Union Minister of State for Textiles & Railways, Darshana Jardosh inaugurated ‘Gartex Texprocess India’ and marked the launch of India’s leading textile and garment manufacturing trade fair in Mumbai, today. During the interaction with the media, MoS Textiles spoke about the contribution and role played by Textile Industry in the country. “Textile sector contributes 10% of the manufacturing production, 2% of the India’s GDP and 15% of the country’s export earnings,” she said. The Minister also spoke about the positive impact of the recent cabinet nod for PLI Scheme for Man Made Fabric (MMF) segment and Technical Textiles at an outlay of Rs. 10,683 Crore. “67 players came forward and 61 have already got approvals,” she informed. Smt. Jardosh also spoke about the need for Indian textile industry, mostly dependent on cotton fabric to pay attention to the global market where man-made fibre (MMF) occupies 75% share. She also appreciated the interest shown by the industry in denim fabric and remarked that the younger generation will be attracted to this. The Minister emphasized that developing textile machinery is the need of the hour. She spoke about how innovation in textile machinery can add value for many especially women who play a major role in this sector. She also stressed the need to equip women by providing them with proper skills to meet the growing demands for ready-made garments especially those made with denim fabric in future. She encouraged the industry and scientists to come forward with their innovations and to engage in research that can bring solution. The Minister also appreciated the organisers of the exhibition which has been expanded from Delhi to Mumbai and for creating an international level show in India that brings fabric to fashion on a single platform. “The exhibition ensures that it creates the demand of country’s textile cluster. It will provide opportunity to domestic manufacturers to identify the right technology and thereby help the growth of Indian textiles,” she said. More than 100 brands were on display at the launch edition with specially curated segments - Fabrics & Trims, Denim Show and Screen Print India showcasing trendy displays. More than 25 top Indian denim mills also showcasing their collections at the fair. The Minister also took a tour of the trade fair. The media interaction was followed by a CXO panel discussion with the various industry leaders. The platform aims to reunite the Indian textile industry for exchange of technologies and solutions to reduce India’s import dependency of textile machinery.
Source: PIB
During the interaction with the media, MoS Textiles spoke about the contribution and role played by Textile Industry in the country. Union Minister of State for Textiles & Railways, Darshana Jardosh inaugurated 'Gartex Texprocess India' and marked the launch of India's leading textile and garment manufacturing trade fair in Mumbai, today. During the interaction with the media, MoS Textiles spoke about the contribution and role played by Textile Industry in the country. "Textile sector contributes 10% of the manufacturing production, 2% of the India's GDP and 15% of the country's export earnings," she said. The Minister also spoke about the positive impact of the recent cabinet nod for PLI Scheme for Man Made Fabric (MMF) segment and Technical Textiles at an outlay of Rs. 10,683 Crore. "67 players came forward and 61 have already got approvals," she informed. Smt. Jardosh also spoke about the need for Indian textile industry, mostly dependent on cotton fabric to pay attention to the global market where man-made fibre (MMF) occupies 75% share. She also appreciated the interest shown by the industry in denim fabric and remarked that the younger generation will be attracted to this. The Minister emphasized that developing textile machinery is the need of the hour. She spoke about how innovation in textile machinery can add value for many especially women who play a major role in this sector. She also stressed the need to equip women by providing them with proper skills to meet the growing demands for ready-made garments especially those made with denim fabric in future. She encouraged the industry and scientists to come forward with their innovations and to engage in research that can bring solution. The Minister also appreciated the organisers of the exhibition which has been expanded from Delhi to Mumbai and for creating an international level show in India that brings fabric to fashion on a single platform. "The exhibition ensures that it creates the demand of country's textile cluster. It will provide opportunity to domestic manufacturers to identify the right technology and thereby help the growth of Indian textiles," she said. More than 100 brands were on display at the launch edition with specially curated segments - Fabrics & Trims, Denim Show and Screen Print India showcasing trendy displays. More than 25 top Indian denim mills also showcasing their collections at the fair. The Minister also took a tour of the trade fair. The media interaction was followed by a CXO panel discussion with the various industry leaders. The platform aims to reunite the Indian textile industry for exchange of technologies and solutions to reduce India's import dependency of textile machinery.
Source: Devdiscourse
The Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal today said that India was considering entering into a Preferential Trade Agreement (PTA) with Oman. He was delivering the Keynote Address at the 10th Meeting of India-Oman Joint Business Council (JBC) in New Delhi today. He also added that India was already looking at a comprehensive trade agreement with Gulf Cooperation Council (GCC) nations, of which Oman is an important member. The Minister said that the Joint Commission Meeting (JCM) that took place yesterday between India and Oman, that had been long overdue, was a very productive one. He expressed confidence that the discussions with business leaders on both sides would complement the discussions under JCM, come up with new ideas to boost our already deep bonds of friendship, and turn our vision into reality. Observing that India and Oman have been connected for more than 5,000 years through friendship and brotherhood and very warm and strong people-to-people ties, the Minister said that despite such close relations, the bilateral trade and investment in the two nations were yet to reach maximum potential. Shri Goyal stressed that all the engagement that happened in the JCM, the friendship between him and his counterpart in Oman, the visionary leadership of the heads of both nations and the warm people to people ties between the two nations should and must lead to significant increase in business to business engagement. Paying his respects to Late HM Sultan Qaboos, Shi Piyush Goyal said that he was held in very high esteem in India and was conferred the Gandhi Peace Prize. He was one of the architects of close India-Oman bilateral relations, the Minister added. We owe it to him to strive to transform his vision into reality and take the partnership between India and Oman to the heights it truly deserves, the Minister noted. He expressed confidence that the Joint Business Council (JBC) will supplement the efforts of govts of both countries to deepen engagement. He underscored that these agreements would only reach their true potential if businesses display that enthusiasm which will in turn help political leadership take bold decisions. He urged businesses in both nations to look at new opportunities, especially in services, investment, food security, sustainability, renewable energy and startups. The Minister acknowledged the care, concern and love that was showered on expatriate Indians by the people of Oman, especially during the pandemic. He added that Oman was the 1st country in the GCC to authorize the use of India made Covaxin. Referring to cultural and culinary affinities between the two nations, the Minister said that these ties have brought the people of both the nations even closer. The Minister invited Government of Oman to increase their pharma trade with India. Mentioning the market study on the cooperation in the pharma sector that was unveiled at the JCM yesterday, the Minister expressed confidence that the report would be invaluable to Indian companies wishing to enter Omani market. Our pharma companies will bring quality products at competitive prices to consumers in Oman and help bring down the cost of healthcare, he assured. He also thanked Oman for agreeing to fast-track approval for Indian medicines that had already been cleared by strong regulatory environments like UK, EU AND USA. The Minister urged both nations to leave no stone unturned when it comes to working together to improve lives of people in India and Oman. H.E. Qais bin Mohammed Al Yousef, Minister of Commerce, Industry and Investment Promotion of the Sultanate of Oman said that the two nations had a successful Joint Commission Meeting and added that India and Oman had great trust and confidence in each other. He also invited Indian companies to invest and do business in Oman. H.E. Qais bin Mohammed Al Yousef, Minister of Commerce, Industry & Investment Promotion of the Sultanate of Oman, H.E. Sheikh Hamad Bin Saif Bin Abdul Aziz AlRawahi, Ambassador Extraordinary and Plenipotentiary, Sultanate of Oman, Shri Amit Narang, Indian Ambassador to Oman, captains of Indian and Omani industry and other dignitaries were present on the occasion.
