The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 17TH APRIL 2021

NATIONAL

INTERNATIONAL

Maharashtra may allow e-commerce companies to sell non-essentials in a week

Maharashtra is likely to allow delivery of non-essentials by ecommerce platforms such as Flipkart and Amazon in a week after a review of the fortnight-long lockdown that began Wednesday night, people familiar with the development told ET.

The Department for Promotion of Industry and Internal Trade (DPIIT) is in talks with the state government and industry to assess the kind of relaxation possible.

“The DPIIT is discussing with all to see what easing can be requested to states,” a government official told ET.

The Confederation of Indian Industry (CII) and the Federation of Indian Chambers of Commerce & Industry (Ficci) have also lobbied the state government on this matter.

“Relaxations will be allowed in the week after, as the state government is keen to check movement of people,” said an industry executive. “We have held discussions on the issue and they have assured to look at them.”

The Maharashtra government asked for a week’s time to review the situation on the ground, based on which it may relax curbs on ecommerce, when approached by companies and industry groups, said another executive.

“They (state government) want to curb all people's movement in the state, hence they have issued such strict guidelines,” he said. “We hope they will relax the guidelines soon.”

The state is seeing a record number of new cases daily, with total active cases at more than 620,000, the highest in the country.

Maharashtra chief minister Uddhav Thackeray on Tuesday announced curfew-like restrictions on the movement of people in the state from April 14 to May 1. As per the guidelines issued, ecommerce companies are allowed to deliver only essentials.

An industry grouping asked the DPIIT to ensure that ecommerce is allowed to function “without any discrimination... in Maharashtra.” In the letter to the DPIIT, a copy of which ET has reviewed, it said the differentiation between essential and non- essential products was a “subjective matter.”

Ecommerce curbs hurt industry and the supply chain takes months to recover from disruptions, the letter said.

The industry has also asked for a relaxation in curfew times for online food aggregators, stating that dinner-time and late-night deliveries made up a large portion of their business.

“The (ecommerce) industry’s point of view was unanimous that there should be no differentiation basis essential and non-essential,” a senior executive at a leading ecommerce marketplace said. The industry is hopeful that the DPIIT would issue recommendations to states asking that they not impose any curbs on ecommerce activity. The industry was, however, aware that the department could not issue diktats to states and can best send an advisory, the person said.

Source: The Economic Times

Back to top

Tamil Nadu's knitwear sector hit hard amid Covid surge

When Europe gets cold Tamil Nadu sneezes. The adage has been proved again as countries like Germany, France and Britain announced lock down due to Covid-19 pandemic leaving nearly one thousand knitwear units in Tirupur gasping for breath.

Despite the Centre’s announcements about various financial packages as part of the Atmanirbhar schemes for the resuscitation of the gloomy industrial sector in the State, the knitwear exporters are yet to come out of the abyss to which they have fallen since the breaking out of the pandemic all over the world. The textile materials manufactured in Tirupur stand out in the global market because of quality and craftmanship. But that has not been successful in reviving the  cash liquidity faced by the European end users of Tirupur’s knitwear products, according to Raja M Shanmugham, president, Tirupur Exporters’ Association (TEA).

Shanmugham, a real Raja of the knitwear industry, says the fortunes of the industry could be turned for the better by a few measures which could be ordered by Nirmala Sitaraman, the country’s finance minister. “The  second  lockdown  promulgated  in  major  countries  like  Germany, France and UK from November, has lead us, mainly MSMEs  into a liquidity crisis. In addition to this we are facing another shock in the form of ever increasing price of yarn, our important raw material due to business dynamics. These factors have eroded the competitiveness of the knitwear industry,” Shanmugham, known for his fighting spirits, told The Pioneer with uncertainty written all over his face.

He said measures like Interest Equalisation Scheme which was announced for a brief period of three months , if extended to a period of two years would help in soothing the pain being suffered by the industry. “This will help us to tide over the financial crunch we are facing due to lock down and high yarn prices and also in sustaining the global competitiveness of Brand Tirupur,” said the TEA president.

