The textile and clothing industry has expressed concerns over the GST Council's proposed plan to implement the increase in GST rates on fabrics and garments from 5% to 12% from January 1, 2022, arguing that such a move will affect 85% of the industry and affect nearly 80% of the final products to the consumers as the GST rates for garments over Rs 1,000 already stands at 12%. The objective behind the proposed increase is to correct the problem of Inverted Duty Structure faced by a small segment of the textile value chain, which according to the stakeholders, constitutes not more than 15% of the total Industry. They argue that the proposed increase will create greater stress on the working capital requirements of the industry, especially the MSME Sector, which is already struggling to achieve prepandemic levels of growth given the ongoing increase in the cost of raw materials such as yarn, fabric, fuel, packaging materials, transportation, etc. According to Ashok Todi, President, WBHA & chairman, Lux Industries, “Adding another increment will lead to a very severe drop in consumption, or a shift to cheaper and lower quality goods. K B Agarwala, President, FOHMA, & MD of Rupa Company, said, “An increase in taxes by as much as 7% will lead to a much higher level of job losses - possibly in excess of 2 million.” As a result, the industry has urged the Central and state governments and the GST Council to review their decision and maintain the current GST rate on the hosiery, knitwear fabric and garment industry. “We believe that a far more beneficial and reasonable solution, which will not only resolve the inverted duty structure anomaly but also give a fillip to the industry,” said Sanjay Kumar Jain, vice president, FOHMA.
Source: Times of India
Of UP's ₹1.21 lakh crore exports in FY21, almost 80% or ₹96,000 crore were of ODOP products. As per officials, the target is to clock almost ₹1.92 lakh crore exports by 2025-26, in line with the state's target of becoming a $1 trillion economy in the next five years. Agra's leather products and marble engraved handicrafts, Aligarh's locks, moonj products from Amethi and Prayagraj, jaggery from Ayodhya, handloom products of Hardoi and Barabanki, zari-zardozi from Bareilly, Unnao and Shahjahanpur, chikankari of Lucknow and Moradabadi metal craft are some of the products whose production and exports are likely to see a massive jump in the coming years as Uttar Pradesh aims to double their output. These are among the 62 unique products identified under the One District, One Product (ODOP) Programme across 75 districts of the state. "District Action Plans are being readied for all the 75 districts and the aim is to double the production and exports of ODOP products in the next five years," said a state government official. Of UP's ₹1.21 lakh crore exports in FY21, almost 80% or ₹96,000 crore were of ODOP products. As per officials, the target is to clock almost ₹1.92 lakh crore exports by 2025- 26, in line with the state's target of becoming a $1 trillion economy in the next five years. Ballia's bindi, wooden toys of Chitrakoot, textile prints of Farrukhabad, hing from Hathras, woollen carpets of Jaunpur, sports products from Meerut, carpets of Sitapurand Sonbhadra, and Banarasi silk sarees are some of the other items identified. "ODOP is changing the lives of people, creating opportunities for employment in the state," said Navneet Sehgal, additional chief secretary-MSME. "It is preserving, promoting local art and crafts of Uttar Pradesh. Exports have risen significantly since the launch of ODOP, especially from local industry clusters." Around 75 food products such as petha, aonla, banana, rice (kala namak), onion, jaggery, and mango have been identified under the programme, which seeks to encourage such indigenous and specialised products and crafts. As per the state, there are products in UP that are found nowhere else like the ancient and nutritious 'kala namak' rice, the rare and intriguing wheat-stalk craft, world-famous chikankari and zari-zardozi work on clothes, and the intricate and stunning horn and bone work that uses the remains of dead animals rather than live ones, a nature-friendly replacement for ivory. "Many of these products are (geographical indication) GI-tagged, which means they are certified as being specific to that region in Uttar Pradesh. Many of these were also dying community traditions that are being revived," the official said. Launched in January 2018, ODOP is Uttar Pradesh's flagship programme that seeks to preserve, develop and promote of 2018-19 export data, Uttar Pradesh stood at fifth spot in the country in terms of exports. The state exported goods worth ₹21,500.85 crore in April and May this year. The state is also establishing 'Overseas Trade Promotion and Facilitation Centres' across all the districts.
