Experts said though there is a provision in GST law to claim the unutilised Input Tax Credit (ITC) as a refund, there were other complications and resulted in more compliance burden. The inverted tax structure caused an effective increase in the rate of taxation of the sector. The finance ministry has notified uniform 12 per cent GST rate on manmade fibre (MMF), yarn, fabrics and apparel, thereby addressing the inverted tax structure in the MMF textile value chain. Currently, tax rate on MMF, MMF yarn and MMF fabrics is 18 per cent, 12 per cent and 5 per cent, respectively. The taxation of inputs at higher rates than finished products created build up of credits and cascading costs. It further led to accumulation of taxes at various stages of the MMF value chain and blockage of crucial working capital for the industry. The GST Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising state finance ministers, had in its previous meeting on September 17 decided that the inverted duty anomalies in the textile sector would be corrected from January 1, 2022. Giving effect to this decision, the Central Board of Indirect Taxes and Customs (CBIC) on November 18 notified 12 per cent GST rate for MMF, MMF yarn and MMF fabrics. Experts said though there is a provision in GST law to claim the unutilised Input Tax Credit (ITC) as a refund, there were The world textiles trade has been moving towards MMF but India was not able to take advantage of the trend as its MMF segment was throttled by the inverted tax regime, they said, adding the correction in duty anomaly will help the segment grow and emerge as a big job provider. EY Tax Partner Bipin Sapra said the rate changes in the textile industry is the first of the changes promised by the GST Council with an aim to rectify inverted duty structure and bring an efficient tax structure for a given sector.
Source: Economic Times
"Though we have given a lot of relief in indirect taxes in petrol, diesel and edible oil, also there are some sunset that have come in customs duty where the total benefit would be about Rs 75,000-80,000 crore, but still I think we should exceed the budgeted estimates on both direct and indirect taxes," Revenue Secretary Tarun Bajaj said. With the net direct tax collection till October closing in on Rs 6 lakh crore and average monthly GST mop-up likely around Rs 1.15 lakh crore this fiscal, the government's tax collection kitty will surpass budget estimates this financial year, Revenue Secretary Tarun Bajaj said. In an interview with PTI, Bajaj said the relief in excise duty on petrol and diesel and customs duty on edible oil will cost the exchequer about Rs 80,000 crore this financial year, and the revenue department will start calculating the tax mop-up position vis-a-vis budget. "After refunds also, we have touched almost Rs 6 lakh crore till October in direct taxes... It is looking good. Hopefully, we should exceed it. "Though we have given a lot of relief in indirect taxes in petrol, diesel and edible oil, also there are some sunset that have come in customs duty where the total benefit would be about Rs 75,000-80,000 crore, but still I think we should exceed the budgeted estimates on both direct and indirect taxes," Bajaj said. The government has budgeted a 9.5 per cent growth in tax collections at Rs 22.2 lakh crore for 2021-22 fiscal (April-March). In the last fiscal, the mop-up was Rs 20.2 lakh crore. Of this, revenues from direct taxes are estimated to be around Rs 11 lakh, including Rs 5.47 lakh crore from corporate tax and Rs 5.61 lakh crore from income tax. With regard to the goods and services tax (GST) revenues, Bajaj said the collections in November will also be good numbers but December mop-up will be little lukewarm. The pick-up in collections will be visible again in the March quarter. "The revenues are looking good, GST revenues are also good. We crossed Rs 1.30 lakh crore (in October). This month, I think we should get a good GST number. This was Diwali, our GST revenue will keep changing. "But, i think the run rate should not go below Rs 1.15 lakh crore. Overall, we should do well in GST, excise duty and customs duty, also we will achieve our budgeted estimates. So, overall, we will exceed," Bajaj said. Customs collection in the current fiscal is budgeted at Rs 1.36 lakh crore, excise duty at Rs 3.35 lakh crore.