Source: PIB
Exports play a crucial role in realizing Atmanirbhar Bharat, said Shri Prahlad Joshi, Union Minister of Parliamentary Affairs, Coal and Mines, who addressed the outreach Programme on India-UAE CEPA and India-Australia ECTA organized by Department of Commerce in Bengaluru today. Shri Joshi, who was the Chief Guest at the event highlighted the various initiatives and reforms being undertaken by the Government of India to further improve the ease of doing business; the significant milestones achieved in the form of the record high annual exports of goods and services in the current year of around US$ 674 billion; and finally delineated the immense advantages of the State of Karnataka. The Department of Commerce, Government of India, in coordination with the Industries and Commerce Department, Government of the State of Karnataka, and the Services Export Promotion Council (SEPC), and other Apex Industry Bodies, Export Promotion Councils, Local Chambers of Commerce and Industry, organized a Stakeholders’ Outreach Programme on India-United Arab Emirates Comprehensive Economic Partnership Agreement (CEPA) and India-Australia Economic Cooperation and Trade Agreement (ECTA) today, at Hotel Shangri La, Palace Road, Vasanth Nagar, Bengaluru, Karnataka. States outreach programmes are part of series of concerted and coordinated efforts being made by the Department of Commerce, Government of India, to sensitize and create awareness amongst exporters across the country on the conducive platform and the favourable trade ecosystem that is being created with conclusion of these landmark Trade Agreements with partners countries exhibiting significant trade complementarities with India. This particular outreach event was exclusively meant for local industry and exporters, particularly from the MSME sector, from the State of Karnataka. Given the importance of the event and the potential for immense benefits for the industry participants, the event witnessed participation of over 200 businessmen from the State of Karnataka, cutting across industry segments and sectors. As part of the event, two panel discussions were also conducted with the participation from Industry representatives. The panelists discussed ways and means of leveraging on the strengths of Karnataka, as a leading export hub, and optimizing the gains from the Trade Agreements in exports of both goods and services. Further, there was participation from various sectors of industry such as Engineering, Pharmaceuticals, Gems and Jewellery, Textiles, IT&ITES, Mining & Minerals, Education services, and R&D etc. Delivering the welcome remarks, Dr. Abhay Sinha, Director General, SEPC provided an overview of the two recently concluded landmark trade agreements, viz., India-UAE CEPA and India-Australia ECTA and succinctly highlighted the benefits that can accrue to the exporters from the State of Karnataka. Shri Darpan Jain, Joint Secretary, Department of Commerce, delivered a comprehensive presentation, which elaborated on the various aspects of the Trade Agreements and explained in detail the concessions on goods and services exchanged by India with the UAE and Australia, measures incorporated for facilitation of bilateral trade, safeguards that have been placed to protect the Industry, and projected gains in exports, GDP, and employment across various sectors, particularly the labour intensive ones. A need to diversify India’s services export basket, presently dominated by IT/ITeS, was emphasized and potential benefits in various services sectors arising from these FTAs were highlighted. These include Professional Services, Business Services, Audio Visual Services, Education Services, Health Services, Fintech etc Shri Dr E.V.Ramana Reddy, Additional Chief Secretary, Government of Karnataka, provided an overview of the Industrial profile of Karnataka and also spoke about the huge latent potential of the State, which is already a powerhouse of IT/ITES, ranking first in the country in IT/ITES exports. He also expressed optimism at the prospect of the State deriving benefits from these Trade Agreements on the back of its own immense advantages. He also shared a statistical snapshot of Karnataka, including an overview of the macroeconomic indicators, external sector performance, and a summary compilation of top goods and services exported from the State. Participants at the event exhibited enthusiasm at the prospects of deriving immense benefits from the Trade Agreements and committed to forging newer trade relationships with importers in these partner countries with an objective to increase their market shares across sectors and Industries. For more details of the Agreements, please visit the following official websites.
