• CCI AD FROM 5th April 2021

MARKET WATCH 27 SEPT, 2021

NATIONAL

 

INTERNATIONAL

 

Shri Piyush Goyal calls for proactive initiatives to modernize the design, quality, packaging and marketing for better prices for products in international market to benefit weavers

Union Minister for Commerce & Industry & Textiles Shri Piyush Goyal today said that Himachal Pradesh possesses tremendous talent and potential with magical hands that are weaving beautiful art products. He said there is a need to work proactively by the State & Central Ministries to bring these products into the international market in a befitting manner. Shri Goyal announced that a Weaver Services and Design Resource Center will be set up in Kullu district of the State to encourage attractive handicraft products of the state besides providing a better platform for export of these products in the international market. The Minister was speaking at an interaction programme with handicrafts and handloom artisans organized under 'Seva & Samarpan Abhiyan' to commemorate the golden jubilee year of statehood of Himachal Pradesh, in Kullu today. The Minister said that Himachal Pradesh had immense potential for handicrafts and skill up-gradation of artisans, modern equipments and training would be imparted to prepare qualitative new designs in the Weavers Service Center. He said that more attention was needed to modernize the design, quality, packaging and marketing so that the weavers get better price for their products in the international market. Union Minister said that Himachal's cap is recognized internationally today and there was a need to redesign the same in line with the international requirements in coldest places in the world. The Union Minister suggested to organize district-wise exhibitions of these products in big cities, people associated with the textile industry and five star hotels so that their branding could be done at national and international level. He asked the weavers to get their trademark for which the central government had reduced the registration fee by 80 percent. Shri Goyal also interacted with the entrepreneurs of the district and distributed woodcraft, handloom, embroidery machines and certificates to the local handicraft and handloom artisans. He urged the State Industries Department to focus primarily on the ways and means for improvement of the quality of wool used in the manufacturing of handloom and handicraft products. Applauding the weavers and workers present on the occasion, Union Minister remarked that he witnessed display of pure art and each product is very beautiful and the hands that have manufactured these products are really precious. He however, cautioned that its commercial value has increased a lot in all these years and there is a need to focus on improvement in product manufacturing. The Minister emphasized that there is a paramount need to focus on standardized packaging following designing of products and its manufacturing with appropriate modern marketing. This, he added, would fetch best and right price for the products in international market. State Chief Minister Shri Jai Ram Thakur on the occasion said that necessary steps had been taken to encourage the artisans of the state. He said that at present, there are 13,572 registered weavers in the state whose livelihood was related to the skill of weaving and embroidery. Shri Thakur informed that the handkerchief of Chamba along-with Kullu shawl and cap and the shawl of Kinnaur had been given G.I. Tags. He said that in order to facilitate online sales platform for weavers, MoU had been signed with Flipkart and department was also doing online sale of products. Chief Minister said that there had been a big change in the design and quality of handicrafts and handloom products in the state in the last 50 years and thousands of families had made it a means of livelihood. He said that Kullu districts handicraft especially caps and shawls were recognized internationally. When any head of state comes to India, Prime Minister welcomes him with a kullavi cap and muffler which was a matter of pride for the state. He urged the weavers to preserve the traditional clothes as they were associated with our culture as well. The Chief Minister said that the tourism sector had been badly affected during the crisis of Covid and the handloom sector was no exception affecting thousands craftsmen. He extended his gratitude to the Union Minister for fulfilling the demand of the state of Weaver Service and Design Resource Center. The Union Minister and the Chief Minister visited the exhibition put up by the weavers at the venue. A small documentary on handloom and handicrafts was also screened on the occasion. State Education, Art, Language and Culture Minister Govind Singh Thakur said that Himachal Pradesh was emerging as a model of development under the leadership of Chief Minister Jai Ram Thakur. He said that Kullu district was today recognized internationally by its beauty, rich culture and handicrafts. Earlier, Union Minister along with Chief Minister also visited ATAL TUNNEL. Shri Goyal appreciated the work of Border Roads Organization (BRO) and described ATAL TUNNEL a marvelous piece of engineering and the pride of the country.

Source: PIB

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Group of Ministers formed to suggest GST system reforms

 It will also identify possible use of data analysis towards better compliance and revenue augmentation, and suggest a mechanism for better coordination between central and state tax administrations. The Union finance ministry has constituted an eight-member Group of Ministers (GoM), led by Maharashtra deputy chief minister Ajit Pawar, to identify potential sources of goods and services tax (GST) evasion and suggest changes in business processes and IT systems to plug revenue leakage. It will also identify possible use of data analysis towards better compliance and revenue augmentation, and suggest a mechanism for better coordination between central and state tax administrations and tax administrations of different states. The GoM will submit its recommendations to the Council from time to time. Another GoM has been constituted to look at rationalisation of the GST rate structure. However, its mandate might not cover the issue of assured GST shortfall compensation beyond the current five-year period ending in June 2022.

