• About 13 states had sent 18 proposals for the textile park. But Punjab did not fulfil the criteria of providing 1,000 acres of litigation/encumbrance-free land. Madhya Pradesh has sent four proposals, and Maharashtra and Karnataka sent two each The Centre, ahead of approving proposals for mega textile parks, has asked states to provide a long-term projection for power tariffs that would be charged at these parks, a government official said. The scheme, known as Mega Integrated Textile Region and Apparel (PM MITRA), was announced in Budget 2021 to make the textile industry globally competitive. It was given a budget of ₹4,445 crore for seven years up to 2027-28. Seven such parks are due to be approved. “We have almost finalized the states where mega textile parks will be set up. But we are trying to get a few things from the states by way of concessions. We are trying to get states to agree to a better power regime. In some states, the cost of power is quite high and we are trying to get it reduced. They have been asked to give us a longterm roadmap— say 15 years—of the power tariff that will be charged at these textile parks. We are telling them to refrain from raising power charges for 15 years but we are looking for some kind of a projection regarding the same," an official said. India’s textile and apparel exporters complain that a largely fragmented supply chain and higher logistics costs push up the cost of production—one reason export orders have steadily moved to countries such as Bangladesh and Vietnam. These mega parks, textile makers say, could help return textile orders as a result of a planned integrated textiles value chain—including spinning, weaving and processing —at a single location. Among the states that have shown interest are Andhra Pradesh, Assam, Gujarat, Madhya Pradesh, Odisha, Rajasthan, Tamil Nadu and Telangana. “About 13 states had sent 18 proposals for the textile park. But Punjab did not fulfil the criteria of providing 1,000 acres of litigation/encumbrance-free land. Madhya Pradesh has sent four proposals, and Maharashtra and Karnataka sent two each. We will most likely select only one proposal from each state," the official added. Last month, the Punjab government scrapped the textile park proposal near Ludhiana after locals and NGOs claimed the project would cause water pollution. CM Bhagwant Mann said the state will would provide an alternative land parcel.
Source: Live Mint
From exquisite handiwork to sumptuous fabric, the Indian textile industry enjoys a rich heritage of over thousands of years that can be traced back to the times of the ancient Indus valley civilization. The popularity of the fine-quality yarns and fabrics transcended the domestic borders, increasing the demand in the global market and making India the sixth largest exporter of textile and apparel in the world. Currently, India holds a 4% share of the global trade, accounting for 5% of Gross Domestic Product (GDP), and 13% of its export earnings. Textile is the core business of the country, and given its contribution to the economy, it is also the second most employment generating sector after agriculture. The Indian textile industry specialises in weaving a diverse range of yarns and fabric, generating employment for both skilled and unskilled workers. Government data suggest that the industry employs about 4.5 crore people directly and another 6 crores through allied sectors. Of all, women make up the largest workforce, accounting for approximately 60 to 70 per cent of the total manpower. The textile industry is a source of income for more than 27 million women in India, out of which about 50% are associated with unorganised sectors like handlooms, handicrafts, and sericulture. The percentage of women workers in the organised sector is less. The textile industry is also one of the prime sectors of employment for the rural population as most of the textile industries are located on the outskirts of the cities. It is a boon for the rural areas, where most people find it difficult to get a proper job due to a lack of education and sufficient skills. Considering the potential of the textile industry in generating revenue and employment opportunities, the Government of India has been taking several measures to promote the business and encourage people to join the field. The Production Linked Incentive (PLI) Scheme approved in September 2021 for the textile sector is one such initiative that is expected to create additional employment for over 7.5 lakh directly and a few lakhs more for supporting activities. As the industry employs women predominantly, the new scheme put in place in line with the ruling government’s Atmanirbhar Bharat vision, will empower women and increase their participation in the formal economy. Under this scheme, the government would provide the