The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 24 NOVEMBER, 2021

NATIONAL

INTERNATIONAL

GoM to meet on Nov 27 to finalise report on GST rate rationalisation

Sources said the Fitment committee, comprising tax officers from states and the centre, has made many "sweeping" recommendations The panel of state finance ministers looking into GST rate rationalisation will meet on November 27 and finalise its report on rate changes to expand the tax base. Sources said the Fitment committee, comprising tax officers from states and the centre, has made many "sweeping" recommendations regarding slab and rate changes and taking items out of the exemption list. The recommendations will be discussed in the meeting, but all might not be accepted in toto. This is the third meeting of the GoM, which was set up in September. It was tasked to submit a report within 2 months. The Group of Ministers (GoM) on rate rationalisation, headed by Karnataka Chief Minister Basavaraj Bommai, also include West Bengal Finance Minister Amit Mitra, Kerala Finance Minister K N Balagopal, and Bihar Deputy Chief Minister Tarkishore Prasad. The sources said the report of the ministerial panel is likely to be finalised in this meeting and would be presented before the GST Council when it meets next month. The GoM in its meeting on November 27 would also review items under an inverted duty structure to help minimise refund payout and review the supply of goods and services exempt under Goods and Services Tax with an objective to expand the tax base and eliminate breaking of input tax credit (ITC) chain. Currently, GST is a four-tier slab structure of 5, 12, 18 and 28 per cent. Essential items are either exempted or taxed at the lowest slab, while luxury and demerit items attract the highest slab. On the top of the highest slab, a cess is levied on luxury and demerit goods. There have been demands for merging the 12 and 18 per cent slab as also taking out certain items from the exempt category to balance the impact of slab rationalisation on revenue. With regard to inverted duty structure, the GST Council has already corrected the rate anomaly in the case of mobile handset, footwear and textiles. The ministerial panel would also look at representations of inverted duty structure and recommend suitable rates to eliminate any such cases where final goods attract a lower GST than the tax levied on its inputs.

Source: Business Standard

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Reconsider GST hike on textile and apparel, industry body to government

The industry body said the pandemic has already dealt a body blow to the apparel industry as prolonged lockdowns and weak consumer demand led to a decline in sales of clothing Industry body Retailers’ Association of India (RAI) has urged the finance minister to reconsider the GST Council’s recent decision to increase taxes on several textile and apparel items from 5% to 12% effective January 2022.  7% hike has been proposed to address the issue of inverted duty structure in the textile industry faced by a small segment of the total textile value chain. However, such a steep increase in the GST rate will adversely impact 85% of the industry while trying to ease the problem faced by less than 15% of the industry, RAI said in its note. The industry body said the pandemic has already dealt a body blow to the apparel industry as prolonged lockdowns and weak consumer demand led to a decline in sales of clothing. Even as demand is picking up, higher prices could spook shoppers in an already inflationary environment. RAI said it “strongly urges" the Central and State Governments and GST Council to “reconsider" its decision. RAI also suggested that the government impose a flat 5% GST rate as a reasonable solution. “This will not only resolve the inverted duty structure anomaly but also give a fillip to the industry," it added. Kumar Rajagopalan, CEO, Retailers' Association of India (RAI), said, the GST hike is “not in anybody’s interest". “On the business side, it will add to the financial burden of an already-stressed sector, slow down its pace of recovery and affect working capital requirements especially in the case of MSME businesses which account for 90% of the industry. On the consumer side, it will lead to a rise in the prices of garments, thereby hurting consumption. On the government side, in the long run, it may lead to many unorganised businesses going out of the GST net," he added.

