Goyal's remarks come days after Congress spokesperson Gourav Vallabh criticised the government saying that while China was renaming places in Arunachal Pradesh and setting up villages in Indian territory, the government was still carrying on with 100- billion-dollar trade with China. Commerce and Industry Minister Piyush Goyal on Monday said there was no extraordinary increase in trade with China and that the trade deficit with the neighbouring country has come down to USD 44 billion in 2021 from USD 48 billion in 2014-15. The minister also said that from 2003 and 2013-14, when the United Progressive Alliance (UPA) was in power, imports from China had increased 1,160 per cent. There was also a 24 times increase in trade deficit from USD 1.5 billion in 2004-05 to USD 36 billion in 20-13-14, he added. Goyal's remarks come days after Congress spokesperson Gourav Vallabh criticised the government saying that while China was renaming places in Arunachal Pradesh and setting up villages in Indian territory, the government was still carrying on with 100- billion-dollar trade with China. "It (trade deficit) almost remains steady… I can assure you that there is no extraordinary increase (in trade) with China," Goyal said. He also noted that India's overall trade with Australia increased 102 per cent, South Africa 82 per cent, UAE 65 per cent and China only 44 per cent. About free trade agreements, Goyal said that India's FTA with the UAE is close to finalisation. India is also concluding the interim agreement with Australia, which will cover "large areas of interest particularly our labour-oriented sectors like textiles, pharma, footwear, leather products and agricultural products," he said. India is also planning to launch FTA negotiations with the UK later this month and put in place an interim agreement by March this year while talks with Canada are expected to be launched in the next 2-3 months, the minister said.
Source: Economic Times
A textile park will be started in Kalaburgi soon as part of the strategy for encouraging industrial development, Large and Medium Industries Minister Murugesh Nirani announced in Kalaburgi on Monday. He was addressing a function after inaugurating the 'Be an Industrialist, Give Employment', organised by the Commerce and Industries Department at the Dr B R Ambedkar Bhavn of Gulbarga University. The Minister said the State Government has taken up the issue with the Union Government and had received a positive response. Nirani said Raichuru, Koppal, Bidar and other surrounding districts grow cotton and the start of the textile park will be very helpful to the farmers. The State Government will offer all facilities and necessary basic infrastructure for the entrepreneurs taking up projects in the Textile Park besides providing power from the wind and solar power generation plants that will be coming up. The Minister mentioned that the textile park will provide several employment opportunities to the local people as the State Government has already identified 1,600 acres of land in Kalaburgi. The government wants to develop the region as a textile hub and was ready to offer all necessary facilities and incentives, he said. Lok Sabha member Dr Umesh Yadav, legislators Basavaraj Mattimoda, Rajkumar Patil Telkur, Appugowda Patil Revoor, Shashil Namoshi and G T Patil, Industries and Commerce Department Additional Chief Secretary E V Ramana Reddy, Commissioner Gunjan Krishna, KIADB Chief Executive Officer Shivakumar and others attended the function.
Source: Daiji World
The Nomura India Business Resumption Index which tracks and compares the activity for a particular week inched up to 120.3 for the week ending 2 January from an upwardly revised 120.2 during the prior week (119.8 previously). Even as India is at the cusp of third wave, business activity has remained high last week, a Japanese brokerage firm said on Monday. It said that even though the impact of the new wave would not be as severe as the previous waves, but Omicron-induced restrictions could derail the recovery in contact-intensive sectors in the January-March quarter. The Nomura India Business Resumption Index which tracks and compares the activity for a particular week inched up to 120.3 for the week ending 2 January from an upwardly revised 120.2 during the prior week (119.8 previously). “India seems to be on the cusp of a third wave. While early signs point to a lower mortality rate, it bears close monitoring, Nomura said in a statement. The restrictions could derail the recovery in contact-intensive services in Q1, but global experience suggests a smaller impact than previous waves and a swift growth rebound once cases peak, it said in a statement. As per the index, Apple driving index rose 10.4 percentage point (pp), but Google workplace mobility index fell by 6pp and the retail & recreation mobility index rose by 0.6pp over the week. The labour participation rate inched down marginally to 40.6% from 40.7% in the prior week. While power demand too fell by 3.1% week-on-week after a 2.5% rise the prior week. New daily cases rose to 33,750 on Sunday from ~6500 a week ago. Maharashtra, Delhi and West Bengal are at the forefront, but case numbers in other states are also rising sharply, with 1700 confirmed Omicron cases so far, Nomura pointed out. The vaccination pace rose to ~6.5 million per day in December from 5.4 million in November, with ~44% of the population fully vaccinated. States have announced more restrictions, but elevated mobility and a rising positivity rate suggest a further rise in new cases, it said. In its previous report, it had suggested that the economy remains on recovery path despite fear of surging omicron cases, tightening policy by central bank and inflationary pressure.
