The Indian government is working to replace Amended Technology Upgradation Fund Scheme (ATUFS) on the pattern of Production-Linked Incentive (PLI) scheme. The ministry of textiles has requested the Office of the Textile Commissioner to share the draft note among stakeholders of textile manufacturing industry. ATUFS ended on March 31, 2022. As per draft concept note issued by the ministry, new scheme will promote indigenous development and manufacturing of textile machinery in line with the government’s flagship initiative Atmanirbhar Bharat. It will focus on sustainability, compliance, innovation and job creation to improve scale and technology simultaneously. The draft proposal prepared by the ministry for incentivising modernisation in textile sector on PLI pattern comprises two parts. The Part-1 of the scheme will incentivise indigenous development and manufacturing of textile machinery, while Part-2 will support modernisation of various segments and weak links of textile value chain. As per the draft proposal, integrated fabric manufacturing unit in MSME category for daily production of 16,000 metre (worsted, polyester or viscose suiting fabric) will have total investment of ₹34.56 crore. It will have annual turnover of ₹106 crore and will generate 121 jobs. Non-MSME unit of the same process will have investment of ₹170 crore and turnover of ₹550 crore and will generate 605 jobs. Fabric processing units of ETP/Printing in non-MSME category will have investment of ₹81.62 crore, annual turnover of ₹153 crore and will create employment opportunity for 280 persons. MSME unit in the same process will have investment of ₹39.17 crore, turnover of ₹47 crore and will create 70 jobs. Garment units in MSME category will have investment of ₹12.39 crore and turnover of ₹100 crore and will employ 700 people. According to the draft proposal, spinning unit in non-MSME category will have investment of ₹99.16 crore, turnover of ₹500 crore and will provide jobs to 325 youth. Knitting unit in MSME will be set up with an investment of ₹28.84 crore and it will have turnover of ₹100 crore, employing 100 people. Likewise, technical textile unit in non-MSME category will have investment of ₹98.25 crore, turnover of ₹105 crore and will be able to employ 103 persons. The draft proposal says that incentives will be provided to units based on the turnover achieved after making a threshold investment in modernisation through installation of benchmarked technology relevant to the segment. The Office of the Textile Commissioner is tasked with collating the inputs/views and suggestions from stakeholders of the textile manufacturing industry and forward to the ministry by August 15, 2022.
Source: Fibre 2 Fashion
They demanded that the TTDS be implemented immediately or the Amended Technology Upgradation Funds Scheme (ATUFS) be extended, instead of PLI. Textile units in Surat have sought the implementation of the Textiles Technology Development Scheme (TTDS) with retrospective effect from April 1. At a recent meeting of industry leaders on the production-linked incentive (PLI) scheme for the textile sector, participants said the scheme was not viable for the fragmented MSME textile industry across India, sources said. They demanded that the TTDS be implemented immediately or the Amended Technology Upgradation Funds Scheme (ATUFS) be extended, instead of PLI. Ashish Gujarati, former president of the Southern Gujarat Chamber of Commerce and Industry, said, “Government of India has projected a domestic market size of $250 billion and exports of $100 billion by 2025-26. Currently, the export value of the textile sector of India is around $40 billion and the domestic market size is estimated to be around $120 billion. When such huge expansion of market size is expected, it requires faster adoption of modern technology. The proposed PLI scheme will not be able to facilitate this.” Gujarati, who owns a weaving unit in Surat, said the textile PLI scheme introduced last year was aimed at promoting manufacturing of garments and specialty yarns that are not being manufactured in India. “The challenge as of now is regarding capacity building of Indian textiles and apparel industry not only for increasing exports to capture the space being vacated by China, but also to retain India’s share in the domestic market as slowly international brands are capturing the share,” he said. “PLI scheme offers incentive on sales value only, therefore it will attract only production-based commodity textiles,” says Vallabh Thummer, former president of the Textile Machinery Manufacturers Association. “It will not mobilise investment in specialty products which are either export-oriented or import substitutes. Textile industry value chain after spinning is still fragmented and the majority are still engaged in doing jobs for others. Such smaller entrepreneurs will not be covered under the proposed PLI. Instead, giving them one-time capital-like subsidies under TTDS or ATUFS would work for the entire textile value chain,” Thummer said. “The biggest problem of the proposed textile PLI scheme is potentiality of creating a market imbalance between the prices offered by the PLI beneficiary and that of nonbeneficiary,” said Ashok Jariwala, president of Federation of Gujarat Weavers Association.