Source: PIB
Cotton prices have gained nearly 40 percent in 2022 and this spells trouble for the textile industry. While spinning mills are partially operational, few fabric manufacturers have decided to hit a stop button to their production at least for a few days. Cotton prices have gained nearly 40 percent in 2022 and are at an 11-year high on the back of a demand-supply mismatch. This is hurting cotton yarn spinners and cottonbased textile and garments manufacturers, forcing many to cut down on operations across the country. While spinning mills are partially operational, few fabric manufacturers have decided to hit a stop button to their production at least for a few days. Industry watchers estimate that the average consumption of cotton per month has also reduced from around 29 lakh bales to 19 lakh bales per month in India. What is further worrying is the fact that the arrival of cotton is slow during this season 2021-22. The Tamilnadu Spinning Mills Association has already made three representations to the Textile Commissioner, Mumbai on this matter. "Many of the spinning mills in Tamilnadu, which contribute up to 40 percent production in the whole country, are running their mills only for five days in a week and many mills are adopting 12 hours of shift and keeping their activities closed for another 12 hours. This means, effectively there is only 35 to 40 percent production going on," says K Venkatachalam, chief advisor of the association. The yarn spinners in the number one cotton-growing state of India, Gujarat, are bleeding and have reported a cash loss of Rs 30 to Rs 40 per kg. "The rise in prices in the international market and low domestic and international demand is worrying the spinning mills. While we are happy that farmers get high prices for their produce, we hope the price surge in input cost is distributed across the value chain. The spinners cannot just carry the burden of price rise," says Ripple Patel, vice president of the Gujarat spinners' association. The government has tried supporting the sector by removing the 10 percent import duty on cotton in April. This move was aimed at encouraging purchases from markets outside of India to address domestic shortages. However, the move may have resulted in a surge in international prices. The global commodity market fears that India, which is the top exporter of cotton, may ban exports and this has pushed the prices to surge further. Meanwhile, the Spinning Mills Association advisor believes that the rise in cotton prices and issues relating to the non-availability of quality cotton to spin quality yarn in India is because the Cotton Corporation of India (CCI) did not buy any cotton this season since October 1, 2021. "Traders and multinational companies engaged in the cotton trading have started stocking the cotton and are creating an artificial shortage in the market…" said Venkatachalam. As a result of all this the price of cotton has gone up from Rs 37,000-Rs 45,000 per candy to Rs 97,000 - Rs 1,04,000 in recent months, he adds. These production cuts may not hurt the value chain immediately, but if no measures are adopted, the fear is that the end consumer may also be hurt soon.
Source: CNBC TV18
Even the government’s decision to abolish import duty on cotton has not provided the much-needed reprieve to the ailing textile industry, the second biggest employment generator after the agriculture sector. With cotton prices breaching the Rs 100,000 per candy mark, the entire textile value chain is in the throes of a grim financial crisis, compounded by dismal export demand and production cuts at every level. Not only smaller units, even bigger players are feeling the heat of increasing cost of important raw materials. Even the government’s decision to abolish import duty on cotton has not provided the much-needed reprieve to the ailing textile industry, the second biggest employment generator after the agriculture sector. “Textile companies are bleeding due to the steep rise in cotton prices. There is production cut all across. They are finding it difficult to match retail rates in proportion to high cotton prices. We want the government to intervene to curb the relentless bullish trend in cotton,” says Chintan Thaker, president, Welspun Group. Thaker said that bigger companies like Welspun have no choice but to continue production activities in order to fulfill long-term orders of their international clients. Welspun’s textile units in Gujarat are running at 60% capacity. “If the current situation prevails for a longer period of time, there would be further production cuts,” Thaker warned. “Nearly 25-odd denim makers in Gujarat have curtailed production, ranging from 25% to 50%,” says Ashish Shah, MD of Ahmedabad-based Aarvee Denims and Exports. Most of the denim producers are suffering losses as it is not possible to balance cotton and other raw material prices with finished products, says Shah. Aarvee Denims too is witnessing a 50% production cut. Spinning units are the biggest sufferers of inflated cotton prices, claims Gautam Dhamsania, secretary, Spinners Association of Gujarat (SAG). “Procurement of cotton from spinning mills has gone down by 50% over the past one month. Exports demand for cotton yarn is weak,” he reveals.Dhamsania says that of the 120 spinning mills in Gujarat, five-six have closed operations and another half a dozen have shifted to polyester and viscose yarn making. The rest have reduced production and working hours, he lamented. Saurin Parikh, president of SAG, attributes the current unrealistically high prices of cotton to future trading on commodity exchanges, coupled with stock piling in large quantities by a handful of multinational companies. He proposes that the government should put a stock limit on cotton to curtail increasing prices. “A large quantity of grey fabric comes from Tamil Nadu to Gujarat for processing. With weavers in Tamil Nadu having reduced production by 50% due to increased prices of cotton yarn, processors in Gujarat are not getting fresh processing job orders from the southern state,” says Naresh Sharma, president Ahmedabad Textile Processors’ Association. Apart from knitted cotton yarns, there has been less demand for polyester and viscoseknitted yarns also from Tamil Nadu since the past fortnight, says Dev Kishan Mangani, former president of Surat Textile Traders Association (STTA). The Tirupur cluster is mainly sourcing knitting yarns from Surat and Ludhiana. The price rise in cotton and cotton yarn has hit the Tirupur garment-export cluster badly. Knitwear exporters feel they would find the going difficult, if the problem is not addressed immediately. They are waiting for the outcome of the proposed meeting of Union commerce minister Piyush Goyal with textile stakeholders scheduled for next Tuesday. Asia’s largest knitwear cluster is observing a two-day strike from Monday in protest against high yarn prices over a period of one year. “This would be a peaceful strike. There won’t be any dharna or protest march. All the units in the cluster will remain closed for two days. Our aim is to draw the attention of the authorities and seek a solution from the prevailing situation,” said Raja M Shanmugham, president, Tirupur Exporters’ Association (TEA). The TEA has also sought assistance from all leading banks to tide over the financial crisis faced by the knitwear exporters, mostly small units, which are reeling under the burden of unprecedentedly high yarn prices. It has asked banks to handhold the exporters and provide ample financial assistance. The TEA has also sought fresh infusion of liquidity schemes like ECLGS. It wants MSMEs to be permitted to avail additional credit facilities of 10-20% of the existing limit. Market observers feel the severity of the impact on the value-added knitwear garment sector will have a cascading effect on each stage of manufacturing, threatening the livelihood of thousands of workers employed with these units, said the TEA. Apart from increased prices of yarns, knitwear-exporting units are also facing a hike in freight charges due to the Russia-Ukraine war. The knitwear exporters may not be able to fulfill more than 40% of their export orders in prevailing situations, Shanmugham apprehends. “Tirupur-based exporters are in the process of preparing the first summer order for the export market and the second summer order is due in May-end. We are doubtful that we will be able to deliver these orders and hence the TEA has approached yarn suppliers to revoke price hike,” he states grimly.
