The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 01 JUNE, 2021

NATIONAL

INTERNATIONAL

India poised to grow at world’s fastest rate despite covid-19

The Indian economy’s resilience will be tested by its ability to overcome a devastating outbreak of Covid-19, although no one yet doubts its potential to pull off the world’s fastest pace of growth among major economies this year. The economy is on track to grow 10% in the year that began April 1, according to the median of 12 estimates compiled by Bloomberg News. That’s after several economists downgraded their forecasts in recent weeks to factor in local curbs on activity, including in India’s political and commercial hubs. Even the Paris-based Organization for Economic Cooperation and Development, which by far had the most optimistic forecast of 12.6% growth for India in its interim economic outlook in March, now sees a relatively modest 9.9% expansion. The downgrades are a message to not take the economy’s recovery for granted. Economists say the relaxation of restrictions across states will determine the strength of the rebound, while the willingness of consumers to spend -- as they did last year when lockdown curbs were lifted -- will also be key. It was pent-up demand for everything from mobile phones to cars that spurred consumption in Asia’s third-largest economy when it reopened last year after one of the strictest lockdowns that lasted more than two months. Data due later Monday will probably show gross domestic product grew 1% in the three months ended March, making it the second straight quarter of expansion since India exited a rare recession.

Source: Live Mint

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Economy Contracts By Record 7.3% In 2020-21

During the first quarter of 2020-21, India's GDP had shrunk by 24.38 per cent, hit mainly by the Covid-19 pandemic. Recording its worst ever performance in over four decades, India clocked a negative growth of 7.3 per cent for 2020-21 while the fourth quarter of the fiscal showed a meagre rise of 1.6 per cent. The GDP numbers released by the National Statistical Office (NSO) on Monday, reflect the delicate state of the nation's economy and is all the more glaring since the Centre had begun the 'Unlock' process from July 2020 onwards after imposing a nation-wide lockdown in March 2020, which had lasted till June 2020. The fourth quarter numbers are all the more poor as during the January-March period, all sectors had been completely opened and the situation was near normal, yet a 1.6 per cent growth during the fourth quarter of FY21 shows all is not well with the fiscal health of the nation. Real GDP or Gross Domestic Product (GDP) at Constant (2011-12) Prices in the year 2020-21 is now estimated to attain a level of ₹ 135.13 lakh crore, as against the First Revised Estimate of GDP for the year 2019-20 of ₹ 145.69 lakh crore, released on 29th January 2021. The growth in GDP during 2020-21 is estimated at -7.3 percent as compared to 4.0 percent in 2019-20," Ministry of Statistics & Programme Implementation said in a press release. In 2019-20, the GDP had shown a poor growth of four per cent, an 11-year low, mainly due to contraction in secondary sectors like manufacturing and construction. During the first quarter of 2020-21, India's GDP had shrunk by 24.38 per cent, hit mainly by the Covid-19 pandemic. The Central Statistics Office (CSO) released the GDP numbers for January-March quarter and financial year 2020-21 on Monday evening. Hit by the pandemic and the nationwide lockdown imposed to curb the spread of infections last year, India's economy had contracted during the first half of FY21, before returning to positive territory in October-December quarter with a growth of 0.4 per cent. In April-June, the economy had shrunk by 24.38 per cent, which improved to 7.5 per cent contraction in July-September. The CSO had projected 8 per cent GDP contraction in FY21, implying a contraction of 1.1 per cent in March quarter. Meanwhile, the Reserve Bank of India had projected a 7.5 per cent contraction for FY21. However, most of the analysts had expected the economy to bounce back at a better-than-expected pace in March quarter, and predicted that the FY21 contraction would be less than CSO's projection of 8 per cent. According to a SBI research report, India's GDP was likely to expand by 1.3 per cent in January-March quarter, thus leading to a less-than-expected 7.3 per cent contraction during FY21.

