From the last one month, in India’s textile industry, the talk of the town is Mega Investment Textiles Parks (MITRA), as in her budget speech, Union Finance Minister Nirmala Sitharaman officially launched this scheme. Under this scheme, 7 textile parks will be established over 3 years.
One of the main reasons or purpose behind this scheme is to make the Indian textile industry globally competitive and attract large investments. At the same time, it will naturally boost employment generation and exports.
Though as of now, the fine print of the scheme is not in the public domain but Government has said that its main features will be to create a world-class infrastructure with plug-and-play facilities to enable build global champions in exports.
Each of these parks will encompass 1,000+ acres of land with modern state-of-the-art infrastructure, common utilities, R&D Lab, workers’ family accommodation and plug-and-play facilities under consideration.
Terming it as a game-changer for the Indian textiles industry, Union Textiles Minister Smriti Irani is very enthusiastic about this scheme. In her words, “Emphasis on state-of-the-art infrastructure through MITRA will give our domestic manufacturers a level-playing field in the international textiles market and pave the way for India to become a global champion of textiles exports across all segments.”
But an important question here is whether these parks will be successful or not. This doubt arises because so far despite the best effort of MoT, its Scheme for Integrated Textiles Parks (SITP) which was launched in 2005 has not given desired results, and in this scenario, how far will the MITRA initiative be successful is debatable.
Is it not surprising that it took full 3 years for the Government to come up with this scheme?
A report by MoT in 2017 had said that SITP has failed to achieve its objectives and the reasons which were cited for the same were small size (most of the parks spanned from 25 to 75 acres) of the parks and lack of marketing support from the Government. Each such park under the scheme was supposed to normally have 50 units.
As per official data, SITP had been under implementation since 10th five-year plan (2002-2007) to provide the textile industry with world-class infrastructure facilities. The project cost covers common infrastructure and buildings for production/support depending on the needs of the ITP with the total financial support of 40 per cent of the project cost subject to a maximum of Rs. 40 crore.
So far around 59 textile parks have been sanctioned under SITP, out of which only 22 were completed, even less than half. The development of 11 parks got cancelled mainly due to land-related issues such as delay in conversion, clearances, disputed lands and even non-availability.
Bodies across states lobbying hard
Irrespective of the reasons, across states, various trade bodies, State Governments are lobbying to get at least one park in their state. For example, the Madhya Pradesh Government has proposed 1,000 acres of industrial land for such a park in Ratlam.
Union Law and Justice Minister Ravi Shankar Prasad recently assured he would make sincere efforts to persuade the Textiles Ministry to set up a textile park in Bihar.
For Gujarat also, the Southern Gujarat Chamber of Commerce and Industry (SGCCI) has urged the Finance Minister for the establishment of MITRA in Surat. It is being said that SGCCI had submitted an expression of interest (EoI) to the MoT for establishing a mega textile park on 1,000 acres of land in Surat in December 2020.
In favour of this initiative, it is being said that this is in line with the Government’s intention to encourage mega projects and increase the scale of operations. A particular positive aspect of this scheme is the incorporation of ‘Plug and Play Model’ which will enable the members of such parks to avoid huge capital expenditure outlays.
Plug and Play Model’s advantage is that it offers a ready-to-use basic infrastructure and the investor need not struggle or work to develop the same. It saves a lot of time and eases the process.
The above-mentioned report, which stated that SITP failed, has suggested that MITRA should have readymade factory sheds, warehouses, incubation centres and testing labs, with express connectivity to seaports and airports.
One of the leading trade bodies has insisted that the Government should very closely study why textile parks have not really succeeded in the past.
It is very crucial to avoid errors of omission and commissions in the past. Otherwise, one more well-intended scheme will fail to lift the fortunes of the industry.
It is also pertinent to mention here that these new parks will be most probably near the ports; in India, such textile clusters and ports are in cities like Chennai, Mumbai and Vishakapatnam.
More or less, these states have saturation from labour availability point of view which is a big concern for at least the apparel manufacturing industry. Apparel manufacturing giants are moving away from states like Tamil Nadu mainly due to labour issue.
Is it possible that an apparel giant will start its big unit where labour is migratory? Most recently Tirupur’s vertical integrated giant company Best Corporation has started construction of its new factory in Ujjain (Madhya Pradesh) and the main reasons for the same are the availability of local workers and land offered by the State Government on 75 per cent subsidy compared to market rate.
