The details of Indian textiles & apparel export during the last five years including the current year are as follows:
|
Commodity |
2017- 18 |
2018-19 |
2019- 20 |
2020- 21 |
2021- 22 |
Apr May 2021 |
Apr May 2022 |
|
India’s textiles |
35,723 |
36,558 |
33,379 |
29,877 |
42,345 |
6,305
|
6,742 |
Government has been supporting textile sector by following schemes/ programs aimed at increasing competitiveness of Indian textile exports:
This information was given by the Minister of State for Textiles Smt. Darshana Jardosh in a written reply in the Rajya Sabha today.
Source: PIB
The Federation of India Art Silk Weaving Industry (FIASWI) has already made representation before the Government of India demanding subsidies up to 40% to textile processors to increase exports. In a bid to capitalise on global opportunities emerging in the post pandemic era, the domestic textile industry is demanding the roll-out of an appropriate Textile Technology Development Scheme (TTDS) which would replace the existing Technology Upgradation Fund Scheme (TUFS). It may be mentioned that the latest modification of TUFS, which was valid up to March 31 this year, was extended pending announcement of TTDS. Textile industry sources said textile units are waiting for the unveiling of the new scheme in order to modernise their units as under the current amended TUFS scheme, they are hardly getting a subsidy of around 10 %. TUFS was originally launched in 1999 and it has been modified numerous times in line with technological and market developments, they say, adding that it is high time to unveil TTDS as early as possible considering the fact that European nations and the US are trying to decrease their dependence on China and looking at countries like India and Vietnam to source imports. “We need to upgrade the manufacturing process rapidly to tap the global opportunity. More than 50 % weaving units across India are still using over 20 year old powerlooms. Time has come to replace old machineries with modern Rapier, Waterjet and airjet looms which would improve quality of Indian fabric,” said Bharat Chhajer, past chairman of Powerloom Development & Export Promotion Council (PDEXCIL), an organisation functioning under Union ministry of textile. “Since modern powerlooms are more expensive, the government should encourage existing MSMEs in the sector by providing subsidies and other financial assistance, ” said Ashok Jirawala, president, Federation of Gujarat Weavers Association (FOGWA). There are more than 7.5 lakh powerlooms in Surat alone of which nearly 50 % require to be replaced with modern looms. “Compared to traditional powerlooms, rapier looms are extremely costly and without financial assistance from the government it is impossible for the smaller units to upgrade their machinery,” said Jirawala. “The entire textile value chain, right from spinning to processing, is in urgent need of modernisation in order to tap global opportunity in the textile and apparel sector,” said Mayur Golwala, president of Sachin Industrial Estate where hundreds of textile units are situated. “The government must consider increasing the investment cap for subsidy and other benefits to textile units in the upcoming TTDS. Otherwise, it will be difficult to modernise the country’s textile sector,”,he adds. The Federation of India Art Silk Weaving Industry (FIASWI) has already made representation before the Government of India demanding subsidies up to 40% to textile processors to increase exports. “The spinning segment must involve all blended yarns as blends would dominate future trends of textile industry. For technology upgradation, spinners should have a higher cap of Rs 100 crore with subsidy of 25 %. The garment sector must include construction of buildings as the cost of machinery is way less compared to construction cost of a garment factory,” said Bharat Gandhi, chairman of FIASWI.
Source: Financial Express
It also proposes to allow units in such hubs to sell goods in the domestic tariff area by paying basic customs duty on just inputs, instead of the extant stipulation of having to pay it on the more expensive finished products A new draft Bill on the Development of Enterprise and Services Hub (DESH), which will replace the Special Economic Zone (SEZ) Act, proposes a concessional corporate tax rate for units, a revamped indirect tax regime, a dispute settlement mechanism, easier exit and an array of non-fiscal incentives, to draw investors into these customs-bonded zones. It also proposes to allow units in such hubs to sell goods in the domestic tariff area (DTA) by paying basic customs duty on just inputs, instead of the extant stipulation of having to pay it on the more expensive finished products. However, it’s silent on allowing units to sell in the domestic market by paying a proposed nominal “equalisation levy”. The draft Bill prepared by the commerce ministry proposes to freeze the corporation tax at a concessional rate of 15% for all greenfield and certain brownfield units in such “development hubs” until 2032. It’s likely to be introduced in the ongoing monsoon session of Parliament after Cabinet approval. The role of states under the proposed regime will rise, and they will have power to extend additional fiscal incentives to units. The draft Bill also proposes a more attractive indirect tax structure under a revamped Manufacture and Other Operations in Warehouse (MOOWR) scheme. Such a scheme typically provides for customs duty deferment for imports of inputs and capital goods by units with no interest liability. The new Bill was necessitated to revive interests in these industrial clusters that lost their charm after the government set a sunset date to start operations (June 30, 2020) to be eligible for a phased income-tax holiday for 15 years. Moreover, India lost a case at the World Trade Organization (WTO) filed by the US that had claimed New Delhi was offering illegal export subsidies through these SEZs. Consequently, the draft Bill has proposed to scrap the primary requirement for an SEZ unit to have positive net foreign exchange (NFE) for five years; instead, the unit’s performance will be evaluated on the basis of “net positive growth” (NPG) under the new law. The NPG of a unit will be based on parameters, including employment generation and economic activity. This will make the DESH architecture more compliant with the WTO rules, as the performance of these hubs will no longer be linked to exports; rather, they can be seen as large clusters of domestic manufacturing and services. The new Bill provides for “ease of exit” under which even floor-wise denotification facility will be extended to IT/ITeS hubs. It also pledges “single-window clearances in spirit”. Importantly, the government will also introduce a dispute settlement mechanism. It will provide for a mediation framework for commercial disputes between units and SEZ developers to “enable speedy dispute resolution”. This will be less time-consuming than seeking remedy through courts. There will be enabling power to make a reference to arbitration for commercial disputes as well. Commenting on the proposed concessional corporate tax for units in these development hubs, Vikram Doshi, partner at PwC, said, “If we leave aside a 15% minimum alternate tax (MAT) applicable to SEZ units now, there are four corporation tax rates — 15% for new manufacturing companies (those registered on or after October 1, 2019, and starting manufacturing on or before March 31, 2024); 22% for other companies that are not claiming any income tax holiday or benefits; 25% for those companies that are claiming benefits, subject to an annual turnover of less than `400 crore; and 30% for companies that are claiming benefits and whose turnovers exceed `400 crore.” So, if a new investor wants to set up a technology (services) unit in an SEZ, it has to pay a minimum tax of 22% (15% rate is only for manufacturing firms); it will work out to 25.17% with surcharge and cess. “Compared to that if the new units are subject to a base tax rate of 15% (17.16% with surcharge and cess) up to 2032, it’s good for them,” Doshi added. S Vasudevan, executive partner at Lakshimkumaran and Sridharan Attorneys, said, “This proposal (15% tax rate under draft DESH Bill) will provide an opportunity to existing companies to expand operations in SEZs and pay lower rate of tax on profits generated from such operations. It will be interesting to see if the proposed concession is subjected to other restrictions, including non-availment of other benefits and deductions.” Ratan Jain, partner (indirect taxes) at Lakshimkumaran and Sridharan Attorneys, said, the MOOWR+++ scheme would “give tax exemption on inputs if not cleared into the domestic tariff area (DTA)”. “It indicates granting of depreciation on capital goods when cleared into DTA. Thus, it would be a more attractive scheme,” Jain said.