Source: Live Mint

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Ministry & Associations continue to differ on GST hike in Textiles

Since the notification from the Central Board of Indirect Taxes and Customs (CBIC) about increase in GST of apparel, textiles and footwear was received yesterday, associations have been raising concerns on the matter. The Textile Ministry has said that removal of inverted duty structure in the Man Made Fibre (MMF) sector with the notification of uniform GST at 12 per cent on MMF yarn, fabrics and apparel, will save working capital and reduce compliance burden leading to growth and creation of jobs. This argument has been considered valid by few industrialists, however, associations are expressing disappointment in response to this crucial decision. Chamber of Industrial & Commercial Undertakings (CICU) has sent a request letter to Finance Minister, Nirmala Sitharaman in which it has mentioned that a single rate without any cap & category on value may be introduced and the Notification so issued increasing the tax rate from 5 per cent to 12 per cent to be withdrawn. “Goods which are lying in stock oldie businessmen and sold on MRP the additional burden of 7% will be on the businessmen. This increase in tax rate will not only hamper the domestic trade it will affect the exports adversely. Already the textile industry is not at a competent status with Countries like Vietnam, Indonesia, Bangladesh and China. On the one hand the Government talks about Make in India and Atmanirbhar Bharat on the other hand levy such high taxes creating an atmosphere of uncertainty and gloom,” said CICU. Similarly, Retailers Association of India (RAI), has said that this comes as a blow to the retail industry. They have appealed to Finance Minister, Nirmala Sitharaman, and has communicated concerns over the impact of the hike on already ailing apparel retail businesses. Kumar Rajagopalan, CEO, Retailers Association of India (RAI), said, “The increase in GST rates on textiles and apparel is not in anybody’s interest due to its impact. On the business side, it will add to the financial burden of an already-stressed sector, slow down its pace of recovery and affect working capital requirements especially in the case of MSME businesses which account for 90% of the industry. On the consumer side, it will lead to a rise in the prices of garments, thereby hurting consumption. On the government side, in the long run, it may lead to many unorganised businesses going out of the GST net.” As per RAI making the Entire Value Chain subject to a flat 5% GST rate will be more beneficial and a reasonable solution.

Source: KNN India

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India – United States to take economic relationship to the next high level

India – United States today reaffirmed their commitment to take economic relationship between the two countries to the next high level. Commerce and Industry Minister of India Shri Piyush Goyal and USTR Ambassador Katherine Tai also ensured that India – US TPF take a firm decision to integrate the economies across sectors and move towards securing and ambitious future for trade relations between the two strategic partners and democracies. The two leaders underlined the importance of integrating the two economies across sectors to harness the untapped potential of the relationship. During the meeting the leaders pushed to work towards a more ambitious future for the bilateral trade and economic relationship and take it to the next level so that both economies could benefit from the inherent complementarities. India and the United States held the 12th Ministerial-level meeting of the India-United States Trade Policy Forum (TPF) in New Delhi on November 23, 2021 with a view to advancing the goal, to “develop an ambitious, shared vision for the future of the trade relationship”, as announced by PM Modi and President Biden at their September 24, 2021 meeting. Indian Minister of Commerce and Industry, Textiles, Consumer Affairs and Food& Public Distribution, Shri Piyush Goyal and U.S. Trade Representative, Ambassador Katherine Tai co-chaired the TPF meeting. The Ministers recognized the importance of engaging in collaborative discussion on the full range of existing and emerging issues affecting our trade relationship. In this regard TPF could be the major platform for collaboration and cooperation in trade matters, resolve bilateral trade concerns and explore important, emerging trade policy issues. Highlights of the India USA TPF 2021 discussions are as follows:

Bilateral trade matters

• TPF Working Groups on agriculture, non-agriculture goods, services, investment, and intellectual property to be activated to meet frequently in order to address issues of mutual concern of both side on a mutually beneficial manner.

• Expressed satisfaction over the robust rebound in bilateral merchandise trade this year 2021 (January – September 2021), which showed almost 50 percent growth over the same period in the previous year; bilateral merchandise trade in the current year poised to surpass US$ 100 billion mark.

• Importance of establishing a conducive business environment underscored and In this regard, economic reforms rolled out by India including liberalization of FDI in the insurance sector, elimination of a retrospective provision in income tax, and launching of the “Single Window System” for facilitating investment highlighted.

• Emphasis on Collaboration and constructive engagement in various multilateral trade bodies including the WTO, the G20 etc for achieving a shared vision of a transparent, rules-based global trading system among market economies and democracies.

