Chief Minister Devendra Fadnavis said Wednesday policy reforms had been initiated to revive textile industries. “Textiles dismissed as ‘dying industry’ has the potential to offset unrest within the agriculture sector which has almost 55 per cent population relying on it for livelihood,” he said. Fadnavis said big players would have to share social responsibilities and not weigh the textile sector in terms of profit and loss. A delegation of big textile industrialists, who met Fadnavis Wednesday, sought subsidies in power tariff on high-intensity operating machinery in their powerlooms. In the state, while the government has given power subsidy to small and medium powerloom operations and handloom sectors, those units which operate on high intensity big machinery to produce yarn have to pay commercial rates between Rs 8.50 to Rs 9 per unit. The finance ministry is against extending power subsidies to looms on high intensity machinery, asking why the state should bear an additional burden of Rs 300 to Rs 350 crore. Officials said Fadnavis had asked Power Minister Chandrakant Bawankule to ascertain the financial implications of extending any subsidy to high intensity powerlooms. Maharashtra houses almost 11 lakh powerlooms. There are 300 textile units which operate on 70,000 machines. The chief minister said he was committed to rationalising power tariff to promote the textile sector, and planned to evolve an overall policy for rural development and employment in the textile industry. He urged textile sector to reckon socio-economic aspects and rural development through textile revival.
Textile sector has been in a state of neglect. The private and public partnership to adopt modern technology to revive the dying textile sector is expected to bring Rs 50,000 crore. It is expected to generate employment for 15 lakh people. The integrated plan by the ministries of textile, power and industries will ensure a slew of policy changes to facilitate the setting up and upgradation of powerlooms. The decision to promote textile parks is expected to bring greater investments. Fadnavis said, “Today, almost 55 per cent of the population is dependent on agriculture. Financially, it is not sustainable for various reasons, including recurring drought and shrinking agriculture land holding in rural areas.” “We are going to promote textile industry as the second largest sector. It would help in development of backward districts, where cotton cultivation is higher in Vidarbha, Marathwada and parts of North Maharashtra.” The government has launched a Farm to Fashion project. Investors are seeking further rationalisation of tariff to withstand competition and make textile sector financially viable. Amravati in Vidarbha is being promoted as a financial hub. Cluster textile development is needed in Amravati, Bhiwandi, Navi Mumbai, Malegaon, Ichhalranji, and Vashi among others.
SOURCE: The Indian Express
Knitwear sector entrepreneurs are perturbed over the possible depreciation of rupee as a consequent implication to the International Monetary Fund's decision to include Renminbi, the Chinese currency, into the Special Drawing Rights (SDR) basket.
International foreign exchange reserve asset
The SDR is an international foreign exchange reserve asset created by IMF in 1969 to supplement a shortfall of preferred foreign exchange reserve assets namely gold and US dollar. The SDR had US dollar, Euro, Pounds Sterling and Japanese Yen in it prior to the addition of Renminbi as the fifth currency. “Once in SDR, the Chinese currency Renminbi will possibly get devalued further as already China undertook reforms like giving more access to foreigners to the Chinese currency markets, among others, to achieve the criteria set for SDR status.
Depreciation of rupee
It should be noted that the previous devaluation of Renminbi a few months back has resulted in rupee depreciating against the dollar. Since Tirupur exporters also import lots of machinery and accessories, the emerging currency situation is considerably going to affect their profit margins”, pointed out S. Dhananjayan, a chartered accountant and industry consultant. R. Sreenivasan, a textile unit owner and importer of machinery, said negotiations would have to be carried out with foreign manufacturers of sewing, cutting and finishing machines to reduce the sale prices to minimise the impact of any rupee devaluation. The rupee devaluation will also result in fuel price hike once the oil companies wanted to offset the rising under recoveries from the import of crude oil. This would result in escalation of transportation costs for the exporters to carry the cargoes to the seaports
Prudent move
Since China is a major competitor in global apparel trade for Indian exporters, the businessmen here are gearing up to take prudent hedging decisions in the currency markets. “Hedging will offset the potential impact of rupee devaluation to a great extent”, said some of the exporters.