Source: Financial Express
India’s trade of apparel and textile products with China is following the trend of overall trade with the neighbouring country. India’s trade deficit with China continues to widen in current fiscal 2022-23, similar to 2021-22. India’s imports from China are increasing but exports are quite lower and declining which is causing higher trade deficit. In the financial year 2021-22, India’s trade deficit with China was recorded at $72.9 billion, up nearly $29 billion from FY21’s figure of $44 billion, according to data from the ministry of commerce. In May 2022, India exported goods worth $1.6 billion to China, over 25 per cent lower than the $2.1 billion in May 2021. On the other hand, India’s imports recorded a growth of 5.47 per cent in May 2022 compared to the same month last year. Likewise, for the April and May combined, India’s exports to China fell nearly 31 per cent from $4.4 billion in the same months of 2021 to $3 billion in 2022. On the other hand, imports grew 12.75 per cent in 2022 compared to 2021. For the second straight year, India and China may cross a total trade figure of $100 billion. In 2021-22, the total trade volume between the two neighbours stood at $115 billion, according to the figures from India’s ministry of commerce and China’s General Administration of Customs. A similar trend can be seen in India’s apparel and home textiles trade with China. India’s apparel imports from China registered continuous increase since February 2022 and reached at $87.901 million in May 2022, according to Fibre2Fashion’s market insight tool TexPro. On annual basis, the import was 1145.475 million in 2021, 838.195 in 2020 and 1026.676 million in 2019. It shows apparel import dipped during COVID19 and military confrontation in 2020. But it jumped in the following year. The import stood at 349.103 million in first five months of 2022. India’s home textile imports from China stood at $36.109 million in May 2022, up from $24.756 million of April. The import was $20.047 million in March 2022, $16.675 million in February 2022, and $36.742 million in January 2022. The import of home textiles from China was $356.734 million in 2021, $327.791 million in 2020 and $485.444 million in 2019. The import stood at $134.331 million in January-May 2022, as per TexPro. However, India’s export of apparel and home textiles was very meagre compared to import. Apparel export was $7.673 million in May 2022 which was declining since March 2022 when the export was $13.387 million. Annually, the export was $104.553 million in 2021, $94.398 million in 2020 and $151.246 million in 2019. India has exported apparel worth $50.774 million in first five months of this year. India’s home textile export to China stood at $3.191 million in May 2022, up from $2.958 million of April but down from March 2022’s figure of $4.364 million. Home textiles export to China was $48.884 million in 2021, $65.345 million in 2020 and $44.351 million in 2019. The export was $17.234 million in January-May 2022.
Source: Fibre2 Fashion
The House of Commons International Agreements Committee, in a report entitled 'UKIndia free trade agreement: Scrutiny of the Government's Negotiating Objectives', questions the Diwali deadline set for the conclusion of the negotiations by outgoing Prime Minister Boris Johnson during his visit to India in April. A UK parliamentary panel on Friday warned the government against accepting a poor deal to rush things through simply to meet a deadline set for the completion of a free trade agreement (FTA) with India. The House of Commons International Agreements Committee, in a report entitled 'UK-India free trade agreement: Scrutiny of the Government's Negotiating Objectives', questions the Diwali deadline set for the conclusion of the negotiations by outgoing Prime Minister Boris Johnson during his visit to India in April. The committee cautioned that could risk giving up a good deal for a fast one, by setting a "time ambition over and above content". "A growing economy, as well as a growing middle class and consumer market, make India an attractive trading partner for the UK. The UK government, however, must not accept a poor agreement simply to meet a deadline," said Baroness Dianne Hayter, chair of the committee. "We have noted that the aspirations in the Negotiating Objectives are particularly challenging because some would require changes to India's own cultural and legal approach, which are unlikely to be achieved, or would take a long time," she said. "We reiterate our recommendation that the government should publish a trade policy, showing how trade links into broader foreign policy, security, defence and other domestic objectives, as well as labour, women's and human rights, and the environment. This will enable trade policy to be understood in relation to other priorities and enable us to assess the impacts and trade-offs," she said. The cross-party committee claims that India's "historically protectionist policies", different regulatory approaches and business practices would mean changes in domestic legislation, which could be a lengthy process to implement. It also references the practice in India of requiring businesses to make socalled "facilitation payments", different administrative requirements at national and state level, a lengthy application process for business permits, a complex tax regime, low levels of contract enforcement and limited IP protections. "The committee therefore questions the arbitrary Diwali deadline set for the conclusion of the negotiations, cautioning that the government could risk giving up a good deal for a fast one by setting a time ambition over and above content," it said. The committee notes that although the Boris Johnson-led government has emphasised that it intends to conclude an agreement that is comprehensive, it is unclear how comprehensive that agreement can be "given India's challenging regulatory and business environment". "Because the government's objectives do not take sufficient account of the Indian context, they can come across as overly ambitious or unrealistic, with some (for example on procurement) seeming particularly unattainable," the report warns. The committee has called on the government to publish a comprehensive trade policy that provides a framework within which all negotiations can be conducted. This is now expected to be taken up after the Parliament is back from its summer recess in September, by which time the UK is expected to have a new Prime Minister - either former Chancellor Rishi Sunak or Foreign Secretary Liz Truss. While trade experts have indicated that the ambition for a UK-India FTA is unlikely to be affected by the leadership change at Downing Street, the Diwali deadline for its completion has had a question mark. "I would much rather have a more comprehensive deal that takes slightly longer to complete. It's good to have a deadline, good to have that target to try and finish by Diwali. But it may not be the end of October but the end of December; my target is the end of this year," Confederation of British Industry President Lord Karan Bilimoria, who heads the UK-India Industry Taskforce as a joint commission to enhance cross-industry collaboration on the ongoing trade negotiations, said recently.