Source: Economic Times
Hike in fuel prices come as double whammy, raw materials were already cause of concern, say experts Shortage of coal in Madhya Pradesh has left the coal-dependent industries like textile mills concerned as per Madhya Pradesh Textile Mills Association. The shortage of coal that subsequently led to a hike in energy costs has led to a three-fold increase in cost of operations, while the prices of colour chemicals have risen simultaneously. The traders are worried about fast slipping inventories and about losing international orders, say the industry experts. Apart from textile, industries including paper mills, rolling mills and a few pharmaceutical units among others use coal to run boilers and thermal packs in the state but the jump in the costs of coal has thrown a severe challenge to keep plants running. Madhya Pradesh has about 700 boilers registered with the directorate of and at least 70 per cent of them run on coal, as per the official statistics. Textile Mills Association chairman Akhilesh Rathi says, “The industry was on a path of revival but was already facing a pressure due to rising prices of raw materials – both natural and synthetic fibres – and colour chemicals costs. Shooting fuel cost has come as a double whammy, further dampening the margins. The power prices were already running high in the state and the continuous shortage has increased them further, bringing down the profit margins to a negligible stance.” “Coal, power, raw material, colour chemicals and manpower are the five main requirements of the industry. Unfortunately, all of these are taking a huge toll on our pockets right now. Global companies are now worried that mills may halt production due to high energy costs. They have begun to source out fearing the production cuts and shipment delays,” he adds. More than 25 large and 100 small and medium textile units in the state are dependent on coal. An alternative to coal, agro-fuel, also reduces due to monsoon, say the experts. I bought imported coal at about Rs 4,000 to Rs 5,000 per tonne a month ago and now it has reached Rs 14,000 to 15,000 per tonne. Generally, around 30 to 35 tonnes of coal is used in the textile industry in a day to generate steam, says the owner of a textile mill in Ratlam. “The production cost has skyrocketed. Though there is high demand of textile post pandemic-induced lockdown, we are not earning margins,” he adds.
Source: Free Press Journal
The Indian textile industry, traditionally a labour-intensive industry, has long been plagued by issues around sustainability. The Indian textile industry, traditionally a labour-intensive industry, has long been plagued by issues around sustainability. Circular economy offers a clear and credible pathway to achieve sustainably — one that equally puts focus on people, the planet and profit, said experts at Sankalp Global2021. While deliberating about issues around sustainability, experts stressed the need for businesses to rapidly adopt industry best practices from across the globe. Forward-looking firms will leverage the idea of sustainability and circular economy, the panel said. The virtual event, held from October 12-14, brought entrepreneurs, investors and policymakers on a platform to share ideas and grow together. Rene Van Berkel, Representative, Regional Office, UNIDO India, said the long-term benefits of the circular economy has to be explained to all stakeholders in the ecosystem, especially consumers as their involvement is crucial for a broader acceptance of the idea. “The textile and apparel sector is a huge industry worth $1.5 trillion. If it was a country, it would have been the 14th largest country in the world or of the same size as that of Australia. However, the greenhouse gas emissions of the sector are about 10% of the global emissions, which exceeds those from the aviation and maritime industry clubbed together,” he said. A circular economy focuses on reusing and recycling products and on sustainable business practices. The Indian textile industry, traditionally a labourintensive industry, has long been plagued by issues around sustainability. Due to a large number of informal players who are yet to join the circular economy bandwagon, the segment is often touted to be one of the major polluting industries in the country. However, industry and the government are trying to transform this. Globally, customers are increasingly making their buying decision based on whether the raw materials in the product have been sourced sustainably or not. Being part of a circular value chain gives an added USP to products, say industry observers. The growing trend is leading to a big demand for products made by firms employing sustainability-driven practices. To address a lacuna in the market, industry bodies — including the Textile Association of India, Apparel Export Promotion Council, Cotton Textiles Export Promotion Council — have taken the necessary initiatives. India — along with Bangladesh, China, Vietnam, Pakistan, Sri Lanka and Indonesia — is a major textile manufacturing hotspot in the APAC region. Rated as the leading foreign exchange earning sector for India, the sector is estimated to grow to $190 billion by FY26, according to IBEF research. Another takeaway of the deliberations at Sankalp is that the nuances of a business remain critical for circular business models to be adopted at scale. Siddharth Lulla, LeadCorporate Strategy for the Circular Apparel Innovation Factory (CAIF), emphasised the need to address perceived as well as real challenges associated with the concept. One such barrier is a lack of clear evidence of financial viability. "A circular business model that looks great on the balance sheet but does not have positive people and planned outcomes will ultimately fail to meet its potential.” Lulla said this issue is more critical in the context of manufacturing hotspots in Southeast Asia. Freija Vermeer, Program Manager, Food Sustainability & Circular Economy, the DOEN Foundation, said stakeholders should not underestimate the effects of innovation even if it’s small. Some changes in the manufacturing processes can go a long way in achieving this goal. Highlighting the role of business interventions, Vaishali Kulkarni, Founder & CEO, KBCols Sciences Pvt Ltd, said polyester is generally dyed at 130 degrees Celsius but with the firm’s unique technology, the required temperature has been reduced to 85 degrees. This has been beneficial for the sector. “We have seen that possibility with multiple fabrics. We now have tried almost every fabric,” she added. For Gigi Mathews, Country Director, Enviu India, embracing circularity in the textile industry is "not an option" anymore. It has become an imperative. “There’s already pressure to consume less energy, use fewer resources and produce less waste. But it’s also important to scale and be profitable too. So, we have seen that conversation has started moving from CSR corridors to finance decision-makers,” she added.
