The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 24 AUGUST, 2021

NATIONAL

 

INTERNATIONAL

Piyush Goyal asks industry to flag non-tariff barriers in exports

Urging domestic industry to work on improving its competitiveness and help the country realise an ambitious merchandise export target of $400 billion for FY22, Goyal said, “The key to success is to focus on goals, not obstacles.” Highlighting the growth in the start-up ecosystem, the minister said over 54,000 startups were providing more than 5.5 lakh jobs, and more than 20 lakh jobs will be created by 50,000 new start-ups in the next five years. Concerned about protectionism by stealth adopted by some nations, commerce and industry minister Piyush Goyal on Monday asked industry associations to flag non-tariff barriers (NTBs) faced by Indian exporters in various countries so that New Delhi can firm up appropriate responses wherever feasible. Urging domestic industry to work on improving its competitiveness and help the country realise an ambitious merchandise export target of $400 billion for FY22, Goyal said, “The key to success is to focus on goals, not obstacles.” Merchandise exports until the second week of August this fiscal jumped 71% from a year before and 23% over the same period in FY20 (pre-pandemic level), the minister said. Highlighting the growth in the start-up ecosystem, the minister said over 54,000 startups were providing more than 5.5 lakh jobs, and more than 20 lakh jobs will be created by 50,000 new start-ups in the next five years. FE had earlier reported that major developed and developing countries, such as the US, China, South Korea, Japan and those in the EU, had put up huge NTBs to discourage “undesirable imports”, even though they claim to maintain a low-tariff regime. The US had put in place as many as 8,453 NTBs, followed by the EU (3,119), China (2,971), South Korea (1,929) and Japan (1,881), according to a commerce ministry analysis last year, based on World Trade Organization data. In contrast, India has imposed only 504 NTBs. While non-tariff measures are not always aimed at curbing imports — for instance, safety, quality and environmental standards are put in place by all countries for imported products — what has often worried analysts is that they can be abused for trade protectionism. Goyal highlighted incentives for manufacturing through the production-linked incentive schemes and the need to focus on 24 sectors to attract investment. He also emphasised the “One District, One Product” programme to create a pool of 739 products for exports from 739 districts. Similarly, he highlighted the India Industrial Land Bank for providing a GIS-enabled database of industrial areas. Industry should suggest areas for intervention through research, handholding of exporters/ manufacturers, deeper engagement with states and greater engagement with overseas missions, among others, to realise the export target, he said.

Source: Financial Express

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FM announces plan to monetise assets, realise Rs 6 trillion till 2024-25

