Textiles have a very long history in India. Known as the land of beautiful fabrics over the ages, India is home to a textiles industry that has been a very important part of the country. However, the country’s recent performance in global trade has not been commensurate with its abilities. Exports declined by 3 percent during 2015–2019 and by 18.7 percent in 2020. And yet during the same period, other lowcost countries such as Bangladesh and Vietnam have gained share. A variety of factors have contributed to India’s recent trade performance. India has factor cost disadvantages (example, power costs 30 to 40 percent more in India than it does in Bangladesh). Lack of free or preferential trade agreements with key importers, such as EU, UK and Canada for apparel and Bangladesh for fabrics, puts pricing pressure on exporters. The high cost of capital and high reliance on imports for almost all textiles machinery makes it difficult to earn the right return on invested capital. Longer lead times than for Chinese manufacturers make India uncompetitive, especially in the fashion segment. The trend of nearshoring in western economies has not helped either. However, COVID-19, which has triggered a recalibration of sourcing patterns (Chinaplus-one sourcing), has provided a golden opportunity for Indian textiles to regain a leadership position as a top exporting economy. India should strive to grow exports at a CAGR of 8 to 9 percent exports during 2019–2026, which should take exports to $65 billion by 2026. The Ministry of Textiles has set an even higher export target of $100 billion over the next five years. Achieving these targets could help generate 7.5 million to 10 million direct new jobs in textiles. For a sector that employs almost 45 million people in direct jobs across industry and farming, generating these many jobs will be a staggering achievement and will provide a big boost to the overall economy. Achieving the $65 billion exports target up from $36 billion in 2019—will require India to double down in five key areas: Apparel: Target a $16 billion increase by riding the China-Plus-One sentiment. India is suitably positioned on this, thanks to its relatively large strategic depth compared to Vietnam or Bangladesh. Fabrics: Target a $4 billion jump by positioning India as a regional fabric hub, starting with cotton wovens and then extending to other sub-categories. Home textiles: Target a $4 billion increase by building on existing advantages to expand the global customer base. Man-made fiber and yarn: Target a $2.5 billion to $3 billion jump with a focus on gaining share in MMF (man-made fiber) products Technical textiles: Target a $2 billion jump by building capabilities in select key sub-segments on the back of potential domestic demand growth. The path to achieving these targets will entail both government and industry taking crucial steps. And the government seems geared up for the challenge. The recent launches of multiple schemes such as MITRA, PLI, RoDTEP highlights this commitment. It will be critical for government to follow up these launches with efficient implementation and for industry players to leverage these schemes effectively. However, much more needs to be done. Achieving growth targets may require fresh investments of $20 to $25 billion. And attracting new investments will entail ensuring attractive returns on those investments. While PLI and MITRA are right steps to achieve the same, India must also explore either reduction in import duties on machinery or promoting indigenous manufacturing to bring down cost of capex. Other critical area will be to keep pursing free-trade / preferential-trade agreements with key importers (example – UK, EU, Canada) so as to make landed cost more competitive. Additionally, in order to ensure that businesses are able to scale up effectively and operate profitably, India must take necessary steps to not only boost factor cost competitiveness but also to optimize service levels, adopt digitization, build design capabilities and invest in sustainability & traceability to enhance global competitiveness If India wants to truly differentiate itself for global consumers, India must aim to project the country’s textiles industry as a one-stop destination for products that are manufactured in a sustainable manner in transparent value chains with best-in-class quality at competitive costs and lead times. India’s performance over the next five years could set the pace for many years to come. With the country’s global positioning and millions of jobs at stake, India will have to move—and move fast—on all identified frontiers.
Source: Economic Times
Mohit Agarwal, director at Asian Tea & Exports, said freight rates to places like Iran and Kazakhstan have gone up by $500-1,000 per container over the last 10 days. "We do not know what is driving this fresh surge in freight rates," he said. "The consignments are lying at the ports for a month or more at times. " Freightrates have started increasing once again after remaining steady in December, rising 10% in the first week of January, raising fresh concerns for exporters of basmati rice, tea, apparel and leather goods among others. The waiting time of consignments at ports has also increased to more than a month from 15 days, trade insiders said. Mohit Agarwal, director at Asian Tea & Exports, said freight rates to places like Iran and Kazakhstan have gone up by $500-1,000 per container over the last 10 days. "We do not know what is driving this fresh surge in freight rates," he said. "The consignments are lying at the ports for a month or more at times." Agarwal said he does not see freight rates cooling off in the immediate future. Some exporters that ET spoke with said they plan to pass on the rising cost to consumers eventually. "The container freight rates have gone up by 3-4 times as compared to last year. This cost will eventually be passed on to consumers in the coming days," said Ashwani Arora, CEO of LT Foods that owns rice brand Daawat. "However, we are not seeing any delay in delivery time to the consumer since LT Foods has made investment in automation, which has reduced the turnaround time of the container," he said. Ramesh Juneja, regional chairman of Council Leather Exports, however, said leather goods exporters are not sure whether they will be able to pass on the rising freight cost to buyers in Europe and the US as there is a lot of uncertainty due to the spread of Covid-19 Exporters also raised concern over demand. "Rising freight cost is a global phenomenon," said Ajay Sahai, director general of Federation of Indian Export Organisations (FIEO). "However, what is more important is how the export markets behave in the next fortnight in view of a surge in Covid cases." India achieved its highest-yet monthly exports of $37 billion in December, registering a jump of 37% year on year. The government has said the country is on track to achieve an export target of $400 billion, adding that the top 10 major commodity groups constituting 80% of exports grew 41% year on year last month.