Source: Financial Express

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Trade winds: High-stakes EU & UK free trade agreements make wish lists longer

Ministries and industry bodies ready list of demands as formal talks to commence soon As India prepares to launch formal negotiations with the UK and the EU this fiscal for free trade agreements (FTAs), domestic players rush to submit demands for greater market access in hundreds of products, with textiles and garments featuring in the wish list of most stakeholders, sources told FE.   Apex exporters’ body FIEO alone has submitted with the government a list of 240 products — ranging from textiles and pharmaceuticals to engineering goods—in which it wants the UK to cut tariffs. Government officials are drawing up a comprehensive list of items for the talks. This includes electrical machinery, capital goods, auto components, organic chemicals, leather, footwear and toys, among others. The textile ministry is pitching for duty-free access in textiles and apparels, which made up for 19% and 14% of India’s exports to the UK and the EU, respectively, last fiscal. Textile secretary UP Singh told FE that the inclusion of these products in the planned FTAs will certainly boost India’s exports. However, the government will take a “balanced view” when it starts negotiations, keeping in mind interest of all stakeholders, he added. The EU imposes up to 9.6% duty on Indian textiles and garments, while least developed countries like Bangladesh, and Pakistan get duty-free access. The Apparel Export Promotion Council and the Confederation of Indian Textile Industry, too, want such products to be part of early negotiations. Similarly, other export organisations seek easier access in dozens of products, relevant to the sectors they represent. However, some others, mainly in the dairy and farm sector, don’t want the government to commit tariff cuts in these products. Since its pull-out of the Beijing-dominated RCEP trade negotiations in November 2019, India has been seeking to expedite talks with key economies. But it has made it clear that any trade agreement will have to be “fair” and “balanced”. While negotiations with the UK could be wrapped up relatively early, those with the EU will be a long-drawn process, given the complexities associated with the 27-member bloc, commerce ministry officials said. Nevertheless, New Delhi will try to hammer out an early-harvest agreement with London, based on issues where a consensus can be easily forged. This would be followed up with a more comprehensive FTA. Similarly, as FE has reported, the resumption of negotiations with the EU after a gap of over eight years could see both the parties focussing on “low-hanging fruit” first, before switching on to contentious matters that had hampered talks earlier. Government officials are also studying the EU’s negotiations with China for an investment agreement and its FTA with Vietnam for meaningful talks. After 16 rounds of talks between 2007 and 2013, formal talks for the FTA were stuck over stark differences, as the EU insisted that India scrap or slash import duties on sensitive products such as automobiles, alcoholic beverages and cheese, among others. India’s demand included greater access to the EU market for its skilled professionals, which the bloc was reluctant to accede to. Since 2013, though, the situation has changed dramatically with Brexit, and the attractiveness of the EU as a large market has somewhat eroded. Nevertheless, it still remains an important trade destination. India’s exports to the EU, excluding the UK, dropped 8% in the wake of the pandemic to $41.4 billion in FY21, representing 14.2% of the country’s total outbound shipment of goods. Similarly, its exports to the UK declined 7% to $8.2 billion last fiscal. India’s major exports to the EU in FY21 were textiles and garments ($5.6 billion), organic chemicals ($4.2 billion), iron & steel and related products ($3.9 billion), mineral fuels, etc ($2.9 billion) and pharmaceuticals ($1.9 billion). Its exports to the UK included textiles and garments ($1.6 billion), gems and jewellery ($744 million), electrical machinery ($565 million), pharmaceuticals ($618 million) and auto ($244 million). Experts, too, have suggested that in their negotiations, both the sides need to work on less controversial issues first. Subsequently, innovative solutions need to be firmed up to break the log jam in more contentious matters. For instance, Arpita Mukherjee — professor at Icrier who specialises in trade and investment—has proposed a threshold price for alcohol for tariff liberalisation, as was done by Japan for Australian wines under the RCEP.

Source: Financial Express

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No funds for more GST aid to states, revenues to jump: Revenue secretary Tarun Bajaj

