The two sides revived the talks on June 17 after a gap of more than eight years for agreements on trade, investments and geographical indications (GI). A GI is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin. Ahead of the next round of negotiations between India and the European Union on the proposed free trade agreement (FTA) at the end of this month, commerce and industry minister Piyush Goyal said on Monday that the pact will give greater market access for several domestic sectors such as textiles, leather and sports goods in the EU. The two sides revived the talks on June 17 after a gap of more than eight years for agreements on trade, investments and geographical indications (GI). A GI is a sign used on products that have a specific geographical origin and possess qualities or a reputation that are due to that origin. The next round of negotiations will take place from June 27-July 1 in New Delhi. "It will open the doors, we believe, to our textiles, leather, pharma, sports goods, some agri products, handicrafts, handlooms. All this will get a bigger market. Our exports will increase," said Goyal. India had started negotiations for a trade and investment pact, called the Bilateral Trade and Investment Agreement (BTIA), with the 27-country economic bloc in 2007 but the talks were stalled in 2013 as both sides failed to reach an agreement on key issues, including customs duties on automobiles and spirits, and the movement of professionals Goyal said that the EU has strength in modern technologies, high-end precision equipment and "we will get the benefit of their modern technologies".
Source: Economic Times
But says the country faces low risk of stagflation The finance ministry on Monday cautioned the re-emergence of the twin deficit problem in the economy, with higher commodity prices and rising subsidy burden leading to an increase in both fiscal deficit and current account deficit. It’s also the first time the government has explicitly talked about the possibility of fiscal slippage in the current fiscal year. “As government revenues take a hit following cuts in excise duties on diesel and petrol, upside risk to the budgeted level of gross fiscal deficit has emerged. An increase in the fiscal deficit may cause the current account deficit to widen, compounding the effects of costlier imports, and weaken the value of the rupee, thereby further aggravating external imbalances, creating the risk (admittedly low, at this time) of a cycle of wider deficits and a weaker currency,” the finance ministry said in its latest Monthly Economic Review. The report said rationalising non-capex expenditure has thus become critical, not only for protecting growth supportive capex but also for avoiding fiscal slippages. The ministry had earlier hinted that India’s fertiliser subsidy bill for FY23 could rise to around Rs 2.5 trillion against the Budget Estimate of Rs 1.05 trillion because of a global supply shortage amid the war in Ukraine. Apart from the already announced Rs 1.10- trillion increase in fertiliser subsidy, the Narendra Modi government’s decision to extend the PM Garib Kalyan Anna Yojana (PMGKAY) until September shall increase the food subsidy outlay for FY23 to Rs 2.87 trillion, from the Budget Estimate of Rs 2.07 trillion. The report said even as the world is looking at a distinct possibility of widespread stagflation, India is at low risk of stagflation, owing to its prudent stabilisation policies. Stagflation is a situation in which the inflation rate is high, the economic growth rate is slow, and unemployment remains steadily high. The high-wire balancing act between maintaining growth momentum, restraining inflation, keeping the fiscal deficit within budgetary target and ensuring a gradual evolution of the exchange rate in line with underlying external fundamentals of the economy is the challenge for policymaking this financial year and successfully pulling it off will require prioritising macroeconomic stability over near-term growth, the report said. Even as the Reserve Bank of India increased policy rates by 90 basis points in a month time to fight record inflation levels in the economy, the finance ministry brought out the limitations of raising interest rates. “Tightening fiscal and monetary policies can however address inflation only from the demand side, insofar as they are able to smother pent-up demand and roll-back stimuli announced as part of the Covid-19 relief package. Simultaneously, from the supply side, trade disruptions, export bans and the resulting surge in global commodity prices will continue to stoke inflation as long as the RussiaUkraine conflict persists and global supply chains remain un-repaired,” it added. The finance ministry said the economy’s medium-term growth prospects remain bright as pent-up capacity expansion in the private sector is expected to drive capital formation and employment generation in the rest of this decade. “Near-term challenges need to be managed carefully without sacrificing the hard-earned macroeconomic stability,” it added.
