In the last few months, India’s textile and apparel exports growth have slowed down on account of various internal and external factors (textile and garment exports rose 0.6% to almost $18 billion in the first half of the current fiscal from a year before). The textile and garment exports target of $47.5 billion for 2015-16 with a projected growth rate of almost 14% from a year before is all set to be missed. Indian exporters are facing turmoil in global markets for which the ministry of textiles has recommended corrective measures to other ministries concerned in consultation with industry stakeholders. Some of these are reduction of excise duty on man-made textiles from 12% to 6%; enhancement of market coverage under the Merchandise Exports from India Scheme (MEIS); upward revision of duty drawback rates as well as value caps; continuation of interest subvention scheme and expanding its scope; and providing working capital at 7% to exporters under priority sector lending.
Of these, the government has taken action on recommendations related to MEIS, duty drawback (rates were raised by 2% for textile products in November) and interest subvention. Export promotion councils and other trade bodies have appreciated this timely action, which will lead to an improvement of textile and apparel exports from India. The ministry of textiles realizing the potential impact of FTAs, including TPP, where the inclusion of a significant apparel producer, Vietnam, in TPP has the potential to shift global trading pattern, as Vietnam will get duty-free access to the US, Canada and Australia. Vietnam is already the second-largest apparel exporter to the US with a market share of 10%, getting duty advantage can help the country grow its apparel exports rapidly. In order to gain sustainable competitiveness and edge over countries like Vietnam, the ministry of textiles is actively engaged with the ministry of Commerce in forging new FTAs with major textile and apparel markets to offset the impact of TPP. India needs to sign FTAs with important markets like the EU, the US, CIS countries, South Africa and Turkey, and also with emerging markets in Latin America.
The ministry of textiles has also referred several issues to the ministry of labour and employment to make labour laws flexible. The proposals include raising over-time limit for employees from 50 hours a quarter to 100 hours; relaxing restrictions on work during night for women in factories; revision of over-time wages at the rate of one-and-a-quarter times of the regular rate (as per ILO convention numbers 1 and 30) instead of two times; redrafting regulatory framework for labour issues in compliance with India’s ILO obligations; and also introducing fixed-term employment under the sub-section 1(15) of the Industrial Employment (Standing Orders) Act, 1946. The existing Revised Restructured TUFS (RR-TUFS) is also under review and a draft note for the Cabinet Committee on Economic Affairs (CCEA) has been circulated among relevant ministries. The decision is expected soon.
Against the voiced raised by the textile industry against the pending and delays in clearance of TUFS subsidies An allocation of R1,413.68 crore has been made under the scheme during 2015-16, of which R882.49 crore has been disbursed until November 30. Further claims under Restructured TUFS and RR-TUFS for R211.92 crore are under process with the ministry for release, which relates to claims up to the June quarter of 2015-16.
For reviewing the textile policy 2000, the textile ministry had constituted an expert committee—headed by Ajay Shankar, member secretary of the National Manufacturing Competitiveness Council. The committee has since submitted a draft vision, strategy and action plan. This document has proposed for additional job creation of about 35 million, export of $185 billion (both textiles and apparels), domestic production level of $350 billion and investment of $200 billion by 2024-25. Based on this, the ministry has initiated consultation with various stakeholders—including industry associations and export promotion councils—and started a study of textile policies of various state governments. The draft is under process for consideration by the committee of secretaries. Also a customs clearance facilitation committee at all ports has been set up which is headed by the chief commissioner of customs and consists of stakeholders from all agencies pertaining to clearance of goods. They have decided to constitute a project management unit and a project management group—while the unit comprises secretary of textiles committee and director (exports) in textile ministry, among others, the group includes joint secretaries for exports and AMR and secretary of textiles committee. The ministry has introduced risk-based inspection of goods. The Directorate General of Foreign Trade (DGFT) has been requested to relax the testing samples in respect of countries where azo dyes have been banned and DGFT has issued a fresh notification for this purpose. There has been delegation of power to customs officers for drawing samples, where required, of exported and imported goods. As far as imports are concerned, customs officers are only authorised to draw samples and forward the same to the textile committee.
The Ministry of textiles has also approved proposal for setting up a new textile laboratory of the textile committee at the Cochin port. Moreover, a standard operating system is prepared in collaboration with the textile committee for testing of articles containing azo dyes, and reducing the time for testing samples from four days to two days online. Regarding risk management, a letter has been written by the textile secretary to the revenue secretary to integrate EDI software of customs and the textile committee so that online test reports can be generated and communicated to the stakeholders swiftly.
SOURCE: Yarns&Fibers
Of the total 2,090 textile processing units identified in Erode, Namakkal, Salem and Karur districts, 1,007 units have given their consent to join the Integrated Textile Processing Park that would have a common effluent treatment plant (CETP) set up at a cost of Rs. 700 crore. Discharge of untreated industrial effluents into Cauvery, Bhavani and Amarvathi rivers have long been a problem for the people and the environment. The Chief Minister on August 11, 2014 announced setting up of CETPs in the four districts to prevent further pollution. The objective was to establish integrated textile clusters and bring in units under one roof in respective areas so that effluents can be treated in CETPs. Tamil Nadu Water Investment Company Limited was vested with the responsibility of preparing reports. The company carried out a survey of processing units in the four districts and is in the process of preparing a feasibility report. Bhavani, Perundurai and Erode clusters have already submitted the report to the government.