Source: Economic Times
The Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal today called upon stakeholders in the innovation ecosystem to strive to take India to the top 25 in the Global Innovation Index. Our startups are the key reason behind India’s meteoric rise in Global Innovation Index from 76 in 2014 to 46 in 2021, Shri Goyal said. He was inaugurating ṭhe “Startup India Innovation Week Launch” virtually from New Delhi today. Expressing his delight at being able to participate in the first ever Startup Innovation launch week, Shri Goyal said that ‘Celebrating Innovation Ecosystem’, as a part of Azadi ka Amrit Mahotsav, was also a call to action for all of us to strengthen our startup ecosystem further. The Minister spoke of the need for institutionalizing the Startup Week Celebrations as an annual event so that we keep reviewing, reinventiing, rejuvenating and reenergizing our startup ecosystem. He said that there is a need for developing a futuristic outlook to pave the roadmap of the future while we celebrate our entrepreneurs. This virtual week-long innovation celebration aims to commemorate the 75th year of India’s independence ‘Azadi Ka Amrit Mahotsav’ and is designed to showcase the spread and depth of entrepreneurship across India. The startup and innovation festival's primary goal is to bring together the country's key startups, entrepreneurs, investors, incubators, funding entities, banks, policymakers, and other national and international stakeholders to celebrate entrepreneurship and promote innovation. Furthermore, to exchange knowledge on nurturing startup ecosystems; to develop entrepreneurial ecosystem capacities; to mobilise global and domestic capital for startup investments; to encourage and inspire the youth for innovation and entrepreneurship; to provide market access opportunities to startups; and to showcase high-quality, high-technology, and frugal innovations from India. The Minister emphasized that the event has been organized with whole of Government approach and in collaboration of 30 Departments. He also announced that the Participant registration for the Innovation Week had already crossed 1 lakh. Shri Goyal noted that this year marked the completion of 6 years of Startup India. The launch of ‘Startup India movement’ by Hon’ble PM in Jan’16, 2016 stirred the entrepreneurial spirit across India, he said. Terming the startups as the harbingers of change, the Minister said that our startups have changed the mind-set from “Can do” to “Will do”. Startup India, which started as a mission to promote Innovation has today become a revolution of National Participation and National Consciousness, he observed. Expressing confidence that the Prime Minister’s interaction with startups on the completion of 6 years of Startup India will encourage our entrepreneurs to dream big and achieve bigger, Shri Goyal said that our Startups turned COVID-19 crises into an opportunity and made 2021 the Year of unicorns; with 3rd largest number of Unicorns (82) in the world. Shri Piyush Goyal called upon entrepreneurs to think of building Startups that focus on Healthifying people at a time when the world is facing successive waves of pandemic. The Minister said that the New in New India symbolized the freshness of perspective and ideas that our startups bring. He added that our Startups were ‘Learning Earl, Learning Often, Learning from Experience and Learning from Others’. He asked innovators to celebrate failure, learn from their mistakes and turn them into stepping stones to success. He outlined 3 goals for Indian entrepreneurs, ‘Make in India’, ‘Innovate in India’, and ‘Mentor the next generation of entrepreneurs’. He also said that there was a need to make our startups much more resilient so that they are well prepared to mitigate and overcome crisis situations like the pandemic. The Minister observed that our young entrepreneurs are eager to make extreme impact and are fearless risk takers. He noted that today, almost 4 startups are recognised in India every hour with 45% belonging to Tier II & III cities and said that 46% of Startups are found by Women Entrepreneurs. Shri Goyal highlighted that the success of IPOs of many startups showcase their power to become the new Multi-National Corporations. He said that from 2018-21, more than 6 Lakh Jobs have been created by Startups and added that in 2021 alone, more than 2 Lakh jobs have been created. The Minister said that our Government has been acting as a ‘facilitator’ by focusing on simplification, facilitation and bringing ease in starting & doing business. Listing some measure taken by the Government to improve Ease of Doing Business, he said that there was an 80% rebate on patent filing and 50% on trademark filing fees, relaxation in public procurement norms, Self-Certification under Labour and Environmental Laws, Funds of Funds for Startups, Income Tax exemption for 3 out of 10 years and Seed Fund Scheme of Rs. 945 Cr. An improved IPR regime has resulted in the registration of 1.16 million trademarks in last 4 years, compared to 1.1 million registrations in last 75 years, he added. Referring to the proposed Open Network Digital Commerce (ONDC) initiative as a game changer will help our entrepreneurs to save cost as well as build trust, Shri Goyal said that ONDC would help bridge the gap between mighty Corporations and small startups and help bring in equity in the business ecosystem. He said that the mantra for startups for further growth is SENSE- Share, Explore, Nurture, Serve and Empower. He called upon entrepreneurs to take initiative to share their knowledge, experience, ideas and mentor others. He asked Startups to explore the unexplored areas like Rural Tourism in terms of agri-stays, hotels and homestays, creating additional income for farmers. He encouraged them to nurture new ideas and constantly try to develop new products. The Minister also called upon innovators to focus on “Prashasan Gaon Ki Aur”, ideas to improve last mile service delivery and empower our weavers, artisans and farmers and bring the market to their doorsteps. He opined that celebrations like the Startup India Innovation Week will definitely bring the spotlight on our innovators. The Minister said that ‘Startup India’ must become a symbol of Self Reliance and Self Confidence. Highlights of the week-long celebration are the Hon’ble Prime Minister’s interaction with startups, result Declaration of National Startup Awards 2021, launch of Doordarshan Startup Champions 2.0 show , roundtable with Global Investors and domestic funds, launch of Open Network for Digital Commerce Digital Strategy, participation by Ministry of Education, Niti Aayog, Office of PSA, DBT, DST, MeitY, Ministry of Defence and Ministry of Social Justice and Empowerment, among other departments, in various sessions, launch of ‘Fisheries Startup Grand Challenge’ by Department of Fisheries and pitching sessions and corporate connect programs for startups from across the country. Smt. Anupriya Singh Patel, Minister of State for Commerce and Industry, Shri Anurag Jain, Secretary, Department for Promotion of Industry and Internal Trade (DPIIT), Smt. Shruti Singh, Joint Secretary, DPIIT, Shri Abhiraj Singh Bhal, Co-Founder & CEO, Urban Company and Sanjeev Bikhchandani, Co-Founder, Info Edge also addressed the inaugural session.