 On tax revenue growth exceeding the overall economic performance, Bajaj said a combination several factors including a trend towards greater formalisation – and much better compliance were boosting the revenues. Even as ‘all companies’ affected by retrospective taxation are ‘positive’ about settling their disputes under the special dispensation offered by the government, the Centre would secure indemnity covers from them in the cases where all ‘separate interested parties’ have not given undertakings to cease litigation after the disputes are settled, revenue secretary Tarun Bajaj told FE. Cairn Energy – the government had raised 98% of over Rs 8,100 crore collected as retrospective taxes from the Scottish energy firm – was on board to resolve the tax dispute, he said. On most state governments likely facing a revenue shock due to the scheduled expiry of the GST compensation period on June 30 next year, the official pleaded an absolute absence of resources for extension of the mechanism, but said augmentation of GST revenues through rationalisation of the rates structure and improved compliance would likely ameliorate the situation. “Where is the money? The cesss proceeds till March-end 2026 are required to finance the (special loan facility) for the shortfall in FY21 and FY22”, he said. The GST compensation mechanism ensures 14% annual revenue growth for states for five years through June 2022. The designated cess fund fell way short of the required level in FY21 and is seen to face a huge shortfall in the current financial year as well. All states are looking for an extension of the cover. Bajaj expressed the confidence that the Centre’s gross tax-to-GDP ratio would improve to a healthy 12% of GDP in the medium term (it was just 10% in FY21) and tax buoyancy would be over 1% from the current financial year onward. Higher revenues for the Centre would enhance devolution to states, he noted. On tax revenue growth exceeding the overall economic performance, Bajaj said a combination several factors including a trend towards greater formalisation – and much better compliance were boosting the revenues. While many analysts believe the formalisation process that eliminated thousands of informal-sector units has been a forced one and could be a drag on growth, the revenue secretary has a more nuanced view. “Had it been only formalisation, personal income tax wouldn’t have grown by 62% on year to Rs 2.88 lakh crore till September 23 (this fiscal). It is far higher than normal growth which is 10%.” “We have collected a lot of information (on likely income profiles based on spending patterns and sales) about the taxpayers, and are playing it back to them, making them voluntarily pay the (full) taxes. We have ensured better compliance,” he said. Bajaj said the gross tax collections would exceed FY22 budget target of Rs 22.17 lakh crore. Separately, another official had told FE that the Centre’s net tax collections could exceed budget target by about Rs 2 lakh crore in FY22, largely covering the additional fiscal cost of stimulus measures announced by the government so far. On the agenda before the two groups of ministers set up by the GST Council for laying the road map for revenue augmentation, the secretary said: “So many issues need to addressed such as correction of inverted duty structure, (minimising) exemptions, moving some commodities to a different slab and compliance issues. It’s not that from 11% (current revenue neutral rate), the RNR will straightway be increased to 15% or so. That may not be the best solution. All issues are on the table and it is for the GoMs to pick them up in their wisdom. According to Bajaj, an expansion of the GST taxpayer base helped boost direct taxes too. “Since GST information is shared with the income tax department, it is difficult for taxpayers to evade or underpay taxes. There are as many as 1.3 crore GSTINs (the unique number assigned to each taxpayer) now, up from 60 lakh in 2017, when the GST was launched.” The GST Council, as it met in Lucknow on September 17, set up two groups of state finance ministers: one to look at ‘rationalisation’ of the rate structure and another to deal with compliance and technology issues, reflecting the urgency felt by the council to bolster the revenues. Gross tax revenue in the first four months of this fiscal surged 29% even over the preCovid (same period in FY20) level. If this pace of growth (over FY20) continues throughout this fiscal, gross tax collection will rise to Rs 25.93 lakh crore in FY22. It will drive up the tax-to-GDP ratio to 11.6% in FY22, the highest since FY08, far exceeding the budgetted level of 9.9%. This, of course, assumes that the nominal GDP for this year will touch the budgetted level of Rs 222.87 lakh crore, recording an annual expansion of 12.9% upon the provisional estimate for FY21. Tax buoyancy, too, will shoot up to as high as 2.2 in FY22. Bajaj said the government received positive feedback to the draft rules to settle retrospective tax disputes for indirect transfer of Indian assets and the final rules would be published soon. As per the draft rules, in order for the government to revoke the tax demand and refund the amounts collected sans interest, the party concerned not only have to withdraw all pending litigation in domestic courts and arbitration under bilateral investment treaties filed abroad, but also ensure that cases filed by any ‘separate interested parties” including beneficial owners are withdrawn. This would mean that Vedanta has to undertake to withdraw the arbitration filed under India-Singapore tax treaty for Cairn Energy to avail of the facility offered by New Delhi. Vedanta has sought compensation close to Rs 5,000 crore for significant decline in share value owing to the Rs 10,250 crore tax notices to Cairn’s the then subsidiary Cairn India. Cairn India later merged with Vedanta.

Source: Financial Express

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India and Columbia business opportunities