SOURCE: The Hindu
Aditya Birla Group controlled Grasim Industries has drawn up capex plan of Rs 150 crore for product development, R&D and business development for its new fabric brand Liva in next fiscal. "We are looking at spending around Rs 150 crore for product and application development, R&D and business development for Liva- a fibre brand launched earlier this year to target retail customers", Grasim Industries Managing Director KK Maheshwari told PTI here. The usage of viscose staple fibre (VSF) is already catching up among domestic processors with VSF-made winter collection expected to go up from 20 lakh garments this year to about 50 lakh garments next winter season, Maheshwari said. The Aditya Birla group company has enhanced its VSF production capacity in March from 1,20,000 tonnes per annum to 5,00,000 tpa with the completion of the last phase of its greenfield project at Vilayat in Gujarat. The company sells about 3,00,000 tonnes of VSF in domestic market and the rest is exported.
Globally, the annual demand growth for VSF is about four per cent. The biggest challenge, Maheshwari said, is to widen the market base by promoting garments made of VSF. "While the cotton production has limitations worldwide, the consumer demand for natural and comfortable fabrics is growing in India. We see this as an opportunity and are trying to reach out to the consumer with the Liva brand", he added. To reach the end-consumer, the company has partnered with designers. Till now we have been supplying the fibre to major fashion and home textile brands like Pantaloon, Van Heusen, Global Desi, Allen Solly and looking at tie ups with more brands, he said. As part of national drive Liva Accredited Partner Forum (LAPF), Birla Cellulose, the pulp and fibre division of Grasim, is organising a stakeholder conclave in various parts of the country.
LAPF is aimed at improving the entire gamut of the textile value-chain. Grasim has over 335 partners including spinners, weavers, knitters and fabricators, with major participation from textile hubs in the LAPF. "Our plan is to strengthen the textile value chain and align it with the 'Make in India' campaign of the government", Maheshwari said. Commenting on growth plans, he said the group company Aditya Birla Chemicals India's merger plans with Grasim Industries is expected to complete in next quarter.
SOURCE: The Economic Times
After remaining in the negative zone throughout this year battered by demand slowdown, India’s exports are expected to show improvement in 2016, propelled by government incentives. But there is a word of caution. Improvement in outbound shipments would still depend largely on demand revival in the global markets and movement in prices of crude oil. The main markets of Indian exporters – the US and Europe – are not yet showing strong signs of demand revival. The two regions account for over 30 per cent of the shipments. Multilateral body World Trade Organization too has lowered the trade growth projections for 2016 to 3.9 per cent from 4 per cent earlier. “I (would) like to have exports improving (in 2016),” Commerce and Industry Minister Nirmala Sitharaman said when asked about her expectation on exports performance next year. The minister’s expectation is based on the incentives announced by the government this year. It has extended the 3 per cent interest subsidy for exporters besides giving benefits under merchandise Export India Scheme (MEIS) and enhanced duty drawback rates. “We have given support under MEIS India Scheme. We have also announced the interest subvention scheme. So there should be an improvement on our exports soon,” she said recently. The government has also taken steps to improve ease of doing business for traders. It has reduced the number of mandatory documents required for import and export of goods to three in each case from 10 earlier.
The Federation of Indian Export Organisations (FIEO) has said meanwhile that improvement in export performance will depend on the crude oil and commodity prices. “Further softening of prices of crude oil and commodity may dampen the export’s growth further. Since global situation will take some time to improve, a 15 per cent increase in exports may take us to USD 305 billion in 2016,” FIEO President S C Ralhan said. Last year, exports had stood at USD 323.2 billion. “In the 11 months of 2015, exports have reached USD 243.68 billion. Going by the current trend, we may end with exports of USD 265 billion this year, reflecting a decline of 21.9 per cent as compared to 2014,” Ralhan said. As for the growth in shipments during the coming year, he said the support extended by the government will help in pushing up exports.
Since December last year, the country’s merchandise shipments have been in the negative zone. In November, the decline was the steepest in several months. Exports dipped 24.4 per cent in November. India’s exports in last four financial years (April-March) have been hovering around USD 300 billion. Falling short of the USD 325 billion target, India’s exports in 2013-14 stood at USD 312.35 billion. The figures for 2012-13 were USD 300.4 billion, after USD 307 billion in 2011-12. Further to boost exports from special economic zones (SEZs), the commerce ministry is holding stakeholders consultation to revive these zones. SEZs contribute about 23 per cent of the country’s total exports. They are facing problems after imposition of minimum alternative tax and dividend distribution tax. The Commerce Ministry has sought roll back of reduction in these taxes from the Finance Ministry. Barring pharmaceuticals and textiles, all the the top four exporting sectors – engineering, petroleum, gems and jewellery and textiles – are registering negative growth.
In November 2015, exports of engineering, petroleum and gems and jewellery dipped by 28.57 per cent, 54 per cent and 21.5 per cent respectively. Pharmaceuticals and textiles exports grew by a meager 1 per cent and 3 per cent respectively in November this year. On the other hand, declining gold imports and crude oil prices are helping in keeping the country’s trade deficit in check. During April-November this fiscal, trade deficit aggregated at USD 87.5 billion as compared to USD 102.5 billion in the same period last year. As almost all the major currencies depreciated in 2015 against dollar, rupee decline has not much impacted the country’s exports growth. The rupee fell in 2015 for the fifth straight year.
SOURCE: The Financial Express
Industry body Assocham has further lowered its outlook for India’s exports to USD 255-260 billion for 2015-16, which stood at USD 310 billion in the previous fiscal, disagreeing with the government’s claim that there is “no crisis” on the outward shipments front. Assocham in September this year had forecast the country’s exports to be around USD 265-268 billion. Cumulative value of exports during April-November 2015-16 stood at USD 174.30 billion as against USD 213.77 billion in the same period last year, down 18.46 per cent. Contraction in exports continued for the 12th month in a row in November as outward shipments shrank 24.43 per cent to USD 20.01 billion amid a global demand slowdown. “Given the further decline in the last few months, the chamber is revising its outlook downward, disagreeing with a pre-dominant government view as if there is no big problem in the sector,” Assocham stated.
