The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 17 FEBRUARY, 2022

NATIONAL

 

INTERNATIONAL

 

India set to sign free trade pact with UAE tomorrow

• Duty concessions soon on jewellery, engineering goods, textiles, apparels, food products • The proposed deal is expected to provide greater market access for Indian exports India may get duty concessions on gold jewellery, engineering goods, textiles, apparels, food products, and other labor-intensive sectors under the free trade agreement (FTA) with the United Arab Emirates (UAE), expected to be signed on Friday, two people said, requesting anonymity. The proposed agreement is expected to provide greater market access for Indian exports. This will be India’s first major FTA as part of the comprehensive economic partnership agreement (CEPA) under the Bharatiya Janata Party-led government. The deal will likely boost India’s gems and jewellery, and engineering exports, besides facilitating easier movement of Indian workers and professionals to the UAE. It is also expected to give Indian industry access to other markets in the region, said experts. During a virtual summit on Friday, Prime minister Narendra Modi and Sheikh Mohamed bin Zayed al Nahyan, the crown prince of Abu Dhabi, are expected to formalize the pact. The negotiations started in September. Engineering export to the UAE are expected to double in the next five years from the current $4-5 billion and create 100,000 jobs on account of tariff concessions once the FTA comes into effect. A ministry of commerce and industry spokesperson said details will be announced after the formal signing of the agreement. India’s exports to the UAE grew by 77% year-on-year in April-December 2021 to $20 billion, accounting for 6.6% of India’s total outbound shipments. Meanwhile, relief on the 5% duty on gold, silver and platinum jewellery under the mostfavoured-nation treatment is expected to boost India’s gems and jewellery exporters, who have witnessed a steep decline in orders from India’s third largest trading partner. The UAE accounts for 80% of India’s plain gold jewellery exports and 20% of studded jewellery exports. According to the Gems and Jewellery Export Promotion Council (GJEPC), exports to the UAE witnessed the highest fall of 41.50% between April 2021 and January 2022 on a yearon-year basis. India’s exports of studded gold jewellery declined from $1.04 billion in FY17 to $400 million in FY21, but are expected to rebound to $800 million if the duty is withdrawn, it said. Experts said the deal is expected to boost job creation and economic growth, provide cheaper products to Indian consumers and lead to lower input costs for many products. “Indian industry has strong export interest in sectors like gems and jewellery, engineering goods and textile and apparel. In these sectors, India will benefit if it gets greater market access," Arpita Mukherjee, professor, ICRIER, said. “UAE is also strategically located to export to the UK and the EU. Some Indian firms have set up manufacturing units in the UAE for certain products (such as products with dairy content of over 10%) where direct exports from India to the UK, EU and Australia are presently banned," she added. The ministry of external affairs said on Wednesday that India and the UAE have collaborated closely during the pandemic in critical areas of healthcare and food security. “Bilateral trade, investment and energy relations have remained robust. The two sides are also strengthening cooperation in areas of renewable energy, startups and fintech," it added.

Source: Live Mint

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E-way bills’ generation picks up, indicates spurt in consumption, GST receipts

Gross GST collections came in at Rs 1.41 lakh crore in January (December sales), the highest mop-up in the history of the comprehensive indirect tax that was launched in July 2017. The number of e-way bills generated for inter-state trade in goods under the goods & services tax (GST) system stood at 23.59 lakh a day in the first 13 days of February, 14% higher than in the first 16 days of the previous month, reflecting a pick-up in commerce after the spread of the Omicron variant of Covid-19 subsided. Generation of e-way bills had declined 4% on month to 22.2 lakh in January, compared with 23.1 lakh in December. E-way bills stood at 3.07 crore in the first 13 days of February.

E-way bills generation is a proxy of GST revenues.

Gross GST collections came in at Rs 1.41 lakh crore in January (December sales), the highest mop-up in the history of the comprehensive indirect tax that was launched in July 2017. Even though e-way bills generation has declined by 4% in January over December, the GST collections could still be around Rs 1.3 lakh crore for February (January sales) going by the recent trend. Bills generation at 7.35 crore in October was the highest monthly data, thanks to a spurt in goods dispatches for stocking ahead of the festival season by shopkeepers and traders.