industry with incentives worth Rs 10,683 crore for five years. Due to the rise in demand for Man-Made Fiber (MMF), and Technical Textiles globally, the government’s PLI scheme for textiles is also promoting the production of high-value MMF fabric, garments and technical textiles in the country. The sector is witnessing fresh investments in these segments to cater to the global need, which is expected to increase in the future and eventually create more job opportunities. Traditionally, the Indian textile sector has been cotton focused, but the scenario is fast evolving and shifting to production of sustainable, synthetic and technical textile fabrics. These types of fabrics have high demand in the global market, and they also bring more revenue. The government is also planning to double the size of the Indian textile and apparel industry in the near future. This move is expected to take the textile market to 209 billion USD by 2029. They are supporting the sector through funding and machinery sponsoring. Through initiatives like “Skill India” and “Make in India”, they are promoting business and skilling opportunities for inclusive growth of the sector. Also, the export promotion policies for the textiles sector allowing 100% FDI in the sector under the automatic route has been quite helpful for boosting players and consumers in the sector. Between April 2000-December 2021 the industry attracted 3.93 USD billion of Foreign Direct Investment. Apart from the aforesaid initiatives, the government has also implemented various other schemes for promoting investment, production, and employment opportunities in rural India by introducing programmes like North Eastern Region Textile Promotion Scheme (NERTPS), National Handicraft Development Programme (NHDP) and National Handloom Development Programme (NHDP). India is a world leader in textiles. From fibre to apparel, it has expertise in producing all kinds of raw textiles and garments. It had a humble beginning, but with time it has grown to become one of the key industries in the country. With over 1200 medium to large-scale textile mills, the sector is considered one of the most important pillars of the Indian economy in terms of output, foreign exchange earnings and employment. The future of the Indian textiles industry looks promising, supported by strong domestic and global demand. With various policies introduced by the Indian Government and increased global demand, the employment opportunities for both skilled and unskilled labourers in the textile sector at multiple layers are only expected to rise in the future.
Source: Times of India
Industry associations and trade bodies will no longer have to burden themselves with paper correspondences to highlight issues and suggestions related to logistics services to the government. A new digital initiative of the Logistics Division, Department for Promotion of Industry and Internal Trade (DPIIT) – the creation of a user-interactive dashboard – will now allow authorized user associations to log-in and lodge issues or suggestions for the government to track and resolve in a transparent manner. It is being seen as a novel initiative for the industry that will not only allow the division to address issues related to a single Ministry/Department but also multiple ministries/departments. A user demonstration of the system was organised recently that witnessed the participation of all major industry associations associated with logistics services in India. In the demonstration, the prototype of the system and its benefits were discussed. This was followed by a detailed demonstration on the dashboard which would bring the industry and agencies closer with a continuous two-way communication that would help in responsive governance. The initiative is expected to help in the identification of procedural issues that lead to lower efficiency in logistics and higher logistics costs. Echoing the views of the government, the senior office bearers of all industry associations present for the demonstration welcomed the initiative as a much needed tool that would significantly reduce communication gap between trade and the agencies. The user interaction dashboard is part of several initiatives being developed by the Logistics Division, DPIIT to address the technology, services, and human resource related aspects of logistics efficiency in the country. The dashboard is expected to be launched for all authorised associations in the sector soon. Senior officials from the Logistics Division have also indicated that to streamline the inter-ministerial coordination of service related issues in logistics, an institutional mechanism such as the Network Planning Group (NPG) under PM GatiShakti is also under consideration. Such endeavors are expected to give a significant boost to India’s logistics efficiency.