Facing flak for 12 straight months of decline in exports, the government had recently said there is “no crisis” in India on the export front and there is “no need for alarm”. “There is no crisis in India on the export front and while there is a need for caution, there is no need for alarm,” the Commerce Ministry had said in a statement. However, Assocham said the sector is in real crisis which goes well beyond petroleum products, gems and jewellery to highly job-oriented leather and leather products and has engulfed the entire agri exports witnessing sharp falls. “There is no point shying away from the crisis, if it is there. The answer lies in recognising the problem without sweeping it under the carpet and then finding a way out. After all, nobody in India or elsewhere, for that matter can be blamed for the global crash in demand,” Assocham President Sunil Kanoria said. He said it would also not be correct to take consolation in the fact that the exports have fallen marginally in rupee terms. “India’s balance of payments is calculated along with the current account deficit in dollar terms and exports have a major contribution. Therefore, one cannot take comfort in currency depreciation,” Kanoria said.
SOURCE: The Financial Express
Taking a cue from the biennial investor congregation — Vibrant Gujarat Summit — held every alternate year in Gujarat, the Centre gis organising “Make in India Week” in Mumbai during February 13-18. The week-long event, being organised by the Department of Industrial Policy and Promotion (DIPP), Union Ministry of Commerce and Industry, will have investors meet for the manufacturing sector under ‘Make in India’. Following the initiative of the Prime Minister Narendra Modi to encourage investments in the manufacturing sector, the Centre will conduct the ‘Make in India Week’ on the lines of three-day Vibrant Gujarat Summit. The event will be inaugurated by Modi on February 13.
Discussions with SMEs
The meet will also discuss issues related to SMEs and start-ups. “We have interacted with entrepreneurs and they have raised valid issues faced by them. These include infrastructure, tax-related problems and demand to reduce compliance burden for small industries. They have given suggestions on how to resolve these issues,” said Amitabh Kant, Secretary, DIPP, during a road-show here. He stated that the ‘Make in India’ initiative is aimed at increasing the share of manufacturing sector in the GDP from the current 15-16 per cent to 25 per cent by 2022. “This is a flagship event for forging global engagement with Indian industry in the form of partnerships and investments.” According to Kant, flow of foreign direct investment (FDI) has jumped by 35 per cent in past few months.
SOURCE: The Hindu Business Line
World Bank may revise its GDP growth projection for India for the current fiscal. World Bank’s Chief Economist Kaushik Basu indicated, “There could be some changes” in the January review of India’s growth forecast for 2015-16. He was responding to media queries here at an event at the Indian Statistical Institute on whether failure of the Centre to get the GST Bill passed would have an impact on the projection. Until October, World Bank retained its growth forecast at 7.5 per cent for India for this year. The India Development Update of the global development lender also expected India’s growth at 7.8 per cent in 2016-17 and at 7.9 per cent in 2017-18. This projection was subject to investment rate picking up along the journey. Basu said the general mood had been positive, which helped the investment climate for the Indian economy. Basu said recession in Brazil and Russia and slowdown in China made India the leading economy in terms of growth prospect for the first time this year. Chinese GDP is projected to grow under 7 per cent. “The detailed decision making (by the government) can have an impact on the growth rate and fact that couple of important decision did not go through could have an impact,” he explained. He, however, did not clarify whether the uncertainty over countrywide Goods and Services Tax reform would influence the investment sentiment. World Bank published its biannual India update in October and mentioned that the GST reform was one of the most important steps that the government needed to undertake to keep the growth momentum going. Despite contraction in exports, decline in the current account deficit owing to lower outgo on crude oil imports has helped India in overcoming financial tidings this year.
SOURCE: The Hindu Business Line
India's trade with Pakistan could get a boost through a more liberal visa regime, closer links between business houses and grant of most favoured nation status to the country by the Nawaz Sharif government, following Prime Minister Narendra Modi's fresh initiative to reach out to his counterpart in an attempt to improve bilateral relations. Officials said improvement in economic relations is one of the least controversial and, therefore, the most easily achievable of the confidence building measures envisaged in the comprehensive bilateral dialogue recently launched by the two sides. Bilateral trade was one area which saw some progress when structured dialogue between the two neighbours was resumed in 2011 after the 2008 terrorist attack in Mumbai.
India-Pakistan trade touched a peak of $2.7 billion in 2013-14, before dropping to $2.35 billion in the next fiscal. Trade through third countries is estimated at $3.5-4 billion. Modi had urged Sharif at their first meeting in Delhi in May 2014, a day after he was sworn in as PM, to take steps to improve cross-border business relations. While there has not been much progress on the ground so far, Modi's surprise visit to Lahore on December 25 and the impetus this is likely to give to relations could change things for the better, the official said. In July last year, the Indian High Commissioner to Pakistan had announced the country's unilateral decision to grant three-year multiple entry business visas to eligible Pakistani nationals. This came after the revised visa agreement of September 2012 liberalised provisions regarding business visas and allowed visa holders to travel to 10 cities for business purposes.