Source: Financial Express
The expected incentives could include deferral of import duties and exemption from export taxes, which could pave the path for revamping Special Economic Zones, through a new legislation The government's move to revamp special economic zones (SEZs) could begin with the introduction of a host of direct and indirect incentives, as proposed by the commerce ministry, an official said. The expected incentives could include deferral of import duties and exemption from export taxes, which could pave the path for revamping Special Economic Zones, through a new legislation. The Centre proposed in the Union Budget this year, to replace the existing law governing Special Economic Zones (SEZs) with a new legislation to enable states to become partners in 'Development of Enterprise and Service Hubs' (DESH). The commerce ministry has sought views of different ministries, including finance, on the new bill, PTI quoted an official as saying. After collating the feedback, the ministry would seek approval of the Cabinet and then introduce the new bill in Parliament. The proposals seek to provide incentives such as retention of zero-rating of IGST (integrated goods and services tax) on domestic procurement by a unit in an SEZ; continuation of indirect tax benefits to developers of these zones; and allowing depreciation on sale of used capital goods cleared to domestic tariff areas. Moreover, there is also a plan to extend the corporate tax rate to 15 per cent without any exemptions for units undertaking authorised operations in these development hubs. States can also provide support measures to these zones to boost manufacturing and job creation. The existing SEZ Act was enacted in 2006 with an aim to create export hubs and boost manufacturing in the country. However, these zones started losing their sheen after imposition of minimum alternate tax and introduction of sunset clause for removal of tax incentives. These zones are treated as foreign entities in terms of provisions related to customs. Industry has time and again demanded continuation of tax benefits provided under the law. Units in SEZs used to enjoy 100 per cent income tax exemption on export income for the first five years, 50 per cent for the next five years and 50 per cent of the ploughed back export profit for another five years. In the Budget 2016-17, the government had announced that the income tax benefits to new SEZ units would be available to only those units which commence activity before March 31, 2020. As on June 30, 2022, the government has given formal approvals to 425 SEZ developers, out of which 268 are operational. These zones have attracted about Rs 6.5 lakh crore investments and employ about 27 lakh persons. During April-June this fiscal, exports from these zones rose by 32 per cent to about Rs 2.9 lakh crore. It was about Rs 10 lakh crore in 2021-22 as compared to Rs 7.6 lakh crore in 2020-21. Presenting the Budget 2022-23 , Finance Minister Nirmala Sitharaman had said: "The Special Economic Zones Act will be replaced with a new legislation that will enable the states to become partners in Development of Enterprise and Service Hubs." This would cover all large existing and new industrial enclaves to optimally utilise available infrastructure and enhance competitiveness of exports.
