Officials said the scheme could be taken up by the Cabinet and if approved, it will pave the way to set up mega parks with integrated facilities and plug-and-play infrastructure on over 1,000 acres in the next three years, on the lines of China and Vietnam The Union Cabinet is likely to approve on Wednesday a scheme proposed by the textiles ministry to setup seven mega investment textile parks (MITRA) to attract investments into the sector and generate employment. Officials said the scheme could be taken up by the Cabinet and if approved, it will pave the way to set up mega parks with integrated facilities and plug-and-play infrastructure on over 1,000 acres in the next three years, on the lines of China and Vietnam. “It is likely to be cleared by the Cabinet and some states have already shown interest in setting up the parks,” said an official. Announced in Budget FY22, the MITRA parks will also have uninterrupted water and power supply, common utilities and research and development labs. They are intended to have and quick turnaround time to minimise transportation losses, aimed to attract bigticket investments in the sector. States will have to ensure road connectivity and power availability for the parks. The parks are crucial to attract foreign direct investment (FDI). From April 2000 to September 2020, India’s textile sector received Rs 20,468.62 crore, or $3.4 billion, of FDI, which is just 0.69% of the total FDI inflows during the period. Last month, the Union Cabinet approved a Rs 10,683 crore production-linked incentive scheme for man-made fibre segment (MMF) apparel, MMF fabrics and ten products of technical textiles for five years, aimed at boosting domestic manufacturing and exports. This would lead to fresh investments of more than Rs 19,000 crore, according to the government.
Source: Economic Times
Exports from India have been rising consistently over the last few quarters India’s export growth prospects are likely to get a boost from the World Trade Organization’s (WTO) latest report that now sees a brighter global merchandise trade outlook for 2021 compared to its earlier projections. India’s exports to its top trading partners such as the US, European Union, nations in West Asia, among others, are expected to rise. Exports data during the first six months of the current fiscal year is emblematic of the fact that external demand has been robust. Exports from India have been rising consistently over the last few quarters, after plummeting for a few months as the outbreak of Covid-19 disrupted global trade. India exported goods worth $33.44 billion in September, up 21.35 per cent year-on-year. This witnessed a 28.51 per cent jump over September 2019. During April-September, outbound shipments worth $197.11 billion were exported, up nearly 57 per cent YoY. It also hit nearly half of this fiscal’s export target of $400 billion set by the government. Experts said with rising global demand, India should be able to compete in various segments vis-a-vis China. “Currently, China is facing supply-side as well as demand-side issues owing to several internal challenges (energy, debt crisis). Therefore, India is in a good position to increase its exports, and can become a substitute for China across various product categories or sectors,” said DK Srivastava, chief policy advisor, EY India. India can take advantage of the increasing global demand, which can ultimately translate into demand for Indian exports, he said. According to a WTO report released on Monday, global goods trade is expected to grow by 10.8 per cent compared to the forecast of 8 per cent in March, but with varied recovery, depending on the region. The report said export volume growth in 2021 will be 8.7 per cent in North America, 7.2 per cent in South America, 9.7 per cent in Europe, 0.6 per cent in the Commonwealth of Independent States (CIS), 7 per cent in Africa, 5 per cent in West Asia and the highest for Asia at 14.4 per cent. On the other hand, imports are expected to grow at a faster pace as compared to exports. Inbound shipments into North America are set to grow by 12.6 per cent. It will be 19.9 per cent in South America, 9.1 per cent in Europe, 13.1 per cent in CIS, 11.3 per cent in Africa, 9.3 per cent in West Asia and 10.7 per cent in Asia. While growth looks better in 2021 due to a low-base effect caused by the outbreak of the pandemic, recovery looks uneven as compared with 2019. Over that period, export growth will be negative in North America, CIS, West Asia and Africa. Positive growth is seen in Asia, Europe and South America at 14.7 per cent, 1 per cent and 2.2 per cent, respectively. The report also pointed out spikes in inflation, longer port delays, higher shipping rates, and extended shortages of semiconductors, as some of the risks associated with the forecast. Besides, supply-side disruptions can also be exacerbated by the rapid and unexpectedly strong recovery of demand in advanced and many emerging economies.