Source: NDTV

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Centre’s fiscal deficit at 9.2% in FY21, against revised estimate of 9.5%

As against the revised nominal GDP figure of Rs 197.45 lakh crore released by the National Statistics Office for FY21 on Monday, the fiscal deficit of Rs 18.21 lakh crore incurred by the Centre in the year is slightly lower at 9.2%. With its net tax revenue being 6% higher than the revised estimate (RE) presented in February, the Centre managed to narrow its fiscal deficit moderately to 9.2% of the GDP in FY21, against 9.5% budgeted (RE). This was still the highest level of deficit for the Centre since 7.8% reported in FY91, the year when economic liberalisation was unleashed amid a balance of payment crisis. Apart from a huge revenue shortfall, stimulus measures to boost economic activities, clearance of arrears to Food Corporation of India (FCI) and fertilizer companies contributed to the surge in the fiscal deficit. Substantial off-budget expenditures (read payments to FCI) were brought into the Budget as well. While a fiscal deficit of 6.8% is estimated by the Centre for FY22, some analysts expect it to go up to 7.8% or thereabouts. Successive years of higher deficits by the Centre and states have worsened India’s debt to GDP ratio; the ratio, which is close to 89% in FY21 is seen to be above 90% in FY2, as against an upper threshold of 60% suggested by an expert panel as being comfortable. Although the data released by the Controller General of Accounts on Monday put the Centre’s fiscal deficit for FY21 at 9.3% of GDP, as against the revised nominal GDP figure of Rs 197.45 lakh crore released by the National Statistics Office for FY21 on Monday, fiscal deficit of Rs 18.21 lakh crore incurred by the Centre in the year is slightly lower at 9.2%. The Centre’s non-debt capital receipts in the last financial year were 23.9% higher than RE. The revenue expenditure was 2.5% higher than RE while capital expenditure was 3.1% less than RE. However, capex in FY21 was 26.5% higher than the amount spent in FY20. Total expenditure in FY21 stood at Rs 35.1 lakh crore, which was 1.8% higher than RE. “Although the government announced a stimulus package of more than 10% of GDP in FY21 (including credit enhancement steps), actual stimulus in FY12 budget has been Rs 4.69 lakh crore or 2.4% of GDP,” said India Ratings chief economist D K Pant. Finance minister Nirmala Sitharaman said in the last Budget speech: “We plan to continue with our path of fiscal consolidation, and intend to reach a fiscal deficit level below 4.5% of GDP by 2025-2026 with a fairly steady decline over the period. We hope to achieve the consolidation by first, increasing the buoyancy of tax revenue through improved compliance, and secondly, by increased receipts from monetisation of assets, including Public Sector Enterprises and land.”

Source: Financial Express

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Economy poised to rebound, provided policy and funding let growth loose

Government final consumption expenditure, which had been an average of 10.75% of GDP over the previous four quarters, rose to a commendable, pandemic-appropriate 17.7% of GDP in Q1 of the last fiscal. Economic growth for the pandemic year has been a bit more resilient than the general consensus, coming in at a decline of 7.3%, instead of a decline of 7.5%. That apart, there are no major surprises in the data. What it does reveal is the government doing a good job of supporting the economy in the rst quarter of 2020-21, when the pandemic had hit India and the country had gone into lockdown, and then falling asleep on the job. Government nal consumption ependiture, which had been an average of 10.75% of GDP over the previous four quarters, rose to a commendable, pandemic-appropriate 17.7% of GDP in Q1 of the last fiscal.

Source: Economic Times

PM Modi’s 59-min MSME loan approval: Banks disburse 2.15 lakh applications; amount tops Rs 60k crore

