Finance Minister Nirmala Sitharaman has called a meeting of the Financial Stability and Development Council (FSDC) on September 3 to discuss the state of the financial sector and a strategy to support the nascent recovery of the pandemic-hit economy. This would be the 24th meeting of the FSDC and the first during the current financial year. The last meeting was held on December 15, 2020. The meeting is to be held soon after first-quarter GDP numbers projected around 20 per cent growth against a contraction of 24.4 per cent recorded in the same quarter of the last financial year. Nascent recovery is seen in some of the macroeconomic indicators including improvement in tax mobilisation, credit growth, manufacturing uptick in certain sectors and pick up in exports. The FSDC meeting will be held via video conferencing on Friday, sources said. Sources also said that the finance minister may ask financial sector regulators to relax and harmonise investment norms for instruments like infrastructure investment trusts (InvITs) to be used to monetise public assets like highways, power and railway tracks. Earlier this month, Sitharaman announced a Rs 6 lakh crore National Monetisation Pipeline (NMP) that will look to unlock value in infrastructure assets across sectors ranging from power to road and railways. Union Budget 2021-22 had identified monetisation of operating public infrastructure assets as a key means for sustainable infrastructure financing. Towards this, the Budget provided for the preparation of a 'National Monetisation Pipeline' of potential brownfield infrastructure assets. NITI Aayog in consultation with infra line ministries has prepared the report on NMP. The aggregate asset pipeline under NMP over the four-year period is indicatively valued at Rs 6 lakh crore. The estimated value corresponds to 14 per cent of the proposed outlay for the Centre under the National Infrastructure Pipeline (Rs 43 lakh crore). Senior officials from the finance ministry will also attend the meeting. The FSDC is expected to review various aspects associated with the stimulus packages announced by the government to tide over the economic crisis induced by the pandemic. The The Reserve Bank of India Governor, and the heads of the Securities and Exchange Board of India, Insurance Regulatory and Development Authority of India, Pension Fund Regulatory and Development Authority, and International Financial Services Centres Authority are also members of the FSDC.
Source: Economic Times
What is common between Jamnagri Bandhini, Kolhapuri chappals, Kashmiri Papier Mache, Naga chillies and Tamil Nadu machine parts? They have all been selected for export promotion and improvement of market accessibility under the first phase of the One District One Product (ODOP) scheme. The initial phase of developing districts as export hubs, being implemented by the Commerce Ministry in collaboration with States, focusses on 106 items spread across 103 districts. “Once the initial batch of products are extended, the required support for integration into supply-chain, brand-building, marketing, and reaching customers through e-commerce and more products from all 739 districts will be worked upon,” an official told BusinessLine.
The ODOP programme
The mandate of the ODOP programme includes identifying, understanding, and solving problems associated with each of the chosen products at all points in their respective supply chains. “Improving the market accessibility of the chosen products, and dedicated handholding of the producers to harness the export potential of their products towards not only diversifying India’s export basket but also making the products globally competitive,” according to a note prepared by Invest India, the government’s investment promotion and facilitation agency. Prime Minister Narendra Modi had endorsed the ODOP and had identified it as one that could foster balanced regional development across all districts of the country. The idea behind the initiative is to select, brand and promote at least one product from each district of the country. “A dedicated team has been established to identify products from 739 districts and create a comprehensive plan on each of these products including product branding & scheme awareness, trade facilitation, e-commerce onboarding, and to create forward & backward market linkages,” the note pointed out. The objective is to convert each district of the country into an export hub by identifying products with export potential. Some of the items identified for the first phase are ones that already are well known in the country as they have been around for centuries and could benefit significantly from brand building and promotion. Jamnagari Bandhani, for instance, is a handloomed textile product from Gujarat dating as far back as the 6th Century AD, the note pointed out. The Kolhapuri Chappals from Karnataka and Maharashtra go as far back as the 12th Century AD rule of King Bijjal of Bidar, while the Sakhta Artisans of Kashmiri Papier Mâche pride themselves with the art since 15 Century AD. Blue Pottery from Jaipur and Markhana Marbels from Nagaur in Rajasthan feature in the list too.