 • Significance of creating resilient and secure supply chains and in this regard India and the United States may work with like-minded partners in developing secure supply chains in critical sectors of trade and technology.

• India highlighted the importance of cooperation in health sector, and expressed interest in partnering with the U.S. and allies in developing a secure pharmaceutical manufacturing base for augmenting global supply chains.

• Emphasis on participation and collaboration of the private sector in both countries in building stronger linkages in critical sectors (including cyberspace, semiconductors, AI, 5G, 6G and future generation telecommunications technology), and supporting resilient and secure global supply chains.

• Emphasis on tangible benefits to farmers and businesses of both countries by resolving outstanding market access issues through continuous engagement.

• Agreement on market access facilitation for mangoes and pomegranates, pomegranate arils from India, and cherries and alfalfa hay for animal feed from the United States.

• Agreed to work to resolve market access for grapes from India and pork/ pork products from USA.

• Both sides to continue engagement on exploring enhanced market access for products including Distillers’ Dried Grains with Solubles from the US and market access for water buffalo meat and wild caught shrimp from India.

 • Significance of IP protection and enforcement for promotion of innovation as well as bilateral trade and investment in IP-intensive industries noted.

Future Work

• India highlighted the significance of restoration of GSP (Generalized System of Preferences) benefits as it would help industries from both sides in integrating their supply chain efficiently. United States noted it for suitable consideration.

• Importance of services, including digital services, and the significant potential for increasing bilateral services trade and investment.

 • Underlined the importance of movement of professional and skilled workers, students, investors and business travelers between both countries, as it contributes immensely to enhancing bilateral economic and technological partnership.

 • Agreed on the significance of negotiating a Social Security Totalization Agreement in the interest of workers from both sides, and further engagement on pursuing such an agreement welcomed.

• Emphasized that the TPF should deliver continually concrete outcomes to generate mutual confidence. Ministers directed the TPF Working Groups to develop, by March 2022, plans of action for making substantive progress, including identification of set of specific trade outcomes that could be finalized for an inter-sessional TPF meeting to be held by mid-2022.

Source: PIB

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Textile, clothing industry say hike in GST to have negative impact