Although efforts have been made to give a fillip to exchange of trade delegations over the past few years, Pakistan has alleged delay in granting business visas to visit India. Further liberalisation of the visa regime could be discussed at the next commerce secretary-level meeting, officials said. India had accorded MFN status to Pakistan in 1996 to boost bilateral trade, but a Pakistan cabinet decision of November 2, 2011 to reciprocate this remains unimplemented. In March 2012, Pakistan substituted a 'positive list' of over 1,950 tariff lines permitted for import from India by a 'negative list' of 1,209 lines, Pakistan government officials said. The two countries had during the commerce secretary-level talks in Islamabad in September 2012 agreed on a road map to move toward full normalisation of bilateral trade. However, Pakistan is yet to implement its decision as per the road map - permitting all importable items through Wagah-Attari land route against only 137 at present - Indian officials said. Three agreements - Customs Cooperation Agreement, Mutual Recognition Agreement and Redressal of Trade Grievances Agreement - were signed during the 2012 talks, officials said. In January 2014, the commerce ministers of the two countries reaffirmed the commitment to expedite establishment of normal trading relations and to provide non-discriminatory market access (NDMA) on a reciprocal basis. The ministers decided to intensify and accelerate the process of trade normalisation, liberalisation and facilitation, and to implement the agreed measures before the end of February 2014. However, implementation of these steps, including removal of 'negative list' and restrictions on the number of importable items via Wagah land route by Pakistan is still awaited, officials said. They said the two sides may also consider cooperation in gas and petroleum sector. In 2013, the Pakistan PM had asked for assistance to tackle power crisis in Pakistan. The possibility of supplying up to 5 million cubic metres gas per day by extending the Dadri-Bawana-Nangal pipeline from Jalandhar via Amritsar to Lahore, and establishing a 500 MW high-voltage direct current link from Amritsar to Lahore to facilitate power trading were explored. The integrated check post at Attari now possesses better infrastructure to facilitate trade and travel.
Spread over 118 acres, it contains a passenger terminal measuring 9,600 square metres, a dedicated 4,700-sq-metre cargo terminal and separate import and export warehouses measuring over 10,000 sq metres, apart from over 50,000 square metres of parking space for trucks and an equally large area for future expansion. Officials said the two sides have earlier discussed initiatives such as 24x7 operation at Attari-Wagah trade route, movement of containers between Amritsar and Lahore, and meeting point for business persons at Attari-Wagah. Various segments of Pakistan society have spoken in favour of opening more land trade routes with India, including Munabao-Khokhrapar, officials said. A joint working group is slated to consider this matter.
SOURCE: The Economic Times
World Bank chief economist Kaushik Basu today said amidst sluggish global growth, the US and India are two engines of growth with India anticipated to be among the fastest growing major economies in the world. Addressing the 98th annual conference of the Indian Economic Association (IEA) here, Basu said, “This is a very critical time to have the conference on economy. Global growth is sluggish. The world economy is expected to grow barely by 2.5 per cent.” He noted that Russia is in recession and its GDP is actually shrinking by about 4 per cent. Among the BRICS nations, only China and India are growing around and below 7 per cent, while Brazil’s GDP is declining by about 3.5 per cent and South Africa is barely growing. “In this bleak scenario, the US among the rich economies and India among the emerging economies are the two engines of global growth,” he said, adding, “In both 2015 and 2016, we expect India to be the fastest growing country among the major economies in the world.” “I don’t think this has happened before since we began measuring and estimating GDP data. All this puts special responsibility on India and there is no room for complacency,” Basu said. “There is a slowdown in global trade going on and this would have an adverse impact on India. There is political conflict in the Middle East and a huge refugee problem that can have impact on us,” he said stressing on the need to bring analysis, research and professionalism to steer the economy in these risky times.
SOURCE: The Financial Express
Months after it called off talks between chief negotiators of the two sides on free trade agreement (FTA) to protest against the ban on sale of around 700 pharma products of a domestic company, India will meet officials from the European Union (EU) later next month to “take stock of the negotiations” on the long-pending FTA. The meeting on the proposed Broad-based Investment and Trade Agreement (BITA), which was earlier scheduled for August 28, will now be held on January 17-18, a senior official said adding that the issue of ban is yet to be resolved. “This is not a commitment to continue the talks. What will be seen is if the talks can be taken forward,” the official said adding that issue of pharmaceutical industry will also be taken up during the meeting. Early in July, the EU had banned over 700 pharma products of GVK Biosciences, Hyderabad, for alleged manipulation of clinical trials conducted it and the decision was to come into effect from August 21. The suspension of sales and distribution of generic drugs ordered by the European Commission, which is the executive body of the EU for proposing legislation and implementing decisions, was to be applicable to all 28 member nations.
Following the decision, commerce and industry minister Nirmala Sitharaman decided to call off the talks and examine “all options in this regard” as the pharmaceutical industry is one of the flagship sectors of India. In June the minister had met her European Union counterpart, trade commissioner Cecilia Malmström, on the sidelines of an informal meeting of trade ministers in Paris and the two sides had agreed to revive talks at chief negotiators’ level. The official said that “the reason for resumption of talks is German Chancellor Angela Merkel’s visit here in October. India was assured that its concerns would be addressed to satisfaction and it is on this assurance that we have decided to move ahead with the dialogue”.