Source: PIB
A 7-7.5% real economic growth can make India an upper-middle-income country by 2047, but the growth rate needs to accelerate to 8-8.5% to make the country a higherincome nation, Economic Advisory Council to the Prime Minister (EAC-PM) chairman Bibek Debroy said on Tuesday. Releasing ‘The Competitiveness Roadmap for India@100’, Debroy said, “Even if we have relatively conservative real rates of growth of 7-7.5%, we will get to a per capita income of about $10,000 by 2047 and the total size of the economy of a little less than $20 trillion.” Following the growth of recent years, India is now a lower middle-income country with average prosperity levels at $2,000 ($7,150 at purchasing power parity). “The question to ask is what does one need to do to get from the $10,000 per capita income to $12,000, which will make India a higher-income country. What does one need to do to get from the rate of growth of 7-7.5% to something like 8-8.5%? There are different ways to slice this, some of which have been attempted in this report.” The report by the Institute for Competitiveness suggests essential areas of action, including improving labour productivity and enhancing labour mobilisation, boosting the creation of competitive job opportunities, and improving policy implementation through greater coordination across different ministries. According to the International Monetary Fund, the Indian economy is forecast to expand by 7.4% in 2022-23, making it one of the world’s fastest-growing economies. In his Independence Day speech, Prime Minister Narendra Modi has set an ambitious target of making India a developed nation by 2047. According to the World Bank’s definition, a country with a per capita annual income of over $12,000 is considered a higher-income nation. Noting that because what happens to India is an aggregate of what happens to the states, Debroy said, “Unless the states jack up their growth records, the overall growth records for India is not going be that high either.” India needs a set of sector- and location-specific growth initiatives to reframe some of its key industrial and regional policies to pursue a coherent strategy for growth and competitiveness upgrading, according to the report. The Competitiveness Roadmap for India@100 provides the basis for a renewed approach to India’s growth and development strategy. Moving ahead, the focus would be on developing KPIs and roadmaps for different industries, ministries and states of the country to shape the journey towards reaching the country’s ambitions by its centennial year. The change in approach to development in different sectors and states will not only shape policy actions today but also have an impact on the design and implementation of future policies, the report said. It said that India’s headline GDP growth has been strong and even accelerating but weak social progress, rising inequality and a lack of convergence across regions suggest that this growth has failed to translate into the expected improvements in quality of life for many Indians.
Source: Financial Express
Outward Foreign Direct Investment, the domestic companies had invested over $2.56 billion in July 2021 in the form of equity, loan and issuances of guarantees India Inc's foreign direct investment in July declined over 50 per cent to USD 1.11 billion in July 2022, the Reserve Bank data showed. As per the RBI data, on Outward Foreign Direct Investment (OFDI), the domestic companies had invested over USD 2.56 billion in July 2021 in the form of equity, loan and issuances of guarantees. In a breakup, the Indian businesses invested USD 579.15 million by equity infusion, USD 193.21 million as loans and USD 337.49 million infused by issuing guarantees to their overseas ventures during July 2022. Among the major investors included Reliance Industries USD 160 million in its whollyowned energy subsidiary in Singapore, Reliance Industrial Investments & Holdings USD w 40.74 million in the fully-owned unit in retail business in the UK, and Ravindra Energy putting USD 33 million in its fully-owned unit in the UAE. Hasham Traders invested USD 32.71 million in a joint venture in the US, which is into financial services.
Source: Business Standard
India’s merchandise export growth slowed down to just 2.1% on year in July to $36.3 billion. Commerce and industry minister Piyush Goyal on Tuesday held a meeting to review the ongoing negotiations for free trade agreements (FTAs) with various countries in a bid to expedite the talks and boost export prospects. The meeting comes at a time when demand from India’s key markets such as the US and the EU are expected to slow down due to recession there. Exports to China, the fourthlargest destination for India, crashed 31% in the June quarter from a year before. Given the strong external headwinds, Goyal has already asked industry to study various FTAs that the country has signed and identify areas where domestic suppliers have competitive edge so that they can boost exports. Deliberations on ways to fast-track negotiations are on “to achieve mutually beneficial FTAs, paving the way for increased exports, investments & people to people ties”, Goyal’s office said in a tweet on Tuesday. India is either negotiating or planning to start talks for a flurry of high-stake FTAs with key economies, such as the EU, the UK, Canada, Israel, members of Gulf Co-operation Council (GCC) and Australia. While New Delhi has clinched an interim deal with Canberra, talks for a full-fledged FTA could start soon. Together these economies (excluding the UAE, a part of the GCC, with which an FTA is already signed) contributed as much as $108 billion, or 26%, to India’s merchandise exports in FY22. Both India and the UK are eying a deal by Diwali this year (October 24). India’s merchandise export growth slowed down to just 2.1% on year in July to $36.3 billion. However, in the first four months of this fiscal, exports grew 20.1% to $157.4 billion. Goods exports had hit a record $422 billion in FY22, far exceeding the earlier peak of $330 billion, on the back of an industrial resurgence in advanced economies, which is now losing momentum