Source: Business Standard
A firm signal of normalisation such as a reverse repo rate hike is warranted only when the risk of another Covid surge is ruled out; cases may surge amid the busy festive season To clarify, the MPC is mandated to vote on the policy rate, i.e. repo rate only. The reverse repo rate adjusts automatically once the repo rate changes. Expectations centred on the upcoming Monetary Policy Committee (MPC) policy announcement are varying—a sharp contrast to the widespread consensus since March 2020 on rate-cuts, the accommodative stance and liquidity. Markets and economists are divided on the possibility of an increase in the reverse repo rate (fixed rate at which RBI absorbs liquidity from the banking system in an overnight window) at the upcoming policy meeting. Consensus (including us) expects the MPC to keep the repo rate (fixed rate at which RBI lends to the banking system) unchanged and maintain its accommodative stance. Currently, the reverse repo rate is at 3.35% and repo rate at 4%. Diverging expectations on the reverse repo rate have emerged over the last few weeks, as auction cut-offs on variable rate reverse repos (VRRRs) have increased gradually, from c.3.40% to 3.99% (7-day tenor), higher than the existing reverse repo rate of 3.35%. VRRRs are also used by RBI to absorb excess rupee liquidity in the banking system, albeit for longer tenors (currently 7-14 days) and at variable rates. RBI has more than doubled the size of VRRRs since the August MPC meeting; the sharp rise in VRRR cut-offs has been interpreted by the market as an indication of RBI’s preference for a lower liquidity surplus and an exit from ultra-low rates. Higher crude oil prices, concerns on the inflation trajectory (though headline inflation is likely to print at lower than 5% over next few months) and a sharp pick-up in the vaccination pace have added to expectations of a firmer signal by RBI on the start of the rate normalisation process at this week’s meeting. To clarify, the MPC is mandated to vote on the policy rate, i.e. repo rate only. The reverse repo rate adjusts automatically once the repo rate changes. However, the reverse repo rate was cut asymmetrically by 155 bps, to 3.35%, during the pandemic in 2020, while the MPC voted in favour of a repo rate reduction of 115 bps to 4%. The asymmetric cut, which led to the widening of the corridor (gap between repo and reverse repo rate) to 65 bps from 25 bps (pre-pandemic), was delivered to support the economy as higher inflation disallowed sharper reductions in the repo rate. The MPC is mandated to keep CPI in the band of +/-2% with a medium-term target of 4%. CPI inflation averaged at 6.2% in FY21 (year ended March 2021). The market thus expects that, as a first step towards rate normalisation, RBI would restore the corridor to 25 bps by raising the reverse repo gradually by 40 bps over couple of meetings. As mentioned above, higher VRRR cut-offs and the broader macroeconomic backdrop have built up expectations of such a move as soon as this week. While a reverse repo rate hike of 15-25 bps on October 8 cannot be ruled out, we think RBI will wait until the December policy meeting to make such a move. We say so for the following reasons. Unlike VRRR cut-offs/sizes and tenor, a reverse repo rate hike is a firmer signal of policy normalisation, in our view. We think a firmer signal is warranted when the risk of another surge in infections is largely ruled out; India could see an increase in Covid-19 cases amid the busy festival season (until mid-November). Equally important, a reverse repo rate increase coming close on the heels of the increase in VRRR cut-offs could increase expectations of a faster pace of policy normalisation (including a repo rate increase from early next year). However, the MPC has emphasised the need for a calibrated and gradual pace of normalisation. Deputy Governor Michael Patra stated in his mid-September speech that VRRRs are neither a signal of a rate lift-off nor of withdrawal of liquidity. We, therefore, expect the MPC to signal the start of the normalisation process from December at its upcoming meeting, in the absence of growth shocks. Concerns on upside risks to inflation are likely to be expressed amid persistent supply-side-led price shocks, even as we expect the MPC to marginally lower its FY22 CPI forecast from the current 5.7%. On liquidity management, an increase in the VRRR size is unlikely at the upcoming meeting as the busy festival season is likely to drain out liquidity organically, in our view. A lower borrowing programme by the government further requires less liquidity to be absorbed; RBI has been buying bonds to support bond supply, which, in turn, has been offset by VRRRs to some extent. A VRRR tenor longer than 14 days is also not required at this juncture, in our view, given that RBI may be required to inject liquidity or allow maturity of a few VRRRs in selected weeks amid the festival season. However, it could start with a longer-tenor VRRR for a smaller amount of Rs 500 billion to test the market’s appetite for future deployment. Overall, we expect the MPC to maintain the status quo on rates, stay accommodative, lower its inflation projection marginally from 5.7%, but flag possible upside risks given hardening of crude oil and natural gas prices. We also expect it to signal the possibility of normalisation from the next policy meeting if no further growth or sentiment shocks are experienced.
Source: Financial Express
Ministry of Textiles has approved continuation of Comprehensive Handicrafts Cluster Development Scheme ( CHCDS) with a total outlay of Rs 160 crore. The scheme will continue up to March 2026. Infrastructural support, market access, design and technology up-gradation support etc will be provided to handicrafts artisans under this scheme. CHCDS aims to create world-class infrastructure that caters to the business needs of the local artisans & SMEs to boost production and export. In brief, the main objective of setting up these clusters is to assist the artisans & entrepreneurs to set up world-class units with modern infrastructure, latest technology, and adequate training and human resource development inputs, coupled with market linkages and production diversification. Under CHCDS, soft interventions like Baseline Survey and Activity Mapping, Skill Training, Improved Tool Kits, Marketing events, Seminars, Publicity, Design workshops, Capacity Building, etc will be provided. Hard interventions like Common Facility Centers, Emporiums, Raw Material Banks, Trade Facilitation Centers, Common Production Centers, Design and Resource Centers will also be granted. The integrated projects will be taken up for development through Central/State Handicrafts Corporations/Autonomous, Body-Council-Institute/Registered Cooperatives/ Producer company of artisans/Registered SPV, having good experience in handicrafts sector as per requirement and as per the DPR prepared for the purpose. The focus will be on integration of scattered artisans, building their grass root level enterprises and linking them to SMEs in the handicrafts sector to ensure economies of scale. The mega handicraft clusters having more than 10,000 artisans will be selected for overall development under this scheme.