DG Shah, secretary general of Indian Pharmaceutical Alliance, said that the issue is not company-specific rather it relates to the industry. “In its observation, no one has raised concerns about the safety of the product. However, despite that the ban was imposed. These measures bring a bad name to the industry and the country. The concern of the government is not one company but the industry as whole, it is a matter of principle”. “We have been in constant touch with the commerce ministry. It is a good sign and we will eagerly await for what emerges in the meeting,” Shah said. The development comes at a time when trans-pacific partnership, a trade deal covering 12 countries including Australia, Japan, Mexico and the US has been announced. Amid a slowdown in its key economies, the EU has intensified its efforts to conclude the negotiations on the FTA with India. In fact it has signalled its willingness to show flexibility on all major issues that have stalled the talks. The last round of talks, which started in June 2007, was held in May 2013. However not much breakthrough was achieved due to EU’s concerns in areas including high tariffs on cars and wines, insurance, banking, retail, legal services, geographical indication, and public procurement while India’s concerns were on services. Exports to the European Union shrank 4.4 per cent to $49.3 billion in 2014-15 while imports contracted 2.2 per cent to $48.8 billion.
SOURCE: The Financial Express
Isaac Eshun watches closely as reams of newly printed fabrics flow down from the giant rollers overhead, vast sheets of cloth with intricate orange and blue designs tumbling from the factory’s whirring machines. The 53-year-old technician has spent almost half his life working at this textile company in Tema, a coastal town around 10 miles from the capital of Accra, yet such a career is increasingly rare in Ghana’s once thriving textile industry. Counterfeit goods, border inefficiencies and rising costs have hit the industry hard, and last month it emerged the government had replaced a local company as the provider of school uniforms for public schools with a Chinese fabric producer.“I have worked here for 25 years and our product is very fine and people can see the difference when they buy it, but the counterfeiting is a problem,” Mr Eshun says. “It is killing us and it is killing the industry.”
Ghana’s markets have flooded with cheap imports, arriving mainly from China in the last decade and under 3,000 jobs now remain in an industry which employed more than ten times that in the 1980s. “The productivity of local companies is fast declining because of pirated textiles that come into the country,” says Charles Asante-Bempong, a director at the Ghana Employers’ Association (GEA). “They are cheaper... [but] their designs are stolen and replicated with a lower quality and it is killing their businesses.”
Another issue is that while locally produced cotton is used by firms, many of the dyes, chemicals and machines are imported from abroad at significant prices. Located in Tema, GTP is one of only four factories still operating. Renowned for its traditional designs and wax printed fabrics, the company has seen production levels drop 30 per cent and its production unit half since 2005. Mr Eshun is among 650 factory staff remaining. The firm’s managing director Kofi Boateng says the impact of cheaper fake goods has been huge. “We started to see that there was a lot of smuggled goods coming from the Far East copying our designs and being smuggled into the country,” he explains. “They don’t only copy our designs they copy the trademark and logo and label. Almost every design we make has been copied.”
Togo and Ivory Coast are often the entry point for smugglers, with some Ghanaian market traders even travelling to China to collect designs. “We have very porous borders and only a few of them are manned by security people and it is very easy for these counterfeiters to pass through,” Mr Asante-Bempong says. “They are coming in huge quantities, truck fulls sometimes with some coming beneath cars and buses.” Mr Eshun, for whom the textile industry runs in the family, says the government must do more to protect the country’s borders. “I enjoy working here. I am able to give my wife and children some clothes at Christmas,” he says. “But allowing the counterfeiters... will kill the jobs.” Earlier this year the government suggested plans to launch a task-force on combating all counterfeit goods in the country to supplement the dedicated textile group it launched in 2010. The Ministry of Trade and Industry along with law enforcement, local manufacturers and trade bodies routinely search the country’s markets for pirated local prints. John Okwan, of the Textile, Garment and Leather Employees Union, is part of the group and believes that without the task-force, there would be no textile industry at all. “We have seized more than 7,000 pieces since we started the task-force. When the traders hear the task-force coming they will run away and leave their wares because they know what they are doing is wrong,” Mr Okwan says. “We are not saying they should not bring in cloth and they have the right to do their own designs but the problem is with the pirated ones.” However the government has been criticised for allegedly taking non-pirated goods during raids. A group of textile traders from Accra’s Makola Market have taken the ministry to court over the seizures with a decision expected next year.
Tackling counterfeit goods remains a major focus and one local firm believes mobile technology can provide a solution. The company mPedigree puts unique barcodes on GTP’s fabrics and lets customers send a text message to verify the garments are authentic. The technology is being adopted by drug companies and others in the country to combat counterfeiters across the board. Ghana’s godfather of independence, Kwame Nkrumah, heavily backed textiles in the 1960s, with the government having stakes in many firms. Today, the country’s four manufacturers are all privately-owned, and many believe support for the industry from the government is on the wane. This was emphasised by the decision of John Mahama’s National Democratic Congress party to ditch Accra-based Printex as manufacturer of school uniforms, instead turning to China. “The president said we should produce things in Ghana and so I don’t know who has given that contract to China. It is a big problem now,” Mr Okwan says.
SOURCE: The Independent
Trade and Industry Minister Tareq Qabil has applied an export fee of LE3,500 per ton of clippings and scrap fabrics in order to save raw materials and protect the labor-intensive textile industry. Qabil said the textile factories requested such a levy, adding that the decision was endorsed by the Holding Company for Cotton, the Textile Export Council and the Flax Company. The Textile Export Council said waste from home furnishings is recycled to produce thick yarn used by small and medium-sized furniture factories. The Businessmen Association, meanwhile, has recommended that the fee be increased by 25 percent. The minister said the export of waste fabrics has increased over the past three years, from 43 tons in 2013 to 294 tons in 2015, adding that producers prefer to export waste fabrics because they sell the ton for LE9,780, as opposed to LE6,080 in the local market. With the application of this new fee, the hope is that people will have more of an incentive to sell locally, as the margins for export would shrink considerably.