Source: Economic Times
“Union Finance Minister Smt. @nsitharaman embarks on an official visit to attend #G20 Joint Finance & Health Ministers meeting in #Rome to discuss measures to strengthen #COVID19 #PandemicPrevention, #preparedness & #response. The meeting precedes #G20RomeSummit,” the Finance Ministry tweeted. Finance Minister Nirmala Sitharaman will attend the G-20 joint Finance and Health Ministers meeting in Rome on October 29, which among other things will discuss COVID pandemic prevention and response. “Union Finance Minister Smt. @nsitharaman embarks on an official visit to attend #G20 Joint Finance & Health Ministers meeting in #Rome to discuss measures to strengthen #COVID19 #PandemicPrevention, #preparedness & #response. The meeting precedes #G20RomeSummit,” the Finance Ministry tweeted. Union Finance Minister Smt. @nsitharaman embarks on an official visit to attend #G20 Joint Finance & Health Ministe… https://t.co/65rFTjcAkV — Ministry of Finance (@FinMinIndia) 1635389777000 Finance and health ministers will discuss how to keep momentum on response to pandemic and build on further coordination arrangements between health and finance ministries. On October 29, G20 Finance and Health Ministers will gather in Rome for their first joint meeting under the Italian G20 Presidency. The meeting will be co-chaired by Daniele Franco, Italian Minister of Economy and Finance and Roberto Speranza, Italian Minister of Health. The meeting will be held on the eve of the G20 Leaders' Summit taking place in Rome on October 30-31, 2021.
Source: Economic Times
The center government has re-appointed Shaktikanta Das as the Governor of the Reserve Bank of India (RBI) for a period of three years. The center government has re-appointed Shaktikanta Das as the Governor of the Reserve Bank of India (RBI) for a period of three years. Shatikanta Das’ re-appointment as the top banker of the country will come into effect from December 10, or until further orders, whichever is earlier, the official notification said. Shatikanta Das was appointed as the 25th Governor of the RBI in December 2018, succeeding Urjit Patel. Shaktikanta Das, a 1980 batch IAS officer from the Tamil Nadu cadre has earlier served as a Secretary in the Department of Revenue and the Department of Economic Affairs at Ministry of Finance. Shaktikanta Das has been at the helm of affairs since the end of 2018, but prior to his appointment as the RBI governor, the former IAS officer was acting as Member, 15th Finance Commission and G20 Sherpa of India. Das brings with himself a vast experience in various areas of governance, spanning over 38 years. He has held important positions in the Central and State Governments in the areas of Finance, Taxation, Industries, and Infrastructure among others. The former Secretary in the Ministry of Finance has directly associated with the preparation of as many as 8 Union Budgets.Shaktikanta Das is a postgraduate from St. Stephen’s College, Delhi University. Since his appointment, Shaktikanta Das has chaired 17 Monetary Policy Committee (MPC) meeting. These included the MPC meetings held just the Covid-19 pandemic was stepping foot in geographies across the globe. 64-year-old Shaktikanta Das in his most recent role as the RBI governor took the center stage in making sure India’s financial system held its ground during the pandemic. Shaktikanta Das was at the helm of affairs when interest rates were brought down to historic lows and borrowing schemes were unveiled for every segment of the society to help them survive the pandemic.
Source: Financial Express
Indian manufacturers are raising prices to pass on to consumers some of the burden of costlier energy and raw materials, which threatens to dent demand as well as a recovery from the COVID-19 pandemic, business leaders and economists say. Prices of items from tea, coffee and biscuits to toothpaste and electric components have risen 4% to 10% in the last quarter, while construction supplies, such as cement and sanitary ware, have added as much as a fifth, they said. Big companies such as NSE -0.19 % , NSE -0.65 % , Procter & Gamble, Ambuja Cement and Kajaria Ceramics, have blamed the increases on higher costs of oil and other raw materials. As the economy swings into gear after pandemic curbs curtailed many activities over the last year, supply chain disruptions are also helping to drive up prices. "This is a challenge, as India's economic recovery is still not broad-based and the rising prices will hurt consumer sentiment," said Kapil Gupta, chief economist at Mumbai brokerage Edelweiss Securities. After keeping above the central bank's target range of 2% to 6%, annual retail inflation eased in September to 4.35%, helped by a softening of food prices, which make up nearly half of the consumer price index. But core inflation, excluding volatile prices of food and energy, has remained near 6% for the last few months, reflecting the rising manufacturing prices. Firms facing increases of 20% to 30% in transport costs could raise prices further to maintain margins, say analysts, if the government offers no relief on energy costs. Until now, Prime Minister Narendra Modi's administration has declined to cut fuel taxes that are the highest among the major economies, at more than 100% of the base price. Those building homes or renovating them to remedy defects made apparent during the pandemic-enforced curbs face a rise of more than 10% in the cost of construction materials such as paint, cement and steel. Kajaria Ceramics has raised the prices of its bathroom tiles by about 7% and sanitary ware by 10%, while Asian Paints has hiked product prices by 7% to 10%, analysts' reports showed. "This time, the material increase has been fairly unnatural," said Amit Syngle, the chief executive of Asian Paints, warning that more hikes could be in store. Consumer goods maker Hindustan Unilever, which markets more than 400 brands of food and beauty products, is struggling with the prices of palm oil, tea, crude and skyrocketing costs of shipping, said its chairman and managing director, Sanjiv Mehta. "The next few months will be critical to assess the underlying market demand and determine whether these are transient or structural," Mehta said after unveiling quarterly results last week. Rural demand has slowed over the last two months, inspiring further caution, he added. Private economists have warned that rising manufacturing and energy prices could dent the recovery from a record contraction of 7.3% in the fiscal year that ended in March 2021. Consumer spending, which contributes nearly 55% of GDP, would be hurt by the rising prices, said Radhika Rao, a senior economist at DBS Bank. "This might hold back consumption beyond the spurt on account of re-opening gains and festive demand, with employment gains yet to fully percolate to the unorganised sectors," she said, referring to celebrations around Diwali, the Hindu festival of lights. Worried by rising prices, some private economists, including ratings agency Fitch, have cut growth forecasts to 8.7% for the current fiscal year, down from nearly 10% earlier.