Source: PIB
In a bid to discuss bilateral trade-related issues Union Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution and Textiles, Piyush Goyal, and Minister for Trade, Republic of Korea, H.E. Mr. Han-koo Yeo, will hold a bilateral meeting on Tuesday. The discussion will focus on addressing the large trade deficit, market access issues, and non-tariff barriers faced by Indian exporters. The discussion will also feature investment-related issues. The meeting is expected to further boost India-Korea trade relations in an equitable and balanced manner to the mutual advantage of both countries.
Source: Business Standard
Piyush Goyal, Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, inaugurated the 'Startup India Innovation Week Launch' virtually from New Delhi today Piyush Goyal, Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, inaugurated the 'Startup India Innovation Week Launch' virtually from New Delhi today. At the event, the Union Minister outlined three goals for the Indian entrepreneurs. At the launch, Goyal called upon stakeholders in the innovation ecosystem to strive to take India to the top 25 in the Global Innovation Index. He added, "Our startups are the key reason behind India’s meteoric rise in Global Innovation Index from 76 in 2014 to 46 in 2021." Expressing his delight at being able to participate in the first-ever Startup Innovation launch week, Goyal said that ‘Celebrating Innovation Ecosystem’, as a part of Azadi ka Amrit Mahotsav, was also a call to action for all of us to strengthen our startup ecosystem further. One must note that the startup and innovation festival's primary goal is to bring together the country's key startups, entrepreneurs, investors, incubators, funding entities, banks, policymakers, and other national and international stakeholders to celebrate entrepreneurship and promote innovation. Furthermore, to exchange knowledge on nurturing startup ecosystems; to develop entrepreneurial ecosystem capacities; to mobilise global and domestic capital for startup investments; to encourage and inspire the youth for innovation and entrepreneurship; to provide market access opportunities to startups; and to showcase high-quality, hightechnology, and frugal innovations from India. The Minister emphasized that the event has been organized with whole of government approach and in collaboration of 30 departments. He also announced that the participant registration for the Innovation Week had already crossed one lakh. Terming the startups as the harbingers of change, the Minister said that our startups have changed the mind-set from “Can do” to “Will do”. Startup India, which started as a mission to promote Innovation has today become a revolution of National Participation and National Consciousness, he observed. Expressing confidence that the Prime Minister’s interaction with startups on the completion of 6 years of Startup India will encourage our entrepreneurs to dream big and achieve bigger, Goyal said that our Startups turned COVID-19 crises into an opportunity and made 2021 the 'Year' of unicorns, with 3rd largest number of Unicorns (82) in the world. He further outlined three goals for Indian entrepreneurs, ‘Make in India’, ‘Innovate in India’, and ‘Mentor the next generation of entrepreneurs’. He also said that there was a need to make our startups much more resilient so that they are well prepared to mitigate and overcome crisis situations like the pandemic. Furthermore, it has to be noted that on the sixth day, PM Modi is expected to interact with startups and address Startup India Innovation Week at 10.30 AM via video conferencing in closed-door event. For this interaction, 150+ startups have been divided into six working groups based on themes such as “Growing from Roots; Nudging the DNA; From Local to Global; Technology of Future; Building Champions in Manufacturing; and Sustainable Development. The aim of the interaction is to understand how startups can contribute to the national needs by driving innovation in the country and how government can assist them with the same.
Source: Zeebiz
The 13 projects for which groundbreaking and inauguration have been undertaken today are spread over nine districts. Even in these difficult times amid the onslaught of COVID19, the state has attracted major investments and continues to enjoy the trust of investors," the CM said. Odisha Chief Minister Naveen Patnaik on Monday inaugurated two new industrial projects and performed groundbreaking ceremony for 11 others, all of which taken together entails an investment of Rs 2,360 crore. The projects, Patnaik said, will generate employment opportunities for at least 3,200 people. "The 13 projects for which groundbreaking and inauguration have been undertaken today are spread over nine districts. Even in these difficult times amid the onslaught of COVID-19, the state has attracted major investments and continues to enjoy the trust of investors," the CM said. He noted that the state has always endeavoured to provide a "hassle-free and smooth business environment" for investors in Odisha. "Today's event, where we launched new industrial projects of diverse sectors -- ranging from cement, food processing, tourism to logistics -- is a proof that our efforts in attracting investments have borne fruit," Patnaik said. The two projects inaugurated during the day -- a cement grinding unit at Jajpur and a bio-degradable tableware manufacturing unit at Bolangir -- are estimated to involve an investment of Rs 409 crore. Others projects for which the groundbreaking ceremony was conducted include three ethanol plants, two resorts and a logistic park.