SOURCE: The Egypt Independent
SAARC Chamber of Commerce and Industry vice president Iftikhar Malik, on the auspicious occasion of birthday of His Imperial Majesty the Emperor of Japan and their National Day falling on December 23, said that it was matter of deep satisfaction for him that Pakistan and Japan enjoy close and cordial relations. Since the establishment of diplomatic relations between the two countries, the friendly relations between Pakistan and Japan are mainly centered on economic cooperation which needs to be strengthened further. Pakistan textile industry see Japan as a promising market for its textile products but Pakistan is facing a disadvantageous position because of differential market access, as compared to regional competitors like India, Bangladesh and ASEAN countries. Last year, Japan imported textile products amounting to $ 38 billion, whereas share of Pakistan was only $123 million less than 0.33 percent.
Although, Pakistan has GSP+ status and is getting on average 1.4 percent lesser duties than developed countries, but yet the tariff imposed on Pakistan's exports is 5.36 percent (on average) more than India/Bangladesh and ASEAN countries. Regarding exports from Pakistan to Japan,T he UBG chairman said that other regional countries are enjoying duty free access to the Japanese market, either because of regional trading arrangements or having a LDC status. He said that auto industry of Japan and textile industry of Pakistan contributed significantly to the good relationship between two countries. Pakistani raw cotton had supported the textile industry in Japan after World War and contributed to the economic revival of Japan. Japanese in response exported a textile machine to Pakistan.
Japan International Cooperation Agency (JICA) expressed its desire to start a technical cooperation project to support the Pakistani textile industry in 2016 in order to produce high value added products and strengthen its international competitiveness. On the national day of Japan, he requested the Japanese embassy for issuance of longer-term validity multiple entry visas to Pakistani businessmen.He also emphasized commitment in further promoting economic cooperation, and activating cultural and people-to-people exchange between Japan and Pakistan. FPCCI president Mian Adrees on the auspicious occasion visited the business community of Pakistan to joined him in expressing their heartiest felicitations to His Excellency and the people of Japan. He expressed that Japan has always remained at the forefront to assist Pakistan in the socio-economic development.
SOURCE: Yarns&Fibers
The All Pakistan Textile Mills Association central Chairman Tariq Saud has thanked the Prime Minister Nawaz Sharif, Federal Finance Minister Ishaq Dar and Federal Petroleum Minister Shahid Khaqan Abbasi for providing 60 MMCFD LNG to the Punjab-based textile industry in winter and averted the threat of a complete closure of mills due to the high cost of doing business. "This single step suggests that the federal government is serious in resolving textile industry issues," he added. However, he has yet termed it as an expensive solution, saying that the high cost of energy is already hitting hard the operational cost of the Punjab-based textile industry. He further recalled the candid attitude of the Prime Minister Pakistan Nawaz Sharif in September 11 meeting with textile industry representatives, which has opened up the path of relief to the energy-stricken textile industry. "The APTMA is of a considered opinion that the government has always taken the textile industry as a mainstay of economy and is all serious on lessening its burdens in line with the regional competitors," he added.
Chairman APTMA Tariq Saud has urged the government to immediately announce remaining part of the textile package, which includes 5 percent rebate on exports and zero rate regime throughout the entire textile value chain, extension of Export Refinance to spinning and weaving sub-sectors, introduction of safeguards through tariff and non-tariff measures against the inroads of synthetic yarns and fabrics in domestic market, removal of electricity surcharge and GIDC and availability of incentives in the export market by matching the regional support package. He has further urged the Prime Minister Nawaz Sharif to save the textile industry from further collapse and announce the remaining part of the textile industry package immediately.
SOURCE: The Business Recorder
Multan Chamber of Commerce and Industry (MCCI)'s President Fareed Mughis Sheikh has said that many textile mills and value-added sector units so far been closed due to non-availability of gas rendering thousands of workers jobless and he has condemned the government's indifferent attitude towards the Punjab-based textile industry, which has resulted into alarming decline in exports during November 2015 comparing with the corresponding period. Fareed Sheikh said the export data for December 15, 2015 reveals that exports of cotton yarn and cotton fabric have dropped by 45 percent and 22 percent respectively against the corresponding period in quantitative terms consequently an overall decline by 15 percent in value terms. Talking to this scribe he said that there is a nominal increase in clothing exports during the same period, he said and added that the textile exports constitute $8 billion of total exports against $4 billion of clothing exports. He said the government's apathy towards the textile industry has resulted into closure of 100 mills out of 270 mills across the Punjab. Textile mills in Punjab are facing a serious blow of non-viability due to the high cost of doing business. The remaining capacity has also closed partially, he added. The MCCI President said that the energy cost had hit through the roof in August 2013 when the government had increased power tariff to Rs 15 per unit due to a surge in oil prices to $100 per barrel. However, the industrial unit is yet Rs 14 per unit despite the fact that oil price has dropped to $35 per barrel in the international market today, he deplored.
He warned that revival of the Punjab-based textile industry would be next to impossible in case the government delayed the solution to the problem of high energy cost. He expressed deep remorse that the textile industry has been left unattended by the government, as no one is ready to kill the disparity in energy cost of Punjab-based textile mills against other provinces as well as the regional competitors. It is also pathetic to note that the cost of LNG was $5 world over but the federal government was not offering a compatible rate to Punjab-based mills against those in Sindh and KPK, he added.