 The plan covers 20 asset classes spread over 12 line ministries and departments Finance Minister Nirmala Sitharaman on Monday announced a pipeline of assets the government is looking to monetise to collect about Rs 6 trillion to partly fund its ambitious infrastructure projects over four years ending 2024-25. About Rs 88,000 crore will be realised through asset monetisation in the current financial year. Sitharaman, however, clarified that the ownership of all these assets would remain with the government, and there would be a mandatory hand-back of assets after a certain time period. “So, the government is not selling away these assets,” she said. The National Monetisation Pipeline (NMP) will constitute 14 per cent of the Centre’s share of Rs 43.29 trillion in the National Infrastructure Pipeline (NIP). Global players such as Blackstone, Blackrock, and Macquarie have shown interest in participating in the monetisation process. The plan covers 20 asset classes spread over 12 line ministries and departments. The top three sectors by value are roads (Rs 1.6 trillion), railways (1.5 trillion) and power (Rs 85,032 crore). The NMP does not include land, but lays the road map for monetising brownfield projects where investments have already been made, where a completed asset is languishing or which is not fully utilised, Sitharaman said. “By bringing private participation, we will be able to monetise these assets better and resources obtained through monetisation would be used for putting further investment into infrastructure building,” she added. Sitharaman said the asset monetisation programme is aimed at tapping private sector investment for new infrastructure creation, and is necessary for creating employment opportunities, enabling high economic growth, and seamlessly integrating the rural and semi-urban areas for the overall public welfare. Contractual partnerships for the execution of the asset monetisation pipeline will be with key performance indicators and performance standards, she said. “They are all de-risked assets, and the value from the consideration and private investment which will come into maintaining it and optimally utilising it will generate greater value and unlock resources for the economy,” she said. The NMP will run parallel to the infrastructure creation road map of the government from the current financial year, Sitharaman said. The Centre’s share is about 39 per cent in the Rs 111-trillion NIP. In the roads sector, about 26,700-km stretch would be monetised to mop up around Rs 1.6 trillion. The National Highway Authority of India (NHAI) and the Ministry of Road Transport and Highways will drive this through the toll, operate and transfer (TOT) and Infrastructure Investment Trusts (InvITs) models. The plan includes monetising power transmission lines of 28,609 ckt km to garner Rs 45,200 crore. These will be driven by Power Grid Corporation. Monetisation of hydro and solar power generation assets of 6 Gw would help the government realise Rs 39,832 crore, and would be undertaken by National Thermal Power Corporation, National Hydroelectric Power Corporation, and NLC India. Natural gas pipeline of 8,154 km would be monetised by GAIL with an indicative value of Rs 24,462 crore. The plan also includes petroleum product pipelines of 3,930 km to be monetised by Indian Oil Corporation, Hindustan Petroleum Corporation and the Ministry of Petroleum and Natural Gas. This would help in realising Rs 22,503 crore through public private partnerships (PPPs) and InvITs. The government will also monetise warehousing assets of 210 lakh MT to realise Rs 28,900 crore. These assets are currently owned by Food Corporation of India and the Department of Food and Public Distribution. For railways, the plan is to monetise railway stations, passenger trains, good sheds, Konkan Railway, Hill Railways, dedicated freight corridor, and railway stadiums to get Rs 1.52 trillion. In the telecom sector, 2.86 lakh km fibre and 14,917 towers of BSNL and MTNL are planned to be monetised that will help in realising about Rs 35,100 crore. In aviation, the plan is to sell 25 airports and reduce the Airport Authority of India's (AAI) stake in existing airports such as Delhi, Mumbai, Hyderabad, and Bangalore. This would garner proceeds of Rs 20,782 crore. In the shipping sector, 31 projects in nine major ports would be monetised to realise Rs 12,828 crore. In the coal mining sector, 160 projects have been identified involving a value of Rs 28,747 crore. In sports, two national stadiums and two regional centres would be monetised to get a value of Rs 11,450 crore. In urban real estate, redevelopment of colonies and hospitality assets worth Rs 15,000 crore will be monetised. “This will be like a PPP where the private sector runs the asset for a period of time but hands it back to the government subsequently. The assets and transactions identified under the NMP are expected to be rolled out through a range of instruments,” CARE Ratings said in a note post the announcement. Sitharaman while announcing the plan said it's important that India recognises the time has come for making the most out of our assets. “The economy needs more resources, the economy wants that kind of liquidity and that kind of value unlocking with which we can move forward.” Sitharaman further enumerated the reforms and initiatives undertaken by the Narendra Modi government towards accelerated infrastructure development and for incentivising private sector investments. This included the recent scheme to incentivise state governments to recycle their assets for fast-tracking greenfield infrastructure. The announcement of the plan is timely, and will provide a much-needed boost to the economy by creating more resources and liquidity in the market, said Alok Saraf, partner at Grant Thornton Bharat. “This is likely to support the launch of more investments in roads, power and other similar sectors and will lead to optimisation in the utilisation of assets owned by the government. This announcement comes at a point where the market is bullish and FDI inflow has grown over 40 per cent, hinting on India being a preferred investment destination amongst global investors. This asset monetisation model will not only lead to better financing structures and mechanisms, but participation of the private sector will also give push to digitisation and innovation,” Saraf said.