Source: Financial Express

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Eye on economy: Govt sticks to growth and inflation estimates

This is in sync with the growth rate of 8-8.5% projected by the Economic Survey for FY23 and is close to the Reserve Bank of India’s (RBI’s) forecast of 7.8%, it added. Amid criticism that the Budget for FY23 has underestimated the so-called gross domestic product (GDP) deflator despite elevated price pressure in the economy, the finance ministry said on Wednesday that global inflation and energy prices will likely moderate in the next fiscal, allowing the projection to hold true. While estimating a nominal GDP expansion of 11.1%, the Budget has projected a real growth rate of about 8% for the next fiscal and the implied GDP deflator, used to compute real expansion from nominal, is pegged at 3-3.5%, the ministry said. This is in sync with the growth rate of 8-8.5% projected by the Economic Survey for FY23 and is close to the Reserve Bank of India’s (RBI’s) forecast of 7.8%, it added. In its report for January, the department of economic affairs (DEA) asserted that retail inflation will likely close within the RBI’s target band of 2-6% despite a spurt in price pressure in recent months. Between April and January this fiscal, retail inflation stood at an average of 5.3%, although it scaled a seven-month peak of 6.01% last month. Presenting an optimistic picture of the economy, the report stressed it’s “on its way” to growing at above 9% in the current fiscal, as projected by the National Statistical Office, despite the Omicron effect. In an interview to FE earlier this month, DEA secretary Ajay Seth had said the GDP deflator would drop, as wholesale price index (WPI), which typically influences the deflator more than retail inflation, could ease considerably next fiscal due to a favourable base effect and a possible softening of global commodity prices in the wake of liquidity tightening measures by key central banks. WPI inflation averaged as much as 12.5% between April and December. The report conceded that private consumption, the principal pillar of the economy that is yet to return to the pre-Covid level, will “grow cautiously as precautionary demand for money will rise at every hint of a new infection”. It will pick up once Covid-related uncertainty wanes. Consequently, demand revival will prompt the private sector to boost investments and augment production to cater for rising consumption. The long-elusive private investment will get the necessary help from the complementary support of public investment in infrastructure and continue to gain traction from the Atmanirbhar Bharat initiative, it said. Production-linked incentive schemes (PLI) schemes will further draw private investment and drive up export growth. Manufacturing and construction sectors will be the “growth drivers”, supported by the PLI schemes and public capex in infrastructure. The Centre’s budgetary capital spending is estimated to rise 36% to a record Rs 7.5 lakh crore in FY23 from the revised estimate for FY22 (excluding capital infusion into Air India). Its capex next fiscal will more than double from the pre-pandemic (FY20) level. The Budget’s “commitment towards asset creation (public infrastructure development) will invigorate the virtuous cycle of investment and crowd in private investment with large multiplier effects which in turn will augment inclusive and sustainable growth”, the report said. “The unchanged repo and reverse repo rate along with the MPCs (Monetary Policy Committee’s) accommodative stance prioritise growth during these uncertain times and reinforce the investment orientation of the Budget. Should retail inflation remain rangebound at 4.5% as projected by the MPC in 2022-23, liquidity levels in the economy will remain high and interface with low interest rates to provide easier financing options to industry and individuals,” the DEA said in the report.

Source: Financial Express

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India-UAE FTA on February 18: Jewellery, garments among key products to get duty relief