Source: Financial Express
The report titled 'The Competitiveness Roadmap for India@100' is jointly published by the Economic Advisory Council to the Prime Minister (EAC-PM) and the Institute for Competitiveness. It was released by EAC-PM Chairman Bibek Debroy. India needs a set of sector- and location-specific growth initiatives to reframe some of its key industrial and regional policies to pursue a coherent strategy for growth and competitiveness upgrading, a report said on Tuesday. It said that India's headline GDP growth has been strong and even accelerating but weak social progress, rising inequality and a lack of convergence across regions suggest that this growth has failed to translate into the expected improvements in quality of life for many Indian The road map is a collaborative endeavour between the EAC-PM and The Institute for Competitiveness and is developed by Amit Kapoor, Chair, Institute for Competitiveness, Professor Michael E Porter and Christian Ketels of Harvard Business School. "India needs to launch a new set of sector- and location-specific growth initiatives to reframe some of its key industrial and regional policies. "Sector- and location-specific initiatives can identify the specific needs of individual clusters and regions and then select from generic policy tools to pursue a coherent strategy for growth and competitiveness upgrading," it suggested. The report also suggested that India needs enabling social policies that enhance the employability of labour market entrants and reduce barriers for job seekers. These policies will address urgent social needs across the country and trigger job creation opportunities, it said While noting that India needs to make strengthening effective market competition a more central element of its efforts to upgrade business environment, the report said, "deeply distorted market structures across many sectors currently lead to poor outcomes, undoing the significant gains made in factor input conditions". The report observed that regulatory frameworks that are unfit for purpose and legacy market structures reminiscent of different times are holding India back. It suggested that India needs to adopt a comprehensive approach towards enabling the growth of competitive firms. Noting that India's government has pursued an ambitious agenda of economic reforms, largely focused on the relevant issues and based on mostly sound conceptual principles, the report said, "but the impact on job creation, terms of job creation and the growth of firms has fallen short of ambitions". While India performs surprisingly well in more sophisticated dimensions of competitiveness, it said, but the country still lags in key fundamentals, in particular skills, some dimensions of infrastructure, and the costs of doing business. "The pandemic has pushed millions back into poverty, at least for now," the report said, adding that social progress is lagging behind average prosperity, with dramatic weaknesses in environmental quality and the quality of basic education.
Source: Economic Times
Odisha Chief Minister Naveen Patnaik has addressed the Investors' meet and curtain raiser for the 'Make in Odisha' conclave in the national capital and urged the investors to invest in Odisha. The event was held by the Odisha government in collaboration with the Federation of Indian Chambers of Commerce and Industry (FICCI). Addressing the investors, Patnaik on Wednesday said, "Odisha is one of the fastest growing economies in India and has consistently grown above the national average in the last decade and a half. We are fast emerging as a major industrial destination in eastern India because of our natural resource advantage and strategic location. I seek everyone support to ensure 'Make in Odisha' Conclave 2022 a successful event." The third edition of 'Make in Odisha' Conclave is being held between November 30 and December 4, with focus on sectors, including metals and metal downstream, chemicals and petrochemicals, textiles and apparel, along with technical textiles, food processing, among others. "Odisha has been famous for trade and commerce. Today, Odisha is the largest producer of steel, stainless steel and aluminium in India. We are emerging as a leader in sectors like chemicals and petrochemicals, textiles and apparel, IT and ITeS, food processing and others," said Suresh Chandra Mahapatra, Odisha Chief Secretary. Hemant Sharma, Principal Secretary, Industries Department, Skill Development and Technical Education, Odisha government, made a presentation about 'Make in Odisha' and highlighted the state's achievements because of more than two decades of stable governance. He said that Odisha is the fastest-growing economy in the country and has emerged as the top choice in the sector of minerals and metallurgy.
