The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 21 OCT, 2021

NATIONAL

INTERNATIONAL

Small industries’ association wants GST to be reduced

Erode District Small Industries Association (EEDISSIA) has urged the Central government to reduce the Goods and Services Tax (GST) on plastic raw materials, textile yarn and carbonated fruit juice-based drink. The association’s general body meeting was held under the chairmanship of its president P. Thirumoorthy in which secretary R. Ramparakash, vice-presidents V.T. Shreedhar and P. Kandasamy, treasurer S. Palanivel, joint secretary A. Saravanan Babu and members participated. Various resolutions were passed during the meeting. A resolution said that the GST council has recommended an increase in the GST rate on cartons, boxes, packing containers of paper from the present 12% to 18%. The resolution said that the move will affect the paper industry much and wanted the proposal to be withdrawn. Another resolution said that it was proposed to increase the GST for carbonated beverages upto 40% and wanted it to be withdrawn. Use of plastic bags for packing was banned without any proof and hence the government should come out with alternative products for packing on war-footing. Since plastic items can be recycled, it should be permitted for secondary packages, the resolution said. Other resolutions were, including Erode under the Coimbatore-Salem Industrial Corridor project, converting Erode district as drone special production centre, focusing on parachute manufacturing in the district, establishing separate industrial estates for textile, food processing and plastics in the district, establishing export hub, establishing railway export terminal at Sipcot in Perundurai and taking steps to control price of fuel. A resolution called for constructing flyovers, public parking lots and ring roads in the city and pedestrian subway near Erode Railway Junction and a flyover at Rangampalayam. The resolution also urged the government to widen the existing roads connecting Tiruchengodu, Chithode and Karur as four-lanes.

Source: The Hindu

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The need for innovation in the textile industry

 In offsetting its huge carbon trail, the textile industry must embrace innovation across the entire value chain to ensure long-term sustainability. As per the UNEP (United Nations Environment Program), globally, the fashion industry leaves a deep footprint on the environment. The statement is backed by some startling statistics. It requires 7,500 litres of water to produce a pair of jeans. The clothing industry utilises 93,000 billion cubic metres of water annually, enough for 5 million people’s survival. It also accounts for 20 percent of the total water wasted worldwide. Producing clothing and footwear leads to 8 percent of GHGs (greenhouse gases). Each second, a quantity of textiles equal to a garbage truck is burned or buried. No doubt, the era of fast fashion has led to an accelerated rise in these negative outcomes. Against this backdrop, the WWF (World Wide Fund for Nature) issued a clarion call years earlier for a shift towards slow fashion or a sustainable clothing and textile industry.

Heavy ecological footprint

The WWF cautioned that the textile industry’s ecological footprint was simply not sustainable, with the sector emitting 1.7 billion tonnes of CO2 and producing 2.1 billion tonnes of waste per year. Worse, the sector needs many toxic chemicals, particularly during processing, often severely damaging the water basins, soil and local biodiversity. Additionally, 2.1 billion tonnes of wastes are produced annually, such as off-cuts or disposed clothing, out of which only 20 percent are recycled. As per the global average, each person purchases 5 kg of clothes each year. In Europe and the US, however, the number runs as high as 16 kg. Going by the above, there’s a clear-cut case for innovation in the textile industry to curb its carbon footprint. For the naysayers or those who believe this may not make much business sense, here’s some food for thought. A Boston Consulting Group study shows that the profit margin of brands could drop by a minimum of three percentage points by 2030 because of rising costs of raw materials, energy and labour if companies continued with business as usual. The colossal loss in profits for the industry needs no elaboration. Even for those willing to change, there is a message. The time for mere efficiencies and incremental changes is long over. To meet the overwhelming challenges, the textile industry should undertake transformational changes at scale backed by broad innovations if mandated Sustainable Development Goals are to be achieved by 2030.

