INTERNATIONAL
Parliamentary Consultative Committee (attached to the Ministry of Commerce & Industry) held its meeting at Goa today andreviewed India’s trade performance during the current financial year. The meeting was chaired by Commerce Minister Smt. Nirmala Sitharaman and was attended by Mr. Dinesh Trivedi, MP(Lok Sabha), Smt. Jyoti Dhurve, MP(Lok Sabha) and Mr. Ajay Sancheti, MP(Rajya Sabha). Director General, Foreign Trade (DGFT) Mr. Anup Wadhawan apprised the committee of the India’s trade performance in the current financial year. DGFT also gave a detailed presentation highlighting the important provisions of Foreign Trade Policy 2015-2020. He gave a summary of the export performance during the period April-September, 2015. He informed that
He also informed that the govt have recently expanded the coverage of Merchandise Exports of India Scheme (MEIS) on 29th October, 2015. Speaking on the occasion, Commerce Minister highlighted that Foreign Trade Policy 2015- 2020 had a sharper focus recognising that in the present scenario of global slowdown, reducing demand and falling commodity prices, the FTP has to be more vibrant and capitalize on the traditional strength of Indian economy. Ms Sitharaman said that the Policy has been formulated with a long term focus and the Ministry would think on any changes only after around 21/2 years for undertaking any midterm course correction. She said that the Policy has provided a direction so that India should not be just an exporter of raw material but should have presence in the world’s markets in value added services.
Mr. Dinesh Trivedi, MP (Lok Sabha) highlighted the concerns on 24% decline in exports in the month of September, 2015. He focussed on Chinese trade data highlighting that most of the imports from China are consumer items and for Make In India to be successful, China must be countered. He also observed that the Ease of Doing Business is still not happening and there was a need to develop trust in the industry/ businessmen to make things easy for them. Mr. Ajay Sancheti, MP(Rajya Sabha) highlighted the challenges posed by the rapid growth in e-commerce. He also raised the issue of import of Tuar Daal saying that there was number of countries having abundant stock of Tuar Daal which needs to be explored by the Commerce Ministry. Ms. Jyoti Dhurve, MP(Lok Sabha) stressed on the need for diversification in the export market to counter China.
Mr. Anup Wadhawan, DGFT and Mr. R.R.Rashmi, Additional Secretary briefed the Committee on the measures taken by the Government to tackle the present situation of declining exports and the trade deficit with China. In her response to the suggestions given by the Committee members, Commerce Minister Ms Nirmala Sitharaman said that focus was being given on sectors such as Pharma/ IT/ ITES/Gems & Jewellery/ Textiles/ Fruits & Vegetables/ meat Exports etc to improve India’s exports to China. The Commerce Minister highlighted the concern that China has been making efforts to stall India’s exports through non-tariff barriers such as Phytosanitary stipulations, standardisation issues etc. She said that she has already spoken to the Chinese Trade Minister on the sidelines of G-20 wherein China was apprised of those action points where the Chinese Govt has accepted India’s stand but has not implemented them. The Commerce Minister appreciated the presence of the members and assured that the Government was fully geared up to meet the challenges through exports on account of slowdownin the global economy.
Source: The Tecoya Trend
Diwali bonanza for the textile industry seems to be pouring in – first with the announcement of the extension of 2 per cent export benefit under Merchandise Export from India Scheme (MEIS), followed by the National Green Tribunal’s order, lifting the ban on the operation of textile units in Rajasthan.Heaving a sigh of relief over the NGT’s order dated November 4, 2015 and terming the re-opening of the dyeing units in Rajasthan as “a Diwali bonanza for textile industry”, M Senthilkumar, Chairman of the Southern India Mills’ Association, said the NGT has specified certain conditions.These include installation of primary treatment plant, payment of security deposit ranging from Rs. 2 lakhs to Rs. 5 lakhs per unit, connecting all the dyeing units to the CETP, fixing of meter in the bore well and flow meter for the water pipeline, and disposing the sledge in specified areas. It has also directed Rajasthan Pollution Control Board to renew the consent immediately after fulfilling the said conditions.“As a majority of the dyeing units are prepared to reopen the units, the problems are expected to come to an end very soon. And this has started to give positive signal and improvement in the yarn market. There is a sudden spurt in demand for yarn and the prices have also started looking up, improving by Rs. 4 to Rs. 6 a kg. This will help improve the capacity utilisation levels in the mill sector.“Export demand for cotton yarn has also picked up particularly from countries like China and Vietnam since July. Export data reveals that the total cotton yarn export between January and August this year increased by 11.89 per cent when compared to the same period of the earlier year. “The mood is upbeat and hopefully after Diwali, the prospects for the textile industry should look good,” he said.
