Indian apparel exporters are looking to collaborate with global man-made fibre (MMF) suppliers to overcome the supply shortfall in the country and improve domestic production quality.
Cotton-based apparels
Indian apparels are predominantly cotton-based. However, the bulk of the global demand is in the MMF segment. The global market for MMF garments is estimated at $500 billion, including $170 billion for sportswear. The share of MMF garments in India’s total apparel exports is only $1.6 billion, or about 10 per cent, whereas the world trade in MMF garments is to the tune of $200 billion.
A sunrise industry
The Apparel Export Promotion Council (AEPC) has identified man-made fibre-based garments as a sunrise industry due to strong demand in the domestic and international markets.
“As the Indian apparel industry seeks to grab a good share of $200-billion global man-made fibre (MMF)-based garment trade, India companies have sought help from international MMF suppliers to overcome the shortage of the fabric in the short run, and also to improve the quality of local production eventually,” said AEPC Chairman A Sakthivel, while addressing a webinar on ‘MMF Fabric Sourcing from International Suppliers’, hosted by AEPC.
India needs to import MMF from international suppliers to increase manufacturing in the country and for their export.
“We are also interested in attracting investments in fabric processing in the country,” he said adding: “India has abundant production of yarn, but is in short supply of good quality MMF fabric as domestic producers lack the latest processing technologies.”
There are production facilities in India, but do not have the latest technologies in processing. Indian apparel exporters are keen on a joint venture or technology transfer or 100 per cent investment. Meanwhile, the Indian government has also come out with incentives and initiatives such as establishment of seven mega textile parks to promote MMF production and textile exports.
“AEPC will make all arrangements to facilitate any technology transfer, joint venture or direct investment in India,” said Sakthivel.
MMF suppliers from China and Taiwan participated in the webinar and discussed their business and requirements from India.
Source: The Hindu Business Line
India is reconsidering a free trade agreement (FTA) with the Gulf Cooperation Council (GCC) after the United Arab Emirates (UAE), the country’s biggest trading member in the bloc, approached it to revive talks that got stalled in 2008.
Early analysis has identified about 1,100 products, including washing machines, ACs, refrigerators, spices, tobacco, cotton fabrics, textiles and leather that can see higher exports through the pact.
Officials said the UAE had reached out to revive the talks.
“We are still considering the feasibility of an FTA. It is in the preliminary stage,” said one of them.
Two rounds of negotiations were held between India and the GCC on the feasibility of a free trade agreement, but talks stopped after the latter began a review of its negotiations with all countries and economic groups.
“We were negotiating an FTA with the GCC, but they had some issues. Now, they have approached us to revive the talks,” the official added.
As per the official, India is keen to increase its exports to the UAE, the country’s largest market in the GCC. The other countries in the group are Saudi Arabia, Kuwait, Oman, Qatar and Bahrain.
In FY21, India imported goods worth $80.5 billion from GCC countries, while exports amounted to $40.5 billion. About half this trade is with the UAE.
India’s exports to the bloc in April-January FY21 amounted to $21.74 billion, of which the UAE accounted for $12.9 billion with the main items being mineral fuels, apparel, gems and jewellery, and electrical machinery. During the same period, India’s imports from the GCC were worth $45.7 billion, of which those from the UAE were to the tune of $19.65 billion.
As per industry experts, products made of leather, plastic, and iron and steel could also help increase India’s exports to the UAE, while New Delhi may have to give tariff concessions to imports of petroleum-related products and fertilisers.
A Framework Agreement on Economic Cooperation between India and the GCC was signed in 2004 that provided for both the parties to consider ways and means to extend and liberalise trade relations besides initiating discussions on the feasibility of an FTA. Two rounds of negotiations were held —in 2006 and 2008. India stands to gain in services as well and could push for long-term business visas with the UAE, experts said.
“We have a geographic advantage with that region and a lot of business travel happens. Long-term business visas will be beneficial for India,” said an expert on trade issues.
Easier movement of professionals, called Mode 4 in trade parlance, could also be among India’s demands, the expert said. Movement of natural persons is one of the four ways through which services can be supplied internationally. It includes movement of natural persons such as independent professionals and is of key interest to India in its global trade relations.
Source: The Economic Times
Around 78 years after Hindi film actress Devika Rani commissioned the first Kullu shawls and catapulted them to fame, designer woollen sarees from the Himalayan valley have stolen the limelight and given the artisans another means to eke out a living amid the pandemic.