Source: Economic Times
The Centre will make every possible effort so that Manipur gets full advantage of free-trade agreement (FTA) as the state is a gateway to Myanmar and ASEAN countries, Union Minister Piyush Goyal has said. The Centre will make every possible effort so that Manipur gets full advantage of freetrade agreement (FTA) as the state is a gateway to Myanmar and ASEAN countries, Union Minister Piyush Goyal has said. The minister stated this on Saturday during an interaction with industry bodies of Manipur. India and the 10-nation ASEAN bloc implemented an FTA in January 2010. 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. The Association of Southeast Asian Nations (ASEAN) members are Indonesia, Thailand, Singapore, Malaysia, the Philippines, Vietnam, Myanmar, Cambodia, Brunei and Laos. "The Union minister also assured that his ministry will make every possible effort so that Manipur gets full advantage of the free-trade agreement as the state is a gateway to Myanmar and ASEAN countries," an official statement said on Sunday. Goyal said that a lot of efforts have been made and special infrastructural development projects have been initiated for the promotion of industry, trade and commerce in the region including the North-East Industrial Development Scheme and sanctioning of the Integrated Development and Promotion of Industrial Projects. He also urged the industrial bodies to undertake cooperative ventures and start-ups to promote the industry and commercial trade as well as share technology and common platforms to optimise the outcome of the efforts. "Northeast states will be taken care of to go on their own identity and not to rush either to Delhi or Kolkata for every issue," he added. During the interaction, representatives of industrial unions of the state that participated include Manipur Chamber of Commerce and Industry, Indo-Myanmar Border Traders' Union, All Manipur Entrepreneurs' Association, Business Excellence Group, Manipur Power loom Development Association, Manipur Handloom and Handicraft Entrepreneurs Artisan Development Society. They raised issues pertaining to the need of introduction of transit duty system, reduction in visa fees, opening of traderelated offices, DGFT, Exim Bank, and RBI forex cells at Imphal, development of multi modal logistics park, transport.
Source: Economic Times
With the Biden administration now insisting on resolving irritants first, rather than going for a mini deal, the focus on Trade Policy Forum has again emerged. With US Trade Representative (USTR) Katherine Tai (pictured), along with her deputy Sarah Bianchi, set to reach the national capital on Monday, issues related to market access, including tariffs, are likely to be discussed by reconvening the India-US Trade Policy Forum (TPF). Established in 2005, the India-US TPF met last in October 2017. It was then replaced by negotiations between the two sides on a trade deal. With the Biden administration now insisting on resolving irritants first, rather than going for a mini deal, the focus on TPF has again emerged. There could also be discussions to promote both nations’ shared interests in the IndoPacific region, people aware of the matter said. “Since the US government has made it clear that a (mini) trade deal with India will not be possible, at least for now, another focus area is likely to sort out market access issues and matters on the Indo-Pacific region,” one of the persons, cited above, said. “A major breakthrough on any trade-related issue between India and the US is difficult (for now) without any investment deal between both the countries. There could also be an expectation to firm up an investment deal (from the US’ side),” the person said. Tai is set to meet commerce and industry minister Piyush Goyal on Monday. This is also her first visit to India since she assumed office in March. The US is the biggest destination for India’s exports, though its outbound shipments have been much lower compared to China. While India exported $29.75 billion to the US, China received only $16.42 billion of exports during the first five months of the current fiscal year from India. However, when it comes to exports to India, US share was much less at $16.42 billion than China’s at $34.15 billion during this period. The US was the biggest trading partner of India, slightly bigger than China during AprilAugust 2021-22. But China was the biggest trading partner in certain years, for instance during 2020-21 and 2017-18. The US has been raising the issue of market barriers in India, including high tariffs. New Delhi has also been flagging this matter against Washington. The US also believes that the Indian regulatory regime is “non-transparent and unpredictable.” According to the US Department of Commerce’s International Trade Agency, US exporters and investors face non-transparent and often unpredictable regulatory and tariff regimes. This is because some goods and services have limited access to the Indian market.