Source: Economic Times
Inverted duty refers to structures where the rate of tax on inputs is more than the rate of tax on outward supplies, which discourages value addition. If required, tax authorities will engage with industry for feedback, the official said. The Goods and Services Tax (GST) Council may go in for another round of rate changes to correct the remaining instances of inverted duty, apart from withdrawing some more exemptions. A group of ministers (GoM) headed by Karnataka chief minister Basavaraj Bommai is working on the second round, people aware of the matter told ET. "The inverted duty correction exercise has not concluded yet and there is more work left," said a senior official, adding that the GoM is working on the next list and a proposal may be floated before the next council meeting, which is likely in September. "The last twothree meetings were productive, with many important decisions being taken. But some items are still pending, including textiles," the person said. Inverted Duty Structures Inverted duty refers to structures where the rate of tax on inputs is more than the rate of tax on outward supplies, which discourages value addition. If required, tax authorities will engage with industry for feedback, the official said. Inverted duty structures also prevail in automobiles, including electric vehicles, some electronic items, urea and other fertiliser inputs, according to experts. "The correction in inverted duty structure in sectors such as textiles, electric vehicles, etc, would help the industry in liquidating their accumulated credits, smoothen working capital issues and reduce compliances," said Saurabh Agarwal, tax partner, EY. The resolution of inverted duty structures in sectors where production-linked incentive (PLI) schemes have been introduced will help improve the internal rate of return. Currently, companies in these sectors are not able to utilise the input tax paid on the procurement of capital goods; nor are they able to get refunds toward this, leading to increased working capital costs, Agarwal said. In September last year, the GST Council decided to rectify the inverted duty structure for footwear and textiles. Duty on footwear and finished apparel of any value was set at 12%, effective January 1. Earlier, the GST rate was 5% for sale value up to Rs 1,000 per piece in the case of finished apparel such as shirts, and per pair in the case of footwear. Traders and manufacturers opposed the increase, saying it would adversely impact India's textile industry and lead to job losses. Many states - including Rajasthan, Telangana, West Bengal and Delhi - opposed the increase, which was eventually rolled back. Excluding textiles, the GST Council has continued with the exercise to correct duty inversion. In June, the council adjusted rates to correct inverted duty on items such as edible oil, solar water heaters, LED lamps, printing ink and knives, among others. Additionally, it imposed 5% GST on pre-packaged and pre-labelled retail packs of certain food items to address tax evasion. It also removed many items from the exemption list.
Source: Economic Times
This suggests that despite a slowdown in IIP growth in June to 12.3% (year-on-year) from a 12-month high of 19.6% in May, driven by the normalisaiton of a conducive base effect, industrial recovery hasn’t lost pace The index of industrial production (IIP) exceeded the pre-pandemic level (same month in 2019) by 6.7% in June, way above 1.7% in the previous month, mirroring improving demand conditions. This suggests that despite a slowdown in IIP growth in June to 12.3% (year-on-year) from a 12-month high of 19.6% in May, driven by the normalisaiton of a conducive base effect, industrial recovery hasn’t lost pace. Crisil chief economist DK Joshi said: “Manufacturing output showed healthy growth in June and supported overall IIP activity. This reflects improving demand conditions and easing of supply-side challenges.” Manufacturing activities have already scaled an eight-month peak in July, according to the PMI data, as new order intakes rose substantially. Of course, a waning base effect, among other factors, could still weigh down the IIP growth to a single digit for July. Aditi Nayar, chief economist at Icra, said: “Given the moderation in the year-on-year performance recorded by most high frequency indicators in July 2022, such as electricity generation, non-oil exports etc., we expect the IIP growth to ease to high single digits in that month.” Economists at India Ratings said, “The healthy growth in capital and infrastructure goods is encouraging, signalling revival in investment activity on the back of capex push by the union government (Government capex in 1QFY23 grew 57.01% y-o-y).” The consumer non-durables sector is expected to witness a moderate recovery going forward, depending on the progress of monsoon, they said. “The rebound in this segment is important for a durable and sustained industrial recovery which so far has been witnessing a K-shaped recovery (tepid growth in consumer non-durables and high growth in consumer durables segment),” they added. The economists expected the IIP to clock a year-on-year expansion of 7%-9% in July. Importantly, capital goods and consumer durables maintained decent growth in June, having jumped by as much as 26.1% and 23.8%, respectively, despite a sequential slowdown due to the base effect. However, at just 2.9%, the growth in the non-durables suggests rural consumption is still bruised.