Handholding states

Nodal officers have been appointed by 26 states and Union Territories, and four states have created their pipeline of assets that can be monetised, NITI Aayog CEO Amitabh Kant said. Most states have shown willingness to monetise their assets, he said. To nudge states to participate in the exercise, the Centre has already announced up to Rs 5,000 crore financial assistance, which is budgeted as interest-free loan if they divest and monetise their assets, or list state-owned entities on the exchanges, Sitharaman said. “We are with the states, we want to work together with the states central ministries now only need to gear up towards taking this initiative forward,” said Kant.

Source: Business Standard

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Industry seeks RoDTEP-like scheme for service exports: Check details here

The scheme - Duty Remission of Export of Services Scheme or DRESS - will reimburse the un-refunded taxes and duties embedded in services exports The industry has urged the Centre to roll out a scheme to boost services export and incorporate it as a part of the new foreign trade policy that is expected to kick in from October. The scheme — Duty Remission of Export of Services Scheme or DRESS — will reimburse the un-refunded taxes and duties embedded in services exports, Maneck Davar, chairman, Services Export Promotion Council (SEPC) told Business Standard, adding that the scheme, if implemented, will increase competitiveness of services exporters in the country. The scheme will support services exports and focus on issues such as employment generation, look into the needs of specific sectors, support small businesses, and remove the burden of un-refunded taxes, levies on the lines of Remission of Duties and Taxes on Export Products (RoDTEP) scheme for merchandise exports.

Source: Business Standard

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Indian textiles sector attracts UAE investments

 The UAE is emerging as a growing investor in India’s textiles sector even as India steps up its efforts to quadruple the exports of handloom textiles in the next three years, according to a Wam report. The Ministry of Textiles here today set up a high-level, eight-member, experts’ committee to double the production of handlooms and boost exports. The committee has been tasked with preparing a roadmap to achieve these targets, an announcement said. Investments from the UAE in India’s textiles sector, a new area of entrepreneurial interest, amounted to $23.09 million in the last five years and is growing, the Ministry said in a statement on foreign direct investments, which covered the period up to 31st March 2021, which marks the end of the financial year in India. The UAE topped the chart of investors from the GCC in the textile sector with Oman and Qatar in second and third places. The high-level committee is headed by Sunil Sethi, Chairman, Fashion Design Council of India. It has been asked to submit its report in 45 days. Simultaneously, the government has released funds worth Indian rupees 1.25 billion ($16 million) for eight Centres of Excellences in textile research across India, the Ministry announced. In addition, 10 new Handloom Design Resource Centres are to be set up by the National Institute of Fashion Technology (NIFT) "with the objective to build and create designoriented excellence in handlooms to facilitate exports," the Ministry’s statement said. The NIFT’s 17 campuses across India have been serving as "knowledge service providers in the area of design development and positioning of handlooms." These initiatives have been occasioned by the National Handloom Day, which falls in August. The Minster of State for Textiles, Darshana Jardosh, said on this occasion that "handlooms are a symbol of India’s rich and varied cultural heritage." She said this sector is also a vehicle for women’s empowerment since more than 70 per cent of all weavers and allied workers in India are women.

Source: Trade Arabia

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Panel aims to double manufacturing exports in 5 years, slash imports