Triple Models of Innovation

The WWF report highlights examples of industry frontrunners who are investing in innovations across process, product and business models. The first-movers are guiding the industry out of its linear ‘make-sell-dispose’ approach towards business models that are more circular and eco-friendly. Business model innovations cover reduction, reuse, repair, recycling, and sharing. It transforms the way business is undertaken and value is generated by attempting to drastically limit the resources and material inputs required in the industry’s value chain and minimising the ecological impact of its activities. The new model adheres to the principles of sufficiency and a circular economy. While the former follows reductionist strategies of producing/consuming less and slowing down, the circular economy aims at closed-loop models, repairing and a sharing economy. Other innovations include ‘product as a service’ or the concept of renting clothes instead of selling and re-materialisation or sourcing of materials from recovered waste, among other innovations. Examples of business model innovation include specialised recycling entities such as TellTex and I:CO, which collaborate with companies to collect their clothing for recycling and reuse. Then there is cotton recycling or re-looping fashion, which denotes remanufacturing old cotton garments into new material while maintaining the quality of reproduced fibres. Thanks to the closed-loop value chain, the value of the material is maintained, waste eliminated and water consumption reduced. Where product innovation is concerned, this comprises recycled content and more sustainable raw materials. This produces better products, e.g., through certified raw materials and manufacturing and recycled content. An example of product innovation is Chetco or Chetna Coalition, which has set up and maintained market access for thousands of Indian farmers who produce Fairtrade cotton, which is organic. Then there is TENCEL®. This is a lyocell fibre from Lenzing that is extracted from wood. Due to its closed-loop system, fibre production itself remains ecofriendly. Whereas process innovation includes transparency, renewable energy sourcing and other innovative processes. This leads to manufacturing processes having a reduced ecological trail, especially vis-à-vis energy, GHG emissions, chemicals and water. Process innovation is exemplified by Nike’s ColorDry – a technology to dye fabric without water by using CO₂ in the dyeing process. This saves millions of litres of water in Nike’s supply chains. Companies such as Levi’s and Adidas are also promoting waterless dyeing. Then there is Patagonia’s Archroma Advanced Denim Technology. An innovative dye process, it colours denim with sulphur dyestuffs that bond easily. Unlike conventional denim dyeing processes, this method results in shorter production lines needing 30 percent less energy and 84 percent less water while emitting 25 percent less CO2. Finally, it is apparent companies can do a lot to make sustainable fashion a reality. But consumers can also contribute their mite in the common cause of slow fashion by reusing and renting garments. Some big brands are already implementing programmes encouraging users to deliver travel clothing. In exchange, they receive bonuses or, in some cases, have new clothing made from their old pieces. These merely represent the tip of the clothing industry’s global innovation drive. Undoubtedly, in the common cause of the planet’s survival, it’s high time that the people and industry players all join hands in promoting a sustainable textile industry.

Source: Your story

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India, UAE, US, Israel hold 1st quad meeting, discuss trade, big data

 India, the United States, the United Arab Emirates and Israel recently sat down for their first ‘quadrilateral’ meeting on October 18, paving the way for a different geopolitical equation with closer cooperation on trade, technology, big data and maritime security and with the objective to generate synergies beyond government-level cooperation. The new grouping is termed an international forum for economic cooperation. Israeli foreign minister Yair Lapid and Indian external affairs minister S Jaishankar joined the meeting from Jerusalem, while the others attended virtually. “The three of you are among the closest relationships we have, if not the closest.” He added, “I think it is very clear that on the big issues of our times we all think very similarly and what would be helpful would be if we could agree on some practical things to work upon,” Jaishankar told the meeting. “A fruitful first meeting with Israeli APM and FM@- YairLapid, UAE FM@ABZayed and US Secretary of State [Antony Blinken] @SecBlinken this evening,” he tweeted after the meeting. “Around this virtual table, there is a unique set of capabilities, knowledge and experience that can be used to create the network that we all want to see created,” Lapid was quoted as saying by a news agency. “I think the word we’re looking for here is synergy, because this is what we’re going to try and create starting with this meeting. Synergy that will help us work together on infrastructure, digital infrastructure, transport, maritime security and other things that preoccupy us all... The key to success is how quickly can we move from ‘government-togovernment’ to ‘business-to-business’,” he added. The group discussed the possibility of working together on joint infrastructure projects. The meeting also deliberated on each country appointing a senior level bureaucrat to be part of a joint working group to materialise these decisions. All four ministers promised to meet in person during the Dubai Expo in the coming months. US state department spokesperson Ned Price in a statement said Blinken and his three counterparts discussed expanding economic and political cooperation in West Asia and Asia. “Blinken and the ministers also discussed people to people ties in technology and science, and how to support global public health in relation to the COVID-19 pandemic,” the statement said. In his remarks, Blinken described Israel, the UAE and India as three of ‘our most strategic partners’ and said that by “bringing friends together in new ways, we are making these partnerships even greater than the sum of their parts”.