The textile sector is certain to require additional working capital now and the final cost will be passed on to the consumer, sources said. The Centre’s notification to hike GST rates for several textile and apparel items from January 2022 has come as major blow to micro, small and medium-scale textile and clothing units, with industry groups asserting that the move will push up prices for consumers. Industry sources observed that since almost 80% of fabric production in the country is in the unorganised sector, increasing the rate to 12% for fabrics will hit the powerloom and handloom weavers. The textile sector is certain to require additional working capital now and the final cost will be passed on to the consumer, sources said. In a bid to address inverted tax structure in the man-made fibre (MMF) textile value chain, the ministry of textiles has notified the uniform goods and services tax (GST) rate at 12% on MMF, MMF yarn, MMF fabrics and apparel. Changed tax rates will come into effect from January 1, 2022. Prior to the change in tax structure, the GST on MMF, MMF yarn and MMF fabrics were 18%, 12% and 5%, respectively. The decision is negative for both the consumer and the industry, said Sanjay K Jain, chairman of the Textiles Committee of the Indian Chamber of Commerce. He felt that while the industry and the market can absorb 3-4% hike, an increase of 7% is steep. “It is the MSME units that make the low-cost garments and these units may suffer from drop in demand. In the long run, many units in the unorganised sector may move out of the GST net,” he observed. This also means that the working capital requirements of these units will go up, he added. Vinod Kumar Gupta, managing director of Dollar Industries, said that the notification on GST increase from 5% to 12% on all fabrics and garments below Rs 1,000 is indeed quite disappointing. “In fact, the proposed merger of existing 12% and 18% slabs to a single 15% or 16% window is a whopping increase by 300% in GST rates for the garments that are used by the lower income group of the society.  The market is likely to see a 15-20% price rise in garments soon since there is an unprecedented price increase of raw materials like yarn, packing materials and freight,” he pointed out.” It is unfortunate that those who buy clothes costing less than Rs 1,000 will be the most affected. On one hand the government is emphasising on Atmanirbhar Bharat and, on the other, these moves of levying high taxes is creating an atmosphere of uncertainty not only on the consumers but also on the manufacturers, he said. Expressing disappointment at the notification, the Clothing Manufacturers Association of India (CMAI) president Rajesh Masand stated that CMAI, along with Associations and Trade Bodies from all over India have been vigorously representing to the government and GST Council not to implement this change. The changes effected will increase the prices of all fabrics and garments priced below Rs 1,000 from 5% to 12%. “What will make the impact of this cost increase even more drastic, is the fact that the industry is reeling under a totally unprecedented price increase of its raw materials, especially yarn, packing material, and freight. The market is likely to see a 15-20% price increase in garments in the coming season even without the GST rate increase,” Masand said. Industry body Retailers’ Association of India (RAI) has urged the finance minister to reconsider the GST Council’s recent decision. The industry body said the pandemic has already dealt a body blow to the apparel industry as prolonged lockdowns and weak consumer demand led to a decline in sales of clothing. Kumar Rajagopalan, CEO, Retailers’ Association of India (RAI), said, the GST hike is “not in anybody’s interest”. “On the business side, it will add to the financial burden of an already-stressed sector, slow down its pace of recovery and affect working capital requirements especially in the case of MSME businesses which account for 90% of the industry. On the consumer side, it will lead to a rise in the prices of garments, thereby hurting consumption. On the government side, in the long run, it may lead to many unorganized businesses going out of the GST net,” he added. While the Southern India Mills’ Association chairman Ravi Sam and Confederation of Indian Textile Industry Chairman T Rajkumar welcomed the move to set right the inverted duty structure for the MMF sector, Sam said the government should not have changed the rates for the cotton sector. The Powerloom Development and Export Promotion Council (PDEXCIL) has urged the government of Tamil Nadu not to increase GST rates for any textile products as it would affect the industry. In a letter to chief minister MK Stalin, its chairperson MA Ramaswamy said PDEXCIL catered to the needs of the powerloom industry that comprised of synthetic fabrics and man-made fibre (MMF). Increasing the GST rates will discourage the entire value chain and affect millions of workers as manufacturers would be forced to go for job cuts.

Source: Financial Express

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Recent reforms to lay base of higher growth: India's CEA Subramanian

The recent reforms initiated by the Indian government will lay the foundation of higher growth, according to the country’s chief economic advisor (CEA) Krishnamurthy Subramanian, who recently told the Confederation of Indian Industry (CII) Global Economic Policy Summit 2021 that the government’s production-linked incentive (PLI) scheme is directed towards growth. There is an impelling need to improve the competitiveness of the manufacturing sector which, in turn, will help in job creation and promote inclusive growth, he said. Subramanian also stressed that the economies of scale is one of the most important aspects to reduce average costs and thereby becoming competitive, not only in the domestic market but also in international markets, a news agency reported.

Source: Fibre 2 Fashion

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Ludhiana: Textile industry seeks rollback of GST hike

With the Union government recently increasing goods and services tax (GST) on garments and textiles from 5% to 12%, the Chamber of Industrial and Commercial Undertakings (CICU) has written to Union finance minister Nirmala Sitharaman seeking a rollback of the decision. With the Union government recently increasing goods and services tax (GST) on garments and textiles from 5% to 12%, the Chamber of Industrial and Commercial Undertakings (CICU) has written to Union finance minister Nirmala Sitharaman seeking a rollback of the decision. The letter stated that the textile and garment industry is already struggling for survival amid the pandemic, and this move by the government will push it into a deeper crisis. The industrialists rued that this will impact business at large as prices of woven and knitted fabrics, knitted garments, textile garments etc will increase. Also, it will adversely impact export, as the sector will not be able to compete at the international market and lead to rampant tax evasion, stated industrialists. CICU president Upkar Singh Ahuja said the industry had also opposed an increase in the GST rate, but the government notified it, ignoring their needs and demand. “We have written to Sitharaman to roll back the order, failing which the industry, especially the small units, will collapse,” Ahuja said. The industrialists stated that rising prices of raw material have already been taking a toll on the business. Knitwear and Textile Club president Vinod Thapar said, “Rather than helping the industry by bringing down the prices, the government has added to our woes. The industry will not be able to survive for long under these circumstances and this hike will further encourage tax evasion. The tax rate should be reduced to 5% to save the industry.” Earlier, a group of industrialists under the banner of Bhartiya Aarthik Party (BAP), had announced a protest outside the house of Prime Minister (PM) Narendra Modi in Delhi on November 25. National president of the party, Tarun Jain Bawa, stated that the agitation has been postponed for now as officials from the PM office have invited them for discussing the problems on Wednesday.

