The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 04 JUNE, 2021

 NATIONAL

INTERNATIONAL

 

Impressive Trade Performance of India in May 2021

The Commerce Secretary Dr Anup Wadhawan today said that India’s export performance continues to be impressive, with provisional data of merchandise exports in May 2021 showing a significant growth of 67.39 per cent over May 2020 level and 7.93 per cent over May 2019 level. Talking to media, he said that Merchandise export, excluding PoL and Gems & Jewellery, increased by 45.96 per cent in May 2021 over the same period of 2020-21 and by 11.51 per cent over the same period of 2019-20. Merchandise imports registered a positive growth of 68.54 per cent during May 2021 visà-vis the same period last year. As compared to May 2019, imports have declined by (-) 17.47 per cent during May 2021. Service exports estimated for May 2021* are USD 17.85 Billion, registering a positive growth of 6.44 per cent vis-à-vis May 2020. The estimated value of services import for May 2021* is USD 9.97 Billion registering a positive growth of 0.30 per cent vis-à-vis May 2020. While, the estimated value of Net of services export for May 2021* is USD 7.88 Billion registering a positive growth of 15.39 per cent vis-à-vis May 2020. Commodity wise growth trends The commodities/commodity groups which have recorded positive growth during May 2021 vis-à-vis May 2020 are Other cereals (823.83%), Jute mfg. including floor covering (255.77%), Petroleum products (199.85%), Handicrafts excl. handmade Carpet (192.05%), Gems and jewellery (179.16%), Leather and leather manufactures (155.06%), Manmade yarn/fabs./made-ups etc. (146.35%), Meat, dairy and poultry products (146.19%), Cotton yarn/fabs./made-ups, handloom products etc. (137.92%), RMG of all textiles (114.15%), Carpet (107.97%), Electronic goods (90.8%), Ceramic products and glassware (81.39%), Mica, Coal and other ores, minerals including processed minerals (74.95%), Cereal preparations and miscellaneous processed item (53.66%), Engineering goods (53.14%), Cashew (38.4%), Marine products (33.59%), Iron ore (25.68%), Plastic and Linoleum (20.44%), Organic and inorganic chemicals (20.11%), Tobacco (15.06%), Rice (12.22%), Oil meals (8.28%), Spices (1.37%) and Coffee (1.07%). Iron Ore exports have been consistently growing throughout 2020-2021 and in the first two months of 2021-22. Rice export has been consistently growing during 2020-2021, April 2021 and May 2021 except for the month of April 2020. Cereal preparations & miscellaneous processed items, Other Cereals and Oil Meals exports have been consistently growing since June 2020. Jute Mfg. including Floor Covering and Carpet exports have been consistently growing since July 2020. Handicrafts excl. handmade carpet, Cotton Yarn/Fabs./made-ups, Handloom Products etc., Ceramic products & glassware, spices and ‘others’ categories exports are growing consistently since September 2020. Mica, Coal & Other Ores, Minerals including processed minerals export is consistently growing since October 2020. Sectors such as Leather & leather products, Man-made Yarn/Fabs./made-ups etc., and Marine products, which had been exhibiting negative growth during the pandemic (2020- 2021), have picked up from March 2021 onwards.

Source: PIB

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Trade Winds: Commerce secretary Anup Wadhawan says India to start FTA talks with UK, EU this year