Exclusive agri items
A number of exclusive agricultural items are also included in the initial list of products to be promoted under the scheme. One of the world’s hottest chillies, the Naga Mircha from Nagaland, and the world’s finest turmeric, Lakadong, with an average curcumin content (ingredient that gives turmeric its healing properties) of a high 7 per cent from Meghalaya, are among the selected items. Processed industrial products, such as machine parts from Tamil Nadu, and pharmaceutical produce from Andhra Pradesh, are also in the initial list of products. “With India’s export target set at an ambitious $400 billion for the current fiscal and $1 trillion for 2027-28, the government has to make a rounded effort to step up exports from the country. The ODOP effort is to ensure that the drive to increase exports do not favour just a few States but encourage development in all parts of the country,” the official added.
Source: The Hindu Line
The move is part of the ministry’s drive to formulate standards/technical regulations or put in place QCOs for 371 key products in the first phase. Imports of these products were to the tune of $128 billion, or a fourth of the total purchases from overseas, in FY19, well before the pandemic struck. The commerce and industry ministry is considering quality control orders (QCOs) for 45 more products, ranging from electronics to industrial machinery, as it intends to harden a crackdown on imports of sub-standard products. The move is part of the ministry’s drive to formulate standards/technical regulations or put in place QCOs for 371 key products in the first phase. Imports of these products were to the tune of $128 billion, or a fourth of the total purchases from overseas, in FY19, well before the pandemic struck. Of the 371 products identified by the commerce ministry, 71 have been allocated to the department for the promotion of industry and internal trade (DPIIT) for the issuance of QCOs. Of these, the DPIIT has notified QCOs for 26 items and the remaining 45 are under consideration,” an official source told FE. However, keeping with the principle of free and fair trade and to ensure domestic consumers have access to quality products, both Indian manufacturers and foreign suppliers will have to conform to the same standard specifications. Importantly, concerned about protectionism by stealth adopted by some nations, commerce and industry minister Piyush Goyal last week asked industry associations to flag non-tariff barriers faced by Indian exporters in various countries so that New Delhi can firm up appropriate responses wherever feasible. Industry sources say the responses could be in the form of subjecting imports to strict quality parameters. So far, QCOs have been issued for a total of 100 products under the BIS Act, the source said. These include air conditioner, toys, footwears, pressure cooker and microwave. Separately, the QCOs for another 15 products, including gas cylinders, valves and regulators, have been notified under the Indian Explosives Act. The QCOs issued by the government are in sync with the WTO Agreement on Technical Barriers to Trade, said the source. Apart from the QCOs, the government has already firmed up standards as well as technical regulations for hundreds of products across sectors, including consumer electronics, steel, heavy machinery, telecom goods, chemicals, pharmaceuticals, paper, R rubber articles, glass, industrial machinery, some metal products, furniture, fertiliser, food and textiles. Though the move isn’t Beijing-specific, it could hurt China, as the second-largest economy is the biggest supplier of low-grade products to India. Government officials maintain that the idea behind the move to enforce standards is not just to curtail low-grade imports but to improve the domestic output of quality products as well. This will, in turn, help boost exports and substitute low-grade imports, in sync with Prime Minister Narendra Modi’s push for Atmanirbhar Bharat. Interestingly, India’s move to develop technical specifications for products in recent years marks a shift in its approach to curb the inflows of substandard products (Its earlier approach was to raise tariffs). Analysts have said India seems to have taken a cue from major developed and developing nations that have effectively employed various non-tariff measures to target non-essential and substandard imports. For instance, the US put in place as many as 8,453 non-tariff measures, 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. In contrast, India has imposed only 504 of them. Of course, 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). But what have often worried analysts is that they can be abused for trade protectionism. Since substandard products are usually imported at much cheaper rates, they not just pose risks to consumer health and environment but also hit domestic manufacturing because of the price-competitiveness. Many countries, especially the big economies, therefore, subject their imports to rigorous technical standards and sanitary and phytosanitary measures.