Launched in November 2018 by Prime Minister Narendra Modi, the scheme offers business loans including term loans and working capital loans, and Mudra loans to MSMEs for purchase of plant and machinery, technology upgrade, product expansion, purchase of raw materials, infrastructure development, etc. Credit and Finance for MSMEs: The number of loans sanctioned by public and private sector banks and non-banking financial companies (NBFCs) to MSMEs under the 59- minute loan approval scheme as of April 30, 2021, stood at 2,31,425 involving Rs 76,670 crore. Of this, 2,15,836 loans amounting to Rs 62,722 crore were disbursed, according to the available data from the Ministry of MSME. This is up from 2,03,120 loans worth Rs 56,773 crores disbursed as of November 30, 2020, and 1,96,473 loans involving Rs 54,545 crores disbursed as of August 31, 2020. SBI, Punjab National Bank, Bank of Baroda, ICICI Bank, Kotak Mahindra Bank, Indian Bank, Central Bank of India, Yes Bank, and more are the partner banks for SIDBI’s 59-minute loan approval scheme. Launched in November 2018 by Prime Minister Narendra Modi, the scheme offers business loans including term loans and working capital loans, and Mudra loans to MSMEs for purchase of plant and machinery, technology upgrade, product expansion, purchase of raw materials, infrastructure development, etc. While in-principle approval is offered for term loans and working capital loans ranging between Rs 1 lakh and Rs 5 crore, the credit limit under Mudra loans is up to Rs 10 lakh. Mudra loans are extended under Shishu loans up to Rs 50,000, Kishore loans between above Rs 50,000 and up to Rs 5 lakh, and Tarun loans above Rs 5 lakh and up to Rs 10 lakh. Importantly, Rs 62,722 crore loans disbursed to MSMEs under the 59-minute loan scheme as of April 30, 2021, were 4.7 per cent of the gross bank credit deployed to MSMEs in March 2021. According to the RBI’s April bulletin, Rs 13,13,358 crore (Rs 11,07,236 crore to micro and small enterprises and Rs 2,06,122 crore to medium enterprises) was the gross bank credit to MSMEs as of March 26, 2021. “Getting this much disbursed from banks is also quite significant for MSMEs. Most of these loans are under Rs 1 crore and the majority are concentrated around Rs 20 lakh or less. It is mostly first-time borrowers that are taking credit under this scheme. But if you would expect this 4.7 per cent share in total credit exposure to MSMEs to be, let’s say, over 20 per cent, then that won’t happen immediately,” Govind Lele, General Secretary, Laghu Udyog Bharati told Financial Express Online. Meanwhile, in order to support Covid-hit MSMEs further, the government had on Sunday had extended the Emergency Credit Line Guarantee (ECLGS) scheme by three months to September 30, 2021, from June 30, 2021, or till guarantees for an amount of Rs 3 lakh crore are issued under the fourth revision of the scheme dubbed ECLGS 4.0. The Ministry of Finance also announced a 100 per cent guarantee cover to loans up to Rs 2 crore to hospitals, nursing homes, clinics, medical colleges for setting up on-site oxygen generation plants and included the civil aviation sector under ECLGS 3.0 scheme.

Source: Financial Express

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Production-linked incentive: What is Modi govt’s pet PLI scheme, who is eligible, which sectors have it?

PLI scheme offers incentives on incremental sales for products manufactured in India. The first three PLI schemes were approved in March last year followed by 10 new schemes which were notified in November of which six were approved later Finance Minister Nirmala Sitharaman had announced an outlay of Rs 1.97 lakh crore for the Production-Linked Incentive (PLI) scheme for 13 identified sectors in her 2021-22 budget speech. The scheme, which aimed to boost domestic manufacturing under the government’s Atmanirbhar Bharat initiative, was introduced in March last year and is expected to result in a minimum production worth more than $500 billion in five years, according to Commerce Ministry. Till early April, the PLI scheme for nine sectors was approved by the Cabinet.

What is the Production-Linked Incentive scheme and why it is needed?

As the name suggests, the scheme provides incentives to companies for enhancing their domestic manufacturing apart from focusing on reducing import bills and improving the cost competitiveness of local goods. PLI scheme offers incentives on incremental sales for products manufactured in India. The first three PLI schemes were approved in March last year followed by 10 new schemes which were notified in November of which six were approved later. The scheme for respective sectors has to be implemented by the concerned ministries and departments. According to a Cabinet statement in November last year, savings, if any, from one PLI scheme of an approved sector can be utilised to fund the scheme for another approved sector. “PLI will help MSMEs but in the second wave of the pandemic, we need to do more for MSMEs. They require help as they will be the engine of revival. There is also a secular realization that the economy is quite shallow and we need to deepen it. Once we do it, we will be able to expand units, get more industries, not just MSMEs, in the heartland of India,” Shashank Tripathi, Leader, Government Strategy, Transformation, and Aerospace and Defense, PwC India told Financial Express Online.

 

Which sectors are currently supported under the scheme?

