Indian traders and spinning mills should first meet demand from the local textile industry and only then export surplus raw cotton and yarn, Textile Minister Piyush Goyal told industry officials in a meeting. The minister's comments came after textile mills in the southern state of Tamil Nadu, a leading exporter of garments, went on a two-day strike earlier this week demanding a ban on exports. US cotton futures prices jumped to an 11-year high earlier this month, and Indian cotton and yarn prices soon followed. The spinning and trading community (should) ensure hassle free supply of cotton and yarn first to the domestic industry and only surplus cotton and yarn should be diverted for exports," Goyal said. Exports should not be at the cost of domestic textile industry, the largest employment generator in the country, he said. India is the world's largest producer of cotton, with Bangaldesh, Vietnam and China its biggest buyers. Goyal asked all stakeholders to resolve cotton and yarn price issues through collaboration rather than competition, without pushing the government to intervene as it may have long term impact on the cotton value chain. The government has decided to form the Cotton Council of India with representatives from textile, finance, agriculture and commerce ministry. The council will hold its first meeting on May 28. India banned wheat exports on Saturday days after saying it was targeting record shipments this year, as a scorching heat wave curtailed output and domestic prices hit a record high.
Source: Business Standard
The parliamentary committee of the external affairs ministry has called for fasttracking signing of bilateral investment treaties and investments to facilitate economic growth, observing in a recent report that the number of pacts signed by India after 2015 and those under negotiations are inadequate. It said the ministry should facilitate such pacts since it is in charge of negotiations and suggested that the process of an investment protection agreement with the US and a standalone investment agreement with the EU be started and concluded early so as to contribute to investments in priority sectors and high technology manufacturing. The committee said it did not see any fresh result-oriented initiative taken by the ministry or any change in approach leading to a reasonable number of bilateral investment treaties, in keeping with the growing requirement of the country, and suggested that the ministry strengthen its coordination with the other ministries and departments concerned. The committee said it was not satisfied with the progress of the ongoing negotiations with 37 countries and blocks. Currently, negotiations are on with 20 countries while they are still at the preliminary stage with the other countries and blocks. While acknowledging the realities of negotiations with sovereign governments, the committee said the longdrawn-out process of negotiations should be reduced, especially if there appears to be limited areas of convergence. In its ‘action taken’ reply to the committee, the ministry said it has been coordinating with the respective Indian Missions abroad and proactively facilitating negotiations. However, it said that the Department of Economic Affairs of the finance ministry leads the Indian side at the negotiations and is responsible for the conclusion of negotiations and implementation of the investment treaties. The committee, however, said the external affairs ministry “cannot absolve itself” of the responsibility for conclusion of negotiations and finalisation of agreements, especially as the ministry has to play an instrumental role in this regard through a separate division i.e. the Economic Diplomacy Division for dealing with matters pertaining to investment treaties”. “Since there is a significant impact of international investment agreements on FDI inflow and increased production under the BIT regime, such delays are not desirable at all,” it said. The committee urged the ministry to extend all possible assistance to the Department of Economic Affairs for an early conclusion of negotiations and finalisation of investment agreements, noting that the proactive contribution of the ministry is all the more imperative as the country aims to be a $5 trillion economy by 2025, said the report. It said the drafting of international treaties, whether investment related or trade specific, should be done in a manner so as to avoid any ambiguity or leave scope for wider interpretation by arbitrators and tribunals as well as abuse of certain provisions by investors. The external affairs ministry should therefore work in close coordination with other ministries and departments and make a combined effort to develop in-house expertise and a panel of lawyers who have experience in investment treaty law, said the parliamentary standing committee.
Source: Economic Times
The Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Piyush Goyal yesterday chaired the 4th meeting of National Startup Advisory Council (NSAC) in New Delhi. Speaking on the occasion, the Minister assured continued government support in developing statrup ecosystem. He appreciated the work done by NSAC members and urged them to focus on tier 2 and tier 3 cities where limited VC funding is available. He also emphasized on the need for capacity building and generating awareness about various initiatives of the government to promote startups in such cities. Members of the council have also been visiting states and interacting with startup entrepreneurs and students in educational institutions to understand and find ways to energize the startup ecosystem.