Source: Hindustan Times

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Strong demand to drive Indian textile sector's recovery: Ind-Ra

 India Ratings and Research (Ind-Ra) has maintained an improving outlook on the overall textile sector for the remainder of fiscal 2021-22 (FY22) on the back of the likelihood of a rise in revenue with improving operating margins due to continued strong demand, despite minor disruptions in the first quarter (Q1) of FY22 due to the second wave of COVID-19. The domestic as well as export demand may sustain during the rest of FY22, leading to improved YoY sales volumes, the rating agency said in a media release. Ind-Ra has maintained the rating Outlook at Stable for the reminder of FY22, expecting a sustained improvement in the sector players’ profitability and the continued deleveraging of their balance sheets. The strong operating cash flows will lead to an improvement in their credit metrics, despite the likely increase in the working capital requirement on the back of the higher sales volumes and increased capital expenditure. The benefits of integrated business operations, healthy balance sheet liquidity and operating efficiencies over FY22 have already been factored into the ratings. Sector players in the ‘IND A’ and above rating categories have demonstrated resilience to COVID-19-led disruptions, given their adequate-to-superior liquidity profile. Ind-Rarated portfolio witnessed an improvement in both liquidity and credit metrics, supported by the strong operating cashflows in first half (H1) of FY22. The agency has changed the rating Outlook to Stable from Negative on the small and mid-sized commodity pure-plays, due to an expectation of a sustained recovery in demand and prices for FY22. The domestic demand improved over second half (2H) FY21 before declining marginally during Q1 FY22, due to the closure of malls and retail spaces in cities. The demand is likely to improve from H2 FY22 with the easing of restrictions but remain vulnerable to any further restriction. Also, the demand from spinning mills seems to be recovering ahead of festivities in India. During Q1 FY22, players witnessed a rise in volumes YoY, although it declined marginally QoQ, according to Ind-Ra. Segments such as cotton yarn and fabrics witnessed a higher YoY demand from downstream players during H1 FY22. The domestic demand for home textile has sustained, whereas that for woven fabric and apparel is likely to improve with the opening of retail shops and malls from H2 FY22. Textile exporters in the cotton and yarn segment continued to witness an improvement in the export of yarn during H1 FY22 with cotton yarn volumes increasing by over 45 per cent during M4 FY22 over FY20 and FY21. Ind-Ra expects export volumes to remain higher for FY22 over FY20 and FY21, owing to the increasing demand for Indian yarn. The export of fabric and apparel also recovered back to the pre-COVID levels during M4 FY21 and is likely to sustain with the unlocking of economic activities and the adoption of China Plus One strategy by importing countries. Apparel and fabric exports during M4 FY21 were up 87 per cent and 108 per cent, respectively, on a YoY basis, due to the low base effect and reached pre-COVID levels. The agency expects the export demand to improve moderately in H2 FY22 due to accelerated vaccination and China Plus One sourcing strategy. The demand is likely to improve further FY23 onwards. Furthermore, the ongoing impact of the sourcing restriction of China (Xinjiang) cotton, could play an important role in boosting the demand, the agency said.