Source: Fibre2 Fashion

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Australia, India partner to boost bilateral trade and investment

The flagship program by the Australian Government is entirely directed towards advancing the commercial partnership and building twoway market linkages between Australia and India. With an aim to boost industrial and manufacturing activity and to drive economic growth, India has partnered with Australia in areas such as agrifood, mining, infrastructure, healthcare and education. Leaders and ministers from India and Australia came together under the Australia-India Business Exchange (AIBX) 2021 Business Leaders Forum and featured Hon Dan Tehan MP, Australian Minister for Trade, Tourism and Investment and senior business speakers. Several eminent personalities like Ambassador Anil Wadhwa, Former Secretary (East) Government of India and Chairman CII Task Force, Australia Economic Strategy were also present at the Business Leaders Forum held recently. Both countries are committed to achieving an early harvest announcement on an interim agreement to liberalise and deepen bilateral trade in goods and services, and pave the way for an early conclusion of a full CECA (Comprehensive Economic Cooperation Agreement),” said Hon Dan Tehan MP, Australian Minister for Trade, Tourism and Investment at AIBX 2021. On Australia's trade relations with India, he added: “There are significant growth opportunities in the India-Australia relationship in areas like critical minerals, infrastructure, energy, technology, agriculture, education and space – and it is these sectors we will place particular emphasis on in the Government’s soon-to-bereleased update to Peter Varghese’s India Economic Strategy.” The Australian government's 'Indian Economic Strategy 2035' envisions significantly raising trade and investment with India. Both countries have witnessed renewed impetus in their relationship under the leadership of Prime Ministers Narendra Modi and Scott Morrison last year. The Australian Government is making efforts to seize the opportunities through greater bilateral engagement, this includes a meeting of Prime Ministers of both the nations in the margins of the Quad Leaders Summit, visits by the Foreign and Defence Ministers to India last month which included a historic inaugural 2+2 meeting and a visit by former Prime Minister Tony Abbott to further economic ties. On AIBX’s role in helping businesses flourish on both sides, Dan Tehan said: “Australian Government’s flagship programme is solely aimed at advancing commercial partnerships and building two-way market literacy between Australia and India. The pandemic has disrupted many aspects of our lives including how we do business, so, in the current environment, AIBX is a digital-first program that includes actionable market insights, including video and written case studies and sector reports on market and partnership strategies. Australia offers a wide range of investment opportunities in mining and resources, low emissions technology, food processing and agribusiness, education, advanced manufacturing, space and emerging tech. The AIBX 2021 Business Leaders Forum brought together CEOs and business leaders from both sides to showcase strengths and strengthen partner ties. “Australia is well placed to support India’s ambition to become a major global advanced manufacturing player through our substantial reserves of critical minerals, mineral processing in Australia, and potentially offtake agreements for Australian supply of critical minerals into India which complement India's own agenda for renewables for the development of electric mobility and those sorts of downstream industries,” the Australian Minister concluded in his remarks. The event had a welcome address by Ms Catherine Gallagher, Minister (Commercial), Australian High Commission where she talked about the role partnerships can play in mutual prosperity. The forum also witnessed participation by business leaders like Mr Alastair Symington, CEO and MD Blackmores Group; Ms Tania Archibald, CFO, Bluescope and Indian counterparts like Mr N G Subramaniam, COO and ED, Tata Consultancy Services; Mr Arun Maheshwari, Joint Managing Director and CEO JSW Infrastructure. The forum emphasised the investment climate in both the countries and highlighted challenges & opportunities on both sides and was conducted by Economictimes.com in association with Australia-India Business Exchange (AIBX) 2021 .

Source: Economic Times

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Traders do not enforce safety measures

 Shoppers too are complacent Lackadaisical approach of traders in the city on enforcing COVID-19 safety protocol has raised concern among the people. With the Deepavali festival round the corner, shoppers have been making a beeline to the major business streets such as NSB Road, Singarathope, Big Bazaar Street, Nandi Koil Street and Chinnakadai Street. The commercial centre attracts customers from Ariyalur, Perambalur and Pudukkottai too. Though the impact of the second wave of COVID-19 on textile business is yet to be analysed, traders have filled up the racks with a hope by procuring dress materials from Mumbai, Surat, Ahmadabad, Kolkata, Bengaluru and others. As expected the textile showrooms are teeming up with customers. What is causing concern among the people is the lackadaisical approach on enforcing the COVID 19 safety measures prescribed by the government. Except one or two, most traders seem to have taken the COVID 19 safety protocol for granted. Shoppers too are complacent Lackadaisical approach of traders in the city on enforcing COVID-19 safety protocol has raised concern among the people. With the Deepavali festival round the corner, shoppers have been making a beeline to the major business streets such as NSB Road, Singarathope, Big Bazaar Street, Nandi Koil Street and Chinnakadai Street. The commercial centre attracts customers from Ariyalur, Perambalur and Pudukkottai too. Though the impact of the second wave of COVID-19 on textile business is yet to be analysed, traders have filled up the racks with a hope by procuring dress materials from Mumbai, Surat, Ahmadabad, Kolkata, Bengaluru and others. As expected the textile showrooms are teeming up with customers. What is causing concern among the people is the lackadaisical approach on enforcing the COVID 19 safety measures prescribed by the government. Except one or two, most traders seem to have taken the COVID 19 safety protocol for granted. Business is as usual in most textile and garment showrooms and utensil stores. It seems that no one has restricted the customers. They allow as many people as possible. Shoppers too do not bother to wear masks. Stating that the danger of COVID-19 is still omnipresent, doctors sound a warning. “We must not forget the sharp rise in fresh cases shortly after the Onam festival season in Kerala. We need to be extremely careful while shopping in congested places,” says M.A.Aleem, former Vice Principal, KAP. Viswanatham Government Medical College, Tiruchi. While admitting the need for enforcing COVID-19 protocol, an employee of a textile showroom on NSB Road said that limiting customers was not practical. If limited, it would cause mayhem and confusion not only inside the showrooms but also on busy streets. Customers, who abide by the safety measures, said that law enforcers should at least ensure all customers in showrooms wear masks. Otherwise, action should be taken against the customers and traders for failing to adhere to the safety norms. Meanwhile, the Tiruchi Corporation’s Assistant Commissioner of K.Abishekapuram zone has announced that it is mandatory for all traders and the employees in their shops to have inoculated with both doses of COVID-19 vaccine. They should produce the certificates of vaccination to corporation workers during inspections, he said in a statement.