Source: Financial Express
Merchandise exports decline to a five-month low of $36.27 billion in July India’s trade deficit widened to a record $30 billion in July as exports grew at a much slower pace compared to imports, data released by the commerce and industry ministry showed on Friday. Merchandise exports declined to a five-month low of $36.27 billion in July but witnessed a marginal increase of 2.14 per cent year-on-year (YoY). The preliminary data released on August 2 had shown a 0.76 per cent contraction in exports at $35.24 billion, and even a wider trade deficit of $31 billion, for July. Inbound shipments grew 43.61 per cent YoY in July to $66.27 billion, though slightly lower from $66.31 billion in June. The rise in imports has been mainly due to an increase in the purchase of petroleum products, electronic goods, and coal. Among major import items, gold declined 43.6 per cent to $2.37 billion after the Centre raised import duty on the metal last month. However, import of non-oil and non-gems and jewellery products grew 42.91 per cent due to recovery in domestic economic activities as well as elevated price pressure. As for outbound shipments, there was a contraction in some of the key drivers of export growth in India. Engineering goods witnessed a 2.08 per cent contraction, gems and jewellery 5.2 per cent, pharmaceuticals 1.05 per cent, readymade garments 0.6 per cent, and cotton yarn 28.17 per cent, amid tepid demand from Western nations. However, some items continued to witness growth. Petroleum products grew at 9.18 per cent, chemicals 8.03 per cent, electronic goods 46.0.9 per cent, and rice 30.88 per cent. A Sakthivel, president, Federation of Indian Export Organisations, said signs of a likely slowdown in exports could be seen as global inventories were pretty high. “Merchandise exports are facing the triple whammy – there is again a shift in consumption from goods to services with the opening up of economies after the Covid19 pandemic; the inflation affecting all economies by reducing the purchasing power; and many economies entering the recession while some advanced ones already in recession,” Sakthivel said. Besides, the normalisation of Covid disruptions has also added to the piling up of inventory as goods that used to reach the West Coast of the United States in 150 days now reach in only 60 days, he added. On a cumulative basis, India exported goods worth $157.44 billion during April-July, up 20.13 per cent. Engineering Export Promotion Council (EEPC) of India Chairman Mahesh Desai said the dip in engineering goods exports in the month of July reflected weak demand from India's major markets. “The recession fears in the West have added to the uncertainties. While geopolitical risks remain elevated and pose downside risks to growth, the recent softening in commodity prices has come as a relief,” Desai said. Earlier this month, Commerce Secretary B V R Subhramanyam had said that with fears of recession looming in some of India’s largest export markets — the US and Europe — India should be “worried”, although India will be able to compensate for the hit from these two regions with recently signed trade deals with the United Arab Emirates and Australia.
Source: Business Standard
Following the representation made by the Tamil Nadu Federation of Power Looms Associations, the State government has decided to release orders soon for manufacturing dhotis and saris meant for distribution through ration shops for the Pongal festival in 2023. A statement from Minister for Handlooms and Textiles R. Gandhi said the free dhotis and saris scheme was introduced by the State government in 1983. The required dhotis and saris were produced in bulk quantities by cooperative societies and power loom weavers’ cooperative societies in the State. A total of 2,664 handloom weavers, 11,124 pedal loom weavers and 41,983 power loom weavers were getting jobs directly while 3.59 crore people in both rural and urban areas benefited from the scheme. The release said it is the policy decision of the government to release orders for production in July or August after the production of school uniforms was completed. The concerned department is involved in procuring yarn for distribution to the societies which in turn will be distributed to the weavers. “Production activities ensure continuous job for weavers from January 2022 to August 2022”, the release said and added that government order for commencing the production will be issued soon. For the year 2022-2023, the State government had allotted ₹487.92 crore for distribution of free dhotis and saris. Federation members welcomed the government’s decision and added that they would commence production once the order is released and yarn is supplied to them. Earlier in the day, members observed a fast in the city urging the government to release the order at the earliest.