Since its pull-out of the Beijing-dominated RCEP trade negotiations in November 2019, India has been seeking to expedite talks with key economies for “fair” and “balanced” trade pacts India and the UK are engaged in preparatory work for launching a free trade agreement (FTA) and formal negotiations would start later this year, commerce secretary Anup Wadhawan said on Thursday. The negotiation for a planned FTA with the EU would resume even before that, he added. New Delhi was also exploring the feasibility of either reviewing or upgrading various existing trade agreements, he said. For instance, it’s seeking a review of its FTAs with Asean, Japan and South Korea to make them more balanced, and planning to upgrade its preferential trade agreement with Chile and Mercosur. Since its pull-out of the Beijing-dominated RCEP trade negotiations in November 2019, India has been seeking to expedite talks with key economies for “fair” and “balanced” trade pacts. Analysts have already pointed out that the FTAs signed with Asean, Japan and Korea (all before 2010) have added to India’s large trade deficit, and domestic exporters haven’t been able to benefit much from them. In FY20, before the pandemic spread its tentacles, India’s trade deficit with Asean was as high as $24 billion. Similarly, its deficit with South Korea and Japan stood at close to $11 billion and $8 billion, respectively. Refuting claims of a few analysts, Wadhawan stressed that the production-linked incentive (PLI) schemes announced by the government in the aftermath of the pandemic “are fully compliant with the World Trade Organization (WTO) rules, as the incentives are tied to output”. The government has announced 13 PLI schemes, covering sectors, including auto, telecom, electronics, pharma, advance chemistry cells, textiles, food processing and steel. The total promised incentives of Rs 1.97 lakh crore will be spread over five years. Wadhawan exuded confidence that the country would be able to meet the ambitious $400-billion merchandise export target for FY22. The “impressive” increase in exports in recent months has been driven predominantly by growth in external demand, and not so much by a rise in global commodity prices, he added. Merchandise exports have exceeded even the pre-pandemic level (same months in 2019) for three months through May despite the second Covid wave, indicating that a recovery is probably taking roots. Of course, export growth was low even before the pandemic – outbound shipments rose about 9% in 2018-19 but again shrank by 5% in 2019-20. Exports dropped 7% last fiscal, weighed down by the Covid disruptions. So, only a sustained uptick over the next 2-3 years would help the country recapture the lost height of exports.

Source: Financial Express

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India to notify PLI scheme for auto components, steel, textile

The government last year approved the PLI scheme for 13 sectors with a total outlay of nearly Rs 2 lakh crore over a ve-year period. The government is looking at notifying the production-linked incentive (PLI) scheme, that was announced to boost domestic manufacturing, for sectors like auto components, steel, and textiles. Additional Secretary in the Department for Promotion of Industry and Internal Trade (DPIIT) Sumita Dawra said that the government introduced the PLI scheme to encourage an incentive-led model for manufacturing, attracting advanced technologies, bringing in economies of scale and meeting quality standards. "We are going as per strict timelines and we will now look to notify the scheme under auto components, steel, and textiles," she said at a PHDCCI webinar on 'Implications of PLI scheme on India's manufacturing and trade competitiveness' on Thursday. "So, India is pitching itself to be part of this global supply chain by attracting investments in these PLI sectors," Dawra said. The government last year approved the PLI scheme for 13 sectors with a total outlay of nearly Rs 2 lakh crore over a veyear period. Speaking at the webinar, PHDCCI President Sanjay Aggarwal said that the scheme would help attract both domestic and foreign investments. Kuntal Sharma, Economic Adviser, Ministry of Food Processing Industries, said that the sector holds huge scope for growth and expansion and the scheme will help in achieving that. "PLI will help increase value addition in the sector as currently it is less," he added.

Source: Economic Times

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Google Tax: Expect global pact soon, says Commerce secretary