Source: Business Standard
In a press release issued in Coimbatore on Friday, Ravi Sam, Chairman, The Southern India Mills’ Association (SIMA) has stated that as the GST rate on MMF fibre has been reduced from 18 percent to 12 percent, it would reduce the cost of finished goods. "The recently announced Production Linked Incentive Scheme for certain MMF fabrics, garments and technical textiles, extending the incentive ranging from 7 percent to 15 percent based on the incremental turnover for five years, the scheme warranted two prerequisites viz., removal of anti-dumping duty on MMF raw materials and fibres and also addressing the inverted duty issues. The Government has successfully fulfilled both prerequisites and hoped that the PLI scheme would soon become a success. Though the PLI scheme aims at creating 40 to 50 global champions in textile trade with higher scales of operations, the reform would greatly strengthen MMF value chain to become globally competitive. Globally, the consumption of cotton and MMF fibre is in the ratio of 35:65, while the same is the reverse in India as the MMF raw materials and fibres were expensive due to anti-dumping duties and inverted duty issues. MMF would thus become the growth engine in the coming years for the growth of the textile industry in India. The Indian textiles and clothing industry that employs over 105 million people, especially people below the poverty line and women folks had several issues on the taxation front for several decades. For the first time in history, the entire textile value chain was brought under GST net without any exemption during July 2017 that ensured compliance and created a level playing field across the value chain. Though the Government brought the entire cotton textile value chain and job work services under 5 percent GST rate, the synthetic value chain had inverted duty structure issue as the fibre attracted 18 percent, yarn 12 percent, fabric 5 percent and garments below Rs.1000 per piece at 5 percent and 12 percent for garments above Rs.1000. This resulted in huge accumulation of input tax due to inverted duty structure. The industry had been demanding the Government to bring the entire synthetic textile value chain also under 5 pecent GST slab on par with cotton textile value chain, clothing being the most important basic needs of the people and a mass consumption item. Based on the recommendation made by the 45th GST Council meeting held on 17.9.2021, the Ministry of Finance has issued a notification on 18.11.2021 by bringing all the textile goods under 12 percent GST rate, except cotton and cotton yarn that continue to attract 5 percent GST rate, with effect from 1st January 2022. Retaining the 5 percent GST rate for cotton and cotton yarn would greatly benefit the cotton farmers. We thank the Government for addressing the inverted duty structure for dyeing and printing of textile and textile products job work by increasing the rate from 5 percent to 12 percent. This would greatly benefit the textile processing segment, the weakest link in the entire textile value chain and job work services account for over 80 percent of the textile manufacturing activities. 12 percent GST on all garments and fabrics would increase the cost for common man, especially the people below the poverty line, and cotton fabrics and garments below Rs.1000 could have been retained at 5 percent GST rate. The increase in GST rates at fabric and garment stage would increase the working capital burden for the fabric and garment manufacturers," detailed Ravi Sam, the Chairman of SIMA.
Source: Simplicity
Under Magnetic Maharashtra 2.0, now in its 7th edition in Dubai, the government of Maharashtra is participating between 19th November 2021 and 2nd December 2021. Kick-starting the Magnetic Maharashtra 2.0 initiative to draw investments to the State of Maharashtra, 25 MoUs worth Rs 15,260 crores ($2 billion) have been signed in the presence of Minister of Industries, Subhash Desai. Under Magnetic Maharashtra 2.0, now in its 7th edition and its 1st international edition in World Expo in Dubai, the government of Maharashtra is participating between 19th November 2021 and 2nd December 2021. The delegation is led by Subhash Desai who is joined by a senior delegation including Additional Chief Secretary (Industries)- Baldev Singh, IAS, Directorate of Industries, Harshadeep Kamble, IAS, Chief Executive Officer Maharashtra Industrial Development Corporation- P. Anbalagan, IAS and Joint Chief Executive Officer Maharashtra Industrial Development Corporation- Amgothu Sri Ranga. Maharashtra has always been a global investment hub and is home to some of the largest and most successful business houses in the country. The state has been at the forefront of FDI inflows in India, attracting the largest share of approximately One-Third of India’s cumulative Foreign Direct Investment (FDI) inflows during April 2000 – 2020. The state’s journey has included an increase in FDI inflow from INR 2,543 Crores in 2004-05 to INR 79,216 Crores in 2019-20. The consolidated efforts of the Industries department, their robust policies and visionary leadership of the state government has boosted industrial growth and boosted investor confidence, positioning the state to be one of the most favored investment destinations of the country, thereby flourishing the industrial sector of the state. The MoUs signed, which have the potential to generate employment for 10,851 people, are in key thrust sectors which are auto & auto components, logistics, EV, textiles, data center, phama, bio-fuels and energy. It is interesting to note that all the interested FDI investors are of the sectors where Maharashtra has dedicated promotion policies. This signifies the importance of the state government’s pro-activeness in policy development and good governance. Moreover, at least several companies from 6 countries such as Japan, Singapore, Sweden, Korea, Germany and Italy will be investing in Maharashtra.