SOURCE: The Hindu Business Line
The Karnataka unit of Textile Association India (TAI) will organise the 13th international conference on 'Functional Textiles and Apparel: Global requirements and opportunities' and the 71st All India Textile Conference early next year. About 700 delegates are expected to participate and 25 invited speakers will be talking on different subjects at the conference to be held on 22-23 January, 2016, at NIMHANS convention hall in Bangalore. Bureaucrats from state and central governments as well as representatives of several professional bodies are also expected to attend the conference, said HL Vijaya Kumar, organising chairman of the conference.
The main objective of the conference is to help in building successful relationships between the leading textile manufacturers, retailers, and other external agencies that are in the same trade by addressing issues concerning them and identifying the common interests to shape up the future. It will provide an ideal opportunity to do business and focus on current industry issues. With the theme of 'shaping the future', emphasis will be on a shared vision for the future of the textile and apparel community, where each part of industrialisation and supply chain plays a role.
SOURCE: Fibre2fashion
Central Cottage Industries Corporation of India Ltd. (CCIC) gave a dividend of Rs. 18.67 lakh for the year 2014-15 to Government of India. The dividend cheque was presented to Shri Santosh Kumar Gangwar, Hon'ble Union Minister of State for Textiles (I/C), by Shri Pramod Nagpal, Managing Director, CCIC in the presence of Dr. S. K. Panda, Secretary (Textiles), Shri A. Madhukumar Reddy, Joint Secretary and other senior officials of the Ministry. CCIC achieved a turnover of Rs. 82.84 crore in 2014-15 and earned a pre-tax profit of Rs.167 lakh as against pre-tax profit of Rs.36.63 lakh in the previous year. CCIC provides direct marketing support to approximately 6,000 artisans, weavers and craft persons. It has also set up two Common Facility Centres in Varanasi for the benefit of weavers.
SOURCE: PIB
All construction activities in the proposed textile park, taken up under the Scheme For Integrated Textile Parks (SITP), have come to a halt due to the Handloom and Textile Department officials allegedly not releasing the share of the State government funds. Only some land-levelling activities, the laying of the foundation stone for the construction of the compound wall and drainage construction has been carried out. Managing director of Gulbarga Textile Park, Subash Kamalapure, told The Hindu here on Friday that delay on the part of the Handloom and Textile Department officials to release the State government’s share of Rs. 2.5 crore released more than three years back was the main reason for stopping all construction work. The total cost of the project was Rs. 49 crore and Rs. 1.50 crore was the share of the Union government. The non-release of funds has also thwarted the Gulbarga Textile Park from getting the second instalment of the cost of the project from the Union government.
According to Mr. Kamalapure, the officials of the Handloom and Textile Department have added new condition that the promotors — Gulbarga Textile Park — should invest their equity amount of Rs. 1 crore in the park. Mr. Kamalapure said that the government had earlier imposed one condition that the project should get final clearance of the Union Ministry of Textiles. “We have already obtained the final clearance for the textile park three years back and fulfilled this condition,” he said.Besides having common facilities like effluent treatment plant, washing facility, creches for children of women workers and rest rooms, the textile park, which had attracted attention of major garment manufacturers like Raymonds, Levis and others, would have worksheds with different sizes to accommodate different machineries used in the garment manufacturing. The textile park also planned to produce the gloves and masks used in industries and hospitals and sanitary napkins and diapers in a largescale.