On Wednesday, the US announced a 25% tariff on annual imports of over $2 billion from six countries (India, Britain, Austria, Italy, Spain and Turkey) it intended to target. However, it immediately held back the punitive steps to allow time for global tax negotiations. A day after the US deferred its plan to slap punitive tariffs on six countries, including India, by six months for imposing a digital services tax (DST) on e-commerce companies, India’s commerce secretary Anup Wadhawan expected a global understanding on the levy soon. Asked about the US move, Wadhawan told reporters that a global agreement on the taxation matter relating to e-commerce is important, as it “doesn’t just concern India but many others”. The OECD has already taken an initiative to hammer out an international agreement on such taxations, he added. In a report in January, the USTR office had claimed the DST imposed by India, Italy and Turkey discriminated against American companies and were inconsistent with international tax principles. India had strongly refuted the USTR claims and asserted that its equalisation levy or the so-called ‘Google tax’ was “non-discriminatory”, had only prospective application and didn’t specifically target American companies. On Wednesday, the US announced a 25% tariff on annual imports of over $2 billion from six countries (India, Britain, Austria, Italy, Spain and Turkey) it intended to target. However, it immediately held back the punitive steps to allow time for global tax negotiations. In a statement, US Trade Representative (USTR) Katherine Tai said: “The United States remains committed to reaching a consensus on international tax issues through the OECD and G20 processes. Today’s actions provide time for those negotiations to continue to make progress while maintaining the option of imposing tariffs under Section 301 if warranted in the future.” The USTR had proposed additional tariffs of up to 25% ad valorem on 26 categories of Indian goods, expecting to match the duties that New Delhi would garner by imposing its equalisation levy. The goods include shrimps, basmati rice, cigarette paper, cultured pearls, semi-precious stones, silver powder and silver jewellry, gold mixed link necklaces and neck chains and certain furniture of bentwood. Given that the world is getting increasingly more digitalised and companies are generating revenue out of transactions undertaken abroad, several countries have begun to tax such transactions that originate from their territories. The US, which is home to several e-commerce giants, including Amazon, has opposed such a move. As for India, its levy is a sort of digital tax on non-resident e-tailers at 2% on the revenue they generate in India from e-commerce supply or services. It was introduced in the Finance Act 2020 (effective from April 1, 2020) by widening the scope of an existing equalisation levy to include e-commerce players and intermediaries. Earlier, the equalisation levy (at 6%) was rolled out in 2016 and slapped on the revenues generated on B2B digital advertisements and allied services of the resident service provider. Last year’s change was brought in to nullify the advantage of foreign-commerce firms sans a physical presence in India over domestic competitors.

Source: Financial Express

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DPIIT registers a record 50,000 start-ups

Recognition by the DPIIT is also a must for applying for easier compliance norms (especially labour and environmental standards), relaxation in public procurement rules, funds under the SIDBI’s Fund of Funds and fast-tracking of patent applications at muchreduced fee, among others. The department for the promotion of industry and internal trade (DPIIT) has recognised as many as 50,000 start-ups so far, enabling them to take advantage of a plethora of tax and other incentives extended by the government under the Start-up India programme. The last 10,000 start-ups were added in just 180 days, against 245 days for the previous 10,000 and 808 days for the first 10,000. Currently, DPIIT-registered start-ups that were incorporated between April 1, 2016, and March 31, 2021, are allowed to apply for the income-tax holiday and the eligible ones get it for a block of three out of the first 10 years. Start-ups wishing to apply from an exemption from the so-called ‘angel tax’, also need to be recognised by the DPIIT. Recognition by the DPIIT is also a must for applying for easier compliance norms (especially labour and environmental standards), relaxation in public procurement rules, funds under the SIDBI’s Fund of Funds and fast-tracking of patent applications at muchreduced fee, among others. The fast registration, especially in the wake of the Covid-19 pandemic, augurs well for start-ups, many of which are struggling to cope with liquidity woes. According to an official statement, recognised start-ups have now been spread across 623 districts. As many as 1,79,181 jobs were created by recognised start-ups in 2020-21, against 1,63,485 in 2019-20 and 92,843 in 2018-19. In the first two months of the current fiscal, the start-ups have created 34,949 jobs despite the second Covid wave, the government said. According to the official statement, 48,093 recognised start-ups have added 5,49,842 jobs, with an average number of 11 employees per start-up. On January 16, 2016, launching an action plan on ‘Start-up India’, the government had envisaged for itself the role of only a “facilitator” for investments, promising to cut the maze of red tape that had hampered the country’s economic growth for decades and squeezed employment opportunities. As many as 30 states and Union territories have now announced specific start-up policies. Maharashtra, Karnataka, Delhi, Uttar Pradesh and Gujarat are the major states housing start-ups.

Source: Financial Express

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Input tax credit blocked for even minor lapses

The tax department is claiming that there could be circular trading or other frauds in many of these cases as tax credits are not tallying, but legal experts say blanket rejection of tax credit will lead to litigations and increase cash ow issues of companies. The indirect ta department has started blocking inputta credit of the whole supply chain under the GST framework if even one of the vendors or suppliers has missed out ling requirements, impacting several corporates, and prompting some to consider legal recourse. The tax department is claiming that there could be circular trading or other frauds in many of these cases as tax credits are not tallying, but legal experts say blanket rejection of tax credit will lead to litigations and increase cash.