Source: Economic Times
The India Pavilion at EXPO 2020 Dubai marked its 100th-day on Monday, becoming one of the most popular enclosures at 7,40,356 footfalls, showcasing the country's business potential as well as cultural and geographic diversity. On the occasion, Minister of Commerce & Industry Piyush Goyal tweeted, "100 glorious days of the India Pavilion shining bright at the @Expo2020Dubai. The world is witnessing #IndiaAtDubaiExpo as a hub of innovation, growth and opportunities. Visit the pavilion to experience the grand celebration of India's growth story." The India Pavilion was inaugurated on October 1 last year by Goyal, who is also the minister of consumer affairs, food, public distribution and textiles. The Expo, inaugurated on October 1, 2021 will conclude on March 31, 2022. It was originally scheduled for October 20, 2020 to April 10, 2021. It was postponed due to the COVID-19 pandemic. As on January 8, the Indian enclosure recorded 7,40,356 visitors - one of the highest among participating nations. The Indian Pavilion has hosted various delegations from key sectors and states, highlighting business opportunities, focused on local diverse geographies, cultures and the socio-economic assortment. A key project at the India Pavilion is 'Elevate', which demonstrates unconventional solutions developed by 500 Indian start-ups to everyday problems. The India Pavilion is currently hosting the ‘Jammu & Kashmir (J&K) Week’ and the ‘Tourism Week’ which were inaugurated on January 3. The Union Territory of Jammu and Kashmir has inked six agreements with global business, bringing investment of USD 2.5 billion. The major investors are Al Maya Group, MATU Investments LLC, GL Employment Brokerage LLC, Century Financial and Noon E-commerce respectively. Gujarat, Karnataka, Telangana, Rajasthan, Maharashtra, Madhya Pradesh, Uttar Pradesh and UT of Ladakh in earlier weeks have successfully showcased their business ecosystem. The 'Tourism Week' has been pivotal in showcasing the different areas of tourism classes India excels - spiritual, medical, luxury tourism among others. Other themed weeks have been on new and renewable energy; space research and projects; urban-rural development; oil-gas exploration, textile; knowledge and learning. Apart from Goyal, the senior Indian ministers who visited the pavilion include Hardeep Singh Puri, Dr S Jaishankar, V Muraleedharan, Dr Mansukh Mandaviya, R K Singh and ministers of state Rajeev Chandrasekhar and Darshana V Jardosh. Gujarat Chief Minister Bhupendra Patel, former Karnataka chief minister B.S. Yediyurappa, Foreign Secretary Harsh V Shringla, Chairman of Indian Space Research Organisation (ISRO) Dr K Sivan have also been in attendance. The Indian enclosure has had its share of glamor with Bollywood celebrities Deepika Padukone, Janhvi Kapoor, Jaaved Jaaferi, Salim-Sulaiman, Hariharan, Benny Dayal, Jonita Gandhi; sports icon Sania Mirza and fashion guru Manish Malhotra making appearances. Since the inauguration on October 1, the Pavilion has celebrated major festivals - Navratri, Dussehra and Diwali - with cultural programmes and other such activities. As per the schedule, the Pavilion will now host state-specific weeks from Goa, Jharkhand, Kerala, Tamil Nadu and sector-themed programmes on steel, healthcare, electronics and information technology, energy conservation, environment and sustainability and tribal affairs.
Source: Livemint
According to the letter written by the Apparel Export Promotion Council, with an increase of ₹7,000 in the price of the cotton, the yarn price reached ₹401, whereas it should be around ₹359. Apparel exporters in Gautam Budh Nagar have written a letter to the Ministry of Textiles to decrease the prices of yarn, which is adversely affecting the garment industry in the district, they said on Monday. According to the letter written by the Apparel Export Promotion Council, the cotton price per candy in October 2021 was ₹67,000 and yarn price ₹331. The cotton price was increased to ₹74,000 this January -- a hike of ₹7,000, with the yarn price set at ₹401 -- an increase of ₹70. “The rise in the prices is not according to the formula adopted by the industry. According to its price increasing formula, for every ₹1,000 increase in the cotton price, the yarn price will also be increased between ₹3.50 and ₹4. But now, with an increase of ₹7,000 in the price of the cotton, the yarn price reached ₹401... whereas it should be around ₹359,” said A Sakhtivel, chairman of AEPC. The council has requested the ministry to suggest the mills to bring down the yarn price by ₹40 per kilogram. Lalit Thukral, president of Noida Apparel Export Cluster (NAEC) and an executive member of AEPC, the total export value of the apparel sector in India is ₹130,000 crore, of which ₹40,000 crore revenue is generated in Uttar Pradesh alone. “Gautam Buddh Nagar is known as the ‘City of Apparel’ as it generates nearly ₹32,000 crore revenue through apparel export, out of the total ₹40,000 crore revenue generated in Uttar Pradesh... Exporters enter into a price agreement with the buyers at least six months before the supply of apparels. Now, as the mills have been increasing the prices frequently and arbitrarily, the buyers or importers are not willing to increase the prices as well,” Thukral said, adding that this has made the situation worse for the Indian exporters, especially those in Gautam Buddh Nagar.