Source: Economic Times
Lauding India's policy efforts to push reserves and strengthen its external position, the multilateral agency has advised the central bank against excessive forex market intervention." Further accumulation of reserves is less warranted, and foreign exchange intervention should be limited to addressing disorderly market conditions" IMF said in its recently released country report for India. After the US treasury labeled India as a currency manipulator on and off, now IMF has also given a word of advice to the RBI on its intervention policy in the foreign exchange market. Lauding India's policy efforts to push reserves and strengthen its external position, the multilateral agency has advised the central bank against excessive forex market intervention." Further accumulation of reserves is less warranted, and foreign exchange intervention should be limited to addressing disorderly market conditions" IMF said in its recently released country report for India. In the previous report of December 2019, though the multilateral agency had called for alerts about restricting intervention to addressing volatility, this time round it has explicitly called for going slow on reserves pile-up. "The guiding objectives of foreign exchange reserve management in India are similar to those of many central banks in the world," the RBI said in the Report on Management of Foreign Exchange Reserves released on Wednesday. The demands placed on the foreign exchange reserves may vary widely depending upon a variety of factors including the exchange rate regime adopted by the country, the extent of openness of the economy, the size of the external sector in a country's GDP and the nature of markets operating in the country." While safety and liquidity constitute the twin objectives of reserve management in India, return optimization is kept in view within this framework " RBI said. Underscoring that the foreign exchange reserves are adequate for precautionary purposes- $599 billion as of end May'21, IMF said that precautionary accumulation of reserves has mitigated risks due to external vulnerabilities, including potential capital flow volatility and oil price surges. In FY'20-21, RBI's total forex purchases were equivalent to 5.5 per cent of the country's GDP, IMF said. The reserves are at $641 billion as of October 15, according to RBI data. In its latest report , RBI has said that at the end of June 2021, the foreign exchange reserves cover of imports decreased to 15.8 months from 17.4 months at end-March 2021. The ratio of short-term debt (original maturity) to reserves, which was 17.5 per cent at end-March 2021, declined to 16.8 per cent at endJune 2021. The ratio of volatile capital flows (including cumulative foreign portfolio inflows and outstanding short-term debt) to reserves declined from 69.0 per cent at endMarch 2021 to 65.5 per cent at end-June 2021. In the April 2021 report, the US treasury report to the Congress titled " Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States" said that the authorities should allow the exchange rate to move to reflect economic fundamentals, limit foreign exchange intervention to circumstances of disorderly market conditions, and refrain from excessive reserve accumulation. As the economic recovery takes hold, the authorities should continue to pursue structural reforms that can help lift productivity and living standards, including greater openness to foreign financial flows and financial sector deepening, which can further support economic growth.
