In a recent visit to India, UK Prime Minister Boris Johnson announced that the FTA was likely to be completed in October The Confederation of British Industry (CBI), Britain’s largest business organisation, and its Indian counterpart, the Confederation of Indian Industry (CII), have agreed to set up a new joint commission to increase cross-industry collaboration and to push the trade deal over the line. According to a memorandum of understanding (MoU), the UK-India Business Commission will provide a critical forum for discussion to ensure that the free trade agreement (FTA) benefits businesses in both countries, an official statement said Monday. The group will provide continual oversight and meet ahead of key milestones to take views on trade-offs, breakdown barriers to market access, and help feed in on-theground business intelligence at a ministerial level in India and UK. In a recent visit to India, UK Prime Minister Boris Johnson announced that the FTA was likely to be completed in October. The first and the second round of negotiations for the FTA took place in January and March, respectively. The third round of negotiations concluded at New Delhi last week. The deal is expected to resolve market access issues, boost exports, and strengthen trade partnership between the two nations. However, both sides now seem to have decided to directly negotiate an FTA without going for an interim deal. The UK’s world-leading renewable sector in particular could play an integral role in India’s transition to clean energy. India has committed to get 50 of its energy from renewable sources by 2030. Reducing tariffs on green exports such as solar, onshore, and offshore wind could open new opportunities for firms in India, the statement said. The deal with India could almost double UK’s exports to India, boost Britain’s total trade by as much as £28 billion a year by 2035, and increase wages across the UK regions by £3 billion. “A free trade agreement with the world’s fastest-growing economy is now within touching distance, and to clinch that deal a focus on lowering barriers to trade is now essential. More broadly, a deal anchored in slashing tariffs, improving the ability to move talent across borders as well as data, will unlock plenty of prizes across a host of sectors from services and life sciences to tech and innovation,” CBI President Lord Karan Bilimoria said. “This partnership is an opportunity to address shared concerns, identify common interests and foster greater understanding and to develop capacity to address the issues of economic and global concerns,” said Chandrajit Banerjee, director general of Confederation of Indian Industry.
Source: Business Standard
The Indian currency ‘rupee’ extended losses and reached an all-time low level of 77.46 against the US dollar today. This is likely to give relief to textile exporters who are currently feeling pressure on their margin due to costlier cotton. However, it is also a cause of worry for the industry as it will raise cost of production due to costlier imports. In the last two trading sessions, rupee has fallen more than 100 paise against the US dollar. Today, rupee was week at the opening of trading in forex market and Indian currency touched all-time low level of 77.46 after decline of 56 paise. Earlier on Friday, the rupee had declined 55 paise to touch a level of 76.90 against dollar. Experts said that the increase in interest rate by the US’ Federal Reserve is the main reason for the stronger US dollar. The Federal Reserve recently raised its rate to contain high inflation by squeezing liquidity. The higher Fed rate is driving the bond yield upside. “The imports of raw material will become costlier due to depreciation in rupee against dollar. It will increase the cost of production in the textile sector. However, exporters may get temporary relief from the all-time low rupee,” Southern India Mills’ Association (SIMA) Secretary General Dr. K Selvaraju told Fibre2Fashion. The Indian rupee has seen steep downfall against the US dollar at a time when the industry is trying to import cotton after the government removed duty till September 30. However, rupee will be expensive due to its depreciation. Global cotton prices are hovering near to domestic prices, so cotton import may become unviable due to weaker rupee. According to forex traders, risk appetite has weakened amid mounting concerns about inflation that may trigger more aggressive rate hikes by the global central banks. Viresh Hiremath, forex analyst and director of Finlit Consulting Pvt Ltd said, “Global trend of higher inflation is disrupting forex market, and the South Asian currencies are falling visà-vis the US dollar.” He said that the dollar index against six major currencies rose to 104.02 due to uncertainty in global economy and rising inflation in the US. The Federal Reserve can increase interest rate further to contain inflation which pushed up 10 years bond yield. As foreign investors got attracted to US bonds, they turned net sellers in the Indian market and outflow increased. The Indian rupee came into pressure due to this exit of foreign investors. However, the Indian rupee has performed better against the US dollar as compared to the currencies of other south and southeast Asian countries like Bangladesh, Pakistan, Sri Lanka, Indonesia and Malaysia. Forex market experts said that Indian rupee remained almost steady in the last one-anda-half months. But international economic concerns and inflation in the US may continue to pressurise rupee against the dollar.