Source: The Hindu
The four existing schemes to promote manufacturing and exports need to be harmonised. Ambit of DESH Bill should be clear The Development of Enterprise and Service Hubs (DESH) Bill, seeking to revamp the existing SEZs, proposes a new set of concessions. DESH will be an addition to four existing schemes promoting manufacturing. Generally, any scheme with a more attractive feature diminishes the competitiveness of existing schemes. Let us understand the impact of different incentives and concessions offered under various schemes on a firm’s performance. How can the concession ecosystem for manufacturing be improved ? The four major schemes for promoting manufacturing in India are: Special Economic Zones (SEZs); 100 per cent export-oriented units (EOU); Manufacturing & Other Operation in Warehouse Regulation (MOOWR); and Domestic Tariff Area (DTA) units. SEZ units are located within a physical wall. Any unit can opt for the EOU or MOOWR scheme irrespective of location. A unit outside the SEZ, EOU or MOOWR framework can be considered a DTA unit.
Features of major schemes A firm willing to set up manufacturing in India has to choose from these. For this, it needs to understand how concessions under various schemes compare. Most schemes differ in the parameters like location choice, tax benefits, payment of import duty, GST on imports, exports, domestic sales, and purchases.
A case study Introduced in 1981, the EOU scheme produced thousands of export-focused units across the country. Textiles/garments, food processing, chemicals, pharmaceuticals, gems and jewellery, engineering goods, and electrical/electronics were the key sectors. In 2009, exports under EOUs at $39 billion were higher than SEZ exports, at $22 billion. The EOUs faced discrimination as the government offered more incentives to new schemes since 2011. For example, direct tax exemptions were withdrawn from the EOU scheme in 2011 even though they continued for 10 more years for the SEZ scheme. To benefit from tax exemption, a few large EOUs converted into SEZs. Many EOUs shut shop as relocation was not easy. The EOUs faced the next shock in 2017, when the GST regime refused to allow continuation of exemption of taxes on domestic procurement of inputs and capital goods. It, however, allowed such exemptions to the SEZ and subsequently to the MOOWR schemes. Also, sale in the domestic market was conditional for EOUs, while SEZ or MOOWR units have no such restrictions. More incentives to other schemes made the EOU units less competitive and maimed them. A raw deal Firms that contribute most to exports and manufacturing have got a raw deal. Lakhs of small and thousands of medium/large units functioning in the DTA contribute to 80 per cent of merchandise exports and much of the domestic manufacturing turnover. The 10,000 units under the SEZ, EOU and MOOWR regimes contribute to an estimated 20 per cent of merchandise exports from India. DTA units are thus the bedrock of manufacturing and exports. But compared to other schemes, the DTA units get the lowest concessions. A few examples: (i) A DTA unit pays both the Basic Customs Duty and IGST on the import of machinery for making products for domestic sale. But a unit under MOOWR or SEZ can import machinery duty-free. This affects the DTA units and machinery makers. (ii) A DTA unit must use government-approved raw materials to make an export product. No such limitation under SEZ or MOOWR. (iii) No GST exemption for domestic sourcing of raw materials for the export product. Such a facility is available to MOOWR and SEZ units. The way out A three-step plan will harmonise the concessions under various schemes and strengthen the manufacturing framework: DESH must subsume only large SEZs/industrial parks, so the zone becomes competitive and self-contained. MOOWR is EOU plus more concessions. The two may be merged or the government should allow the EOUs to get all MOOWR features. But this is unlikely as the Finance Ministry — the owner of MOOWR — may not agree with the Commerce Ministry — the owner of the EOU scheme. Create a cohesive policy framework for the DTA units. There is none now. They work under different schemes and frameworks. DTA units must not be getting lower concessions than SEZ or MOOWR units as they are India’s best hope of becoming a manufacturing powerhouse and job creator.