SOURCE: The Hindu Business Line
The government and financial sector regulators flagged shrinking exports as a major area of concern, amid warnings that an aggressive use of trade defence tools might adversely impact the manufacturing sector. A proposal to put in place a mechanism for expedited recovery of funds mopped up through collective investment schemes (CIS) was also discussed at a meeting of the Financial Sector Development Council (FSDC) chaired by finance minister Arun Jaitley on Thursday. CIS have emerged as a major area of concern, given that deposits are being accepted by unregistered or unregulated schemes and re covering money from them is often a tricky issue. While the report by a task force headed by Ajay Tyagi, additional secretary in the finance ministry, is yet to be made public, some officials suggested that the move would not be easy to implement, considering the states would have to enact separate laws, while the Centre could only provide a model legislation. "It will be a time-consu ming process and in the interim we need to recover the money and end disputes," said a source.
At the FSDC meeting, some options to bolster exports were also discussed as part of an overall review of the economy , sources said. Although there were suggestions of using anti-dumping duty to check cheap imports, especially from China, which has surplus capacity for several products due to low domestic demand, some officials cautioned against a blanket use. "There should be a distinction between how the duties are levied. It needs to be done carefully ," said a source. For instance, it was pointed out that higher levies, including customs duty , on raw material or intermediates, could push up the price of finished goods and a specific reference was made to steel, where several steps have been taken, and automobiles. Exports, which have declined for 10 months in a row, are a major policy worry , although the government has so far done little beyond offering benefits to a few more industry segments. A proposal to provide interest subsidy to exporters has been pending and the commerce ministry has virtually no action plan to bolster trade in medium term.
SOURCE: The Economic Times
Aeropostale, an American mall-based specialty retailer, today launched its first flagship store here in collaboration with Textile major Arvind. The American youth brand known for its jeans, hoodies and t-shirts aims to have approximately 30 standalone stores and 25 shop-in-shop locations in the next three years with Arvind Group firm Arvind Lifestyle. It will offer a wide range of clothing and accessories from their Fall-Winter 2015 collection for boys and girls, a joint statement said. "India is expected to become the world's youngest emerging economy by 2020, with around 64 per cent of its population in the working age group. Having understood this, we are glad to add power players like Aeropostale as additions to our already fast growing fashion portfolio," Arvind Lifestyle MD and CEO J Suresh said. "This young consuming class has new aspirations and is more open to experimenting with fashion brands", he added.
Aeropostale Inc Senior Vice President, International and Global Licensing Kenneth Ohashi said: "Arvind brings tremendous knowledge and expertise to building brands and operating licensed stores in India. We look forward to this exciting launch and continuing our rapid growth throughout the country." Aeropostale is primarily a mall-based specialty retailer of casual apparel and accessories targeting young women and men through its Aeropostale stores.
SOURCE: The Economic Times
Prime Minister Narendra Modi said the Indian economy was in much better shape than it had been when he took over thanks to his government's policy changes and that this improvement had come about despite a deteriorating global situation. "By almost every major economic indicator, India is doing better, than when we took office 17 months ago," Modi said on Friday at the Delhi Economics Conclave. "GDP growth is up and inflation is down, foreign investment is up and the current account deficit is down, revenues are up and interest rates are down, the fiscal deficit is down and the rupee is stable." Modi, who's just ended several weeks at the head of a relentless election campaign in Bihar, said India's economic success was the result of well thought-out policies. He also said that the goal of reforms was not to grab headlines but better people's lives. "What is the aim of reform? Is it just to increase the measured rate of GDP growth? Or is it to bring about a transformation in society? My answer is clear. We must reform to transform," Modi said. He said the weeding out of corruption was an achievement that the government's "worst critics" do not dispute. "For many years, economists and other experts have held corruption to be one of the main constraints on the growth of any developing economy," he pointed out. The removal of discretion in the allocation of key resources was also a key reform, he said. "Our auctions of coal spectrum and FM radio licences have produced major additional revenues," he said, adding that the government is taking several steps to serve the honest taxpayer better. He said digital filing now covers 85% of all income-tax returns and that he had asked tax authorities to move to electronic scrutiny. The department should also change the appraisal system to show whether orders and assessments had been upheld on appeal. "This will deter corruption and also motivate officers to pass correct orders," he said.
