The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 15 NOVEMBER, 2021

 

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Ministry of Textiles of Republic of India : We should increase our exports five times from 1.25 lakh crore to 7. 2 5 lakh crore in coming Five years; Shri Goyal

Union Minister of Textiles, Commerce & Industry and Consumer Affairs and Food & Public Distribution, Shri Piyush Goyal said that we should increase our exports five times from 1.25 lakh crore to 7.25 lakh crore in coming five years in Uttar Pradesh (UP). He said with a culture of competition & excellence, UP has enhanced its potential to become a model of India's export growth story. He said UP is number one in exports in country excluding the coastal states. Shri Goyal stated that in coming five years with the help of Central Govt, exporters, artisans and industries in Uttar Pradesh will get massive investment in defence, railways, medical, mobile manufacturing and medical sector. The Minister further added that good governance and better coordination with central govt will bring better results for Uttar Pradesh. Interacting with exporters and artisans on the sidelines of "Azadi ka Amrit Mahotsav: Inaugural of Exhibition, Display of Handicrafts and interaction with artisans and exporters, in Lucknow, UP today the Minister said that UP is becoming the hub of Handicrafts & Handlooms. He called upon the artisans to showcase their artefacts and artistic carvings by using the latest technology and display the potential to carve India's future. Thanking the women artisans for their contribution in promoting the traditional art and craft, Shri Goyal said that it contributes not only in strengthening country's economy but also help our women workforce to earn a respectable living. Shri Goyal said women in India have art but need leadership and market connect. He asked the women artisans to work with confidence and dedication. He also said "When you really desire something from the heart and soul, all the universe helps you to achieve it". While answering the concerns of artisans Shri Goyal said, 'if we don't connect artisans with market , traditional handicraft will disappear'. He urged that we should try to have a system that ensures future generation participation in handicrafts and export industry related work . The Minister said that One District One Product scheme has been effectively implemented under the UP government and has aimed to bring an holistic approach to promote domestic industry. One-District, One Product will promote Skills, Startups, Industries & Farmers of UP, he added. Shri Goyal said we need a honest Government in UP which treats industrialists ,businessmen poor farmer and labour equally. He further added that this balance is indispensable for UP as well as for India's growth. Shri Goyal also mentioned with tireless efforts, the State government under Yogi ji is ensuring a bright future for 20 crore people of UP. Today, UP is becoming a model & has ensured that benefits of all the central schemes reaches the last man. "Various initiatives have been taken by the UP Govt. to promote the welfare of handicraft artisans, with "Sabka prayas" we need to make sure, works of our artisans reach foreign markets", he said.

Source: Market Screener

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PM Modi tasks entire Council of Ministers to develop resources for further improving governance

In a major push for a hands-on approach to governance, the Modi Government is planning to rope in young professionals, seek suggestions from retiring officials and make the best use of technology for project monitoring, besides various other steps to be overseen by eight different groups comprising of members from the entire Council of Ministers, sources said.The 77 Ministers have been divided into eight groups to develop technology-based resources, create a pool of professionals for recruiting in their teams and other similar initiatives to be adopted in the offices of all Ministers’ offices to bring more transparency and further improve and efficiency of the Modi Government, the sources said. This exercise of dividing the Ministers into eight groups was done following ‘Chintan Shivirs’ (brainstorming sessions) of the entire Council that were chaired by Prime Minister Narendra Modi, with each meeting lasting for nearly five hours. A total of five such sessions were held — one each on Personal Efficiency, Focused Implementation, Ministry Functioning and Stakeholder Engagement, Party Coordination and Effective Communication and the last one was on Parliamentary practices. The last brainstorming meeting was also attended by the Lok Sabha Speaker Om Birla and Rajya Sabha Chairman M. Venkaiah Naidu. All these meetings primarily focused on improving the efficiency and the delivery system of the Modi Government. The forming of groups is another step in that direction, broadly focusing on overall improvement in the governance by making Ministers more hands-on approach, the sources said. All the 77 Ministers in the Council are part of one of these eight groups, each comprising nine to ten Ministers with one Union Minister designated as a group coordinator, sources said. Developing a portal in each Minister’s office that gives updates on the performance of the Centre’s flagship schemes and policies, a dashboard for monitoring decisions made by the respective Ministers and a system to schedule meetings and managing correspondence are among the tasks assigned to these groups. They have also been asked to create profiles of all districts, States and Ministries and develop stakeholder engagement programmes. One of the groups has been assigned to set up a mechanism for creating a team of at least three young professionals with command over research, communication and other key areas, the sources said. Similarly, a group has been assigned to create a portal that maintains feedback and experiences of the retiring employees, sources said. Union Ministers Hardeep Singh Puri, Narendra Singh Tomar, Piyush Goyal, Dharmendra Pradhan, Smriti Irani, Anurag Thakur are among the Ministers who are the coordinators of their respective groups, the sources said. They have been given this responsibility so that they can share the good practices of their respective offices with other Cabinet colleagues. Most of the Ministers who had given presentations during the ‘Chintan Shivirs’ have been given the responsibility of coordinating their respective groups. Meanwhile, for attending these brainstorming sessions, Union Ministers on the instruction of Prime Minister Modi did carpooling with their cabinet colleagues from different ministries and hailing from different States.