Source: Hindustan Times
Reliance Industries-ACRE and Welspun Group unit Easygo Textile Pvt Ltd are the two highest bidders among the four firm offers that lenders have received for the textile-cumyarn making company. Reliance Industries Ltd (RIL) and Welspun are the leading contenders to acquire bankrupt NSE 2.86 % Industries, said people with knowledge of the matter. RIL, in partnership with Assets Care & Reconstruction Enterprise (ACRE), has offered a ₹2,863 crore resolution plan that includes 10% equity to lenders, they said. Reliance Industries-ACRE and Welspun Group unit Easygo Textile Pvt Ltd are the two highest bidders among the four firm offers that lenders have received for the textile-cum-yarn making company. "There is a marginal difference between the offers made by Reliance Industries-ACRE team and Welspun Group," one of the persons said. "Both are highest but conditional. It is difficult to assess which of the two plans is better. Resolution professional Pinakin Shah has asked the two highest bidders to resubmit revised unconditional resolution plans, said the people cited above. The RIL offer includes payment of ₹2,280 crore to financial creditors, equity infusion of ₹500 crore for working capital requirements and a ₹83 crore payment to employees and trade creditors, one of the persons said. ₹15.4 cr Payment Default The existing equity will be fully written off. RIL will hold 79%, ACRE will hold 11% and 10% will go to lenders after the acquisition. To finance the proposed offer, RIL will avail debt of Rs 2,349 crore and infuse Rs 500 crore as capital. ACRE, an Ares SSG-backed asset reconstruction company (ARC), will issue security receipts for Rs 14 crore to lenders. Details of the Welspun offer aren't available. Lenders to Sintex Industries got four firm resolution plans last month. GHCL Ltd and Himatsinka Ventures Pvt Ltd are the other two bidders, as reported earlier. RIL, ACRE, Welspun Group and the resolution professional (RP) didn't respond to queries. The RP has allowed claims to the tune of Rs 7,534.6 crore from 27 financial creditors. Sintex Industries was admitted to the insolvency process by Invesco Asset Management after the company defaulted on a Rs 15.4 crore payment on principal and interest on nonconvertible debentures. An attempt to arrive at an out-of-court resolution failed after lenders rejected an offer of Rs 1,950 crore made by Welspun in January last year to acquire the distressed Ahmedabad-based company. Lenders to Sintex Industries had got 16 expressions of interest (EoIs), including bids from foreign fund CarVal Investors and Varde Capital-backed Aditya Birla Asset Reconstruction Co. The other EoI applicants included Edelweiss Alternative Assets Advisors Ltd, Asset Reconstruction Company of India (Arcil), Prudent ARC, Ludhiana based Trident Ltd, Punjabbased Lotus Hometextile, Mumbai-based Indocount Industries and Nitin Spinners. Sintex Industries, which was promoted by Amit Patel and family, specialises in the premium fashion industry. It provides fabric to global clients such as Armani, Hugo Boss, Diesel and Burberry, according to the company's website.
Source: Economic Times
In view of the abnormal price rise in cotton and cotton yarn, the Tiruppur Exporters’ Association (TEA) has said that the Indian government should ban export of cotton. This is in addition to the call already given by the industry to remove 11 per cent import duty on cotton. Last month, the price of Indian cotton was higher than the international market. “The increase in cotton and cotton yarn exports from India is benefitting our competitors. India’s share in the export of knitting garments is only 4 per cent, while China has 39 per cent, Vietnam 13 per cent and Bangladesh 14 per cent in the segment. The government should ban export of cotton so domestic industries can compete in international market and India can benefit from value addition. Higher MSP can protect the interest of farmers, if necessary,” TEA president Raja M Shanmugham said. The issue has already been taken up with the government. Representatives of the textile industry have submitted a memorandum to textiles minister Piyush Goyal requesting government’s intervention. Subsequently, textiles secretary Upendra Prasad Singh held a virtual meeting and discussed with the industry representatives. Shanmugam says the problems of the industry have been explained to the government officials, and Singh has given assurance of looking into the problems. Now, the ministry of textiles and the industry representatives are trying to approach finance minister Nirmala Sitharaman as the issue of foreign trade is directly related to the Ministry of Finance. TEA has also urged the government to stop futures trading in cotton, as it is also causing for spike in cotton prices due to trading activities of investors. According to Shanmugham, production is currently in full swing for export orders, but the recent price rise in cotton and yarn have worsened the things for exporters and producers. The additional cost is unbearable for them, and has put the garment units of Tiruppur in deep crisis. TEA has requested other textile organisations like the Textile Mills Association, SISA, TASMA and ITF to appeal their members not to increase the rates of cotton yarn. Meanwhile, to highlight their issues, TEA has called for a strike in Tiruppur on January 17-18. Around six lakh workers associated with about 20,000 MSME units and 2,000 direct exporters will participate in the strike. However, the strike has only symbolic significance, according to Shanmugham
Source: Fibre2 Fashion
PM aide stresses both measures will lift exports; assures industry of resolving problems The Ministry of Commerce has not withdrawn the Textile and Apparel Policy 2020-25 and the Drawback of Local Taxes and Levies (DLTL) scheme will continue in future to enhance export of value-added textile, remarked Adviser to Prime Minister on Commerce Abdul Razak Dawood. Speaking at a meeting arranged by the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) on Monday, the adviser assured businessmen that their problems would be taken up with Prime Minister Imran Khan and in the federal cabinet. “The government will consider and resolve all issues,” he said. “Textile sector is playing a major role in stabilising the national economy, therefore, the government is striving to address its issues on a priority basis.” Highlighting the positive outcome of the “Make in Pakistan” strategy, the adviser pointed out that investment of billions of rupees was in the pipeline and new textile units were expected to be established. “Such industrial concerns will help enhance the export capacity and create hundreds of thousands of jobs,” he said. The