Kullu shawls play a significant role in shoring the economy of the valley. It is estimated that around 30,000 people work part-time and about 15,000 people earn their livelihood by working full-time on weaving the distinctive shawls. Almost every household in Kullu has a handloom
In 1942, when Devika Rani, the daughter-in-law of celebrated Russian painter Nicholas Roerich, came to Kullu, she took an active interest in the looms and it was at her request that Sheru Ram of Banontar village fashioned the earliest urban-sized shawl. Inspired by Sheru Ram, Urvi Dhar started manufacturing the shawls commercially.
Providing a fillip to the economy
However, now hoping to give a fillip to the economy, a young Dehradhun-based textile designer Deshna Mamgain, 27, has collaborated with local weavers of Bodh Shawls to produce a unique range of woollen designer sarees.
“I came across Kullu’s beautiful craft and cultural heritage when I was assigned a project on the Kullu shawl. I initiated a market survey in January and got a first-hand account of the difficulties being faced craftsmen. They were facing a stiff competition from cheap imitation woollen shawls being produced in Panipat, which were also being branded as Kullu shawls,” she said.
This year, the ministry of textiles had sanctioned a project for training and skill development of the local artisans in Kullu’s Shamshi village, as a part of which Deshna had worked on new designs and the manufacturing of sarees. Around 30 women were trained in weaving shawls.
Designs capture essence of Himachal
“I realised that a lot of work has already been done on the Kullu shawls, which are famous all over the world for their designs. Therefore, I came up with the idea of the saree that has been a part of the Indian wardrobe for ages. These sarees are unlikely to go out of vogue. I have used auspicious colours and patterns for the saree. My designs have the essence of Himachal. The patterns are inspired from the local fauna and flora, including pine trees, bodhi flower, sheep, deer and rhododendron flowers,” says Deshna, adding that the iconic Kullu patti can be seen on the saree border.
The exquisite pieces that span 5.5m and come with a blouse piece start at ₹4,000. “The weaving is so fine and soft that they can easily be worn by any age group. A wide variety of designs and patterns are available,” says Chime Angmo, general manager, industries department, Kullu.
“ There is high demand for woolen sarees in winter across India and the new designs will boost the local economy,” she said.
The government is likely to encourage the other shawl weavers to manufacture Kullu sarees.
Source: The Hindustan Times
Turkish exporters have seen a noteworthy surge in exports to the United Kingdom from January to March this year following the signing of a post-Brexit free trade agreement (FTA). Exports to the UK rose by 12.7 per cent to reach $2.7 billion, making it the country’s second-biggest market in the first quarter of the year, according to statistics from the Turkish Exporters Assembly (TIM).
Ankara and London inked the FTA in the last days of 2020 to support a trade partnership worth around $25 billion.
The deal became effective from January 1, when the UK formally left the European Union.
The current pact is expected to be expanded to include areas such as investments and services, according to a report in a Turkish newspaper.
The UK received over $1 billion worth of Turkish goods in March alone, the data showed, a 33.1 per cent year-on-year surge, making it Turkey’s third-biggest export market in the month after Germany and the United States.
Overall, Turkey’s sales from January through March have surged 17.3 per cent year on year to over $50 billion, marking the highest first-quarter figure ever.
Sales soared by 42.2 per cent year on year in March alone to $18.98 billion, an all-time monthly high. Imports were up 25.8 per cent to $23.68 billion.
The United States came in third with nearly $2.71 billion, a rise of $716.27 million from a year ago. Exports to Italy increased by $449.91 million to $2.5 billion, while those to France and Spain were up $451.93 million and $361.14 million to $2.13 billion and around $2 billion, respectively.
On the other hand, sales to Saudi Arabia all but dried up as exports plunged by 93 per cent on an annual basis to $56 million, down from $810.6 million in the January-March period of 2020.
Exports to Saudi Arabia in March plunged to just $19 million, the TIM data showed, collapsing 93.7 per cent year on year from around $298.23 million a year ago.
Source: Fibre2Fashion News
Recron (Malaysia) Sdn Bhd — which is part of Reliance Group, one of the world’s largest integrated polyester and textile companies — was not spared from the impact of the Covid-19 pandemic. While it had embarked on its digitalisation journey earlier, much like other businesses, the company had to accelerate its digitalisation efforts to ensure business continuity.
The transition to work-from-home (WFH)arrangements and sustenance of operations across its locations were done seamlessly, thanks to an efficient and responsive IT support team. The support provided by MITI, MIDA and other government agencies as well as shipping companies, port authorities, customs officials and trade associations during the pandemic also helped in ensuring limited disruptions to its exports operations. But the more complex processes required different solutions.