Source: Business Standard
The proposed free trade agreement with the European Union, when implemented, will provide greater market access for several domestic sectors such as textiles, leather and sports goods in the EU market, commerce and industry minister Piyush Goyal said on Monday. After a gap of over eight years, India and the EU on June 17 formally resumed negotiations for agreements on trade, investments and Geographical Indications (GI). The next round of negotiations will take place from June 27 till July 1 here. India had started negotiations for a trade pact, dubbed the Bilateral Trade and Investment Agreement (BTIA), with the 27-country economic bloc in 2007, but the talks stalled in 2013 as both sides failed to reach an agreement on key issues, including customs duties on automobiles and spirits, and the movement of professionals. Goyal said that the EU is a large market with 27 countries which are prosperous. It is one of the largest trading blocs, having a big share of the world's market. "It will open the doors, we believe, to our textiles, leather, pharma, sports goods, some agri products, handicrafts, handlooms. All this will get a bigger market. Our exports will increase," he told reporters here. EU, he said, has strength in modern technologies, high-end precision equipment and "we will get the benefit of their modern technologies". In the services sector also, both sides would get an opportunity to support each other and expand trade. "We will get a larger flow of investments from Europe. It will be a win-win for both the countries," he added. India's merchandise exports to EU member countries stood at about USD 65 billion in 2021-22, while imports aggregated to USD 51.4 billion. A GI is primarily an agricultural, natural or a manufactured product (handicrafts and industrial goods) originating from a definite geographical territory.
Source: Economic Times
Chief minister Ashok Gehlot in a letter to Union textile minister Piyush Goyal has urged him to approve the proposal of Prime Minister Mega Integrated Textile Region and Apparel (PM Mitra) Park at Kankani in Jodhpur soon. Gehlot wrote that Jodhpur already has good facilities to project the products of Rajasthan in the international market. The Marwar Industrial Cluster, which connects to the Delhi-Mumbai Industrial Corridor (DMIC) located in Rohat, is just 7km from the proposed park. Multi-model logistic park is also proposed in this cluster. He wrote as the Amritsar-Jamnagar highway passes through Jodhpur, movement of goods from Kandla and Mundra port will be possible. Gehlot pointed out that Rajasthan also has prestigious institutes related to textile technology like IIT, NIFT and FDDI, where skilled workers and technicians are getting ready for the textile industry. To further strengthen the textile industry, many beneficial provisions have been introduced by the state government in the investment promotion scheme by declaring textile as a thrust sector. He said about 1000 acres has been proposed for PM Mitra Park in Kankani, Jodhpur. The works for developing electricity, water, roads and other infrastructure facilities have already begun. The proposal of the park was sent by the state to the ministry of textiles on March 9, 2022. He has requested for early approval of the proposal of the park in view of the favourable conditions for textile industry in Rajasthan.
Source: Times of India
A rise of 10 per cent in import freight price will result in a rise of 0.21 percentage point (pp) in annual consumer price inflation in particular and is expected to raise the year-onyear CPI inflation by 0.89 percentage point over the next six quarters before dying down, according to an article published in Reserve Bank of India’s (RBI) Monthly Bulletin for June. The article is authored by Ripankar Biswas, Savita Pareek and Seema Saggar from RBI’s balance of payment statistics division of the department of statistics and information management. They, however, said this study precedes the recent Russia-Ukraine war and hence do not quantify the impact on the freight costs from further disruptions caused to supply chains. The softening seen since September 2021 in the transport costs with new capacities coming on stream and economies normalising has already started getting constrained by the renewed pressure from the war effects. ‘’The stretched shipping costs could, therefore, be a new-normal for a longer period, contingent largely on easing of geopolitical pressures and appearance of no further pandemic waves,’’ the article said. The COVID-19 pandemic-induced supply-side disruptions increased transaction costs in many sectors, especially the contact-intensive ones, it said. The associated disruptions had adverse impact on many activities, exposing weak links. Global transport of goods was one such segment which has taken time to respond as trade started rebounding after the initial wave of the pandemic, it said. In line with sharper recovery in global trade in 2021-22, particularly the imports that recovered and exceeded the pre-COVID-19 levels faster than the exports, the freight costs surged and have remained elevated since the third quarter of 2020-21, the authors said. This reflects the increasing supply-demand imbalances, market frictions and constrained shipping capacities. These developments impacted logistic charges worldwide, including in India, the article added.