government has reversed the de-industrialisation process and “Pakistan is now on the path of industrial growth.” In August 2020, the government had announced the “Make in Pakistan” policy to promote export-oriented industrialisation in the country, Dawood said. Under the policy, the government has reduced duties on hundreds of tariff lines including the raw material for industries to make their products competitive. “In the past, there was no focus on diversification of exports, but now it is happening,” he said. In the past three years, exports of non-traditional products to the traditional markets increased significantly as the government accelerated its endeavours to further push diversification of exports, he pointed out. The PM aide said that surging imports posed a threat to the trade deficit and to tackle the issue, the government was in the process of identifying and enhancing tariffs on a few items to discourage their import. He reaffirmed that the government had made all-out efforts to ensure that Pakistan continue to enjoy the GSP Plus facility and voiced hope that the country would secure an extension in the facility from the European Union. Earlier, PRGMEA Regional Chairman Sheikh Luqman Amin urged the adviser to abolish all duties and taxes and permit duty-free import of cotton yarn, which was the basic raw material for the value-added textile sector. Participants of the meeting called on the government to ban export of cotton yarn in order to ensure its availability to the export sector and enable it to meet orders timely and without any hassle. They asked the government to consider allowing import of cotton yarn from India through Wagah border because good quality yarn was not available in Pakistan and its prices were soaring. They called for fixing special tariffs at 7.5 cents for electricity and $6.5 per mmbtu for gas for at least three years coupled with provision of uninterrupted electricity and gas for delivering export orders. An industry official said that Prime Minister Imran Khan’s plans for industrialisation, increasing exports, creating trade surplus, generating employment opportunities and earning more foreign exchange could only be achieved when cotton yarn availability and uninterrupted supply of utilities were ensured.
Source: Tribune
The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) recently proposed capacity building of the Chittagong seaport and faster cargo transport to cope with potential trade expansion and draw more foreign investors. If production starts in full swing at the Bangabandhu Industrial City and other special economic zones, then the pressure on the prime seaport will increase manifold, it said. The recommendations were made during the first meeting of the FBCCI standing committee on ports and shipping last week in Dhaka. "At least 5.0 per cent of cost of doing business could be reduced if the capacity of Chittagong port is enhanced and foreign entrepreneurs would get interest in investing in Bangladesh," the apex trade body said in a standing committee meet. FBCCI president Mohammad Jashim Uddin called for increasing the capacity of the port and speeding up haulage now as they foresee prospect of trade expansion, according to Bangla media reports. "At present the speed of cargo vehicles on the Dhaka-Chattogram highway is 40 kilometres per hour. If this speed is doubled, the competitiveness of the export sector will increase by 6 per cent," he said. He recommended that chemicals imported through Chittagong port be tested separately before unloading. "Chittagong Customs does not have adequate laboratories. It takes importers 10 to 12 days to get the test done. Steps should be taken immediately to solve these problems related to the port," he added.
Source: Fibre2Fashion
Global manufacturing activity as tracked by the Purchasing Manager’s Index (PMI) showed positive sentiment to end 2021. Increased rate of change in factors like output, new orders and employment and improvement in overall business sentiment suggested greater momentum going into 2022. Global manufacturing PMI for Dec-21 remained flat at 54.2 from previous months, suggesting strong acceleration in activity however the pace may have been thwarted slightly. PMI indices for all three broad subsectors (investment goods, consumer goods and intermediate goods) showed positive growth, with investment goods growing the strongest.1 Sentiment in China also improved slightly in Dec-21 (50.9 vs 49.9 in Nov-21) however it still suggests weaker expansion in activity. This is not surprising as China remains the economy with the strictest policies on curbing COVID infections. Data suggests that demand from exports weighed overall sales down as shipping challenges impacted global trade. However, increased new business put pressure on the production capacity increasing backlogs of work. This was further aggravated by a rise in labour shortage. Average input costs in Dec-21 rose at the weakest pace in the past 2 years, as the rate of inflation fell from the peak in Oct-21. Overall supply restrictions appear to be easing in China with inflation pressures also relaxing. Global sector demand and employment pressures remain key issues.2 Manufacturing PMI in the Eurozone slipped slightly in Dec-21 to 58.0 compared with 58.4 in Nov-21. This was despite an overall easing in supply chain bottlenecks as lead times increased at the slowest pace since the beginning of 2021. Manufacturing activity was perhaps bogged down by still higher rates of increase in input costs and output prices. In terms of sub-sectors, consumer goods manufacturing led the growth, while investment and intermediate goods segments saw only marginally quicker growth. As a response to a slower increase in lead times, the purchase of raw materials and semi-finished goods by manufacturers increased tremendously. Still, manufacturing output faced pressured as many faced shortages at their suppliers’ end while others saw only subdued demand outlook.3 In the US, manufacturing activity saw a drop in sentiment recording the lowest reading for this year, however the outlook remained expansionary. Manufacturing PMI reached 57.7 in Dec-21 from 58.3 in Nov-21, on the back of heightened pressures from higher input costs, longer lead times and overall weaker demand outlook. Manufacturing output was subdued as shortages with suppliers increased despite muted deterioration in supply chains. On the other hand, demand from clients was also slow to grow reflecting increased reluctance to place new orders before clearing existing inventories. However, even with these challenges, positives at the end of 2021 were that input costs rose at the slowest rate in the last six months, and consequently, firms