Source: Economic Times
For the second year in a row, the government is borrowing under a special, relatively lowcost mechanism to bridge a yawning shortfall in the GST compensation cess pool and transfer the funds to states as back-to-back loans. To help accelerate capital expenditure by state governments, the Union government on Thursday released Rs 44,000 crore to them to bridge their GST revenue shortfall. With this, the target of releasing Rs 1.59 lakh crore under the special back-to-back loan mechanism for the current financial year has been met. Of course, this amount is additional to what the states get as compensation from the designated cess funds. The Centre had released Rs 75,000 crore as GST compensation to states on July 15 and another Rs 40,000 crore on October 7 to make available more liquidity to them. These back-to-back loans entail no significant fiscal cost to the states. The front-loading of GST compensation loans will not lead to additional market borrowing by the Centre. Robust revenue receipts are giving the Centre confidence to limit its annual market borrowing programme at the budgeted level of Rs 12.05 lakh crore for FY22 even after factoring in Rs 1.59 lakh crore borrowings to be undertaken by the Centre for GST compensation to states Even with the relief packages and export subsidy arrears clearances announced recently, the fiscal cost of which is estimated at around Rs 2 lakh crore, the fiscal deficit target of 6.8% of GDP for 2021-22 could be adhered to, given that tax revenue receipts would likely exceed the budget estimate by about Rs 2 lakh crore and expenditure rationalisation undertaken might allow savings of around Rs 1 lakh crore. Of the Rs 44,000 crore compensation released in the latest tranche, Karnataka will get the largest amount of (Rs 5,011 crore), followed by Maharashtra (Rs 3,814 crore), Gujarat (Rs 3,609 crore) and Punjab (Rs 3,357 crore). Aided by impressive growth in tax revenues, capital expenditure by state governments have shown a marked improvement in the first five months of the current financial year even as the advantage of low base has begun to peter out. Data gathered by FE of 20 major states showed that these states reported combined capex of Rs 1.21 lakh crore in April-August of FY22, up 70% on year compared with a decline of 35% on year in the corresponding period of FY21. These states’ capex in April-August in the current fiscal year was 10% higher compared with the same in the corresponding period of the pre-pandemic year, FY20. The Centre has asked states to undertake Rs 1.1 lakh crore more capex in FY22 than Rs 5 lakh crore achieved in the pre-pandemic year of FY20. The states are allowed net borrowing of 4% of GSDP in FY22 with 50 basis points of this linked to the achievement of incremental capex over their investment in FY20. For the second year in a row, the government is borrowing under a special, relatively lowcost mechanism to bridge a yawning shortfall in the GST compensation cess pool and transfer the funds to states as back-to-back loans. While the amount borrowed under the RBI-enabled mechanism last year was Rs 1.1 lakh crore, the Centre acknowledged in Parliament that an amount of Rs 81,179 crore was yet to be released to the state governments towards fully compensating them for their GST revenue shortfall for FY21.
Source: Financial Express
At present garments above the price of Rs 1,000 are charged 12% GST. But the government has indicated charging 12% GST even on garments priced below Rs 1,000, currently charged at 5%. The GST council’s proposal to increase rates from 5% to 12% for garments across price categories will create greater stress on the already extended working capital requirements of the textile garment and hosiery industries, especially in the MSME sector, with the industry yet to tide over the crisis owing to Covid-19 induced pandemic. At present garments above the price of Rs 1,000 are charged 12% GST. But the government has indicated charging 12% GST even on garments priced below Rs 1,000, currently charged at 5%. The objective of such a change is an anomaly of an inverted duty structure faced by a small section of the industry, constituting not more than 15% of the total industry. The government is proposing to implement an inverted duty structure, which will affect nearly 80% of the final products to the consumers, Ashok Todi, president West Bengal Hosiery Association (WBHA) and chairman, Lux Industries said at a press conference. Seven industry bodies representing hosiery, knitwear, fabric, textile traders & garment manufacturers expressed concern over the GST council’s recent announcement, though no formal communications have been made to them. The rate enhancement has been proposed to be made effective from January next year. Around 60-65% of the apparel retail stores, the lifeline of the apparel manufacturing industry, are still at pre-Covid levels. KB Agarwala, president, Federation of Hosiery Manufacturers’ Association of India (FOHMA) and managing director Rupa & Co. said, the domestic hosiery and garment industry, traditionally extending long credit to buyers, has a high requirement of working capital. The pandemic compelled to extend even higher credits thereby requiring higher working capital. An increase in GST rates will lead to the closure of many units, 90% of which are in the MSME sector. Banks had extended additional credit to MSMEs under the government-backed emergency credit line scheme but have started recalling their loans because of limited recovery. The hosiery, knitwear fabric and garment industries are already seeing a drop of 20% employment. The increase in GST rates will further affect at least 2 million job losses with the industry shrinking down, Agarwala added.
Source: Financial Express
The state has also allowed faceless assessment of GST and VAT, doing away with the need for traders and industrialists to be physically present with tax officers. Punjab will scrap 40,000 pending cases of value added tax (VAT) out of 48,000 cases, related to FY15, FY16 and FY17, against traders and industrialists, said CM Charanjit Singh Channi. The remaining 8,000 cases will be settled amicably and the state will ask the traders and industrialists concerned to deposit just 30 per cent of the outstanding tax liability. A fifth of the tax liability will have to be deposited in FY22, while the pending amount will have to be paid by next year. “This industry-friendly initiative will go a long way in boosting their morale to invest in a big way. The state will act as a facilitator to promote industry to new heights of glory,” Channi said at the 4th Progressive Punjab Investors Summit. The state has also allowed faceless assessment of GST and VAT, doing away with the need for traders and industrialists to be physically present with tax officers. Channi also said the foundation stone of the upcoming greenfield airport at Ludhiana will be laid on November 15 and the airport would be completed in eight months.