The TEA in a memorandum to the minister has pointed out that the Remission of Duties and Taxes on Export Products (RODTEP) announced in January 2021 to replace the ROSCTL (Rebate of State and Central Taxes and Levies) has not been operationalised which has put the exporters and MSMEs between deep sea and devil.

“The MSMEs are not receiving  the  reimbursement  of  the embedded  taxes  including  electricity  tax, Mandi tax, GST on petro-products. The non-disbursement of RODTEP is causing severe liquidity crisis,” said the TEA plea.

Raja Shanmugham pointed out that the Centre has  extended  ECLGS  3.0 to  Hospitality and Tourism  sectors  by providing  40 per cent of  credit  outstanding  on  28.2.2021.  “Being  a  labour  intensive sector and still undergoing a financial stress, we request the Government  to extend  the  ECLGS  to  apparel  sector  also  by  providing  additional  20 per cent  credit outstanding as like given to other sectors and help us to ease the liquidity crisis,” said Shanmughham.

Tirupur employs more than 6,00,000 workers in its knitwear units and earns Rs 200 billion every year by way of exports.

Source: The Pioneer

Back to top

India has been exemplary in publishing foreign exchange market intervention: US report

India has been exemplary in publishing its foreign exchange market intervention, the US Department of Treasury said in a report to Congress on Friday.

It said that like most emerging market currencies, the rupee was buffeted in 2020 by substantial swings in global risk appetite and associated shifts in capital flows.

India's goods trade surplus with the US was USD 24 billion in 2020, broadly in line with its average level since 2014. India also ran a USD 8 billion services trade surplus with the US in 2020, said the India section of the Treasury Department report that reviews developments in international economic and exchange rate policies.

“India has been exemplary in publishing its foreign exchange market intervention, publishing monthly spot purchases and sales and net forward activity with a two-month lag. The Reserve Bank of India (RBI) states that the value of the rupee is broadly market-determined, with intervention used only to curb undue volatility in the exchange rate,” the Treasury said.

While the RBI frequently intervenes in both directions, it purchased foreign exchange on net in 11 of the 12 months of 2020, with net intervention reaching USD 131 billion, or 5.0 per cent of the GDP, it said.

Purchases slowed following the onset of the pandemic when India experienced large capital outflows and in response, the RBI engaged in net sales in March 2020 as the rupee weakened.

As portfolio inflows resumed and foreign direct investment remained strong during the second half of 2020, the RBI's net purchases accelerated.

The RBI's purchases have led to a rapid rise in total reserves. As of December 2020, foreign exchange reserves totalled USD 542 billion, equivalent to 21 per cent of the GDP and 219 per cent of short-term external debt at remaining maturity, it said.

“Like most emerging market currencies, the rupee was buffeted in 2020 by substantial swings in global risk appetite and associated shifts in capital flows. After depreciating 6.0 per cent against the dollar during the first half of 2020, the rupee partially recovered and ended the year 1.7 per cent lower against the dollar,” the Treasury said.

On a nominal and real effective basis, the rupee weakened 6.9 per cent and 3.2 per cent respectively over the four quarters through December 2020.

The Department of Treasury in its report has asked Indian authorities to allow the exchange rate to move to reflect economic fundamentals, limit foreign exchange intervention to circumstances of disorderly market conditions, and refrain from excessive reserve accumulation.

“As the economic recovery takes hold, the authorities should continue to pursue structural reforms that can help lift productivity and living standards, including greater openness to foreign financial flows and financial sector deepening, which can further support economic growth,” it added.

Source: The Economic Times

Back to top

Exports rise to USD 13.72 bn during Apr 1-14: Commerce Ministry data

The country’s exports have increased to USD 13.72 billion during April 1-14 this year on account of healthy growth rate in sectors such as engineering and gems and jewellery, according to the provisional data of the Commerce Ministry. Exports during April 1-14 last year were aggregated at USD 3.59 billion.

In April 2020, the outbound shipments had contracted by a record 60 per cent due to COVID-19 related lockdown.

Imports during the period under review swelled to USD 19.93 billion as against USD 6.54 billion during April 1-14 last year, the data showed.