Source: Outlook India
Apparel exporters are renegotiating rates with big brands to pass on higher cost, while prices of agriculture commodities such as basmati rice have already gone up amid crop damage due to the inclement weather in India affecting production and supplies. Freight rates have eased from the peak and container availability has improved for India's exporters and importers of apparel and agricultural commodities to consumer electronics, but high input costs could force them to increase prices in the coming months, according to industry insiders. Prices of television, smartphones, refrigerators and airconditioners are likely to increase 5-6% by next month and another round of price hikes is expected in January-February, due to a 10-12% rise in input cost. Apparel exporters are renegotiating rates with big brands to pass on higher cost, while prices of agriculture commodities such as basmati rice have already gone up amid crop damage due to the inclement weather in India affecting production and supplies. Freight cost has cooled 5-15%, depending on the destination, from the peak of $10,000-12,000 in August for carrying a container from or onwards to India. and the improvement in container availability to help further boost India's exports, which rose 43% in October to $35.65 billion. Exporters were finding it tough to renegotiate prices earlier this year when freight rates were increasing, as buyers, worried about a possible third wave of the pandemic in India and the ability of suppliers to meet their commitments in that event, were unwilling to pay more. "Now, that the spread of Covid is somewhat under control and the vaccination has picked up across the globe, overseas apparel buyers including the big brands like Zara, Mango and others have agreed to take into consideration a portion of the freight cost while fixing prices," said Lalit Thukral, president of the Noida Apparel Export Cluster. However, what is pinching the apparel industry is the rising yarn prices. "It has gone up by more than 60% in the last one year. We have to increase prices of our products, but we are not sure whether buyers will accept it," he added. "The container pile-up has reduced and it's available in about a week than what it was earlier," said Poorna Seenivasan, president at Gokaldas Exports, a large manufacturer and exporter of apparel. Consumer electronic companies, which are among the largest importers of components, said shipping and air freight rates from China and Hong Kong have come down by about 10- 15% from the peak in August. Container rates are now varying between $6,000 and $6,500 from China, compared with $7,000 even a month back. Air freight from Hong Kong is down to HK$36-37 a kg from HK$44-45. "The rates are marginally down but still higher than what it was in the June quarter when it was around $3,500 per container. We understand rates would continue to remain on an elevated level and hence the input cost pressure remains, leaving little room to not hike prices," said Godrej Appliances business head Kamal Nandi.
Source: Economic Times
What’s clashing with the sustainable culture today is fast fashion. The concept of fast fashion is all about quick shifts on the season’s colours, trends, and styles which one can buy for cheap and then layer it, play with different styles, or cycle it through all the seasonal trends. In fast fashion, you dump your clothes at least once a year and then move on to the next collection in order to maximize on the hype. This way, the process keeps repeating, proffering significant variety to your wardrobe. While slow fashion is about choosing brands which have quality assurance, timeless classic styles curated by elegant clothing, and a high value for money, fast fashion stands on the contrary, bringing forth the fashion designer in you. In a nutshell, slow fashion is simply the opposite of fast fashion in terms of cost, ethical values, as well as alternation of trends.
Effects on biodiversity At the root of these two concepts, there are key elements playing a positive and negative impact on biodiversity, climate change, and global warming. The emerging pollution is a concomitant of the damaging effects of over-production tempting over-consumption. Each year, there’s an estimate of more than 100 billion garments being purchased and 92 million tonnes being thrown out. By the year 2030, these statistics will have crossed more than a whopping 134 million tonnes. But, we still talk breezily about fast fashion and how a pandemic affected sales in physical shopping. While the fashion industry seems to be on the rebound through fashion weeks making rounds all over the world, post-pandemic textile productions are bouncing back to the graph of 2019 and textile industries are expecting a growth of over 34% in the next 5 years to catch up with the losses of the last two years. But is it going to be rational to increase production of any kind at the cost of what the earth and nature can sustain?
Clear the concept for consumers Brands have started turning their production and value systems into having a more sustainable approach, but at the same time they are still far from giving up the rat race of fast fashion and its collection cycle. They don’t wish to produce less because their actual aim remains selling more. Today, if we take an example of the leather industry where many known brands have adopted the culture of vegan leather, the production of vegan leather and its processing consumes more chemicals and causes more damage than using the unwanted skin leather from meat industries. This “shift” is actually creating more havoc to the comprehension of sustainable culture which hasn’t even gotten the chance to fully spread its wings. Now, on the scale of being ethical, what's more environmentally friendly? Creating vegan leather from scratch or using the leftovers of meat industries by recycling that into real leather and utilizing that waste? On the other side, fast fashion brands like H&M and Zara have revamped recycling schemes by taking old clothes in exchange of issuing discount coupons to their buyers. They give the assurance of recycling old garments and eliminating the introduction of raw material into the process by keeping textiles out of landfills. Theoretically speaking, recycled garments should be considered as downcycled, resulting in lower costs, but engaging more labour force as the garments need to be segregated, their colours, trims, seams, buttons, zippers, clips & hooks, and even embroidered patches need to be removed, and their material makeup needs to be altered. This requires a lot of skilled manual labour with experience and training. “Fast fashion is not free. Someone somewhere is paying” - Lucy Siegle.