Source: The Hindu

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FTAs with nations to help provide more mkt access to Indian goods: Commerce and Industry Minister Piyush Goyal

Talks for the proposed free trade agreements (FTAs) with countries, including Australia, the UK and the UAE, are moving at a fast pace and these pacts, when implemented, would help provide greater market access to domestic goods, Commerce and Industry Minister Piyush Goyal said on Sunday. Under a free trade agreement, two trading partners reduce or eliminate customs duties on the maximum number of goods traded between them. Besides, they liberalise norms to enhance trade in services and boost investments. Goyal said that talks for such pacts are going on with Australia, UAE, GCC (Gulf Cooperation Council), European Union, Israel and the UK. 3&4BHK Luxury Homes @Sector 59, Golf Course Ext. Rd, Gurgaon Ad Mahindra Luminare VISIT SITE Sponsored by Member countries of GCC are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates (UAE). When these agreements would be finalised, it would provide "greater access to our manufactured goods as there will be less or zero customs duties," the minister said at Vaishya Samaj Sammelan. He also said that Uttar Pradesh plays a key role in promoting the country's exports.

Source: Economic Times

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USTR to visit India this month; countries to discuss trade, investment issues

India and the US will discuss ways to promote trade and investments besides increasing cooperation in agriculture sector and intellectual property rights during a meeting this month between US Trade Representative Katherine Tai and Commerce Minister Piyush Goyal, an official said. The two-day meeting will begin from November 22. India and the US will discuss ways to promote trade and investments besides increasing cooperation in agriculture sector and intellectual property rights during a meeting this month between US Trade Representative Katherine Tai and Commerce Minister Piyush Goyal, an official said. The two-day meeting will begin from November 22. The US Trade Representative (USTR) is visiting India to revive the Trade Policy Forum (TPF), which has not met for the last four years, the official said. The meeting is also important as the 12th ministerial conference of the World Trade Organization (WTO) is scheduled from November 30 to December 3 in Geneva. Both India and the US are members of the 164-member multilateral organisation which deals with global exports and imports. The TPF is a premier forum to resolve trade and investment issues between India and the US. It has five focus groups: Agriculture, Investment, Innovation and Creativity (intellectual property rights), Services, and Tariff and Non-Tariff Barriers. "Both sides would discuss ways to further boost bilateral trade and investments," the official added. The bilateral trade between the countries stood at USD 80.5 billion in 2020-21. India has received USD 13. 8 billion foreign direct investment from the US during 2020-21.

Source: Economic Times

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‘We’re back in business’: Piyush Goyal says India set to hit historic high on exports

Union minister Piyush Goyal said that with the launch of the 40th India International Trade Fair, one of the finest and largest convention centres made in the country will arrive at the Pragati maidan complex in Delhi. Piyush Goyal, the Union minister of commerce and industry, said on Sunday that India is on its way to hitting a historic high on exports of goods and services this year. Assuring that the economy that suffered due to the Covid-19 pandemic will soon be back on track, the minister said India has been witnessing a constant growth in foreign direct investment (FDI) for the past seven years. “We're back in business,” said Goyal, who also holds the portfolios for textiles, consumer affairs, and food and public distribution, while speaking at an event in Delhi's Pragati Maidan. He was addressing the launch of the 40th India International Trade Fair in the national capital. The event will continue till November 27. “Collectively, we are on the track for a historical high on exports of goods and services in the current year,” he said, adding, “India has been witnessing constant growth for the last seven years on FDI”. Elaborating further on the positive outlook for India's businesses, Goyal said, “Today's launch of this trade fair reflects the five ‘sutras’ of India – economy, exports, infrastructure, demand, and diversity.” The Union minister said that with the launch of the 40th India International Trade Fair, one of the finest and largest convention centres made in the country will arrive at the Pragati maidan complex, along with two other exhibition halls. “‘Make in India, make for the world’ isn't just a slogan,” he added, “It implies assurance, thoughts, and trust in ourselves.” On Saturday, World Economic Forum president Borge Brende highlighted India's efforts towards strengthening the fight against Covid-19 and the economic reforms undertaken in the country while speaking to Prime Minister Narendra Modi at an event. Calling India the “fastest-growing among the large economies,” Brende extended his greetings on the country’s 75 years of independence from colonial rule. He said he expected a “two-digit growth” the next year while India prepares for its G20 presidency.