Source: The Hindu

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Investors showing keen interest in J&K: Piyush Goyal

Union Minister Piyush Goyal on Tuesday said the concerted efforts made by the government of Jammu and Kashmir had started showing results, with investors from India and abroad eager to invest in the Union Territory. The minister for commerce and industry; consumer affairs and food and public distribution; and textiles concluded his two-day visit to Pahalgam as part of the public outreach programme of the Central Government. Addressing a gathering at Pahalgam, Goyal thanked the people of Kashmir for their participation in the development process and appreciated their dedication towards promotion of tourist activity, an official statement said. He said the concerted efforts of the administration towards development had started bearing fruit and investors from the rest of the country and abroad are eager to invest in the Union Territory. The minister also inaugurated a 250-mm Seer water supply scheme. The project will benefit around 10,000 people and will be completed under the ambit of Jal Jeevan Mission within three months. He appreciated the rapid pace of developmental works and commended the frontline workers for working towards realising the Prime Minister's dream of tap water for all households, the statement said. Goyal also visited Rahi Shawl Unit located at Akad Park and interacted with the local artisans. He examined various handicrafts like zari, sozni and tapestry.

Source: Tribune India

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KTR interacts with European Business Group members

The Telangana government on Thursday said state IT and industries minister KT Rama Rao interacted with members of the European Business Group (EBG). He informed them of Telangana’s single window clearance system TSiPASS and the state government’s focus on sectors such as IT, electronics, life sciences, medical devices, defence & aerospace, food processing and textiles, among others. Highlighting some of the advantages of the state as compared to other states in the country, KTR said Telangana has the largest industrial land bank in the country and is a power surplus state with availability of skilled manpower. He said that Telangana has received investments from investors across the globe such as US, Japan, Korea, China and Taiwan, among others.

Source: Times of India

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Goal way beyond inflation targeting

In the complex world of globalised finance, such flexibility is appropriate. Let Operation Twist apply to short and long rates, not to what makes the RBI tick. A study of the Indian experience of using a combination of monetary policy and macroprudential policies to achieve financial stability concludes that India has been quite successful in achieving financial stability and there is no need to shift its flexible inflation targeting mandate. The study, by the RBI's staff and published in the RBI Bulletin, is too ready to credit inflation targeting for policy success. While India has had financial stability, it would be difficult to attribute this to any particular combination of macroprudential measures and policy rates at particular stages of the financial or credit cycle. While India formally has a flexible inflation-targeting mandate (an inflation target that is mindful of the requirement of growth), in actual practice, the RBI has continued with its flexible multiple indicators mode of policymaking. There is everything right with this approach and there is no need to be embarrassed about admitting to sophistication. When the inflation target was accepted, it was assumed that the Monetary Policy Committee of the RBI, with three external members, would set policy rates and that would be all there is to monetary policy. But, in practice, rate-setting has been just a statutory minimum function of monetary policy. The RBI has expanded the list of tools in its armoury to influence interest rates, the exchange rate, liquidity in general and liquidity targeted at specific segments of end-borrowers to be mediated by different financial intermediaries and to prevent the differential between short- and medium-term rates from widening too much. The rudimentary development of the debt market and an incomplete suite of instruments to hedge against different kinds of risk inhibit market-based interventions, but, here too, the RBI intervenes in the forward markets to influence the exchange rate and, thereby, the rate of interest. In the complex world of globalised finance, such flexibility is appropriate. Let Operation Twist apply to short and long rates, not to what makes the RBI tick.