Enlightenment on the concept of sustainability The concept of a sustainable life needs more awareness, kind of a platform of its own to achieve perfection on that particular term. It is more like leading yourself to the right path and continuing on the ethical journey by learning and re-learning from it every time as life is all about how you grow and how you learn from growing. The problem is not with recycling goods or with producing from scratch by going back to raw material resources. It is with producing more raw material causing more consumption of nature which already needs healing. When issues arise on the verge of threatening a mixed ecosystem, sustainability is the only thing we can look up to. While textile mills and brands are trying to lift hefty fundings on the grounds of pioneering new technologies and pushing organic innovations forefront in their annual memorandum, the cost is being paid by nature which can take eons to recover. Many recycling ideas are not even in the pilot phase to take off or even scale up; it's high time to be aware of the circumstances that are prevailing. From mechanical recycling to chemical recycling or zero waste recycling, it is still a journey from brand to brand, a quest which is due to be set forth. If the fashion industry is really marching towards closing the loop of climate change, sustainability, and biodiversity, perhaps utmost focus would be needed on the path that takes fashion along with the targeted ethical offerings to life’s sustainability. The lead image is from designer Urvashi Kaur, who is a pioneer of sustainable fashion.
Source: Times of India
Vietnam is likely to see near-term benefits from its membership in the Regional Comprehensive Economic Partnership, a free trade agreement to come into force in January, following the Nov. 2 ratification by Australia and New Zealand. Fifteen Asia-Pacific nations have signed the RCEP, including China, South Korea, Japan, Australia, New Zealand, and the 10 Association of Southeast Asian Nations members – Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. It is widely considered the world’s largest free trade deal, accounting for approximately 30% of the world’s population and 30% of global gross domestic product. It is ultimately expected to remove tariffs on more than 90% of goods traded in the region. Vietnam considers RCEP to be one of a series of successes in international economic integration, especially in the context of COVID-19 and the needs of economic recovery. Along with 14 Vietnamese free trade agreements already in effect, RCEP is expected to allow Vietnamese exports to enter more markets at lower tariff rates. Steven Okun, senior adviser at geostrategic consultancy McLarty Associates, told VOA that RCEP is a significant agreement, especially when it comes to making trade easier and better integrating supply chains. “In long term, if RCEP brings greater China, Japan, and Korea closer on trade, this would limit U.S. economic integration in the region but could offer opportunities for countries in Southeast Asia, including Vietnam. It would likely not impact the ongoing shift of supply chains out of China,” he said.
Cheaper imports For Vietnam, RCEP will also pave the way for cheaper imports, especially of materials needed for production. Within ASEAN alone, Vietnam's annual imports of raw materials and production equipment exceed $30 billion. In addition, Vietnam still has a trade deficit of several tens of billions of dollars per year with major markets such as China and South Korea, according to the Ministry of Planning and Investment’s newspaper. Raw materials imported from RCEP countries will be considered as raw materials produced in Vietnam when products are exported to RCEP member countries. This allows the exported product to be labeled as made in Vietnam, lowering tariffs imposed by the importing country. These are also countries that provide a huge amount of raw material for Vietnam's billion-dollar export industries, such as electronics, components, textiles, footwear, and others. “Therefore, Vietnam enjoys many benefits from RCEP, when it has strong products such as agriculture and fishery meeting the needs of most RCEP members. Thanks to the harmonization of rules of origin within the RCEP bloc, Vietnamese goods can more easily meet conditions for enjoying preferential tariffs and increase exports in the region, especially Japan, South Korea, Australia, and New Zealand,” the newspaper said. Phan Thi Thanh Xuan, vice president of Vietnam Leather, Footwear and Handbag Association, said that the industry will benefit from the advantage of importing raw materials from China under RCEP. Vietnam can already import the raw materials under the ASEAN-China FTA, but Vietnamese-manufactured exports to countries other than China or other ASEAN members are not considered to have been made in Vietnam. Under the RCEP, such exports to Japan or other RCEP signatories benefit from lower tariffs as products made in Vietnam.