Source: Hindustan Times

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Road to recovery: Textile industry pegged to grow 300% over next 2 years despite COVID impact, says report

Government initiatives to bolster the sector have raised hopes of the sector growing to $300 billion by 2025-26, a growth of 300% in the next 2 years, according to a report by ratings firm Infomerics Valuation and Rating.After being hit hard by COVID-19, India's textile industry is well on course on the road to recovery. During the pandemic, the domestic textiles and apparels industry slumped to $75 billion after peaking at $106 billion in FY2020.However, government initiatives to bolster the sector have raised hopes of the sector growing to $300 billion by 2025-26, a growth of 300 per cent in the next 2 years.There has been a remarkable turnaround in technical textiles. In terms of value, technical textiles imports exceeded exports by Rs 1,058 crore in FY20 while in FY21 exports exceeded imports by Rs 2,998 crore.These are some major findings of a report titled 'Textile Industry: Trends and Prospects' released by Infomerics Valuation and Rating Pvt Ltd., a SEBI-registered and RBI-accredited financial services credit rating company. The report analyses the factors that have affected the sector's performance. It notes that apart from the impact of COVID-19, other reasons which are acting as bottlenecks are high tariffs faced by Indian exporters in key markets, such as the European Union, and logistics.The report compares the high tariffs in the EU with zero duty access given to competing nations like Bangladesh, Sri Lanka, Pakistan, and Turkey, which affected export performance.The report also highlights logistics as one of the major constraints with Indian exporters. For comparative purposes, the turnaround time (TAT) (from order to delivery) is 50 days for Bangladesh and 63 days for India, whereas the time taken to reach port is one day for Bangladesh and 7-10 days for India.

Turnround in technical textiles

India has transitioned from being a net importer, in terms of value, of technical textiles (imports exceeded exports by Rs 1,058 crore) in FY20 to a net exporter of the same (exports exceeded imports by Rs 2,998 crore) in FY21. "In January 2019, 207 HSN Codes have been classified and notified as technical textiles with a view for ease of doing business," the report stated. The government earlier approved the proposal for the creation of National Technical Textiles Mission (NTTM) for a period of four years (2020-21 to 2023-24) with an outlay of Rs 1,480 crore.Indian technical textiles market could increase at a CAGR of 7.6 per cent in Asia-Pacific to reach $23.3 billion in 2027, up from $14 billion in 2020, says the report. Currently, Indian technical textiles constitute approximately 8 per cent of the global share. A target has been taken by the government, to increase the export of technical textiles to five times in three years, from the current approximately $2 billion to $10 billion.

Other government interventions

The report also outlines the various initiatives taken by the government to help and bolster the sector. Historically such initiatives include the introduction of Technology Mission on Cotton (TMC), Technology Upgradation Fund Scheme (TUFS), Scheme for Integrated Textile Park (SITP), etc. Some of the recent measures include National Technical Textiles Mission (NTTM) for a period of four years (2020-21 to 2023-24) with an outlay of Rs 1480 crores. State-level action is also visible whereby Tamil Nadu, one of the largest T&A hubs in the country, signed up for Techtextil India 2021 - the leading international trade fair for technical textiles and non-wovens. It notes that this is likely to open doors for innovation and reduce foreign dependence. Other measures include the Scheme for Capacity Building in Textile Sector (SAMARTH) to address the shortage of skilled workers in the textile sector with a target of training 10 lakh persons.

Challenges Fund allocation is a major limitation for the textile industry, says the report, pointing out that the Finance Ministry approved only Rs 3,631.64 crore for the textile ministry as against the proposed outlay of Rs 16,883 crore during the FY22. Further, the industry has been lately witnessing low manufacturing activity accompanied by high prices for the final product reflected in the annual NIC-2 digit and sectoral indices of industrial production wherein the index for 'manufacturing of textiles' has fallen below the 100 marks, settling at 91.1 for the first time in almost a decade, according to the report. The yearly wholesale price index for 'manufacturing of textiles' has been nearing the 118-point mark which is 6-7 notches above the decadal average of approximately 112. The report also highlights other generic factors like weakened consumer demand or production networks; obsolete technology, inflexible labour laws, infrastructure bottlenecks, and fragmented industry; the major role of the unorganised and small players hit by the triple whammy of demonetisation, rolling out of GST and the COVID-19 pandemic. More specifically, it outlines industry risk factors, which relate to the GST issue, gap in proposed outlay and amount approved, low performance and high price, and poor textile machinery performance.