Source: Business Standard
The government of Denmark, through the Danish International Development Agency (DANIDA), has committed for a fund of $3.19 million to enhance cleaner production in the ready-made garment (RMG) sector in Bangladesh. "The latest UN IPCC report on climate change has reminded us once again to take climate action now," said Danish Ambassador to Bangladesh Winnie Estrup Petersen. The IFC's Partnership for Cleaner Textile (PaCT II) is supporting cleaner production and green growth in the RMG sector towards a sustainable Bangladesh, Petersen said today, according to a statement of Bangladesh Garment Manufacturers and Exporters Association (BGMEA). The Danish and Dutch embassies in Bangladesh and PUMA are renewing their commitment for programme to support decarbonisation of the garment sector in Bangladesh, according to the statement. German multinational Puma is scaling up its efforts to decarbonise its supply chain in Bangladesh through PaCT's advisory services. "At Puma, we are committed to climate action in alignment with the UN's Sustainable Development Goals and Science Based Target Initiative," said Veronique Rochet, senior head of sustainability at Puma. "We are not only reducing the carbon footprint from our own operations but more importantly also from our supply chain." As Bangladesh is an important sourcing market for us, the PaCT Program helps our supplier factories to optimise their resource consumption and minimise their environmental impact." PaCT is also expanding its activities through a grant agreement with BGMEA to support strengthening the sector's backward linkages and diversifying products to boost exports. "The Bangladesh RMG industry needs to find new ways to conduct business to become more resilient and adapt to shifting global demands," said Faruque Hassan, BGMEA president. The IFC's PaCT program has already delivered impressive results, including 618,779 tonnes of greenhouse avoided in a year, which is equivalent to removing 134,572 passenger vehicles from the road annually, said Tuyen Nguyen, Asia regional lead for manufacturing advisory of the IFC. The PaCT also saved water of 27,637,931 cubic meter per year, which is equivalent to meeting the water needs of 1.5 million Bangladeshis a year, he said. The programme works with stakeholders, including five global apparel brands, 381 RMG factories, industry associations, the government, financial institutions, and technology vendors. "A big lesson from Covid-19 is the need to re-orient the global economy onto a more sustainable path," said Nuzhat Anwar, IFC's acting country manager for Bangladesh, Bhutan and Nepal. "These agreements will help factories become more climate conscious and brands to decarbonize their supply chains effectively, contributing to economic recovery and resiliency of the sector.
Source: The Daily Star
In a crowded Addis Ababa factory, Finoteselam Nigussie's needle plunges in-and-out of the gauzy white cloth she deftly guides through a sewing machine. Like thousands of other Ethiopian women, stitching shawls for export to the United States pays the 40-year-old textile worker's rent and her daughter's school fees. Now though, Finoteselam's job is in danger as the United States ponders suspending Ethiopia's duty-free market status, citing abuses and a growing famine in the war-ravaged northern Tigray region. Suspension of benefits under the African Growth and Opportunity Act (AGOA) would threaten Ethiopia's aspirations to become a light manufacturing hub and dent hard-won economic gains in a nation once a byword for hunger and poverty. "We have used AGOA since we started business," said Finoteselam's boss Sammy Abdella, who set up the company nearly two decades ago and employs 250 people. "People ... have worked with us since we have started. We have created a family," he added, his voice cracking. Although Ethiopia is not a large global supplier, suspension of its U.S. trade status would be yet another problem on the list for global fashion brands such as The Children's Place, Tommy Hilfiger and Calvin Klein as COVID-19 disrupts manufacturing capacity, ports and supply chains. WAR HORRORS Washington has repeatedly expressed concern over widespread reports of sexual violence by Ethiopian and allied Eritrean soldiers in Tigray, where local forces have battled the military and its allies for a year. The United Nations says a de facto blockade of aid has forced 400,000 people into famine. On Thursday, it said no food convoys had entered Tigray for the past 10 days. There have been many reports of mass killings of civilians. The government has denied blocking aid and said individual soldiers have been tried for any abuses, without giving details. Eritrea has denied committing abuses. Washington has already laid the ground for sanctions, with its chief trade representative promising a decision soon on its AGOA status. The act gives sub-Saharan African nations duty-free access to the United States if they meet criteria including removing barriers to U.S. trade and progress towards political pluralism. Prime Minister Abiy Ahmed's chief trade negotiator Mamo Mihretu told Reuters that AGOA had directly created 200,000 jobs and indirectly created millions. "We should not politicize trade issues," he told Reuters. Over the past decade, Ethiopia has spent billions constructing a dozen industrial parks and related infrastructure. Some factories produce goods for fashion giant PVH, owner of the Calvin Klein, Speedo and Tommy Hilfiger labels. At Finoteselam's company, Sammy Ethiopia, around 90% of products are exported to the United States, via retailers such as Eileen Fisher and Anthropologie. Exports to the United States account for three quarters of the firm's annual turnover of over $200,000. If Ethiopia is suspended, Sammy said his company will close. Ethiopia exported about $237 million worth of goods duty-free to the United States under AGOA in 2020, U.S. commerce department data shows, more than 90% of it textiles and apparel. Duty-free access is a major draw for companies including Gap and Sweden's H&M. The full impact a suspension on foreign investors and Ethiopian companies exporting to the United States is not yet clear, with layoffs and order cancellations possible. 'ADDED HEADACHE' Mamo warned an AGOA suspension would hurt U.S. companies trying to diversify production from Asia by relocating or expanding to Ethiopia. Conlumino, a retail research agency and consulting firm, noted, however, that Ethiopia's textile exports to the United States were still minuscule compared to the likes of China, Bangladesh and India. Though Ethiopia would suffer from a AGOA suspension; retailers will find alternatives despite the havoc from COVID-19, said Neil Saunders, a Conlumino analyst. "The suspension of AGOA will not have a huge impact on clothing retail," he said. "However - as this will come at a time when global manufacturing capacity is already reduced and retailers are struggling to keep up with demand - it is an added headache." An H&M spokesperson said the company was following developments regarding AGOA carefully, but it was too early to comment. In December, H&M said its long-term manufacturing and sourcing strategy involves Ethiopia and it did not plan to change. But its Ethiopia production is comparatively small. U.S.-based apparel companies The Children's Place, Gap and PVH did not respond to requests for comment.