Modi also listed reforms in the working of the state-owned banks and doing away with interviews for lower-level jobs as being part of this strategy. "We inherited a system where cronyism and corruption were believed to be rampant in banking decisions and in appointments to PSBs (public sector banks)," he said. "Interference in banking decisions has ended... Major steps have been taken to improve efficiency." He also said the government's efforts to bring back black money stashed abroad has led to the detection of as much as Rs 10,500 crore of illegal wealth. Reforms to transform India were a "marathon and not a sprint," Modi said. These included embarking on the path of fiscal consolidation and entering into a monetary framework agreement with the Reserve Bank of India to curb inflation. He said the rate at which highway contracts were being awarded has risen to 23.4 km per day from 5.2 km in FY13 and 8.7 km in FY14. "These managerial reforms in the working of the public sector will have large multiplier effects throughout the economy," he said.
With a view to turn the country into one of job creators rather than just job seekers, the government has floated the Micro Units Development & Refinance Agency or Mudra credit scheme. This is part of the government's push to widen access to the banking system. "Financial inclusion is not just about opening bank accounts or enabling electronic payments. Our financial inclusion reform has been transformational," he said, adding that accounts opened under the Pradhan Mantri Jan-Dhan Yojana now have a balance of Rs 26,000 crore.
SOURCE: The Economic Times
The India-US commercial relationship has a busy calender ahead in the next 12 months, which is aimed at encouraging greater ambition in expanding bilateral trade and addressing market access challenges facing US companies, a senior Obama administration official has said. "In the coming months, our commercial engagement will be focused on encouraging greater ambition in expanding US-India trade and address market access challenges facing US companies," Arun M Kumar, Assistant Secretary of Commerce for Global Markets and Director General for the US and Foreign Commercial Service told a think-tank this week. In February next year Deputy Secretary of Commerce Bruce Andrews would lead a high powered Infrastructure Trade Mission to India. The two countries would also hold their meeting of the Innovation Forum, in addition to the annual India-US Commercial Dialogue and the CEO's Forum and the second edition of the Strategic and Commercial Dialogue, he said.
Among other things, the commercial engagement would also focus on continuing to advance a whole-of-government approach on both sides through the S&CD and the CEO Forum. It will also focus on leveraging CEO Forum recommendations to further encourage ambition and prioritise work under the S&CD and institutionalising the S&CD and formalising the link between the S&CD and the CEO Forum through public-private working groups, Kumar said. "As we plan ahead, we will be increasingly focused on how to take advantage of the positive developments taking place at the State level," Kumar said. Noting that India's states are increasingly the focus of economic activity and laboratories for initial economic reform initiatives, he said the American engagement on three US-designated smart cities requires robust state-level communication. "We have Commerce offices in seven states in India, providing us the ability to work locally in those states. In addition we have an American Business Corners system, a network of agreements with key business chamber organisations in 15 2- and 3-tier cities in India. The system enables Indian importers in these cities learn about our services and programs and make connecting with American businesses. "Our SelectUSA unit works closely with states on both sides. The recent successful Investor Roadshow in India was very well attended and we have set the stage for future Indian investment in the US," he added."At Commerce, we are intent on realising the promise and potential of the commercial relationship, and have a busy year ahead of us to make progress and deliver concrete results during the first year of the Strategic & Commercial Dialogue," Kumar said. "The overarching goals for India US commercial engagement is to reach the goal of USD 500 billion in annual two-way trade, develop a balanced trade relationship (to increase US exports, not just imports from India) that creates jobs in both countries and construct a shared commercial agenda that will enable meaningful progress, including in the short term, by better aligning our goals with PM Modi's domestic agenda.
Achieving these goals, he said, will require India to integrate into global supply chains, making in India requires first "Trading with India", he said adding that the Commerce Department is working to open channels for US private sector capabilities and resources in support of these initiatives. "We are engaged in areas like Infrastructure and Smart Cities working in close coordination with USTDA and NIST among others," he said.