The Steering Committee for Advancing Local Value-Add and Exports (SCALE), a joint government and industry panel under Welspun Group chairman BK Goenka, has said focus on these three critical factors would catalyse incremental domestic value addition of $350-380 billion over the next five years. The panel has worked out action plans for 24 priority sectors. A government-backed panel has firmed up a roadmap to double manufacturing exports over the next five years, reduce imports by two-thirds in select sectors and drive up annual domestic consumption growth to about 9% from roughly 7% in a normal year under the Atmanirbhar Bharat initiative. The Steering Committee for Advancing Local Value-Add and Exports (SCALE), a joint government and industry panel under Welspun Group chairman BK Goenka, has said focus on these three critical factors would catalyse incremental domestic value addition of $350-380 billion over the next five years. India’s manufacturing exports stood at $229 billion in 2019 (before the pandemic), or 43% of its total — both merchandise and services — exports. In contrast, manufacturing goods comprised 80% of the total exports of Vietnam, 70% of Malaysia and 56% of Thailand, according to the panel. Of course, India’s total exports of $533 billion were way ahead of these nations, since they are not major players in the services sector. The SCALE committee is set up under the commerce and industry ministry. The 13 production-linked incentive (PLI) schemes, with proposed incentives of almost `2 lakh crore over five years, will be a major driver of domestic manufacturing, it said. The panel was tasked with improving the growth of manufacturing sector, whose share in the GDP has remained stagnant at around 16% for decades now. The panel has worked out action plans for 24 priority sectors. These include electronics, auto components, textiles, steel, aluminium, marine products, ready-to-eat and processed fruit & vegetable, agrochemicals, certain electric vehicles and integrated circuits, toys, furniture, ethanol, ceramics, set-top boxes, robotics, televisions, close-circuit cameras, drones, medical devices, sporting goods and gym equipment.

Source: Financial Express

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Asset monetisation will have multiplier impact on economy: Amitabh Kant, NITI Aayog

"The ultimate objective of NMP is to enable accelerated infrastructure creation and modernisation of services for a multiplier impact on the economy." The monetisation of assets, as laid out in the National Monetisation Pipeline, will have a multiplier impact on the economy and will give a push to growth and employment, NITI Aayog CEO Amitabh Kanttells ET's Yogima Seth Sharma in an interview. Edited excerpts: NMP has set a target of Rs 88,000 crore for this year. We are already five months into the fiscal year so whatis the plan to fasttrack the implementation of NMP to achieve the FY22 target? National Monetisation Pipeline (NMP) aims to enable a systematic approach.

Source: Economic Times

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Too Soon To Predict Indo-Afghan Trade Future: FIEO DG

In the past few days, several reports have emerged about how import-export trade in India, the largest beneficiary of Afghanistan's exports, is at a halt which is taking a toll on the people in the business due to their stuck payments. The recent takeover of Afghanistan by the Taliban forces has put the entire world upside down, in many terms. From the emerging humanitarian crisis to the economy, trade to import-export business, everything is at stake, especially for South Asian countries including India. In the past few days, several reports have emerged about how import-export trade in India, the largest beneficiary of Afghanistan's exports, is at a halt which is taking a toll on the people in the business due to their stuck payments. Ajay Sahai, Director General and CEO, Federation of Indian Export Organisation (FIEO) said, “The recent political development in Afghanistan has caused uncertainty in trade and businesses, and we are watching the development closely. It has impacted the flow of trade between the two countries (India and Afghanistan). It is too early to predict what will happen in the future. However, we feel that over a period of time the stability and predictability in trade will be established.” As the intense crisis unfolds in Afghanistan with each passing day, there are a lot of exporters who are worried about the stuck payment and current situation. “The situation is quite fluid and thus waiting and watching is the best policy. We have advised exporters to go for credit cover to tide over the payment problem. The exporters who still have delivery time left or otherwise also are postponing exports,” Sahai added. The major Afghanistan exports to India consist of cereals, sugar, pharmaceuticals, apparel, textiles, tea, coffee, spices, tobacco, and machinery including transmission towers. Meanwhile, Indian exports to Afghanistan consist of coffee, tea, cotton, toys, footwear, and several other consumable items. Talking about the uncertainty among exporters, whether they should continue the operation in Afghanistan or not. Sahai said, “Yes, their concerns are genuine but they should not hurry their decision as all aspects need to be evaluated to arrive at a well thought conclusion: political, economic, logistics, banking, currency movement, etc.” Meanwhile, commercial traffic across Pakistan and Afghanistan's border at the Spin Boldak/Chaman crossing was seen, on Thursday, which further depended on the worries of Indian traders. However, to clear the confusion of any future trade with the country, Sahai said, “Let us not rush to a decision . We are hopeful that the situation will get clear within the next few days and whatever instruction is provided by our Government will be followed by our exporters/importers.” Few have predicted that the halt on Indian trade by the Taliban can affect the Indian economy to a certain extent and the whole situation is a bad sign for the Indian economy. Sahai said, “The Indian economy is primarily domestic driven. Moreover, Afghanistan’s share in India’s exports is miniscule and thus I would say that economically, it does not affect us.”