The nine sectors for which the scheme has already been approved included electronic or technology products (Rs 5,000 crore outlay for 5 years), pharmaceuticals drugs (Rs 15,000 crore), telecom & networking products (Rs 12,195 crore), food Products (Rs 10,900 crore), high-efficiency solar PV modules (Rs 4,500 crore), etc. The other four sectors under PLI awaiting Cabinet approval were automobiles & auto components, advance chemistry cell (ACC) battery, textiles, and specialty steel. 16 applications worth Rs 35,541 crore by electronics and technology product enterprises under the scheme were approved till early April vis-à-vis 14 applications involving Rs 873.93 crore by manufacturers of medical devices. Applications have to be submitted to the respective ministry or department online which is followed by the disbursement process involving verification of the claim, approval of the disbursement, and final disbursement. “The PLI scheme is the textbook example of successful government enablement of a laggard sector. PLI 1 was aimed at mobile handset assembly. In 2014, 50 million handsets were made in India representing 19 per cent of our national demand. In 2020, 260 million handsets were made in India representing 96 per cent of national demand. Not only has the PLI scheme helped the industry grow explosively, it has all but eliminated the import of mobile handsets,” Omer Basith, Co-founder & CEO, Virtual Forest told Financial Express Online. Virtual Forest helps reduce carbon emissions of home appliances through machine solutions.

Who is eligible for the scheme?

Eligibility criteria for businesses under the PLI scheme vary based on the sector approved under the scheme. For instance, the eligibility for telecom units is subject to the achievement of a minimum threshold of cumulative incremental investment and incremental sales of manufactured goods. The minimum investment threshold for MSME is Rs 10 crore and Rs 100 crores for others. Under food processing, SMEs and others must hold over 50 per cent of the stock of their subsidiaries, if any. The selection of SMEs is based on “their proposal, uniqueness of the product and the level of product development, etc.,” according to the Ministry of Food Processing Industries. On the other hand, for businesses under pharmaceuticals manufacturing, the project has to be a greenfield project while the net worth of the company should not be less than 30 per cent of the total committed investment. Moreover, the proposed Domestic Value Addition (DVA) of the company should be at least 90 per cent in the case of fermentationbased product and at least 70 per cent in the case of chemical synthesis-based product.

What are the incentives involved?

An incentive of 4-6 per cent was offered last year on mobile and electronic components manufacturing such as resistors, transistors, diodes, etc. Similarly, 10 per cent incentives were offered for six years (FY22-27) of the scheme for the food processing industry. SMEs in the four areas such as ready to cook or ready to eat, processed fruits and vegetables, marine products, and mozzarella cheese will also be supported for manufacture innovative and organic products, according to the ministry. For white goods too, the incentive of 4-6 per cent on incremental sales of goods manufactured in India for a period of five years was offered to companies engaged in the manufacturing of air conditioners and LED lights. During the first five months of the scheme, the companies in electronics manufacturing, which had applied for the scheme, produced goods worth around Rs 35,000 crore and invested around Rs 1,300 crore under the scheme, the Commerce Ministry had said citing the Quarterly Review Reports for the quarter ending December 2020. For companies in white goods, the PLI Scheme is expected to see an incremental investment of Rs 7,920 crore over five years along with incremental production worth Rs 1.68 lakh crore, exports worth Rs 64,400 crore, and direct and indirect revenues of Rs 49,300 crore. “Supporting MSMEs is not merely a financial activity, it is an act wherein the person needs better supply chain, mentorship, etc. This is the point for us to think about ease of doing business 2.0 and take it to places where the PLI scheme is being instituted and not just in bigger cities,” added Tripathi.

Source: Financial Express

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Covid impact: India's economy unlikely to see double-digit growth in FY22