The way ahead

The report stresses that the industry needs to command premium prices; target niche products and markets; redesign products in higher value-added segments. It also needs to focus on regional and cluster subsidies, technology upgradation and skill development subsidies for sustained development. Investment in value added services, e.g., marketing, warehouse rentals, logistics, courier, other product fulfilment costs constitute a pre-requisite for the sector going to scale. However, the report is optimistic about the potential for growth and structural transformation of the textile industry. India's textile industry is one of the largest in the world with a large unmatched raw material base and manufacturing strength across the value chain. It is the second-largest producer of man-made fibre (MMF) after China. The textiles and apparel (T&A) industry contribute 2.3 per cent to the country's GDP, 13 per cent to industrial production and 12 per cent to exports. The report further recommends that the industry needs to effectively address the risk factors, the distinctive peculiarities of the sector and the integration of the textile value chain for steady growth and consolidation of the Indian textiles position in the comity of nations.

Source: Business Today

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Festive sales have lifted economy: Piyush Goyal

The economy is “bouncing back” strongly with festive sales hitting highs “not seen in a long time” and is set to record the highest-ever exports of $550 billion in 2021-22, Commerce, Industry and Textiles Minister Piyush Goyal said on Sunday. Merchandise exports stood at $235 billion for the first seven months of the year and are “well on track” to hit $400 billion, while Services exports are expected to go up to about $150 billion, Mr. Goyal said at the launch of the India International Trade Fair.

Job creation

“I am told several reports suggest that Diwali sales, festival sales, earlier this month, were probably the highest seen in a long time. Every statistic, be it job creation or enrolments into the Employees’ Provident Fund Organisation, reflects a broad recovery,” he said. “The economy is bouncing back if you look at the figures in every aspect, the PMI [Purchasing Managers’ Index] for Services has hit a decade high, Manufacturing PMI is above 55. GST collections… one normally sees a spike in collections in April, because it’s the year-end, but this October, we recorded ₹1.3 lakh crore,” he said. in some way, exports also reflect the growing relevance of India in the world. Collectively, we are on track for a historical high for exports of goods and services in the current year, showing how quickly the world has engaged with India, wants to deepen their engagement with India, so that they can be sure of India as a trusted partner in their supply chains and services chains.” Alluding to the need for States to take greater interest in promoting exports, the Minister cited the example of Uttar Pradesh and said no other State has taken steps like creating a full department for export promotion. “When you talk to other States, they say ‘Export promotion is the Centre’s role, Why should we do it?’. But Yogi Adityanath has understood that when exports are promoted, it will create jobs for people, economy will be strengthened and when domestic and export markets are combined, you get economies of scale,” he said.

Record inflows of FDI

Record inflows of foreign direct investment demonstrate the “attraction of India” and the 14-day trade fair starting on Sunday will tell the world that “India is back in business”, Mr. Goyal said. “The launch of this international trade fair reflects in some senses, the five Sutras of Bharat. They are Economy, Exports, Infrastructure, Demand and Diversity . How the economy has been protected by the Government, industry and people at large, and pushed it forward, is a matter of pride for us.” He said the trade fair will help combine the PM’s clarion call of “Vocal for Local” and “Local for Global”.

Source: The Hindu

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Indian economy to grow at double-digits this fiscal: CEA

Indian economy is expected to see a double-digit growth in 2021-22 and between 6.5-7 per cent in the next financial year, outgoing chief economic advisor K V Subramanian said on Sunday. The CEA said that he does not expect commodity inflation will taper the V-shaped recovery going forward. "I expect India to grow at double digit this year (FY22) and 6.5-7 per cent next year and over seven per cent and thereafter growth accelerating over seven per cent," Subramanian told PTI in a interview. He was in the city to receive the Distinguished Alumnus Award from the Indian Institute of Management-Calcutta. India's growth projection had been capped between 8.7 per cent and 9.4 per cent by IMF and other institutions. Subramanian said people often do not take into account the impact of substantial reforms that were done, even in 1991 reforms were done, 99 per cent people did not understand implications. "We have done seminal reforms actually which will be felt going forward. He said inflation is 4.5 per cent and global inflation is high due to global policies that have only focused on demand in contrast to India's policies that are clearly focused on enhancing supply. "When you focus on only enhancing demand without supply measures inflation is what results. Indian policy has shown clear difference with the global financial crisis when India did only demand side measures without supply side interventions that's why we had double digit inflation despite without lockdown and night curfews every month for one and half years," Subramanian said taking a dig at the then government.

Source: Times of India

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Exporters now brace for continued spike in Chinese raw material prices

Bangladesh's exporters now brace for a bigger blow to its raw material sourcing from China as the ongoing gas and electricity crisis in the world's second largest economy is expected to continue for at least four more months with the advent of winter when consumption peaks.