Source: Fibre2 Fashion
In fiscal year 2021-22, India’s exports did rather well. They were nearly $420 billion, raising hopes that India was putting behind it a decade of export under-performance. For India to be a $5 trillion economy by 2024-25, we need to export at least $1 trillion worth of goods and services, as exports contribute around 20% to overall gross domestic product (GDP). What would it take to sustain India’s export growth? We explore some avenues. To export $1 trillion by 2024-25, it is imperative to boost export competitiveness. Though competitiveness is often observed through changes in global market shares, a country may mask its underlying competitive weakness by manipulating exchange rates—through devaluations, for example, or by maintaining a weak currency. In the case of India too, studies have pointed to the exchange rate as an important determinant of exports and our trade balance. However, it is not the key determinant. During 2002-2007, our merchandise exports grew at a healthy annual growth rate of around 25%, while the 36- currency export-weighted real effective exchange rate (REER) appreciated by 1.2% per annum (Veeramani, 2008). Similarly, between 2011 and 2021, while the Chinese yuan appreciated by around 57% relative to the Indian rupee, our merchandise trade deficit increased by around 78% with China. So there was no improvement in our trade balance with China despite rupee depreciation versus the yuan, implying there are other forces at work affecting export performance. Other than the exchange rate, factors such as tariffs and quotas and non-tariff factors like infrastructure, research & development (R&D) expenditure, innovation, the ease of doing business and efficiency of logistics play a critical role in determining export competitiveness. Lack of R&D investment remains a concern for India, as the share of gross domestic expenditure on R&D in GDP stood at a low 0.65% in 2018, as against 2% in China, and that too driven mainly by the government with a share of 56%. Indian businesses account for just about 37% of national R&D expenditure, compared to 68% in other large economies and 77% in China. This can explain why India—once nearly self-sufficient in pharma inputs in the 1990s—is critically dependent on imported inputs today. Research suggests that weak protection of intellectual property (IP) rights leads to low returns on innovation, thereby disincentivizing companies to innovate. India ranked 43rd out of 55 nations in recent IP rankings. On the Global Innovation Index 2021, India stood at No. 46. While an improvement from our earlier rankings, we fell short of China, which was ranked 12th. Given that frontier technologies represent a $350-billion market expected to reach over $3.2 trillion by 2025, as per UNCTAD estimates in 2021, Indian industry needs to urgently invest in technology, corporate R&D and product innovations to be competitive and make India a global technology and innovation leader. To reduce logistics cost and make supply chains efficient, the country must digitize supply chain operations, leverage disruptive technologies such as blockchain and Internet of Things, and move towards green supply chains, even as we enhance skill development. It is also observed that none of the export commodities in which India has a high comparative advantage is among its top exports in terms of share and value. India holds a comparative advantage in mainly labour-intensive commodities such as cotton, carpets and other textiles, etc, while Indian exports more capital-intensive products such as transport equipment, machinery and mechanical appliances. This is reflected in our declining share of labour-intensive exports over time, raising concerns for a country that is labour abundant. As for services, the export specialization index suggests that we hold relative export competitiveness with major economies in computer programming, consultancy and information services, which are our largest exported services. However, export competitiveness does not exist for sectors like health and education, despite India’s inherent potential in providing cost-effective, high quality services in these areas; this is reflected in the negligible share of these services in total service exports. India’s private sector needs to acquire specialization in products in which it is competitive. India needs to climb the rankings of the Economic Complexity Index. The higher this score, the better the export performance. In the Harvard Growth Lab’s ‘Atlas of Economic Complexity’, India’s score in 2019 was 0.46. It was 0.32 in 2000. The country’s global ranking has remained unchanged. The Indian private corporate sector has several advantages as it enters a new decade. Its balance sheets are healthier than before. Its profitability is high while Indian corporate tax rates and real borrowing costs are low. Space is opening up for India to exploit avenues created by myopic policies pursued by some other nations. It is time for Indian businesses to aim bigger and lengthen their horizon. The focus has to be on win-win: pay small suppliers on time, help the pie of prosperity grow bigger, and focus on competitiveness gains through investment in research and technology, rather than through a weaker currency and tariff protection. These are the authors’ personal views. V. Anantha Nageswaran, Prerna Joshi & M. Rahul are, respectively, chief economic adviser, and Indian Economic Service officers serving the Government of India.