Source: Financial Express
Gold reserves increase by over 100 tonnes in two years Rupee hit a fresh intra-day low on Thursday as it breached the 77.5/$ mark on the back of strengthening of the US dollar, before intervention from the Reserve Bank of India (RBI) helped cut its losses. The rupee ended the day at 77.43/$, before touching a low of 77.63/$, losing 18 paise or 0.24 per cent from its previous close of 77.24/$. “Rupee fell to a fresh all-time low today (Thursday) as the dollar continued to strengthen. But losses remained restricted as the RBI intervened to curtail volatility of the currency. Dollar strengthened after inflation in the US rose in April,” said Gaurang Somaiya, Forex & Bullion Analyst, Motilal Oswal Financial Services. Rupee had hit an all-time closing low on May 5 when it hit 77.47/$. Rupee came under pressure as investors pulled out from riskier assets following the global uncertainty caused by the prolonged Russia-Ukraine war. The currency has depreciated 2.1 per cent against the dollar in FY23 so far and depreciated 4 per cent in 2022. The central bank has beefed up its intervention across foreign exchange market – spot, futures and off-shore – to slow the fall in rupee. As a result, the foreign exchange reserves fell by $45 billion since September 2021. “USDINR spot touched a fresh all-time high after higher-than-expected inflation print in the US pushed US dollar Index to a fresh 20-year high,” said Anindya Banerjee, VP, Currency Derivatives & Interest Rate Derivatives at Kotak Securities Ltd. “Weakness in equities was an add-on force for the US dollar. We suspect the RBI might have sold dollars to stem the decline in the rupee. Overall view is of a range, between 77.2 and 78.2 on spot,” Banerjee said. Total forex reserves have fallen below $600 billion, and the market expects reserves to go down further before it increases. Total foreign exchange reserves were at $597.7 billion for the week ended April 29. In the half yearly report on management of foreign exchange reserves, released on Thursday, the RBI has said its net forward assets stood at $65.79 billion as at the end of March 2022. The RBI has increased its gold reserves over the last two years by over 100 metric tonnes, the report on management of foreign reserve said. As at end-March 2022, the RBI held 760.42 tonnes of gold, as compared to 653.01 tonnes same time in 2020, while in 2021 the amount was 695.31 metric tonnes. The value of gold reserves increased to $42.7 billion as of March 2022, from $30.9 billion two years back. The report noted that at the end of December 2021, foreign exchange reserves cover of imports (on balance of payments basis) declined to 13.1 months from 14.6 months at endSeptember 2021. The country has foreign exchange reserves of $633 billion as on December 31. “The ratio of short-term debt (original maturity) to reserves, which was 16.5 per cent at end-September 2021, increased to 18.1 per cent at end-December 2021,” the report said. The ratio of volatile capital flows (including cumulative portfolio inflows and outstanding short-term debt) to reserves increased from 64.1 per cent at end-September 2021 to 65.0 per cent at end-December 2021.
Source: Financial Express
In signs that both private consumption and investment are yet to turn the corner on a sustainable basis, growth in capital goods output slowed while both consumer durables and non-durables production shrank, albeit at a slower pace than the previous month. The index of industrial production (IIP) grew at 1.9% in March from a year earlier, having crept up only marginally from 1.5% in the previous month, suggesting the fragile nature of the economic recovery. However, given the sharply-contracted base in the wake of Covid curbs during the second wave, industrial output in April may even record a doubledigit expansion, analysts said. Official data released on Thursday showed that the IIP grew as much as 12.5%, sequentially, in March. But it was partly driven by seasonal factors that led to a spike in electricity generation and also weighed on manufacturing. With this, the IIP grew 11.3% in the last fiscal, driven by a favourable base (it was -8.4% in FY21). Still, the index grew for the first time in three years in FY22. In signs that both private consumption and investment are yet to turn the corner on a sustainable basis, growth in capital goods output slowed while both consumer durables and non-durables production shrank, albeit at a slower pace than the previous month. Capital goods production grew just 0.7% in March against 2% in the previous month. Consumer durables and non-durables witnessed contraction of 3.2% and 5% in April, compared with that of 8.7% and 5.8%, respectively, in February. In fact, for durables, it was the sixth straight month of fall. Coupled with an elevated inflation, the sluggish industrial activities will complicate the central bank’s task of curbing underlying price pressure in the economy when global commodity prices are moving up without upsetting the growth dynamics. Some analysts have pencilled in a further repo rate hike of 40-50 basis points by the monetary policy committee in June. While growth in manufacturing improved to 0.9% in March from 0.5% in the previous month, that of electricity and mining rose to 6.1% and 4%, respectively, from 4.5% each in February. Of course, at the use-based classification, four segments witnessed growth in March – primary goods (5.7%), capital goods (0.7%), intermediate goods (0.6%) and infrastructure goods (7.3%). Icra’s chief economist Aditi Nayar said: “A majority of high-frequency indicators witnessed an improvement in their growth performance in March 2022, aside from a contraction in the output of CIL (after a gap of 11 months), and a sharp moderation in the y-o-y growth of non-oil merchandise exports, based on which we expect the IIP growth to accelerate to 3-5% in the just concluded month.” Economists at India Ratings said: “The pattern of growth across used-based classification suggests that weak consumption demand is likely to witness more headwinds in the coming months from high inflation and reversal of interest rate cycle, but the demand for infrastructure goods may continue due to the sustained government capex spending.” They expected that consumption demand in view of high inflation and rising interest rate will remain a major risk to the economic recovery.