But it is also pertinent to mention here that post-Covid, labour housing is also the need of the hour and every apparel manufacturing hub is insisting on Government support on the same.
MITRA scheme has an option for labour housing that can be a hit and trial because so far apart from Tamil Nadu, few factories like that of Shahi Exports have successful hostel facilities for their workers.
Successful examples
Secondly, an entire ecosystem, right from ensuring the raw material availability to mid-level professionals is also a must and very difficult to establish in a new area. So far only Brandix India Apparel City, Vishakapatnam has been successful in this regard and its total credit goes to Brandix. This park is also a perfect example of foreign investment in such textile/apparel park.
Netaji Apparel Park, Tirupur is also one example where apparel manufacturers are working properly and the park is quite beneficial. Apart from good infrastructure of park, proximity with the main city and solar plant are also a few big attractions of this park.
Another big foreign investment in any Indian textile park is by Youngone Corporation, a Korean company, which has announced to invest Rs. 900 crore in Kakatiya Mega Textile Park (KMTP) at Warangal, Telangana. Its operations are expected to start soon. It is being said that soon more Korean companies will be investing in this park. One of the biggest reasons for this successful investment is the State Government’s aggressiveness.
The MITRA scheme is targeting to have large capacities at one place as each of such parks will be in 1,000+ acres of land. On the other hand, it is also pertinent to mention that from last few years, the concept of mini textile park is in discussion. The hubs or states where large scale textile-parks are not successful or the trade bodies don’t have resources to manage a large textile park prefer to opt for mini textile parks. Normally these parks require an area of 10 acres and have at least 10 production units. Such initiatives also have support from various State Governments. But overall there are no enthusiastic results achieved from these mini textile parks.
It can be highlighted here that internationally, the textile parks are not less than 100 acres; however, in India several approved parks are smaller than 25 acres.
India has missed the opportunity once again as during US-China trade war and strong anti-China segment, not even a single Chinese company invested in India. One can hope that now with these initiatives, at least a few global manufacturers will invest in India. And for that, one of the most important things to focus upon is good infrastructure. SITP was also launched to provide the industry with state-of-the-art world-class infrastructure facilities for setting up their textile units, but still India is struggling to have good infrastructure.
There are enough chances that with the suggested support infrastructure which includes 18 points right from readymade factory sheds/flatted factories to warehouse, dormitory and much more… MITRA will be successful. All stakeholders will now probably learn from the experience of the unsuccessful SITP.
Source: Apparel Online
The mills in the textile hub of Ichalkaranji, often known as the Manchester of Maharashtra, are seeing a drop in work as migrant workers head back home amid the rise in Covid-19 cases and the stringent restrictions in place.
The traders from other states are also hesitant to place orders here due to the increasing number of Covid cases in Maharashtra.
Satish Koshti, the president of the district power loom association, said that Ichalkarani has a large number of migrant workers working in around 13,000 small and big power loom factories.
“The textile industry here was recovering after the huge set back last year. But the fear of lockdown and rise in Covid cases is driving migrant workers back. The industries, which stay largely dependent on migrant workers, have been badly affected again,” he said.
The strict lockdown last year and reduction in orders had severely hit the textile hub. Currently, only the looms with export orders are functioning up to 50%, while the domestic supply is stopped.
Ashutosh Hupare, a textile loom owner, said, “If the migrant workers leave they won’t return soon and without them, the mills can’t function. So I have decided to provide food and shelter along with some advance payment to the migrant workers in my factory. But still few are insisting on returning home in fear of lockdown.”
Harsh Shah, a textile trader said, “With the yarn cost fluctuating, the owners are hesitant to place an order as after purchase if the yarn cost goes further down it will be difficult to recover the amount.”
He added that due to this the dealers from other textile producing cities like Surat, Mumbai, Bhiwandi, Delhi, Meerut and Kanpur are not placing any new orders. A few of them have cancelled their orders due to rise in Covid cases.
Last year’s traumatic experience still haunts the workers. Maan Singh, a migrant worker said, “Last year, we faced several difficulties to reach our home towns and hence we are returning to avoid the same. The market is slow and the Covid cases are continuously rising. So, it is better for us to return home and stay with our families.