Source: Fibre 2 Fashion

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Republic Economic Summit: Indian Textile Industry 'knits' Future Amid COVID Pandemic

According to data, the Indian textile industry had a passive reaction to the economic imbalance witnessed during the COVID-19 pandemic. The Indian textile and apparel industry is one of the oldest and largest sectors in the Indian economy which is extremely varied, from hand-spun and hand-woven textiles to the capital-intensive sophisticated mills' sector. The industry which is closely linked to the agriculture sector for raw materials like cotton had a passive reaction to the economic imbalance witnessed during the COVID-19 pandemic. According to Invest India data, India is the sixth-largest exporter of textiles and apparel in the world and it contributes 5% to the country’s GDP, 7% of industry output in value terms, and 12% of the country’s export earnings. In the lead-up to the first-ever Republic 'India Economic Summit', which will see the most influential names in the industry and the economic world come together to put the world's fastest-growing major economy under the microscope, Republic World is taking an indepth look into some of its key drivers. Here’s a look into how India’s textile industry held firm across the entire value chain from fiber, yarn, fabric to apparel amid the COVID pandemic.

India's Textile Industry: The COVID scenario Initially, the COVID-19 pandemic tore into the textile industry of India as the garment factories were forced to shut down or work at half capacity to curb the Coronavirus infections. But, when the country re-opened, India exported textile products worth Rs 1.77 lakh crore between January and July 2021, IBEF (India Brand Equity Foundation) informed. It is to be noted that the industry exported 52.6% more than the same period last year and 13.7% more than the pre-pandemic market of 2019. One of the factors that kept the industry alive amid the pandemic was the export of textile products to the US. According to an analysis of US International Trade Commission data by the Peterson Institute for International Economics, “India makes up about 16 percent of textile imports to the U.S. and about 5 percent of apparel and accessories”.

Textile industry market growth rate As per the National Investment Promotion & Facilitation Agency, “In 2019-20, the domestic textiles and apparel industry stood at $108.5 bn of which $75 bn was domestically consumed while the remaining portion worth $28.4 bn was exported to the world market”. From April 2016 to March 2021, the highest contributors to FDI in India's textile sector were Japan, Mauritius, Italy, and Belgium. According to the data, about 5.8 million farmers rely on cotton production while 40-50 million people depend on allied sectors. Export of cotton yarn, fabrics, made-ups, handloom products and others was valued at $33.28 bn in August 2021 with a positive growth of 45.76% over exports of $22.83 bn in August 2020.

Future of Indian textile industry For the past five years, the textile industry has seen a rise in investment as it attracted Foreign Direct Investment (FDI) worth $3.75 billion from April 2000 to March 2021. To further boost manufacturing, increase exports and attract investments to the sector, the production-linked incentive (PLI) scheme for man-made fiber and technical textiles is available under the Aatmanirbhar Bharat package. Owing to the pandemic, the demand for technical textiles in the form of PPE suits and other equipment has increased and so the country has begun to work on various initiatives to boost its technical textile industry. Government and top players in the sector plan to support the industry through funding and by manufacturing textiles using recyclable materials. With strong domestic consumption and export demand, the future of the Indian textile and apparel industry looks promising. Also, in the past decade, the retail sector witnessed rapid growth with the entry of many international players including Marks & Spencer, Guess, and Next into the Indian market.

Source: Republic World

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RAI urges govt to reconsider proposed GST rate hike on textiles, apparels

Stating that the apparel retail businesses are already ailing, RAI said the 7 per cent hike has been proposed to address the issue of inverted duty structure in the textile industry faced by a small segment of the total textile value chain. Retailers Association of India (RAI) on Tuesday urged Finance Minister Nirmala Sitharaman, state governments and GST Council to reconsider the proposed hike in GST rates on several textiles and apparel items to 12 per cent from January saying it will adversely impact 85 per cent of the sector. Stating that the apparel retail businesses are already ailing, RAI said the 7 per cent hike has been proposed to address the issue of inverted duty structure in the textile industry faced by a small segment of the total textile value chain. "However, such a steep increase in the GST rate will adversely impact 85 per cent of the industry while trying to ease the problem faced by not more than 15 per cent of the industry," the retailers’ body said in a statement. RAI CEO Kumar Rajagopalan said, "The increase in GST rates on textiles and apparel is not in anybody’s interest due to its impact. On the business side, it will add to the financial burden of an already-stressed sector, slow down its pace of recovery and affect working capital requirements especially in the case of MSME businesses which account for 90 per cent of the industry.” On the consumer side, he added, "It will lead to a rise in the prices of garments, thereby hurting consumption. On the government side, in the long run, it may lead to many unorganised businesses going out of the GST net." RAI asked "the central and state governments and GST Council to reconsider its decision to prevent a complete collapse of the sector and maintain an atmosphere of hope and certainty." It further said, "A far more beneficial and reasonable solution is to make the entire value chain subject to a flat 5 per cent GST rate. This will not only resolve the inverted duty structure anomaly but also give a fillip to the industry."