India’s economy is unlikely to see double-digit growth and may grow between 8 per cent and 9 per cent this fiscal year (2021-22, or FY22), against the estimated 11.5 per cent, according to leading economists and rating agencies. The downward revision of growth projections to as low as 10 per cent is mostly on account of stringency in restrictions by states, relatively slow vaccination pace, and the possibility of a third wave of the pandemic. However, they say the impact will not be as severe as the first wave, and expect the first quarter to see positive growth. Soumya Kanti Ghosh, group chief economic adviser, State Bank of India, said, “It is a good thing that gross domestic product (GDP) contraction of 2020-21 (FY21) is slightly better than expected, but downside of it is that FY22 numbers will now undergo revision and will be in single digits since the base has been significantly revised downwards. Given the pace of vaccination, it is unlikely a large part of the population will be vaccinated by the second quarter of the year. The overall growth prospect looks bleak,” said Ghosh. While the country’s GDP has contracted 7.3 per cent in FY21, growth was expected to bounce back in double digits in the current fiscal year as rapid vaccinations were expected to counter the second wave. D K Srivastava, chief policy advisor, EY India, said, “With a lower contraction in GDP, as well as gross value added in FY21, the sharp recovery projected for FY22 by a number of agencies, like the International Monetary Fund (IMF) at 12.5 per cent and the Reserve Bank of India (RBI) at 10.5 per cent, may have to be moderated. These projections were done prior to the impact of the second Covid wave. A combination of the Covid second wave and the revised base effect may imply a lower GDP growth for the Indian economy for FY22, which may be in the range of 9-9.5 per cent.” Alok Sheel, RBI Chair professor in macroeconomics at the Indian Council for Research in International Economic Relations, said, "The provisional estimate of FY21 GDP numbers are slightly better but unlikely to change the big picture. These numbers will need to be counter-balanced by likely downgrades of current GDP growth estimates for FY22. The consensus number for this is now down to below 10 per cent on account of the severity of the second wave of Covid-19. Thus, the overall rebound of the economy through to FY22 is likely to be lower, and the output loss greater than what can be estimated from the IMF April’s forecast. ”In view of this, despite Consumer Price Index being on the higher side, the RBI is unlikely to raise interest rates any time soon, even though the current monetary policy regime primarily targets inflation. Also, greater fiscal support might be required to stabilise growth,” added Sheel. After factoring in recent developments, even most of the global rating and research houses, such as Fitch and Goldman Sachs, have started slashing their India growth estimates for the current fiscal year. For instance, Barclays has pegged growth at 7.7 per cent in a bear-case scenario, if the country is hit by a third wave of the pandemic. The economic cost, it believes, could rise by at least a further $42.6 billion, assuming another round of similar stringent lockdowns are imposed across the country for eight weeks later this year. Devendra Pant, chief economist, India Ratings and Research, said, “As things stand now, the scale, the speed, and the spread of Covid 2.0 has once again given a push-back to the economy. This push-back, however, has not resulted in major supply-side disruption, but the rating agency believes its impact will be felt more via the subdued demand - which will be more pronounced in rural areas due to the spread of infections. So it, therefore, believes the economy will continue to need both fiscal and monetary policy support, at least in the foreseeable future to ensure recovery does not falter on the way to full recovery.”

Source: Business Standard

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Covid 2nd wave hits India Inc’s business confidence  

India Inc's business condence has been severely hit due to the record surge in Covid-19 infections in the second wave, a survey by the Federation of Indian Chambers of Commerce & Industry (Ficci) showed. India Inc's business condence has been severely hit due to the record surge in Covid-19 infections in the second wave, a survey by the Federation of Indian Chambers of Commerce & Industry (Ficci) showed. Worsening conditions as well as muted expectations about near-term prospects pulled down the overall business condence index by 20 points to 51.5, the industry body’s survey showed. Companies have backed demand for another scal package, focusing mainly on addressing the demand side. The Overall Business Condence Index stood at 51.5 in the current round after reporting a decadal high value of 74.2 in previous survey round, Ficci said in a statement on Monday. The survey was conducted during April-May and gauges the expectations of respondents from across sectors for April September 2021. The result was, however, higher than the value of 42.9 registered a year ago, which was the lowest since 2008 financial crisis, Ficci said. In the present round, 70% of participants reported weak demand conditions as a bothering factor compared to 56% in the previous round. The corresponding number last year was 77%.

Source: Economic Times

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India's declining pace of business activity bottomed out in May: Nomura

The Nomura India Business Resumption Index (NIBRI) picked up to 63.6 for the week ended May 30, from a low of 60.3 a week earlier, the rm said in a note on Monday. The declining pace of India’s business activity appears to have bottomed out as the momentum gathered pace last week, breaking an 11-week falling streak, according to Japanese brokerage Nomura. The Nomura India Business Resumption Index (NIBRI) picked up to 63.6 for the week ended May 30, from a low of 60.3 a week earlier, the rm said in a note on Monday…………..