Concerns about domestic market From Vietnam’s perspective, participation in RCEP brings both pros and cons. While the prospect of increasing exports would lead to positive economic growth indicators for Vietnam, there are concerns over how the agreement will affect the domestic market, where small and medium-size enterprises, which account for 98% of companies, will expect a flood of goods from elsewhere, especially China. In the footwear industry, for example, Thanh Xuan said small and medium-size companies must improve to survive as “the inner strength is very weak. In a competitive market, if they don’t improve, they are easily eliminated.” “In fact, the share of the number of SMEs accounts for 60% [in the footwear industry] but the contribution to exports is low, at less than 20%. In contrast, foreign direct investment and big enterprises in Vietnam account only about 30 to 40%, but their proportion of exports is up to 80 to 90%,” she said. “There are advantages as well that help Vietnam improve its capacity. In the footwear industry, Vietnam has many additional advantages, and is currently the second-largest source of footwear exports in the world. We also created a fairly long-term supply chain with major markets. Foreign investment in Vietnam is a long-term process, accounting for a fairly large proportion,” Thanh Xuan told VOA. She added: “In general, the growth potential for this industry is still very good, still competitive, and still earning reputation within big brands – they still maintain orders in Vietnam, and foreign investors are still committed to continue manufacturing in Vietnam, at least for another 10 to 20 years.” Okun, who is also the former chair of the American Chamber of Commerce in Singapore, said Vietnam has a major advantage over most RCEP members because it has signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, another trade agreement. He said that agreement goes further in advancing trade in ways such as committing its parties to ensure that state-owned enterprises compete fairly with private companies, without undue advantages from governments. The CPTPP also has “high-quality digital trade rules which, if fully implemented, would strengthen Vietnam's digital economy and open up new opportunities for the digital economy to be the next engine of growth for Vietnam.” “Vietnam should act immediately to implement its commitments within the CPTPP and go beyond by establishing new digital trade agreements, such as with key partners such as Singapore and the United States. This would enable Vietnam to maintain its preferential position in developing a foundation for its economic recovery, being one of the few countries to benefit from both RCEP and the CPTPP and maximizing its opportunities for growth through the digital economy,” he told VOA.
Source: VOA News
Sri Lanka’s import bill has risen significantly so far this year despite restrictions. Central Bank Governor Ajith Nivard Cabraal said Sri Lanka is growing at 7% per annum from the year 2006 to 2014. “Thereafter we did hit a fairly low patch, growth was stagnant. But at the same time, we should not be discouraged by that,” the CBSL Governor said. He said that getting back to a 6%+ growth is not difficult adding that it also must be ensured that exports revenue is improved. A Central Bank report shows Sri Lanka has spent nearly USD 15 billion on imports between January and September this year. This is higher than USD 11.7 billion spent within the same period last year. The Government had spent USD 2.6 billion to import fuel with a percentage of 36 increase from the amount spent on fuel imports last year. According to the CBSL report, the country had only generated USD 8.9 billion through exports in the first 9 months of this year. Textile and garments were the most exported products. As the imports were higher than the exports, the deficit in the trade account had widened to USD 6 billion in the first nine months. The deficit during the same period last year stood at USD 4.3 billion,
Source: News First
One thing that our industry people appear to be the best at is explaining, often in great detail, the problems and challenges that we face. The existing purchase practices are unfair and harming suppliers and their workers, we are told. Yes, we know that already. Fast fashion is harming the environment and leading to a surplus of poor-quality clothes, they say. We are aware of that, too. There is a "funding gap" in terms of supply chain upgrades and investment in sustainable garment production, we are informed. People have been telling us of all these for well over a decade. Garment workers are underpaid. Again, that's fairly obvious. The latest report outlining our woes, but not really offering any meaningful and practical solutions, came out in the wake of the recently held UN Climate Change Conference (COP26). The report, the authors of which I will not name here, suggests that decarbonising global fashion supply chains to achieve a net zero fashion industry by 2050 will cost more than USD 1 trillion. The report says 61 percent of the fund will be required to implement the "existing solutions," and the rest will be required to further develop, scale and implement new innovations. It says that investments should be focused on using renewable electricity and reducing coal dependence in supply chains, as well as using sustainable materials in fashion and finding options for extended use/recycling. Most notably, as far as RMG suppliers are concerned, the report tells us that the current levels of financing are insufficient to succeed in decarbonising the industry before 2050. It is argued that the industry—that's us, the suppliers—is unlikely to achieve necessary transformation without a significant change in financing flows. The report tells us that the USD 1 trillion fund that our industry needs to raise will come via financiers (debt and equity), manufacturers, brands, philanthropy, and governments. USD 