 Colombia exported USD795 million to India in products like oil and coking coal, wood, metal scrap, aluminum scrap, vinyl chloride polymers and gold. India is an important trade and investment partner for Colombia. Despite COVID-19, in 2020-21, the total trade balance was USD1.731 million. Colombia exported USD795 million to India in products like oil and coking coal, wood, metal scrap, aluminum scrap, vinyl chloride polymers and gold. While India exported to Colombia USD 936 million in products like organic chemicals, pharmaceuticals, cotton, motorcycles in CKD form, machines, plastic materials, aluminum. Over a decade India’s FDI into Colombia has been around USD 1 billion in manufacturing and services of added value. The business environment between both countries boasts of 13 bilateral agreements in many fields have laid the foundation for building a stronger relationship, like: Investment Promotion & Protection, Double Taxation Avoidance Agreement, Information Technology, Hydrocarbons, Business Development, including the latest one of exploration and use of Outer Space for Peaceful Purposes. Yet, there is an opportunity to unlock the untapped potential of two-way trade between Colombia and India. Nearly more than thirty Indian companies have settled down in Colombia, driven by the benefits offered by the country as an investment platform. Colombia also enjoys a privileged geographical position, located in the northern part of South America, with access to the Pacific and Atlantic oceans, it is a gateway to the southern part of the continent, and is commercially and culturally an influencer to the countries of Central American and the Caribbean, and is part of the Pacific Alliance trade bloc. Colombia offers investors advantages as an exporting platform too, for example to the United States thanks to a Free Trade Agreement (FTA), among other several FTAs that the country has. It is a politically stable country, whose economy always grows, and as said by many businessmen, it is a lucrative market. With a competitive SEZ regime that grants benefits to businesses involved in production or service activities other markets can be served, counting a population around itself of almost 1 billion people. A constant presence of Colombian companies in India is yet to be a reality. India is generating great opportunities across several different sectors of its economy through FDI (USD 64 billion in 2020). Sectors like food processing, ready-to-eat food, the services sector, airport services, security, water treatment, renewable energy, urban infrastructure, and services (waste treatment), cosmetics, and luxury goods, could be of interest to the Colombian companies. This is a call to the ‘Multilatinas’ and ‘Global Latin’ companies from Colombia to come to India and see what the country has to offer. The growth of products and services in India can be exponential. Despite the size and differences among both countries, there are business opportunities for both sides, like: Food and Food Products: India’s growing population and income per capita will create a huge demand for high-quality products: fruit, vegetables, grain, pulses, juices, which Colombian companies produce and with whom Indian companies can invest/partner. Colombia as a hub for Indian products and manufacturing: localization of the supply chains and nearshoring are two great options to cover the Latin-American market from Colombia under the current scenario, where the prices of the containers are very high, and the constant restrictions due to the covid-19. ITeS: Colombia has started a race to to establish itself as a technology hub: the Latin American Silicon Valley, and India is a reference point. India’s own tech valleys like Bengaluru and Hyderabad; the NITI Aayog Agency, the Start-up India Initiative are important to look at. As per the RBI, India has 100 unicorns, while Colombia has only two. But with Colombia’s policy called the “Orange Economy”, the scenario is promising and changing rapidly. FDI is welcome. Media and Entertainment: Colombia’s Film Law, offers tax incentives for foreign production companies of 40% cash rebate on expenses paid in the country on film services and 20% of the amount paid for logistics services. Doing business in India or in Colombia is not without challenges, some of which may seem insurmountable at first. In our experience at the Colombia-India Chamber of Commerce we always brief both Indians and Colombians on how cultural barriers will always be there, and how flexibility plays a key role along with patience in the bureaucratic processes and regulatory frameworks. (The author is the Executive Director of the Colombia-India Chamber of Commerce, with 10+ years’ experience working between India and Colombia. He is also an International Speaker on subjects like Intercultural Management, Business, Design, Innovation and India.)

Source: Financial Express

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Govt's current foreign trade policy likely to continue till March 31

For this fiscal year, the main target is to accelerate exports and reach the $400-bn aim The new foreign trade policy that the government was planning to unveil on October 1 is likely to be delayed yet again, people aware of the matter said. Officials said the commerce and industry ministry wants to continue with the existing foreign trade policy (FTP) for another six months and may take some more time till the government finalises a fresh support or any incentive-based scheme for exporters, which is crucial at a time when circumstances have changed since the outbreak of the pandemic. The present policy came into force on April 1, 2015 and was valid for five years.

Source: Business Standard

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India likely to push for strict origin norms in UAE FTA talks

 India will also take a call on the UAE's request to include government procurement, small and medium enterprises and e-commerce in the proposed FTA, as this could have a bearing on the country's stance on these issues in the World Trade Organization. India is likely to push for strict origin norms in its proposed free trade agreement (FTA) with the United Arab Emirates (UAE) to determine the source of goods and avoid circumvention as the latter is a trans-shipment hub. It will also take a call on the UAE's request to include government procurement, small and medium enterprises (SMEs) and e-commerce in the proposed FTA, as this could have a bearing on the country's stance on these issues in the World Trade Organization (WTO). While India has opposed the plurilaterals on e-commerce and SMEs at the WTO, it is not a signatory to the Agreement on Government Procurement. The two sides kick-started the first round of the negotiations on the FTA - called the Comprehensive Economic Partnership Agreement (CEPA) - on Thursday, with discussions on tariff concessions on goods, services, rules of origin and nontariff measures. "Text negotiations and technical meetings on some chapters have started but issues such as investment will be discussed later," said an official. Investment related issues are likely to be taken up next week, when large sovereign wealth funds from the UAE and other business would participate. To ensure no circumvention of duties takes place through rerouting of trade routes, India is likely to push for the mandatory 35% value addition in the origin country to claim duty exemption under the pact. This is crucial as the UAE is a trans-shipment hub, making it difficult to implement the rules of origin criterion.

Source: Economic Times

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A quiet technocrat scaling up Indian manufacturing