Source: PIB
In the meetings, ceilings for all categories of expenditure, including central sector and centrally sponsored schemes will be discussed with the departments. The details of non-tax revenue mobilisation and the potential by the ministry/department would also be discussed during the pre-budget meetings. The union finance ministry will commence pre-budget meetings with various departments from Tuesday to finalise their revised estimate (RE) for FY22 and budget estimate (BE) for FY23. The BE for FY23 will be provisionally finalised after expenditure secretary completes discussions with the secretaries and financial advisers of the departments concerned. Prebudget meetings would continue till November 12. In the meetings, ceilings for all categories of expenditure, including central sector and centrally sponsored schemes will be discussed with the departments. It is proposed to discuss the totality of the requirements of funds for various programmes and schemes, along with receipts of the departments (such as interest receipts, dividends, loan repayments, departmental receipts, receipts of departmental commercial undertakings) during the pre-budget meetings chaired by expenditure secretary. All the ministries/departments are required to submit details of all the autonomous bodies/implementing agencies for which a dedicated corpus fund has been created, clearly indicating the purpose, whether in public account, accumulated balances as on March 31,2021, annual expenditure for the last three years, and allocations made during the current FY. The reasons for their continuance and requirement of grant-in-aid support should be explained and why the same should not be wound up. The details of non-tax revenue mobilisation and the potential by the ministry/department would also be discussed during the pre-budget meetings.
Source: Financial Express
Moody's Investors Service on Tuesday changed its outlook on India's sovereign ratings to stable from negative. However, it retained the ratings, both on foreign and domestic currencies, at the lowest investment grade. Experts said this would have a beneficial impact on debt allocations by foreign portfolio investors (FPIs) to Indian papers. "The decision to change the outlook to stable reflects Moody's view that the downside risks from negative feedback between the real economy and financial system are receding," said the ratings agency. Now, Moody's and Standard & Poor's have a stable outlook on their ratings on India, while Fitch still has a negative outlook. All three rating agencies have given India the lowest investment grade. Chief Economic Advisor Krishnamurthy Subramanian told Business Standard that there was ample scope for further re-calibration in Moody's assessments with several reforms implemented in the financial sector and the prospects for the sector looking better. "It (Moody's action) is a positive development that incorporates our consistent assessment about the strong fundamentals of the Indian economy," he said. The development came close on the heels of finance ministry officials pitching for a ratings upgrade during a meeting with Moody's on September 30. The agency has now partly accepted the request. Moody's had said in the meeting that while India's fiscal or financial strength, including its debt profile, had materially decreased, it had become less susceptible to event risks. William Foster, vice president - Sovereign Risk Group of Moody's, told a TV channel that the outlook was changed to indicate that the economic recovery was getting entrenched. "There are still challenges from the fiscal deficit and debt burden, but the big risk from the financial sector has stabilised," he said. In June last year, Moody's had downgraded India's sovereign rating by a notch to the lowest investment grade and kept the outlook at negative. Foster said the negative outlook reflected lots of uncertainty that were there due to coronavirus and lockdowns. On Tuesday, Moody's said that with higher capital cushions and greater liquidity, banks and non-bank financial institutions posed much lesser risk to the sovereign than the agency had previously anticipated. While risks stemming from a high debt burden and weak debt affordability remain, Moody's expects that the economic environment will allow for a gradual reduction of the general government fiscal deficit over the next few years, preventing further deterioration of the sovereign credit profile. Ranen Banerjee, leader of economic advisory services at PwC India, said the Moody's move should lead to a higher allocation of debt by FPIs to bonds in India. So far as the equity market is concerned, FPIs do not look at ratings. However, it would assure FPIs that foreign exchange risks would subside now and this will have some effect on their allocations to equities in India, he said. In Moody's lexicon, India has Baa3 ratings. It said retaining the ratings balances India's key credit strengths, which include a large and diversified economy with high growth potential, a relatively strong external position, and a stable domestic financing base for government debt, against its principal credit challenges, including low per capita incomes, high general government debt, low debt affordability and more limited government effectiveness. India's long-term local-currency (LC) bond ceiling remains unchanged at A2 and its long-term foreign-currency (FC) bond ceiling remains unchanged at A3. The four-notch gap between the LC ceiling and issuer rating reflects limited political event risk that would significantly disrupt the economy and modest external imbalances, balanced by a large government footprint in the economy and limited predictability and reliability of government policies. The one-notch gap between the LC and FC ceiling reflects limited external indebtedness and that, despite a history of several forms of capital controls, a debt moratorium remains unlikely. The rating agency said it could upgrade the ratings if India's economic growth potential increased materially beyond its expectations, supported by effective implementation of government economic and financial sector reforms that resulted in a significant and sustained pickup in private sector investment. It could downgrade the rating to junk if there are weaker economic conditions than currently expected that point to lower growth over the medium term and resurgence of financial sector risks. Think tank ICRIER said since ratings are lagged rather than leading indicators of economic performance, there is a need for the authorities to be prepared to deal with the onslaught of external headwinds blowing our way, rising commodity prices, fragility of global supply chains, tapering of hyper accommodative monetary policy stance in advanced economies and the global contagion of the Evergrande debacle to name a few.