Source: Economic Times

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Asian textile industry must embrace digital transformation: Majyd Aziz

Former President, Employers’ Federation of Pakistan, Majyd Aziz has said that to be digital or not is no longer the option and so Asian textile industry must embrace digital transformation that is imperative and must make the most of it. However, the truth is that these industries have a low score on the overall spectrum of digital adoption in comparison to other sectors. This is because of a number of reasons such as the nebulous nature of the industry, lack of awareness of digital tools, and absence of a proper business environment to enable this transformation, to mention only a few. He was addressing on behalf of Asia and the Pacific Employers at the inaugural session of “ILO Tripartite Regional Meeting: towards a more resilient, inclusive and sustainable garment and textiles sector in Asia and the Pacific”, hosted virtually by the ILO Regional Office in Bangkok. “Even before Covid struck, the textile industry in Asia and the Pacific was already experiencing the effects of other mega-trends, in particular of the digitalization transformation, including the automation of production and logistics processes, and this transformation is bringing in substantial improvements in production speed, precision, quality and supply chain visibility for the benefit of the entire industry”, he said. EFP former president was of the opinion that modern technologies not only benefit the creation of new business models by responding to changing customer’s needs but also enhance working conditions and existing production processes with better management of hazardous stock, safer working environment, better workforce coordination, and improved equipment monitoring etc. Majyd Aziz proposed that notwithstanding the intensive intra-regional competition and protection of share in the global marketplace, the garment manufacturers of Asia and the Pacific region must share better practices, such as the experience of ILO Better Work Program, and must display unanimity. Aziz added that considering the critical mass that is so evident in Asean and Saarc countries, there is a need to establish a shared platform to promote, protect, and project common interests. This working together can pave the way to ensure that the industry becomes more sustainable, resilient and productive.

Source: Brecorder

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Sri Lanka: Trade deficit tops $ 5.5 b by August  

 The country’s trade deficit topped the $ 5.5 billion mark by end-August as imports remained high despite many curtailing efforts. As per the latest data released by the Central Bank, the trade balance in the first eight months amounted to $ 5.5 billion, up from $ 3.8 billion in the corresponding period last year. The deficit was purely due to robust imports up 31% to $ 13.4 billion, whilst exports, though resilient, grew at a lesser pace up 22.6% to $ 7.9 billion. In August, imports grew by 31% to 1.68 billion as against $ 1.3 billion a year ago. Exports marked the third consecutive month of over $ 1 billion exports, up by 16.2% from a year earlier. In August, the trade deficit amounted to $ 586 million as against $ 342 million a year ago. Imports have been consistently averaging at $ 1.6-1.7 billion since April this year despite on-going restrictions and foreign exchange scarcity. In the first eight months, big deficit was caused by a $ 704.7 million increase in fuel imports, $ 498 million increase in machinery and equipment imports, $ 486.5 million in textiles and textile articles imports, $ 252.6 million increase in base metals imports and $ 214 million in chemical products import, according to the Central Bank. It said in August an increase in import expenditure was observed across all main categories of imports, namely, consumer goods, intermediate goods, and investment goods, despite the continuation of some import restrictions imposed by the Government. Expenditure on the importation of food and beverages increased by 12.3% in August 2021 (YOY), with the increase primarily stemming from vegetables (mainly lentils and onions), dairy products (milk powder), seafood (mainly dried sprats and frozen fish), spices (chillies), and miscellaneous food and beverages. A significant decline was observed in expenditure of sugar imports. Expenditure on the importation of non-food consumer goods increased by 67.5% (YOY), mainly owing to the expenditure on importation of vaccines. Several broad categories of non-food consumer goods, including home appliances, telecommunication devices, clothing and accessories, rubber products, household and furniture items etc., also recorded an increase. Expenditure on the importation of intermediate goods in August 2021 increased by 27.6% over August 2020, mainly due to the rise in import expenditure on fuel and textiles and textile articles. Expenditure on fuel imports increased by 42.5% (YOY) with the increase in the prices of refined petroleum and crude oil imported, while their import volumes declined. The import expenditure per barrel of crude oil amounted to $ 74.88 in August 2021, compared to $ 47.74 in August 2020. A marked decline was observed in the expenditure of fertiliser imports, reflecting the impact of Government policy on fertiliser. Expenditure on the importation of investment goods increased by 30.8% in August 2021, compared to the same month in 2020. Under machinery and equipment, office machines such as computers, medical and laboratory equipment, agricultural machinery, electric motor and generating sets and miscellaneous industrial machinery recorded a significant increase in import expenditure, among others. Import expenditure on building material increased, mainly owing to imports of iron and steel, articles of iron and steel, and mineral products (primarily asbestos). Import expenditure on cement imports declined due to the volume effect while that on transport equipment increased mainly due to the imports of small airplanes and agricultural tractors. The Central Bank said the import volume and unit value indices increased by 3.6% and 26.3%, respectively, on a YOY basis in August 2021, implying that the increase in import expenditure was mainly due to the price effect. Commenting on exports, it said earnings in August were marginally higher at $ 1.1 billion in July 2021. “However, the recent gap of around $ 345 million per month, on average, between the merchandise outflow and the financial inflow related to such exports has been a matter of concern,” Central Bank added. It said earnings from the export of industrial goods increased by 17.5% in August 2021 compared to August 2020. This increase was due to a broad-based increase in earnings from most of the industrial products led by textiles and garments; petroleum products; rubber products; food, beverages and tobacco; and machinery and mechanical appliances. Export of garments to all major markets increased. Earnings from the export of petroleum products increased with the increase in prices of aviation and bunker fuel and the increase in volumes of bunker fuel exports. Increase in earnings from tyres and gloves led to higher earnings from rubber products. Total earnings from the export of agricultural goods in August 2021 increased by 10.9%, compared to August 2020, mainly due to the increase in export earnings from tea, coconut (both kernel and non-kernel products), minor agricultural products (mainly sesame seeds and areca nuts), seafood and rubber. Although the unit price earned by tea exports in August 2021 was lower than a year earlier, export volumes increased, resulting in an increase of earnings from tea. Export earnings from spices, including pepper, cloves, nutmeg, and mace increased, except for earnings from cinnamon. Earnings from mineral exports increased in August 2021 compared to August 2020, due to high earnings from earths and stone, and ores, slag, and ash. The export volume index and the export unit value index increased by 13.9% and 2%, respectively, on a YOY basis in August 2021. This indicates that the increase in export earnings in August 2021 was mainly due to the volume effect.