Dr. Pawan Goenka is driving an unusual public-private partnership, informing and helping finetune policy changes. Before the pandemic started, the major players in India’s room air conditioner market had no plans to invest in larger manufacturing operations, relying instead on convenient imports for over 80% of AC parts. Over the past week, despite COVID-19 denting AC sales, global brands like Hitachi, Daikin and Panasonic, as well as domestic majors like Voltas and Blue Star, have announced investments of about ₹5,000 crore to reverse the reliance on imported AC parts from 80% to 20% over the next five years. The seeds for this about-turn, driven partly by a Production Linked Incentive (PLI) scheme, were being sown from a third-floor corner office of an auto major in Worli, Mumbai. Dr. Pawan Goenka, the Mahindra group’s managing director till this April, is driving an unusual public-private partnership that is informing and helping finetune policy changes that are leading to outcomes on the ground already in sectors like air conditioners. For instance, when domestic and global AC players conveyed that India’s ₹25,000 crore AC market didn’t necessitate larger manufacturing investments to replace established import supply chains, Dr. Goenka tapped his deal-making skills to arrive at an attractive formulation. Recalling the challenge, he said: “An Indian player may not have technology for a compressor, so they are forced to import. An MNC has technology, but doesn’t want to make it in India, given the volumes.” His solution — convince the MNC to make more compressors in India by getting the domestic player to buy from them instead of importing — thus adding up volumes that justify fresh investments and repeat this idea for various AC components with both domestic and foreign players stepping to invest for each. While this debate played out and Dr. Goenka engaged with industry players on ideas to expand the market to ₹1 lakh crore, take local value addition higher and over time, begin exporting AC components, another battle was won without much ado. The imports of finished air conditioners that constituted nearly a quarter of the room ACs market last year, have virtually come down to zero, after the government banned the import of ACs with pre-filled refrigerant in October 2020. Over the past year and a half, Dr. Goenka has been spending two days a week deep-diving into sectors like ACs, far removed from the auto industry he spent 41 years in, to recommend practical strategies and policy tweaks — not just to scale up manufacturing, but also to boost exports, reduce import dependence and expand domestic demand.

Govt-industry panel drives policy to revive manufacturing

With an eye on navigating Indian manufacturing away from the import-dependence pitfalls exposed by the pandemic, Dr. Goenka heads a group that informally began working soon after the national lockdown was announced in 2020, following a meeting between industry captains and Commerce and Industry Minister Piyush Goyal. Noting that many of them had more time on their hands due to the lockdown, Mr Goyal had suggested CEOs put on their thinking hats and come up with ideas to tap the global sentiment against China and strengthen Indian manufacturing. To his surprise, the minister asked Goenka to drive this introspection, that was formalised subsequently by his ministry as the Steering Committee for Local Value Addition, Manufacturing and Exports or SCALE. The group is now working on such ideas for 17 sectors — from toys, textiles, furniture and e-cycles to drones, and even fisheries. The SCALE includes the top brass from three industry bodies – CII, FICCI and Asshocham, three representatives from government, with member secretary Manmeet Kaur Nanda from the Department of Promotion of Industry and Internal Trade (DPIIT), and three industry honchos – including JSW Steel joint managing director and group CFO Seshagiri Rao MVS. India has seen multiple similar committees India over the past two decades to enhance the share of manufacturing in the economy, with recommendations either gathering dust, scuttled by inter-ministerial and intra-industry crossfire, or leading to botched policies like the non-starter National Manufacturing Investment Zones (NMIZ). SCALE is different for a few reasons. First, it has no deadlines and drafts no voluminous reports — all its proposals are laid out in a presentation at best. Second, it doesn’t just gather up ideas from various sectoral players and splash them together for the government to consider, as usual industry representations tend to be. Third, it follows a rigorous process of consultations to align different factions of industry with varying agendas at multiple levels and tries to nudge an alignment of interests where differences seem intractable, before it takes up the relevant issues with the government. “Generally, industry bodies come to government and say, ‘Give me this, Give me that’,” Dr. Goenka told The Hindu. “My first sentence to them in SCALE interactions is, “It  should be ‘I am going to do this, and this is the help I need.’ And if you don't have an ‘I am going to do this’, then let's not even talk.” Consequently, none of its presentations have had policy suggestions without an equal commitment from the industry on what it would commit to do, in terms of investments and job creation, for instance, if those suggestions were accepted. In fact, in the case of air conditioners, one of the first sectors it began working on, the industry players actually gave a letter of commitment to the Mr. Goyal that they will invest more and take domestic value-addition to 80% from the present 20% in five years, even before the government notified the PLI scheme for the sector. “This was signed off by the industry and is almost a contract,” Dr. Goenka said, adding that air conditioners, unlike drones, another sector whose PLI scheme has taken inputs from SCALE, was considered a sunset sector with no scope for a change in status quo. The panel’s ideas for other uninteresting sectors, including fisheries and TVs, are also at advanced stages of deliberations within the government. The SCALE panel’s approach is more effective, but also runs the usual risks that India’s political economy dynamics entail, said former Planning Commission member Arun Maira, who worked on drafting an industrial policy using a similar technique of wider consultations, even roping in trade unions and small-scale industries, to find broader synergies. “The objective of a national industrial policy must be to scale up the outcome, which must be faster growth of incomes of citizens in the country, especially for those at the bottom so that poverty is reduced,” he told The Hindu, emphasising that firms invest in China despite its low ease of doing business because of the sheer size its market. “Large scale industrial units will not produce this outcome. They employ less people per unit of capital, and per unit of land. They also have larger negative impacts on the environment. New technologies with new business models make small units viable, as well as provide solutions to problems of inclusion and environmental sustainability,” he said, stressing this is why the NMIZ never took off. In his first innings, Prime Minister Narendra Modi had tasked an industry chamber to come up with policy prescriptions for what he said was a central challenge for the Indian economy — scaling up income and employment levels of the people. Mr. Maira, who was associated with the exercise, said larger players in industry objected to the recommendations which were based on scenarios that encouraged smaller units along with larger ones to create a more vibrant manufacturing ecosystem. “There was a sense that the chamber’s scenarios seem to suggest that small is beautiful and big is bad. While Dr. Goenka is following the right approach for the SCALE panel, it  may face the same limitation and must use its own lens to carefully assess ‘Who is asking for what and why’,” Mr. Maira concluded. Having traversed through India’s industrial ecosystem for decades, the SCALE chairman is aware of these home truths. “All companies want to do well. But by and large, even if there will be exceptions, companies also want to do good for the nation. There is this desire: Is there a way that without compromising my company's requirements, am I able to add value to the country,” he noted, underlining that to that extent, the AtmaNirbhar Bharat has been a ‘motivating’ clarion call.