Domestic cost pressures, fuelled by energy shortages, have already halved factory outputs in China, eventually forcing its suppliers to hike product prices by up to a 100 Bangladesh, which depends on China for about 60% of its raw materials required for export sectors, is not shielded from the impacts. The country's export industries have started feeling the heat as they are having to import industrial inputs from China even at high costs to meet increasing demand for products flowing in from buyers. Bangladesh's exports registered double-digit growth in the last three months, which saw over 60% year-on-year rise in October, according to the Export Promotion Bureau (EPB).Only months ago, global economists had banked on China's strong growth momentum propelling the global recovery. Now, China's V-shaped economic rebound is fading faster, posing a new headwind for an uneven global recovery, says Bloomberg. The latest cost burden on Bangladesh industries comes on top of exorbitant global freight charges and recent spike in domestic transportation cost owing to fuel price hike. On the other hand, shipping vessel shortages have also put Bangladeshi entrepreneurs in a tighter spot over maintaining lead time and export competitiveness, according to the industry people. Fazlee Shamim Ehsan, chief executive officer at Fatullah Apparels Limited, told The Business Standard, "Raw material prices have doubled over a month, and shipments that would take a week now take more than a month." For example, Chinese dyes-chemicals now cost $22 per kg, while it was only $13 per kg a month ago. India could be an alternative sourcing country for some items, but Indian exporters charge $2-$3 higher than China's and they are now charging more capitalising on the ongoing crisis, he added. This situation may not be normalised before March next year as China's power shortage might not end before the advent of spring, Ehsan said. Sayeed Ahmad Chowdhury, director (operation) at Square Denims Ltd, said, "The way prices of raw materials increased is unbelievable for Bangladeshi importers, but we still have to procure at very high prices to maintain export commitments." Liquid indigo now costs $8.20 per kg, which was $4.80 per kg just two weeks ago, he also said. Md Shahidullah Azim, vice-president at Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told TBS that freight costs rose to $12,000-13,000 per 20-foot container from $2,500-$3,000 a year ago. On top of it, their production cost will go up further by 5% because of 23%-30% rises on transport cost, container handling charges and other services, he added. Kutubuddin Ahmed, a former president at the BGMEA, said costs of inputs from China have added to woes of textile and apparel industries, which have already been hit hard owing to shipping vessel crisis and rising petrochemical prices in the global market. But it is now not possible to shift to another country to source such raw materials and capital machinery owing to pricing issues as China is a more competitive sourcing hub for the globe, he added. Kutubuddin said if the situation continues for a long time, alternative suppliers will be developed. Bangladesh, also one of the largest importers, has an opportunity to develop some backward linkages for manufacturing synthetic yarn, woven fabrics and chemicals, etc, he added. "We have to go for a joint venture initiative to set up such facilities as currently, we do not have technological knowhow for the purpose," he noted. Imports from China totalled $13.55 billion in the last fiscal year, merchandises include industrial raw materials and capital machinery, apart from a host of consumer goods.

Source: Tbs News

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Thai cabinet approves ASEAN -Canada FTA framework

The Thai cabinet recently approved the negotiation framework for the Association of Southeast Asia Nations (ASEAN)-Canada Free Trade Agreement (FTA). The pact is expected to help facilitate the expansion of trade and investment, reduce obstacles from tariffs and non-tariff barriers and promote the services sector between ASEAN members and Canada. The negotiation framework covers trade, protection and remedy measures; rule of origin; customs procedures; trade facilitation, sanitary standards; practices on trade rules, services and investment; intellectual property, labour and environment protection; trade competition, state procurement; and the free movement of people. Previously, the ASEAN Secretariat had studied the FTA and found that Thailand's gross domestic product (GDP) could increase by $7.967 billion (about 254.944 billion baht), or a rise of 1.97 per cent while ASEAN GDP would rise by $39.361 billion, up by 1.6 per cent. Meanwhile, the pact could boost Canada's GDP by $5.104 billion (163.328 billion baht), an increase of 0.3 per cent, according to Thai media reports. Two-way trade between Thailand and Canada totalled $2.31 billion last year, up by 0.53 per cent. Of the total, exports represented $1.54 billion, up 0.67 per cent, while imports stood at $767 million. According to deputy government spokeswoman Rachada Dhanadirek, the FTA can create a linkage of Thailand's supply chain to North America or a gateway to the regions that Thailand has yet to ink FTAs with. Promising exports from Thailand include farm products and processed farm products, rubber products and machines. Rachada noted the FTA may cause drastic competition for the farm, industry and service sectors, urging entrepreneurs to speed up upgrading their quality standards; intellectual property protection, online trading, labour rights and environmental protection.

Thailand currently has 13 FTAs in place with 18 nations.