Source: Financial Express
The official said the government has not told the RBI to manage yields for its borrowings, as “interest rate is a monetary policy tool to calm inflation”. He was responding to reports that the central bank may buy government debt to put a lid on elevated yields. The rate hike by the Reserve Bank of India (RBI) to control inflation will lead to a “less high growth rate” for the country, as demand is expected to moderate as a result of the central bank’s move, finance secretary TV Somanathan said on Thursday. “When interest rates go up, demand is expected to moderate and that’s part of the reason for increasing the interest rates,” he told CNBV TV18. He, however, added that despite the effect of rate hike on demand, “India would still be one of the fastest growing economies”. The official said the government has not told the RBI to manage yields for its borrowings, as “interest rate is a monetary policy tool to calm inflation”. He was responding to reports that the central bank may buy government debt to put a lid on elevated yields. The 10-year G-sec yield had gone up by 31 basis points last week after the central bank hiked the benchmark lending rate by 40 basis points, in an out-of-cycle action on May 4. “The government is in constant conversation with the RBI at all times — good times, bad times, normal times and abnormal times — as the RBI is the government’s debt manager,” he added. The official said higher interest rates is unlikely to hit the capex plans in the private sector, which does not take investment decision based on interest rate alone. Despite likely about Rs 1.8 trillion additional expenditure on subsidies on fertiliser (about Rs 1 trillion) and food (Rs 0.8 trillion on free grains scheme in H1), Somanathan said he didn’t see any reason for a fundamental change in fiscal policy at this point. “Some of the numbers have changed, but the changes have been on both sides of both expenditure and revenue. So in terms of the net fiscal position, we’re not very different from where we were on February 1,” he added. Somanathan had told FE recently that additional subsidy expenditures would likely be offset by additional tax and disinvestment receipts in FY23. According to an FE estimate, the Centre’s net tax receipts, net of transfers to the state could be a steep Rs 1.7 trillion higher than the BE of Rs 19.35 trillion in FY23. The tax receipts are to be boosted by robust mop-up of direct taxes and the higher-than- expected goods and services tax (GST) collections. Additionally, proceeds of about Rs 21,000 crore from LIC’s IPO will come in as extra receipts as this was not factored in the Budget for the current fiscal year. On GST compensation requirement after the five-year guarantee on revenue ends on June 30, the official told the TV channel that GST Council is seized of the matter. “But, I think the problem (revenue constraints of states) is of a smaller size than we might have thought a year ago.” Gross GST collections have been robust in recent months with April showing a record Rs 1.68 trillion. The average monthly GST collection FY23 may average about `1.3-1.35 trillion as against Rs 1.2 trillion factored in the FY23 Budget. However, there could still be a shortfall in GST revenue growth compared with 14% annually guaranteed by the Centre as included compensation and back-to-back loan arrangements in the past two years.
Source: Financial Express
The ongoing power crisis in northern and western states has crippled the textile industry in India. Production is being hampered by power cuts in the states of Haryana, Delhi, Uttar Pradesh, Punjab, Rajasthan, Gujarat, Madhya Pradesh and Maharashtra. Spinning mills are the most affected as yarn production is a high power consumption process. The disruption of electric supply is adding to the problem faced by the textile industry due to skyrocketed prices of cotton. Ludhiana-based trader Ashok Singhal told Fibre2Fashion that the spinning mills are badly affected due to the power crisis. “The power intensive spinning mills are forced to halt production, as captive power consumption from DG sets is not viable due to high cost.” He explained that mills are getting power supply at average price of ₹7-8 per unit from local electricity distribution company, while captive power from DG sets cost around four times at ₹25-28 per unit. So, “most of the mills have replaced the large capacity DG sets with smaller ones for light-fan power supply.” Anil Bansal from Mumbai said that most of the cities of Maharashtra are facing power cuts. According to him, lakhs of powerlooms across the state are forced to halt production due to power shortage. However, powerloom operators are not very much worried due to halt of production because demand from downstream industry is also weak after cotton prices rose to a record high. Gujarat based textile mills are also facing power shortage, but the extent of power cut is limited compared to other states. The states of Delhi and Uttar Pradesh are also reeling under severe disruption in power supply. However, furnishing textile hub of Panipat is the most affected by the power crisis. All the production activities including spinning and weaving are adversely affected in the textile hub. Trading activities are also hampered due to slow production, which has not improved even after Eid due to power shortage. According to industry sources, there is a power cut of 10 to 15 hours in Panipat and other adjoining areas of Haryana. A mill owner from Panipat said that the power crisis in Haryana started in mid-April itself, which is still not over. He added that he does not find production profitable if he runs his mill on DG sets. Panipat-based trader Suresh Durga said, “It became very difficult to meet out the regular demand for furnishing products like curtains, bedsheets. There is a production mismatch as items in high demand are short supplied.” Durga said that there is off-peak season in Panipat for furnishing textiles, but the power crisis has made it difficult to maintain production and supply even at a minimum level.
Source: Fibre2 Fashion
The UK government has introduced a bill which will help to bring into force its first independently negotiated Free Trade Agreements in more than 50 years. This bill will enable UK to export goods and services and bring imports at reduced rates for British customers. The UK signed the Australia Agreement in December and the New Zealand Agreement in February. The UK-Australia Agreement is expected to increase trade by 53 per cent, boost the economy by £2.3 billion and increase wages each year in the long-run. The UK-New Zealand Agreement is expected to increase trade by almost 60 per cent and boost the economy by £800 million. “I am excited to see the UK implement its first ‘from scratch’ Free Trade Agreements in over 50 years and deliver on a key Brexit benefit - having our own independent trade policy,” said international trade secretary Anne-Marie Trevelyan. Introducing this bill is an important step in ratifying these trade agreements so that UK businesses can begin benefiting and expanding their trade with Australia and New Zealand as soon as possible. To bring these agreements into force, Parliament must formally scrutinise the agreements under the Constitutional Reform and Governance Act; the Trade (Australia and New Zealand) Bill has to be agreed by Parliament; necessary secondary legislation has to be passed by Parliament to make the changes required to the procurement regime to meet the terms of the Agreements; and only once the steps above have been completed can these agreements be ratified and brought into force, the government of UK said in a media release. “International treaties are negotiated and then entered into force by the government. Treaties do not always require legislation to come into force, but on some occasions changes to domestic law might be needed to implement a trade deal. For these agreements, this bill will change our rules on procurement which in turn will widen access for UK suppliers to procurement opportunities in Australia and New Zealand. The changes are needed to give Australian and Kiwi suppliers rights to access the benefits of the Agreements,” the release added. The new commitments in free trade agreements like these will not affect the power the UK has to reform its domestic procurement rules. Both the UK-Australia and UK-New Zealand free trade agreements include commitments to addressing climate change like decarbonisation and increasing innovation in green sectors.