Ichalkaranji is famous for its grey cloth production after which the unprocessed cloth is sent to Surat, Mumbai, Bhiwandi and Delhi for further processing. The city with the presence of powerloom, air-jet, knitting and handloom also exports fabric across the world.
Harsh Shah, a textile trader said, “With the yarn cost fluctuating, the owners are hesitant to place an order as after purchase if the yarn cost goes further down it will be difficult to recover the amount.”
He added that due to this the dealers from other textile producing cities like Surat, Mumbai, Bhiwandi, Delhi, Meerut and Kanpur are not placing any new orders. A few of them have cancelled their orders due to rise in Covid cases.
Last year’s traumatic experience still haunts the workers. Maan Singh, a migrant worker said, “Last year, we faced several difficulties to reach our home towns and hence we are returning to avoid the same. The market is slow and the Covid cases are continuously rising. So, it is better for us to return home and stay with our families.
Ichalkaranji is famous for its grey cloth production after which the unprocessed cloth is sent to Surat, Mumbai, Bhiwandi and Delhi for further processing. The city with the presence of powerloom, air-jet, knitting and handloom also exports fabric across the world.
Source: The Times of India
Several shops and business establishments were allegedly forcibly shut by the administration due to a revised order by the Karnataka government on Wednesday that business establishments other than grocery and hardware will not open till May 4 as part of steps to contain the surge in coronavirus.
The closure of shops led to chaos in the market on Thursday, prompting traders to call it ''partial lockdown''.
The government has already announced night curfew from 9 pm to 6 am everyday and week-end curfew till May 4.
Accordiing to the modified order, ration shops, grocery shops, wholesale vegetable markets, restaurants and hotels to sell takeaway products, standalone liquor shops and bars, food processing related industries, banks and insurance companies, delivery of e-commerce and barber and salon shops are permitted to operate with strict adherence to the COVID protocol.
Rest will remain shut, the order said.
The revised order permitted shops and establishments dealing with construction materials to operate.
There was confusion throughout the day among traders who were of the view that the order was related to the weekend curfew.
However, as the traders opened their shops, the police and senior municipal and district-level officers reached there asking them to close following revised guidelines, some shop owners said.
The bustling Chickpet, Balepet, Chamarajpet, Cottonpet and neighbouring trade centres fell silent following this.
A few of the traders PTI spoke to termed the closure of shops as ''partial lockdown'', which would deal a severe blow to their businesses, which is already in doldrums for the past three to four years.
"The GST and last year''s lockdown had broken our back and now this is going to ruin whatever is left with us. We are not sure whether this phase will end on May 4 or would be extended further," Mangilal, a textile dealer, told PTI.
Trade activist Sajjanraj Mehta said Prime Minister Narendra Modi had assured that there would be no lockdown.
Yet, the shops are being closed, Mehta said.
Meanwhile, the Karnataka Hosiery and Garment Association wrote to Chief Minister B S Yediyurappa to implement the order uniformly and not restrict it to Chickpet and Gandhinagar areas in Bengaluru.
Source: Outlook The News Scroll
Cotton futures were trading higher at Rs 21,200 per bale on April 22 as participants increased their long positions as seen from open interest. The agri commodity traded in the positive territory after a gap-up start in the evening session.
The soft commodity has been trading higher than 100 and 200 days’ moving averages but lower than 5, 20 and 50 days’ moving average on the daily chart. The Relative Strength Index (RSI) is at 44.76, which indicates weak momentum in prices.
“Though short term gains could be seen in ICE Cotton, proliferating COVID cases in Asian countries may drag cotton in coming sessions. If ICE Cotton sustains above 86 today, more gains could be expected”, said Mohit Vyas, Analyst at Kotak Securities.
Abhijeet Banerjee, Senior Research Analyst-Agri Research, Religare Broking Ltd said, “Cotton complex markets had registered impressive gains in last few sessions. Under a bullish price scenario, the April month’s USDA report has added fuel to the market from buyers’ perspective. World cotton production is forecast at 113.0 million bales in 2020/21, the smallest in 4 years and the result of lower harvested area. million bales, equivalent to 22 percent of total usage."
Meanwhile, world cotton stocks (93.5 million bales) are forecast lower in 2020/21, bolstering this season’s cotton price expectations.