SOURCE: The Economic Times
Two of America's major trade bodies, the National Council of Textile Organisations (NCTO) and the American Apparel & Footwear Association (AAFA) have said they would initiate a thorough analysis of the Trans Pacific Partnership (TPP), the text of which has been released by the Office of the US Trade Representative. In a press release, the NCTO said the release of the TPP text will allow NCTO to begin an exhaustive review of the details of the agreement. NCTO will immediately initiate a thorough analysis of the text to determine its impact on its members, the US textile industry as a whole, and its Western Hemisphere trading partners. “Based on our generalized understanding of the final agreement reached last month, we believe that many of the US textile industry's key objectives have been met, including a yarn forward rule of origin for most products and reasonable duty phase-outs for sensitive textile and apparel items. While we need to thoroughly familiarize ourselves with the fine details of the agreement, we feel that the US government was able to achieve a well-balanced outcome for all parties, including US textile manufacturers and our partners in the Western Hemisphere,” NCTO said. The AAFA said free trade agreements have the potential to help US industries, including its members, access new markets, new suppliers, and new customers.
"The Trans-Pacific Partnership agreement represents nearly 40 per cent of the world's economy and could present a tremendous opportunity for our industry. We are hopeful that the final agreement contains provisions to enable our members-as well as the millions of US workers they employ and the billions of customers they serve-to benefit from the deal as soon as it is implemented,” it said in a statement. AAFA said it looked forward to reviewing the details of the agreement. “Throughout this process, we communicated what's needed to create trade opportunities for the clothing and shoe industry. Now we plan to evaluate those provisions that impact the industry, review the details, and consult with our members," it said. The much-awaited full text of the 12-nation TPP reveals that many tariffs on US exports of textiles and apparel to the other TPP markets will reduce to zero on day one. While the TPP requires a “yarn forward” rule of origin to ensure that the benefits of the pact go to workers and businesses in the 12-member countries, the chapter on Textiles and Apparel includes a “short supply list,” which provides TPP partners with flexibilities in cases where the TPP members do not produce enough of a particular fabric or yarn to meet production needs.
SOURCE: Fibre2fashion
With the conclusion of Trans-Pacific Partnership agreement, the apparel produced in the Southeast Asian country for the United States market will be tariff-free. This has enticed Chinese textile manufacturer to Vietnam which is turning into a hot spot as it has become a major importer of fabrics and a leading exporter of clothing. But weak domestic production has left local companies struggling to cope with international demand. However, before the zero-tariff policy reached by the TPP, many labor-intensive Chinese industries had already shifted to Southeast Asian countries, said Zhang Jianping, a senior researcher at the Institute for International Economic Research under the National Development and Reform Commission. The labor costs there are four to five times cheaper than in China. Here, the country is undergoing an economic transformation. In China's developed coastal regions, high-tech industries are springing up to replace labor-intensive industries, he added. The trend has been gathering pace, and the new policy will speed up the process. Huafang Co, a textile business in Shandong province which is also listed on the Shanghai stock Exchange, plans to set up a high-end fabric factory in Vietnam with a 700 million yuan ($110 million) investment. This will be the company's first overseas factory.
Another 150 million yuan will be pumped into a research and development center in Vietnam to look into new technologies covering the whole industry chain, including cotton, spinning, weaving and dyeing. Huafang is also planning to issue about 120 million shares for corporate investors, with an issuing price of about 7.4 yuan per share. This will help the company raise 900 million yuan to finance its Vietnamese project. That was another key factor in Huafang's decision to set up a manufacturing center in Vietnam. Now the company plans to set up two production lines, although it will take up to three years to build the plant. Luen Thai International Group, Hong Kong's largest clothing company, Sanshui Jialida TextileCo, based in Guangdong province, and Vietnam's Vinatex Co are also planning to establish a textile industrial park. According to Pei Chunqu, former deputy minister of trade and industry in Vietnam, textile industry in the country has been growing slowly.