Source: Economic Times
The country’s exports in December 2021 surged 37 per cent on an annual basis to USD 37.29 billion, the highest-ever monthly figure, on the back of healthy performance by sectors like engineering, textiles and chemicals, even as the trade deficit widened to USD 21.99 billion. Imports in December too rose by 38 per cent to USD 59.27 billion on account of an increase in oil imports, which soared 65.17 per cent to USD 15.9 billion, government data showed on Monday. Gold imports expanded by 4.5 per cent to USD 4.69 billion. Exports in December 2020 stood at USD 27.22 billion, while imports aggregated to USD 42.93 billion. Trade deficit was at USD 15.72 billion. Cumulatively, during April-December 2021-22 exports rose by 48.85 per cent to USD 299.74 billion. Imports during the period increased by 69.27 per cent to USD 443.71 billion, leaving a trade deficit of USD 143.97 billion. In December 2021, exports of engineering goods grew by 37.27 per cent to USD 9.7 billion, followed by petroleum products (140 per cent to USD 5.6 billion), gems and jewellery (15.8 per cent to USD 2.98 billion), chemicals (26 per cent to USD 2.64 billion) and ready made garments of all textiles (22 per cent to USD 1.46 billion). Addressing a press conference, Commerce Minister Piyush Goyal said India’s merchandise exports will cross USD 400 billion this fiscal. With USD 300 billion in the first nine months of 2021-22 we are on track to achieve our target…This growth is satisfying and we must aspire for more,” Goyal said. He added that the third wave of COVID-19 is impacting developed economies like the US, Europe and the Middle East, and problems related to shipping lines can be expected. “We don’t immediately see any supply disruptions or in the supply chains because by and large the world has seen that the effects of this wave are relatively less harmful and the western world has not restricted any movements as yet. “We’ve also not seen instances of lockdowns being announced in any major country,” Goyal said, adding that the only problem could be temporary in the form of some shipping staff getting infected with COVID-19, causing short-term disruptions. “Most cases are asymptomatic and recover very quickly. Hopefully supply lines and supply activity will continue in full steam,” he said. Commenting on the numbers, Federation of Indian Export Organisations (FIEO) President A Sakthivel said looking at the current trend, India will achieve the USD 400 billion merchandise exports target for the fiscal. Goyal also said the country is well on track to go up to USD 230 billion or upwards in services exports this fiscal, which will also be an all-time high. “We have seen a USD 179 billion services exports in first nine months,” he said. He also said exports from Uttar Pradesh are expected at Rs 2 lakh crore this fiscal, up 60 per cent from Rs 1.23 lakh crore last year.
Source: The Print
Indian exporters of leather goods, garments and carpets have begun to witness a fall in orders from Europe, requests to push deliveries by a few weeks, and queries related to various restrictions being put in place to control the rapidly rising cases of the Omicron variant of Covid-19 in the country Indian exporters of leather goods, garments and carpets have begun to witness a fall in orders from Europe, requests to push deliveries by a few weeks, and queries related to various restrictions being put in place to control the rapidly rising cases of the Omicron variant of Covid-19 in the country. Likely manpower crunch, especially in logistics, high freight and restrictions across the globe, could dent India's exports in the first quarter of 2022, they said. "Queries have slowed as fear has set in among global buyers. Orders from Europe have slowed down and we expect retail sales to get hit," said Yogesh Chaudhary, director, Jaipur Rugs. Buyers in the US, who were earlier asking for earlier delivery of their orders, have delayed it by a few months, Chaudhary said. Exporters said that buyers who had earlier predicted strong demand, are now reforecasting it for the next 2-3 months. India's exports hit a nine-month low at $30.04 billion in November. As per Rafeeque Ahmed, chairman of Chennai-based Farida Group, one of India's largest shoe manufacturers and exporters, and a vendor to Adidas, Clarks, Marks & Spencer, Debenhams and Bally Shoes, among others, clients in the US are inquiring about the various restrictions in India. "We are running at full capacity now and maybe we can increase production a bit more to prepare for the bad days ahead. Business will get affected once the transport-related restrictions come in place," Ahmed said. A Delhi-based exporter of garments expects deferred order flows as many activities are expected to shut down globally in the next few days once client return from their holidays.