Source: Financial Express
In India, just like anywhere in the world, MSMEs are an integral part of the value chain, offering diversified products on one hand and delivering intermediate goods for the largescale industries on the other. It is one of the largest employment generator and backbone of Indian economy. India is home to more than 6.3 crore MSMEs, which have the ability and capability to access international markets and work as ancillaries to larger international firms. In terms of exports, the sector holds high potential in various sub-sectors such as textiles, leather & leather goods, pharmaceuticals, automotive, gems & Jewellery etc. with overall contribution of 45 percent. The Indian economy has shown an excellent growth performance over the past few years and is likely to emerge as one of the leading economies in the world, poised to become USD 5 trillion economy by 2025. Thus, a major impetus is to be made to reinforce the overall Entrepreneurship Development eco-system and impediments needs to be understood in terms of internationalization of these enterprises. Ministry of MSME has been tirelessly working towards development of MSMEs and has undertaken interventions to enhance MSME ecosystem in India. Some of the key reforms introduced by Ministry of MSME are:
Source: PIB
In an interview with Mithun Dasgupta, Basu says in the disruptive post-Covid scenario, cost & management accounting has acquired prime spot to ensure survival, continuity and sustainability of a business. Edited Excerpts: Once the pandemic settles down, the GST Council can merge the tax rates from the existing four slabs to three slabs so that the compliance burden is minimised for the taxpayers and ensure that there is no revenue loss to the government, opines Biswarup Basu, president, Institute of Cost Accountants of India. In an interview with Mithun Dasgupta, Basu says in the disruptive post-Covid scenario, cost & management accounting has acquired prime spot to ensure survival, continuity and sustainability of a business. Edited Excerpts: As Covid has created significant challenges for financial institutions and companies, how has it changed the conventional roles of a cost & management accountant?
In the pandemic period, we developed two very important documents — “Conceptual Approach to Board Reporting Framework — A Post Covid-19 Corporate Governance Perspective” and “Post Covid-19 & Lockdown – Technical Guide on Business Continuity Plan” — that would certainly help in proper board-level monitoring and evaluation and in preparing right business continuity plans post lockdowns. We have also developed activity-based performance costing system that would assist the organisations to correctly and timely measure and assess the performance of different activities/ operations. The GST collections in July crossed Rs 1-lakh-crore mark after the easing of Covid-curbs. Do you expect this to continue going ahead?
Yes, the relaxation of the restrictions has helped the industry come back to normalcy to a large extent in increasing the GST revenues for July 2021. Apart from these, the digitisation initiatives in the GST have also contributed a lot. I believe GST collections growth will continue as the ITC control measures are now in place i.e by way of matching with GSTR-2a data. However, system control by way of GSTR2 will further strengthen the system and avoid revenue leakage. What are your views on the current GST rate structure?
What have been the implications of the current regime in today’s cost & management accountant functioning? The current average rate of GST is a notch above 11%, which is very less than what it has been envisaged. Any further reduction will impact the collections and have an adverse impact on the central and state government spending, which will impact the growth. Once the pandemic settles down, the GST Council can merge the tax rates from the existing four slabs to three slabs so that the compliance burden is minimised for the taxpayers and at the same time ensure that there is no revenue loss to the government.
Source: Financial Express
The government on Saturday said that foreign direct investment (FDI) into the country more than doubled to $17.57 billion during April-June this fiscal from $6.56 billion in the year ago period. Total FDIinflow rose to $22.53 billion during the first quarter of FY22 as against $11.84 billion in the same period last year, the commerce and industry ministry said in a statement. Total FDI comprises equity inflows, reinvested earnings and other capital. “FDI equity inflow grew by 168% in the first three months of 2021-22 ($17.57 billion) compared to the year ago period ($6.56 billion),” it said. As per the statement, highest FDI was garnered by the automobile industry with 27% share of the total FDI equity inflows, followed by computer software and hardware at 17% and services at 11%. “Measures taken by the government on the fronts of FDI policy reforms, investment facilitation and ease of doing business have resulted in increased FDI inflows into the country,” the ministry said. Among states, Karnataka was the top recipient with 48% share of the total FDI equity inflows, followed by Maharashtra 23% and Delhi at 11% in the quarter. The FDI trends are an endorsement of India’s status as a preferred investment destination amongst global investors, the ministry said.