SOURCE: The Hindu
The Indian government is pushing for more locally-available jobs in the manufacturing sector by ensuring that its contribution to the overall GDP increases, said Surendra Nath Tripathi, additional secretary and development commissioner of the Ministry of Micro, Small and Medium Enterprises. While speaking at the '4th National Conference on Skill Development 2015: Linking Skills to Jobs', organised by Confederation of Indian Industry (CII), Tripathi said, “The government is going all out to ensure that the manufacturing sector pushes up its contribution towards the GDP from 16 per cent to 25 per cent in the country with the objective of creating more jobs.” He informed that all the 654 districts in the country have been mapped for information on manufacturing, industries and skill profile for ease in setting up of manufacturing industries and for fulfilling the requirements related to skills. Twenty two ministries and many states are training people on skills. Required skills can be obtained from many places. The government will be happy if the manufacturing industry is able to generate jobs and pay decent wages to its employees, Tripathi said. On a similar note, Brij Kumar Agarwal, Joint Secretary (UPA), A&C, Ministry of Housing and Urban Poverty Alleviation commented during the conference that fast changes are taking place in the skilling industry. For the government now, skilling has become an involved process. Besides, the government is also urging the training institutes to lend loans to trainees who want to become entrepreneurs, he added.
SOURCE: Fibre2fashion
The State government Excise and B.C. Welfare Minister K. Ravindra on Tuesday announced that more than Rs. 96 lakh would be spent on setting up the three common facility centres for weavers in Krishna district. Foundation stones for the centre have already been laid at Kappaladoddi and Pedana, and officials will soon identify the location for the other centre in the district. Mr. Ravindra after inaugurating ‘Cheneta Hoyalu’, a district-level handloom exhibition here, said that a mega showroom would also be opened in Visakhapatnam and Tirupati soon to enable handloom weavers to sell their products. The Minister further said that loan waiver to the tune of Rs. 110 crore announced by the Telugu Desam Party president N. Chandrababu Naidu would be extended to beneficiaries during a special programme to be held in Vijayawada soon. Handloom Department Assistant Director Ch. Laxmana Rao said that at the Cheneta Hoyalu’, a district-level handloom exhibition which will run till December 8 at the Sri PKR Teachers Guild Home in Machilipatnam has a total of 34 Weavers’ Co-operative Societies from seven districts displaying handloom products.
SOURCE: Yarns&Fibers
Andhra Pradesh government has announced debt waiver scheme to handloom and powerloom sector. Under this scheme loans worth Rs.110.96 crore will be waived. It was one of the election promises made by the Telugu Desam Party president N. Chandrababu Naidu along with the debt redemption scheme for farmers. The loan waiver would be implemented during Janmabhoomi programme commencing from January 1 and the Finance Department also gave its approval. According to officials, loan waiver to be implemented at one go will benefit 24,209 weavers whose total loans amounted to Rs.82.84 crore. Besides this loans of Rs.11.83 crore availed by 674 weaver SHGs, Rs.16.27 crore borrowed by 584 powerlooms would be waived. Soon after the TDP rode to power, the Chief Minister constituted an expert committee headed by P.Kotaiah, former NABARD Chairman, to examine in detail the implications and to suggest the modalities of implementing the debt waiver scheme to both handloom and powerloom weavers. After the committee submitted its report in July 2014 to the Commissioner, Handlooms and Textiles, AP, several months passed by as the latter sought the details of outstanding loans availed by weavers from all the banks as on March 31, 2014 and submitted a report to the Government that the financial burden would be about Rs.110 crore. According to the GO issued on Tuesday, under the scheme, loans against weavers credit cards and individual loans up to Rs.1 lakh, Weavers Group loans up to Rs.5 lakh, loans up to Rs.1 lakh availed by powerloom units with below five HP power connection and availing 50 percent power subsidy scheme will be eligible for the loan waiver scheme.
SOURCE: Yarns&Fibers
The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, has approved the signing of the agreement between India and Iran on visa facilitation for Diplomatic, Official/Service and Ordinary passport holders.