Source: Fibre 2 Fashion
The textile industry employs around 45 million workers and is expected to be worth more than $209 billion by 2029. But if this anomaly continues, then the industry will rapidly lose its global competitiveness to countries like Bangladesh and Vietnam, where the labour cost is very low, say industry insiders. Garment exporters are staring at a potential loss of Rs 1,200 crore due to the new conditions imposed in the Rebate of State and Central Taxes and Levies (RoSCTL) scheme. The scheme offers rebate against the taxes and levies already paid by exporters on the inputs. Now, this rebate has been converted into scrips that are tradeable. Exporters can sell the scrips to importers, who in turn can use the instrument as an alternative to cash to pay import duty. The scrips trade at a discount, which has now gone up to 20% from 3% in December, industry insiders said, putting pressure on the margins of garment exporters at a time when they are facing challenges on account of rising cotton prices. “This discounting of scrips benefits importers, who are taking undue advantage at the cost of exporters,” said Vijay Jindal, a member of the Apparel Export Promotion Council (AEPC) and president of the Garment Exporters & Manufacturers Association (GEMA) Garment exports at $16 billion contribute 36% to the country's annual textile exports of $44 billion. According to estimates, reimbursement under the RoSCTL scheme is equal to around 5% of the apparel exports, or roughly Rs 6,000 crore. At a broad level, a discount of 20% on this would mean a direct hit of around Rs 1,200 crore for the exporters. “The textile industry wants the government to restart cash reimbursement instead of these tradeable scrips, as these scrips are trading at a 20% discount,” Jindal said. “This is resulting in a substantial cash transfer from exporters to importers and is helping the importers. The textile industry employs around 45 million workers and is expected to be worth more than $209 billion by 2029. But if this anomaly continues, then the industry will rapidly lose its global competitiveness to countries like Bangladesh and Vietnam, where the labour cost is very low, say industry insiders. Even though the scheme was launched with the intention of making India’s textile industry competitive and bolstering exports, because of the discount in the market, it is acting against the government’s intention of helping the exporters and is instead benefitting importers, they said. It also defeats the purpose of the government’s stated policy of ‘Make in India’ for the world, they added. At present, demand for such scrips is very less as exporters are finding it difficult to find enough importers who can buy the scrips,” said Harish Ahuja, an executive member of the AEPC and management committee member of the GEMA.
Source: Economic Times
China's policy package aimed at economic revival is starting to pay off and aiding a gradual recovery in growth momentum, as official data for May indicate upticks in key economic indicators like foreign trade, industrial output and retail sales after the government rolled out intensive pro-growth policies and the COVID-19 situation improved. In May, China's exports jumped by 15.3 per cent year on year (YoY), while industrial output grew by 0.7 per cent YoY, rebounding from a 2.9 per cent decline in April. Retail sales was down 6.7 per cent YoY compared with the 11.1-per cent decline in April, official data showed. Authorities and analysts, however, have called for continuous support to counter economic headwinds. "With the COVID-19 impact wearing thin, major economic indicators showed marginal improvements in May," said Meng Wei, spokesperson for the National Development and Reform Commission, noting that the recovery on both the supply and demand side still faces many challenges. Deeming the current situation as a key point to determine the economic trend of the whole year, Meng said that the commission will spare no effort to promote the implementation of preferential policies to remove the bottlenecks restricting economic circulation, an official news agency reported. The State Council unveiled 33 measures to stabilise the economy last month, covering policies on investment, consumption, food and energy security, industrial and supply chains, as well as people's livelihoods. Shanghai, once hit hard by the virus, launched an action plan to expand subsidies for enterprises' epidemic prevention and disinfection and to reduce rent, property tax and urban land use tax for qualified firms, among other measures. Shanghai's policies provided enterprises with timely support to tide over difficulties, said Wang Peng, an associate professor with the Renmin University of China, suggesting that local policies should reflect the characteristics of different regions and be targeted. Hainan Province, which is striving to become the country's largest free trade port, granted 20 million yuan of vouchers to boost offshore duty-free shopping and over 100 million yuan of vouchers to support the recovery of tourism and catering sectors. In east China's Zhejiang Province, supportive measures include advancing major water conservancy and transportation infrastructure projects, building 1,200 km of new urban gas pipeline network and invigorating private investment. Analysts point out that the country's pro-growth policies are not just helpful for immediate economic recovery, but will also benefit long-term growth by prioritising structural adjustment and sustainability. China will support private investment and take forward projects that deliver multiple effects as part of the efforts to better spur effective investment, consumption and employment, according to a recent executive meeting of the State Council.