Source: Fibre2 Fashion
China has freed up the coastal piggyback system for shipping of foreign trade containers between domestic ports, enabling foreign logistics giants like A.P. Moller-Maersk and Orient Overseas Container Line to plan first voyages by May end, according to analysts, who recently said the move highlights China's willingness to further its 'opening up' policy. The administrative committee of Shanghai's Lin-gang Special Area of China (Shanghai) Pilot Free Trade Zone told a recent news conference that China will introduce a container freight forward rate contract trading platform. Despite a complex international situation and given the impact of the COVID-19 pandemic, the Yangshan Special Comprehensive Bonded Zone in Shanghai has encouraged enterprises to resume production, and the business in the bonded zone has operated smoothly in the first quarter, the committee said. "The new service (for shipping of foreign trade containers between ports within China) is expected to help cut the logistics costs for both exporters and importers, improve the utilisation rates of container ships, and relieve the tightness of shipping capacity to a certain extent," said Zhou Zhicheng, a researcher at the Beijing-based China Federation of Logistics and Purchasing. Jens Eskelund, China chief representative of Danish shipping and logistics giant A.P. Moller-Maersk, said the permission for foreign carriers to carry out international relay is very welcome news and represents a tangible step for foreign carriers in China toward achieving market access on reciprocal terms, an official Chinese media outlet reported. "International relay will allow us to improve services, giving our customers more flexibility and options for their shipments. We are preparing the first shipment in Yangshan terminal in Shanghai, together with the Lin-gang Special Area Administration and other relevant stakeholders," Eskelund said. Hong Kong-based Asia Shipping Certification Services Co Ltd has been officially approved to carry out statutory ship inspection work in the Lin-gang Special Area as the first inspection agency that is not incorporated in the Chinese mainland. In March and April, the daily average container throughput in Yangshan terminal reached 66,000 and 59,000 twenty-foot equivalent units or TEUs, each accounting for 90 per cent and 85 per cent respectively of the average level seen in the first quarter. As of May 8, 193 companies operating in the Yangshan Special Comprehensive Bonded Zone, or 85 per cent of the total, had resumed operations. About half of total employees who work in the bonded zone arrived at their workplaces physically. "The coastal piggyback system will help boost logistics capacity, improve efficiency and provide more business opportunities for global companies to further expand their market presence in China," said Bai Ming, deputy director of international market research at the Chinese Academy of International Trade and Economic Cooperation. "The move is more advanced than the coastal transportation policies being practiced in some countries. Major economies such as the United States and Japan have not opened up coastal transportation for global shipping firms yet," Bai said. China's total imports and exports of goods expanded by 1.9 per cent year on year to a record 32.16 trillion yuan ($4.77 trillion) last year, despite a worldwide slump in shipments due to the pandemic.
Source: Fibre2 Fashion
Estimated by the European Commission to have the fourth highest impact on the environment and climate change (just after food, housing, and mobility), textiles are increasingly in the focus of the Commission’s efforts to make the EU climate neutral by 2050. As part of its Green Deal, and in particular its Circular Economy Action Plan, the Commission recently adopted its Strategy for Sustainable and Circular Textiles, and is in the process of seeking stakeholder input, by way of consultation survey open until 15 May 2022. In the Strategy, the Commission sets out several proposals to address sustainability and circularity in the textiles industry. By looking at the whole lifecycle of textile products, the Strategy aims to take a new and holistic approach, by making textiles more durable, tackling so-called “fast fashion” and textile waste, and ensuring production respects human rights. The Commission has outlined an ambitious 2030 vision with the following core aims: • all textile products placed on the EU market should be durable, repairable and recyclable, to a great extent made of recycled fibres, free of hazardous substances, and produced with respect to social rights and the environment; • fast fashion should be “out of fashion” and consumers should benefit longer from high quality affordable textiles; • profitable re-use and repair services should be widely available; and • the textiles sector should be competitive, resilient and innovative, with producers taking responsibility for their products along the value chain with sufficient capacities for recycling and minimal incineration and landfilling, so that circular clothes become the norm. Below, we provide an overview of the key aspects of the Strategy that manufacturers, retailers, and others in the textiles supply chain will want to watch closely as the Commission’s legislative proposals to achieve these aims take shape.
Introduction of mandatory (eco-) design requirements In order to reduce the impact of textile products on the climate and environment, the Commission intends to introduce several mandatory product design requirements intended to enhance the quality, durability and environmental performance of textiles. The Commission’s recent proposal for a new Ecodesign for Sustainable Products Regulation (discussed previously here), includes binding product-specific design requirements, and in respect of textiles, seeks to make them last longer in order to enable consumers to use clothing for longer and at the same time support circular business models such as reuse, renting and repair, take-back services and second-hand retail. Design aspects may also include requirements as to the material composition, including mandatory recycled fibre content, as well as the ability to recycle and re-manufacture textile products. As part of its Chemicals Strategy for Sustainability (discussed previously here), the Commission further intends to address the presence of hazardous substances used in textile products under REACH. Additionally, to achieve its zero pollution ambition in the production of textiles, the Commission will further consider necessary revisions of other legislation, including for example the Industrial Emissions Directive. As part of this initiative, the Commission also plans to address microplastic pollution. In addition to product design, measures will therefore target manufacturing processes, prewashing at industrial manufacturing plants, labelling and the promotion of innovative materials.
Reducing the destruction of unsold and returned textiles As a disincentive to destroy unsold or returned textiles, under the draft Ecodesign for Sustainable Products Regulation, the Commission proposes to impose an obligation on large companies to publicly report on the number of products they discard and destroy, including their approach to reuse, recycling, incineration and landfilling. Subject to the powers granted under the draft Regulation, the Commission may also introduce bans on the destruction of unsold products, including as appropriate unsold or returned textiles. Additionally, the Commission will assess with industry how digital precision technologies could reduce the high percentage of returns of clothing bought online, in particular by encouraging on-demand custom manufacturing.