In a separate development, the cabinet yesterday approved a framework of the country's 13th national economic and social development plan, which spans 2023 to 2027. The new plan aims to transform Thailand from natural resource-based industries towards a knowledge-based or high value-added economy that is environmentally friendly and upgrade the manufacturing sector to higher value-added industries such as the bio-, circular and green economic model.

Source: Fibre2 Fashion

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Apparel manufacturers are key to fashion’s climate ambitions

Last week, I wrote about the implications of COP26 on the RMG sector in Bangladesh. Since then, representatives from the fashion industry have made another major announcement at the climate conference, which could set off serious reverberations in the global fashion supply chains over the next decade.

A group of leading global fashion brands, including some of Bangladesh's largest customers such as H&M and Inditex (owner of Zara), signed an updated commitment to the United Nations Fashion Industry Charter for Climate Action. The original fashion charter was signed at COP24, held in Katowice, Poland in 2018. At that time, signatories made commitments on decarbonising their supply chains, reducing dependence on coal-fuelled power in their supply chains, and directing their suppliers towards increasing the use of sustainable materials, including recycled textiles. Anyone who thought that our buyers were not serious about this issue, will now need to think again. At COP26, all signatories made renewed commitments, including forming a decarbonisation plan aligned with the Paris Agreement ambitions to limit the global temperature rise to 1.5 degrees Celsius above pre-industrial levels. Central to the new agreement was a call for the signatories to set science-based targets, or halve their emissions by 2030, with a pledge to achieve net zero emissions by no later than 2050. This is an update of the previous target of 30 percent aggregate greenhouse gas (GHG) emission reduction by 2030. Further commitments in the updated charter include sourcing 100 percent of electricity from renewable sources by 2030, the sourcing of environmentally friendly raw materials, and phasing out the use of coal from supply chains by 2030, among others. I can remember COP24 like it was yesterday, and here we are, three years later, where the global fashion industry is once again making commitments that will make business as usual a thing of the past in the coming decade, and which have fundamental implications for suppliers. How do we respond? Well, it has been interesting to note that the past week has also seen calls by fashion retailers to provide fiscal incentives to encourage them to source sustainable fibres such as organic cotton, recycled polyester, etc. This call was made by the US-based non-profit Textile Exchange, and also included signatories from the fashion sector such as Gap, Primark, and VF Corp—all of whom source apparel products from Bangladesh. Textile Exchange claims that these incentives are required because "cost is one of the key barriers faced by companies looking to shift their supply chain towards environmentally preferred materials." I would not argue for or against that, but what about suppliers? The signatories of the renewed fashion charter will be heavily dependent on their suppliers to invest in more sustainable manufacturing processes in order to meet their climate commitments. In light of this, it seems reasonable to ask: Where are the fiscal incentives for suppliers? How can trade policies be used to incentivise and support suppliers in the greening of supply chains? How can investment in sustainability be made to make economic sense for suppliers? This is a question I believe that we all need to give much thought to in the coming 12 months. It strikes me as odd that over the past five years, the fashion industry has made many commitments where the climate is concerned, but has not yet provided enough details about how these commitments will impact suppliers, what suppliers need to be doing for fashion retailers to achieve the goals, and where the funding and investment will come from to upgrade the supply chains. There are a lot of great ideas, but none of them has enough "meat on the bones." Then what could fiscally incentivise suppliers to look at alternative sources of energy, to invest in new water-saving technology, and to examine how recycling options can be incorporated into production? This is a broad question, and there are many ways of gently nudging the suppliers to go green. But how about, as a starting point, offering tax relief on supply chain investments which have a focus on sustainability? Surely, it is not beyond the imagination of the authorities to develop a list of investments that fall under this category? But as fashion brands and retailers are making these pledges—which have implications for suppliers—perhaps there are some steps that they could take to support the suppliers along this path. In the past, I have seen partnerships between the fashion industry and global entities such as the World Bank, designed to provide low interest rates for suppliers. To offer a specific example, a couple of years ago, the International Finance Corporation (IFC), a member of the World Bank Group, and US-based fashion giant Levi Strauss & Co signed an agreement to help the company to reduce GHG emissions and water use in its supply chain. The IFC worked with 42 Levi's suppliers and mills in 10 countries to implement renewable energy and water-saving interventions to cut GHG emissions. I don't know what happened with this initiative, which included Bangladesh within its remit. What I do know, however, is that we will need more—a great many more—initiatives and partnerships like this one if suppliers are to help fashion meet some of the climate objectives laid down at COP26. Fashion has thrown down the gauntlet at COP26 with its latest sustainability announcements. Suppliers are ready to work with their buyers to meet the challenge, but we can't do it without the necessary support and access to finance.