Source: Live Mint
The depreciation will also partially soften the blow of elevated shipping costs and supply chain disruptions in the wake of the Russia-Ukraine crisis. As the rupee nosedived to a fresh low of 77.47 against the greenback on Monday, exporters expected the weakening domestic currency to aid a broad range of sectors, more so for some of the labour-intensive ones like textiles and garments, agriculture, footwear and handicrafts, where the margins are typically limited — and services sectors like IT. The depreciation will also partially soften the blow of elevated shipping costs and supply chain disruptions in the wake of the Russia-Ukraine crisis. However, for the benefits to accrue, the rupee needs to stabilise at a depreciated level in the coming weeks and stay at that level for a relatively long period, they told FE. Of course, a weak currency — coupled with a spike in global crude oil prices — would further inflate the input and logistics costs of companies and further erode their margins. Importantly, the depreciation of the currencies of India’s competitors will determine the extent of gains for India. Nevertheless, the sectors that are not dependent on input imports stand to gain. The cost of capital goods, mostly imported, will also go up at a time when the government has stepped up focus on capital spending to spur economic growth. India imported machinery worth almost $40 billion and transport equipment, including auto components, of another $13 billion in the first 10 months of this fiscal. Together, these two segments made up as much as 11% of the country’s merchandise imports. The domestic currency has shed as much as 4% against the dollar this year and 3.8% since Russia’s military operations in Ukraine on February 24. According to A Sakthivel, president of the apex exporters’ body FIEO, the rupee depreciation will augur well for exporters in general. It will particularly help industries like software and textiles where the reliance on imported raw materials is limited. However, it will also push up costs of manufacturing firms in sectors (like petroleum and gems and jewellery) that rely on large volumes of imported inputs for domestic value addition and subsequent re-exports. A senior executive of the engineering exporters’ body EEPC, however, said it was too early to gauge the precise impact of the currency depreciation. Recently, Mahesh Desai, chairman of EEPC India, stressed the need for stability in the local currency. According to the RBI’s real effective exchange rate (REER) index, based on the exportweighted average of about three dozen currencies, the rupee was “over-valued” by 2.66% in March, compared with from 4.31% in January, thanks to the depreciation. According to noted textiles expert DK Nair, the depreciation, if sustained, will help exporters, especially in sectors like textiles and garments where the dependence on imported raw materials is minimal. Merchandise exports breached the record target for FY22 to hit $421.8 billion, while services exports, too, scaled a fresh peak of $254.4 billion. The government is aiming at a meaningful rise in exports this fiscal as well, even on a base that is not conducive, and external headwinds. Against this backdrop, the rupee depreciation augurs well for exporters.
Source: Financial Express
Textiles, Commerce & Industries Minister, Nemcha Kipgen has asserted that the Manipur Integrated Logistics Policy, 2022, which was approved in the 1st Cabinet Meeting, will surely streamline the logistic infrastructure in Manipur. The Minister made the statement during her official visit to Integrated Check Point (ICP), Moreh. Interacting with the officials of Land Ports Authority of India, Nemcha urged the officials to maintain the infrastructures of ICP Moreh properly as it has the strategic advantage of India’s Gateway to the East and the only feasible land route for trade between India, Myanmar and other Southeast Asian countries. The Minister also sought cooperation from the local CSOs and villagers for proper maintenance of the ICP and other developmental activities/projects of the Central and State Government. The officials of Land Ports Authority of India also felicitated Nemcha Kipgen with the insignia of ICP, Moreh. During the visit, Nemcha also inspected the site for Industrial Estate in Tengnoupal District and Trade Centre in Moreh. On her way to the border town, the Minister also inspected the Keiraopokpi Industrial Estate in Kakching District. The Minister was accompanied by Director, Commerce and Industries, Y Robita and other officials on her visit.