The global stock reduction is supportive of cotton prices, particularly in an expanding global economy with rising world cotton mill use, he said.
Cotton arrivals across the country in the first half of April plunged below 31,500 tons, down by 70 percent month-on-month. Arrivals are still better than last year when a complete lockdown around the nation brought the arrivals near 3,000 tons, as per Agmarknet data.
MCX April Cotton trades at a discount of 18 percent from Cotlook A price of 90.20 cents as on Tuesday.
In the futures market, cotton for April delivery touched an intraday high of Rs 21,280 and an intraday low of Rs 21,180 per bale on the MCX. So far in the current series, the commodity has touched a low of Rs 20,340 and a high of Rs 22,760.
Cotton futures for April delivery jumped by Rs 110, or 0.52 percent, to Rs 21,200 per bale at 19:38 hours IST on a business turnover of 3,324 lots. The same for May contract gained Rs 90, or 0.42 percent at Rs 21,520 per bale with a business volume of 6,016 lots.
The value of April and May’s contracts traded so far is Rs 70.77 crore and Rs 63.39 crore, respectively.
At 14:10 (GMT), US Cotton futures were slightly up 0.06 percent at 86.28 cents/pound on Intercontinental Exchange (ICE).
Source: Money Control
Homegrown textile industries driving high on overseas demand since September last year have started losing business due to loss in production and delay in shipping consignments owing to shortage of manpower.
The second Covid wave has affected the availability of workers in factories, creating shortage and disrupting production activities that industry players feel may worsen in the future looking at the daily spike in cases.
Textile units claim to have received export orders for another four to six months but shortage of manpower has slowed down production and dispatch of goods on scheduled time. The United States and United Kingdom are the major export markets for Indian made garments and textiles.
H S Jha, who heads the human resource department at a textile industry in Pithampur said, “Though industries are exempted from the lockdown restrictions but the pace of infection has gripped a lot of the workforce and this has hit our production efficiency. We are not able to meet targets due to loss in production and simultaneous delay in shipping orders.” He said his company has been operating with just 30% manpower.
Growing concerns over health and fear of catching the infection has led many workers to flee urban hubs. According to Indian National Trade Union Congress (INTUC), over 3,000 workers from Pithampur left for their villages in the last 10 days.
Source: The Times of India
Whilst exporters fret over an inordinate delay in notification of the charges underneath a brand new WTO-compliant scheme for rebating taxes and duties to the export sector, they’re additionally searching for larger readability from the federal government on some gray areas within the scheme’s functioning, in response to tax consultancy agency RSM Astute.
‘Very close to future’
On Tuesday, Commerce Secretary Anup Wadhawan had mentioned that the charges underneath the RoDTEP (Remission of Duties and Taxes on Export Merchandise) scheme, which got here into impact on January 1, could be notified within the ‘very, very close to future’.
Exporters have been urging the federal government to elevate the uncertainty over the advantages that may accrue to them underneath the scheme, as they’re it discovering it tough to cost contemporary world orders within the absence of the essential data particularly in sectors with skinny margins.
“The commerce and trade is hopeful that the scheme’s operation could be easy, and considerations could be addressed within the early levels of operationalisation,” RSM Astute famous in a white paper on the scheme. “Resulting from COVID-19, India’s exports could require extra stimulus and the exporters hope that RoDTEP wouldn’t be an obstacle to their enterprise plans,” it added.
Gray areas
The consultancy flagged the ability given to Customs officers to droop the scrips or refund credit and even to bar exporters from utilising these scrips particularly because the grounds on which such suspensions might be achieved haven’t been spelt out.
As per authorities statements, the refund of taxes on exports could be credited to exporters’ ledger account with the Customs division, which might be utilised to pay fundamental customs obligation on imported items. “Readability could be required whether or not the refund might be utilised to pay different taxes on imported items resembling IGST and Social Welfare Surcharge,” the tax advisor mentioned. Below the MEIS scheme, which RODTEP has changed, these refund credit might be used to pay customs obligation, extra customs obligation (with some exceptions) in addition to central excise duties.
The delay in operationalising the scheme is affecting the exporters by proscribing their means to cost merchandise competitively and the uncertainty was making it tougher to finalise contracts, RSM Astute identified.