For its part, Abu Dhabi, too, has sought duty concession across broad range of products, including in food items such as dates and confectionary. India and the UAE are set to grant each other duty-free market access in hundreds of products as they prepare to clinch a full-fledged free trade agreement (FTA) on February 18, in what is going to be New Delhi’s first such pact with any economy in over a decade. The comprehensive economic partnership agreement (CEPA), as the FTA is formally called, will be announced by Prime Minister Narendra Modi and the crown prince of Abu Dhabi Sheikh Mohamed bin Zayed al Nahyan at a virtual summit. It will be followed by due processes of ratification by the two sides. Earlier, both the sides were aiming to sign an interim agreement first by December 2021, which was to be followed by a broader FTA by March 2022. Sources told FE that India had identified more than 1,000 products across sectors, including gem & jewellery, textiles & garments, leather, spices, engineering goods, chemicals and poultry, where it wanted duty concessions from the UAE under the FTA. Both the sides started formal negotiations from September 23 last year. While the UAE, India’s third-largest export destination, currently imposes a 5% duty on textiles & garments and jewellery, certain steel products are taxed at 10%. These three segments alone made up 34% of India’s $16.7 billion exports to the UAE last fiscal and 43% in the pre-pandemic year of FY20. The UAE has also prohibited poultry imports from India on concerns of bird flu. Seeking the lifting of the ban, New Delhi has highlighted that it has been strictly adopting the safety norms stipulated by the World Organization for Animal Health. For its part, Abu Dhabi, too, has sought duty concession across broad range of products, including in food items such as dates and confectionary. Gem and Jewellery Export Promotion Council chairman Colin Shah said the proposed FTA will help drive up India’s gem and jewellery exports to the UAE to as much as $10 billion by FY23 from just $1.2 billion in FY21 (when the shipments were hit by the pandemic). The UAE accounts for 80% of India’s plain gold jewellery exports and 20% of its studded jewellery shipments. Abu Dhabi is also a gateway to the entire West Asian region, Shah said. Both sides are aiming to raise bilateral merchandise trade to $100 billion in five years following the signing of the pact from about $43 billion in FY21. It also aims to more than double bilateral services trade to $15 billion during this period. The negotiations with the UAE are a part of India’s broader strategy to forge “fair and balanced” trade agreements with key economies and revamp existing pacts to boost trade. The move gained traction after India pulled out of the China-dominated RCEP talks in November 2019. India is also engaged in talks with Australia, the UK and the EU for FTAs.

Source: Financial Express

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Indian economy may witness post-pandemic economic reset by year-end: Finance Ministry

Once the uncertainty and anxiety caused by the Covid-19 virus recedes, consumption will pick up and the demand revival will then facilitate the private sector stepping in, finance ministry’ department of economic affairs said in a report. The Finance Ministry on Wednesday said that current year may as well end with an economic reset manifest of a post pandemic world. It added that commitment in the Union Budget towards asset creation will invigorate the virtuous cycle of investment and crowd in private investment. “Once the uncertainty and anxiety caused by the Covid-19 virus recedes, consumption will pick up and the demand revival will then facilitate the private sector stepping in, finance ministry’ department of economic affairs (DEA) said in its Monthly Economic.

Source: Economic Times

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Don’t scrap the SEZ Act: Way forward is to make SEZs favourable investment destinations