Source: The Sangai Express
Tod's has been operational in India since 2008 with mono-brand stores in DLF Emporio, New Delhi, and Palladium, Mumbai Reliance Brands has become the official retailer of Tod’s in all categories including footwear, handbags, and accessories in the Indian market. Tod’s has been operational in India since 2008 with mono-brand stores in DLF Emporio, New Delhi, and Palladium, Mumbai, and multi-brand e-commerce platform Ajio Luxe, Reliance Brands said in its release. The management of the existing channels will be taken over by Reliance Brands and the focus will be on enhancing the brand’s potential in the market and strengthening their digital presence. “Tod’s has crafted a unique space for itself at the global luxury front. A name that conjures images of luxe leathers and soigné materials, we are thrilled to partner with the brand to uphold its core values of exceptional quality, craftsmanship and effortless elegance in the Indian market,” said Darshan Mehta, managing director of Reliance Brands, in the release. Reliance Brands is a subsidiary of Reliance Retail Ventures and was set up to launch and build global brands in the luxury to premium segments across fashion and lifestyle. Carlo Alberto Beretta, Tod’s general manager, said: “We are pleased to partner with the country’s leading luxury retailer as we believe that our common passion for quality and a modern and sophisticated lifestyle will allow us fully to express the potential of this important partnership.” Reliance Brands’ current portfolio of brand partnerships include Armani Exchange, Bally, Versace, Villeroy & Boch, and West Elm. Reliance Brands operates 1,937 doors, split into 732 stores and 1,205 shop-in-shops. In 2019, Reliance Brands marked its first international foray by acquiring British toy retailer Hamleys. Hamleys has 213 doors in 15 countries.
Source: Business Standard
Gartex Texprocess India, jointly organised by Messe Frankfurt India and MEX Exhibitions, will provide an opportunity to accelerate technological advances in the Indian textile and garments industry by showcasing products from over 120 exhibitors in Mumbai 12-14 May. The show includes an exclusive Denim Talks series to present digital manufacturing and bio dyeing technique for the first time in India, while the first-ever Flash dyeing technique of indigo will be made public at the show. The Mumbai trade fair, held at at the Jio World Convention Centre in BKC, hopes to capitalise on the momentum created by its New Delhi edition. The Denim Show, Fabric & Trims Show and Screen Print India will also be hosted under the Gartex Texprocess India 2022 umbrella and will display innovations in textile and garment making machinery, denim, trimmings and screen-printing verticals. Shri Vijoy Kumar Singh, additional secretary, Ministry of Textiles – Government of India, stated: “I am glad to know that Messe Frankfurt India and MEX Exhibition are organising the first edition of Gartex Texprocess India 2022 in the financial capital of India after successfully hosting the show in Delhi last year. I had an opportunity to inaugurate the Delhi edition and visited the exhibition in person… We need to be careful but at the same time push economic activity in light of employment creation and development. The Indian textiles industry is majorly dependent on imported machines. Singh said the Ministry was formulating a scheme for incentivising manufacturing of textiles machinery in India. “The approach is to incentivise local innovation and at the same time invite eminent manufacturers to set up ventures locally,” Singh believed.
Source: Exhibition World
The Bangladesh Bank on Monday eased the value addition requirements for the textile mills to achieve cash incentive facility. On the basis of the government’s latest decision, the textile sector would be eligible to receive cash incentive upon ensuring value addition of at least 20 per cent. As per the BB circular of September 20, 2021 the textile sector was supposed to ensure value addition of at least 30 per cent to claim cash incentive from the government. Textile sector receives cash incentive at the rate of 4 per cent against export of their products.