Source: Economic Times
Anticipating an increase in demand for tri-colour in the wake of Prime Minister Narendra Modi’s clarion call for Har Ghar Tiranga ahead of the Independence Day, traders association is tying up with textile manufacturers across the country to increase supply of the national flag. Prime Minister Modi had on Friday urged people to strengthen the 'Har Ghar Tiranga' movement by hoisting or displaying the national flag at their homes between 13 August and 15 August, stating that the movement will deepen people's connection with the national flag. The Confederation of All India Traders (CAIT) said in a press release on Sunday that people are already visiting markets in large numbers to buy the national flag tricolour to join the campaign. “This enthusiasm of the people is expected to culminate in huge demand for the national flag tricolour in near future. In order to ensure greater participation of the trading community, CAIT has asked the manufacturers of clothes and other items to fabricate the national flag as per the provisions of the flag code in order to meet the possible high demand," said Praveen Khandelwal, secretary general, CAIT. The central government has set a target of voluntary installation of the tricolour on 250 million houses across the country. “According to a rough estimate, there will be a stock of only about 40 million flag across the country. To bridge the gap between the potential demand and the stocks, CAIT has initiated necessary efforts to meet the large demand of tricolours that may come up in following days," said Khandelwal. CAIT has asked its state chapters of Delhi, Maharashtra, Gujarat, Chhattisgarh, Uttar Pradesh, Madhya Pradesh, Punjab, Tamil Nadu, Odisha, Bihar and Rajasthan to contact cloth manufacturers in their respective states and motivate them to make more tricolour flags. Currently, various sizes of tricolours are available in the market, ranging from Rs10 to Rs150. However, to make it easy for people to purchase the national flag, the Cultural Affairs Ministry has suggested sizes of 20"x30", 16"x24" and 6"x9". “Apart from this, we have planned to take tricolour flags from Khadi Village Industries Commission and make them available to trade associations," said Khandelwal. On 20 July, by amending the flag code, the central government simplified the rules for putting the national flag at houses, enabling more to display the national flag at their house through day and night. CAIT has also appealed to the traders to observe "Tiranga Mahotsav" across the country from 13 August to 15 August.
Source: Live Mint
India-UK FTA likely to be signed in October 2022 while progress on Pakistan’s request to initiate bilateral FTA will take time With India likely to sign a Free Trade Agreement (FTA) with the United Kingdom (UK) soon, exporters of various products in Pakistan fear they might lose important markets to India in Europe. Being the major competitor for various products in the foreign market, India may occupy the lucrative market under a relaxed or free duty structure. And although Pakistan also enjoys a relaxed duty regime in the UK under the UK-Generalised Scheme of Preferences (GSP) system, the facility is going to conclude by the end of next year as the UK has placed Pakistan in the “Enhanced Framework” which is the same as the GSP Plus category of the EU-GSP scheme following Brexit. According to sources, the UK may introduce a new GSP plus scheme after 2023, with limited duty facilities to countries falling under the GSP umbrella. “Though Pakistan would qualify for the new GSP plus scheme, its major competitor India may have better and larger access to the UK market under the bilateral FTA,” sources at the Ministry of Commerce informed this scribe. It may be mentioned here that Pakistan has also requested the UK to initiate a bilateral FTA. “Initial negotiation and talks on diplomatic and departmental level have already began but the process may take time as it needs in-depth assessment and deliberation,” they said, adding that such an initiative has on the cards since the UK’s disintegration from the EU. According to the sources, the already delayed process faces further hurdles after the change of government in Pakistan. In the meantime, the fast tracked progress of the India-UK FTA has alarmed various sectors in Pakistan including the rice sector which is cognizant of the fact that India may occupy the UK market after getting free duty. As per Taufiq Ahmed Khan, former vice president of Rice Exporters Association of Pakistan (REAP), the FTA between the neighbouring country and UK, which is likely to materialise by October, will ultimately create hurdles for rice exporters from Pakistan. “We have come to know about this development through different sources and importers in UK; the said FTA is likely to be signed in October 2022 at the time of Diwali,” he said, adding that since no third country can Interfere in this matter, Pakistan needed to lobby for similar treatment under any PTA, FTA or existing GSP facility. “Both the government in Pakistan and the Pakistani diaspora in the UK should work together and use their influence for a similar FTA with Pakistan. The government and concerned ministry in Pakistan should focus on the issue as the business opportunities in the UK have increased manifolds after Brexit,” he emphasised. Data shows that India is a major competitor for Pakistan in the UK rice market with its export of rice to the kingdom registered at $167 million in 2021 against Pakistan’s exported rice worth $104 million out of its total export amounting to $2.159 billion registered in the last fiscal year. Under the existing GSP regime, white milled rice from both India and Pakistan are subject to 17 per cent duty in the UK. In case of an FTA, Indian exporters of white milled rice would not have to pay any duty. A study by the Pakistan Business Council (PBC) regarding the post-Brexit feasibility of a Pakistan-UK FTA suggests that Pakistan needs to take a proactive approach to initiate negotiations leading to the signing of the agreement. The UK is Pakistan’s fourth largest market for exports. As much as 85 per cent of Pakistan’s exports to the UK consist of other made-up textile articles, articles of apparel, cotton and leather products. All these products currently enjoy duty-free access to the country under the GSP+. The UK is also Pakistan’s 15th largest source of imports. Major imports include iron, steel, machinery, electrical equipment, made-up textile articles, and miscellaneous chemical products. The GSP+ scheme currently provides 96pc Pakistani exports preferential market access to the UK. It is pertinent to note here that India considers the FTA with the UK very significant for its exporters because of the benefits their rivals from Bangladesh, Sri Lanka and Pakistan enjoy under the UK’s GSP scheme. Whisky, cars, vaccines, basmati rice, wool, and pre-mixed tea top the list of some 240 odd products that the Indian industry has identified for import duty cuts in the United Kingdom under the proposed agreement. Earlier in January, both countries had formally launched talks for a free trade agreement to boost bilateral trade and investments. India’s main exports to the UK include ready-made garments and textiles, gems and jewelry, engineering goods, petroleum and petrochemical products, transport equipment and parts, spices, metal products, machinery and instruments, pharma and marine items.