Source: The Hindu

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VN enterprises can't produce because of lack of materials, parts

 A fish sauce plant using millions of tons of fish has had to close because it cannot buy stopples to bottle products. Many enterprises will not be able to regain previous production capacity If Vietnam doesn’t have a comprehensive economic promotion program. Seven textile and garment companies in Tien Giang province, with 13,300 workers, have sent a petition to Prime Minister Pham Minh Chinh, provincial authorities and the Vietnam Textile and Apparel Association (Vitas) , asking for help to resume production before they lose clients. The companies said they had suspended operation since mid-July. Some of them had organized production under the ‘three on-site’ mode (employees have to eat, sleep and work onsite to maintain production), but stopped on August 5. “We are facing a risk of bankruptcy as most clients have announced cancellation of orders, or asked to send products by air instead of marine shipping,” the petition said. “Textiles and garments sales depend on the season. Partners cannot keep waiting for us." It’s now the time for models for next-year fashion season. “In order to obtain one order, we have to develop models six months in advance at least and compete with a lot of rivals. If we fail to do this, we will lose customers and markets,” they said. Some foreign partners have warned that if Vietnamese companies cannot reopen by September 20, they will place orders with other countries. If this happens, textile and garment companies will lose clients and have no more orders for the 2021 year-end season and 2022. Vitas Chair Vu Duc Giang confirmed that most textile and garment companies in the south have stopped production and some big brands have canceled orders. In previous years, Vietnam’s textile and garment companies mostly did outsourcing for foreign partners. But many them now design and create products to obtain higher added value. However, this also means risks due to seasonality. Some foreign partners said they will only make decisions on whether to place orders if Vietnam’s enterprises can regain normal operation. Meanwhile, enterprises are not sure when they can. The same situation is occurring with the footwear industry. According to the Vietnam Leather, Footwear and Handbag Association (Lefaso), the long period of social distancing has caused 80 percent of factories in the industry in HCM City, Dong Nai, Binh Duong, An Giang and Kien Giang to stop production. In northern and central regions, footwear companies are running at 50-70 percent of capacity because of social distancing and a lack of workers. Many companies have reported losses because they have had to scale down production. Businesses are struggling hard to recruit new employees due to a labor shortage. To be employed, workers must meet the requirements for ‘green cards’, which includes being vaccinated against Covid-19. As for the seafood industry, Nguyen Hoang Anh, General Director of Nam Mien Trung Seafood Investment, said shrimp cannot be harvested and sold. “We now can farm shrimp on only 20 percent of total area because of the lack of feed, breeders and materials for cultivation,” he said. Many other seafood companies are in the same situation and experts have warned of a material shortage crisis in the next months.

Uncertain future

The statistics in August clearly show losses to Vietnam’s economy. The worrying issue now is the ability of the manufacturing sector to sustain the long period of social distancing. The PMI (purchasing managers’ index) dropped to 40.2 in August, a 16-month low. Meanwhile, industrial production in August fell by 11 percent compared with the same period last year, a sharp fall after the solid growth of 12 percent in the first six months. This was the first time in a year that exports decreased significantly. Supply chain interruption and production disruption have occurred in some industries. The Ministry of Industry and Trade (MOIT), in its report to the Government, stressed that the situation of enterprises has become much worse compared with a few months ago. A lot of factories and production bases which are important links in supply chains have suspended operation or reduced capacity. A number of foreign associations have urged the Government to take action promptly to help enterprises preserve their competitiveness and not lag behind others during economic recovery.

Source: Vietnam Net

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Pakistan: Govt transforming Punjab into a 'hub' of investment, trade activities: minister