Source: Economic Times

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Rupee depreciates 9 paise to 73.18 against US dollar in early trade

The Indian rupee slumped 9 paise to 73.18 against the US dollar in opening trade on Thursday tracking strengthening of the American currency in the overseas market. The Indian rupee slumped 9 paise to 73.18 against the US dollar in opening trade on Thursday tracking strengthening of the American currency in the overseas market. Market participants remained vigilant ahead of Reserve Bank of India (RBI) monetary policy meeting outcome scheduled to be announced on Friday, forex traders said. At the interbank foreign exchange, the domestic unit opened lower at 73.17 against the dollar, and lost further ground and touched 73.18, registering a fall of 9 paise over its previous close. On Wednesday, the rupee had settled at 73.09 against the US dollar. Most Asian currencies have started mostly flat to marginally stronger against the US dollar this morning and could lend support, Reliance Securities said in a research note. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.06 per cent to 89.96. Global oil benchmark Brent crude futures advanced 0.62 per cent to USD 71.79 per barrel. On the domestic equity market front, BSE Sensex was trading 309.99 points or 0.60 per cent higher at 52,159.47, while the broader NSE Nifty advanced 85.90 points or 0.55 per cent to 15,662.10. Foreign institutional investors were net buyers in the capital market on Wednesday as they purchased shares worth Rs 921.10 crore, as per exchange data. Meanwhile, with 1,34,154 fresh cases, India's COVID-19 tally has climbed to 2,84,41,986, while the daily positivity rate has further dropped to 6.21 per cent, the health ministry said on Thursday.

Source: Business Standard

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Lockdowns hit economic activity in April, May: CLSA

Foreign brokerage CLSA said the initial lockdowns in Indian states due to the second wave of the coronavirus pandemic hit economic activity in April and a bigger hit is likely in May Foreign brokerage CLSA said the initial lockdowns in Indian states due to the second wave of the coronavirus pandemic hit economic activity in April and a bigger hit is likely in May. The brokerage said nearly half of its 43 high-frequency economic indicators for April 2021 worsened and among them, only 35% were above three-month moving averages. CLSA also said half of its macro and consumption indicators deteriorated from the previous month in April and 6% of its industrial indicators worsened. The brokerage said all of its 14 early indicators point towards even weaker economic activity in May as all states went into lockdown during the month. “We believe the relaxation of lockdowns will be gradual and economic normalisation may take at least 2-3 months,” said CLSA. The brokerage pointed out that the unemployment rate jumped to an 11-month high of nearly 12% in May from 8% in April. Some of the state governments have announced limited relaxation on lockdown rules from early June as India saw a 52% decline in active cases from the peak of the second wave. “Economic activity may remain impacted in the near term as restrictions may only be relaxed gradually by state governments through June and July 2021,” said CLSA.

Source: Economic Times

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Virtual textile trade event, F2F Sourcing Show 2021, to begin Sept 6

When the pandemic forced cancellations of all physical trade events in 2020, Fibre2Fashion.com was among the first to organise a virtual trade expo, bringing together leading manufacturers and importers of textile and apparel sector under one roof. India – Business Wire India The second edition of F2F Sourcing Show, the virtual trade event for apparel, fabric, and yarn exhibitors, will be held from September 6, its organiser Fibre2Fashion.com has announced. After tremendous success of its debut edition last year, the tradeshow this year is expected to witness greater number of exhibitors and visitors. Try-On Digital Draping for visualising fabrics and styles on 3D models, and a 360° product display in high resolution to showcase realistic designs are among the new features that are being introduced at the F2F Sourcing Show 2021. The other new features to be introduced are Vendor Connect, Knowledge Centre, and Networking Lounge. Vendor Connect will help brands and buyers connect with leading and qualified suppliers, manufacturers, exporters, and vendors specific to their sourcing needs. The Knowledge Centre is where visitors and exhibitors will get market intelligence to make informed business decisions. Interactive booths at the second edition of virtual trade show will have a creative display of brands’ logo, exhibitor company profiles, and a resource centre. Visitors to these booths will be able to exchange business cards and have live interactions through video meets. "F2F Sourcing Show 2021 is going to be one of the best business networking platforms for stakeholders in the textiles-apparel-fashion value chain. It will help generate business leads from the comfort of home with two weeks of 24*7 online exposure and visibility. What's more, one can explore both sourcing and selling on a single platform," said Jose Daniel, executive director of Fibre2Fashion.com. After the tremendous response of exhibitors and visitors from over 100 countries in the 1st edition last year, I am confident of even greater exhibitor and visitor participation this year. New concepts like Vendor Connect and Try-On Digital Draping at this year's edition are going to be liked by everyone," Daniel added. Visitors to the event will include representatives of the entire textiles value chain, including apparel and fashion brands and retailers, buying houses, fabric importers, and manufacturers, suppliers and exporters.