Source: Pakistan Today
Official sources said the complementary nature of the India-Africa trade engagement is hard to miss. As India and Africa weigh the feasibility of a broad trade and investment agreement, the potential of scaling up bilateral commerce remains huge but negotiators have to traverse substantial challenges as well to clinch a win-win deal, trade sources and analysts told FE. Official sources said the complementary nature of the India-Africa trade engagement is hard to miss. India imports inputs and intermediate goods in large volumes from Africa, while it ships out mostly finished products to the continent. There are opportunities for investments by Indian companies in Africa, especially in the commodity sector. The strategic relations between India and Africa, where China has already consolidated its position, is also important. At the same time, there are challenges of negotiating with the African Union, many of whose members are still poor and may not necessarily have common ambitions in several aspects of trade, some analysts said. The intra-regional disparity within the African Union is still stark and will make the job of Indian negotiators difficult. In 2021, African nations launched the African Continental Free Trade Area (AfCFTA) with the objective of creating a single African market for the free movement of goods, services, labour, and capital, and increase intra-African trade. “AfCFTA may be able to provide Indian firms and investors certain opportunities to tap into a larger, unified, and robust African market,” said Tanu M Goyal, senior fellow at ICRIER. The AfCFTA has its own secretariat in Accra, which will likely be instrumental in negotiations with India for any trade or investment pact. David Sinate, chief general manager (Research & Analysis) at Exim Bank, said AfCFTA is expected to push up intra-regional trade from 16% of Africa’s total trade to 52% in the next five years, with removal of tariffs on 90% of goods. “It would thus be the right time in stepping up and integrating India’s engagements in Africa. Manufacturing subsectors such as textile, apparel, leather, wood and paper, vehicle and transport equipment, electronics and metals are expected to benefit the most from the AfCFTA reform,” Sinate said. While India exported goods worth $40 billion to Africa in FY22, its imports were higher at $49 billion, partly due to oil purchases from countries like Nigeria. Addressing a conclave on India-Africa Growth Partnership late Tuesday, commerce and industry minister Piyush Goyal stressed the intent to forge a trade pact with Africa. This is because the economic outlook, in the long run, “is going to be promising for both India and Africa, because this is where the markets and opportunities are present”, he said. In the pre-Covid year of 2019, over 60% of India’s imports from the African Union comprised fuels, mainly from Nigeria, Angola and Algeria; this was followed by precious stones and glass (about 20%) from Ghana, South Africa and Botswana. About a fifth of India’s exports to the continent were petroleum products and over 18% were pharmaceuticals. A trade agreement will enable seamless movement of these products at zero or concessional duties, helping both the sides. Similarly, as ICRIER’s Goyal points out, between January 2015 and May 2021, about $23.3 billion has been invested by Indian firms in Africa. Financial services, telecommunications services, and mining sectors in Africa are among the largest recipients of FDI from India. Some of the large Indian investors in Africa are ONGC Videsh, Bharti Airtel, Vedanta, Shapoorji Pallonji Infrastructure Capital Company, GMR Infrastructure, and Sun Pharmaceutical Industries. “The AfCFTA is thus likely to create opportunities for India with Africa by integrating it with global value chains, and within Africa by fostering trade linkages with different countries of the continent,” she said. “However, broadly, there are three crucial challenges in Africa: Infrastructural bottlenecks; language and cultural challenges; and access to finance,” she added. The renewed focus on Africa comes at a time when New Delhi looks to further strengthen its trade with relatively small and medium-sized economies, as key markets like the US and the EU are staring at a huge growth slowdown. African nations, too, will benefit hugely from this engagement, as India’s trade and investments in the continent are not designed to lead the countries into “debt trap”, an official source had said earlier, in a veiled reference to China, which has often been accused of resorting to unfair trade and investment practices.
Source: Financial Express
Foreign exchange reserves depleted around $70 billion from its peak in September 2021 India’s foreign exchange reserves dropped $7.5 billion to $572.7 billion during the week ended July 15, the latest data released by the Reserve Bank of India (RBI) showed. The reserves are now at 20- month low, lowest since November 6, 2020, when they were at $568 billion. The decline in foreign exchange reserves during the week is mainly due to foreign currency assets that were down $6.5 billion, the data showed. Reserves have fallen about $60 billion in 2022, which was mainly due to aggressive intervention by the central bank to curb the sharp volatility in the foreign exchange market. The rupee has come under pressure since the war broke out in Europe in late February. The Indian unit has depreciated around 7 per cent against the dollar in 2022. Foreign exchange reserves depleted around $70 billion from its peak in September 2021. RBI Governor Shaktikanta Das on Friday said the current level of foreign exchange reserves were adequate. “…the Indian rupee is holding up well relative to both advanced and emerging market economies (EME) peers. This is because our underlying fundamentals are strong, resilient, and intact. The recovery is gradually strengthening. The current account deficit is modest. Inflation is stabilising. The financial sector is well-capitalised and sound. The external debt-to-GDP ratio is declining. The foreign exchange reserves are adequate,” Das said. The July RBI bulletin had said the foreign exchange reserves at $ 580.3 billion on July 8, 2022, were equivalent to 9.5 months of imports projected for 2022-23.