Source: Economic Times
India's manufacturing sector activities moderated in December but output remained in the growth territory, amid slower rise in sales and new orders, even as business sentiment was dampened by concerns surrounding supply-chain disruptions, COVID-19 and inflationary pressures, a monthly survey said on Monday. The seasonally adjusted IHS Markit India Manufacturing Purchasing Managers' Index (PMI) eased to 55.5 in December, from November's ten-month high of 57.6. The December data pointed to a "substantial, albeit slower, rises in sales and output", the survey said, adding that the latest quarterly reading was at 56.3, its highest since the final quarter of fiscal year 2020/21. The December PMI data pointed to an improvement in overall operating conditions for the sixth straight month. In PMI parlance, a print above 50 means expansion, while a score below 50 denotes contraction. "The last PMI results of 2021 for the Indian manufacturing sector were encouraging, with the economic recovery continuing as firms were successful in securing new work from domestic and international sources," Pollyanna De Lima, Economics Associate Director at IHS Markit, said. Lima, however, noted that "manufacturers were optimistic that output would continue to increase in 2022, but business sentiment was somewhat tamed by worries surrounding the path of the pandemic, inflationary pressures and lingering supply chain disruption. The survey noted that the upturn in new orders during December was sharp, despite being the slowest since September. Similarly, production rose at a sharp pace that was nevertheless the weakest in three months. Spending trends were mixed, with employment falling fractionally in response to a lack of pressure on capacity, but firms purchasing additional inputs amid restocking efforts. Further, international demand for Indian goods continued to improve in December. New export orders rose for the sixth month in succession, albeit only slightly, the survey said. On the prices front, although input costs rose sharply, and at an above-trend pace, the rate of inflation eased to a threemonth low. "Despite easing in December, input cost inflation was still running at one of its highest rates in around seven-and-a-half years. The vast majority of firms nevertheless decided to keep their selling prices unchanged, in order to boost sales, with overall charges up only marginally in December," Lima said. Concerns over elevated price pressures hampered business confidence in December, with firms also worried that the pandemic and supply-chain issues could dampen the recovery next year. "The overall degree of optimism remained below its long-run average, despite improving from November's 17-month low," the survey said.
Source: Economic Times
After the Goods and Services Tax Council deferred the increase in the GST rates for the textile and garment business, the local industrialists now want the GST on scrap to be reduced from 18 to 5%. The industrialists had raised this demand a few months ago as well, when they had also requested state finance minister Manpreet Singh Badal to try and convince the central government to reduce the GST. The businessmen argue that this reduction will curtail bogus billing that hurts genuine businessmen. Induction Furnace Association of North India general secretary Dev Gupta said: "The GST council took a big decision when it deferred the hike in GST on textiles and garments from 5 to 12%. Compared with that, the tax on scrap is 18%. If they cut it to 5%, the government will get several hundred crore more rupees in revenue." Gupta claimed that: Once the GST on scrap is fixed at 5%, it will put a full stop to bogus billing and, as a result, revenue will increase." Supporting his views, Fasteners Manufacturers Association of India president Narinder Bhamra said: "The present rate of GST on scrap is 18% while on several other input components, it is 5%. Organised gangs use this gap of 13% to do bogus billing, show fake sale, and purchase invoices to claim fraudulent input tax credit from the GST department, while those who do their business honestly also come under the radar." Bhamra said that in some cases, despite buying scrap, the businessmen get bills that somewhere down the supply chain have bogus suppliers, so despite no fault of theirs, the genuine businessmen get penalised by the department. We the Ludhiana industrialists, therefore, request the GST council to reduce the tax on scrap to 5%."