Notwithstanding severe criticism, policy reversals, and government apathy, vast industrial infrastructure, covering 57,000 hectares of land, is already up in the country, developed chiefly with private investments. The FM’s Budget-speech announcement that new legislation would replace the SEZ Act came as a shock amid reports that the government was considering a new lease of life for SEZs. This disruptive change in the policy needs a serious relook. With 425 formal approvals, 376 SEZs have been notified in the country. Of this, 268 are in operation, hosting over 5,600 units that provide employment to 2.6 million and contribute around 20% of exports. The SEZs are the most successful industrial hubs in terms of private investment. Notwithstanding severe criticism, policy reversals, and government apathy, vast industrial infrastructure, covering 57,000 hectares of land, is already up in the country, developed chiefly with private investments. A total investment of Rs 6.29 lakh crore is locked in SEZs, of which Rs 5.93 lakh crore is in newly notified zones. A disaggregated analysis shows that the newly notified SEZs offered an opportunity to IT companies to avail economies of scale. To this date, India remains one of the most preferred outsourcing destinations for IT-enabled services. It has managed to upgrade to higher value-added activities even though the outsourcing industry is becoming extremely competitive with the rise of the Philippines and several other centres. In a comparative analysis of SEZs in India and China co-authored with Yu Zheng, I have shown that, as of September 2018, the total employment generated in the newly notified IT SEZs exceeded the employment they had proposed. The newly notified manufacturing SEZs had fallen 85% short of the proposed employment. Yet, they accounted for 56% of the total investment locked in the SEZs (both in development and production). Even if the Jam Nagar refinery, the single largest contributor to manufacturing exports, is excluded, they contributed around 49% of the total SEZ exports. Nevertheless, it is fully recognised that the manufacturing SEZs are not able to attract investors to leverage the industrial capacity generated in them. But is it due to the SEZs themselves or the inconsistent SEZ policies? In general, the promise of a distinct set of rules, single-window governance, high-class infrastructure, and a secured environment in a geographically delineated area is appealing to national and international investors. This is manifested in the explosion of the SEZs the world over. A 2019 UNCTAD shows that the SEZ number swelled from 176 in 1986, across 47 countries, to about 5,400 by 2019 with 500 in the pipeline in 147 economies. SEZs have become the preferred destination for investment, particularly by exporting firms. In today’s world, where industrial production is increasingly organised into global production networks developed and driven by MNCs, SEZs are being used as springboards to get integrated with these networks. The SEZs are serving to promote not only trade, FDI, industrial growth, and diversification but also spatial rejuvenation, urbanisation, border development, regional integration, and international relations. But leveraging the SEZs requires a strong bureaucratic understanding of the philosophy and prerequisites underlying the SEZs and strategic competencies to make the right choices to set clear direction and capability to implement the policy effectively. Unfortunately, in the policy circles of India, SEZs are still seen from the conventional lens of direct tax incentives. It is assumed that the SEZs have lost relevance and identity after the sunset clause has set in. Following orthodox thinking, the government’s focus is on improving India’s ranking in the World Banks’ ease of doing business index. While the country jumped 79 positions between 2014 and 2019, private investment dynamism is yet to be seen. This is where the SEZs pitch in. In my recent quantitative studies in progress, based on the firm-level data of 9000 odd firms in India, both inside and outside SEZs compiled by the World Bank, I find that various infrastructural facilities are rated statistically significantly higher SEZs than those outside them. Further, the SEZ firms rated security, government inference, and corruption as considerably less serious obstacles than others. Also, SEZ firms are more competitive in export intensity, meeting order quantities and delivery dates’ commitments, and facing import regulations in international markets, than their domestic counterparts. Clearly, SEZs matter. The way forward is not to replace the SEZ Act but to make SEZs favourable investment destinations. One of the most serious obstacles is the policy restrictions on domestic sales. This is not allowing firms to avail economies of scale and insure against the export market risks. Following the worldwide patterns, there is a need to allow SEZ firms to sell domestically after refunding the duties foregone on imported materials. Local sales strengthen SEZs’ linkage with regional industries due to the incentive to localise and facilitate technological transfer from SEZs to domestic companies. China used this policy very effectively to create domestic production capability. Second, allow the IT firms to provide domestic market services in rupee rather than the foreign currency. Finally, offer production-, investment-, or employment-linked incentives to firms in the SEZs to incentivise growth, and create a level playing field with the rest of the firms; unleash competition in the domestic markets instead of protecting from SEZ firms. It is high time that the high-pitched rhetoric on Make-in-India and self-reliance was supported by serious efforts to understand the evolutionary dynamics of industrialisation and the SEZs the world over, and perceive SEZs beyond a narrow set of beliefs. The author is Professor, Copenhagen Business School, Denmark , and visiting professor, International Management School, New Delhi

Source: Financial Express

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Don't drag developing nations to WTO on Covid Time measures: India, Cuba, 44 others

As per the submission made last week, developing countries have no other choice but to be more creative in their responses, including through the use of trade measures and the trade regime should not penalize them for taking action to support their citizens during such an extraordinarily difficult time. At least 46 countries including India, Cuba, Kenya, Nigeria and South Africa have proposed that developing countries be exempt from being taken to the World Trade Organization's dispute settlement body if they implement trade measures that are essential and necessary in response to the ongoing pandemic.

Source: Economic Times

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2022-23 Budget proposals, recent monetary policy set tone for broad-based economic revival: RBI