Source: News N Polo
The number of Indian companies operating in the UK and their job creation levels have registered growth despite the challenges of Brexit and COVID-19 pandemic over the past year, the 'India Meets Britain Tracker' concludes in a report released here on Thursday.
The 2021 tracker, collated annually by Grant Thornton and the Confederation of Indian Industry (CII) to weigh up the contribution of Indian businesses to the UK economy, found that the number of Indian companies operating in the country grew from 842 in the 2020 tracker to 850 and these firms employed 116,046 people, an increase from 110,793 on the previous year.
The total turnover of these companies added up to GBP 50.8 billion, up from GBP 41.2 billion and 47 per cent have at least one woman on their board, compared with 20 per cent in last year's analysis.
"I welcome these findings, which show that the UK continues to be a highly attractive destination for Indian investors, who are both bringing jobs to the UK and increasing female representation at the highest level in our boardrooms," said Lord Gerry Grimstone, UK Minister for Investment, during a virtual launch of the report.
"Deeper trading ties with India will ensure more fast-growing companies like Birlasoft and Diligenta will have the opportunity to bring jobs and growth to the UK, as we build back better, and stronger, from COVID-19," he said.
During the course of 2020, despite continued uncertainty over the final outcome of the UK's exit from the European Union (EU), the research finds that Indian investors continued to invest in the UK and were involved in 10 acquisitions - the highest of any single EU country - throughout the year, including four in the technology and telecoms industry and two in manufacturing.
"Trade and investment flows between India and the United Kingdom have remained on a positive trajectory despite the pandemic," said Gaitri Issar Kumar, the Indian High Commissioner to the UK.
"Our governments are committed to removal of trade barriers and encouraging collaborations in innovation and technology development particularly in sectors where our nations have complementary capabilities," she said.
The report also provides a tracker of the fastest growing Indian-owned companies in the UK, measured by those with a turnover of more than GBP 5 million, year-on-year revenue growth of at least 10 per cent and a minimum two-year track record in the UK.
This year, 49 companies met the qualifying criteria for appearing in the tracker, achieving an average revenue growth rate of 40 per cent.
The corporation tax payments were down somewhat from GBP 462 million previously to GBP 459.2 million during the course of 2020, a reflection of the economic upheaval unleashed by the pandemic.
"Despite the challenges of the past year and, as Britain aims to increase trading and investment links around the world post Brexit, the long-standing ties between Britain and India only look set to deepen," said Anuj Chande, Head of South Asia Business Group, Grant Thornton UK LLP.
"Our research finds that the number of Indian companies operating in the UK has increased and that many continue to grow at a rapid rate, with some recording triple digit growth," he said.
For the eighth year in a row since the report was launched, technology and telecom companies dominated the tracker, accounting for 20 of the 49 companies included.
Birlasoft Solutions tops the list as the fastest-growing company this year, recording 158 per cent revenue growth.
Meanwhile, Diligenta, owned by Tata Sons, was the largest company listed, with revenue of GBP 388 million and an impressive growth rate of 62 per cent.
While technology and telecoms continue to dominate, the proportion of pharmaceuticals and chemicals companies featuring in the tracker increased significantly this year, up to 27 per cent of the total from 15 per cent in 2020.
Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII), said: "The statistics are a reflection of the strong contribution that Indian industry has continued to make in the UK, in keeping jobs and supporting the local economy.
"As discussions around the India and UK Enhanced Trade Partnership agreement continue, and as nations continue to battle the pandemic, CII and its members have worked towards facilitating an economic recovery path which has been invaluable and it is therefore highly encouraging to see the role our Indian industry has played here in the UK."
The Tracker also finds that London remains the preferred location for fastest-growing companies, with over half (53 per cent) of the fastest- growing Indian companies in this year's report located in London, confirming the UK capital as their continued preferred location though there is also growing interest across other regions.
Source: The Economic Times
The UAE announced on Thursday that it will suspend the travel of passengers from India for a period of 10 days from April 25.
Arrival of passengers from India through another country is also not allowed, unless travellers have stayed for 14 days in the transit country.
UAE nationals, diplomatic passport holders and official delegations will, however, be exempted from the restrictions. Private jets will also be allowed.