Source: The Hindu Businessline
Pakistan to continue to work with Turkey on strengthening bilateral ties Pakistan and Turkey on Friday signed the Preferential Trade Agreement (PTA) aimed at boosting trade in goods between the two countries. Prime Minister Shehbaz Sharif witnessed the inking of the PTA at a ceremony held at the PM Office, as the visiting Turkish Trade Minister Dr Mehmet Mus and Minister for Commerce Syed Naveed Qamar signed the accord. Commonly known as the Trade in Goods Pact, the PTA includes comprehensive provisions on bilateral safeguards, balance of payment exceptions, dispute settlement, and periodic review of the agreement. Prime Minister Shehbaz termed the agreement “a great moment and a milestone” in the brotherly and historic relations between Pakistan and Turkey. He recalled that following his official visit to Turkey in May, the untiring efforts of the ministries of both sides resulted in the signing of the agreement. The premier added that immense business opportunities existed between the two countries and expressed confidence that the accord would further explore the trade avenues in diverse sectors. The PM also said Pakistan would continue to work with Turkey on strengthening bilateral ties. Trade Minister Dr Mehmet said the occasion marked a significant milestone which would contribute in a long way to further strengthening and expansion of trade ties. He said that meeting the expectations of all stakeholders was not easy but dedication and step-by-step measures led to the conclusion of the accord. The Turkish minister also thanked PM Shehbaz for his leadership to seal the agreement for the betterment of the two countries and enhancing linkages between their business communities. Qamar hoped the PTA between Pakistan and Turkey would open up new opportunities to boost bilateral trade across various sectors. He said Pakistan also looked forward to working towards materializing a Free Trade Agreement (FTA) with Turkey. The trade minister stressed the need to increase business-to-business interaction for strengthening trade and investment relations between the brotherly countries. A key highlight of the trade concessions offered by both sides under the agreement is that Turkey had offered concessions to Pakistan on 261 tariff lines, which include key items of Pakistan’s export interest to Turkey from both agriculture and the industrial sectors. Pakistan and Turkey enjoy historical relations, which are growing in different domains including political, defence, culture and education. However, realizing that economic engagement, especially trade, required concentrated steps to improve bilateral relations, the Framework Agreement between Pakistan and Turkey was signed in 2016 by the Turkish Minister of Economy, Mustafa Elitas and Minister of Commerce Engineer Khurram Dastagir. The agreement laid the ground for a gradual liberalization of goods, services, and investment by establishing a Free Trade Area. Under the ambit of the agreement, a Joint Scoping Study was conducted to identify the areas in which both sides can make progress in reducing tariff barriers to trade. Turkey highlighted its sensitivity in the textile sector whereas Pakistan highlighted its sensitivities in various sectors such as auto, iron and steel, processed agriculture, dairy, value-added textile, and specific products in the chemical, plastics, and white goods. Negotiations on Pakistan-Turkey Preferential Trade Agreement (PTA) remained slowpaced until Prime Minister Shehbaz Sharif’s recent visit to Turkey from May 31 to June 2, 2022. During the visit to Turkey, Qamar and Dr Mus inked a joint Ministerial Statement to conclude the Trade in Goods Agreement based on mutual benefit between the two countries. xThe Trade in Goods Agreement will help achieve the strategic goal of bilateral trade of $ 5 billion in the medium term. After 19 rounds of bilateral negotiations, the agreement was finalised to be signed on August 12. Both sides agree that once the initial agreement creates goodwill and economic gains, both sides can move towards a more comprehensive arrangement. Under the PTA, Pakistan has market access in 261 tariff lines. Pakistan’s global export of these products is $5.1 billion. Turkey's global import of these products is $7.6 billion. Pakistan has offered concessions to Turkey on 130 tariff lines. Turkey's global export of these products is $23 billion (12% of Turkish global exports). Pakistan’s global import of these products is $6 billion. Pakistan has gained market access in traditional sectors such as leather, rice, dates, mangoes, cutlery, and sports goods; and non-traditional sectors including seafood, processed agricultural products, rubber tubes and tyres, plastics, and engineering goods. Pakistan-Turkey bilateral trade The total trade between Pakistan and Turkey stood at $883 million in the fiscal year 2021-22 with Pakistan’s exports to Turkey amounting to $366 million and Pakistan’s imports from Turkey amounting to $517 million. The balance of trade is in favour of Turkey with a negative trade balance of $151 million in 2021-22.