Introduction of a Digital Product Passport The Commission also proposes introducing Digital Product Passports, which may become mandatory for textiles. These passports would enable (and indeed require) provision of more information about a product to consumers and other entities in the supply chain. This is likely to require other players throughout the supply chain, including manufacturers, distributors and retailers, to provide and substantiate information to their customers so that both businesses and end-consumers can make informed decisions about the products they purchase.
Substantiating “green” claims A source of growing concern for the Commission is the accuracy of sustainability or “green” claims. In this context, the Commission is proposing to amend the Consumer Rights Directive to oblige traders to provide consumers with information on the durability and reparability of products. The Commission also proposes amendments to the Unfair Commercial Practices Directive, including an expansion of the list of practices which are automatically deemed to be unfair to include making vague, excessively broad or generic environmental claims, displaying ‘sustainability’ labels which have not been verified by an authorised scheme, and designing products in a way that limits their durability (planned early obsolescence). Both pieces of legislation fall within scope of the new Representative Actions Directive (an overview of which can be found here), so a breach of any such new rules could potentially tempt collective actions on behalf of European consumers in due course.
Extended Producer Responsibility The Commission proposes to introduce extended producer responsibility (EPR) requirements specifically for textiles waste. Among other things, these will require that Member States establish separate collections for textile waste by 1 January 2025. The Commission proposes to use eco-modulation of fees in the forthcoming revision of the Waste Framework Directive. This would see fees for EPR paid by producers based on the environmental performance of products, aiming to incentivise the design and production of more environmentally-friendly products. The Strategy does not address potential fines for non-compliance which are instead likely to be subject to national laws.
UK developments in this space In March 2021, the UK government unveiled its plans for a broad, multi-sectoral Waste Prevention Programme. As part of this programme, the government set out its ambition to encourage a textiles sector where items are made to last and easy to reuse, repair and recycle, indicating among other things that it intended to introduce an EPR scheme for textiles, supported by measures to encourage better design and information for consumers. However, the status of these proposals is now unclear – the government published its response to consultation on EPR for packaging on 26 March 2022, but has made no further announcements regarding EPR for textiles. It is possible that proposals may be introduced in due course under the powers granted to the Secretary of State under the Environment Act 2021. It is also worth noting that following the publication of its Green Claims Code, the CMA has announced that it is currently conducting compliance reviews into the fashion retail sector in respect of “green” claims (discussed further here). The outcome of this review could trigger further interest in issues such as the recycled content, durability, and labelling of clothing.
The Nigeria Textile Manufacturers Association (NTMA) has appealed to the Federal Government to provide the enabling environment for the revival of the textile industry and the manufacturing sector. Mr Folorunsho Daniyan, President of the association, made the appeal during the Workers Union news conference on Thursday in Lagos. Daniyan noted that the textile industry was still confronted with challenges in spite of the efforts to revive the industry. He said that the challenges confronting the textile industry include high-cost of production, uncompetitiveness; smuggling and counterfeiting of Made-in-Nigeria textiles, among others. “The Nigeria Customs Service (NCS) has not effectively combated smuggling such that cheap smuggled textile products largely from China and other Asian countries continue to dominate the local market with little or no access to locally produced textiles. “We, therefore, call on the NCS to be more patriotic and adopt new creative measures that must include consistent raid of warehouses of smugglers in Kano, Lagos, Kaduna, Onitsha and other cities of the federation. “We also demand the establishment of a presidential task force made up of relevant stakeholders including the textile manufacturers and union with the power to confiscate goods smuggled into the country. “Recall that a similar task force existed during the administration of former President Olusegun Obasanjo,” he said. Daniyan said that the benefits of the African Continental Free Trade Agreement (AFCFTA) might elude Nigeria if illegal imports of textile fabrics and other locally produced goods continue to flood Nigerian markets unchecked. He acknowledged some measures by the Federal Ministry of Industry, Trade and Investment, Central Bank of Nigeria (CBN) and Bank of Industry (BOI) to revive the industry. Daniyan called for an urgent meeting with stakeholders to objectively review some of the measures and ascertain the level of success as well as the challenges. The president said that lack of patronage was bane of the industry in spite of the Executive Order 003 on the patronage of locally produced goods. He called on relevant agencies of government to comply with the Executive Order by patronising locally produced textiles to avert further factory closures and the attendant loss of jobs. “A fully revived textile industry is capable of creating millions of jobs, addressing the security challenges in the country, and improving internally generated revenue. “It can also reduce billions of dollars in import bills incurred annually on textile and apparel, safeguarding and earn foreign exchange for the country,” he said. Daniyan appealed to state governments to complement the Federal Government’s efforts through creation of industrial policies that would revive closed factories in their localities. He said that the policies should include the provision of infrastructure, granting of genuine tax incentives, and patronage of Made-in-Nigeria products. Also, Mr John Adaji, President National Union of Textile Garment and Tailoring Workers of Nigeria (NUTGTWN), said that effective implementation of the Executive Order 003 of 2017 would facilitate rapid recovery of the textile industry. According to the Executive Order, all Ministries, Departments and Agencies (MDAs) of the Federal Government shall grant preference to local manufacturers of goods and service providers in their procurement of goods and services. Adaji said that the textile sector is a huge investment opportunity for the country if properly harnessed, thus called for the political will to resolve challenges confronting the industry.