SOURCE: Yarns&Fibers
The Directorate of Textiles is going to be vested with the authority to regulate the readymade garment (RMG) sector under a new law aimed at streamlining the country's main export-earner. Officials said the new law in the making--The Textile Industries Establishment Act 2015-would take effect early next year. They said the draft law proposed making the Directorate of Textiles under the Ministry of Textiles and Jute as an effective "sponsoring authority" for the apparel industry. It means the directorate would have the authority to control all major activities, including registration, permission for import, utilisation declaration (UD) and even import of capital machinery.
According to the legal provisions, none can establish and run textile and garment factories without registration from the Directorate of Textiles. If anyone violates the law, there is a provision for one-year imprisonment or Tk 100,000 penalty. After enactment of the law, all the new establishments (textiles and garments) would have to register under the act and all the existing factories would have to come under registration with the directorate within six months. As per the proposed law, the directorate will enjoy the authority to suspend or cancel registration of any industry if it finds proper reason to do so after carrying out investigation. The government has already sent the draft of the law to the stakeholders for their comments and held a number of meetings in this regard. "We are working hard to formulate the law," said State Minister for Textiles and Jute Mirza Azam while talking to The Financial Express. "We are hopeful about enacting the law within this year."
Officials concerned, however, hinted that it might take some more time as they are yet to sit with major stakeholders, including Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), two apex trade bodies of the export-oriented woven and knitwear industries respectively. Most of the stakeholders, including BGMEA and BKMEA, have already opposed the move as they termed some of the provisions of the proposed act detrimental to the overall growth of the industry. BKMEA demanded the scrapping of the provision of recommendation to the customs authorities regarding release of imported capital machinery and indemnity bond. The Ministry of Textiles and Jute will soon convene an inter-ministerial meeting to discuss the issues elaborately with stakeholders to settle the differences, defuse confusions and finalise the draft law. The draft law will be sent to the cabinet committee hopefully early next month for their approval before going to the cabinet. Officials, however, expected the new law by early next year. After enactment of the law, officers designated from the directorate could inspect factories anytime and the factories would be bound to provide documents as per requirement. "The textile directorate will establish a database of the industries based on the information provided by the factories," says the draft law. "The industries will not be able to enjoy any government facilities if found reluctant to take registration," said an official of the directorate.
Furthermore, the proposed law says all the textile industries, excepting silk and handloom ones, have to be registered with the directorate. According to the directorate, there are more than 6,000 RMG factories and about 1500 textile mills, many of which are being operated without proper monitoring. "To have a legal ground to control textile industries the government has taken the initiative to formulate a law," said Mohammad Ismail, director of the Directorate of Textiles. The textile industries had been under control of the Department of Textiles until 1993, when the government transferred the functions of sponsoring authority to the Board of Investment (BoI). "But the government again on May 26, 2013 handed over the authority of textile industries to the textile directorate. Now, the ministry is trying to formulate a law for assisting the directorate in ensuring smooth run of textile industries," said an official of the ministry. The directorate, as per the proposed law, will play the role of coordinator and maintain coordination with the National Board of Revenue, the Export Promotion Bureau, the Registrar of Joint Stock Companies and Firms, the Fire Service and Fire Defence, the Directorate of Labour, the Ministry of Power, the Ministry of Water Resources and other stakeholders. It will also maintain coordination with the Technical Education Board, the University Grants Commission and universities in fixing curriculum related with textile industries.
SOURCE: The Financial Express Bangladesh
During the last three and a half months, over one million spindles capacity has been closed down in Pakistan mainly because of the unbearable high cost of doing business, said Tariq Saud, chairman of All Pakistan Textile Mills Association (APTMA).He said that all these spindles were predominantly contributing to the exports of the country.The main cause of closure is the unaffordable cost of energy, particularly the extortionate and unjustified burden of Rs3.63 per unit surcharges included in the electricity bills that have been enforced on the industry to deal with the continuous inefficiency of the power sector, he said.He further said that it has become difficult to survive competition with such an unjustified addition of surcharges which has led to an increase in the cost of electricity to Rs14 per unit against regional competitors, who are paying less than Rs9 per unit.He stated that a large number of textile mills were not able to pay monthly electricity bills because of such unprecedented losses.