Source: The Tribune
Exports of textile and apparel from the United States went up by 13.10 per cent year-onyear in the first six months of this year. The value of exports stood at $12.434 billion during January-June 2022 compared to $10.994 billion in the same period of 2021, according to data from the Office of Textiles and Apparel, US department of commerce. Category-wise, apparel exports increased by 24.97 per cent year-on-year to $3.489 billion, while textile mill products rose 6.07 per cent to $8.945 billion during the first six months of 2022. Among textile mill products, yarn exports increased by 21.34 per cent year-on-year to $2.313 billion, while fabric exports were up 3.58 per cent to $4.460 billion and made-up and miscellaneous article exports grew 9.15 per cent to $2.171 billion. Country-wise, Mexico and Canada together accounted for more than half of the total US textile and clothing exports during the period under review. The US supplied $3.460 billion worth of textiles and apparel to Mexico during the six-month period, followed by $3 billion to Canada and $0.857 billion to Honduras. In recent years, US textile and clothing exports have remained in the range of $22-25 billion per annum. In 2014, they stood at $24.418 billion, while the figure was $23.622 billion in 2015, $22.124 billion in 2016, $22.671 billion in 2017, $23.467 billion in 2018, and $22.905 billion in 2019. However, the value dropped to $19.330 billion in 2020 because of the COVID-19 pandemic. In 2021, US textile and apparel exports stood at $22.652 billion.
Source: Fashion Network
Indonesia’s textile and garment industry will expand its markets to meet the export target of 13-14 billion USD this year, according to the country’s Industry Minister Agus Gumiwang Kartasasmita. Indonesia’s textile and garment industry will expand its markets to meet the export target of 13-14 billion USD this year, according to the country’s Industry Minister Agus Gumiwang Kartasasmita. The textile industry continues to give a good performance, mostly driven by the rapid growth of sales through e-commerce platforms as well as consumer awareness of the sustainability principle, which is in line with the commitment to reduce carbon and water consumption in the production process, Kartasasmita said in a statement. On the commodity side, the principle of sustainability is also being encouraged through the use of environmentally friendly raw materials and the application of the circular economy principle, the official added. "The existence of Making Indonesia 4.0 will encourage the transformation of the textile industry to make it more competitive and innovate in an effort to compete and answer global market demands," the minister was quoted by Antara news agency as saying. To accelerate the implementation of the Fourth Industry Revolution, the textile industry is expected to utilise several key technologies to beat the global competition, including artificial intelligence, novel fabrics, Internet of Things (IoT), rapid data analysis for quick adaptation, mobile commerce, virtual and augmented reality (VR), online vector editors, 3D printing, blockchain technology, and sustainable practices. The Industry Ministry has initiated a strategic step in the form of a 35% import substitution programme in 2022 to encourage the increased utilisation of existing industries, as well as boost investment in Indonesia. It is also carrying out a machine and equipment restructuring programme in the fabric refinement and fabric printing industries. According to Kartasasmita, this effort has been proven to increase production capacity, production realisation and energy efficiency by 21.75%, 21.22% and 11.86% respectively, as well as raise sales volume, both domestically and via export, by 6.65%.