Source: Live Mint

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Vietnamese denim manufacturer Viet Hong eyes $25mn revenue in 5 years

Founded at an investment of $12 million in 2005, Vietnamese denim fabric manufacturer Viet Hong Textile aims to earn sales revenue of $25 million per year in the next five years, according to Quinn Hang, vice director of the company. The company’s annual turnover dropped to $14.5 million in 2020 from $18.8 million in 2019 due to the pandemic. The estimated amount of denim being manufactured by local mills in Vietnam amounts to about 75 million metres a year in which Viet Hong produces 15 million metres, Hang said in an interview with Fibre2Fashion. “Viet Hong Textile is open to expansion not only in terms of our facilities but also for our market reach. Due to the current economic situation brought forth by COVID-19, investment is on hold. But we continue to reach out to our current and prospective customers to win more market share. Physical store is not on our plan at present, but we are exploring the idea of having our own brand soon,” she added.

Source: fibre2fashion

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New UK-funded initiative to help Pak SMEs

A new initiative to enable small and medium enterprises (SMEs) in Pakistan to effectively engage in international markets was launched last month. The UK-funded £5 million project, part of an existing project running from 2020 to 2024, will help enhance Pakistan’s trade diversification and integration into global value chains. Geneva-based International Trade Centre (ITC) will implement the initiative. The efforts are part of a larger UK-supported Revenue mobilization, Investment and Trade Programme (ReMIT) programme aimed at contributing to sustainable and inclusive economic development in Pakistan. “It is very heartening to note that the aims and objectives of the project dovetail and align with the Strategic Trade Policy Framework of the government through which we aim to revitalise Pakistan’s economy in the challenging times of COVID-19. I am pleased to note that the project international trade environment will be strengthened by enhancing exports, augmenting institutional capacities, and introducing trade facilitation reforms,” Abdul Razak Dawood, advisor to prime minister on commerce and iThis project is a comprehensive and far-reaching project involving major public and private stakeholders in business and international trade in Pakistan,” Pakistani commerce secretary Muhammad Sualeh Ahmad Faruqui said. Through development of Pakistan’s National Priority Sector’s Export Strategy and capacity building of the Ministry of Commerce (MOC), Federal Board of Revenue (FBR), Trade Development Authority (TDAP), the National Trade Facilitation Committee (NTFC) and business associations and groups, the programme will support formulation and reform of trade policies, including addressing some of the main barriers to trade. These efforts will reflect public-private consensus. The project will also build business associations’ capacity for advocacy, including women entrepreneurs. A trade facilitation toolbox will be developed, for optimal implementation of the WTO Trade Facilitation Agreement.nvestment and textile, was quoted as saying in an ITC press release.

Source: fibre2fashion

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BGMEA: It’s a very significant budget

Continuation of 1% additional cash incentive for garment industry proposed by finance minister The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan has termed the proposed budget for the next fiscal year a very significant one as the country celebrates 50 years of independence and given the situation due to the global pandemic. “We’ve received the digital copy of the proposed budget and are looking into it. But we need time to come up with an official observation,” he said in a video message. Finance Minister AHM Mustafa Kamal on Thursday proposed to continue additional export incentive at the rate of 1% in the next financial year as well. The BGMEA president hoped that the budget focused on all issues related to the lives and livelihoods considering the current situation. Faruque said the BGMEA board will evaluate the budget in detail on Saturday and will brief the media at 2pm on the same day. As per the directives of Prime Minister Sheikh Hasina, in the 2019-2020 fiscal year, the government started providing an additional 1% cash incentive along with other existing export incentives to the textiles and RMG industry, and as a result, the sector has been able to successfully cope with the effects of the pandemic. As this has continued in the current fiscal year, the textile and garment industry has turned around and achieved the expected exports despite the challenges arising from the pandemic situation.