Source: New Age
The under-construction fabric park in Punnakuda in Sri Lanka’s Batticaloa district will strengthen import substitutes for the apparel industry and annually save $500 million for the country, according to Board of Investment (BOI) chairman Raja Edirisuriya. It is the largest development project in the Eastern Province with an investment worth SLR 5.5 billion. Sri Lanka annually spends $6 billion on raw materials needed for textile manufacturing. With this new set up, raw materials worth $500 million can be manufactured every year. Four leading garment manufacturing companies are willing to invest in the fabric park, which is expected to create at least 5,000 jobs, according to Sri Lankan media reports. In addition, the government will spend SLR 5.5 billion on developing infrastructure facilities for the project. Edirisuriya and BOI director general Renuka M Weerakone made an inspection tour recently to the site along with a group of potential investors.
Source: Fibre2 Fashion
Export growth in April in dollar terms slowed to 3.9% from a year earlier, compared to an increase in March of 14.7%, customs data showed Monday China’s exports and imports struggled in April as worsening Covid outbreaks cut demand, undermined production and disrupted logistics in the world’s second-largest economy. Export growth in April in dollar terms slowed to 3.9% from a year earlier, compared to an increase in March of 14.7%, customs data showed Monday. That’s the weakest pace since June 2020 but faster than the median estimate of a 2.7% gain in a Bloomberg survey of economists. Imports were unchanged in April after sliding 0.1% in the previous month. Economists expected a 3% decline. April’s data captures the impact of Covid restrictions on the trade and manufacturing hub Shanghai -- home to the world’s largest port -- where most of the population have been under some form of lockdown for more than five weeks. The disruptions add another threat to global supply chains and inflation, and have affected the operations of companies from Tesla Inc. to Apple Inc. Zhang Zhiwei, president and chief economist at Pinpoint Asset Management said export growth may continue to be weak in May because of disruptions to supply chains. “One big macro issue is to what extent export orders will be shifted to other emerging countries such as India and Vietnam,” he said. What Bloomberg Economics Says China’s April trade data offered a glimpse of how lockdowns in Shanghai and other parts of the country are affecting the world’s goods markets. It doesn’t look pretty. An abrupt slowdown in export growth underlines strain on global supply chains from the disruptions to factory output and logistics. Zero import growth -- down from double digits just two months earlier -- suggests domestic demand is cratering. Eric Zhu, China economist China’s government is trying to get production back on track, but with many foreign businesses saying they’re still unable to resume operations and lockdowns tightening again, it’s unclear how much of the city is actually back to work. The slowdown in trade is a concern as exports have been one of the strongest growth drivers for China, helping propel the economy out of its Covid-related slump in 2020 to a better-than-expected performance in 2021. Inflation Effects Imports were boosted by the soaring prices of energy and commodities. The value of coal imports rose almost 80% in the first four months of the year, while the volume of inbound shipments dropped 16%. The value of crude oil, natural gas, and steel also rose, while volumes fell. Imports from Russia jumped almost 57%, likely boosted by rising prices of oil, gas and other commodities, which make up the majority of what China buys from Russia. The biggest declines in exports in April were to Russia, with shipments falling about 26% from a year ago, followed by Hong Kong, U.K., Japan and Germany. Exports to the U.S. rose 9.4%. The slump in China’s trade came despite signs showing global demand likely stayed resilient last month. While South Korea’s exports -- a leading indicator of world trade -- grew by double digits in April, its shipments to China fell 3.4%. Other data from April also showed the extent to which Covid-related disruptions have bruised the economy. Manufacturing activity plunged to its worst level since February 2020, while logistics bottlenecks have continued to be a strain. Suppliers face the longest delays in more than two years in delivering raw materials to their manufacturing customers and Chinese port activity fell below levels seen during the first coronavirus outbreak in 2020. The Communist Party’s top leaders have pledged more stimulus to meet an economic growth target of about 5.5% this year, but have also insisted on sticking with the strict Covid Zero strategy -- two goals economists say contradict one another.