Source: The Daily Star

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A $1 million stitch in time for Australia’s fast fashion addiction

Our name is Australia, and we have a fashion waste problem. It’s been only seconds since we purchased some unnecessary sneakers, T-shirts or polyester dresses. Now the federal government is dispensing with the need for anonymous confessions, as Environment Minister Sussan Ley delivers a $1 million grant to the Australian Fashion Council that will be used towards addressing the ugly side effects of our fast fashion addiction. “I don’t think we realise that Australians are the second-largest consumers of textiles in the world. We consume 27 kilograms of clothing and throw away 23 kilograms,” Ms Ley said. “We need a road map to 2030 to halve the waste. That’s 800,000 tonnes of textile waste. Of course, we need to act on it.” The grant will fund the creation of Australia’s first National Product Stewardship Scheme for clothing textiles to devise strategies for improved recycling, recovery and reuse of textiles. “There is lots of consciousness within the fashion sector of the problems surrounding importing incredibly cheap clothing that we end up throwing in the ground in Australia, leading to contamination,” Ms Ley said. “This demands a stronger call to action.” With British brand Topshop leading the fast fashion charge into the Australian market in 2009, followed by Zara in 2011 and H&M in 2014, concerns have been growing for years over our casual consumption, but Ms Ley said that only now has there been enough support to act. “If you asked someone five years ago, I don’t think it would resonate the way it is now,” she said. In June, clothing textile waste was added to the National Priority Waste List by Ms Ley, alongside electronics, plastic oil containers and child car seats. The $1 million grant seems quite little and quite late for Marnie Goding, founder of ethically designed womenswear label Elk, which is taking part in a sustainability-themed show as part of Melbourne Fashion Week on Wednesday. “Anything that the industry and the government can do to solve the mounting challenge to deal with textile waste is incredible,” Ms Goding said. “In the past five to six years we’ve seen other countries forging ahead with new ways to address this problem. Until now, we have not heard anything from the Australian side.” For more than eight years, Ms Goding has been exploring ways that Elk can address its waste issues and will soon launch a renewal program to upcycle and repair old products. “But some items end up trashed and they have to become landfill. There’s only so much mattress packing you can make. This is at least a welcome step in the right direction.” This is the second $1 million grant awarded to the Australian Fashion Council this year. In May, the AFC was given funds to promote Australian brands by developing a trademark to certify locally produced products. “We need to turn each Marie Kondo into Marie Conscious,” said Kellie Hush, acting chief executive of the AFC. “Each business and organisation with a touchpoint in both the supply chain and product life cycle must recognise their responsibility and actively contribute to textile circularity and reduction of waste.” The AFC will work alongside Charitable Recycling Australia, Queensland University of Technology, Sustainable Resource Use and WRAP to better manage our fashion problem.

Source: Sunday Morning Herald

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EA’s private sector pushes for 35pc external tariff

Summary

  • The private sector umbrella body, the East African Business Council, says the majority of its members are in support of Uganda and Tanzania’s proposal of 35 percent.
  •  The EABC says adopting the 35 percent maximum tariff rate will incentivise industrial development, protect nascent industries exposed to unfair competition and safeguard industries against cheap and subsidized imports and jobs.
  • Under the priority value chains as provided for in the EAC Industrialisation Policy (2012-2032) some of the products to be included in the fourth band tariff are textiles, iron and steel and motor vehicles.

East Africa’s private sector is pushing for the adoption of a 35 percent tariff as the fourth and maximum common external tariff for EAC member countries. The private sector umbrella body, the East African Business Council, says the majority of its members are in support of Uganda and Tanzania’s proposal of 35 percent. The two countries have differed with Kenya, Burundi and Rwanda who want 30 percent as the maximum common external tariff (CET) rate. The EABC says adopting the 35 percent maximum tariff rate will incentivise industrial development, protect nascent industries exposed to unfair competition and safeguard industries against cheap and subsidized imports and jobs. “The 35 percent maximum tariff rate will attract investments in industrial value chains and transform the bloc into an export-led, industrialised economy,” said Bosco Kalisa, chief executive of the EABC. “The proposed 35 percent tariff rate provides an adequate tariff differential required to incentivise industrial development in the EAC region,” he added. Given the two options on the maximum rate, a meeting of the sectoral council on Trade, Industry, Finance and Investment in Arusha in May, proposed a middle-ground of 32.5 percent as a maximum rate.

The EAC Council of Ministers is yet to agree on the rate.