“A significant portion of our revenue comes from our exports to various countries. The complexity of the processes and volume of documentation necessitated a solution that focuses on risk management, cash flow and digitalisation for quicker turnaround times, which would help improve our balance sheet and streamline our trade transactions,” says Anil Kumar S Mungad, chief financial officer of Recron.
“At the factory level, we invested heavily in the safety, health and well-being of the employees, where technology helped to address distinct needs, from disinfectant monitoring and temperature checks to WFH flexibilities.”
The company’s goal is to ensure that it has state-of-the-art plants that are fully automated, digitalised and technologically superior. This includes the use of digitalised supply chain planning to ensure efficient execution and improve service levels, as well as the use of best-in-class tools for secure digital operations.
“The first step is always the most difficult. We had to look inwards and carefully identify areas in our business and operations where improvements could be made. We also needed to identify the right solutions, which was another challenge, as they needed to meet specific and unique requirements,” says Anil.
Additionally, given Recron’s vast network and sprawling manufacturing facility, it had to ensure that digitalisation was implemented across the entire supply chain seamlessly.
Fortunately, the company was able to find the solutions it needed from Standard Chartered, says Anil.
“We were attracted to its strong network in the countries that we export to. While its long history equipped it with intricate knowledge of the markets, it also impressed us with its digital awareness and capabilities.”
Adapting to stay ahead
By utilising solutions from Standard Chartered, Recron managed to automate its export process and collaborate with trade partners, such as shipping lines, customs and ¬other government agencies, through a digital trade platform.
The trade platform enables end-to-end online documentation for exports, and facilitates electronic presentations that remove the need to manually courier hard copy of documents between parties.
“This leads to greater operational efficiencies, lower costs and improved security. The faster receipt of trade documents also removed the need for shipping guarantees to release cargo prior to the documents’ arrival, which was the norm when things were done manually,” says Anil.
“The result is a shorter end-to-end turnaround time due to an accelerated payment process and earlier receipt of goods, improving the working capital cycle.”
Given its strong footprint in many countries that Recron exports to, Standard Chartered is able to help the company meet specific trade requirements of each market and rely on its network with local banks to provide quicker processing times and competitive rates. “The bank currently supports Recron’s trade transactions by performing letters of credit discounts and confirmation,” Anil adds.
By automating its processes and digitalising its supply chain, Recron also managed to enhance its decision-making process. For instance, real-time decision support and analytics are made available through its Business Command Centre dashboards.
Meanwhile, its Electronic Warehouse Management system, which utilises smart devices, simplifies complex logistical processes, and optimises inventory tracking, distribution operations, multi-channel fulfilment and other processes in real time, according to Anil.
“As a predictive strategy, we are planning to implement industrial Internet of Things as part of our manufacturing execution system to enhance data-driven smart operations,” he adds.
Additionally, Recron enhanced its customer experience by enabling collaborative planning through a Customer Relationship Management (CRM) platform, mobility apps and predictive analytics on demand forecast. The existing website was revamped and an E-room created for effective document collaboration with internal and external bodies, taking into consideration the WFH arrangements.
“We are planning to implement artificial intelligence and machine learning-powered solutions to detect the changing patterns of customer behaviour by analysing data in near real time, driving revenues and enhancing personalised experiences,” says Anil.
Recron is also looking at utilising Standard Chartered’s host-to-host implementation solution that is integrated with the company’s enterprise resource planning (ERP) system. This cuts down on the payment processing time and strengthens the security of the transactions.
“The solution allows for straight-through processing of payment instructions by automating the process, where transactions are encrypted and routed via a secure internet connection. It provides file acknowledgement and status update of the transactions to the ERP for an easy payment reconciliation process,” says Anil.
“By eliminating the need for manual intervention, it brings down the risk of human error.”
Banking on innovation
An increasing number of companies like Recron are looking for solutions to set up their supply chains for growth while staying resilient. Noting the demand from the industry, Standard Chartered has been helping corporations across Asia, Middle East and Africa manage their digital transformation to achieve those goals.
The bank has developed innovative solutions to meet the international trade, cash and custody needs of businesses and their supply chains.
These include its award-winning Straight2Bank suite of digital banking platforms to help businesses securely and effectively run their cash management, trade finance, foreign exchange and securities services. It has a simple user interface and acts as a single touch point for businesses’ digital banking needs.
Its Straight2Bank Next Gen platform uses the latest technologies to provide business intelligent analytics and intuitive web experiences, with high levels of customisation and security. To date, the bank has migrated more than 90% of its clients to this platform, says Wendy Ang, country head of transaction banking at Standard Chartered Malaysia.
“It is important that both business-to-business and business-to-consumer sellers invest in real-time insights about their buyers so they can constantly adapt and change,” she says.