The 2022-23 Budget proposals and the recent monetary policy announcements have set the tone for a durable and broad-based economic revival which has started gaining traction as the nation emerges from the third wave of the COVID19 pandemic, according to an RBI article. The RBI article on the 'State of Economy' also emphasised that the domestic economic situation continues to improve, the unsettled global environment notwithstanding. "The Union Budget 2022-23 and the monetary policy announcement of February 10, 2022, have set the tone for a durable and broad-based revival," said the article published in RBI's February bulletin. The renewed emphasis on public investment in the Budget through infrastructure development is expected to crowd-in private investment and strengthen job creation and demand in 2022-23, it said. Fundamental to the infrastructure boost is the GatiShakti National Master Plan, which aims to achieve inclusive growth through multi-modal connectivity and logistics efficiency," the article said. Observing that domestic macroeconomic conditions are striking a path that is diverging from global developments, the article said, "in India, the recovery in economic activity is gaining strength and traction as it emerges from the third wave. "Both manufacturing and services remain in expansion with optimism on demand parameters and uptick in consumer and business confidence. As businesses return to a new normal, the job landscape is expected to improve," it said. It further said that today, the global economy stands at an inflection point. Inflation has become entrenched across economies, owing to a spike in commodity prices and persistence of supply chain bottlenecks. "The global macroeconomic situation remains embroiled in a heightened state of uncertainty, with risks tilted to the downside," the article added. With inflation projected to stay within the tolerance band in 2022-23, the Monetary Policy Committee (MPC) decided to pause and persevere with an accommodative policy stance. RBI Governor Shaktikanta Das emphasised that monetary policy would continue in its endeavour to achieve price stability, while ensuring a strong and sustained economic recovery. Higher spending and ease of doing business have brightened the outlook. India has once again emerged as the fastest growing economy among the major economies of the world according to the IMF," the article said.

Source: Live Mint

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Welspun group is planning to expand businesses, B2C play

The company is bullish on the government’s Har Ghar Nal Se Jal scheme for its pipes, small and large diameter, business Welspun Corp. Ltd, the second largest manufacturer of large diameter pipes in the world and the flagship company of the $3 billion Welspun Group, is expanding the ambit of its businesses to make them more consumer-centric, said Vipul Mathur, the company’s managing director and chief executive officer. We have been significantly successful both in the domestic and international markets. Now I think it is time that we expand our base and, against that backdrop, we are diversifying our portfolio. We are foraying into ductile iron pipe manufacturing, setting up a steel plant, a long product mill, and a super specialty business," Mathur said in an interview. The company also sees a significant growth potential in the polymer business and is scouting for opportunities in this field. “All in all, we are trying to change the shape, colour and the contour of Welspun Corp. from what it was two years ago. In the next three years it is going to be a very different company," Mathur said. “The point of inflection was about two years ago. We are seeing that there is a lot of discussion around sustainability, fossil fuel, and decarbonization. So, we realized that being over dependent on one particular line of business could be fairly detrimental for our business," he said. Welspun Corp., which posted a 70.21% drop in its net profit to ₹61.38 crore on a 6.78% decline in revenue from operations to ₹1,298.89 crore in third quarter of this fiscal, plans to invest more than ₹2,500 crore in this expansion. To give a fillip to its steel business, last year Welspun Corp. acquired Welspun Steel Limited (WSL), which is engaged in the manufacturing of BIS certified steel billets and direct reduced iron, specialty steel, and thermo mechanical treatment bars. “This merger is all about getting our footprint into some B2C business, part of it which is basically nothing but a long product," said Mathur. The company is bullish on the government’s Har Ghar Nal Se Jal scheme for its pipes, small and large diameter, business. In this budget, the government allocated ₹60,000 crore to cover 38 million households in 2022-23. The company said that its B2B business is project-based and is quite cyclical in nature and the market likes to see predictability. “Today the market wants to see your play in B2B, B2C, in infrastructure, because then you are able to overcome this unpredictable element of the businesses. These are the areas we have not built upon and we are stepping into that," said Mathur. Three years down the line, the company expects at least 40% of the revenue, and at least 50% of earnings before interest, taxes, depreciation, and amortization (Ebitda) to come from the new businesses. Welspun Group firm Easygo Textiles, which is in a race to acquire Sintex Industries, is bullish on the company’s polymer business. “At the Welspun Corp. level we have been evaluating the polymer part of the business, which has a strong B2C play. As we want to have a foothold in the B2C segment, we are interested in their polymer business," Mathur said.

Source: Live Mint

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Textile, apparel policy to ensure sustainable growth: Razak Dawood

▪ Govt to maintain tariff rationalisation, says advisor for commerce and investment Advisor for Commerce and Investment Abdul Razak Dawood said on Wednesday that the newly-approved textile and apparel policy will boost the industry's capacity, and help ensure sustainable growth of the sector's exports. The federal cabinet approved on Tuesday the revised Textile and Apparel Policy 2020- 25, after resolution of a dispute between Commerce Ministry and Energy Ministry on energy (electricity and RLNG) prices for the textile and apparel sector. “The economy of Pakistan is moving in the right direction,” said Dawood, while addressing a news conference on Wednesday. “One of the main objectives of the textile policy is to first, give our textile industry internationally competitive electricity and gas rates, and that has been a major impetus behind export growth.