The final figures for April 2021 would be released during mid-May by the ministry. Exports have surged by 60.29 per cent to USD 34.45 billion in March, even as the outbound shipments contracted by 7.26 per cent during the full 2020-21 fiscal to USD 290.63 billion

Source: The Financial Express

Back to top

Ajay Seth takes over as new Economic Affairs Secretary

Newly appointed economic affairs secretary, Ajay Seth, took charge of the department of economic affairs on Friday, the finance ministry said in a Twitter update.

The Appointments Committee of the Cabinet had approved the appointment of the 1987-batch Karnataka cadre IAS officer earlier this month, replacing Tarun Bajaj.

Prior to this, Seth was posted in his cadre state as the managing director of the Bangalore Metro Rail Corporation Limited since July 2018.

The new position marks Seth’s return to a central posting after a gap of 13 years and will be his second stint in the department of economic affairs, where he previously served as a director.

Apart from heading the Bangalore Metro Rail Corporation, Seth held various positions in the Karnataka government including additional chief secretary of health and family welfare and commissioner of commercial taxes.

Source: The Economic Times

Back to top

Birla Cellulose wins UN GCNI's sustainable supply chain award

Birla Cellulose, part of the Aditya Birla Group and one of the largest global manmade cellulosic fibre (MMCF) producer, has emerged as a winner in the first edition of the “National Innovative and Sustainable Supply Chain Awards” initiated by the UN Global Compact Network India (GCNI)—the Indian local network of the United Nations Global Compact (UNGC).

The case study of Liva Reviva & Fully Traceable Circular Global Fashion Supply Chains – was awarded for innovation in recycled and circular fibre made with pre-consumer fabric waste and end-to-end ‘live’ supply chain transparency and traceability through its unique blockchain-based platform GreenTrack.

This case study solves two unique challenges: mounting textile waste which is either incinerated or landfilled due to lack of recycling technologies, and lack of transparency / traceability in the scattered, complex and long fashion supply chains.

“We are proud to be recognised for our innovative Next Generation solution for upcycling the textile waste, reducing the pressure on virgin materials and establishing transparency in complex fashion value chain. These efforts are aligned to our prioritised UN SDG goals and dedicated to building circular business models which are based on partnerships that add value to stakeholders, people and planet,” Dilip Gaur, director of Birla Cellulose and managing director, Grasim Industries, said in a press release.

“The first edition of the awards witnessed outstanding case studies from prestigious organisations with notable contributions to adoption and implementation of innovative and sustainable supply chain practices in their organisations. We congratulate Birla Cellulose for their pioneering work done in accelerating circularity and transparency in the supply chain in a short time, which are high priority UN Sustainable Development Goals,” Shabnam Siddiqui, executive director, UN GCNI, said.

Birla Cellulose has achieved a path breaking innovation in manufacturing viscose fibre “Liva Reviva” using 20 per cent pre-consumer fabric waste following the principles of circular economy. This innovation has the distinction of Recycled Claim Standard (RCS) and portrays Birla Cellulose's commitment to developing NextGen solutions.

Through its pioneering platform GreenTrack based on blockchain technology, Birla Cellulose along with its value chain partners tracks material flow real time in the supply chain of fibre, from certified forests to the end consumers. Through simple scan of QR code end-to-end sustainability journey is visible to consumers and helps them make an informed purchase decision.

"Since the launch in 2020, multiple global brands have added Liva Reviva to their sourcing basket as they take decisive steps towards circular economy. Our close-knit partnerships across the global value chains helped us to establish ‘viable reverse logistics’ and created higher value for textile waste for small scale waste recyclers," the release added.

Birla Cellulose is prioritising the increased use of alternate feedstock like textile waste and is committed to accelerate innovations that are aligned with UN SDGs 2030.

Source: Fibre2Fashion News

Back to top

INTERNATIONAL

“Bangladesh needs more efforts to produce and supply manmade fiber”

South Korea-based global conglomerate Youngone Corporation Chairman and CEO Kihak Sung said, “Bangladesh needs to make a lot of efforts to produce and supply more manmade fiber (MMF) so that such a supply chain is established successfully here.”