Source: Fibre2 Fashion
For the first time, a delegation of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) comprising member factories specialised in manufacturing technical textiles-based garments will participate in an international trade exhibition - Techtextil - in Germany. The leading international trade fair for technical textiles and nonwovens will begin today at Frankfurt in Germany. International exhibitors will be showcasing a vast spectrum of technical textiles, functional apparel textiles and textile technologies at Techtextil organised by Messe Frankfurt from June 21 to June 24, said a press release. Manufacturers from all over the world will be presenting their leading products and technologies for the apparel industry and other textile processing segments in the trade show, including textile products from high-tech fibres, functional apparel fabrics and smart textiles to composites and nonwovens. The delegation, headed by BGMEA vice-president Shahiduallh Azim, will showcase the strengths of Bangladesh’s RMG industry, especially its prioritised focus on man-made fibres (MMF) and growing capabilities in producing value-added apparels made from non-cotton and technical textiles. The Export Promotion Bureau (EPB) is supporting the Bangladeshi delegation in participating in the exhibition. The trade show will be a vast platform for Bangladesh’s apparel industry to brand Bangladesh as a promising manufacturer of high-end non-cotton apparels. The RMG industry of Bangladesh is increasingly focusing on apparels made from MMF to meet the rising demand in the global market where consumers are switching from cotton to blended fabrics. About 75 per cent of the total global apparel consumption is non-cotton, whereas Bangladesh’s exportable garment items are largely based on cotton, which is more than 74 per cent. Hence there lies huge potential for Bangladesh to diversify its export basket to non-cotton items, including technical textiles ones.
Source: Newage bd
Nomura warns that financial conditions will tighten further, consumers sentiment is souring, energy and food supply distortions have worsened and the global growth outlook has deteriorated The US economy will likely fall into a mild recession by the end of 2022 as the Federal Reserve raises rates to tame prices, according to economists at Nomura Holdings Inc. Nomura warns that financial conditions will tighten further, consumers sentiment is souring, energy and food supply distortions have worsened and the global growth outlook has deteriorated. “With rapidly slowing growth momentum and a Fed committed to restoring price stability, we believe a mild recession starting in the fourth quarter of 2022 is now more likely than not,” Nomura economists Aichi Amemiya and Robert Dent wrote in a note Monday. Excess savings and consumer balance sheets will help mitigate the speed of economic contraction, they said, but noted that monetary and fiscal policy will be constrained by high inflation. Nomura has lowered its real GDP forecast for this year to 1.8%, compared to 2.5% earlier, while the projection for next year is seen declining 1%, from 1.3% growth earlier. The analysis comes as Treasury Secretary Janet Yellen said Sunday that “unacceptably high” prices are likely to stick with consumers through 2022 and that she expects the US economy to slow down. Separately, Federal Reserve Bank of Cleveland President Loretta Mester said Sunday that the risk of a recession in the US economy is increasing, and that it will take several years to return to the central bank’s 2% inflation goal. “With monthly inflation through 2022 likely to remain elevated, we believe the Fed response to the downturn will initially be muted,” the Nomura analysts wrote in their note.” They expect ongoing rate hikes to continue into 2023, but with a slightly lower terminal rate of 3.50-3.75% reached in February, compared to the previous forecast of 3.75-4.00% in March.