Provincial Minister for Commerce & Industries Mian Aslam Iqbal has said that Government is transforming Punjab into a hub of investment, trade and economic activities. Within a short span of three years, Government has set up 23 small industrial estates in the province; whereas 13 special economic zones are also being established in Punjab. Addressing the 35th Annual General Meeting of Pakistan Textile Exporters Association, he said that due to the investor friendly environment, local and foreign investors are  investing in Punjab. The growing investment in the country is an expression of confidence in Prime Minister Imran Khan's economic policies. He said new industrial zones in the province would usher a new era of industrial development in Punjab. He said that the Punjab Board of Investment would not spare any effort in promoting investment in the province and providing facilities to investors. Under the vision of Prime Minister Imran Khan, Punjab Government is committed to facilitate industrialists and investors for improving economic activities and increasing employment opportunities, he said. He said Faisalabad is the central hub of textile sector, with a large share in exports of different textile products; therefore, country's biggest expo center will be established at Faisalabad. Government have strong believes that economic revolution in the country can only be possible through trade promotion and all possible support to export sector is being extended to achieve optimum growth. Textile industry is the backbone of economy and remedial measures to overcome the challenges are being taken to uplift this sector. In order to keep industrial wheels moving during pandemic times, Government had taken several measures including easy financing for payment of wages and liquidation of outstanding refunds. No country could achieve economic targets without the due role of exporters, he said. Future of Pakistan is very bright and all resources will be mobilized for converting Pakistan according to the Premier's vision of economically stable and strong Pakistan. The Country Director ILO Ms. Ingrid Christensen, addressing the occasion, said that Better Work Programme (BWP) will help improve Pakistan's compliance and exhibit its commitment to improve labor welfare. BWP included a comprehensive framework on improving industrial relations through training and compliance with international labor standards including occupational safety and health, nature of employment, discrimination and other forms of labor practices as well as strengthening employers' and workers' organization in textile industry, she said. This program is successfully being run by ILO and IFC in eight countries benefiting a workforce of 2.5 million as 1,700 factories and 150 international brands are linked with this programme, she added. Earlier, PTEA Chairman Muhammad Ahmad presenting his annual report said that despite the turbulent economic environment and challenges appeared on account of Covid-19, Association continued its efforts to put the business on the path of economic diversification and growth by enhancing its value proposition. This year, we envisioned the idea of striving towards pro-business reforms to ensure a favorable environment that is conducive to growth, boost productivity and enhance the competitiveness with regional rivals in international markets. To achieve the same, we worked closely with the Government quarters and all relevant flora to build mutual grounds for the betterment of textile industry in general and textile exporters in particular. Some of such initiatives were the formulation of ease of doing business proposals, reduction in cost of production, structural reforms in the tax system and availability of energy inputs at regionally competitive prices. He expressed the hope that new team will continue the efforts to strengthen the linkages with the local and international businesses to promote and protect the interests of textile industry. Newly elected Chairman PTEA Sohail Pasha said that rising cost of doing business has not only stalled fresh investment in the textile industry but have also hampered the export growth. Government should devise a comprehensive strategy to counter the issue in order to accelerate the industrial pace and also to save livelihood of millions of workers. Pakistani exports are under pressure due to prevailing economic financial, industrial crisis in the country as well as persistently high cost of production which is badly affecting the industrial and trade activities and productivity output. He appreciated the successful efforts of outgoing team in resolving the issues confronting exports.

Source: B Recorder

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In fashion, ‘sustainability as usual’ may no longer be enough

Can we decouple business growth from climate impacts? This is the thorny question that no politician wants to answer right now, and it is easy to understand why. On the one hand, all our leaders recognise that "business as usual" is no longer an option on a planet where we are already seeing evidence of global change on a daily basis. The latest report by the Intergovernmental Panel on Climate Change (IPCC), the United Nations body for assessing the science related to climate change, states that many of the changes observed in global climate are unprecedented in thousands—if not hundreds of thousands—of years. It says that the changes are widespread, and that the role of human influence on climate is undisputed. At the same time, if one considers the above argument in light of Bangladesh's most successful export industry, it is evident that we may have a problem. Fashion creates millions of jobs in lesser developed countries, such as Bangladesh. If the "fast fashion" tap were to be switched off—in the name of protecting the environment—many of these jobs would be gone, and the societal impact would be huge. Our leaders recognise this conundrum—this balancing act between societal and environmental impacts. It is for this reason that the idea of decoupling economic growth from climate impacts is so appealing. Such a decoupling would mean that economic growth would become a sustainable goal for all of society.   Is this even possible? Until relatively recently, decoupling of this nature has been viewed as a fanciful notion. This is because the majority of historical data and projections illustrate the intrinsic link between material and energy use and the consequent carbon emissions/climate impacts. As a consequence, many people have difficulty reconciling the sustainability goals of a business model—fashion, in this case—which is dependent upon selling more and more business units. In short, they say we can't have our cake and eat it. I personally have one foot in this camp, and believe that the idea of "sustainability as usual" may no longer be an option, given the urgency of our planet's situation. What do I mean by that? I mean that, essentially, the traditional, voluntary sustainability approach by our industry—by that I mean fashion buyers and us, their suppliers—may no longer be enough if we are to avert climate calamity. There may come a time when we need more "stick" and less "carrot"—where national and international regulators are forced to step into industries like ours and create laws around issues such as clean production, waste disposal, and other areas. On the other hand, I see a potential solution where we can separate traditional GDP growth from climate impacts. Within the textile industry, this is via recycling and the circular economy. I have written about this issue before, but I believe it deserves growing scrutiny in countries like ours, which are so heavily dependent upon labour-intensive manufacturing industries, such as clothing production. It is in our own interest to embrace solutions that can separate growth from the impacts of climate change, given that our industries are so dependent on carbon-intensive manufacturing. How can we do this? One way is to shift to the use of renewable energy, as I have previously discussed in my column. But a complete rethink of our RMG manufacturing base may also be required, if we are to shift towards a less resource-intensive operating model in line with circular economy principles. The three major principles around circular economy are: smarter use and manufacture of products; extension of product lifespan and its parts through reuse, repair, refurbishment, and remanufacturing; and useful application of materials such as repurposing, recycling, and material recovery. While not all of these ideas will be easy to apply in the RMG manufacturing space, many of them could extend the useful life of garments. For example, textile materials can be repaired and refurbished, and alternative markets can be found for them. Is our garment industry ready to explore these ideas? If all of this sounds quite radical, that's the intention. I said sustainability as usual might not be an option moving forward, and as manufacturers we need to think about what this new landscape might entail if we are to remain relevant to our fashion buyers. Be in no doubt: our buyers are looking for solutions in these areas. When they talk about "going circular," it is us, their manufacturers, that they are relying on to enable them to achieve their goals. What can we do now to prepare for a less resource-intensive, circular environment, where GDP growth is decoupled from carbon emissions? Most experts agree that several steps will be required for textile manufacturers. One is to phase out the use of unsafe materials and the discharge of microfibres (another huge issue for our customers). This will require more innovative garment design and smarter production processes. The second is changing the way clothes are designed, a step to be taken in collaboration with our buyers. Step three is designing products keeping recycling in mind, so that the products are recoverable at the end of their "life." Taken together, these actions would initiate a major step for our RMG sector. At some point, we may need to think very differently about our business models as part of a broader societal shift away from a linear business model. These are difficult questions, but now is the time to think about their answers. Mostafiz Uddin is the managing director of Denim Expert Limited. He is also the founder and CEO of Bangladesh Denim Expo and Bangladesh Apparel Exchange (BAE).