Salient features of the agreement are as given below:
SOURCE: PIB
Deflation is negative price inflation. Why is it a source of worry? Because in such conditions it is not possible to service any debt, and that puts paid to the financial system as we know it. There are other smaller problems. Wages, especially in government, are sticky. Negative dearness allowance increments anybody? The golden mean is small positive core inflation, in the range of 2-4%, depending on whether it is a developed or developing economy. Inflation is measured in terms of annualised change in price indices. In India, the wholesale price index (WPI) for goods was commonly used. There were — and there still are — several consumer price indices (CPI) for different situations, and it was used for inflation neutralisation of wages. The CPI has the advantage of capturing retail prices and services. But it has never been aligned to the structure of the economy.
Under-reporting
The WPI, however, is so aligned. The new CPI (starting 2010) uses the expenditures reported by the National Sample Survey of Household Consumption Expenditures to derive weights. These surveys have been found to under-report aggregate consumption in the economy by over 50%. The ratio is much better for food and much worse for manufactured consumer goods and services. Hence, the weights tilt excessively to food items. The third method to measure inflation is the implicit GDP deflator. That is the rate derived from the GDP current and constant prices data. Cross-country data since 2000 shows that inflation as measured by the CPI and the implicit GDP deflator vary, but not by much. In most developed economies, including the United States, Germany and France, average CPI inflation for 2000-2014 was higher than the implicit GDP deflator by 0.2 to 1.0 percentage points. In a minority of developed countries, namely Britain, Australia and Canada, it was the other way round. In most large developing countries and regions – China, Southeast Asia, South Africa and Latin America — average CPI was lower than the implicit GDP deflator.
By contrast, India, Bangladesh and Taiwan, in this very limited sense, resembled the majority developed world. In India, average CPI for 2000-2014 was 6.8% while the implicit GDP deflator was 5.5%, a differential of 1.3%. Of the three measures, the implicit GDP deflator fully reflects the structure of the economy and is a good ex post indicator of what happened with inflation. So, what does it say for India? In Q3 2014-15, the implicit GDP deflator was 1.3%, falling to -0.1% in Q4 2014-15. It was 0.1% in Q1 2015-16 and fell to -2.0% in Q2 2015-16. Where was CPI inflation in this period? In Q3 and Q4 of 2014-15, it was 4.1 and 5.3%, respectively. In Q1 and Q2 of 2015-16, it was 5.1 and 3.9%, respectively. These are way above the implicit GDP deflator that is now firmly in the negative. Indeed, the WPI rate for manufactured goods — low to negative — has tracked the implicit GDP deflator more closely.
India has, thus, been in deflation in 2015 and steeply declining rates (direction) since the middle of 2014. Our monetary policy does not reflect this. It is still battling an inflation that does not exist in the GDP data. There is a great challenge ahead in 2016 in the way monetary policy will unfold globally. After seven years of near-zero policy rates and liquidity creation via asset purchases, the US Federal Reserve is set to normalise monetary policy over the coming years. The Fed holds $1.95 trillion of private sector mortgagebacked securities, including yield premiums, which will mature in the next few years.
Excess Reserves
Against this there is about $2.6 trillion of ‘excess’ reserves — that is, reserves held by banks with the Federal Reserve in excess of statutory requirements. Thus, the liquidity created by asset purchases has effectively remained un-lent. But the combination of very low policy rates and the potentially available liquidity lowered the longer end of the yield curve. The pre-conditions for transition to normalcy are there. And in the process, the US economy has recovered and the US banking system has been recapitalised with hardly a draft on federal dollars — a remarkable feat by the gutsy Ben Bernanke. But Europe languishes. The European Central Bank already has a negative deposit rate and a main lending rate of 0.05%. It may or may not move to negative lending rates. But it is certain to maintain near zero rates. Thus, there will be an unprecedented divergence in which the main economic regions — the US and Eurozone (and Japan) — will move in 2016, and the consequential pulls may be tidal. That is a very serious challenge for everyone, India included. Yet, we are in disinflation and have a monetary stance befitting of a moderately high positive inflation trajectory. Our domestic demand is still in an early phase of recovery. And our public sector banks are under pressure from weak asset quality and squeezed margins that cannot support rebuilding their balance sheets. Much needs to be done, and in short order.