It is expected that more mills would soon shut down their operations when they will receive the heavy monthly bills by November 20, 2015 onwards.Closing down one million spindles means more than one million unsold cotton bales, a loss of one million jobs and production losses, he added.Instead of improving efficiency of the power sector, government has levied these surcharges which have forced the mills to shut down, he stated.
SOURCE: Yarns&Fibers
The Ethiopian government announced plans to generate USD 2.3 billion revenue from the export of textile products in GTP II period, according to the Daily Monitor. The government plans to draw such amount of revenue by raising competitiveness of textile companies through capacity utilization, encouraging local and foreign investments and expanding industrial parks. The textile sector has earned USD 455 million in the GTP I period, yet the plan was to garner USD 1 million. Ayka Addis Textile and Investment Group had made a 60 percent contribution. It had registered USD 272.2 million export revenue in GTP I period. Adama Spinning Factory, Bahir Dar Textile S.C., Bay Kebire Enterprise, Elsie Addis Industrial Development PLC, Kombolcha Textile S.C., MNS Manufacturing PLC and Selendawa Textile S.C. had contributed 20 percent share to the export in GTP I.
SOURCE: The 2merkato
Garment workers' real wages have increased but there is scope for a further increase as competitiveness of the $27 billion export-earning sector has not eroded due to a wage spike in 2013, according to a study by Bangladesh Institute of Development Studies. The study calls for participation of global buyers and retailers to improve working conditions so that workers can make a living, saying that buyers and retailers take 75-88 margins over the retail prices of an apparel item. “They cannot avoid their responsibility of sharing part of the cost of social upgrading," said Nazneen Ahmed, senior research fellow of BIDS, who presented the study at a programme -- BIDS Research Almanac 2014-15 -- at the institute's auditorium in Dhaka. Dev Nathan of New Delhi-based Institute for Human Development co-authored the report.
The study finds that the minimum real wages of garment workers rose 37 percent in 2013, helping to improve their economic and working conditions. Citing the fears of entrepreneurs that wages would affect competitiveness, she said the reality is different: an increase in wages and an improvement in working conditions have not resulted in the loss of international competitiveness. The unit value of garment exports rose 16.86 percent over the two-decade period of 1990-2009, benefiting entrepreneurs, said Nazneen. The rate was higher than in India, China and Vietnam.
Referring to International Labour Organisation, she said even after the increases in wages, Bangladesh's minimum wage is less than that in competing countries: $68 a month against $80 in Cambodia, $71 in India, $79 in Pakistan and $78 in Vietnam. Despite improvements in economic and working conditions, she said: "These progresses still do not amount to what the ILO terms 'Decent Work', and the minimum wage in Bangladesh is not yet a living, family wage." The 2006 price data of some garments showed that the living wage as a percentage of retail was as low as 0.3 percent to as high as 3 percent. The living wage was taken at Tk 5,000, as against the then-existing minimum wage of Tk 1,662 in 2006, she said. Nazneen said the costs of factories will go up if they pay properly, invest in ensuring worker safety, and provide other legally mandated benefits to workers. "These increased costs have to be borne somewhere in the global production network and shared between buyers and suppliers." "What is now needed is to make a regular quadripartite system (manufacturers, workers, government and global buyers) to manage industrial relations in the garment industry in Bangladesh."
Another study on municipal finances in Bangladesh showed that about 90 percent of holding taxes are not paid due to inefficiency and corruption. Out of Tk 100, only Tk 10 is collected in municipalities, said Mohammad Yunus, senior research fellow of BIDS. BIDS Research Fellow Abdul Basher recommended the government should play a role in promoting migration of the poor, in another study on migration from Bangladesh for overseas jobs. State Minister for Planning MA Mannan, and economists Prof Wahiduddin Mahmud and Hossain Zillur Rahman also spoke.
SOURCE: The Global Textiles