Source: The Daily Star

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What Would A Truly Circular Fashion Industry Actually Look Like?

Circularity is a word that’s used a lot in fashion at the moment – but what does it actually mean? Essentially, it refers to a system in which all garments can be reused, recycled, or returned to the earth (by virtue of being biodegradable or compostable), reducing the hugely damaging impact the fashion industry has on the planet, from the strain on natural resources and vast amount of CO2 emissions it produces to the giant heaps of clothing waste clogging up landfills. Currently, though, we are a long way off achieving a fully circular fashion industry. In fact, critics argue that “circular” has become yet another buzzword that’s been hijacked by brands that are guilty of greenwashing. “We are being told by brands not to worry, to continue shopping because the circular economy will save us anyway,” Livia Firth, cofounder of Eco-Age and producer of the new short film Fashionscapes: A Circular Economy, tells Vogue. One of the main issues is that discussions around circularity are usually limited to one piece of the jigsaw, whether that’s resale, renting, or using recycled materials. Just having a take-back scheme doesn’t mean you’re suddenly operating on a circular model – in fact, data suggests that less than one per cent of clothing is currently recycled into new clothes. That’s why the British Fashion Council’s Institute of Positive Fashion has launched a new report entitled The Circular Fashion Ecosystem: A Blueprint For The Future, which calls for a more ambitious and holistic approach towards circularity. The first step? Reducing the vast volumes of new garments produced every year – which is estimated to be a shocking 100 billion pieces globally. “The initial part is to stop the culture of overconsumption, where we know from the research that people buy a product, wear it once, and don’t feel that they can wear it again,” Caroline Rush, chief executive of the British Fashion Council (BFC), says. “And that product often then goes in the bin; it doesn’t even go to recycling and, therefore, ends up in a landfill. So we definitely need to change behaviour as far as that’s concerned. We also know there’s overproduction in the industry.” Secondly, it’s about extending the life of the garments that are in circulation, both in terms of ensuring customers hold onto them for longer, as well as finding a second life for them afterwards. “We’ve seen the growth in secondhand and resell, but also in rental,” Rush continues. “It’s something that businesses can really think about as part of their business model for the future.” Lastly, the report emphasises how improved sorting and recycling facilities are needed to ensure that textiles from the fashion industry can actually be used again, rather than ending up in landfills. “We know that innovation can absolutely be scaled [up],” Rush says. “In the UK, we collect more post-consumer waste in terms of textiles [per capita], and so if we actually had the infrastructure we could play a very big part in closing that loop.” While these are the three key action points highlighted by the BFC report, the journey to circularity, of course, doesn’t end there. At the design stage, for example, careful thought needs to be put into all the materials used to create a piece of clothing (from the threads to any dyeing or chemical treatments involved) and what happens to these at the end of a garment’s life. For that reason, Firth doesn’t believe that a synthetics-based fashion industry (polyester still makes up 60 per cent of fibres produced globally) can ever be truly circular. “Plastic is something that doesn’t decompose; it doesn’t go away,” she says, adding that even recycled plastic is a problem. “The majority of recycled plastic fibres are recycled plastic bottles, so when you throw away the garments, they [still end up as] pollution.” On the human side, too, there are issues that need to be addressed. “Along any supply chain, there’s people, so you cannot take people out of the equation,” Firth continues. The BFC report notes that there needs to be a “just transition” to a circular economy, to help those whose livelihoods might be affected by the changes, adding that there’s also the opportunity for more jobs to be created. How quickly can we actually move to a circular fashion economy, given the scale of the challenges involved? Well, legislation and government incentives for brands would make a significant difference in accelerating change – but in reality, everyone has a role to play. “We’re in a place where we all have to – as citizens of this planet, whether we’re in industry or consumers – play our part in change, otherwise we’re not going to move quickly enough,” Rush concludes.

Source: Vogue

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