Source: Business World

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What it’ll take to achieve goods exports of $400 billion

We have a ready blueprint for export success but here are seven points that demand attention. We are aiming for merchandise exports of $450 billion in a couple of years." This was a statement from India’s minister for commerce and industry. “We are concentrating on higher value products such as engineering, drugs and pharmaceuticals, leather and textiles," he added. In addition to the pursuit of free trade agreements, the minister mentioned that tax and trade reforms were also necessary, as well as a decrease in transaction costs. The commerce secretary too assured us that the present fiscal year’s exports, growing between 25% and 30%, were ahead of target, and saw no reason why India couldn’t reach an audacious goal of $450 billion in a couple of years. A strategy paper to double exports in three years had been prepared by his ministry. Do these statements sound familiar? They are very similar to current conversations around India’s trade policy and ambitions. But alas, these statements are from 10 years ago. Hence, you can be excused if you can’t shake off a feeling of deja vu. In 2010-11, India’s growth rate of merchandise exports was 37.5%, and there was tremendous export optimism. Reaching $450 billion was seen to be just around the corner. India’s export-togross domestic product (GDP) ratio, at a mere 17%, was seen as too low compared to Asian peers like Thailand at 66%, or even South Africa at 27%. Ten years later, we are back to focusing on exports as a major driver of growth. It is opportune because the world economy led by two of its largest economies, the US and China, is literally booming. These two economies make up nearly 40% of global GDP and they will clock an average growth of 5% over the next two years. That is the equivalent of India’s economy growing at 50%, since it is about one-tenth their size. Buzzing international trade is manifest in high commodity prices, skyrocketing freight charges, container and ship shortages, and overflowing order books. Surely, this is India’s opportunity to seize, and even if it manages to increase its share of manufactured exports in the world from 1.5% to 3%, it would have doubled its exports. As such, the run-rate of exports in the first three months of this fiscal indicates that a $400 billion target is achievable. This target was underlined by the Prime Minister himself in an address to diplomatic missions overseas. Clearly, economic diplomacy will also be intensively used to serve the cause of energizing exports. After a lacklustre five years of cumulative zero growth, prospects are bright for a stellar export performance in the next couple of years, both for manufactured goods and services. That is mostly due to strong economic growth in the developed world, which in turn is fuelled by vaccine optimism and fiscal stimulus. That growth boom has a strong base effect, but it is likely to sustain for a couple of years. The blueprint for doubling India’s exports in three years was written in great detail 10 years ago. It just needs to be dusted and re-read. And maybe updated to incorporate new opportunities. For instance, India’s Special Economic Zones policy needs a reboot. The key determinant of success is implementation. As we embark on an ambitious yet attainable target, here are seven important considerations. First is the importance of free trade agreements (FTAs). Our biggest trade partner (including services) is the US, with which we do not have an FTA. Clearly, an FTA is not a prerequisite to keep our export engine chugging. In fact, almost three-fourths of India’s exports are outside the ambit of FTAs. So while we aggressively pursue trade and investment treaties with the EU, Australia, Canada and the US, that effort should not stymie export growth. Secondly, nearly 80% of our exports are from only 21 chapters of the Harmonised System (HS) of codes for classifying goods. The remaining 78 of 99 HS chapters lie underused. Of these, there are 24 chapters that contribute between $1 and $4 billion, and need focused attention to double exports. Thirdly,we must ensure that initiatives like Atmanirbhar Bharat (self reliance) or production-linked incentives (PLIs) do not become a camouflage for protectionism. Import substitution as a strategy is fine only if done with low tariff protection and subject to the same benchmarks of quality. Fourthly, export incentives must be generous enough to negate the effect of domestic taxation, in line with the maxim that “you cannot export taxes". Fifth, the embrace of global value chains means that our exports will have significant import content. Hence, tariff barriers for imports have to be modest. The counter to this is that exporters get their import duties refunded, or that they can take the route of advance licensing. But every such minutiae is an invitation to delays, paperwork and cumbersome processes, if not corruption. Why not just keep tariffs modest and let exporters focus on enhancing their competitiveness? The sixth aspect is the rupee’s exchange rate. Even the Reserve Bank of India has said that the currency is overvalued, and huge dollar inflows on the capital account are not helping. For exports, a slight bias towards an undervalued currency is preferable. India has a current account deficit, so it should not fear being labelled a ‘currency manipulator’. And seventh is plug-and-play access to global markets for small enterprises. Omnipresent global e-commerce players should be the conduit for this, where a buyer in remote Alaska can click on an item to be shipped from Coimbatore. Are all our systems geared to make this happen? Or will the paperwork, tax, foreign exchange and customs requirements defeat this potential. That’s the litmus test.