Source: Money Control

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Bangladesh's BTMA demands raising EDF loan cap

The Bangladesh Textile Mills Association (BTMA) recently demanded an increase in and extension to loan limit from the Export Development Fund (EDF) for millers from the $30-million cap now to $40 million until December 2022. It also demanded bringing down the interest rate of the loan to 1.75 per cent. The trade body wrote a letter to Bangladesh Bank on the issue. BTMA claimed that the weaving, dyeing, printing and finishing mills were not receiving the facility of enhanced loans from EDF. BTMA president Mohammad Ali Khokon said in the letter that prices of raw materials, particularly raw cotton, yarn, dye chemicals, have increased by almost 100 per cent in the global market. For this reason, the limit of $25 million is not enough. Based on the current price of raw materials, the limit should be $35-$45 million, he said. The facility should be extended till December 30, 2022, as the disruption caused by the pandemic still continues and the recovery may take two to three years more, the organisation was quoted as saying by Bangla media reports. The trade body also requested the central bank to consider the proposals to facilitate the manufacturers and exporters to maintain their supply chain and sustain the local textile industry. According to millers, along with abnormal hikes in the price of raw materials, freight fares have also increased significantly, which brought additional pressure on them.

Source: Fibre 2 Fashion

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Vietnamese investment abroad rises by 35.1% in 1st 10 months of 2021

Vietnam’s overseas investment totalled $646.03 million in the first ten months of 2021, up by 35.1 per cent year on year, according to data from the ministry of planning and investment. The United States was the leading destination of Vietnamese investment during the period with investments worth $305 million, followed by Cambodia ($89.4 million), Israel ($66.6 million) and Laos ($48 million). Industrial production in October prospered when the social distancing measures eased, production and business activities gradually recovered to a new normal status. The index of industrial production (IIP) in October was estimated to increase by 6.9 per cent over the previous month and decrease by 1.6 per cent over the same period last year. In the first 10 months of this year, IIP increased by 3.3 per cent over the same period in 2020. The number of newly-established enterprises in October increased in both quantity and registered capital compared to the previous month. The number of re-operated enterprises increased by 29.8 per cent over the previous month. In October 2021, the country had 8,233 newly established enterprises with combined registered capital of 108.6 trillion VND—an increase of 111.2 per cent in the number of enterprises, a rise of 73.9 per cent in the registered capital and an increase of 17.9 per cent in the number of employees compared to September. The average registered capital of a newly established enterprise in the month reached 13.2 billion VND, a decrease of 17.6 per cent compared to September, and a decrease of 2.8 per cent compared to October 2020. However, import and export activities in October continued to be affected by the pandemic. The total import and export turnover of goods went down by 0.4 per cent compared to September and up by 4 per cent over the same month last year. Export turnover in September 2021 reached $27.03 billion, while the same in October was estimated at $27.3 billion. In ten months, the export turnover was estimated at $267.93 billion, a rise of 16.6 per cent over the same period in 2020. Gross retail sales of consumer goods and services in October 2021 were estimated at 357.9 trillion VND, up by 18.1 per cent over the previous month and down by 19.5 per cent over the same period last year.