Source: Financial Times

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UK agrees historic trade deal with New Zealand

Prime Minister seals free trade deal with New Zealand PM Jacinda Ardern. • Prime Minister seals free trade deal with New Zealand PM Jacinda Ardern • Boost to British exporters and small businesses as both countries ditch tariffs and cut red tape • More opportunities to live and work in New Zealand and deeper cooperation on digital trade and climate change A comprehensive trade agreement with New Zealand will cut red tape for businesses, end tariffs on UK exports and create new opportunities for tech and services companies, while making it easier for UK professionals to live and work in New Zealand. The ground-breaking deal was agreed in a video call today (20th October) between Prime Minister Boris Johnson and New Zealand Prime Minister Jacinda Ardern after 16 months of talks by Department for International Trade negotiators. UK-New Zealand trade was worth £2.3 billion last year and is set to grow under the deal. The deal will remove barriers to trade and deepen access for our advanced tech and services companies, while making it easier for smaller businesses to break into the New Zealand market. Tariffs as high as 10% will be removed on a huge range of UK goods, from clothing and footwear to buses, ships, bulldozers and excavators, giving British exporters an advantage over international rivals in the New Zealand import market - a market which is expected to grow by around 30% by 2030. High-quality New Zealand products loved by British consumers, from Sauvignon Blanc wine to Manuka honey and kiwi fruits, could be cheaper to buy. UK workers will benefit from improved business travel arrangements and professionals such as lawyers and architects will be able to work in New Zealand more easily, allowing UK companies to set up shop and bring the best British talent with them. Both sides have also committed to a mobility dialogue outside the trade agreement that will consider how people-to-people links can be deepened further. The New Zealand trade deal follows advanced free trade agreements already struck with Australia and Japan and helps pave the way for UK to join Trans-Pacific Partnership (CPTPP), a free trade area of 11 Pacific nations with a GDP of £8.4 trillion in 2020. Prime Minister Boris Johnson said: This is a great trade deal for the United Kingdom, cementing our long friendship with New Zealand and furthering our ties with the Indo-Pacific. It will benefit businesses and consumers across the country, cutting costs for exporters and opening up access for our workers. This is a fantastic week for Global Britain. On Tuesday we raised almost £10bn in investment for the industries of the future, and this new deal will help drive green growth here and on the other side of the world in New Zealand. New Zealand Prime Minister Jacinda Ardern said: The United Kingdom and New Zealand are great friends and close partners. The historical connections that bind us run deep. This world-leading free trade agreement lays the foundations for even stronger connections as both countries embark on a new phase in our relationship. It is good for our economies, our businesses and our people. The deal will provide benefits for people and businesses across the UK: • Edinburgh’s financial and insurance services companies will benefit from greater access to New Zealand’s market and easier digital trade and business travel. • Welsh auto companies that exported £3.4m of road vehicles to New Zealand last year will now benefit from the removal of tariffs of up to 10%, while manufacturing companies like Zip-Clip and K-form will also see the removal of tariffs up to 5% on metal goods and construction products. • Northern Ireland’s Wrightbus, from Ballymena, will benefit from the removal of a 5% tariff on buses, helping to boost £2.4m of road vehicle exports to New Zealand last year. Textile producers such as Ulster Weavers, who exported £1.5m to New Zealand last year, will also benefit from the removal of tariffs of up to 10%. International Trade Secretary Anne-Marie Trevelyan said: This deal is a win-win for two like-minded democracies who believe in free and fair trade. It delivers for families, workers and businesses across Britain, and sets the stage for greater cooperation between our two nations on global challenges like digital trade and climate change. It is a vital part of our plan to level up the country: slashing costs and red tape for exporters, building new trade routes for our services companies and refocusing Britain on the dynamic economies of the Asia-Pacific. Mike Cherry, Federation of Small Businesses National Chair, said: It’s fantastic to see progress being made on a free trade agreement with New Zealand. New Zealand has long been a priority market for UK’s small exporters – more than a quarter of which already sell there – and we welcome efforts to build on existing trade ties that go back many decades. The inclusion of a dedicated small business chapter within this deal is very welcome, and we look forward to working with DIT to help firms of all sizes maximise this opportunity, through the myriad ways FTAs can benefit their business. Lord Karan Bilimoria, CBI President, said: This agreement in principle is a big step forward and will be welcomed by businesses. New Zealand and the UK are at the fore of the green trade revolution and this deal has the potential to showcase to the world that trade and tackling climate change can go hand-inhand. This is not just about goods but also enabling fluid services trade - digital policies that underpin all industries and innovation. With an ultimate aim of CPTPP accession and the need to retain the high standards in areas such as agriculture and intellectual property, it is essential that both sides now seal the deal so we can realise the full economic potential as we look to strengthen our recovery. Dominic Goudie, Head of International Trade, the Food and Drink Federation, said: Food and drink manufacturers welcome the news that the UK has agreed in principle a trade deal with New Zealand – an important partner for UK food and drink, with trade in our sector’s products worth more than £661m in 2020. Our manufacturers will benefit from an ambitious trade deal with New Zealand that removes a range of tariffs that currently constrain exports. Significant growth opportunities exist as UK production becomes more competitive in the New Zealand market.

Source: UK Government

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Exposing China’s investment strategy