Source: Economic Times
Business resumption activity continued its northward journey and reached a new high, much above the pre-pandemic levels for the week ended August 29, a Japanese brokerage said on Monday Business resumption activity continued its northward journey and reached a new high, much above the pre-pandemic levels for the week ended August 29, a Japanese brokerage said on Monday. The Nomura India Business Resumption Index rose to 102.7 for the week ending 29 August from 101.3 in the prior week, as per the brokerage. The index, which compared business activity with the pre-pandemic levels of March 2020, had fallen steeply during the two waves of infections, which were accompanied by lockdowns. Nomura said the index increased by 5.6 percentage points (pp) in August 2021, after 17.1 pp in July and 15 pp in June. For the week ended August 29, Google retail and recreation and Apple driving indices rose by 0.6 pp and 10 pp, respectively, although workplace mobility surprisingly fell by 3.7 pp. Power demand rose by 0.1 per cent as compared to the previous week, while the labour participation rate inched up to 40.8 per cent from 40 per cent. There is, however, a mixed set of news on new infections, it said, pointing out that the 7- day moving average (MA) of cases rose by 9,200 from last week to 41,000, although this deterioration was led by Kerala. It warned that a potential third wave cannot be ruled out given the impending festive season. On the other hand, the vaccination pace has risen to 7.1 million doses per day (7-day MA) from 4.7 million a week back, it said, adding that if this pace sustains, India would be on track to fully vaccinate roughly 50 per cent of the population by end-2021. GDP growth will sequentially rebound in the September quarter, the brokerage said, maintaining its above-consensus GDP growth forecast of 10.4 per cent in FY22.
Source: Business Standard
The proposed amendments include capping revisions on bids to two times, banning unsolicited bids and empowering the Committee of Creditors to decide on the timeframe and thresholds for improvement on the resolution plan in advance. Major changes in the insolvency process have been proposed by the Insolvency and Bankruptcy Board ofIndia. These changes are being brought about to increase transparency and address issues that have come up recently. The Board (IBBI) is seeking public views till September 17, on the same. Among other things, a code of conduct has been introduced for the Committee of Creditors (CoC). The 31-point code of conduct requires creditors to disclose any conflict of interest, maintain full confidentiality and not try to adjust funds of the corporate debtor against their dues during the resolution process. However, it does not mention how violations in the code will be addressed. “The proposed changes to IBC regulations pertaining to both resolution and liquidation are timely and intend to plug the loopholes, which are affecting the timelines and valuemaximisation. The measures also aim to bring in greater accountability and transparency in the conduct of key stakeholders driving the process,” said UV Asset Reconstruction Company director Hari Hara Mishra to TOI. The proposed amendments include capping revisions on bids to two times, banning unsolicited bids and empowering the CoC to decide on the timeframe and thresholds for improvement on the resolution plan in advance. A separate paper on the liquidation process, the board has proposed that more powers should be given to the stakeholder’s consultative committee. Besides, the board plans to ban liquidators from appointing commission agents in the sale of assets. The changes come even as the government is proposing to amend the Act by introducing a prepackaged insolvency resolution (PIRP) for small businesses.
Source: Economic Times
The growth was projected on a low base of 24.4 per cent contraction in the gross domestic product in Q4 of the previous financial year. Economists have pegged economic growth in the range of 14 per cent to 23 per cent for the first quarter of the current financial year. The growth was projected on a low base of 24.4 per cent contraction in the gross domestic product in Q4 of the previous financial year. This implies that economic growth has to be more than 24.4 per cent in order for the GDP at constant price in Q1 of FY'22 to equal that of FY'20. The projections fall short of that number. The data will be released on Tuesday.