Source: Economic Times

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A look at the potential of Kenya’s textile industry

When you hear textiles, what comes to mind? I am guessing fabric, fashion, style? Well, like I recently learnt, there is way more to it. The textile industry in Kenya is a multi-million dollar industry. With majority of Kenyan youth being in informal employment, a large chunk of them are involved in the sale of second-hand clothes aka mitumba. Among other main exports like tea, coffee, fruits and vegetables, flowers and macadamia, cotton growing in Kenya is currently only at 8% of the demand in the country. In this article, I will dissect the 3 segments of the textile industry, the process of raw material from farm to factory, and the opportunities that are yet to be tapped. The textile industry entails 3 main segments 1. Textile mills 2. Textile product mills 3. Apparel manufacturing These three segments include establishments that process fiber into fabric, and fabric into clothing and other textile products. The establishments in the textile industry produce a variety of goods. Some of these goods are sold to the consumer, others are sold as inputs to the manufacture of other products. Textile mills provide the raw material to make apparel/clothing and textile products. Textile product mills convert raw textiles into finished product, other than apparel. Such products include carpets, rugs, towels, curtains, and sheets. Apparel manufacturing transforms fabrics produced by textile manufacturers into clothing and accessories. Now, dear reader, this segment involves the most labour. The employment potential covers the cotton farmer, the textile mills laborers and the workers in the factories working on production, packaging, transportation, etc. In Kenya, cotton has been grown as a cash crop over the years, although supply does not meet demand. Cotton crop trials in Kwale county have shown that 1 acre of land can produce 800-1000kg of cotton balls. After harvesting in the cotton farms, the cotton is exported to Bangladesh or Australia for spinning, then comes back to Kenya as fabric. The fabric is then taken to EPZ zones, designated factories that promote export oriented investments. These fabrics are then made into apparel, ready for export all over the world. The USA and Canada are the top export apparel markets for Kenya. Brands like Tom Hilfiger and Polo make their products here, then sell abroad. So far it sounds like a profitable and robust process, right? Well, the flipside is that the goods produced here are exported to foreign countries, but later come back as second-hand clothes. Most Kenyans, some even in the middle class, cannot afford new clothes made in Kenya. It is for this reason that the mitumba business has grown, thanks to the massive ready market here. Other than lack of awareness, poor supply capacities and inability to reach international market are some of the major hurdles crippling the textile industry in Kenya. Since 2000, Kenya has been a significant beneficiary under AGOA (African Growth and Opportunity Act) and is one of the leading apparel exporters to the US in sub-Saharan Africa. Under AGOA, the textile industry has been termed as the biggest beneficiary, as it is now easier to exploit local markets duty free to the US, until the end of the 2025 stipulated period of the Act. The main purpose of AGOA is to assist sub-Saharan Africa economies and to improve economic relations between the United States and the region. With this in mind, Kenya is still at an advantage in exploiting these benefits as the US is a major export destination. Filling up spaces in manufacturing and spinning the cotton locally will go a long way in covering the extra resources used in exporting and spinning outside the country. With the country’s exports now at Ksh. 60 Billion annually only at 8%, this means that Kenya is sitting on a Ksh. 7.5 trillion industry. What if the raw material could be manufactured here? This means more employment opportunities. A surplus of these products would translate to better local pricing. And this would ultimately fulfill the goal of Buy Kenya Build Kenya. In conclusion, the textile industry is a sleeping giant. If we could exploit the available resources, have better seed for raw materials like cotton and localize manufacture, then we will be on our way to growing our economy to unthinkable levels.

Source: Hapa Kenya

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S. Korea, Mercosur to Hold 6th Round of FTA Talks

South Korea will hold the sixth round of free trade talks with a group of South American countries, known as Mercosur, after a hiatus of 16 months amid the COVID-19 pandemic. According to the Ministry of Trade, Industry and Energy, South Korea and Mercosur will hold virtual FTA talks for four days from Tuesday to set details on the pending trade agreement. The South American trade bloc comprises Brazil, Argentina, Paraguay and Uruguay, accounting for 70 percent of the regional population. The two sides have held five rounds of official FTA talks since the start of negotiations in 2018. The previous meeting was held in Uruguay in February 2020. The planned talks will reportedly discuss commodity, trade remedies, place of origin, intellectual property rights and dispute settlement. A ministry official said that the FTA with Mercosur will help the two parties expand trade and investment, and bolster economic ties.