China leveraged its success on international trade and finance to promote OFDI through bundling China imported raw materials from Africa by accelerating mining, resolving transportation difficulty, infrastructure and logistics investment. (Representative image) A recent report by US AidData, reveals inter alia ‘hidden debt’ in Chinese development projects worth $843 billion, highlighting Belt and Road Initiative (BRI) implementation problems. Outward Foreign Direct Investment (OFDI) from China witnessed a 3% decline (as per the World Investment Report 2021) and scaling back of public investment (IMF World Economic Outlook 2021). This necessitates a review of China’s FDI strategy for the last 20 years. FDI is a cross-border investment aiming at enterprise management, diversifying risk and improving efficiency. While it increases productivity and employment opportunities, its benefits depends inter alia on factors like governance quality, policy distortion, foreign exchange stability, investment skills, money laundering and related risks. FDI typically flowed from advanced to developing countries due to technology and wage gaps. However, it has seen recently a surge from developing countries, especially China, exploring new growth engines, viz. high technology and valuable trademark. China mobilised inward FDI by opening up its coastal cities and SEZs, targeting export-oriented manufacturing way back in 1990s, and shifting to service sector after World Trade Organisation formation in 2001, justified by its comparative advantage in capital and labour. Policy support through tax reduction, preferential treatment on loans, land, licence, etc, led to reallocation of factories to coastal cities (Hong Kong and Taiwan), rapid economic growth, high return for investors and massive hoarding of international reserves. China’s FDI strategy changed after Global Financial Crisis (GFC) due to slowdown, weak demand and lacklustre export-led growth, evolving from rising labour and capital costs. The liquidity constraint, coupled with falling asset price, and increased purchasing power of international reserve, motivated it to adopt OFDI. WIR 2016 reveals it as one of largest outbound direct investor in 2015 ($127.6 billion). China promoted OFDI through multinational management experience and technology development through imitation and innovation. China, then, was also a key player in international trade, with a third of the world’s merchandise trade in 2011, having efficient export platform for manufacture goods and huge import demand for natural resources. China had a large net foreign-asset position with sufficient capital goods and liquidity and international aid/loan and credit lines. Thus, China leveraged its success on international trade and finance to promote OFDI through bundling, a marketing strategy to sell group of products/services as a package. Bundling a star product with a new one increased China’s market share, sales and efficiency. China imported raw materials from Africa by accelerating mining, resolving transportation difficulty, infrastructure and logistics investment. It identified recipient country’s fund shortage and facilitated provision of capital goods, financial aid and liquidity, bilateral currency swap lines etc. Bundling OFDI with trade and finance increased China’s attractiveness to these countries. Studies reveal positive association of Chinese trade and finance with its OFDI, as their investments strategically target countries from where China imports commodities and exports manufacturing goods (Aizenman, Jinjarak and Zheng, 2018). The financial support to those countries strengthens the bundling effect. The positive relation between trade and OFDI is more pronounced after GFC for OFDI in tradable and natural resource sectors. China embarked on bilateral currency-swap agreements after 2008, targeting emerging economies through credit lines, providing liquidity buffer, increasing resilience of financial system, and enhancing business confidence in both markets. When host countries face credit constraints, institutional challenges and commodity price volatility, China enhanced its market power by injecting liquidity and improving stability. The provision of swap lines improved bundling efficiency. The strategy of OFDI is heterogeneous across Chinese State-owned enterprise (SOE) and privately-owned enterprise (POE). Through preferential treatment, Bundling is made more efficient for SOEs, when leveraging market power. Political linkages among SOEs facilitated bundling. POEs have more bundling opportunities through provision of lower barriers, when dealing with nationalism government, enabling flexibility and motivation to be bundled. Studies reveal that SOEs dominated before GFC while POEs caught up after 2012. Presently, OFDI from China is 133 billion, retaining its position as the largest investor in the world (WIR 2021). The value of cross-border M&A purchases by Chinese MNEs doubled, mostly due to financial transactions in Hong Kong. Continued expansion of the BRI also led to resilient FDI outflows amid pandemic. However, there are reports on serious debt crisis in China coupled with proposed default in its property sector. Also, the unusual confidentiality clauses in Chinese OFDI contracts bar borrowers from revealing even the terms or existence of the debt. The intensity of the crisis however, shall be evident in the days to come.

Source: Financial Express

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Robotic Textiles for Breathing Recovery

Researchers at MIT, alongside collaborators from Uppsala University and KTH Royal Institute of Technology in Sweden, developed a ‘robotic textile’ that consists of an array of actuatable fibers. The fiber actuators are powered using compressed air, and can perform an impressive array of movements. Garments made using such fibers can sense how they’re stretched and compressed, and can provide tactile feedback at the same time. Although these fabrics have a multitude of uses, the researchers initially propose that the technology could assist patients in recovering breathing patterns after surgery or respiratory illnesses such as COVID-19. The system consists of thin, flexible fibers with a fluid core that can contain either air or a liquid that can be compressed or released to actuate the fibers, thereby making them act like artificial muscle fibers. The flexibility and small profile of the fibers allows them to be sewn or woven into fabrics, and their thin structures contain sensors that can detect how much the fibers stretch during movement. The fibers consist of five layers: a fluid channel, a surrounding silicone layer, a stretchable sensor to monitor stretching during use, a braided polymer mesh, and a non-stretchy filament to prevent overextension. When incorporated into garments, the fibers have numerous applications, not all of them medical. For instance, the researchers suggest that they could help singers perfect their breathing technique. An experienced singer could use the device to create an ‘imprint’ of the correct breathing technique, and then a novice could wear the garment and it would prompt them to activate specific muscles while singing. The fibers can respond very quickly, and rapidly provide tactile feedback during use. However, refining respiratory muscle control would also be helpful for those who are experiencing respiratory difficulties because of surgery or the aftermath of a respiratory illness such as COVID-19. Indeed, the garments could be useful for a wide variety of muscle training applications for rehabilitation. In the next steps, the researchers wish to miniaturize the system that supplies compressed air and the electrical components of the system, while also increasing the potential length of the manufactured fibers. “Everybody has to breathe. Breathing has a major impact on productivity, confidence, and performance,” said Hiroshi Ishii, a researcher involved in the study, via an MIT announcement. “Breathing is important for singing, but also this can help when recovering from surgery or depression. For example, breathing is so important for meditation.”

Source: Med Gadget

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