Source: Business Standard
The big pop, however, will likely obscure a slowing from the previous quarter, caused by activity curbs to stem the second wave of the virus. While the government doesn’t report an official quarter-on-quarter figure, Bloomberg Economics estimates the economy slumped sequentially, contracting 12% from the January-March period. The economic toll from a deadly second wave of Covid-19 that swept through India last quarter doesn’t appear to be as bad as feared, with analysts still seeing the nation pulling off the world’s fastest growth this year. A better-than-expected manufacturing performance and a milder hit to services, combined with a robust pace of vaccinations, have helped keep the annual growth outlook for the economy steady at 9.2%, according to a Bloomberg survey. That pace is the same seen in a poll last month and the quickest among major economies. “The economic damage appears to be less than previously expected,” said Rahul Bajoria, chief India economist at Barclays Bank Plc. “With the second outbreak brought under control, a rapid recovery appears underway,” he said. Data due later Tuesday will likely show gross domestic product grew 21% in the three months through June from a year ago, according to the median of 45 estimates compiled by Bloomberg, mainly as a bounce back from last year’s crash. estimates the economy slumped sequentially, contracting 12% from the January-March period. In recent months, India’s annual growth forecast has gone from being upgraded to double digits to slashed by the steepest rate amid uncertainty about Covid’s devastation on the economy. But recent data from high-frequency indicators have shown the impact of pandemic restrictions were less severe than last year, with demand staying resilient. Factory managers in India saw a surge in activity in July, reflecting a pick up in new orders, while a similar survey of services’ purchasing managers showed the sector was inching back toward expansion. Exports, which account for nearly a fifth of the economy, have been growing for the past eight months signaling strong global demand. “The recovery from the second wave has been faster with activity indicators recovering lost ground in less than three months compared to 10 months in the first wave,” said Gaura Sen Gupta, an economist with IDFC First Bank. “High frequency growth indicators show that the economic cost of the lockdowns was lower.” The milder hit to the economy coincides with India’s vaccination rate picking up pace over the last few weeks. And there’s room for further improvement, given that the country has managed to inoculate only just over 10% of it’s population -- a key vulnerability given risks from a possible third wave of infections. The risks from the pandemic has also kept the nation’s central bank from unwinding its ultra-easy monetary policy, with Governor Shaktikanta Das last week reiterating that policy makers wouldn’t reverse course suddenly despite mounting inflationary pressures. Prime Minister Narendra Modi plans to complement the monetary stimulus with fiscal measures. His government aims to raise 6 trillion rupees ($81.9 billion) by leasing out state-owned infrastructure assets over the next four years to fund new capital expenditure without further widening the budget deficit.
Source: Economic Times
The fiscal deficit estimate stays unchanged, at 6.8% of GDP for FY22 Despite the severe second Covid-19 wave, the central government is likely to meet its FY22 fiscal deficit target of 6.8% of GDP. Here is how. Nominal GDP: The government had factored in 14.5% year-on-year (y-o-y) nominal GDP growth while estimating the FY22 budget estimate. The second Covid-19 wave may have reduced expectations for FY22 real GDP growth, but we note that nominal GDP growth will likely be in excess of 16% y-o-y due to a larger-than-expected GDP deflator. Therefore, the fiscal position is unlikely to face any material headwind, despite the severity of the second Covid-19 wave. – Tax revenue: It must be said that the revenue targets that were set for FY22 were realistic and conservative to start with. The government had forecast net tax revenue collection growth of 14.9% y-o-y for FY22, with respect to FY21 revised estimate figures, which looked credible, given the nominal GDP growth assumption of 14.5% y-o-y. But we now know that the actual tax collection in FY21 turned