Textile and Apparel Policy stands approved by Cabinet: MoC “In the textile policy, we are assuring the business people that we will give them international competitive prices. Furthermore, we will maintain tariff rationalisation,” he said. “In last year budget, we reduced duties on the raw material and on the intermediaries for textiles, which would be maintained under this policy. We will also continue to give DLTL, we will also continue financing both long-term and working capital,” he said. He said that the textile sector's position has improved in the last three years, as the government eyes to increase textile exports to $21 billion by the end of this fiscal year. “This means that there will be an increase in textile exports of $6 billion,” said Dawood, terming it "very good progress". Dawood said that the textile sector has grown by 23%, and the government expects the textile sector to grow by 26%.

Textile, apparel industry: Govt decides to substitute power, RLNG tariffs On the global share of Pakistan products, Dawood said that local yarn alone constitutes 7% share of the global market. “(However) Pakistan’s overall share of the world textile market is 1.8%, which suggests that the textile sector still has a lot of space,” he said. Highlighting the challenges pertaining to Pakistan exports, Dawood shared that "we need to move towards diversification and value-added products, maintain the competitive prices for energy and improve our infrastructure for garments particularly". “We are exporting 75% of all our goods to only 10 countries. This means that we have not achieved the level of diversification required. Only 15 tariff lines in the customs book constitute 50% of our export,” he said. The advisor said that the textile sector is bringing in machinery worth $435 million, and 50% of it has been imported whereas the rest remains, meaning that the textile sector would increase their capacity. “Our biggest challenge is that we have to be able to make this growth sustainable, and this is the challenge of the government’s entire economic team. We do not want that after 2-3 years the textile sector dips,” said Dawood, while expressing confidence that sustainability would be achieved.

Source: Business Recorder

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Textiles caused 3rd highest pressures on water, land use in 2020: EEA

Compared with other consumption categories in 2020, textiles caused the third highest pressures on water and land use, and the fifth highest use of raw materials and greenhouse gas (GHG) emissions, according to a European Economic Area (EEA) briefing that provides updated estimates of textiles’ life-cycle impacts on the environment and climate. The briefing, titled ‘Textiles and the environment: The role of design in Europe’s circular economy’, says per average person in the EU, textile consumption required 9 cubic metres of water, 400 square metres of land, 391 kg of raw materials, and caused a carbon footprint of about 270 kg. The vast majority of the resource use and emissions took place outside of Europe. The briefing also looks at how circular business models and design can reduce the negative impacts from textile production and consumption by retaining the value of textiles, extending their life cycles and increasing the usage of recycled materials. This requires technical, social and business innovation, supported by policy, education and changes in consumer behaviour. A key aspect to increase textile products’ circularity is their design. Circular design, such as careful material selection, timeless look or garment multi-functionality, can allow for longer use and reuse of products, extending the life cycle of textiles, the briefing says. According to the EEA briefing, optimising resource use and reducing emissions at production stage would also mitigate negative impacts as would better collection, reuse and recycling of discarded textiles. Textiles are a major source of microplastic pollution as well, mainly through wastewater from washing cycles, but also through manufacturing, wearing, and end-of-life disposal of garments. Another EEA briefing ‘Microplastics from textiles: towards a circular economy for textiles in Europe’ looks at this specific type of pollution, highlighting three key prevention measures: sustainable design and production, controlling emissions during use and improved end-of-life processing. According to that EEA briefing, pollution could be reduced, for example, by using alternative production processes and pre-washing of garments at manufacturing sites with proper filtering of wastewater. Other promising measures that could be introduced or scaled up include integrating filters into household washing machines, developing milder detergents, and generally taking better care of garments.