SOURCE: The Business Recorder
Korea likely to suffer losses of 15.5 trillion won ($13.3 billion) in its export of parts and materials over 10 years failing to join the Trans-Pacific Partnership agreement, a think tank said on Thursday. According to the Korea Economic Research Institute report, Korea's exports of parts and materials to the United States are estimated to drop $11.3 billion in terms of added value, for 10 years after the TPP goes into effect, if the U.S.-led free trade agreement abolishes all import duties among its signatories. It also said that exports to Japan is also likely to fall $1.96 billion. Korean companies' exports to 12 member nations of the TPP, made from their manufacturing bases in Vietnam, are expected to drop $620 million a year and their shipments via global supply networks in Mexico are also to drop $290 million, the report said. By industry, the estimated export losses for textile are $420 million. Although Korea has already signed FTAs with 10 of the 12 TPP members, besides Japan and Mexico, the price competitiveness of Korean exporters, applied by complicated rules of origin, cannot help but lag behind those of their counterparts in member nations, which are applied by a uniform set of completely cumulative rules of origin, said Professor Choi Nam-seok of Chonbuk National University The industries' reliance on global value chains has increased since 2008. If, therefore, Korea is excluded from Asia-Pacific global supply networks to be created by the conclusion of the TPP, it would adversely affect the nation's export of parts and materials, directly and indirectly. Prof Choi said that the nation should hurry joining the mega-FTA to help Korean exporters make the most of its supply networks and set up new business models, taking into account the large export losses resulting from Korea's exclusion from the regional supply networks of the TPP.
SOURCE: Yarns&Fibers
Bangladesh Bank has announced a raise in its credit limit for the textile mills of the country from $15 million to $20 million, according to Bangladeshi media reports. The Bangladesh Bank's circular said that it will provide more credit to the textile mills from its Export Development Fund (EDF). However, the terms and conditions to avail loan under the credit facility will remain the same.
SOURCE: Fibre2fashion
Vadim Solovyov, Deputy Chairman of Russia's Duma Committee on constitutional legislation and state construction and a member of the Communist Party, has warned that the unofficial ban on the import of fabrics and textile products from Turkey might force Russian textile firms to stop production, according to Russian daily Kommersant. In a letter to Prime Minister Dmitry Medvedev and Minister of Industry and Trade Denis Manturov, Solovyov urged them to take action against the unofficial ban. He said the fabrics already purchased by Russian textile companies from Turkish fabric manufacturers are still in Turkey, as the carriers refuse to deliver them into Russia or are waiting in the transit zone between Ukraine and Russia.
Kommersant reported that Turkish textiles are not officially included in the Russian sanctions list against Turkish goods but were under an 'unofficial' ban. However, the Deputy head of the Ministry of Industry and Trade of the Russian Federation Victor Evtukhov stated recently that a ban could be formally established for Turkish textile products. The Department has already proposed to ban the import of 70-80 per cent of light industry goods from Turkey. This may create problems to international retailers, producing clothing in Turkey for Russia, including brands like Zara, Mango, Lacoste and Adidas.
Relations between Moscow and Ankara have turned frosty since Turkey shot down a Russian warplane for violating its airspace on November 24. Following the incident, Russia announced a rash of sanctions targeting Turkey, ranging from restrictions on visa-free travel to a ban on imports of certain goods. Hit by Russian sanctions, Turkey's ready-to-wear exporters are eyeing new markets in Africa and diversify their client base to compensate for the losses due to Moscow's decision. Turkey hopes double the ready-to-wear exports to Africa in three years. The foreign trade volume between Turkey and Russia reached $31.2 billion in 2014 - an approximately 17.3 per cent increase from the previous year.
SOURCE: Fibre2fashion
Rwanda is desperately looking for investors in textile industry to overcome a chronic clothing shortage that has forced the country to spend millions of dollars on the import of second hand clothing. “Every year, we spend over $15 million to import second hand clothes. Wearing such clothes is not worth our value,” said Claver Gatete, Rwanda's Minister of Finance and Economic Planning, according to a report by Rwandan news agency KT Press. Rwanda spent an average of $57 million on textile imports annually between 2008 and 2012, according to Rwanda Development Board (RDB). At the 13th National Dialogue, Gatete said that Rwanda needs investors in the textile industry to provide quality clothes and more importantly create more jobs. The country is targeting to create 200,000 new jobs every year, but this target has not been achieved in the last two years. Rwanda created 146,000 jobs every year for the last two years; 54,000 jobs short of the annual target. Rwanda has two textile industries, Utexrwa and C&H Garments, a Chinese textile company. Since 1984, Utexrwa has been running at 40 per cent capacity. It produces about 12,000 meters/year, and has a turnover of $ 3million. However, Utexrwa produces uniforms for students and other institutions, but does not produce for retail consumption. In 2014, China's C&H Garments also built a franchise in Kigali, which produces for the export market, especially European stores. The company has invested in automatic computerized sewing machines with a capacity of training 200 local workers at start-up. The number of workers is expected to reach 400 in two years. Officials at RDB said the plant will soon introduce its products into the market. “We have to go by quantity when we export. Our goal in Rwanda is to export garments to the US and Europe, leaving about 20 per cent of our production for the local market”, said Malou Jontilano, General Manager of C&H Garments Ltd. During the National Dialogue, Senator Tito Rutaremara suggested that there must be a paradigm shift in attracting investment to boost the industry sector in Rwanda. He said Rwanda can apply the “Copy and Transform” approach, “because building new industries from scratch can cost us huge in import of some equipment.”
SOURCE: Fibre2fashion
The European Union's (EU) economic recovery is gaining strength, but the pace of growth continues to be modest, despite accommodative monetary policy and favorable financial conditions, and investment remains subdued, says the new World Bank EU Regular Economic Report, a bi-annual publication that covers economic developments, prospects, and economic policies in the EU. “The EU is gradually emerging from a protracted economic downturn that led to an increase in poverty in many countries. Continued easing of financial conditions, improved confidence, low commodity prices and a reduced drag from fiscal consolidation will continue to support growth in 2015 and 2016,” said Theo Thomas, World Bank Lead Economist and co-author of the report. “However, a prolonged period of low investment growth, a slowdown in emerging-market growth, higher financial volatility and regional tensions could undermine the outlook”.