Source: Business Standard
Bangladesh’s latest budget hows public finances in the fiscal ending June 2023 (FY23) will remain weaker than in the past even as the country’s economic recovery gathers pace, according to Fitch Ratings, whose forecast for a 6.4 per cent economic growth in FY23 is lower than the government’s. It expects the budget deficit to slightly exceed the government’s target. However, Bangladesh has a record of posting deficits below those targeted in the budget. The budget targets a deficit of 5.5 per cent of the gross domestic product (GDP) in FY23, up from a revised estimate of 5.1 per cent in FY22. This remains higher than the norm prior to the outbreak of the COVID-19 pandemic: the deficit averaged 3.5 per cent of GDP in FY15-FY19. In contrast, the authorities expect the economy to expand by 7.5 per cent in FY23, above the average of the same five-year period. The deficit could undershoot the government’s target, as has often occurred in the past, Fitch Ratings said in a note. The authorities originally projected a deficit of 6.2 per cent of GDP in FY22, but expenditure fell below budgeted levels and growth, at 7.25 per cent according to provisional estimates, was above the rating agency’s expectations. Government revenue/GDP is low, at just 9.8 per cent in FY22, compared with a ‘BB’ category sovereign median of 27.3 per cent. This represents a key credit weakness, Fitch Ratings noted. A failure to return the budget deficit to pre-pandemic levels in the next two to three years is unlikely to pressure Bangladesh’s rating, which the rating agency affirmed at ‘BB minus’ with a stable outlook in November 2021. Bangladesh’s external metrics are a source of rating strength, Fitch Ratings noted. The budget retains a 15 per cent preferential tax rate for textiles, a sector that drives export growth. US imports of apparel from Bangladesh rose by 65 per cent YoY in the first four months of 2022 to $3.3 billion. However, official foreign-exchange reserves fell to $42.2 billion by end-May this year from $46.2 billion at end-2021. This reflected rapid growth in goods imports, a slight decline in inward remittances and central bank intervention to slow the taka’s depreciation, among other factors. A continued drop in reserves would over time increase the risk of negative rating action on Bangladesh.
Source: Spectrum Local News
On average, Americans throw away 81 pounds of clothing each year. That’s according to SMART, or the Secondary Materials and Recycled Textiles Association. They also say that 95% of the textiles we wear can be recycled, but right now only 15% gets donated or recycled and the rest heads to a landfill. If you’re on TikTok or Instagram – you may have heard some content creator’s warnings about ‘fast fashion.’ That’s when trendy – but typically poorly made clothing – is rapidly produced in enormous volumes. It’s brought to retailers while demand for the trend is at its highest and sold for very cheap. Since trends move quickly, fast fashion is a leading contributor to clothing waste, and many other problems too. A New York-based clothing designer, Kathleen Tesnakis, has made it her mission to change the world with sustainable fashion. “That’s buying used clothing, that’s learning how to repair your clothes. It’s also investing in good quality made products. It’s investing in locally made products. When you can support people who are doing things in a positive way for the planet,” said Tesnakis. In 1996, working as a textile designer, Kathleen found her passion in a pile of old wool sweaters. Her clothing brand and design studio "Ekologic" was born out of the desire to prove recycled garments could be more beautiful in their second life, and spur change. Ekologic uses recycled cashmere sweaters, sourced within New York State. Kathleen says her business is almost zero waste, utilizing nearly every inch of a secondhand item. Ekologic’s process doesn’t require the use of any dyes or chemicals either – something that can’t be said for the textile industry at large. According to CDP.net – a non-profit that provides a platform for companies to disclose and manage their environmental impact – the apparel and textile sector greatly contributes to excessive consumption and pollution of water across the globe. That’s particularly an issue in third world countries. According to the organization ‘Good Clothes, Fair Pay’ – the fast fashion industry exploits workers by paying low wages. Information on FashionRevolution.org shows that in places like India — where a large portion of fast fashion is produced and garment workers are primarily women — they’re subjected to poor working conditions too. “Slow fashion is fashion that is transparent, meaning you can know who makes it, know how it’s being made, what the materials are… These garments are meant to last longer,” said Tesnakis. Tesnakis knows that it can be hard to shift to a reuse/recycle mindset when it comes to clothing but taking small actions can really pay off. “A lot of this is re-learning behaviors. It doesn’t have to be wrought with anxiety. It can be fun, and empowering,” said Tesnakis. And Tesnakis will be the first to tell you – Ekologic’s clothing is not inexpensive – but she says it’ll last ten to 20 years, it’s one of a kind, and supports the local economy. She adds there are levels to sustainable fashion. You can still go to TJ Maxx, Target, or Walmart – but you should look at the clothing tags to see if it’s ‘Better Cotton’ or ‘Oeko Tex’ which certifies the products are free of harmful chemicals.
Source: Spectrum Local News