Source: Business Standard
41 Industrial Parks have been assessed as "Leaders" in the Industrial Park Ratings System Report released by DPIIT today. 90 Industrial Parks have been rated as under Challenger category while 185 have been rated as under "Aspirers". These ratings are assigned on the basis of key existing parameters and infrastructure facilities etc. The 2nd edition of the Industrial Park Rating System (IPRS) Report was launched by the Minister of State for Commerce & Industry, Shri Som Prakash here today. Speaking on the occasion, Shri Som Parkash said the IPRS 2.0 Report will enhance India’s industrial competitiveness and attract investment. “As India continues to strengthen its status as a leading investment destination by continuously improving its ‘Ease of Doing Business’ through the enactment of several policy measures especially during the COVID-19 pandemic to ensure continuity, I am sure this rating exercise will be instrumental to contribute to India’s growth story and to chart out the path of progress for both the industry and the country,” he said. The Minister said the Report is an extension of the India Industrial Land Bank which features more than 4,400 industrial parks in a GIS-enabled database to help investors identify their preferred location for investment. The portal is currently integrated with industry-based GIS system of 21 States and UTs and plot-wise information in these are updated on a real-time basis, he said. “We expect to achieve PAN India integration by December 2021,” said Shri Som Parkash. The Minister said, with this system, the investors can even remotely refer to this report to identify the suitable investable land area, as per the various parameters of infrastructure, connectivity, business support services and environment and safety standards and make informed investment decisions. “This exercise also aligns with the Government’s concentrated efforts for encouraging industries to set base in the country and grow. Some of the recent initiatives include Project Development Cells (PDC), that have been constituted in Ministries/Departments to create a shelf of readily investible projects. PDCs will handhold investors and aim to improve Ease of Doing Business to spur sectoral and economic growth. To ensure ease of living for citizens and Ease of Doing Business, around 15,000 unnecessary compliances have been reduced by rationalising, eliminating, and automating processes,” he said. Shri Som Parkash said said, under the astute leadership of Prime Minister Shri Narendra Modi, India has fought the successful battle against COVID-19 globally. Several initiatives have been undertaken by the Government, such as the One District One Product (ODOP) Initiative, Production-Linked Incentive (PLI) Schemes and the National Single Window System (NSWS), to promote industry and boost exports. Despite the COVID, India’s economic indicators have bounced back. “India’s GDP has grown at over 20% in Q1FY22, highest quarterly expansion, exports jumped 45.17% to US$ 33.14 billion in August as against US$ 22.83 billion in the same month last year. India attracted record FDI inflows of US$81.72 billion last year. Continuing this record run, US$ 22.53 billion flowed in just in first three months of this financial year – almost double as compared to same period last year! Few weeks ago, India has jumped to the 46th spot on the Global Innovation Index, a jump of 35 places in last 6 years,” he said. Shri Som Parkash said this IPRS 2.0 ratings will be instrumental to contribute to India’s growth story and to chart out the path of progress for both the industry and the country. “The aim to take India to new heights in manufacturing seems to be getting nearer,” he said. The IPRS 2.0 Report is part of the Commerce & Industry Ministry’s AtmaNirbhar Bharat Abhiyan, and comes during the Azadi Ka Amrit Mahotsav festival. The India Industrial Land Bank (IILB) provides details of more than 5.6 lakh hectares, roughly the size bigger than 30-40 countries, on the click of a button and prospective entrepreneurs can apply sitting from anywhere across the world. The GIS-enabled IILB acts as a one-stop source of information on Industrial Infrastructure. Significant scaling up in coverage of Industrial Parks on this Land Bank has played a key role in facilitating the IPRS. The IPRS pilot exercise was launched in 2018, with an objective of enhancing industrial infrastructure competitiveness and supporting policy development for enabling industrialization across the country as the Government pushes ahead a high-growth trajectory with an aim to scale the $5 trillion mark for the Indian economy by 2025. Based on the learnings from the pilot stage, the Government started the IPRS 2.0 in 2020. All the States of India and 51 SEZs, including 29 Private, have participated the IPRS 2.0 Report. 24 Private Sector Industrial Parks have also been nominated. Ratings have been undertaken for 449 out of 478 nominations received. The feedback survey involved responses from 5,700 tenants.