Source: Business Standard
State industry minister Syed Shahnawaz Hussain on Tuesday said five major factories, including those of ethanol and cement, are ready for inauguration in different parts of Bihar. Talking to reporters at New Delhi, Shahnawaz said he is interacting with investors from across the country and many of them are willing to set up their units in the state. "The factories ready for inauguration include that of ethanol of 5 lakh litre capacity in Ara, which would be biggest in the country. Besides, two more ethanol factories are set for inauguration in Gopalganj district. That apart, a cement plant at Tajpur is also set for commercial production. Moreover, a textile factory is also ready in Kaimur district. The unit would be a complete package as it would have the facility for processing raw cotton to thread, followed by knitting fabric and its packaging as well," he said, adding that total investment in these units is worth several hundred crores. "Keeping in view the availability of chief minister Nitish Kumar, all these units will shortly be inaugurated," Shahnawaz said. The industry minister said he is in Delhi on Tuesday on way to Morbi in Gujarat, where he is going to seek investment for a ceramic tile unit in Banka. Morbi is well known for ceramic industry.
Source: Times of India
UN said the global economy is now projected to grow 3.1% in 2022, down from 4% projected in January, due to broad based deterioration of growth prospects including the US, EU, China and a majority of developing countries The United Nations on Wednesday said India is expected to grow 6.4% in 2022, well below the 8.8% growth in 2021, as higher inflationary pressures and uneven recovery of the labour market are likely to curb private consumption and investment. It said the global economy is now projected to grow 3.1% in 2022, down from 4% projected in January, due to broad based deterioration of growth prospects including the US, EU, China and a majority of developing countries. In its World Economic Situation and Prospects report as of mid-2022, the UN’s department of economic and social affairs said global inflation is projected to increase to 6.7% in 2022, twice the average of 2.9% during 2010–2020, with sharp rises in food and energy prices.
Source: Economic Times
The optimism sounded by some needs a check; the projected revenue growth in Fy22 is over a low base, and growing credit uptake must be weighed against rise in NPAs The Covid-19 pandemic and the protracted lockdown severely affected India’s 6.3 crore micro, small and medium enterprises (MSMEs). The government of India (GoI) announced several support measures like credit guarantee schemes, loan restructuring measures, moratorium and deferment of interest payments on borrowings, and a few others under the broad umbrella of Atmanirbhar Bharat initiatives to help the sector come out of the woods. Did such policies have any positive impact on the sector’s revival prospects? A recent Assocham-Crisil report titled MSMEs back to the grind suggests so, based on the following. First, the sector will likely see a pro-cyclical growth in revenue of around 15- 17% in FY22 and between 11-13% in the ongoing fiscal. Some green shoots of recovery are emerging in construction, exports, commodities and consumption services as the normalcy of economic activities in these sectors are restored. Second, MSME-lending by banks and non-banking finance companies (NBFCs) is exhibiting steady year-on-year (y-o-y) growth, 7% in FY21 and an expected 7-9% in FY22, implying an uptick in borrowings and investments by MSMEs. The rising digitalisation of the sector has aided access to financial services provided by new-age fintech firms. Third, export-linked MSMEs continue to exhibit steady growth in this fiscal, as global companies increasingly adopt a China+1 strategy, in a bid to diversify their supply chains. Sectors such as healthcare, chemicals, ceramics, dyes and pigments are posting strong recovery due to such de-risking (from China) strategy. Does all this mean that MSMEs are out of the woods? Not really. The projected revenue growth in FY22 is on the back of a negative 10% growth in FY21, implying a low base effect more than anything else. Besides, an earlier survey across a random sample pool of 1,029 MSMEs across the country revealed that over 50% of the surveyed MSMEs witnessed an erosion of more than a quarter of their revenues in FY21. Nearly two-thirds reported a decline in profitability due to lower revenues and escalating costs. Further, as per the MSME ministry’s own admission in Parliament, the number of MSME closures increased nearly 17x—from 330 Udyam-registered entities in FY21 to 5,577 entities in FY22—clearly indicating the prevailing distress in the sector. Similarly, the recent trend of a rise in credit uptake needs to be weighed against the fact that there has been an alarming rise in loan delinquency and NPAs of MSMEs. MSME NPAs have increased from 8.6% in FY19 to 12.5% in FY21, and are predicted to stay around the same level in the current fiscal. Worryingly, the rise in NPAs has been despite the Reserve Bank of India’s (RBI’s) four MSME-loan-restructuring schemes announced between January 2019 and May 2021. Besides, the sector remains grossly under-served despite a rise in borrowings. Latest estimates suggest that while the credit demand of MSMEs is around $500 billion, the supply from formal sources remains below $200 billion, implying that the credit gap is substantial. The conflicting signals underscore the need for a more careful and nuanced interpretation of the recent numbers and a realistic assessment of the ground situation. Else, misplaced and premature optimism may undesirably divert policy attention from issues that continue to hinder MSMEs’ revival in the aftermath of the pandemic. The wounds inflicted by the pandemic (and the prolonged lockdown) on MSMEs are indeed deep and painful, suggesting the need for continued and targeted public policy interventions. First, the government should focus on lowering the business