CET is the import tariff or rate adopted and applied by countries within a common market. The tariff is ideally imposed on products imported from non-member countries, with the intention of promoting industrialisation in the bloc, enhancing the economic development of member states, and liberalising regional trade. The current CET tariff stipulates that the EAC members may import products at different levels with a triple band structure duty rates: Raw materials at 0 percent, intermediate goods at 10 percent, and finished products at 25 percent. Partner states have not agreed on the fourth band. Under the priority value chains as provided for in the EAC Industrialisation Policy (2012-2032) some of the products to be included in the fourth band tariff are textiles, iron and steel and motor vehicles. “There is a need to agree on the fourth band, after which partner states have also to agree on different tariffs. I believe by end of this year we are going to agree on the CET,” said EAC secretary general Peter Mathuki. The private sector prefers the 35 percent CET rate because the proposed 30 percent will create just a five percent tariff differential with the third tariff band of 25 percent charged on finished goods. They say that 35 percent will create a tariff differential of 10 percent, which will safeguard products that are sufficiently produced in the region against similar cheap imports. “EABC is proposing a 35 percent tariff rate to promote consumption of locally manufactured goods and strengthen the regional value chain,” said Mr Kalisa. According to EABC members, most of the products that have been considered to be assigned a maximum CET rate (in the fourth Band) are under the EAC priority value chains as provided for in the EAC Industrialisation Policy (2012-2032). Some of these products include textiles, iron and steel and motor vehicles. “The 35 percent CET rate will offer the necessary effective protection the region requires to drive regional value chains and drive industrialisation through these products,” Kalisa explained. “Some of the products have a long value chain and face unfair competition from cheap imports from Asian countries hence need higher rates to safeguard their production in the region.” According to EABC analysis, the Products to be assigned Maximum CET Rate (4th tariff band) are produced in EAC. Based on the agreed criteria for classifying and categorisation of goods, the products identified and assigned in the 4th band are only those manufactured in sufficient quantities in the EAC region.

Source: The East African

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Local weaving mills struggling for survival

The country’s weaving industry has been struggling to stay afloat for the last five months due to the continued price hike of yarns. People from the sector said that a good number of power looms had gone out of production in the last few months as they had been incurring huge losses amid a rise in the cost of production. ‘We are unable to obtain yarns at reasonable prices. Both the power loom and hand loom sectors are struggling for survival amid the high prices of yarns and nearly 50 per cent of  the looms have gone out of production amid huge losses incurred,’ Bangladesh Specialised Textile Mills and Powerloom Industries Association president Faizuddin Ahmed told New Age on Sunday. He said that although the Bangladesh Textile Mills Association had set the maximum prices of yarns, the weavers were unable to buy the item at the mill rate as a section of influential traders controlled the market. ‘Due to the high prices of yarns, the cost of production is going up but we are not getting additional prices in the market as fabrics imported under the bonded-warehouse facility are selling at low prices on the local market,’ Faizuddin claimed. The BTMA has, however, requested all spinners to sell yarns to the local weaving mills at the mill rate. The trade body on Sunday asked its member spinning mills to suspend or cancel the agent-ship of their respective agents if they charged additional prices for yarns from local weaving mills. The local weaving mill owners claimed that no mill was getting yarns from the spinners at the rate set by the BTMA. BTMA president Mohammad Ali Khokon in a letter sent to all weaving mills on Sunday informed that a total of seven spinning mills had agreed to sell yarns at the mill rate to them. These spinning mills are Little Star Spinning Mills Ltd, Hazrat Amanat Shah Spinning Mills Ltd, Shah Fateullah Textile Mills Ltd, Jalal Ahmed Spinning Mills Ltd, Intimate Spinning Mills Ltd, Baishakhi Spinning Mills Ltd and Russel Spinning Mills Ltd. ‘It is nothing but eyewash. Local weavers have no scope for buying yarns directly from spinners as the market remains under the control of a section of influential traders,’ said Narshingdi Chamber of Commerce and Industry president Ali Hossain. He said that all the spinners had taken crores of taka in advance from their agents and the agents had raised the price of the yarns threefold in a day. Ali Hossain claimed that the unstable price of yarns made the lively hood of more than 10 lakhs of workers worked in 5,000 power looms at Narsingdi area made uncertain. M Shahadat Hossain, chairman of the Bangladesh Terry Towel and Linen Manufacturers and Exporters Association, said that the prices of saree, lungi and three piece salwar suits had already started go up on the local market due to the high price of yarns. He said that amid the high prices of essential commodities, the price hike of clothes would hit the poor and middle-income earners badly. Shahadat blamed the spinners for the monopoly in the business and claimed that the government should open the import of yarns for all at reduced tariff rates to bring down the cost of living for fixed income earners. ‘The government has imposed a 37-per cent duty on the import of yarns and the spinners are taking advantage of the duty imposition through increasing prices of yarns at their will,’ he said. If the government opens the import of yarns at reduced duty to all, there would be competition on the local market and people would be able to but cloths at reasonable prices. According to the Bangladesh Weaving Board, there are 2,90,282 handlooms in the country and the livelihoods of more than 8 lakh people depend on the sector. People from the textile sector claimed that the local weaving industry met local demand worth $5 billion per year.  

Source: New Age

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