out to be higher than the revised estimate, which implies that net tax revenue will need to rise only 8.5% y-o-y in FY22 over FY21 collection to meet the absolute tax collection target. But, given the nominal GDP growth assumption of 16%-plus in FY22, net tax collection growth target of 14.9% y-o-y looks achievable, even after factoring in the second wave. Assuming net tax collection rises 14.9% yoy over the actual tax collection in FY21 (instead of using the lower revised estimate figure), we estimate tax revenues to be higher by about Rs 914 billion in FY22 versus what has been assumed in the budget estimate, ceteris paribus. The above dynamic is probably what gave the authorities confidence to transfer `750 billion to states in lieu of GST compensation cess without borrowing more from the market. – Non-tax revenue: RBI has transferred Rs 991 billion dividend to the Centre, which is about Rs 500 billion more than the budget estimate. – Asset monetisation: Rs 880 billion is expected in FY22 on account of this (we have factored in Rs 800 billion), which will help the revenue side of the budget. – Disinvestments: The budget has assumed an ambitious target of Rs 1.75 trillion for disinvestments in FY22 and it is critical for the LIC IPO to go through in this fiscal year, if the overall target has to be met. – Total revenue: Taking all the above factors into consideration, we estimate that the overall revenue collection for FY22 could be potentially higher than the budget estimate by Rs 384 billion. According to budget documents, Controller General of Accounts and Deutsche Bank research, the FY22 fiscal deficit (BE) is estimated at Rs 15,068 billion (6.8% of GDP), which is almost similar to Deutsche Bank’s estimate of Rs 15,084 billion (6.8% of GDP). – Expenditure: The Centre announced a number of fiscal support measures to help various affected sectors; we estimate the additional on-budget fiscal cost to be 0.2% of GDP (or about Rs 400 billion). Putting everything together: Based on the factors discussed above, we arrive at a rough estimate, which, in our view, keeps the fiscal deficit estimate unchanged at 6.8% of GDP for FY22. If the disinvestment target misses the mark by a bigger margin than what we have estimated currently, and if India encounters a severe third wave, which is not our base case scenario at present, then there could be possible upside risks to the fiscal deficit estimate. The Centre is required to pay another Rs 830 billion for GST compensation to states in H2FY22, which is likely to be funded out of increased revenues, aided by the recently announced asset monetisation programme, with any shortfall on this front likely to be met by potential compression in capital expenditure (Rs 5.5 trillion allocation; +30% yoy) of a commensurate amount.
Source: Financial Express
Sees post-Covid increase in demand for yarns from home textiles and technical textiles Pioneer Embroideries, manufacturer of speciality polyester filament yarn, plans to invest ₹58 crore to enhance its capacity to 26,000 tonnes per annum by adding 8,000 tonnes. The new manufacturing unit will come up on existing factory land and is expected to be operational by FY23. At full utilisation the added capacity has potential to generate sales revenue of ₹110 crore through a mix of domestic sales and exports. The current capacity utilisation is 95 per cent. The major equipment is being sourced from Germany-based Oerlikon Barmag Group, a known supplier of textile extrusion equipment. For the project cost, the company will manage ₹18 crore from internal accruals and the rest through bank borrowings. The capacity expansion follows a post-Covid increase in demand for these yarns in newer segments such as home textiles and technical textiles. The company is focusing on POY-based speciality textile avenues such as flame retardant, automotive, anti-microbial and value-added DTY yarn for non-apparel segments. Harsh Vardhan Bassi, Managing Director, Pioneer Embroideries, said the increased demand from the home textile segment helped the company grow its sales in these difficult times of Covid. The focus is to improve operating margins through a higher share of value-added products and operational efficiencies, he said. The company currently deals in almost 1,200 shades and over 500 product variants for specific needs. Shares of the company were flat at ₹68 on Monday.