Source: PIB
Auto and appliance makers dependent on China for sourcing components may have a tough time getting supplies as a power shortage in the country forces most manufacturing units to operate only two or three days a week. India Inc’s supply-chain woes don’t seem to be ending. Automotive, appliance, consumer durables and FMCG companies have been grappling with shortages of key components and raw material for more than a year after disruptions caused by the onset of Covid-19 and the blocking of the Suez Canal. Now, a power shortage in China, the world’s manufacturing hub, is hurting supplies of key parts and sub-assembly units for auto, consumer durables and appliance makers in India, while even pharmaceutical, solar panel and pesticide makers could face a supply crunch, experts said. “We are yet to see any major impact in India but we need to remain watchful of the situation in pharmaceuticals and pesticide industry as several intermediary products used for production are imported from China,” said Hetal Gandhi, director at Crisil Research. China has been facing an acute power shortage since summer and several of its provinces have witnessed sudden blackouts of late. A rise in demand, weather conditions and measures to cut the use of fossil fuels have contributed to the power shortage in China. According to reports, manufacturing units have been asked to close or operate only on limited days. The development will have implications on the world economy and on India given its heavy import dependency from the country. Appliance makers Although appliance and consumer durables companies said they are yet to feel the impact of the development in the neighbouring country, they anticipate facing issues in the supply of semiconductors, motors, aluminium controllers and electronic circuits in a few months. “We have sourced products for about 90 days and while the production in October and November will not be impacted, we are anticipating a crunch from December onwards, which would impact the production of ACs ahead of the summer season,” Vikas Gupta, managing director – operations, at PG Electroplast, told Moneycontrol. The company is a contract manufacturer for consumer durables and electronic companies in India. According to Gupta, the company’s vendors in China are operating two-three days a week, which has impacted production severely. “They are not even allowed to operate on diesel generator sets,” he added. While companies are trying to find alternative vendors in Thailand and Vietnam, this would take time. About 80-85 percent of the parts used to manufacture televisions are sourced from China, while for air-conditioners about 65-70 percent of the components are China-made, as per industry estimates. About 40-45 percent of units used to make a washing machine are imported from China. A halt in the production of these components will severely hit the manufacture of consumer products in India. This will be in addition to the semiconductor shortage. Companies have indicated that despite the government’s production-linked incentive scheme to encourage domestic manufacturing and phase out imports, it would take at least a year for such units to attain scale in India. Short of semiconductors Auto companies, too, will face a supply crunch of sub-assembly units, which are imported from China. Vikram Mohan, MD of Pricol, an automotive components and precision- engineered products manufacturer, said the power crisis in China will affect India’s vehicle and auto component makers that are heavily dependent on China for various inputs. Experts said the power crunch will aggravate the shortage of semiconductors in India, a constant headache for auto companies for more than a year now. The semiconductor shortage has created supply issues ahead of the festive season. Vehicles with dealers and at warehouses of car companies are lower than expected. However, some auto companies are still managing production levels. Volkswagen, Skoda, MG Motor and Tata Motors are ramping up production this month and next. “Retail numbers for the last four months have been higher than wholesale numbers, leading to a reduction in network stock. We have 24-25 days of stock, which should otherwise be 45 days of stock,” said Tarun Garg, director (sales, marketing and service) at Hyundai Motor India. Maruti Suzuki, the country’s biggest car seller, has forecast a 40 percent cut in production to 100,000-110,000 units in October from 165,000-170,000 units. Other companies have learned to deal with the new normal. They include Tata Motors, which will launch the Punch compact SUV on October 20. “The semiconductor shortage is hitting everybody and it seems that this will remain with us for some time. But the fact that we have unveiled the Punch, we are fairly comfortable in ramping up production,” said Vivek Srivatsa, head – marketing, passenger cars, at Tata Motors. Garg of Hyundai Motor India said, “Because we have launched so many products in the last two years, there is demand for all our products and this gives us the flexibility in shuffling production and giving priority to those models and variants that have good demand.” A booster for textiles, steel? Not all sectors will be adversely affected by the power shortage in China. Economists and industry stakeholders said a production halt in China could help India emerge as the new textile hub. “The textile industries in Jiangsu, Zhejiang and Guangdong are affected due to power shortage, which are major hubs for the product. Another textile hub Xinjiang is affected due to labour issues and this has impacted the textile exports from the country,” said OP Gulia, CEO (India), SVP Global Ventures, a cotton yarn manufacturer. China, according to experts, contributed about 39 percent to the world’s textile exports, with the US and Europe as its major markets before the pandemic. However, its share has now narrowed to 31 percent and analysts indicate it could drop below 30 percent due to stalled production. “Demand for textiles has picked up drastically as we emerge from the second wave, and given the supply crunch in China, India can benefit,” said Gulia. “We are expecting a 28- 30 percent increase in textile export revenue due to the development in China.” Gandhi of Crisil said sectors including steel and textiles will benefit from the power shortage in China.