Source: Fibre 2 Fashion

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Govt approves textile policy to boost capacity of textile industry

The government has approved textile policy to boost the capacity of textile industry with the aim to ensure sustainable growth in textile exports. Addressing a news conference in Islamabad on Wednesday, Adviser on Commerce Razak Dawood said the policy was approved by the federal cabinet at its meeting yesterday. The Adviser said one of the main objectives of the policy is to give internationally competitive gas and electricity tariff to the textile industry. Razak Dawood said the government had reduced duties on the import of raw material in the budget and this tariff rationalization has been maintained in the policy. Similarly, he said, we will continue to provide financing facility to the textile industry. The Adviser said a phenomenal growth is currently being witnessed in the textile sector. He said the textile exports are expected to touch twenty one billion dollars by the end of this fiscal year as compared to the fifteen billion dollars last year. He said this is a twenty six percent growth in the textile sector. Razak Dawood also emphasized for greater value addition and diversification of products to tap the country's potential in the textiles.

Source: Radio

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Bangladesh’s uniform exports fetch half a billion dollars

Of over $31 billion garment exports from Bangladesh, defence dresses fetch between $400 million and $500 million annually. Bangladesh has turned into a major sourcing hub for uniforms for the military, navy, air force, fire brigade and police for countries around the world as local garment manufacturers have enhanced their capacity and diversified products. The country has also been a good source to supply dresses to the army of the North American Treaty Organisation (Nato), an intergovernmental military alliance, for many years. However, manufacturers mainly supply the uniforms indirectly: international retailers and brands place work orders with Bangladeshi factories and they supply the products to the forces. For instance, Team Group, a garment exporter, supplies uniforms to the Belgian army and Kosovo police through a buyer. “Currently, I am making uniforms for the army of Belgium and the police of Kosovo. The quantity is small but I have the capacity to produce a lot,” said Abdullah Hil Rakib, managing director of the company. Last year, Team Group exported garment items, mainly outerwear, worth $36 million. Uniforms account for nearly 2 per cent of the shipment to the countries, mainly in Europe. Uniforms of forces, personal protective equipment, technical clothes, medical bed sheets and medical clothes have a huge market worldwide, according to Rakib. “Bangladesh needs to improve the capacity to grab the globally value-added garment markets.” The global market size of technical clothing items is more than $370 billion. Of over $31 billion garment exports from Bangladesh, defence dresses fetch between $400 million and $500 million annually, according to industry insiders. The growing production of uniforms indicates that Bangladesh is gearing up to capture more market shares in the high-end value-added garment segment. And like Rakib, many garment factories are producing uniforms for the forces in many countries. Although Snowtex, an outerwear exporter, does not produce uniforms for defence forces, it makes and ships similar dresses for customers. It also produces work apparel and outerwear for farmers, engineers, firefighters and other professionals. Snowtex’s Managing Director SM Khaled says the market of outerwear is growing at a faster rate because of higher demand. The company is set to export $300 million worth of garment items in 2022, which will include $50 million worth of outerwear. Urmi Group, another garment supplier, used to manufacture uniforms for the Belgium army a few years ago, albeit in a small quantity. “We have the potential to grab the market as we are diversifying products,” said Asif Ashraf, managing director of the group, adding that buyers either supply fabrics or nominate suppliers to make the uniforms for forces. Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), thinks Bangladesh’s next growth potential lies in the high-end value-added garment items. “Accordingly, the industry is switching to technical and high-end value-added garment items. A good number of garment factories are already supplying uniforms to fire departments in many countries.” The BGMEA is carrying out a study in collaboration with an Indian firm to find out the markets of uniforms so that local manufacturers can raise their share in the segment. The outcomes of the study might be known within the next two to three months. Local garment producers have targeted two kinds of uniforms: professional and school uniforms. Currently, many factories are exporting school uniforms to European nations. However, making professional uniforms is complicated and expensive as it needs a lot of coarse yarn. As Bangladesh does not produce cotton, Pakistan is performing strongly in the segment since the country is a major producer of the key textile raw material, Hassan said. Mohammad Ali Khokon, president of the Bangladesh Textile Mills Association, says currently, some mills are producing military and tent fabrics and supplying them to other countries. “Many mills are capable of producing uniform fabrics as they have upgraded technologies.” Manufacturing fabrics for professional uniforms requires strong printing technologies in which Bangladesh is already a good performer, the entrepreneur added. “Bangladesh is investing to produce man-made fibre. So, local weavers can supply the required fabrics to garment makers for the production of more uniform fabrics.”