increased their selling prices at the slowest pace since the last eight months.4 In India, manufacturing activity continued to improve in Dec-21, with sharp growth in new orders and production. Business sentiment remains positive but was slightly dampened by supply chain concerns, COVID-19 restrictions, and inflationary pressures. Manufacturing PMI for India was at 55.5 in Dec-21 compared to 57.6 in Nov-21. Manufacturers saw new orders rising sharply but the rate of increase was slower than observed in the past few months. Cost increases also remained sharp, above the long-run average, however it had slowed to a three-month low. Similarly, a major part of the cost increase was transferred to clients, however output prices grew at the slowest rate since Oct-20. Overall, manufacturers were optimistic about business in 2022 but sentiments remained slightly muted due to pandemic worries, inflationary pressures, and continuing supply chain challenges.5 In nearby Japan also, manufacturing sector reflected expansion, but the momentum weakened as PMI slipped slightly to 54.3 in Dec-21 from 54.5 in Nov-21. External demand was hurt by renewed cases in partner countries, particularly in South Korea, which also disrupted supply of goods. Shipping challenges continued to disrupt activity for manufacturers as lead times deteriorated further in the last quarter of 2021. Businesses are optimistic, however their confidence in economic recovery slipped to the lowest in Dec-21. One of the positives was, that job creation in Japan picked up pace in Dec-21, rising at the fastest rate since Apr-18. In Australia, manufacturing activity was reported to have been hampered predominantly by supply shortages while external demand provided tremendous push. Manufacturing PMI slipped to 57.7 in Dec-21 from 59.2 in Nov-21. Manufacturers increased their purchases sharply however rate of growth was slower than previously. Increasing demand led to manufacturers raising operating capacity, further leading to increase in employment levels. However, firms reported increased difficulties in hiring. With supply issues and some concerns related to hiring of labour, backlogs of work increased rapidly, however overall business sentiment continues to remain strongly positive. More recently, restrictions on movement have varied in all the major economies, as infections have surged again uniformly across with a new variant “Omicron” spreading widely. Global recovery depends largely on sustained demand and consistent growth in supply side activity. While many economies report relaxation in demand, supply side bottlenecks remain a major concern going forward and will likely be a dampener for at least the first half. Similar sentiments for 2022 were resonated by heads of major international textile and apparel industry associations in the latest edition of our magazine.
Source: Fibre 2 Fashion
Pakistan's top commerce official is pushing the government to bet big on the export industry by maintaining tens of millions of dollars of policy support even as the South Asian nation looks to tighten its fiscal belt in a mid-year budget this month. The country's all-important textile industry is at the centre of this exportled growth strategy, said Abdul Razak Dawood, advisor to Pakistan's prime minister, as the government targets ambitious growth of 4.8% in the 2021- 2022 financial year. Authorities have supported the export industry since coming to power in 2018 by securing competitive energy prices and offering cheap credit. Dawood told Reuters he had spoken to the prime minister and finance minister about the need for continued support. The government is looking to end tax exemptions in a number of areas in its mid-year budget as part of fiscal tightening efforts aimed at securing the release of $1 billion in IMF funds. Pakistan entered a $6 billion support programme with the International Monetary Fund in 2019. "People in this country don't understand what the importance of exports export-led growth strategy is," Dawood said in an interview with Reuters on Friday. He said continuing support for exports is the best way to tackle Pakistan's long-standing economic woes and achieve sustained growth. Pakistan's exports hit a historic high of $25.3 billion in the 2020-2021 financial year, with textiles making up a whopping 60% of those exports. That helped the country achieve 3.94% GDP growth last year after a coronavirus-induced slump. Remarkable jump Pakistan's exports have risen 24.7% year-on-year in the first half of the 2021-2022 financial year, official data showed last week. "You can see that there's been a remarkable jump," Dawood said. One driver has been the government's policy of securing regionally competitive power rates to allow Pakistani exporters to match prices offered by peers such as India, Bangladesh and Vietnam, he said. The central bank has also offered cheap credit to the industry after the coronavirusinduced economic slowdown. To sustain this, Dawood is encouraging the government to push through with a textile export policy which has faced push-back from various government departments. The policy could include billions of rupees in regionally competitive energy rate assurances, concessional funds, drawbacks and tax rebates, experts and local media reports say. While Dawood said months of negotiation between the commerce and other ministries have delayed the policy's release, it could be enacted as early as this month with certain "conditionalities". Good imports Growing exports have been accompanied by a surging import bill, which Dawood said has been driven by rising global fuel and food prices and purchases of Covid-19 vaccines. Imports grew 65% year-on-year to reach over $40 billion in the first half of this financial year, putting a strain on the country's $24 billion foreign exchange reserves. The spike has not unnerved Dawood, who said it also reflected "good imports" of capital goods and raw materials a sign that the country's industries are growing. Some economic experts have criticised Pakistan's over-reliance and continuous support for the textile industry. Dawood said he did not agree that the textile sector was "too pampered" but acknowledged the need to diversify Pakistan's exports: "In the long run, we should not just depend on just textiles if something were to happen to textiles, where would the country go?" Other experts do not agree with Dawood's policy of sustained support. "The government needs to evaluate subsidies given to export related sectors in light of the fiscal challenges as well as misuse of those subsidies," said Mohammed Sohail, CEO of brokerage Topline Securities. "In the past we have seen that such support has not yielded desired results."