Source: Lexology
If fashion wants to be circular, it needs to master textile recycling at scale to account for goods that can’t be resold. Hurdles stand in the way, but some solutions are on the horizon. Circular fashion requires turning old clothes into new ones. Doing that isn’t so easy. “We have to figure out a way to scale not just resale but circularity initiatives in general, and have a pretty significant volume of our production stay in the fashion industry. That's the messy part that no one wants to talk about,” says Kathleen Talbot, chief sustainability officer and VP of operations at Reformation. She estimates at least 20 to 25 per cent of items collected by take-back programmes can’t be resold. And, as the industry rushes to implement resale, the issue she says is they “don't have the solution set for the products that don't make it”. Recycling is critical for circularity because it’s the only way fashion can stop clogging landfill and coastlines, as well as minimise its impact on the world’s natural resources. However, a lot of hurdles stand in the way. For one, the supply chain is set up for linear production. Most textiles that are classified as recycled today are made from other waste streams, such as plastic bottles and fishing nets, which means they are not circular materials. Technologies for recycling fibres into new fibres exist, but have lacked industry buy-in at a speed necessary to scale quickly. Infrastructure for keeping resources in use is also lacking — as are current legislative and economic policies that could incentivise greater efficiency and reuse, among other gaps. Participation matters, too: only a fraction of materials that can already be recycled today, such as paper and (to some degree) plastics, actually are. The industry has begun to recognise it cannot operate within planetary boundaries and brands can’t meet their ambitious sustainability goals if they don’t figure out how to recirculate textiles at scale. Some pieces are starting to fall into place — startups from Renewcell to Circ to Infinited Fiber Company, for example, are developing and preparing to commercialise their textile-to-textile technologies. However, for them to move the needle on fashion’s total resource use, there are gaps that still need to be solved. Industry experts agree on one place to start: collecting used clothes, sorting them and getting them to companies that can recycle them at scale. To operate smoothly and economically, and to produce a fibre that will meet fashion’s standards, those companies often depend on having specific textiles — some work with cotton or viscose or polyester, others use a variety and fibre blends — and on having them be a reliable quality and in large-enough volumes. A number of startups have launched dedicated to bridging this gap in circularity. “This has been the bottleneck for recycling being able to scale — fibre-to-fibre processes have purity standards for feedstock in order for the processes to work — for example, 95 per cent cotton,” says Anna Vilén, communication manager at Siptex, a sorting facility in Sweden. “And for the bigger investments in recycling to take place, you need to know that there are steady, large volumes of raw material available.” Putting circularity into action Siptex is the first large-scale facility of its kind, working with corporate partners including Ikea and H&M, and with fibre recyclers such as Renewcell and Recover (mechanical recycling) to sort textiles automatically by composition and colour. Vilén says the textiles they receive originate in nearby European countries, where manual facilities first sort out clothes for the secondhand market before sending what they classify as waste to Siptex. High-quality and efficient sorting is still lacking in most regions, however. In the US, that could be poised to change if the two companies — For Days, an apparel brand that has been piloting a take-back bag with customers; and Supercircle, a company launched this week by the founders of footwear label Thousand Fell — are successful in delivering their vision. For a circular system to generate an impact, it needs logistics and infrastructure to be in place. It also needs people to actually participate. That’s top of mind for both Super circle and For Days, which both aim to provide the logistics to collect, sort and then funnel old clothes and shoes onto their “next-best” use. “Our top level goal is to shift as many consumers into circular consumption as possible,” says For Days founder Kristy Caylor. “Obviously we have to work on product design and regeneration, but we also have to really focus on the customer, what they need and how they want to participate. There's a lot of talk and a lot of people standing on stage making commitments — and not necessarily the really hard, heavy-lifting work to reengineer the way we work as an industry and the way we relate to customers.” In the last year, For Days has collected 170,000 garments through its take-back bags — which has become the brand’s best-selling product, says Caylor. Customers buy a mailer for $20 and use it to send in old clothing (from any brand, not just For Days) for the brand’s processing centre to sort and determine the next-best use for each item. Some will be resold, some downcycled into things like insulation and others recycled into new fibres. The latter is a focus for expansion: For Days has one supply chain partner that recycles cotton fibres — used to launch a T-shirt last month that was made from old For Days clothes — and the company is exploring relationships with several others. For Days is expanding its reach by partnering with other brands to offer the same takeback and sorting service for their products as well; it recently started selling Cariuma shoes on its website, and is talking with about 90 other brands to “facilitate circularity” for them in the next nine to 12 months. “Who’s going to build it themselves?” Caylor says. “I think isolating this behaviour at the individual brand level is really challenging for the consumer, so aggregating it into one place feels like the most value add, both for the consumer and from an ecosystem perspective.” Supercircle, which soft-launched with Reformation and then Mate the Label this spring before its formal launch this week, is taking a different approach. It also takes clothes and shoes for sorting and grading for resale, downcycling or recycling (or to be fed to waste-to-energy facilities, the lowestgrade use). However, it operates with individual brands and asks customers to register the specific garments they plan to mail back. That allows the sorters to know exactly what they’re taking in, although the technology is designed to also verify. “Goodwill is not the trash. Goodwill is not the solution to get rid of old, pilled, holed stuff — so instead, pack it all up, slap a label on it, send it to Supercircle,” says co-founder Chloe Marie Songer. Products that can’t be identified for fibre recycling will be downcycled, she says, but as the technologies advance, which they believe will happen in the next five years, they expect to increase the percentage of products sent for true recycling. There are a handful of brands on the platform to start, with a target to feature 40 to 50 brands next year, Songer says, adding that the system offers the scale and efficiency that brands need to be able to make the economics of recycling work. Working to scale Both companies have kinks they still need to work out, many dependent on factors beyond the companies’ control, such as technology development. For the brands working with them, it’s a significant step in the right direction, however — both because they are taking greater responsibility for the clothes they produce, which is something policy experts want to see; and because it is closer to true textile circularity than most of what happens today. Currently, too much clothing collected today is downcycled rather than recycled, for example, says Talbot of Reformation. “That's giving that material one extra life, but it's far from promoting true circularity, and it's not staying in the fashion system again. It's not helping us use less virgin cotton in our denim,” she says. The ability to recycle its clothing into new products is also a key part of how the brand plans to meet its ambitious goal to be climate positive by 2025. “We see the opportunity in the innovation to be there for fibre to fibre recycling.” No company, sorting process or technology will be perfect yet — they all operate in a system that’s not designed for circularity — but advocates are encouraged by the rise of companies making an effort and nudging progress in the right direction. Perhaps eventually, this will prompt investments in more systemic needs, such as infrastructure. “Circular models are interesting because they inspire better consumer behaviour. What businesses are able to actually do depends on the infrastructure that exists,” says Rachel Kibbe, founder of Kept SKU and Circular Services Group, an advisory group. “What are we doing to link the front end with the back end? What brands are doing right now is in an imperfect system. The worst thing we can do is not look at the root causes and not invest in scalable solutions.”
Source: Vogue Business