Source: Asia News

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New Zealand-China FTA upgrade to enter into force in April

The New Zealand-China Free Trade Agreement (FTA) upgrade, signed in January 2021, will enter into force on April 7 this year, according to New Zealand’s minister for trade and export growth Damien O’Connor. Both the countries have ratified the upgrade protocol. New Zealand’s primary industry exports are forecast to hit $50 billion this year, he said. “We will soon be concluding our FTA negotiations with the UK, which will remove tariffs on our exports and create new market opportunities for New Zealand businesses. Our free trade negotiations are progressing with the EU for access to a market of 450 million people,” O’Connor said on the government’s official website. “Goods and services exports between China and New Zealand reached $20.1 billion in the year ending June 2021. New Zealand businesses will benefit from up-to-date rules underpinning our trade. This upgrade modernises the original 2008 New Zealand-China FTA to ensure it remains fit for purpose,” he said. “The Upgrade also includes new market access commitments in goods and services, and additional trade facilitation measures. In terms of goods, the Upgrade will deliver further market access improvements, resulting in tariff-free access for 99 per cent of New Zealand’s $4 billion wood and paper trade to China, once fully implemented. Our existing FTA will also be augmented by new chapters in e-commerce, competition policy, government procurement and the environment,” he said. “Separately, from 1 January 2022, most New Zealand dairy products to China are entitled to duty-free access for the first time as a result of ongoing implementation of the existing FTA. This will directly benefit many of New Zealand’s rural exporters to China, and is expected to result in additional savings of $180 million per annum at current export volumes,” O’Connor added.

Source: Fibre 2 Fashion

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Vietnam apparel exports seen rising 7.4% this year to $43.5 bln -official

Vietnam's apparel exports are expected to jump 7.4% this year to $43.5 billion as factories keep up production despite surging coronavirus infections, the country's textile and garment association told Reuters. Among the world's largest manufacturers for brands like Nike, Zara, and H&M, Vietnam has recently lifted most of its COVID-19 curbs, which last year disrupted production and hobbled global supply chains. "The pandemic will have a milder impact on Vietnam's garment and textile industry this year thanks to a high vaccination rate," Vietnam Textile and Apparel Association vice chairman, Truong Van Cam, said in an interview this week. Daily coronavirus infections in the Southeast Asian country reached a record high of 31,800 on Tuesday but businesses and experts said the risk of repeating last year's lockdowns is lower now that millions of factory workers have been vaccinated and with the Omicron variant appearing to be less severe.

Source: Reuters

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US' Baldwin partners with Blutec to serve Mexican textile industry

Baldwin Technology Company Inc has forged a new partnership with Blutec S.A. de C.V., which now represents Baldwin’s full range of innovative spray systems and corona/plasma treaters for wovens, knits and nonwovens in Mexico. Blutec is a leading agency in the textile sector, representing many of the most reputable textile machinery manufacturers worldwide. Present in the Mexican market for more than 25 years, Blutec is committed to collaborating with companies on the forefront of textile manufacturing technology, including Brückner, Mahlo, EFI Reggiani, Ferraro and now, Baldwin. Baldwin’s precision spray systems for finishing and remoistening use non-contact spray technology to provide optimal controlled coverage of the exact amount of liquids needed to achieve the specific characteristics of the fabric, saving customers time, money and valuable resources. Because only the required amounts of water and chemicals are applied, water consumption can be reduced by up to 50 per cent, contributing to considerably improved productivity in the finishing process, Baldwin said in a media release. In addition, these solutions can process a wide range of low-viscosity water-based chemicals—such as softeners, antimicrobial agents, durable water repellents, flame retardants and more for woven fabrics, knitted textiles and nonwovens. “We are pleased to partner with Blutec in Mexico,” said Rick Stanford, Baldwin’s vicepPresident of Global Business Development for textiles. “We find that this organisation has an excellent reputation in the Mexican textile industry, with a portfolio of machinery principals that provides excellent synergy for Baldwin and our product lines. We’re extremely excited to be onboard.” Daniele Uslenghi, Blutec’s general manager, said: “The textile industry in Mexico is looking for solutions to help reduce manufacturing costs. Baldwin’s precision spray technology provides savings in energy, water and chemistry.

Source: Fibre2 Fashion

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