Source: Reuters
Ahead of the upcoming UN COP26 climate summit, the United Nations Conference on Trade and Development (UNCTAD) on Thursday suggested a limited climate waiver of World Trade Organization (WTO) trade and environment rules combined with a ‘peace clause’ for disputes on trade-related environmental measures of developing countries. In the second part of its Trade and Development Report, 2021, UNCTAD pitched that international community could support initiatives to transform rules governing intellectual property rights, such as through a WTO Ministerial Declaration on TradeRelated aspects of Intellectual Property Rights and Climate Change, with a view to expanding TRIPS flexibilities for developing countries in relation to climate-related goods and services. It said that trade policy has a limited scope to contribute to a global green growth agenda, and instead pushed for an approach based on special different treatment (SDT) and the ‘common but differentiated responsibilities’ (CBDR). The report comes at a time when many WTO members are pushing to include environment related issues in its agenda by linking it with trade, in the upcoming ministerial conference. UNCTAD said that trade liberalisation of environmental goods and services will lead to a revenue loss for developing countries which earned $15 billion through tariffs on these in 2019. Most of the developed economies like Australia, Canada, European Union, Germany, Japan, and the United States, have higher carbon dioxide emissions per capita compared to developing countries like China, India, Indonesia, and Malaysia, UNCTAD said. Moreover, though climate adaptation remains a priority for developing countries, greenhouse emissions in traded goods and services account for only 27% of global carbon emissions. ”National trade policies can be at best play a complementary role but international trading rules that are being proposed in the WTO can constrain developing countries’ progress towards environmentally sustainable growth,” said Rashmi. As per the report, developing countries are standing on the edge of another lost decade in the aftermath of the pandemic, and it is a “clear contradiction for the world’s most advanced economies to restrict what policy space is available to them through SDT or industrial policy tools while expecting them to meet increasingly demanding climate goals”. As per the report, should carbon border adjustment mechanisms actually be implemented, much of their impact on structural transformation in developing countries will depend on their detailed challenges being to make these mechanisms compatible with WTO rules. “Yet, independent of these details, the principle on which these mechanisms are based is to impose on developing countries the environmental standards that developed countries are choosing. This goes against the principle of common but differentiated responsibility enshrined in the Paris Agreement,” UNCTAD said. Climate waiver, patent protection A narrowly defined waiver and peace clause would give countries the assurance that they will not face disputes for climate and developmentfriendly initiatives such as prioritizing a transition to renewable energy, green procurement, and green jobs programmes – all initiatives that advanced economies are also prioritizing but that could be challenged under the WTO-dispute mechanism, according to UNCTAD. The Doha Declaration on the TRIPS Agreement and Public Health adopted by the WTO Ministerial Conference of 2001 reaffirmed flexibility of TRIPS member states in circumventing patent rights for better access to essential medicines. “This could provide a basis for innovative mechanisms for promoting access to patentprotected critical green technologies,” UNCTAD said that other initiatives that could support this agenda include the open-sourcing of key green technologies as global public goods, South-South cooperation on low-emission research and design, and green investment strategies that include technology transfer. It also said that incentive-based approaches such as optional preference schemes that provide ringfenced climate financing additional to ODA or preferential market access in exchange for progress towards nationally determined contributions could accelerate climate action without recurring to punitive measures with anti-developmental effects. New financing support could be provided through a Trade and Environment Fund, as proposed by some WTO members in 2011 as it could finance the incremental costs of sourcing critical technologies, provide grants for specific green technologies, finance joint research, development and demonstrations, as well as the establishment of technology transfer centres, exchanges and mechanisms. Should negotiations on carbon tariffs proceed at the WTO, UNCTAD cautioned that it will be important to ensure that this issue remains in the multilateral rules-based system, and that no decision should be taken between smaller groups of developed economies, as this would risk further undermining the trust of other WTO members, particularly those impacted most, in the ability of the multilateral trading system and global climate.