Source: world kbs

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Zimbabwe, Zambia pursue joint venture industry projects

ZIMBABWE and Zambia are working on setting up industrial joint ventures riding on the recent signing of a Memorandum of Understanding (MoU) aimed at facilitating close collaboration between the two countries towards rejuvenating the manufacturing sector. Industry and Commerce Minister, Dr Sekai Nzenza, told regional ministers who attended the 4th Comesa Committee of Ministers of Industry last Thursday that the joint venture efforts would assist the two countries to unlock higher economic potential in line with regional industrialisation ideals. The two neighbouring counties will seek to utilise complementarities of national resources in key sectors to drive value-addition of skills, technology and marketing, among other capabilities, said Dr Nzenza. “So far, the governments of Zambia and Zimbabwe have signed a Memorandum of Understanding to form a Joint Industrialization Cooperation Programme, which will facilitate deeper collaboration by setting up joint ventures,” she said. “Priority sectors include agriculture and agro-processing, mining and mineral beneficiation, petrochemicals, fertilizers and pharmaceuticals, capital goods industries, textiles, forest and timber-based industries, building materials and knowledge economy, among others.” Minister Nzenza said Zimbabwe and Zambia were well positioned to develop and facilitate regional value chains based on their comparative advantages. For instance, she said copper from Zambia could be smelted at Mhangura in Zimbabwe while cotton from Zimbabwe could be ginned at Mulungushi Textiles in Kabwe, Zambia. “Such intra-regional trade could justify infrastructure projects such as the Lion’s Den to Kafue railway, right up to the Beira Corridor,” said Dr Nzenza. The intention is to establish common agro-industrial parks based on comparative advantage. Such an initiative requires a harmonised framework of managing Special Economic Zones and industrial parks at regional level.” The 4th ministerial committee meeting deliberated on key regional integration issues and closed with adoption of the draft implementation strategy for the domestication of the Comesa Local Content Policy Framework. The regional industry framework is anchored on management of Special Economic Zones and Industrial Parks and seeks to enhance industrial production during and after the Covid-19 pandemic in an inclusive and sustainable way. This is a critical step for the Comesa market, which represents 42.6 percent of Africa’s population and 27.2 percent of the continent’s Gross Domestic Product. In the past five years average GDP growth rate for Comesa has been hovering around 4.89 percent. In 2014, the region attracted investment of around $15 billion representing 27.8 percent of Africa’s total foreign direct investment inflows. According to the African Economic Outlook, real GDP in Africa grew by an average of 3.6 percent in 2015, higher than the global average growth of 3.1 percent and more than double that of the European Union. The United Nations Economic Commission for Africa (UNECA) reports that: “the continent has many growth opportunities and has become a magnet for investment driven by improved governance, better macro-economic policies, abundant human and natural resources, urbanization and the rise of the middle class, steady population growth, good economic performance, rising FDI, and huge market potential’’. This resurgence has led to growing recognition of Africa as an emerging market and a potential global growth pole, ready for economic take-off. Regional economic experts have stressed the need for the Comesa region and the African continent for structural transformation through industrialisation. This also entails embracing the precepts of the 4th Industrial Revolution and introducing innovation of new technologies to industry and commerce. Dr Nzenza has said that industrial development was critical pillar of the Tripartite Free Trade Area Agreement and the recently launched African Continental Free Trade Area, which came into force in January this year.

Source: The Herald

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A startup will build world-first textile resource recovery facility

The Australian startup Blocktexx is - thanks to a Series A Funding - underway to build and commission its world-first, commercial-scale, textile resource recovery facility in Queensland. The co-founders of BlockTexx, Graham Ross and Adrian Jones announced that the company has closed its second investment round. Private investment and government funding contributed to the AUD $5.5M capital raise in recognition of BlockTexx’s S.O.F.T. (separation of fibre technology) process as a solution to the textile waste problem in Australia and across the world. The federal government held a first national roundtable on textile waste on Wednesday – recognition of a piling-up problem that results in Australians discarding an estimated 780,000 tonnes of textile waste each year, according to a 2020 national waste report. Blocktexx has developed its process with researchers at the Queensland University of Technology. The company hopes it can help “close the loop” by diverting textiles from landfill, and at the same time replacing virgin material. BlockTexx is now underway to build and commission its world-first, commercial-scale, resource recovery facility. To date, investment in innovation in this space has been lacking, BlockTexx is excited to bring our world leading resource recovery technology to the market.