Source: Business Standard
Talking to ET, Vivek Merchant, general manager, Swan Energy said “Recently, we have been presenting our fabric range to renowned brands, retail, ready made garment manufacturers, exporters, buying houses, large traders. We are working in collaboration with the large textile corporates to explore the possibilities growing commercially Swan Energy’s textile division that manufactures and markets cotton and polyester textile products in the country has expanded the capacity of its Ahmedabad plant to 3 million metres per month. The company wants to expand in brands and retail and penetrate in the export markets of Bangladesh, Vietnam, South Africa, Latin America, Sri Lanka and the USA. Talking to ET, Vivek Merchant, general manager, NSE 4.16 % said “Recently, we have been presenting our fabric range to renowned brands, retail, ready made garment manufacturers, exporters, buying houses, large traders. We are working in collaboration with the large textile corporates to explore the possibilities growing commercially.” Merchant said that the cost of cotton has come down and this will help Swan leverage its current export clientele by providing quality products at competitive prices and improve its market share globally. Cotton prices are set to weaken amid slackening demand and global recessionary fears. “A better crop outlook could also drive cotton prices lower. After touching the lifetime high of Rs 110,000 per candy (356kg) in recent months, cotton price is likely to dip to around Rs 60,000 per candy by December 2022 because of the slump in demand and the wait-and-watch strategy of the market players. However, given the volatility of the current economy, it is hard to predict whether these prices will sustain in the long run,” he added. Commenting about the international markets, Merchant said that the manufacturing and services activity readings indicate that the economic outlook is darkening in Europe and the US. “High energy costs because of the war in Ukraine, surging commodities prices, supplychain disruptions because of pandemic-related lockdowns in China, and rising interest rates are increasing the risk of recession. In fact, demand for manufactured goods in the EU has fallen due to high prices, at a rate faster than they did in May 2020 when the pandemic was just taking a hold for the first time,” Merchant said. “Due to these factors, Indian textile producers are witnessing initial signs of a demand slowdown. It’s a fact that inventory levels are high at the moment. With the weakening rupee and easing cotton prices (due to slowing demand) providing some relief to the Indian textile exporters, the international market is grappling with higher input costs, and significantly reduced demand. It will be no surprise to see the output curtailed from the international textile sector in the next few months,” he added.
Source: Economic Times
State Industries minister Syed Shahnawaz Hussain on Sunday held a meeting with selected industrialists in Delhi, and while giving a presentation on the prospects of the industry in Bihar, appealed them to make Bihar their manufacturing hub to get a good hold in the big market of northeast states. Directors of companies from textile, leather, agriculture, plastics, manufacturing and other sectors participated in the meeting held in Delhi. “Prominent names who attended the meeting were Sunil Bansal, executive director, Liberty Group, Rakesh Grover, MD, Grover Sons Apparel, Sunil Goel, MD, ARB Bearings, Inder Dev Gupta, MD, Kumar Mangalam Birla Group, Ajay Kumar Bansal, Director, Hitech Pipes, Micromax Chairman Rajesh Agarwal, KR Papal Paper Mill MD Madhav Gopal Agarwal, Athija Herbs MD Sahil Khan, Sadhna Group MD Rakesh Gupta and others,” an aide of the minister said. The minister, who arrived in Delhi from the Bihar Investors' Meet in Hyderabad on Saturday, told the industrialists attending the meeting that there was always a possibility of Bihar becoming the manufacturing hub of northeast India, but now the conditions are favourable for a big leap in the industry sector. Under the leadership of Chief Minister Nitish Kumar, due to the immense development of infrastructure for roads, electricity, good governance and industry in Bihar, now the ground is completely ready for the rapid expansion of industries in Bihar, he said. The Principal Secretary, Industries Department, Sandeep Poundrik was also present in the meeting.
Source: Times of India
Vietnam has surpassed the Republic of Korea to become the world’s sixth largest fibre and yarn exporter after shipping abroad 2.37 billion USD worth of these items in the first five months of 2022. Vietnam has surpassed the Republic of Korea to become the world’s sixth largest fibre and yarn exporter after shipping abroad 2.37 billion USD worth of these items in the first five months of 2022. The revenue increased 10% from a year earlier, according to the Vietnam Cotton and Spinning Association (VCOSA). Meanwhile, textiles and garments, fibre, yarn and fabric brought home 18.73 billion USD in total exports during the period, rising 20.81% year-on-year. That includes 14.99 billion USD in textiles and garments (up 22.2%), 376.8 million USD in geotextiles (up 27%), and 979.8 million USD in materials (up 19.2%). VCOSA noted China accounted for nearly 60% of Vietnam’s textile and garment exports. Meanwhile, the US and Europe, which are the world’s biggest textile and garment importers, have reduced shipments from China, giving Vietnam a chance to expand its market share. The association also cited the World Health Organisation’s prediction that new COVID- 19 variants will continue appearing in 2022, expecting the country’s fibre and yarn segment will continue to be the main recovery driver of the industry and be less affected by the pandemic compared to the apparel segment, which is labour intensive, since its manufacturing is mostly conducted by machine. VCOSA added Vietnam’s economic integration into the world, especially the participation in free trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU - Vietnam Free Trade Agreement (EVFTA), also promises breakthrough developments for the fibre and yarn segment.