Source: Economic Times
Vietnam’s garment and textile sector has reached the 2021 export target, but is confronted with ever-growing competition from the Asian continent as well as other markets. The high growth rate in the fourth quarter helped Vietnam’s garment and textile sector complete its export target of $39 billion, equivalent to 2019. But Le Tien Truong, chairman at the Vietnam National Textile and Garment Group, said that the growth of 11.2 per cent compared to 2020 does not indicate an “improvement in market share”. According to him, Vietnamese garment and textile groups “don’t know what to do when the world stops and does not know what to do when the world trades again”. The Vietnam Textile and Apparel Association (Vitas) has developed three growth scenarios for 2022. The most positive scenario is to strive for an export turnover of up to $43.5 billion and the lowest would be a maximum of $39 billion. Vu Duc Giang, chairman at Vitas, said that freight rates remain high, and there is a serious shortage of empty containers, and shopping demand could decline again if the pandemic continues to surge. The cost of transporting goods by air has increased fourfold, from around $4,250 per tonne to $17,000, which “has become a huge challenge for textile enterprises,” Giang said. A survey by the Research Centre for Employment Relations found that only 16.7 per cent of buyers agree to share air freight costs with businesses with long-term contracts. Factories that act as intermediaries have also difficulty communicating with buyers. “Vietnam’s garment and textile sector is facing severe competition to export to major markets, especially the EU and the United States,” said Giang. Currently, China, Bangladesh, Cambodia, and Pakistan are the main competitors of Vietnam in exporting textiles to the world. All have a more complete domestic supply chain than Vietnam. Giang also worries, “Labour costs in Vietnam will continue to rise due to an increase in the annual base salary and the new insurance policy.” Labour costs at garment companies in Bangladesh currently account for about 20 per cent of the cost of goods, while this figure in Vietnam is 26-30 per cent. Labour costs in Pakistan and Cambodia are also lower than in Vietnam. According to the US Office of Textiles and Apparel, Bangladesh currently ranks third in exporting ready-made garments to the US, up about 27 per cent over the same period in 2020. China’s exports to the States reached $16 billion with a growth rate of 25 per cent, followed by Vietnam and Indonesia at 14 and 10 per cent, respectively. Many US importers are shifting towards suppliers from Vietnam’s competitors after the production disruptions. The Bangladesh Knitwear Manufacturers and Exporters Association stated that garment exports to the US have continued to increase, with many buyers now turning to Bangladesh again. Meanwhile, India is also rising, with self-sufficiency in input materials such as cotton and yarn, reasonable labour costs, and an efficient supply chain. The Indian government has set the goal of increasing its export turnover for the textile industry to $80 billion by the 2024-2025 period. The Autonomous India programme and various other policies have come into play, helping the country’s textile industry to recover quickly in 2021. In 2020, the pandemic caused that nation’s textile and garment exports to decrease by 13 per cent compared to the previous year, only reaching $29 billion. According to the Indian Textile Association, its government decided to extend tax and refund schemes for textiles until March 2024 and speed up the implementation of other preferential programmes to provide credit subsidies for capital in the textile sector. Despite this harsh competition, Vietnamese garments and textiles could remain competitive if they make good use of existing advantages. For example, with the EU market, Vietnamese businesses could take advantage of the EU-Vietnam Free Trade Agreement to increase their market share. But Vinatex’s Truong believed that businesses must be cost-competitive compared to Bangladeshi products, which have lower prices, and offer faster delivery than Turkish products, as these are closer to the EU’s border. Vietnam annually exports about $5 billion to the EU, equivalent to about 2 per cent of the total import turnover of garments and textiles in that market. The global garment and textile sector is focusing on more efficient models to establish flexible relationships, with responsive suppliers, while the environment remains a priority.
Source: Vietnam Net
The import of textiles and apparel by the US in 2021 is all set to surpass 2019’s prepandemic figure of $110.033 billion. In the first eleven months of last year, US imports have risen by 26.16 per cent to $103.789 billion, compared to $82.270 billion in JanuaryNovember 2020, according to latest Major Shippers Report of US department of commerce. With 27.83 per cent share, China continues to be the largest supplier of textiles and clothing to the United States, followed by Vietnam with 13.60 per cent share. Apparel constituted the bulk of textiles and garments imports made by the US during the initial eleven months of last year, and were valued at $74.289 billion, while non-apparel imports accounted for the remaining $29.500 billion, according to the latest Major Shippers Report, released by the US department of commerce. Segment-wise, among the top ten apparel suppliers to the US, imports from Pakistan, Honduras and Nicaragua shot up by 59.30 per cent, 47.10 per cent and 42.90 per cent year-on-year respectively. Surprisingly, imports from Vietnam registered a growth of only 12.73 per cent compared to the same period of the previous year. In the non-apparel category, among the top ten suppliers, imports from Italy, India, and Turkey soared by 55.75 per cent, 51.86 per cent and 40.27 per cent, respectively. The sharp rise in numbers is due to the base effect, as imports were disrupted last year due to the COVID-19 pandemic. Of the total US textile and apparel imports of $103.789 billion during the period under review, cotton products were worth $44.799 billion, while man-made fibre products accounted for $53.977 billion, followed by $3.144 billion of wool products, and $1.867 billion of products from silk and vegetable fibres. In 2020, the US textile and apparel imports had decreased sharply, mainly on account of the COVID-19 pandemic induced disruption, to $89.596 billion.
Source: Fibre2Fashion