Source: Vietnam Plus
The continuous entry of fibre, yarn and thread mills into the Cambodian market is set to considerably lessen the textile-related sectors’ dependence on imports of raw materials, observers have said. Newcomer Shun Wei Fang Zhi Ke Ji Co Ltd’s proposal for a $5.2 million fibre, yarn and thread mill in eastern Kampong Speu province has received the green light for a final registration certificate, the Council for the Development of Cambodia (CDC) said in an August 11 notice, adding that the project would create 226 jobs. Of note, Shun Wei Fang Zhi Ke Ji is currently not listed on the Ministry of Commerce’s business registry. And according to the CDC, the project will be located on road Pr 130 between national roads 41 and 3 in Prey Khvav village, Roka Koh commune of northern Kong Pisei district. According to the Ministry of Economy and Finance, textile raw material imports into Cambodia reached $20.1708 billion in 2019, up by 353 per cent from $4.4512 billion in 2008, before falling by 6.11 per cent to $18.9382 billion in 2020 as Covid-19 hit. Cambodian Footwear Association president Ly Khun Thai confirmed to The Post on August 15 that the Kingdom imports large quantities of fibres, yarns and threads from China, Vietnam and Thailand. The amounts sourced domestically by the textile sector are miniscule, he said, adding that local manufacturers of these raw materials are also relatively small-scale. Aside from reducing imports of raw materials, the addition of more fibre, yarn and thread mills will spur the economy and create jobs and skills for Cambodians, he propounded. Such local mills “will also make it easier for factories that need threads – there’ll be no need to spend time buying overseas, they’ll save on shipping as well as on other costs”, he said, contending that the facilities would in turn attract more investment into the Cambodian garment, footwear and travel goods sector. “Travel goods” is a designation that includes suitcases, backpacks, handbags, wallets and similar items. Hong Vanak, an economics researcher at the Royal Academy of Cambodia (RAC), underscored the value of fibres, yarns and threads as raw materials for textile-linked industries, as well as the importance of the mills that produce them, commenting that the Kingdom has historically been heavily reliant on imports from China, a top cotton grower. He said local mills would improve the sustainability of the Cambodian garment sector, and “cut down production costs to a certain extent, which will help to better compete in the international market”. These facilities could also curb work-related migration and could draw in investment into the cultivation of plants used to make threads, he added. Senior economist Ky Sereyvath, director-general of the Institute of China Studies at the RAC, lauded Shun Wei Fang Zhi Ke Ji’s project as a major step for the Cambodian garment sector, believing that more producers of textile raw materials would follow “in the near future”. “Such investment will bring more value added to the Cambodian people as well as the Cambodian economy as a whole,” he asserted. The garment, footwear and travel goods sector is the Kingdom’s largest foreign currency earner. As of last year, the sector comprised about 1,100 factories and branches with around 750,000 workers, according to the Ministry of Labour and Vocational Training. The General Department of Customs and Excise reported that the Kingdom exported $6.6 billion worth of garments, footwear and travel goods in the first half of 2022, up by 40 per cent from the $4.72 million recorded in the same period last year.
Source: Phnom Penh Post
The Bangladesh Economic Zones Authority (BEZA) and the China Road and Bridge Corporation (CRBC) recently signed a memorandum of understanding (MoU) to soon begin work on developing an economic and industrial zone in Chattogram's Anowara sub-district. The economic zone covering 778 acres is expected to generate 30,000 jobs, according to BEZA chairman Shaikh Yusuf Harun. Harun said the zone is fully dedicated to Chinese entrepreneurs and investors. Chemical, automobile assembly, garments and pharmaceutical factories will be built in the economic zone. The China Harbour Engineering Company Ltd was initially chosen for the project by the Chinese government, which changed its decision later. CRBC, a subsidiary of Fortune Global 500 company China Communications Construction Company, focuses on global civil engineering and construction projects like highways, railways, bridges, ports and tunnels. A government-to-government agreement was signed with China earlier for the project, Harun was quoted as saying by Bangla media reports. He said the zone has access to water transportation and the site is suitable for exportoriented industries due to its proximity to the largest sea port in the country. Everything will be finalised after securing the seal of approval from the Cabinet Committee on Economic Affairs. China had expressed interest in building the economic zone when Prime Minister Sheikh Hasina visited the country in 2014.
Source: Fibre2 Fashion