Source: Business Standard
Bangladesh’s export earnings have almost reached its export target amounting to 43.5 billion set for FY22 in 10 months Exporters and Export Promotion Bureau officials have expressed hope that Bangladesh's goods exports will reach a milestone of $50 billion after the end of the current fiscal year 2021-22, which will be $7 billion more than the target. AHM Ahsan, vice-chairman of EPB, told TBS, "If we take $8 billion worth of services exports into account, our exports will reach $58 billion after the end of the current fiscal year." The exports will continue to grow this way until next October, he noted. Bangladesh's export earnings have almost reached its export target amounting to 43.5 billion set for FY22 in 10 months, thanks to growing global demand for apparels and shifting of a good number of work orders from China. In April, the exports clocked the $4 billion mark for the eight consecutive month with a little over 51% year-on-year growth. In July-April, the country raked in $43.34 billion in exports with the readymade garment sector having been the major contributor as usual - it alone accounts for more than 81%, according to sources at the Export Promotion Bureau (EPB). Shahidullah Azim, vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told The Business Standard, "The ongoing robust growth of RMG exports will continue in upcoming months too." The RMG exports will surpass $43 billion while the target was $35 billion for FY22, he noted. Shahidullah Azim said RMG exports have potential to grow at a higher rate if customsrelated complications are eased and business costs are reduced. The RMG sector apart, frozen and live fish, agricultural goods, leather goods, home textiles, pharmaceuticals and plastics also posted a robust growth. Three potential sectors, leather and leather goods, agricultural products and home textiles crossed the $1 billion mark, but jute and jute goods registered a negative growth. Industry leaders say China's gradual pulling out of the apparel business owing to high production costs has come as a blessing for Bangladesh as it is now getting many orders shifting from the world's largest exporter. Besides, consumers still continue to release their pent-up demand for clothing in particular after the pandemic situation normalised, leading to word order pouring in a big number.
Source: TBS news
Conversations around fashion have also become synonymous with conversations around sustainability. While fashion, of course, would like to be more eco-conscious, the pathway to that isn’t overnight. Many companies have implemented progress plans to get their supply chains and products to be mostly sustainable within the next five to ten years. There’s still the question of how do you have sustainability and growth? A recent report by Global Fashion Agenda revealed that the fashion industry can be 80 percent sustainable by 2030 with increased investment in existing recycling technologies and infrastructures. Currently, the fashion industry is on track to overshoot its 1.5-degree pathway target almost twofold, with emissions of 2.1 billion tons of CO2 equivalents in 2030, compared to the 1.1 billion tons required to stay on the pathway. Ways to reduce these emissions include scaling circularity, adopting circular design principles, extending the use-life of products and materials, and ensuring post-life that components break down and are reused or recycled into future items. Recycling happens for less than 1 percent of textile waste into new fibers or clothing. Textile recycling is one big part of the circulatory picture that can get the fashion industry to be 80 percent sustainable by 2030. The issue is these recycling technologies would need to be fully scaled to get to that 80 percent goal. Technologies to deliver recycling across color cotton, cellulosics, synthetic fabrics, and solutions for blended fibers are all burgeoning. The big challenge is providing conditions for scaling, which include collection and sorting infrastructure, and investment in the recycling sector to scale up capacity. The informal waste management sector also needs regulation and formalization. Moving from downcycling to recycling will greatly aid the fashion industry toward sustainability. Manufacturing facilities often incinerate cotton waste for energy. The fashion industry needs to move away from this, and access to affordable, clean alternative fuels needs to be developed to shift incentives toward recycling and away from incineration. Bangladesh, one of the largest manufacturers of apparel, will need infrastructure investment and policy reform to achieve this. Recycling capacity is also still very small in many manufacturing markets. The good news is that the post-industrial textile waste offers volumes of quality, consistent textile feedstock, making it more recyclable than post-use waste. To attract investment to scale this capacity, investors and recycles need greater transparency that this feedstock exists and can be reliably channeled toward recycling. Global Fashion Agenda found that there are three key components beyond postproduction recycling that are a priority for pre-completive action, including standardized consumer labeling, infrastructure for collection and shorting, and shared logistics. In addition, there also needs to be a reduction in the use of virgin materials. Material production contributes 40 percent of greenhouse gas emissions, with oil-consuming textiles the biggest contributor. While the technology to guide the fashion industry toward a more sustainable future is there, the infrastructure needs to be put in place. Transitioning to a circular economy is a win-win for both fashion and the environment. Progress is slow but steady.
Source: Fashion United