Source: Times Of India
According to rating agency CRISIL, the domestic textile industry is firmly on course to recover in fiscal 2022 on the back of reopening of businesses, educational institutions and retail outlets. Shares of textile companies continued their northward movement on improved outlook. Vardhman Textiles and Sangam India hit their respective record highs, while Cantabil Retail touched a 52-week high on the BSE in Monday’s intra-day trade. In the past one month, Vardhman Textiles, Trident, Alok Industries, Himatsingka Seide and Cantabil Retail have seen their market price risen between 20 per cent and 25 per cent. In comparison, the S&P BSE Sensex was up 2 per cent during the same period. According to rating agency CRISIL, the domestic textile industry, which had seen demand slump in fiscal 2021 owing to onset of the Covid-19 pandemic, is firmly on course to recover in fiscal 2022 on the back of reopening of businesses, educational institutions and retail outlets with increase in the vaccinated population. Sanctions on Chinese textiles have boosted Indian textile exports as well. Government announcements such as the Production Linked Incentive scheme, setting up of mega textile parks, and extension of the Rebate of State and Central Taxes and Levies scheme are also supporting the sector, the rating agency said. Meanwhile, the Goods and Services Tax (GST) Council on Friday decided to defer the hike in tax rate on textiles from 5 per cent to 12 per cent. "The Indian Textile and Apparel (T&A) production market is $106 billion as of FY21 with around 70 per cent of the demand being driven by the domestic market. India’s T&A exports, which were steady at $36-38bn since FY15, are anticipated to reach an all-time high of $44bn in FY22 ̶a source of excitement of late for the sector. We believe the sector can grow at 16 per cent CAGR over the next 5 years led by higher exports and stable domestic market demand", analysts at Spark Capital said in an initiate coverage report of the sector. The Covid pandemic has altered the global T&A supply chain with several apparel brands preferring more than one sourcing destination. Further, the US-China trade war and the subsequent imposition of additional duties on Chinese T&A imports have led to importers in USA scouting for other destinations such as India. We observe that Made-ups sale in India has been a huge beneficiary of this trend and has witnessed robust offtakes over the past 18 months, the analysts said. Based on conversations with players across the spectrum, they said that there is an ambiguity over whether the current cotton prices and the subsequent yarn-cotton spreads are sustainable, prompting several buyers to be cautious during the current cotton harvest season. "With export demand set to prevail and supply increase being limited, we believe that cotton prices can hold firm over the near-term", an analyst added.
Source: Business Standard
A textile park will be started in Kalaburgi soon as part of the strategy for encouraging industrial development, Large and Medium Industries Minister Murugesh Nirani announced in Kalaburgi on Monday. He was addressing a function after inaugurating the 'Be an Industrialist, Give Employment', organised by the Commerce and Industries Department at the Dr B R Ambedkar Bhavn of Gulbarga University. The Minister said the State Government has taken up the issue with the Union Government and had received a positive response. Nirani said Raichuru, Koppal, Bidar and other surrounding districts grow cotton and the start of the textile park will be very helpful to the farmers. The State Government will offer all facilities and necessary basic infrastructure for the entrepreneurs taking up projects in the Textile Park besides providing power from the wind and solar power generation plants that will be coming up. The Minister mentioned that the textile park will provide several employment opportunities to the local people as the State Government has already identified 1,600 acres of land in Kalaburgi. The government wants to develop the region as a textile hub and was ready to offer all necessary facilities and incentives, he said. Lok Sabha member Dr Umesh Yadav, legislators Basavaraj Mattimoda, Rajkumar Patil Telkur, Appugowda Patil Revoor, Shashil Namoshi and G T Patil, Industries and Commerce Department Additional Chief Secretary E V Ramana Reddy, Commissioner Gunjan Krishna, KIADB Chief Executive Officer Shivakumar and others attended the function.