1 trillion is a nice round number, at least. With so many variables involved, so many different actors in play, the figure could easily have been double, and few would be in a position to question it. This figure seems quite arbitrary, but it will undoubtedly grab headlines. A few thoughts pop up in my mind when reading reports like this, a great many of which have come out over the years. The first is that they are simply framing and rehashing a problem that the industry leaders all recognise—be it suppliers, buyers or other fashion industry stakeholders. The second thought is that these reports sell investment in sustainable supply chains as an "opportunity" quite often. In this case, the authors state that while an investment in excess of USD 1 trillion over the next 30 years is a huge amount, the majority of it is for projects that offer an attractive financial return on investment. Really? For whom? In Bangladesh and other garment sourcing hubs, we have seen factories spending money on water- and energy-saving initiatives over the years and, yes, these do have a return, but a small one. It is also a simple fact that many factory owners struggle to even make small, incremental investments such as this. In any case, to my knowledge, the investment required in Bangladesh as well as in supply chains globally is much greater. And I haven't seen investors queuing up to support RMG suppliers in Bangladesh to "green" their operations these past few years. Ask any garment manufacturer here about the challenges of getting access to finance for green investment. Yes, the money might be there, but accessing such finance is an onerous task. Moreover, things have become much, much harder since the pandemic broke out—many suppliers are still paying debts incurred after the huge downturn in business in 2020. In terms of external investment, there have been various pilot initiatives over the years which typically involve a tripartite structure of factory, buyer and a third-party environmental non-profit entity, which can leverage public money for "green" projects over a certain period of time. Such initiatives are supposed to encourage and foster green investment, but I hear that such initiatives nearly always fall by the wayside as soon as the public money dries up. No one—certainly not the buyer or factory owner—has any desire to cover the funding of such work themselves. We know there is a lack of capital to meet the needs of industrial upgrading required to future-proof our industry and make it more sustainable. With this in mind, it is time to move beyond framing the problem and onto actually developing clear, practical plans about how it will be tackled. We can't afford to have continued talking shops, which produce plenty of soundbites and nice corporate speak but do not move us any closer to where we want to be. The danger is that these same conversations will happen again in another five years' time, or even 10 years' time. It will be too late then if this status quo stays. Coming back to the issue of poor purchase practices, I must say they are the root of all problems in our industry. We have all known this for years, and don't need another report to tell us so. Some mythical, outside investor is not going to come and save us all—of that we can be certain. This is a problem which, by and large, needs to be solved from within. The only real question is this: Who pays for it? Who pays to upgrade the supply chains? Is it the suppliers or the buyers, or both? And where and how do the government and other third parties come in? These are the only questions I see as relevant moving forward. If we are going to have more talking shops, let's at least allow them to be about this issue where we can all have a frank, honest and transparent debate about how we are going to move our industry to where it needs to be. We know the problems our industry faces. It's now time to talk in great detail about the solutions and set out clear, actionable goals about how those solutions can be achieved. Mostafiz Uddin is the managing director of Denim Expert Limited, and the founder and CEO of Bangladesh Apparel Exchange (BAE) and Bangladesh Denim Expo.
Source: The Daily Star
Speaking on the sideline of the commemoration of African Industrialisation Day on Saturday, as recognised by the United Nations to re-industrialise Africa, Comrade Adaji said re-industrialisation of Nigeria will create jobs, address insecurity, reduce inflation, improve the value of naira against dollars, create locally made goods, create food and reduce the price of commodities. For Comrade Adaji, Nigerians have been subjected to lamentations over comatose industries in the country, while the nation’s leaders showed little or no political will to reindustrialise the country. We need government that is committed to industrialisation of Nigeria. “In those days of our great leaders like Ahmadu Bello, Nnamdi Azikiwe and Obafemi Awolowo, among others, there was competition over industrialisation of the North, the West and the Eastern zones. But today we are just into lamentations over comatose industries in the country. “In the 70s and 80s when the population of Nigeria was much more less than what we have now, there were several industries everywhere in the country. But today we are over 200 million people, we cannot boast of functional industries that should triple that of the early 70s. “It is lamentation because every successive government proved wrong in improving the situation. There was no policy consistent to transform the manufacturing sector. The implication of these comatose industries is the insecurity we are witnessing today because one thing leads to another. It has also led to massive youths unemployment. “One of the solutions to this ugly situation is that our leaders should develop political will to solve these socio-economic problems. We have the manpower and population to transform the manufacturing sector,” he said.