Source: Money Control
While China still reels under electricity shortage, a similar crisis now looms on India where 70 per cent of electricity generation is through coal-fired power stations. Shortage of coal on the domestic front, rising prices of imported coal, and an increased demand for electricity due to robust economic growth are the reasons for the current situation. October is normally a monsoon-impacted mining output trough in India. But this year, beside the post-monsoon supply shortage and the surge in demand due to strengthened economic activity, there is a sharp fall in imports owing to high prices in international markets. Stock build-up in April-June 2021 was also deficient compared to pre-COVID years. Coal stocks have reached a crisis point as most power plants in the country are left with 0-3 days stockpile, according to media reports. Meanwhile, Coal India Limited (CIL), the Indian government-owned coal mining and refining corporation and the largest coal producing company in the world, has assured of scaling up production to meet the present demand. But it can do so in a short time only by importing coal, which has risen from around $70/ton in November 2020 to $240/ton now. Coal India produces more than 600 million tonnes of coal, all of which is domestically consumed. In addition, another 300-400 million tonnes is imported from countries like Australia, South Africa and Indonesia to meet domestic needs. While Coal India has not raised prices since 2018, coal prices in international markets have been rising this year— a factor that led to a drop in imports. Last week, CIL issued a statement that the present low coal stock at thermal power stations could have been averted if thermal power plants had maintained the 22 days stocks, as mandated by the Central Electricity Authority (CEA). “Coal stocks were at a comfortable level of 28.4 MTs at the beginning of the fiscal and even at the end of July coal stock at power utilities was 24 MTs at par with the previous five year average of the same period. It was in August that stock at power plants fell by over 11 MTs," the CIL statement said. To monitor the supply of coal to thermal power generation plants, the Indian government has constituted an inter-ministerial team comprising representatives from the ministries of power and railway, CIL, CEA, and Power System Operation Corporation Limited. At present, it seems unlikely that India’s power situation will worsen like China. However, there may be temporary outages in few regions in the coming days, according to various reports ascribed to officials from the ministry of power.
Source: Fibre2 Fashion
Krishnamurthy Subramanian, Chief Economic Adviser at the Union Finance Ministry, on Tuesday said international ratings agency Moody’s projection of 6 per cent growth rate in India is an “underestimate" as the country has been “fiscally very prudent". He suggested the US-based firm needs to take into account India’s reforms while estimating the growth rate. In an exclusive interview to CNBC-TV18 on the same, Subramanian said, “We have always maintained that fundamentals of the economy are strong. We pushed Moody’s to see our point of view. Banking and fiscal situation is looking better. We made our case about the economic situation in India and convinced Moody’s pointed out that this year’s budget made a clarion call for reforms. Assuaged concerns about future NPA’s from retail and MSME’s." “Moody’s projection of 6 per cent growth rate is an underestimate. India’s potential growth rate is 7.5 per cent. Moody’s needs to take into account India’s reforms while estimating the growth rate. India has been fiscally very prudent," he added. Subramanian also said that it is time international agencies take into account necessary conditions around announcement of reforms. “Private capex rates are clearly going up. Private capital investment in both services and manufacturing is picking up. India is the only country which was focused on supply side measures. Despite rising commodity prices, India’s inflation is in control. Supply side reforms will definitely spur private capex," he said. The reaction came after Moody’s upgraded India’s rating outlook to ‘stable’ from ‘negative’, saying a recovery is underway in Asia’s third-largest economy and growth this fiscal will surpass the pre-pandemic rate. Moody’s Investors Service however kept India’s sovereign rating at ‘Baa3’ — which is the lowest investment grade, just a notch above junk status. The change in the rating outlook to ‘stable’ from ‘negative’, which was assigned in November 2019, reflected receding downside risks to the economy and financial system. “An economic recovery is underway with activity picking up and broadening across sectors," Moody’s said. Following a deep contraction of 7.3 per cent in fiscal 2020 (ended March 2021), Moody’s expects India’s real GDP to surpass 2019 levels this fiscal year (April 2021 to March 2022), rebounding to a growth rate of 9.3 per cent, followed by 7.9 per cent in the next financial year. “Downside risks to growth from subsequent coronavirus infection waves are mitigated by rising vaccination rates and more selective use of restrictions on economic activity, as seen during the second wave," it noted. The US-based rating firm had in 2020 lowered India’s rating from ‘Baa2’ with a ‘negative’ outlook, saying there would be challenges in policy implementation amid low growth and deteriorating fiscal position. In a statement on Tuesday, Moody’s said “the decision to change the outlook to stable reflects Moody’s view that the downside risks from negative feedback between the real economy and financial system are receding." Looking ahead, Moody’s expects real GDP growth to average around 6 per cent over the medium term, reflecting a rebound in activity as conditions normalise. The government announced reforms throughout the pandemic that include measures aimed at increasing the flexibility of labour laws, raising agricultural sector efficiency, expanding investment in infrastructure, incentivising manufacturing sector investment and strengthening the financial sector. “If implemented effectively, these policy actions would be credit positive and could lead to higher potential growth than expected," Moody’s said. However, it noted that India’s general government debt burden increased sharply from 74 per cent of GDP in 2019 to an estimated 89 per cent of 2020 GDP, significantly higher than the ‘Baa’ median of around 48 per cent. “Looking ahead, Moody’s expects the debt burden to stabilise at around 91 per cent over the medium term, as strong nominal GDP growth is balanced by a gradually shrinking, but still sizeable, primary deficit. “Combined, a higher debt burden and weaker debt affordability than before the pandemic, which Moody’s expects to persist, contribute to lower fiscal strength," It said.