Source: Vietnam Plus
Việt Nam's textile and garment industry is still on track to achieve its export target of US$42-43 billion this year, despite the industry facing many difficulties in the second half of this year. Vũ Đức Giang, chairman of the Việt Nam Textile and Apparel Association (VITAS) said that at the press conference on the business results of the textile industry in the first six months of the year held in Hà Nội on Thursday. According to VITAS, 2022 is the year that enterprises of the textile and garment industry gradually recover after two years of being heavily affected by the COVID-19 pandemic. In the first six months, Việt Nam's textile and garment export value was estimated at $22.3 billion, up 17.7 per cent on year, including $16.94 billion from the garment exports (up 19.5 per cent), $1.4 billion from fabric exports (up 20.8 per cent), and $2.76 billion from the fiber exports (up 4.4 per cent). Meanwhile, the total import value of raw materials and accessories for textile and garment in the first six months was estimated at $13.4 billion, up 9.8 per cent on year. Thus, the textile and garment industry had a trade surplus of $8.86 billion in the first half of this year, up 32 per cent on year. This was the effort of textile and garment enterprises in the context of that the world economy still has many difficulties. However, according to Giang, Việt Nam's textile and garment industry still faces many risks and challenges in the second half of this year, including the new strain of COVID19 that is still present. Many markets being important trade partners of Việt Nam such as mainland China, Japan and Taiwan are still applying strict pandemic prevention measures. That affects significantly on the supply chain of raw materials and accessories as well as consumption of textile products made in Việt Nam. In addition, high inflation in Việt Nam's major textile and garment consumption markets such as the US and Europe, and complicated development of Russia-Ukraine conflict have caused the prices of raw materials and fuels to rise continuously since the beginning of the year. Specifically, the price has increased by 19.1 per cent for cotton; 40 per cent for crude oil in the global market; 67 per cent for the domestic gasoline price. Meanwhile, transportation cost has been three times higher than the average of the past five years. Those have made the cost of enterprises increase by about 20-25 per cent. "Vietnamese textile and garment enterprises are still facing disadvantage in exchange rate with countries being competitors, labour shortage after the pandemic, requirements for traceability of cotton, fabric, yarn or green industry of textiles and garment from new-generation free trade agreements (FTAs)," Giang said. For example, the devaluation of the euro has a great impact on the textile and garment exports because it will increase the price of goods in the context that consumers in this market tighten spending, he said. "In general, purchasing power in the EU market will decrease, the competitiveness of textiles and garments imported from all countries to the EU market will be affected, not only textiles and garments from Việt Nam," said Giang. However, Giang said that it is expected that textile and garment export value will reach $20-21 billion in the second half of the year. To achieve this goal, the textile and garment enterprises need to quickly restructure export markets to not depend on a few markets. They should change technology and equipment to meet requirements from importing countries, such as requirements on recycled garments of the EU market. In fact, Vietnamese textile and garment enterprises have set a growth target in exports from the beginning of the year, but it is important to keep stability in export markets, employees, customers. In general, to stabilise production and achieve sustainable goals in the future, the businesses themselves need to catch up with market trends, invest in machinery and technology, and switch to green production according to the brands' requirements. They also need to build human resources, especially designers for the fashion industry. In the past time, VITAS has connected domestic enterprises with each other and with foreign-invested enterprises to form supply chains and expand export markets. It has been also an effective bridge between State management agencies and textile and garment enterprises. The association will continue to accompany the businesses to propose recommendations and call for supports from the Government and ministries, sectors and localities in terms of pandemic prevention, production, market information, administration reform, and human resource development.
Source: EIN News
China and Nicaragua are moving ahead for a comprehensive free trade agreement (FTA) and have formally established a bilateral intergovernmental economic and trade cooperation mechanism. Both the countries have begun negotiations to achieve the goal, according to China’s ministry of commerce. This may boost textile trade between the two countries. Last week, Chinese minister of commerce Wang Wentao and Nicaragua’s foreign minister Moncada, on behalf of the two governments, signed the “Arrangement between the Government of China and the Government of Nicaragua on the Early Harvest of Free Trade Agreements”, jointly announcing the launch of the China-Nicaragua comprehensive FTA negotiations. In addition, both countries also signed the Memorandum of Understanding on the Establishment of a Mixed Committee for Economic, Trade and Investment Cooperation, formally establishing the bilateral governments’ economic and trade cooperation mechanism. The latest steps by both the governments are likely to result in increased trade, including apparel and home textiles trade, between both nations. Although the current China-Nicaragua textile and apparel trade is negligible, China has surplus trade with the Central American country. Nicaragua imported mere 0.02 per cent apparel of China’s total exports in year 2021. In terms of home textiles, Nicaragua has share of 0.01 per cent in China’s total exports to the world, according to Fibre2Fashion’s market insight tool TexPro. China exported apparel worth $3.240 million to Nicaragua in May 2022 which was higher than $2.361 million of April. China exports dipped to 0.555 million in February from $2.443 million in January. The export was 0.965 million in March 2022. Annually, China’s apparel exports were $27.796 million in 2021, $20.015 million in 2020 and $22.558 million in 2019, as per TexPro. China exported home textiles of $0.127 million in May 2022 which was higher than $0.071 million of April. Annually, China exported home textiles worth $2.736 million in 2021, $6.988 million in 2020 and $2.040 million in 2019. On the other hand, China’s imports of textile products from Nicaragua were meagre in terms of value.
Source: Fibre2 Fashion
Section 301 penalty tariffs on finished Chinese textile and apparel imports give American manufacturers a chance to compete and provide trade officials with an essential trade negotiation tool, the National Council of Textile Organizations (NCTO) has told a key government panel in a formal written submission. Removing the tariffs, the association said, would reward China, put US manufacturers at a competitive disadvantage, and do nothing to reduce inflation. These were among the key points outlined by NCTO President and CEO Kim Glas in a written testimony submitted to the US International Trade Commission during three days of hearings on the economic impact of Section 301 China tariffs and Section 232 steel tariffs on US industries, an NCTO press release said. The 301 penalty tariffs should be maintained “absent substantive improvements in China’s pervasive, predatory trade practices,” Glas said in her testimony. China’s illegal actions “have put US companies at a serious disadvantage, and tariffs give American manufacturers a chance to compete.” Glas noted that US trade officials have “stressed that the penalty tariffs also create leverage and are a ‘significant tool’ in ongoing negotiations with China.” While some advocates for lifting the tariffs point to concerns about inflation, Glas said, “cancelling these penalty duties would do little to ease Americans’ inflationary pains.” She also noted that “apparel prices out of China continue to hit rock bottom even with the Section 301 tariffs in place. As detailed in an economic study recently released by Werner International, US import prices for apparel from China have dropped 25 per cent since 2019 and 50 per cent since 2011.” Glas also warned that lifting the tariffs would have “a substantial negative ripple effect” on US free-trade agreements, including undermining those with Western Hemisphere partners that have established shorter coproduction supply chains and serve other US and regional interests. The Section 301 tariffs were first imposed in 2018 in response to China’s persistent violations of intellectual property rules. By law, they are now under review, the release added. NCTO represents the full spectrum of the US textile industry, from fibres to finished sewn products.