Source: Livemint

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Lower costs, ink FTAs to push exports: CEO panel

 A committee comprising top Indian CEOs has argued that India’s proposed free trade agreements (FTAs) could help push exports of auto components and textiles, while also suggesting a sustained effort to reduce five disabilities for domestic companies — cost and ease of doing business, market access via trade treaties, technology and quality issue and supporting Brand India for manufacturing. The Steering Committee for Advancing Local Value-Add and Exports (SCALE committee), headed by former M&M MD Pawan Goenka — working on increasing exports of 24 identified products — has said that the government needs to urgently address cost issues related to land, power and capital, apart from addressing scale, which lowers cost disabilities. Addressing concerns around infrastructure and logistics, labour flexibility and strengthening MSMEs could also help in lowering costs for companies and make them more competitive in global markets. In a presentation made at a meeting between industry players and commerce minister Piyush Goyal on Monday, it suggested a push to the “China plus one strategy” to attract investment from multinationals, while positioning India as an export hub. The minister agreed with several of the suggestions and listed out areas on which the government is already working With FTAs in place, the panel concluded that auto components could be the biggest gainer across markets, including the US, UK and the EU. Similarly, treaties with the UK, EU, Asean, South Asia and the US could benefit textiles. While ACs and drones could gain in at least four markets each, products such as set-top boxes and sports goods & gym equipment may not see much impact of the treaties. The panel made a presentation to commerce and industry minister Piyush Goyal on Monday.

Source: Times of India

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Sewing tradition into wedding finery

 Hand embroidered, rich and extravagant, couturier Manish Malhotra sews his couturelike creations with emotions. As he captures culture in pieces that blur the line between modern and traditional with his India Couture Week collection. Couturier Manish Malhotra opened the India Couture Week 2021 organized by the Fashion Design Council of India association with Hindustan Times, tonight with his signature magnificence, setting the tone for the entire collection. He amalgamated the emotions of a modern bride with traditional weaves and textiles. The collection titled, Nooraniyat, was not just about extravagant ensembles but deep-rooted emotions of a bride – the one who is shy, or happy or undergoing a sea of emotions. Talking about the film, designer Manish Malhotra confesses his love for film making and capturing emotions. “I closely work with brides and for this collection inadvertently got drawn into those intriguing memories and decided to capture it all - from their enthusiasm and joy to the heartfelt and compassionate, there’s a myriad of emotions and sentiments that are so heart-warming yet unsettling moments before she turns the page onto her new chapter,” says Malhotra who completes 31 years in the fashion industry this year. The collection is fun, flirty, cheeky, decadent and rich. Breaking all stereotypes we saw brides of all shapes, sizes and age – a young girl with her mother dressed as a bride, to the dancing bride, – there was inclusivity and diversity. One can also see exquisite craftsmanship- rich gotta patti to elaborate embroideries, age-old zardosi, badla, carefully crafted on all ensembles. As traditional as it is with red being the dominant colour and brides dressed with veils, the collection still resonates with the modern bride of today.