SOURCE: The Economic Times
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 40.66 per barrel (bbl) on 02.12.2015. This was lower than the price of US$ 41.48 per bbl on previous publishing day of 01.12.2015.
In rupee terms, the price of Indian Basket decreased to Rs 2708.49 per bbl on 02.12.2015 as compared to Rs 2759.02 per bbl on 01.12.2015. Rupee closed weaker at Rs 66.62 per US$ on 02.12.2015 as against Rs 66.52 per US$ on 01.12.2015. The table below gives details in this regard:
|
Particulars |
Unit |
Price on December 02, 2015 (Previous trading day i.e. 01.12.2015) |
Pricing Fortnight for 01.12.2015 (Nov 11 to Nov 26, 2015) |
|
Crude Oil (Indian Basket) |
($/bbl) |
40.66 (41.48) |
41.17 |
|
(Rs/bbl |
2708.49 (2759.02) |
2725.87 |
|
|
Exchange Rate |
(Rs/$) |
66.62 (66.52) |
66.21 |
SOURCE: PIB
Nigeria's textile, apparel and footwear industry is earmarked to contribute significantly to plans to diversify the economy. Calls to broaden the economic horizons have been loud in recent months owing to the decline in the international price of oil, a major foreign currency earner for Nigeria. “The new administration favours the revival of the country's textile and footwear industry as it would play a major role in diversifying the economy. "Not only could it result in revenue diversification and reduce pressure on the import bill, it could also help boost employment,” said FBN Capital, the local financial institution. The sub-sector accounted for 21 percent of manufacturing gross domestic product in the third quarter of the current year. However, it contracted by -13 percent year-on-year. “This is understandable considering the economy as a whole is strained due to the current macro headwinds,” said FBN Capital.
According to a report released by the National Union of Textile, Garment and Tailoring Workers of Nigeria (NUTGTWN), the textile industry performed poorly in the first half of 2014. This was mainly due to heavy inflow of smuggled textiles, which usually accounts for over 75 percent of Nigeria's textile market. Annual cotton production was estimated at 533 metric tonnes (mt), with Zamfara and Katsina accounting for 25 percent and 22 percent of total production respectively. There are suggestions over 30 operational textile mills are operational while 80 are moribund.
Meanwhile, Aba, located in south-east Nigeria, has received global recognition with investors from Brazil indicating interest in collaborating with the state government to provide modern machineries aimed at boosting shoe production. Also, the Nigerian Investment Promotion Commission (NIPC) recently announced it would work closely with National Cotton, Textile and Garment (CTG) policy committee to resuscitate the country's textiles industry. The CBN has indicated interest in lending support to this industry through the establishment of an intervention fund at a single digit interest rate.
SOURCE: The News24
Vietnam's economy has weathered the recent turbulence in the external environment fairly well with GDP growth expected to grow at 6.5 per cent this year, according to the World Bank's Taking Stock report. The performance is underpinned by further recovery in domestic demand, in turn reflecting robust private consumption and investment growth. “Stronger domestic demand, robust export performance, low inflation and improved confidence have enabled Vietnam to create firmer foundations for mid-term growth,” sayid Victoria Kwakwa, the World Bank Country Director for Vietnam. “This is a good time to solidify macroeconomic stability and rebuild policy buffers including through decisive efforts to rein in fiscal imbalances and tackle remaining vulnerabilities in the banking sector.”
According to the report, better macroeconomic conditions helped maintain stability in the banking system. On the external front, Vietnam's export performance remains strong, with total export turnover increasing by 9.2 per cent compared to the same period last year, mostly because of strong performance of manufacturing exports, especially high technology products such as cell phones, electronics, and computers. The report said the medium-term outlook for Vietnam remains positive, with growth projected to strengthen and inflation expected to remain low. However slow structural reform progress poses risks to medium-term growth prospects, while delays in implementing fiscal consolidation could undermine debt sustainability.