Source: Fibre2 Fashion
Việt Nam's textile and garment industry is still on track to achieve its export target of US$42-43 billion this year, despite the industry facing many difficulties in the second half of this year. Vũ Đức Giang, chairman of the Việt Nam Textile and Apparel Association (VITAS) said that at the press conference on the business results of the textile industry in the first six months of the year held in Hà Nội on Thursday. According to VITAS, 2022 is the year that enterprises of the textile and garment industry gradually recover after two years of being heavily affected by the COVID-19 pandemic. In the first six months, Việt Nam's textile and garment export value was estimated at $22.3 billion, up 17.7 per cent on year, including $16.94 billion from the garment exports (up 19.5 per cent), $1.4 billion from fabric exports (up 20.8 per cent), and $2.76 billion from the fiber exports (up 4.4 per cent). Meanwhile, the total import value of raw materials and accessories for textile and garment in the first six months was estimated at $13.4 billion, up 9.8 per cent on year. Thus, the textile and garment industry had a trade surplus of $8.86 billion in the first half of this year, up 32 per cent on year. This was the effort of textile and garment enterprises in the context of that the world economy still has many difficulties. However, according to Giang, Việt Nam's textile and garment industry still faces many risks and challenges in the second half of this year, including the new strain of COVID19 that is still present. Many markets being important trade partners of Việt Nam such as mainland China, Japan and Taiwan are still applying strict pandemic prevention measures. That affects significantly on the supply chain of raw materials and accessories as well as consumption of textile products made in Việt Nam. In addition, high inflation in Việt Nam's major textile and garment consumption markets such as the US and Europe, and complicated development of Russia-Ukraine conflict have caused the prices of raw materials and fuels to rise continuously since the beginning of the year. Specifically, the price has increased by 19.1 per cent for cotton; 40 per cent for crude oil in the global market; 67 per cent for the domestic gasoline price. Meanwhile, transportation cost has been three times higher than the average of the past five years. Those have made the cost of enterprises increase by about 20-25 per cent. "Vietnamese textile and garment enterprises are still facing disadvantage in exchange rate with countries being competitors, labour shortage after the pandemic, requirements for traceability of cotton, fabric, yarn or green industry of textiles and garment from new-generation free trade agreements (FTAs)," Giang said. For example, the devaluation of the euro has a great impact on the textile and garment exports because it will increase the price of goods in the context that consumers in this market tighten spending, he said. "In general, purchasing power in the EU market will decrease, the competitiveness of textiles and garments imported from all countries to the EU market will be affected, not only textiles and garments from Việt Nam," said Giang. However, Giang said that it is expected that textile and garment export value will reach $20-21 billion in the second half of the year. To achieve this goal, the textile and garment enterprises need to quickly restructure export markets to not depend on a few markets. They should change technology and equipment to meet requirements from importing countries, such as requirements on recycled garments of the EU market. In fact, Vietnamese textile and garment enterprises have set a growth target in exports from the beginning of the year, but it is important to keep stability in export markets, employees, customers. In general, to stabilise production and achieve sustainable goals in the future, the businesses themselves need to catch up with market trends, invest in machinery and technology, and switch to green production according to the brands' requirements. They also need to build human resources, especially designers for the fashion industry. In the past time, VITAS has connected domestic enterprises with each other and with foreign-invested enterprises to form supply chains and expand export markets. It has been also an effective bridge between State management agencies and textile and garment enterprises. The association will continue to accompany the businesses to propose recommendations and call for supports from the Government and ministries, sectors and localities in terms of pandemic prevention, production, market information, administration reform, and human resource development.
Source: EIN News
Germany’s growth is expected at 1.2 per cent in 2022 and 0.8 per cent in 2023, down from 2.9 per cent in 2021, according to the executive board of the International Monetary Fund (IMF), which recently concluded the Article IV consultation with the country. Inflation is expected to average 7.7 per cent in 2022 and 4.8 per cent in 2023, IMF noted. Uncertainty is very high, with risks to the baseline growth forecast skewed downward and risks to the inflation forecast skewed upward. The greatest threat is a persistent shut-off of the remaining Russian gas exports to Europe, which could cause sizable reductions in German economic activity and increases in inflation, IMF said in a release. A prolonged war and resurging COVID-19 infections could also intensify supply chain disruptions. Persistently-high inflation and fears of a de-anchoring of inflation expectations can prompt major central banks to tighten policies faster than currently expected, potentially triggering a sharp tightening in financial conditions and corrections in asset prices. In response to surging energy prices, the government is expanding income support for vulnerable households, cutting fuel taxes, and providing liquidity support to firms. However, the fiscal stance in 2022 is expected to be broadly neutral as COVID-19 relief measures are phased out, IMF noted. The war has so far had limited effects on the financial sector. Overall, banks remain largely resilient to solvency and liquidity shocks. The IMF directors welcomed the German authorities’ ambitious decarbonisation plans and their digitalisation and transportation infrastructure push. They encouraged the authorities to continue investing in Germany’s growth potential and resilience, through further enhancing energy security, digitalisation, innovation, labour supply and training, and social protection.