Source: Fibre 2 Fashion

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China to bolster textile sector

Cooperation in cotton industry providing possibilities for textiles If you walk into a clothing store in any shopping mall in a major Chinese city – whether it is an international or a local brand – “Country of Origin: Pakistan” hang tag is not uncommon. Especially in the jeans wear section, these high-quality Pakistani products are increasingly popular with Chinese consumers. According to the Pakistani government, the textile industry contributes nearly 60% to the country’s total exports. Denim fabric, as one of Pakistan’s main garment products exported to the world, occupies a pivotal position in its garment industry chain. According to the Pakistan Bureau of Statistics (PBS), exports of denim fabric from Pakistan reached Rs96.92 billion during the year 2017-18, a commendable performance of the denim sector. However, whether it is jeans wear or other garment products, the impact of recent global cotton prices and other factors cannot be ignored. Pakistani industrialists argue that the textile and garment industry of the country faces a series of challenges, including low production of cotton and difficulty in obtaining financing for new facilities.

Cotton industry: China-Pakistan cooperation Pakistan, one of the world’s largest cotton producers, is finding it increasingly hard to meet its own needs. “Last year, we had to import more than 50% of cotton,” said Sapphire Fibre Executive Director Muhammad Abdullah. Low production and quality force the local industry to choose imports. “So far, the domestic consumption of cotton is 14 million bales. Nevertheless, Pakistan only harvested 5.6 million bales of cotton in the last season,” he said. “As far as I am concerned, the seed of high quality must be the top priority. Unless we can increase the yield per unit area, the demand cannot be met,” he added. The idea of Muhammad Abdullah was echoed by Central Cotton Research Institute Director Zahid Mehmood. “Under CPEC, we hope to see the plan between China and Pakistan in cottonseed cooperation soon,” he said. Regarding this, Xinjiang Agricultural University Deputy Dean Chen Quanjia introduced further planning during an interview with China Economic Net. “Local high temperature-resistant cotton varieties in Pakistan are of great use to us,” Quanjia said. “In Xinjiang, the heat resistance of cottonseed is particularly indispensable when facing the extreme high temperature. At the same time, our high-yielding cotton varieties are also needed for Pakistani farmers,” he said. Recently, international cotton futures have remained high, and China’s domestic cotton futures prices have also risen simultaneously. According to a survey conducted by the China Cotton Association, the country’s cotton planting area this year has dropped year-on-year, but due to favourable weather conditions, the total output remains relatively stable. It is expected to be 5.83 million tons, down 1.5% year-on-year. Improving cotton production to maintain the stability of the futures market will be a problem, demanding prompt solutions from China and Pakistan. Besides, the impurity, which is caused by 100% manual picking, also worsens the dilemma of Pakistan cotton. Sapphire Fibre cotton field supervisor Kamran Razaq said that the impurity content of imported cotton is 4.5%, while the counterpart in Pakistan cotton is 8-9%, which is well below the criteria of textile mills. Accordingly, Xinjiang Agricultural University and University of Agriculture Faisalabad (UAF) have set up experimental fields in Faisalabad and plan to test mechanical picking in Pakistan. “In north Xinjiang, one of the biggest cotton areas in China, the mechanisation can reach 90%. We use machine picking everywhere so as to decrease the impurities,” Chen Quanjia said, adding that in future, China’s advanced cotton pickers can play a role in Pakistan as well.

CPEC projects: cures for textile Apart from raw material shortage, financing difficulty is also a restraining factor in Pakistani textiles. In this regard, China and Pakistan are seeking for a wider cooperative space. National Textile University Faisalabad Chairman of Department of Garment Manufacturing Abher Rasheed told CEN that Pakistan and China can collaborate in two main areas, which are accessories and fabric. China has the capacity in both areas while Pakistan has a comparatively cheaper workforce available. Joint ventures in both areas could create a positive impact, he emphasised. Obviously, his ideas coincide with some Chinese entrepreneurs with a strategic vision. “The strong bilateral ties between China and Pakistan provide great convenience for our local investment,” said Karen Chen, Managing Director of Challenge Fashion, a Chinese company investing $150 million in an industrial park on Lahore’s border with Kasur.

Source: Tribune

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