Against the backdrop of these uncertainties, the report suggested that sound macroeconomic management remains crucial to rebuild policy buffers and safeguard against future shocks. Fiscal consolidation, structural reforms, and a further build-up of reserves could help reduce vulnerabilities. The report also features a special section on the Trans Pacific Partnership Agreement, in which it said that the TPP is expected to generate considerable benefits for Vietnam. “The recently concluded TPP will not only improving market access, but will also serve as a critical anchor for the next phase of structural reforms in Vietnam,” said Sandeep Mahajan, Lead Economist for the World Bank Vietnam. Among the current TPP signatories, Vietnam as the economy with the lowest per capita GDP, has unique comparative advantages, particularly in labour-intensive manufacturing. On the economic impacts, simulations suggest that the TPP could add as much as 8 per cent to Vietnam's GDP, 17 per cent to its real exports, and 12 per cent to its capital stock over the next 20 years. Despite various implementation challenges, the impact of the TPP on Vietnam is expected to be positive.
SOURCE: Fibre2fashion
An economic delegation of South Korea that includes 37-person, made up of government officials and businessmen, would be visiting Ethiopia and the Ivory Coast to help lay the basis for more trade and industrial cooperation, said the Korean Ministry of Trade, Industry and Energy. Lee Sang-Jin, Director General at the Ministry of Trade's Cooperation Office, said that during the visit, leaders from the Korea Federation of Textile Industries would meet Ethiopia's President to discuss future investment plans. He also said that Lee Sang-Jin has planned to ask his Ethiopian counterparts to allow South Korean companies to take on a greater role in the Bole Lemi 2 industrial park project. South Korean company involvement in the park could spur exports of machinery and spare parts as well as other areas of manufacturing. The Bole Lemi Industrial Zone is the only government owned Industrial Park. The 139 million Birr consultancy contract for phase two of this project was signed between the Ministry of Industry and DOHWA Engineering Co. Ltd. on April 1, 2015.
SOURCE: Yarns&Fibers
Cambodia’s garment industry continued to perform “solidly” through the first half of the year, allaying fears that recent minimum wage increases would cripple one of the country’s main economic engines, according to the latest figures released by the International Labor Organization (ILO). According to its latest industry bulletin, drawing on data from the Ministry of Commerce, garment exports over the first half of the year hit $3 billion, growing 12.7 percent over the same period last year. “The data shows that the sector continued to perform quite well—Cambodia’s market share of garment and footwear exports has continued to rise in recent years. Of course, this positive experience from the past minimum wage increases does not guarantee that future increases will necessarily be as benign for the industry,” he said.
Drawing on U.N. trade data, the ILO said Cambodia’s share of garment exports among all developing countries has steadily gone up over the past decade, from 1.1 percent in 2005 to 1.8 percent last year. The Garment Manufacturers Association in Cambodia (GMAC), which represents all the industry’s exporting factories, has warned against the sharp raises to the minimum wage in recent years, predicting a major slowdown—even contraction—ahead of each one. In October, just before the Labor Ministry set the new minimum wage at $140—a year-on-year rise of 9 percent—GMAC said the factories could only afford a 3 to 4 percent raise next year, and that multiple factories had already had to close because of the last wage hike.
But according to the data the ILO pulled from the Commerce Ministry, only one factory closed during the first half of the year, compared with seven that closed over the same period in 2014. At the same time, 30 new factories opened during the first six months of this year, an additional $152 million worth of investments in the industry were approved, and an extra 42,000 jobs were created. Though all three areas grew at a slower rate than they did in 2014, Matthew Cowgill, a regional technical adviser for the ILO on labor standards, said they were still growing at a “decent pace.” “You’re right that some measures did not grow as fast in the first half of 2015 as they had in some previous years,” he said by email, “but growth has still been solid. For example, employment was 10.2 percent higher in the first half of 2015 than it had been in the first half of 2014.”
SOURCE: The Global Textiles