Private consumption is the main driver of the EU recovery. Growing wages and employment, bolstered by low consumer-price inflation largely due to subdued commodity prices, have raised household incomes and spending. Youth unemployment is also declining, but remains elevated in some countries, especially in Central and Southern Europe, where further support may be required to provide education and training to ensure they have marketable skills. However, as investors remain concerned about the strength of the recovery, and households and corporations continued to pay down debts, investment remains the weak link to a more vigorous and sustained recovery. The recovery is leading to a decline in poverty rates, which surged across the EU during the crisis despite significant social protection systems. While EU countries are among the biggest spenders on social protection in the world, some EU countries have been unable to provide effective protection for their poorest citizens through poverty-targeted programs. Some countries, especially in Southern and Central Europe, saw cuts in social assistance spending during the crisis. Reforms for making social protection systems more effective in supporting the poor include the introduction of guaranteed minimum income (GMI) programmes, maintaining the effective coverage and adequacy of existing social exclusion programs, and reducing the leakages of social assistance transfers to the rich.
“The EU needs to turn current tailwinds into self-sustaining growth through continued structural reform,” continued Thomas. “Continuing to remove constraints on businesses, by reducing rigidities in labor and product markets, and ensuring labor has the right skills through investing in education and training are likely to raise the EU's long-term growth potential. In this context, focusing social assistance systems on the poorest and most vulnerable groups, while ensuring that spending is affordable over the long-term, could continue to reduce poverty.” The World Bank expects growth in the EU to reach 2 per cent in 2015 and 2.1 per cent in 2016. It projects that growth will strengthen from 1.8 per cent (y-o-y) in the first half of 2015, with Central Europe experiencing the highest growth, driven by the Czech Republic, Poland and Romania. Romania is expected to grow at 3.6 per cent in 2015, and 3.9 per cent in 2016, fueled by a surge in private consumption and supported by fiscal measures. Poland is projected to reach 3.5 per cent in 2015 and remain above this level over the medium term, as improved labor market conditions raise real disposable household incomes and consumption. Southern Europe's growth rates, at 1.4 per cent in 2015 and 1.6 per cent in 2016, are likely to be the slowest, but a significant improvement from less than 0.5 per cent in 2014.
In Croatia, economic activity is expected to increase by 1.5 per cent in 2015, with recovery continuing in 2016-17 at on average 1.9 per cent. The recovery is led by strengthening domestic demand, exports and investment while unemployment continues to gradually decline. However, external factors, like a slowdown in Croatia's main trading partners, the Fed's tightening monetary policy and a surge in emerging market risk premium, could undermine Croatia's fragile recovery, affecting exports and raising financing costs for an already high level of indebtedness of public sectors as well as other domestic sectors. On the domestic side, the prolonged formation of a new government, and the uncertain scope of fiscal consolidation measures for 2016 and 2017 could reduce investor confidence and thus hamper the growth outlook. “To ensure macroeconomic stability and growth, addressing fiscal vulnerabilities as well as high inactivity and unemployment rates, and a commitment to implement long-lasting structural reforms remains crucial”, said Sanja Madžarevic Šujster, World Bank Senior Country Economist for Croatia.
SOURCE: Fibre2fashion
Profits earned by Chinese industrial companies in November fell 1.4 percent from a year earlier, marking a sixth consecutive month of decline, statistics bureau data showed on Sunday. Industrial profits – which cover large enterprises with annual revenue of more than 20 million yuan ($3.1 million) from their main operations – fell 1.9 percent in the first 11 months of the year compared with the same period a year earlier, the National Bureau of Statistics (NBS) said on its website. The November profits of industrial firms have seen some improvement from the previous month. In October, profits fell 4.6 percent from a year earlier. “The November industrial profit data matched earlier output data and they showed some signs of stablising, which are in line with recent data from other Asian countries,” said Zhou Hao, China economist at Commerzbank in Singapore, adding the figures were slightly better than market expectations. The NBS said investment returns for industrial companies in November increased from a year earlier by 9.25 billion yuan ($1.43 billion). The jump in November profits from the auto manufacturing and electricity sectors, up 35 percent and 51 percent from a year earlier, respectively, helped narrow overall declines, the statistics bureau said. “Declines in industrial profits narrowed in November, but uncertainties still exist,” said He Ping, an official of the Industry Department at NBS. He added that inventory of finished goods grew at a faster pace last month.
Profits of state-owned enterprises (SOEs) among major industrial firms saw a 23 percent slump in the first 11 months this year from the same period in 2014. Mining remained the laggard sector, with profits falling 56.5 percent in the same period. Aluminium producer China Hongqiao Group said in early December it would cut annual capacity by 250,000 tonnes immediately to curb supplies. Eight Chinese nickel producers including state-owned Jinchuan Group Co Ltd, said they would cut production by 15,000 tonnes of metal in December and reduce output next year by at least 20 percent from this year, in a bid to lift prices from their worst slump in over a decade. China’s producer prices have been in negative territory for nearly four years due to weak domestic demand and overcapacity. The country’s top leader last week outlined main economic targets for next year after they held the annual Central Economic Work Conference, where it said the government will push forward “supply-side reform” to help generate new growth engines in the world’s second-largest economy while tackling factory overcapacity and property inventories.
SOURCE: The Financial Express