costs for MSMEs, an urgent imperative given the state of high wholesale and retail inflation and the rising cost of borrowings in India. The concessional corporate tax rate of 15%, applicable for newly incorporated manufacturing units, should be extended to all MSMEs for at least the next 2-3 years. Lowering GST rates and customs duty on raw materials can also decrease overall costs, helping MSMEs stay afloat in such a challenging business environment. Second, recommendations of the Parliamentary Standing Committee on Industry to extend the loan repayment period for MSMEs under ECLGS to 7-8 years, and at least a two-year moratorium period on the principal amount should be accepted without delay. Such steps can provide the much-needed cushion against the slew of onslaughts inflicted by the pandemic. Third, there is an urgent need to devise MSME-specific, export-linked insurance products. If India plans to catapult itself as an alternative to China in newly emerging global and regional value chains, the government needs to facilitate export credit insurance to the export-linked MSMEs to cushion them from global uncertainties and macroeconomic shocks. The government should also mandate time-bound approval of insurance cover and claims given inordinate delays hurt businesses, especially in today’s challenging business environment. Finally, only about 14% of total MSMEs are registered on the MSME digital registration portal—Udyam. Onboarding the remaining 86% of an estimated 6.33 crore MSMEs should be carried out in a mission mode. This is because most government support schemes, aimed at fulfilling the operational liabilities of MSMEs through low-cost credit, such as the Emergency Credit Line Guarantee Scheme (ECLGS) and the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, are available to registered entities only. Further, onboarding onto Udyam can also help MSMEs take advantage of the Samaadhan portal, a delayed payment redressal platform, in a more streamlined and timely manner. Latest estimates suggest that approximately Rs 10.7 lakh crore (amounting to 6% of India’s GVA for FY21) is stuck as delayed payments to MSMEs, severely constraining their working capital needs. India’s economic revival from the prolonged pandemic-induced slump critically hinges on the performance of the MSMEs, which represent 90% of the country’s enterprises, employ 60% of the workforce, and account for 49% of total exports and about 30% of India’s GDP. While MSMEs are back to the grind, they are not out of the woods yet. The government needs to enact necessary reforms and policies to ensure that the growth and vitality of the sector are restored at the earliest.
Source: Financial Express
Committed to Skill India Mission, Apparel Made-Ups Home Furnishing Sector Skill Council (AMH SSC) donated Rs. 51 lakhs from their Corporate Social Responsibility (CSR) funds to National Skill Development Fund (NSDF) to empower the youth of India with skill training. The cheque was presented by Shri Premal Udani, Chairman AMH SSC to Shri Rajesh Aggarwal, Secretary MSDE, in the presence of Shri Ved Mani Tiwari, COO & Officiating CEO, NSDC and Dr Roopak Vasishtha, CEO AMH SSC. The fund will be utilized in the capacity building of the skilling ecosystem. Education and skill development are fast emerging as the preferred choice for CSR initiatives in India. By utilising CSR funds in a planned way, companies can not only boost the Skill India Mission but also have a huge impact on skilling India and millions of livelihoods by creating a robust labour market. CSR funds can also contribute towards scaling up skill development initiatives by financially supporting activities across the skill development value chain, capacity building and managerial support. Lauding the decision of AMHSSC, Shri Rajesh Aggarwal, expressed his confidence that such a contribution will help expand the skilling sphere and add new avenues to the list of areas of skill development. He further said that the corporate sector’s support can play a big role in making skill development efforts more inclusive so that the skill divide will be minimized. Companies have resources, infrastructure, machinery, and expertise that can support the endeavour of skill development in the country, he added Shri Rajesh Aggarwal urged more organisations to come forward and get involved in the skill-building activities and help strengthen the Skill India Mission. Shri Premal Udani, Chairman, AMHSSC, said that given the huge task of achieving the target and maintaining quality and sustainability of the skill development mission being pursued in India, we realised that Ministry of Skill Development and Entrepreneurship would be a perfect choice to fulfil our CSR contributions, as they have extensive expertise and a focused vision towards skilling the youth of the country. We realise that industries have a crucial role in impelling lasting economic development of the country and investment by us in skilling the workforce makes a strong business case, he added the further said that MSDE has been instrumental in strengthening the skilling eco-system and we wish to support it in every possible way. We are proud to be aligned to the Skill India Mission as we continue to impart employable skills and knowledge in the apparel, made-ups and home furnishings sectors which has a huge growth potential both in domestic and international markets. The Apparel, Made-Ups and Home Furnishing Sector Skill Council (AMH SSC) has been the single largest Sector Skill Council by securing maximum jobs for the youth of the country under the Pradhan Mantri Kaushal Vikas Yojana (PMKVY) scheme of MSDE. Since its inception in December 2013, AMH SSC has developed 45 Qualification Packs for the industry and has been able to certify nearly 12 lakh people in the apparel sector. One of the salient features of the AMH SSC is designing the training programmes based on the industry demands of different segments and ensuring that all successful trainees are certified through an accredited assessment agency.