The strength of Standard Chartered’s solutions lies in the fact that they are highly innovative, fully customisable and designed to meet the needs of businesses, observes Ang. The bank’s global network and deep knowledge of international markets also allows it to offer advice and services across a wide range of specialised areas.
“Technology has always been at the heart of our strategy as a leading bank in the digital space to drive efficiencies, increase automation, introduce global platforms, reduce manual errors and strengthen our defence against financial crime,” says Ang.
“We recognise that our clients are increasingly looking for new solutions to address their need for greater efficiency and security. Ultimately, our aspiration is to be the leading digital banking platform powering global trade, commerce and financial services to clients across our network.”
Additionally, Recron values the importance of sustainability in business and has put in place initiatives aligned to those values. For instance, it is optimising its energy source by using green energy, reducing carbon emissions and ensuring strong human rights policies are in place to protect its employees.
By acting as a partner, Standard Chartered is helping clients like Recron achieve their goals in the long run and embark on their sustainability agenda.
“The adoption of ESG practices is one of the key core initiatives of our group to ensure that we create a safe and resilient business model, and wield a positive impact on the environment and local communities,” says Anil.
Source: The Edge News
The payment of customs duty rebate to the textile sector doubled during tax year 2020.
According to details issued by the Federal Board of Revenue (FBR), the payment of customs duty rebated was Rs18.31 billion during tax year 2020 as compared with Rs9 billion in the preceding tax year, showing an increase of 103.33 percent.
According to the FBR, the major chunk of the rebate payment to the textile sector was issued to ready-made garments and fabric made-ups.
The payment of customs duty rebate to the ready-made garment industry was Rs6.5 billion during tax year 2020 as compared with Rs1.88 billion in the preceding tax year, showing a growth of 246 percent.
Likewise, the payment of duty rebate to fabric and made-up increased to Rs6.41 billion in tax year 2020 as compared to Rs1.12 billion in the preceding tax year, showing an increase of 472 percent.
The FBR has taken all possible measures to provide relief through payment of refunds and rebate to sectors of the economy for resolving liquidity issues during the coronavirus pandemic.
The FBR issued a rebate to the tune of Rs1.56 billion to the hosiery industry during tax year 2020 and Rs1.24 billion to the cotton fabric industry.
The FBR issued an amount of Rs24.4 billion as a total duty rebate during tax year 2020 as compared with Rs14 billion in the preceding tax year, showing an increase of 74 percent.
It is pertinent to mention that FBR last week announced to allow exporters of the five ex-zero rated export sectors, including the textiles and clothing industry, to refile their claims for “missing amounts” of their past sales tax refunds, that is a major relief.
In a circular, the FBR admitted that the flaws in its fully automated sales tax e-refunds (FASTER ) system rolled out almost a year ago for fast-track processing and payment of export refund claims in 72 hours “simply missed out on the sales tax credits of various taxpayers”, thus stalling the processing of refund claims.
The FBR claims that the flaws in FASTER have been remedied and matters regarding the processing of past missing amounts of sales tax refunds resolved.
Source: Pakistan Observer News
Textile and garment manufacturers and exporters today demanded the government to keep factories open during the lockdown to help them offset the losses.
Failure to continue production and ship goods in time will cause them huge losses, and they fear the work orders may also get shifted from Bangladesh to other countries.
The leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), Bangladesh Textile Mills Association (BTMA) and some top garment manufacturers and exporters made the call at a joint press conference at Pan Pacific Sonargaon in Dhaka.
The leaders of Bangladesh Terry Towel and Linen Manufacturers and Exporters Association and Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association also took part in the press conference.
The local garment suppliers have been struggling to recover the losses they incurred during the first wave of the Covid-19 pandemic, said Mohammad Abdus Salam, acting president of BGMEA.
Bangladesh exported garment items worth $34.12 billion in fiscal year 2018-19, which came down to $27.94 billion in the next year, Salam said.
Moreover, work orders worth $3.18 billion were either cancelled or held up by the international retailers and brands due to the fallouts of the epidemic.
Later 90 per cent work orders were reinstated with discount and delayed payment, he said.
Similar situation may arise again if production is disrupted and timely shipment is missed, he said.
Adequate safety measures have already been taken at the factory levels to protect the workers from the Covid-19 infection, said Shafiul Islam Mohiuddin, former BGMEA president.
Faruque Hassan, BGMEA president-elect, sought cooperation from the government for keeping the factories open as there is a fear of losing the work orders.
Hassan also said the factory owners will have to face troubles in paying the salaries and festival allowances for the workers if they cannot run production and ship goods as per schedule.
Source: The Daily Star