Source: Dhaka Tribune

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Bangladesh: Budget FY22: 1% cash incentive for apparel exporters to continue

As a result, the sector has been able to sustain their businesses amid the Covid-19 pandemic' An additional 1% cash incentive against export of apparel goods, along with the existing incentives, will continue well into the next fiscal year. Finance Minister AHM Mustafa Kamal made the announcement while he was announcing the national budget for FY2020-21 in the parliament on Thursday. As per the directives of the prime minister, the government started providing an additional 1% cash incentive along with other existing export incentives to the textiles and RMG industry from FY2019-2020. “As a result, the sector has been able to sustain their businesses amid the Covid-19 pandemic,'' said Kamal. “As this has continued in the current fiscal year, the textile and garment industry has turned around and achieved the expected exports despite the challenges arising from the pandemic,” he also said. “For this reason, I am proposing to continue this additional export incentive at the rate of 1% in the next financial year as well,” the minister added. Moreover, Kamal also proposed to include a photosensitive rotary screen, temperature sensor and loaded PCB in the concessionary rate to protect the textile industry. Currently, apparel exporters enjoy 4% cash incentives against exports to non-traditional markets. Beyond this, the sector also enjoys a 1% cash incentive to all export destinations. The government has kept on providing all kinds of benefits, including cash incentives, to the readymade garment (RMG) industry, as it is the principal export sector of the country. The additional 1% export incentive is being provided to all categories of RMG exports from FY2019-20. A substantial portion of Bangladesh’s export earnings comes from the RMG sector. Moreover, various supplementary service sectors, such as banking, insurance, IT, transport, tourism, etc., have flourished with the growth of the RMG industry. The Export Promotion Bureau has been implementing a skill development program for the RMG sector with a revolving fund of Tk20 crore under which 10,980 workers have been provided with skills training in FY2019-2020. In addition, the ongoing Skills for Employment Investment Program (SEIP) of the Finance Division has provided skills training and job opportunities to 100,000 newentrants, of which 35% are women.

Source: Dhaka Tribune

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World's first digital fiber can collect, store, analyze data

Engineers have developed the world's first digital fiber, capable of capturing, storing and analyzing a variety of data. The breakthrough technology, detailed Thursday in the journal Nature Communications, could be paired with machine learning algorithms and used to make smart fabrics to record health data and aid medical diagnosis. "This work presents the first realization of a fabric with the ability to store and process data digitally, adding a new information content dimension to textiles and allowing fabrics to be programmed literally," Yoel Fink, a professor of material sciences and electrical engineering at MIT, told MIT News. Until now, electronic fibers were analog, carrying a constant electric current. The new digital fiber carries distinct bits of information in the forms of 0s and 1s, just like a computer. Engineers created the fiber by placing hundreds of tiny digital chips made of silicon into what's called a fiber preform. The polymer resin is then carefully introduced to form the fiber itself. The precise process allowed scientists to created an uninterrupted connection between hundreds of digital chips. The resulting fiber is thin and flexible, and can be easily introduced to textiles. "When you put it into a shirt, you can't feel it at all," said co-author Gabriel Loke, a doctoral student at MIT. "You wouldn't know it was there." To showcase the technology's abilities, researchers used the fiber to store digital information, including a short movie. Because the fiber could be used to capture environmental data, in addition to physiological data, researchers suggest the technology's potential can extend far beyond medical diagnostics. To demonstrate the technology's potential, researchers sewed it into the armpit of a shirt and recorded body surface temperature data while wearers engaged in a variety of activities. Scientists then trained a machine-learning algorithm to recognize relationships between temperature patterns and different activities. When redeployed, the fiber and artificial intelligence system were able to accurately guess what a wearer was doing. Researchers suggest the fiber could prove invaluable to sports scientists and investigations of physical performance. "This type of fabric could give quantity and quality open-source data for extracting out new body patterns that we did not know about before," Loke said.

Source: UPI

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