Source: News18
In the year ending March 2021, the overall retail market shrunk by 5 per cent due to lockdown, while the e-retail market surged by 25 per cent to reach USD 38 billion. The ecommerce penetration has moved up to 4.6 per cent from 3.5 per cent last year. An apex association of e-commerce companies has been announced under the aegis of the Confederation of Indian E-commerce (CIE) to provide a neutral voice of the industry by bringing the government, industry, policymakers and consumers on one platform. CIE, which has been formed as a trust and not-for-profit organisation, will be based out of New Delhi. Key e-commerce companies as well as retail, MSMEs (micro, small and medium enterprises) and farmers associations are being invited to be active members of the CIE. "CIE aims to provide a dedicated platform for the retail and e-commerce companies to take up economic or policy issues with the government and other relevant agencies, support to MSMEs and traditional retail, promotion of exports and access to export markets, and easing regulatory compliances for export and returns by encouraging exports," according to a statement. In the year ending March 2021, the overall retail market shrunk by 5 per cent due to lockdown, while the e-retail market surged by 25 per cent to reach USD 38 billion. The ecommerce penetration has moved up to 4.6 per cent from 3.5 per cent last year. A team of industry veterans have come together to build this initiative, including Amitabh Singhal (former CEO and founder of National Internet Exchange of India and past president of Internet Service Providers Association of India) and Ajay Sharma (who has around two decades of experience at India's apex business associations). CIE has retained Venky Venkatesh, former CEO at Press Trust of India (PTI) as its strategic adviser. He brings in more than three decades of FMCG knowledge with vast experience in retail trade and media. Technology-enabled innovations across digital payments, hyper-local logistics, analytics-driven customer engagement and digital advertisements are expected to drive growth in the sector. "CIE will be an apex body of the industry and by the industry. CIE intends to be the neutral voice of the industry by bringing the government, industry, policymakers and consumers on one platform," the statement said. The organisation will also build a state-level agenda by working with the state governments to support the needs of e-commerce companies and MSMEs locally. CIE will be working closely with the state governments for integrating the MSMEs in the states with digital retail by facilitating them with the domestic and international market, it added. The Confederation also aims to assist and build the ecosystem for the agriculture sector and promote technologies to empower the farming community. The organisation will also undertake evidence-based, scientific policy research and advocacy, including consumer research, capacity building, thought leadership, new membership drive, and representing members' concerns and issues to the government, among others.
Source: Economic Times
The Board of Century Textiles & Industries will meet on 14 October 2021 to approve the proposal related to raising of funds upto Rs. 500 crore in one or more tranches by issue of Listed, Rated, Secured, Redeemable, Non-Convertible Debentures of the Company on private placement basis, subject to such statutory and regulatory approvals as may be necessary under applicable law and within the borrowing limits approved by the shareholders.
Source: Business Standard
Risks to a broad global recovery rising: IMF chief The International Monetary Fund (IMF) expects global economic growth in 2021 to fall slightly below its July forecast of 6 per cent, IMF Chief Kristalina Georgieva said on Tuesday, citing risks associated with debt, inflation and divergent economic trends in the wake of the Covid-19 pandemic. Georgieva said the global economy was bouncing back but the pandemic continued to limit the recovery, with the main obstacle posed by the “Great Vaccination Divide” that has left too many countries with too little access to Covid vaccines. In a virtual speech at Bocconi University in Italy, Georgieva said next week's updated World Economic Outlook would forecast that advanced economies will return to prepandemic levels of economic output by 2022 but most emerging and developing countries will need "many more years" to recover. “We face a global recovery that remains ‘hobbled’ by the pandemic and its impact. We are unable to walk forward properly — it is like walking with stones in our shoes,” she said. The US and China remained vital engines of growth, and Italy and Europe were showing increased momentum, but growth was worsening elsewhere, Georgieva said. Inflation pressures, a key risk factor, were expected to subside in most countries in 2022 but would continue to affect some emerging and developing economies, she said.