UAE has become the latest to restrict travellers from India, after the U.K., the U.S., Hong Kong and New Zealand following a surge in COVID-19 cases.
The travel ban will come into effect from 11.59 pm on Saturday, April 24, and is subject to review after 10 days, Gulf News reported.
Departure flights will continue to operate, it added.
According to Khaleej Times, people are barred from booking flights from the UAE to Indian destinations after April 24 on the Emirates, Etihad, flydubai and Air Arabia websites.
Source: The Hindu Business Line
During the 2020-2021 cotton season, which will be concluded in the next few days, Cameroon Cotton Development Corporation (SODECOTON) is expected to reach a new record production of 350,000 tons. This production will be up by over 20,000 tons compared to the 328,000 tons it produced in the previous season, according to internal sources.
As usual, most of the fiber from this seed cotton production will be exported to Asian countries, China notably. For many years now, the Middle Kingdom has been the main destination for Cameroonian cotton. Indeed, according to authorized SODECOTON sources, 38% of the company’s products are exported to China. Nevertheless, other countries like Bangladesh, Vietnam, and Indonesia buy Cameroonian cotton.
According to the National Institute of Statistics (INS), in 2019, Cameroon exported 18.4% of its cotton production (against 22% in 2018) to China, 12.2%, and 11% to Italy and India respectively.
The same source adds that in 2019, 98% of Cameroon’s exports to China were constituted of five products. They are notably crude oil (56.7% of overall exports to China), LNG (23.6%), raw timber (9.1%, sawn timber (5.2%), and raw cotton (3.4%).
Source: Business in Cameroon News
Pakistan’s Ambassador to the Philippines Dr. Imtiaz Ahmad Kazi said on Wednesday he would push for the inclusion of Pakistan in the Regional Comprehensive Economic Partnership (RCEP) to boost trade with the Philippines and other members of the Association of Southeast Asian Nations.
“In 2008 we had comprehensive economic partnership agreements with Malaysia, Indonesia. We also had similar arrangement in 2016 when I was director general of East Asia Pacific countries in foreign office — we were negotiating with Thailand, free trade agreement, we already have with China also, but I think most important in these days is what has been accomplished last year in November, which is the RCEP agreement between 15 countries — Asean plus 5 — and I’m going to recommend Pakistan to become part of that. Once we are in that group, automatically we will have all the Asean related tariff reductions as well as between all the 15 countries,” said Kazi during a roundtable with The Manila Times.
The RCEP, which includes the 10 Southeast Asian economies along with China, Japan, South Korea, New Zealand and Australia, is the world’s largest trade pact in terms of gross domestic product.
“So I would request them -— and they will study RCEP procedures — and if we can join that, this automatically takes care of our [Philippines-Pakistan] bilateral FTA (free trade agreements) that there’s no need [for] that once we join the RCEP. Let’s see how things work out in that, we’ll keep doing our best,” the ambassador said.
Kazi said that while there were several initiatives to increase trade between the Philippines and Pakistan, a negotiation for a possible preferential trade agreement is yet to push through.
He added that Trade Undersecretary Ceferino Rodolfo earlier informed him that the Cabinet was deliberating the possibility of relaxing import rules for Pakistani rice and pork.
“So, these are good developments. But you are right; we need to come to a point where we should have some preferential trade. We already had it in Malaysia when I was deputy high commissioner in 2009,” Kazi said.
The bilateral trade between the two countries amounted to $154 million in 2020. Pakistan’s exports to the Philippines stood at $120 million.
Philippine exports to Pakistan include garments, paper products, cosmetics, dairy products, processed fruits, coconut products, tobacco, electronic components and machineries, iron, steel, cement, and chemicals.
Top imports from Pakistan were housewares, textiles, processed foods, dairy products, marine products, fresh foods, tobacco, textile yarns and twines, and industrial products.
Besides strengthening economic ties, Kazi expressed enthusiasm on the revival of the Philippine Embassy’s Defense Wing in Islamabad in 2020 and the planned drafting of a memorandum of understanding for the Pakistan-Philippines defense cooperation.
He cited the Pakistani armed forces’ exceptional capabilities and experience in fighting terrorism, which the Philippines could benefit from.
Kazi said both countries could share intelligence since the Philippines was also dealing with terrorists’ threat particularly in Mindanao.
Source: The Manila Times Newsletter