Source: The Hindu Business Line
United States and Pakistan on Monday agreed for enhancing the economic and trade ties in different spheres of economy spheres and also decide to search new avenues of trade. Adviser for Commerce and Investment, Abdul Razak Dawood and the United States Secretary Commerce, Gina M. Raimondo held a telephonic conversation to discuss issues for promoting trade and investment between the two countries, said press release issued by Ministry of Commerce here. It was the second such engagement at the top level on trade and investment since the inauguration of the Biden Administration, first dialogue was held with United States Trade Representative (USTR) earlier in May this year. The adviser highlighted the trade and investment opportunities for US enterprises in Pakistan in areas such as textiles, agriculture, IT, engineering, pharmaceutical, etc. To this, the US Secretary Commerce showed interest in investment opportunities in digital economy in Pakistan. The both sides underscored the importance of enhancing collaboration to remove the trade barriers and subsequently smoothen trade between the two countries.
Source: Urdu Point
According to most unions and its supportive organizations, the signing of the new Accord will ensure the health and safety of workers Apparel manufacturers expressed their hesitation about the recent developments in signing of a new and improved Accord International. Factory owners were also unconvinced about how the new Accord will work. According to a recent press statement of the Accord Foundation, the new agreement named the "International Accord for Health and Safety in the Textile and Garment Industry" will be officially signed between the brands and international labor organizations on Wednesday. In a recent meeting, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) expressed their hesitation, confusions and anxiety about the new Accord. In a statement, Faruque Hassan, president of the BGMEA, said that the recent press release by the Accord Foundation may have been confusing for many and might give the impression of a poor partnership. “It may be seen to be undermining an independent organization; one that is not controlled or subservient to the parties of the above captioned agreement,” he added. He also stated that the claim that the International Accord agreement is being implemented in Bangladesh by the independent national tri-partite RMG Sustainability Council (RSC) is misleading. The RSC was formed as an independent non-profit company, licensed by the government to take over the Bangladesh operations of the Accord and has taken over the monitoring regime as of June 1, 2020 bringing the Bangladesh RMG safety monitoring regimes under one umbrella, he added. It remains the objective of the RMG Industry to foster an environment which promotes a common safety platform and code of conduct. “The duty of compliance must be ensured for our continued safety and our well-earned pride in the stature of our industry. The industry has zero tolerance for backsliding on matters related to safety. The RSC is working to overcome all issues,” stated the BGMEA president. The RSC consists of all stakeholders having equal representations and is an independent platform, where the protocols of the former Accord 2013 had been adopted, he added. The Board of the RSC is only accountable to its stakeholders and works through a unique consensual decision-making process, whereby no two groups may influence operations. “We also remain accountable to the government of Bangladesh, being licensed to monitor the RMG sectors safety compliance and complaint mechanism,” he added. The ILO and the EU, being key development partners to Bangladesh, have lent their endorsement to the RSC from its very inception. “It should be clear to all constituents and stakeholders that there is no licensed entity, apart from the RSC working in this sector,” said Faruque Hassan. “The former Stitching Bangladesh Accord Foundation, and the proposed International Accord for Health & Safety in the Textile and Garment Industry Foundation, are separate entities to the RSC and will not have any function in Bangladesh, directly or indirectly, unless expressly permitted by the government of Bangladesh,” he added. He also stated that clauses and sub-clauses of any agreement signed outside Bangladesh, which are directly contradictory to the dictates of the laws of Bangladesh, must stand as null and void and have no scope of being implemented and RSC would not be functioning beyond its mandated remit. “As we have engaged in this endeavour with the commitment of non-interference, zero tolerance and continued improvement, we take this opportunity to reiterate our dedication to our joint initiative,” he added. In a separate discussion, Shahidullah Azim, vice-president of the BGMEA said that they are accountable only to the RSC and since the RSC has been operating here there is no need for the signing of a new Accord. However, according to most of the unions and its supportive organizations, the signing of the new Accord will ensure the health and safety of workers and they welcomed the initiative of the brands. Over 220 companies and two global labour organizations signed the five-year Accord on fire and building safety in Bangladesh in 2013 after the Rana Plaza accident which claimed 1,133 workers and critically injured thousands more. The Accord had more than 1600 factories under their supervision.