Source: Fibre2Fashion
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) requests support from the International Monetary Fund (IMF) to reach its apparel export target by 2030. The BGMEA’s president Faruque Hassan and the International Monetary Fund (IMF)’s mission chief for Bangladesh, Rahul Anand, met earlier this week (20 July) to discuss the future of Bangladesh’s apparel sector, including its aim of reaching an export target of US$100bn by the end of the decade. Hassan hopes the IMF can help BGMEA realise its vision for the country’s apparel sector, which he explained in turn would contribute to the development of Bangladesh. The BGMEA shared the apparel sector’s goal to create employment for six million people by 2030 whilst ensuring 100% gender equality, inclusiveness and a decent workplace. Hassan explained the BGMEA has set a sustainable strategic vision for 2030 and said he hopes to grow the ready-made garment (RMG) industry in a way that is sustainable and positively impacts the economy, the environment and the lives of Bangladesh people. The BGMEA and IMF also discussed the wider issues facing the apparel industry in Bangladesh, as well as the strategies required to meet future challenges and sustain growth. The two organisations spoke about the possible impact of Bangladesh’s graduation from least developed country (LDC) status in terms of tariff changes and market access. Bangladesh is expected to graduate from LDC status in 2024, however it will continue to benefit from duty-free access to the European Union, Canada and Japan until 2027. A report published earlier this year titled ‘Textiles and clothing in Asian Graduating LDCs: Challenges and options,’ suggests Asia’s LDC countries such as Bangladesh will need to prepare for graduation-related challenges and says how they cope will largely depend on the “extent to which such adjustments can cushion the impact on their textiles and clothing (T&C) sector”. Associate Professor of Fashion and Apparel Studies at the University of Delaware Sheng Lu, who contributed to the report, told Just Style at the time LDC countries such as Bangladesh need to be encouraged to gradually move up the global value chain and engage in “more value-added functions such as design, product development, and branding”. The BGMEA also met with Eswatini (former Swaziland)’s minister of commerce, industry and trade senator on 20 July to discuss potential areas of trade and investment between the two countries. Senator Manqoba Khumalo and the BGMEA’s Hassan spoke about a possible collaboration that could include an investment in a joint venture for sectors such as apparel and textiles.
Source: Just Style
Pakistan exported textiles worth $19.329 billion during fiscal year 2021-22 against the exports of $15.399 billion during fiscal year 2020-21, showing a growth of 25.53 percent, according to Pakistan Bureau of Statistics (PBS). Readymade garments exports reached $3.904 billion in FY2021-22 against $3.032 billion in FY2020-21, showing a growth of 28.75%. Adeeb Iqbal Sheikh, Former Chairman of Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) told Gwadar Pro that Pakistan’s response to COVID-19, government subsidies for gas and electricity, and consumer panic caused by global inflation are behind the surge in exports. The export share of textiles is about 60% in Pakistan, but Pakistan’s share of textile and clothing export in the international market is only 2%. In this context, policy coherence is essential to enhance business confidence. Yasin Siddik, Former Chairman, All Pakistan Textile Mills Association, estimated that the export potential of Pakistan’s textile could be doubled, yet was limited by high energy costs and outdated and inadequate infrastructures. Accordingly, Pakistan’s power distribution system should be developed to meet international standards. The textile industry is the most important manufacturing industry in Pakistan, with a relatively complete industrial chain: from raw cotton, cotton ginning, spinning, cloth, printing and dyeing to garment manufacturing. Nevertheless, if the growth rate of raw materials cannot keep up with the pace of industrial development, it will become a major barrier to textile development. Usman Muhammad Khawaja, CEO of Excell group, which imports raw materials including polyester and viscose fibers from China, emphasized that the demand for viscose staple fiber, denier yarn, denier polyester is high in Pakistan, but there is not a single factory manufacturing the fiber in the country. He believes it will be a win-win situation for Chinese entrepreneurs with technical expertise to set up factories in Pakistan. Du Zhenli, Deputy Director-General of China International Engineering Consulting Corporation (CIECC), andHonorable Investment Counsellor (HIC) of the Board of Investment (BoI), Pakistan also highlighted that the cotton surplus in Pakistan can be made into viscose fiber and chemical fiber from natural fiber. He added that, “besides artificial fiber manufacturing, there is more room for China-Pakistan cooperation in garment manufacturing, textile skills training.” With the construction of China-Pakistan Economic Corridor, Pakistan’s infrastructure has been greatly improved, providing basic conditions for attracting foreign investment. Building garment factories along CPEC routes and efficient railways to export garments will generate huge profits. Syed Emad Raza, Chairman of Manufacturers and Exporters Ferozepur Road Association (MEFRA), Lahore told Gwadar Pro that Pakistan should reduce the export of textile materials and maximize the use of all fabrics for value-added clothing. In this regard, Sajid Saleem Minhas, a member of Board of Directors, Punjab Industrial Estates Development and Management Company (PIEDMC), said that one of the challenges for garment manufacturing is accessories, such as buttons and zippers. In addition, digital systems are ubiquitous and a one-stop window will greatly facilitate the export of ready-made garments.
Source: China Economic Net
The Foreign Buyers Association of the Philippine (FOBAP) has identified some gaps in the value chain that hamper the growth of exports of textile and garments. The group said one of these constraints is that some suppliers do not meet specified standards as well as international trade rules This serves to limit the number of reliable suppliers to buyers. Difficulty in meeting orders by exporters is another constraint due to low productivity that results from reliance on imported raw materials for finishing the product. FOBAP said with raw materials not readily available due to importing process delays, export order volumes are not met resulting to cancellations. Due to the closures arising from the pandemic and business losses and in the absence of new manufacturing investors, the number of operating factory suppliers has declined which in turn has made sourcing by FOBAP challenging. The group said the country needs to attract new investments in garments and textile manufacturing and appealed to the Marcos administration to put in place a comprehensive, sustainable and non- obstructionist export liberalization policies to support the sector. In a letter, the group outlined its wishlist to the new administration. FOBAP said to attract more foreign direct investments (FDI), the government could consider granting subsidies and implementing intervention and out of the box solutions in reviving dollar revenue earner industries such as the garments and textile. For Congress, the group is pushing for the prioritization of the bill filed by incoming House Speaker Martin Romualdez in support to the micro, small and medium enterprises which belong to the supply chain as well House Bills 4462 and 4316 which aim to put in order the shipping costs and regulations vital to business survival.
Source: Malaya Business Insigh