Source: Daiji World
After an unprecedented wave of layoffs, the sector recovered rapidly in the last quarter by abandoning its "zero-covid" policy. Vietnam, along with Cambodia, Bangladesh and more recently Burma, is a major supplier of clothing and textiles to the European Union (and the Western world in general). Its economy has been one of the best performing in 2020 (2.9 percent growth). Production has been on the rise since China, for the past decade, has wanted to move upmarket in its production. Nike, New Balance, Puma and Adidas, to name but a few, depend on this Southeast Asian country for much of their production. However, the pandemic - starting with the strict confinement of the Ho Chi Min region, with the army delivering the meals - did not spare this new workshop of the world. A trauma for the 1.3 million migrant workers who came from the countryside and returned to their native region from July to September. The country has indeed experienced the pandemic with the Delta variant, which caused a surge in infections from last summer. The epidemic bounced back in early November. On November 29, VnExpress International, the English version of Vietnam's leading news website, sounded the alarm: "Factories may be offering higher wages and better benefits to attract workers as their end-of-year order books fill up, but they are receiving few applications amid lingering fears of Covid-19. Same level as before the pandemic Bloomberg reported in November that a Nike subcontractor was offering 100 dollars a month bonuses to its workers - a quarter of their salary - and a New Balance supplier was promising free transportation for those returning to Ho Chi Minh City. Phan Thi Thanh, vice president of the Vietnam Leather, Footwear and Handbag Association, recently told Reuters that many Christmas orders from foreign countries would not be fulfilled. However, Le Courrier du Vietnam now claims that the sector is recovering, especially since the government has relaxed measures to prevent and control the epidemic, abandoning its "zero Covid" policy. Cao Huu Hiêu, general manager of Vinatex, told the Courrier du Vietnam that in October, 90 percent of the employees of the group's companies had already returned to work. At present, nearly 100 percent of the group's employees are present in their companies. "The high growth rate in the fourth quarter has enabled the textile and garment industry to achieve the export target of USD 39 billion for the whole year, an increase of almost 12 percent compared to 2020. Already, growth in the sector has returned to pre-Coronavirus levels. Exports to the EU have reached 3.7 billion dollars, up 14 percent. The good figures are explained by strategic choices: the high profits are due in particular to the choice of factory managers to give priority to the yarn industry, which has risen from 20 to 50-55 per cent of total production. The concern remains, however, that logistics costs are still four to five times higher than before the pandemic. Other challenges include a shortage of empty containers, shipping congestion that forces companies to deliver goods by air, and fluctuations in key export markets. The sector is targeting USD 38-39 billion in export sales in the worst case scenario, USD 42.5-43.5 billion in the best case scenario.
Source: Fashion United
The Turkish textile and apparel industry will have to pay higher prices for electricity and natural gas in the New Year. This too at a time when Western countries, especially those in Europe, are actively considering sourcing more of their textile and apparel from Turkey under their near-shoring strategy, and the country’s inflation is at a 19-year high. Citing the increase in global energy prices, the Energy Market Regulatory Authority of Turkey has raised power consumption charges by over 100 per cent for high-demand commercial users. Separately, BOTAS Petroleum Pipeline Corporation (BOTAS), the state-owned crude oil and natural gas pipelines and trading company in Turkey, has raised natural gas prices by 50 per cent in January. However, for electricity-generating industrial use, the price increase is 15 per cent. Meanwhile, the annual consumer inflation rate in Turkey has shot up to a 19-year high of 36.08 per cent in December, a sharp rise compared to 21.31 per cent in November. According to economists, the high rate of inflation is due to the decrease in value of lira, mainly owing to the policy of President Recep Tayyip Erdogan to keep interest rates low. Addressing an event in Istanbul last week, Erdogan urged citizens to keep all their savings in lira. He also advised people to deposit their gold savings with the country’s banks.
Source: fibre2fashion
The value of textile and garment exports from Pakistan increased by 28.41 per cent yearon-year in dollar terms in the first five months of fiscal 2021-22. During the period, Pakistan earned $7.758 billion from textile and apparel exports, compared to exports of $6.041 billion in July-November 2020, according to data from Pakistan Bureau of Statistics. Category-wise, knitwear exports rose by a sharp 36.62 per cent year-on-year to $2.059 billion during the five-month period, while exports of non-knit readymade garments were up 23.38 per cent to $1.48 billion. Among textiles, cotton yarn exports increased by 65.45 per cent to $503.897 million in July-November 2021, as against exports of $304.553 million made during the corresponding period of 2020. Exports of cotton fabric also rose by 22.30 per cent and were valued at $945.561 million during the period under review. Bedwear exports jumped by 23.55 per cent to $1.406 billion during the five-month period, the data showed. On the expenditure side, synthetic fibre imports shot up by 53.64 per cent year-on-year to $361.084 million, while imports of synthetic and artificial silk yarn rose 34.80 per cent to $344.121 million during July-November this year. Meanwhile, the value of textile machinery imports by Pakistan increased significantly by 97.93 per cent year-on-year to $361.737 million during the five-month period. In fiscal 2020-21 ending June 30, textile and garment exports from Pakistan increased by 22.94 per cent to $15.400 billion over $12.526 billion exports in the previous fiscal. In fiscal 2018-19, the value was $13.327 billion.