Source: Hindustan Times

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Nepal's trade body wants to raise exports to $7 bn by 2025

Nepal’s Federation of Export Entrepreneurs plans to expand exports to up to $7 billion by 2025. In the next three years, the federation aims to raise export volume to $2 billion. In a recent virtual meeting on export promotion, the federation told representative of diplomatic missions of 40 nations that it wants to raise export to make the country prosperous. It requested the diplomatic missions to provide details regarding the need for goods in their countries and furnish recommendations to the federation, according to media reports in the country. The dialogue with diplomatic missions was initiated to reduce Nepal’s trade deficit by boosting agricultural and industrial productions and exports. Export of energy is also a priority. Currently, Nepal is exporting more than 950 goods to more than 120 countries. Carpet, readymade garments, pashmina, phelt are some of the top export items. India is the largest export market for Nepali products followed by the United States.

Source: Fibre2 Fashion

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Bangladesh: End of yarn price chaos signals cooperation among apparel, textile sectors

Textile millers and apparel manufacturers fixed yarn prices on Saturday night, lowering prices slightly The amicable end of the chaotic situation created by the frequent rise of yarn prices signals the beginning of much-needed cooperation among the country's apparel and textile sectors, according to industry insiders. Textile and apparel are complementary industries, so any chaos between them will tarnish the image of the country in front of buyers, who might then take undue advantage of the situation, they added. Earlier, on Saturday night, the textile millers and apparel manufacturers fixed the yarn prices, bringing down the price of yarn slightly. According to the newly fixed price, the ceiling of 30s carded yarn has been set at $4.20 per kg, while that of 30s combed yarn has been set at $4.50 per kg. However, both parties will sit again to fix the prices if cotton price surpasses $1 per pound in the international market (Cotton Index 100) and it will be kept the same if the price remains at 85 to 100 cents (Cotton Index 85-100) per pound. The price will be reduced through a meeting if the cotton price falls below 85 cents. Currently, the price of cotton in the international market is fluctuating between 93 to 96 cents per pound. The decision was taken on Saturday at a meeting of top leaders of Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and Bangladesh Textile Mills Association (BTMA). BGMEA President Faruque Hassan told Dhaka Tribune that they had reached an agreement by fixing the yarn price in discussion with the textile millers on Saturday night. “We have fixed the price of yarn at $4.20 per kg if the cotton price remains under $1 per pound in the international market, but if it surpasses $1 per pound, we will sit again to fix the new price limit,” he added. The BGMEA president also said that this will bring a positive sign for both apparel and textile industries of the country and that the decision was needed to keep the country's market stable. Mohammad Ali Khokon, president of the BTMA, said: “We agreed to set a price ceiling as apparel and terry towel manufacturers were demanding lowering the prices. We will be able to supply the yarn at these fixed prices.” Faruque Hassan also said that local procurement of yarn from the domestic market has given some advantages to the manufacturers. However, unusual hikes may force them to find alternative markets, he added. According to the industry insiders, 70-80% of the demand for yarn are met by local spinners. Bangladesh imports 20-30% of yarn from India, Pakistan, Indonesia, and Turkey and most of them are specialized varieties. Rising yarn prices for several months had created a chaotic situation for textile millers and apparel exporters. Apparel and terry towel exporters alleged that the spinning millers unfairly and abnormally increased yarn prices which put the exporters in a difficult situation for the last seven to eight months. However, textile millers denied the allegation and claimed that they are not hiking prices intentionally. On August 10, the ongoing chaos over high yarn prices between textile millers and apparel exporters was settled amicably, with no price hike planned. The decision was taken at a joint meeting of the BGMEA, BKMEA, BTTLMEA, and the BTMA. But after only a few days of the meeting, on August 14, the country's apparel manufacturers sent a letter to Commerce Minister Tipu Munshi asking him to allow partial shipment in all the land ports of the country for importing raw materials needed by the sector. They also demanded to relax the conditions of importing yarn, cotton, fabrics and other raw materials through these land ports. But textile millers expressed worries over the new proposal.