Sung added that the textile zone at the Korean Export Processing Zone (KEPZ) in Chattogram will become a ‘textile hub’ in Bangladesh fetching a lot of businesses if the vital support is provided to ‘quickly and fully implement it. Most importantly not losing everything to Vietnam. Besides, bringing a lot of businesses to Bangladesh.

Youngone Corporation already started manufacturing polyester fabrics at the 2 newest state-of-the-art polyester garment factories with a floor space of over 430,000 for each which will be extended to 2 more similar units for export and supply of high-quality products to garments and apparel factories in Bangladesh as an import substitute and backward linkage industry.

Sung said, “We want to be supportive of Bangladesh garment factories. We need to make raw materials, garments and everything here.” Adding that quality energy supply remains the key hurdle.

Sung said they are inept to build 2 new factory buildings now due to the Gas Ring Main (GRM) pipeline of Karnaphuli Gas Distribution Co, Ltd, presently passing diagonally from north to south in the textile zone.

“We are appealing to the government to give us a license very quickly so that we can run and produce high-quality products for Bangladesh garment factories,” urged Sung.

Emphasizing improved infrastructure to be able to enhance export as well as making more profit. As an operating business in less profit, doing more production and more export is not sustainable.

The versatile leader Kihak Sung elaborated that in the MMF section Vietnam is doing well and Bangladesh’s readymade garment (RMG) industry should follow suit.

Sung said, “I’ve apparel units in Vietnam. They are doing fine and rising faster than Bangladesh. We need to catch up with that. If we can satisfy our customers with the delivery and quality then customers will rely on us giving more business.”

Sung said once Youngone is more successful and more comfortable here in Bangladesh, there will be many other companies to join and make a big investment, creating more jobs. Eventually adding more to the economy of Bangladesh.

Source: Textile Today

Back to top

CCOE extends tariff scheme for textile sector

The textile industry is set to milk more money following the Cabinet Committee on Energy’s (CCOE) approval of another package worth Rs26 billion for the industry by extending the Time of Use (ToU) tariff scheme.

On a summary of the Power Division, the CCOE approved the proposal of “Extension of Time of Use (TOU) Tariff Scheme for Industrial Consumers” from May 1, 2021 to June 30, 2022.

The package was originally approved in November 2020 and was set to expire on April 30, 2021.

Sources told The Express Tribune that the government would bear a burden of Rs26 billion due to extension of the tariff scheme for industrial consumers.

The Power Division had sought approval of the energy committee for allocation of a budget subsidy of Rs26 billion for industrial consumers from May 1, 2021 to June 30, 2022 due to extension in the tariff scheme.

The industry is receiving gas supply at discounted rates. The textile industry is a major beneficiary of the subsidy scheme.

The government had initially introduced the gas supply scheme at discounted rate for the export-oriented industry. But later, the Petroleum Division said that all industries, including those which were not exporting textile products, were availing the subsidy.

The Petroleum Division also proposed that only the export-oriented industry should avail the subsidy on gas supply. Interestingly, the textile industry was not only availing the subsidy on gas supply but it was also receiving electricity at discounted rates.

Moreover, the textile sector was receiving gas for its captive power plants. The government had approved a plan for conducting audit of captive power plants. But some textile industrialists obtained a stay order from court as they were not ready for the audit of inefficient captive power plants.

The textile industry is also yet to pay cotton cess for conducting research on cotton crop. It has obtained stay orders and is not ready to pay the cess.

Earlier, the government had prepared a policy under which only those millers that paid the cess would be eligible for subsidy schemes. But under the current government, the textile ministry has withdrawn this condition for big textile millers.

The CCOE meeting was chaired by Federal Minister for Planning, Development and Special Initiatives Asad Umar on Thursday.

The committee also took up another summary of the Power Division wherein it was proposed that the National Electric Power Regulatory Authority (Nepra) may be directed to withdraw the generation tariff and licences awarded to category-III renewable energy projects as their determinations were not consistent with the approved policies.

The CCOE referred the matter to the Law Division for legal opinion.

The Maritime Affairs Division presented a report on the progress on establishing two new LNG terminals at Port Qasim, Karachi.

The meeting was informed that the sub-committee, headed by the Ministry of Maritime Affairs, was holding regular meetings to facilitate the setting up of new terminals.