Source: fibre2fashion
China will further reduce tax and fee in 2022 to support small and medium sized enterprises (SMEs), Wang Jun, head of the State Taxation Administration, the country’s taxation authority, has said. In 2021, China has deferred an estimated 200 billion yuan of tax payments for MSMEs in the manufacturing sector to boost the country’s industrial economy. The new tax and fee reductions given in 2021 are expected to be more than 1 trillion yuan (about $157 billion), Jun said at an annual meeting. In the past six years from 2016 to 2021, the total reduction in tax and fee was over 8.6 trillion yuan. This year, the Chinese government will also take further steps to tighten regulation on taxes, and will impose severe punishments on all tax evasion, the meeting was told, according to Chinese media reports.
Source: fibre2fashion
About $250 million of textiles exports were lost last month after mills in Punjab were forced to shut for 15 days, said Shahid Sattar, executive director of All Pakistan Textile Mills Association Pakistan’s natural gas shortage is hurting its most important export industry, putting even more stress on an economy already struggling with accelerating inflation and a weakening currency. About $250 million of textiles exports were lost last month after mills in Punjab were forced to shut for 15 days, said Shahid Sattar, executive director of All Pakistan Textile Mills Association. Factories in the province are dependent on regasified imports of liquefied natural gas, while domestic supply is being diverted to other regions, he said. Pakistan has become a fast-growing import market for LNG as local supply has subsided over the last few years. But competition for the fuel -- used as an electricity feedstock and for heating and cooking -- has intensified due to global shortages, sending spot prices to levels that Pakistan can’t afford. The textiles industry -- which supplies everything from denim jeans to hats to buyers in the U.S. and Europe -- is one of the country’s few economic bright spots. Production grew almost 6% in the nine months through March 2021 and the sector accounted for 60% of total exports, government data show. “The high gas prices are prohibitive,” Sattar said in an interview. The “supply shortfall is due to the energy ministry’s inability to arrange supply, and is hurting the very future of Pakistan’s exports and economy.” The country exported $11.4 billion of textiles in the nine months through March 2021, according to government data. Based on those figures, the $250 million probably amounted to around 20% of Pakistan’s textiles exports last month, according to Bloomberg calculations. The gas shortage is hitting Pakistan at a critical economic and political juncture. The country is struggling with accelerating inflation and a weakening currency, with support for Prime Minister Imran Khan’s ruling party ebbing ahead of national elections due in 2023. The government also needs to raise taxes, and has just increased petrol price levies, as a pre-condition to resume its $6 billion bailout program with the International Monetary Fund. Officials at the energy ministry didn’t respond to phone calls seeking comment. Pakistan, which is heading into the coldest months of the year, issued an emergency tender to import more LNG in November after suppliers backed out from deliveries amid skyrocketing prices and surging global demand. More recently, gas trader Gunvor told Pakistan it would be unable to make a delivery scheduled for Jan. 10. The country faces gas shortages every winter because Pakistan’s natural gas fields are seeing a depletion of about 9% each year and imported LNG is very expensive, Energy Minister Hammad Azhar said at a press briefing in late December. Pakistan announced a bidding round to help find more oil and gas reserves, Azhar said in a Twitter post on Friday. The government restored gas supplies to the textiles sector last Wednesday, but frequent power blackouts are still curbing operations, Sattar said. Mills will only be able to run at about 80% of capacity if the situation persists, he said. “Our history is littered with episodes of ‘stop-go’ growth caused by energy shortages and exorbitant costs, both of which are the result of mismanagement” by the government, Sattar said.
Source: Bloomberg