Source: Blue Print
promises" made in a communique for establishing diplomatic links with China, the Chinese Foreign Ministry said China downgraded ties with Lithuania to the level of charge d’affaires, further raising tensions after Taiwan opened a diplomatic office in the Baltic nation earlier this week. Lithuania is “walking back on political promises” made in a communique for establishing diplomatic links with China, the Chinese Foreign Ministry said on Sunday. China withdrew its ambassador from Lithuania in August in protest at the Baltic nation’s move to let Taiwan set up a representative office under the name of Taiwan, something that China deems disrespect to its sovereignty and territorial integrity. China sees democratically-ruled Taiwan as part of its territory and has repeatedly voiced opposition to countries engaging in official contact with Taipei and vowed to take countermeasures. The “One China” policy is the political basis of relations between the two countries and the establishment of Taiwan’s office sets a bad international precedent, China’s foreign ministry said.
Source: Business Standard
PBC CEO fears drop in imports will hit investment in industrial sector Pakistan is set to see a slowdown in economic activities in the wake of recent monetary policy tightening by the central bank, as the move is targeted at curbing imports, 91% of which goes for the expansion of domestic and export industries, and meeting raw material and food needs. “Consumer products make up nearly 8% of imports while 1% share is occupied by vehicles (ready to drive),” Pakistan Business Council (PBC) CEO Ehsan Malik said while talking to The Express Tribune. “Curbing them to some extent may not directly hurt economic activities in the country.” The remaining 91% of imports consist of industrial machinery, petroleum products, industrial and agricultural inputs (raw material) and food items (like wheat, sugar and cooking oil). Making them expensive and monetary tightening will definitely hit investment activities in industries. This would, in turn, make exports expensive and uncompetitive as well as contribute to food inflation, he said. According to him, nearly two-thirds of the surge in import bill during the current fiscal year to date (July-October) came in the wake of rise in global prices of commodities, which Pakistan imports to meet its domestic requirement. The remaining one-third increase in the import bill is due to the volumetric growth (pickup in demand). “Imports (in terms of volumes) are bound to slow down in the aftermath of price hike in the global market,” he said. “The growth in import of plant and machinery for industrial setups and transport vehicles (mostly buses and trucks) … is good for expansion of the economy,” Malik said, adding that the growth in the segment came mainly due to the introduction of Temporary Economic Refinance Facility (TERF) by the central bank during Covid-19. Banks disbursed Rs436 billion for machinery imports through the facility that expired in March 2021. Pakistan Bureau of Statistics (PBS) data suggested that machinery imports grew 41% to $3.71 billion in the first four months (July-October) of current fiscal year 2021-22. Inward shipments of textile machinery recorded an increase of 110% to $297 million during the period under review compared to $141.5 million in the same period of last year. The textile industry fetches almost 60% of total export earnings every year. “The growth in import of textile machinery will help increase exports in future,” he said. Similarly, imports of modes of transport like trucks and buses, motor vehicles, aircraft and ships surged 140% to $1.48 billion in the four months under review compared to $618 million in the same period of last year, according to the PBS. Energy imports rose 96% to $6.2 billion in July-October 2021 compared to $3.17 billion in the same period of last year, the PBS said. The increase in energy imports was witnessed primarily due to a significant hike in prices of crude oil and liquefied natural gas (LNG) in the global market. Foods imports grew 37% to $3.12 billion in July-October 2021 compared to $2.28 billion in the same period of previous year. The growth was mostly because of price hike in the global market, the PBS data suggested. Imports of textile inputs surged 65% to $1.57 billion while inward shipments of agricultural and other chemicals rose 75% to $4.54 billion. Pakistan’s total imports surged 65.41% to $25.1 billion during July-October FY22 compared to $15.17 billion in the corresponding period of last year. The exponential growth in inward shipments contributed significantly to the widening current account deficit and triggered rupee depreciation, according to the central bank. “The monetary policy tightening like aggressive increase of 150 basis points in the benchmark interest rate (to 8.75%) and reduction in circulation of money in the economy through an increase in commercial banks’ cash reserve requirement (CRR) by 100 basis points to 6% will hurt economic activities,” Malik said.
Source: Tribune
