinerated. Less than 1 per cent of them are used as material for new garments.
Each new Klippan sofa cover contains 40 per cent of post-consumer recycled denim, equivalent to two pairs of old jeans. Compared to the industry standard denim method, each cover made with this post-consumer denim saves 27,000 litres of water and reduces the carbon footprint by 67 per cent.
“IKEA wants to grow within the boundaries of the planet. We believe all materials are valuable and should not be wasted. By joining forces with Mud Jeans, we can work together to secure new sources of recycled materials, and develop products using post-consumer materials such as recycled jeans,” Malin Nordin, head of circular development, Inter IKEA Group said. “By working together, we are exploring ways to minimize waste and reduce our impact on the planet.”
Mud Jeans is a denim brand based in the Netherland and a pioneer in circular textiles with a proven and certified positive impact. IKEA and Mud Jeans want to accelerate the change of adopting circular business models by working together.
Source: Fibre2Fashion News