Source: Waste Management World

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Australian Fashion And Textiles Industry Worth $27.2 Billion According To New Study

First-time research by the Australian Fashion Council in collaboration with Afterpay has revealed the huge diversity and scale of the fashion industry’s ecosystem. First-time research by the Australian Fashion Council in collaboration with Afterpay has revealed the huge diversity and scale of the fashion industry’s ecosystem. A new report, High Fashion to High Vis -The economic contribution of Australia’s fashion and textiles sector found that the fashion industry: ▪ Contributes more than $27.2 bn to the Australian economy ▪ Employs 489,000 Australians (315,000 full time) – more than mining and utilities ▪ Generates $7.2 bn in export revenue, totalling 1.7 per cent of all Australian exports, more than double the value of wine and beer exports ▪ Creates opportunities for women, with 77 per cent of the workforce female, compared to the national average of 47 per cent. The report was commissioned to EY by the Australian Fashion Council and supported by Afterpay, and is the most comprehensive study of the entire fashion and textiles ecosystem in Australia. It shifts the focus from consumer trends towards the industry’s economic and workforce contribution, its current challenges, and what will shape its future development. Overall, the industry’s economic impact both direct ($16.3 bn) and indirect ($10.9 bn) represents upwards of 1.5 per cent of the national economy. EY uncovered that more than 489,000 Australians (315,000 full time) are employed in the supply chain that is the fashion and textile sector. This is more than the mining and utilities sectors respectively. With more than 77 per cent women, the industry provides significant economic security for women. The report underscored how significantly the Fashion and Textiles sector drives regional prosperity and tourism growth, given the industry’s physical retail presence in every local shopping centre and Main Street across the country. The research highlights the complex footprint of the fashion and textiles industry – from design, textile, manufacturing, retail, and education – and its interaction with the broader economy, including wool and cotton production, tourism, media and creative professional services and the recycling and reuse sectors. The highly visible, value-adding designer label sector accounts for approximately 2 per cent of total fashion industry employment. The industry supports a diverse array of roles, including pattern makers, colourists, photographers, seamstresses, stylists, and uniforms and workwear production. While the industry was able to weather the worst effects of COVID-19 with a strong shift towards online sales, the research shows leading industry challenges being rising business costs and supply chain volatility. EY observes that the industry needs to continue to evolve as it responds to changes to physical retailing, consumer behaviour and supply chains that have been accelerated as a result of COVID-19. For future growth, areas of continued focus for the industry will be responsible, circular business models where sustainable sourcing and recycling are paramount. The report recognises the scope for the industry to leverage new digital technologies for growth and innovation and to create more engaging consumer-focused experiences. It also highlights the need for further investment from government and business in reskilling talent to ensure workers have future-ready skills to meet the demands of new technology and more complex models of design, production and retail. Australian Fashion Council Chief Executive Officer, Leila Naja Hibri said, “this groundbreaking report highlights the true economic clout of our dynamic and diverse industry.” “Until now, the comprehensive value of the industry’s economic contribution – and its predominantly female workforce – has not been fully recognised. Now we can better understand the impact of this sector’s significant role in Australia’s creative economy, and the substantial potential of its future.” Afterpay Co-Founder and Co-CEO, Anthony Eisen said, “such a comprehensive assessment of the Australian fashion industry and its far-reaching economic impact is long overdue.” “It is a privilege to be associated with this report, and with the Australian Fashion Council, as we work together to focus on the long-term, sustainable future of the industry on behalf of consumers and retailers.” IMG Vice President-Managing Director, Fashion Events and Properties Asia-Pacific Natalie Xenita said: “Afterpay Australian Fashion Week is the centerpiece of our industry, and celebrates the spirit and ingenuity of our designer community.” “This week will see the industry at its best, while delivering the economic benefit of the most important marketing event of the year for the Australian fashion industry.” NSW Minister for Jobs, Investment, Tourism and Western Sydney Stuart Ayres said, “Sydney is the proud home of Afterpay Australian Fashion Week, which is a platform to showcase design and creativity, celebrate industry, foster discussion and partnerships between Australia’s creative leaders while attracting visitors to the Harbour City for a world-class event.” “It’s wonderful that these important sectors are recognised for their economic and social contribution, and there’s nowhere better to acknowledge that than at the country’s preeminent international fashion event, Afterpay Australian Fashion Week in Sydney.”

Source: Bandt

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