Source: Economic Times
In view of the COVID-19 pandemic, the 25th Taipei Innovative Application Show (TITAS) will begin virtually from November 1. A new format and first-of-its-kind in Taiwan’s textile industry, TITAS looks forward to creating boundary-free, one-stop-for-all, and totally virtual business opportunities for the textile suppliers and global buyers of Taiwan. Organised by the Taiwan Textile Federation (TTF) and under the aegis of the Bureau of Foreign Trade, ministry of economic affairs, the 30-day exhibition is expecting 154 international and domestic exhibitors including big players in the industry such as Far Eastern New Century, Formosa Taffeta, Li Peng, Eclat Textile, New Wide, Zig Sheng, Shinkong Synthetic Fibers, Singtex, Honmyue, Yu Yuang, Acelon C&F, Taiwan Paiho, Everlight Chemical, Nan Pao Resins Chemical, and others to showcase their innovative capacity in this platform to global buyers Additionally, prominent R&D institutions, namely Taiwan Textile Research Institute and Material (TTRI) and Chemical Research Laboratories, Industrial Technology Research Institute (ITRI) will also participate in the event. At the same time, various textiles related associations who have supported TITAS are also anticipated to join the fair. The exhibition focuses on 6 major exhibition areas to highlight the diversity and strengths of textile supply chains. The Exhibitor Hall will feature six categories: fibre and yarn, industrial/home textiles, apparel, trimming and accessories, textile machinery and sewing equipment and other relevant services. Each exhibitor will present their promotional materials, product images, videos and more on the virtual showroom. The Association and Institute Hall will line up the leading textile related associations and institutes as well as their members. 12 associations will be present in this hall, including Taiwan Man-Made Fiber Industries Association, Taiwan Spinners' Association, Taiwan Weaving Industry Association (TWIA), Taiwan Knitting Industry Association, Taiwan Regional Association of Filament Fabrics Printing Dyeing & Finishing Industries, Taiwan Textile Printing Dyeing & Finishing Industrial Association, Taiwan Towel Industry Association (TTIA), Taiwan Glove Manufacturers Association (TGMA), Taiwan Hat Exporters' Association, Taipei Sewing Machines Association, Taiwan Technical Textiles Association and Southern Taiwan Textile Research Alliance (STTRA). TTIA, TGMA, and TWIA will even build their own 3D virtual showroom to promote their members and their latest products. The Trend Zone will take the spotlight on three themes: Functional Applications, Sustainability and Personal Protective Equipment with digital displays aligned according to the themes, buyers can browse through in ease. The theme of Functional Applications will point to end uses such as sports, outdoor and work-from-home products. The theme sustainability will emphasise on how natural materials bring added values to the products as well as processes that are environmentally friendly, such as ecological dyeing and dopedyeing processes with both sustainable and visually appealing features. The theme personal protective equipment will look at post-pandemic demands in areas of professional, everyday life, and medical apparel. The Events Zone will host the new product launch and fashion show videos for exhibitors to present their product highlights and advantages in diverse ways. Exhibitors who will present their product videos include Lily Textile, Oshima, Tung Ho, Frontier.Cool, Zig Sheng, Neshin Spinning, San Wu, Far Eastern New Century, Tah Tong, New Pads, Ta King, Ho Yu, Kaulin MFG, New Wide, etc. Furthermore, “Dynamic ? TITAS Virtual” is a runway show presenting innovations by 7 leading companies including Far Eastern New Century, New Wide, Zig Sheng, Eclat, Taiwan Paiho, Singtex and Formosa Taffeta. The show allows buyers to explore fabrics, accessories and actual products up close. It’s another way to boost up visibility for the products. The Seminars Zone will be a link to access the latest trend and industry insight. 22 exhibitors will present their latest technologies and solutions through pre-recorded or live stream seminars. Participants include Far Eastern New Century, Eclat, New Wide, Taiwan Paiho, Honmyue, TTRI, STTRA, etc. Seminar topics will cover subjects across technologies in textile materials, digital printing, trends in sustainable fabrics, brand digitalisation, functional materials, and applications in smart textiles. The Online Meeting Zone will function as a quick access to the exhibitors’ virtual booths which is where the meeting reservation and live chat will take place. It will allow exhibitors and buyers to communicate more efficiently. At TITAS Virtual, interactive digital technologies will be introduced by the Industrial Technology Research Institute (ITRI), who will implement the project of 2021 Empirical Research Project on Digital Exhibition Technology, allowing visitors to immerse themselves into the interactive experience offered by this project. TITAS Virtual will integrate all the substantial contents and events into the digital sphere, allowing visitors to have the same experience as they visit TITAS in person. Synergy between global professional media and innovative digital channels will further enhance the visibility of TITAS Virtual.
Source: Fibre 2 Fashion