Source: Dhaka Tribune

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Why is used clothing popular across Africa?

Many people in Africa buy second-hand clothes sent from Europe and the US. But East African countries could ban imports of used clothes and second-hand cars, putting an end to a lucrative trade in the region. Burundi, Kenya, Rwanda, Tanzania, and Uganda could all ban second-hand clothes and leather, among the countries which make up the East Africa Community (EAC). The EAC directed member countries to buy their textiles and shoes from within the region with a view to phasing out imports. In 2019 the EAC also proposed a reduction in imports of used cars. The EAC suggested phasing out imports. However, that it depends on the heads of state all agreeing to a common industrialisation policy. The proposal suggests a ban would only come in after an increase in local textile production. The idea is to give a boost to local manufacturing, and help the economy. One argument is that the imported clothes are so cheap that the local textiles factories and selfemployed tailors can't compete, so they either close down or don't do as well as they could. A release from a previous EAC manufacturing and business summit says (http://www.eac.int/news-and-media/pressreleases/20150902/1st-manufacturingbusiness-summit-held-speke-resort-munyonyokampala-uganda) the leather and textile industries are "crucial for employment creation, poverty reduction and advancement in technological capability" in the region. Across the African continent second-hand clothes from developed countries are a mainstay of many informal traders, dominating local market stalls. East African Community (EAC) proposed ban aims is to encourage local production and development within member countries: Burundi, Kenya, Rwanda, Tanzania and Uganda alone imported $151m (http://comtrade.un.org/data/) of second-hand clothing in 2018, most of which (https://www.bbc.co.uk/news/magazine30227025) was collected by charities and recyclers in Europe and North America. In the 1970s, East Africa’s clothing manufacturing sector employed hundreds of thousands of people, but when the debt crisis hit local economies in the 1980s and 1990s, local manufacturing struggled to compete with international competition and factories were forced to close. Today, the small sector remaining is geared towards production for exports. People in countries like the UK donate used clothes to charity. A research conducted recently in Britain explains that demand for the clothes sold in charity shops is low compared to supply. More than 70 per cent of all UK reused clothing goes overseas, where they are sold. People believe that their clothes will be given to those in need or sold in high street charity shops to raise funds and don't realise that their donations will be traded abroad for profit. Second-hand underwear has been called unhygienic. The EAC urged governments to make sure that used-clothes imports complied with sanitary standards urging East African governments to make sure that used-clothes imports complied with sanitary standards. Used knickers were banned in Ghana in 2011 (https://www.bbc.co.uk/news/world-africa-11845851) and a Ugandan bill also proposed (http://www.monitor.co.ug/News/National/Civilsociety-petition-MPs-toban-second-hand-underwear-imports/-/688334/2839310/- /i5yqiu/-/index.html) a ban in the country last year. Second-hand cars have also been blamed for causing accidents. In Uganda, second-hand garments account for 81 per cent of all clothing purchases. According to UN figures (http://comtrade.un.org/) from 2013, South Korea and Canada combined exported $59m worth of used clothes to Tanzania while the UK alone exported $42m worth of used clothes to Kenya. In 2013 Tanzania banned import and sale of second-hand inner wear (under pants), called ‘mitumba’ locally, citing concern about people’s health and the necessity to protect the environment. In a statement, the Tanzania Bureau of Standards (TBS) said it has noted with concern that innerwear is sold in various parts of the country contrary to TZS 758:2003 requirements on compulsory standards for inspection and acceptance criteria for used textile products.There are 48 major importers of second-hand garments in Tanzania, who then distribute the same to retailers, according to the Ministry of Industry and Trade.

Source: Ippmedia

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