Source: Dhaka Tribune
Annual report details growth for sustainable textile certifications Oeko-Tex ended its 2020-2021 fiscal year having issued 5,840 certificates and labels for the Made in Green sustainability program. That marked a 108% increase over the previous year, making it the fastest growing certification provided by the association. Made in Green is a traceable product label for textiles and leather products that verifies an article has been tested for harmful substance. It also guarantees that a product has been manufactured using sustainable processes under socially responsible working conditions. “The COVID-19 pandemic and resulting supply chain challenges have made us all painfully aware of how globally interdependent we are. However, Oeko-Tex sees great opportunities in these disruptive times,” Oeko-Tex secretary general Georg Dieners stated in the organization’s newly released annual report. Looking ahead, Oeko-Tex announced that its Carbon and Water Footprint Tool methodology has been certified by a neutral third party and will be integrated into the Step by Oeko-Tex certification process in 2022. Step covers production facilities at all processing stages to assure social and environmental conditions.
Source: Home Textiles Today
The fashion industry is characterized by always looking ahead to the future, predicting trends and anticipating the needs and desires of consumers. And while the industry has always been responsive - producing more goods in ever shorter timeframes to meet demand and pivoting to online and omnichannel sales to meet consumers where they are – the pace of change has only accelerated in the last year. Not only have businesses had to focus on increased efficiency for success, but also providing an excellent customer experience. In a recent survey, one-third of consumer goods companies and nearly 40% of retailers named providing customer experience, commerce and marketing as their top priority for 2021. Showcasing environmental credibility is one such way to connect with consumers, as they are demanding more sustainability and transparency from the brands and retailers they shop with and the fashion industry has increasingly been under the spotlight in this arena. It is increasingly an imperative for future success: a consumer survey conducted by the IBM Institute for Business Value (IBV) among more than 14,000 consumers in nine countries, including the UK, revealed that globally, 76% of respondents say sustainability is significantly important to them when choosing a brand. Responding to these trends and preparing for the future requires reflecting on entrenched processes that may no longer be up to date, and considering novel uses of technology. Pioneers in the industry have embraced the technological ABCs - artificial intelligence, blockchain and cloud technologies - and put them to use to their advantage and that of their customers.
Creating efficiencies from design to point-of-sale The "Infor Design and Tech Lab" at the Fashion Institute of Technology (FIT) is using AI from IBM to develop a series of application programming interfaces (APIs) for the fashion industry. Among other things, it is using deep learning and natural language processing to improve the customer experience, optimise product design and merchandising/planning activities, and expand merchandise performance analysis. FIT actually had its first experience with AI back in 2018, in a collaboration with Tommy Hilfiger and IBM Research on the "Reimagine Retail" project. The goal of the project was to gain competitive advantage through market insights, product design, and supply chain personalisation and optimisation, and to train the next generation of retail leaders in the use of AI.
Engaging customers across the lifecycle Relationships between brands and consumers need to be based on trust and cooperation. Arianee, a leading NFT (Non-fungible Tokens) platform for the luxury and fashion industry, are working with IBM on a comprehensive blockchain-based solution that combines supply chain transparency with brand and consumer engagement. The relationship between brand and consumer starts with the purchase of the product, but it doesn’t end there. It can be continued throughout the lifecycle of the product, via authentication and identification of the buyer, as well as special offers to customers - for example, with product-related incentives.
Proving sustainability through transparency
Very recently, the UK Fashion and Textile Association (UKFT) launched an AI and blockchain traceability project in collaboration with IBM and retailers such as H&M, Next, N Brown and New Look. The platform will use IBM blockchain technology to make information about garments - such as the place and date of manufacture, product composition and environmental certifications - accessible to consumers via a QR code. It will also use new technologies like AI and hybrid-cloud to monitor the environmental and social impact along the value chain to enable course correction. With projects like these, the fashion industry will not only meet regulatory requirements for sustainability and the demands of its customers, it will also be able to flexibly respond to new regulations and trends. What's more, it can show it is one step ahead of its customers, able to anticipate and respond to their needs and offer them services that they cannot imagine today. Doing so will demonstrate that the industry is fit for the future and has its finger on the pulse of the times.
Source: Fashion United