The Guangdong province in China witnessed a strong rebound in foreign trade and economy despite the impact of the COVID-19 pandemic, with 230 international freight trains departing the southern province for overseas destinations in the first four months of this year. The figure represents a year-on-year (YoY) growth of 91.6 per cent, statistics from Guangdong customs show. The growing number of freight trains set out primarily from the prosperous Pearl River Delta cities in the province to destinations in Central Europe, Central Asia and Southeast Asia that have already established close economic ties with Guangdong, the department said in a statement. On May 10, a freight train carrying 100 standard containers of lamps, furniture, clothing, shoes, boots, household appliances and related products manufactured in the Guangdong-Hong Kong-Macao Greater Bay Area left the Guangzhou Dalang international logistics and freight base for its European destination. It was the 500th freight train that has headed to Europe from the Dalang base since its maiden trip in August 2016, official Chinese media reported. By the end of April, a total of 27 freight trains had headed from cities in the Greater Bay Area to Laos’ capital Vientiane via the China-Laos Railway line, which started operations in early December. The Greater Bay Area includes the Guangdong cities of Guangzhou, Shenzhen, Zhuhai, Dongguan, Foshan, Zhongshan, Huizhou, Jiangmen and Zhaoqing, plus the Hong Kong and Macao special administrative regions. Guangdong, China's biggest province for foreign trade, had an import and export volume of more than 8.27 trillion yuan ($1.28 trillion) in 2021, up by 16.7 per cent YoY and representing about 22 per cent of the country's total trade.
Source: Fibre 2 Fashion
European exports of textile and clothing items increased by 10.6 percent to 58 billion euros in 2021, according to new data published by Euratex, the European Apparel and Textile Confederation which represents the interests of the European textile and clothing industry at the level of the EU institutions. Imports decreased by 7.5 percent to 106 billion euros. Purchases of textiles and clothing from China decreased by 28 percent in 2021 but overall textile activity fully recovered from the strong contraction in 2020, with sales of clothing returning to pre-pandemic levels. Dirk Vantyghem, Director General Euratex, said in the report: "2021 export figures confirm that Euratex members have gained momentum. Even if energy prices are causing serious disturbances in the short term, our long-term ambition remains to be a world leader in the sustainable textile sector.” Euratex also strongly condemned the war in Ukraine, which has seen the Ukrainian textile industry greatly suffer. “Ukraine offers valuable sourcing opportunities for European textile and apparel brands as part of a broader nearshoring trend that appears to emerge from the trade data,” the report said.
Source: Fashion United
The Bangladesh Energy Regulatory Commission (BERC) today held a public hearing on a proposal to raise bulk electricity tariff in response to an appeal by the state-run Bangladesh Power Development Board (BPDB). Textile and apparel industry owners have expressed concern over the public hearing on the proposed 65.95 per cent bulk electricity price hike. The worry is that the power tariff price hike amid an economic crisis would put industrial units under added pressure and such a decision would not be judicious. In a statement, the Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) said the electricity price hike in the current context would be considered a ‘suicidal move’ by the government. "Bulk electricity price hike will have a multifaceted negative effect on the agriculture, service and manufacturing sectors. Even the ongoing trend of economic development will also be severely affected," it read. The trade body requested the government not to accept the proposal to increase the price of electricity. The BPDB had urged the energy regulator to set the bulk power tariff at Tk8.58 instead of the existing Tk5.17 per kilowatt-hour. BPDB claims it will incur a loss of Tk30,251 crore in this fiscal if the bulk tariff is not raised. Attributing its financial losses to increasing fuel cost and other soaring expenses, it said the production cost of electricity has gone up to Tk4.24 per unit in 2022 from Tk2.13 in fiscal 2019-20, according to Bangladeshi media reports. Any rise in bulk tariff will be applicable to the power distribution companies as they are the bulk consumers. All state-owned power distribution companies have already submitted their respective proposals to the BERC to raise power rates at the retail level.
Source: Fibre 2 Fashion