Source: Reuters
Given its current reputation as the world's second largest apparel manufacturer and exporter, one wonders why Bangladesh is yet to make its presence felt on the global Technical Textile (TT) market. Seeing the recent rise in the demand for medical textiles, which is a category of TT, thanks to the COVID-19 pandemic, the importance of this subsector of the apparel market has now become too obvious to miss. So, Bangladesh can ill afford to miss it, as the global TT market's worth in 2020 was US$179 billion and has been growing at a 4.2 per cent rate to reach US$ 224.4 billion by 2025. Bangladesh's potential for being an important player in this particular market figured prominently in a study done by the German technical cooperation agency, GTZ. Highlighting the possibilities, it also pointed to the bottlenecks to overcome and the challenges to meet if Bangladesh is to take full advantage of the growing TT market. Obviously, to enter the market, Bangladesh will be required to build capacity through addressing the skills deficit in the sector, ensure adequate supply of capital for the start-ups and carry out necessary market research. At the same time, it will have to fulfil the compliance and certification requirements pertinent to this sector. Last but not least, getting a reliable source of the high-performance non-cotton raw materials necessary for manufacturing TT products is an important precondition to meet. As such, Bangladesh will have to act fast to catch up with its Southeast Asian neighbours like Thailand and Vietnam who have meanwhile staked their claim in the global TT market. It is worthwhile to note at this point that the Asia Pacific region dominates the global TT market with its share, as of 2019, of 45.90 per cent where China is the biggest player with its 24 per cent share of the export market. Even as Bangladesh's apparel sector lacks necessary expertise in TT, its potential to claim a substantial share in the international market is huge. That is eminently clear from the fact that the existing infrastructure of the garment industry can also serve through certain adjustments and improvements to work as the springboard for producing TT products. Evidently, the pandemic, as a blessing in disguise, has created an enormous opportunity for manufacturing and exporting medical textiles. These include, for example, PPE, hand gloves, masks and so on. Gradually, along with manufacturing personal care, healthcare and hygiene products, the manufacturing base can be further expanded to include also other specialised products for use in agriculture, homecare, packaging, construction, protective gear, automotive industry, aerospace, to name but a few. In fact, the range of TT products is indeed vast and so is the size of the market. Understandably, to be up to the challenge, the existing apparel industry will have to readjust its priorities and create a new ecosystem of collaboration and cooperation with all other related sectors of the economy. At this point, the sector leaders should begin to work forthwith so that the existing apparel industry can soon catch up with other South and Southeast Asian players vying for their turf in the world market for technical textiles. The government, on its part, needs to play its due role and extend necessary financial and policy-related support to facilitate the process. It is believed, given the support, the apparel sector of Bangladesh would soon be able to carve out a niche for itself in the global Technical Textile (TT) market.
Source: The Financial Express
The office of the US trade representative (USTR) yesterday announced the initial steps it will take to realign US trade policies towards China around its priorities. It will first discuss with China its performance under the Phase One Agreement, and while pursuing its enforcement, it will restart targeted tariff exclusions process to mitigate the effects of certain Section 301 tariffs that raised costs on Americans. It will also continue to have serious concerns with Chinese policies that were not addressed in the Phase One deal, specifically related to its state-centered and non-market trade practices, including Beijing's non-market policies and practices that distort competition by propping up state-owned enterprises, limiting market access, and other coercive and predatory practices in trade and technology, USTR said in a press release. China made commitments that do benefit certain US industries, including agriculture, which the United States must enforce, the press release said. “We welcome competition with the People’s Republic of China (PRC). We have also been clear that competition needs to be fair and managed responsibly. Our objective is to create a level playing field for American workers, farmers, and businesses,” it said. “President Biden and his administration are clear-eyed that Beijing is resistant to making meaningful reforms to address concerns shared by the US and many other countries about the distortions to the global market from its state-centered economic system,” it said. While making significant progress on those two fronts, the Biden administration undertook a comprehensive, thoughtful USTR-led, whole-of-government review of the bilateral trade relationship. “The previous administration’s unilateral approach alienated our allies and partners and hurt select sectors of the American economy. We want to bring deliberative, long-term thinking to our approach. Our objective is not to escalate trade tensions with China or double down on the previous Administration’s flawed strategy,” it added.
Source: Fibre2 Fashion
Exhibitors from across the globe will showcase their fabrics for womenswear, menswear, childrenswear, bridalwear, lingerie and accessories at Textile Forum. A group of garment manufacturers under the aegis of the UK Fashion & Textile Association (UKFT) are scheduled to exhibit at the fashion fabric show beginning from October 13 in London. At the two-day event, there will also be an abundance of trimmings – from buttons, embroideries and edgings to brooches, clasps, linings and labels, UKFT said in a media release. Textile Forum has always been a catalyst for creating some amazing and profitable relationships. March 2020 show was one of the last exhibitions to be held before lockdown. This upcoming event will be the first textile exhibition to be staged in the UK.
Source: Fibre2 Fashion