Source: The Express Tribune

Back to top

February industrial production slips; but apparel and textiles continue to add gain

Industrial production, which primarily measures the manufacturing heft of local factories, slipped in February from the levels seen in January, but apparel and textiles manufacturing made stronger gains continuing the momentum set forth this year.

The latest Industrial Production (IIP) Index, a key gauge of the industrial firepower of the country, recorded 98.0 index points in February compared to 108.3 index points in January this year. The IIP in the same month last year was 104.2.

Despite the slippage in the overall index, a more granular level look into how key manufacturing sectors had performed during the month showed some notable improvements in the areas of textiles and wearing apparel, re-kindling hope for better months ahead for the sector, which suffered immensely from the pandemic-induced conditions.

Manufacturing of textiles made the highest gain of any sector in the month, climbing 39.4 percent year-on-year to 114.3 index points in February.

Meanwhile, the manufacturing of wearing apparels added 0.8 percent gains from a year ago to record 102.1 index points in the month.

The solid gains in the two sectors is an indication that the broader apparel and textiles sector, which makes the country’s largest merchandise export basket, is well on its way to its pre-pandemic days of sales and earnings as key customers in the West are gradually returning to normalcy, leaving the pandemic days behind.  

Another notable catalyst for the broader garment sector to make sizeable gains in February was the New Year festival season, which sparked a fresh wave of sales in the domestic markets as people flocked to streets and fashion retailers after more than a year in sheltering-in-place.

Meanwhile, the food manufacturing segment shed 7.6 percent in February to 97.4 index points but the beverage segment added 8.6 percent to make 115.3 index points from the year earlier levels. Further, the tobacco products also added 20.3 percent to the index in February to end with 80.4 index points.

The other manufacturing segments, which made notable gains in February, were pharmaceutical products, paper and paper products, printing and reproduction of recorded media, furniture and manufacture of machinery and equipment.

Meanwhile, the segments which made declines in February from a year ago were wood and products of wood and cork, coal and refined petroleum, chemical and chemical products, rubber and plastic products, fabricated metal products, electrical equipment and categories clubbed together under other manufacturing.

Sri Lanka’s current economic policy is largely premised on re-building a domestic production economy, which has received tremendous support from funding at very low interest rates and extremely low taxes.

Source: The Daily Mirror

Back to top

Indonesian apparel & fabric exports expected to decline

Exports of apparel and fabric from the Southeast Asian nation of Indonesia are expected to decline during the first seven months of this year, mainly on account of the continuing impact of COVID-19 pandemic in the country as well as major regions of the world. Around 70 per cent of textiles produced in Indonesia are exported to the US, EU and Middle East.

In 2019, Indonesia exported apparel and fabric worth $9,172.36 million, with a monthly average export of $764.36 million. Last year, the value of export declined by 15.94 per cent year-on-year to $7,709.94 million due to the COVID-19 pandemic. The monthly average export decreased to $642.49 million in 2020. This is expected to drop further to monthly average of $599.30 million during January-July 2021, a fall of 6.72 per cent, according to Fibre2Fashion's market intelligence tool TexPro.

The Indonesian industry ranks among the top 10 producers and exporters of apparels and textiles in the world. The industry employs approximately 600,000 workers. In recent years, approximately 20 per cent of factories have shifted their production from West Java to Central Java due to lower labour costs. However, efficiency is much lower in Central Java compared to Jakarta and surrounding areas of West Java.

Indonesia’s strength is its median age which is 28.6 years. This ensures availability of abundant skilled workforce as well as young consumers in the country.

With effect from January 1 this year, Indonesia has implemented the Omnibus Bill, aimed at creating new jobs, increase investments, reduce taxes, easing licensing procedures and revamping the ease of doing business for both domestic and overseas manufacturers.

Recently, the Indonesian Trade Promotion Centre (ITPC), along with the Indonesian Embassy in Mexico, has taken efforts to boost exports of home decor items and textiles to Mexico. The cooperation includes market Balinese clothes and textiles, and Indonesian furniture in Mexico.

Source: Fibre2Fashion News

Back to top