Source: Investing
A 12-member delegation from Nigeria is on a week’s study tour to India Nigeria is looking at strengthening its ties with Indian textile industry to revive its cotton integrated industry. Muhammad Bala, Deputy Director of Industrial Development Department, Federal Ministry of Industry Trade and Investment, Nigeria, and Navdeep S. Sodhi, Partner, Gherzi Textil Organisation, told The Hindu on Tuesday that a 12-member delegation was on a week’s study tour to India. They are holding discussions with the industry in some of the textile hubs to learn more about the best practices adopted across the textile value chain. On Tuesday, the delegates had a meeting with Southern India Mills’ Association (SIMA) and with South India Textile Research Association, apart from visiting some of the textile industries and institutions. According to one of the delegates, Nigeria has 84 million sq.km of fertile land and nearly one million sq.km is under cotton cultivation. However, the textile industry in Nigeria, which was once a thriving sector, is facing challenges because of import of garments at low prices. Mr. Sodhi said “influx of low cost Chinese garments through the unorganised route undermines the local industry.” Mr. Bala added that the Nigeria Government was trying to address it.It has a cotton textile government policy. Indian investments in the textile sector in Nigeria is one of the highest. “We need to modernise and upgrade this industry,” said Mr. Sodhi. Hence, Nigeria was looking at strengthening cooperation with the Indian textile and garment industry in the areas of cotton production, trade, investments, and capacity building. K.Selvaraju, Secretary General of SIMA, said India’s textile and garment exports were worth $ 44 billion in 2021-2022 and is expected to touch $ 100 billion by 2030. Explaining details of cotton cultivation in south India and the textile industry’s growth, he said the industry is willing for better cooperation with Nigeria.
Source: The Hindu
This would make India the world's fastest growing major economy in FY23 The government is confident that India’s real gross domestic product (GDP) growth will exceed 7 per cent in 2022-23 (FY23), Finance Secretary T V Somanathan said on Wednesday. This will make it the world’s fastest-growing major economy. Somanathan and Economic Affairs Secretary Ajay Seth were briefing the media after the release of April-June quarter (first quarter, or Q1) GDP data. Seth said the goods and services tax (GST) collections for August are expected to be around Rs 1.42 trillion, making it the sixth consecutive month that GST collections will cross the Rs 1.4-trillion mark. India’s economy grew 13.5 per cent in Q1FY23 — the fastest in four quarters — on account of better performance by the agriculture and services sectors, revealed official data. It was, however, lower than the Reserve Bank of India’s (RBI’s) Q1FY23 GDP forecast of 16.2 per cent. “13.5 per cent in Q1 is good enough to achieve what everyone, including the RBI, International Monetary Fund (IMF), and others, is expecting. We are on course to achieve more than 7 per cent GDP growth throughout the year. It is expected to be between 7 per cent and 7.5 per cent,” said Somanathan. The RBI has projected a real GDP growth of 7.2 per cent, while the IMF has projected a 7.4 per cent GDP growth for India in FY23. “On demand side, real Gross Fixed Capital Formation, as a percentage of GDP, stood at 34.7 per cent — the highest in Q1 in 10 years. Private Final Consumption Expenditure has also revived and its share in GDP stood the highest in Q1 in a decade, supported by various measures undertaken by the government to boost consumption in the past two years,” said Seth. Seth said GST collections in August are likely to grow 27 per cent year-on-year (YoY) to more than Rs 1.42 trillion, crossing the Rs 1.4-trillion mark for six successive months since March 2022. “The growth in collections was supported by robust growth in economic activity, along with various measures undertaken to prevent anti-evasion activities and encourage better compliance. Sustained growth in GST collections indicates that the growth momentum of the Indian economy has sustained even beyond Q1FY23,” he said. “The volume of e-way bill generation in August 2022 registered YoY growth of 15 per cent to Rs 7.56 crore, indicating robust domestic economic activity. This shows robust economic activity in the movement of goods and tax collections,” said Seth.
Source: Business Standard
India needs to strengthen and reframe its enterprise, competition and business environment policies to enable more productive firms to emerge and scale up for sustainable job creation, said a report which flagged unfit regulatory frameworks that are holding the country back. The report, 'The Competitiveness Roadmap for India@100', jointly published by the Economic Advisory Council to the Prime Minister (EAC-PM) and the Institute for Competitiveness, was released by the EAC-PM chairman Bibek Debroy on Tuesday. It said India's headline GDP growth has been strong and even accelerating but weak social progress, increasing inequality and a lack of convergence across regions suggest that this growth has failed to translate into the expected improvements in quality of life for many Indians. The report, authored by Amit Kapoor, chair, Institute for Competitiveness, and Professors Michael E Porter and Christian Ketels of Harvard Business School, said India has become fully integrated into the global economy through significant global trade and foreign direct investment (FDI) inflows. "India needs to strengthen effective market competition, a more central element of its efforts to upgrade business environment conditions," it said. Deeply distorted market structures in many sectors lead to poor outcomes, undoing the significant gains made in factor input conditions, said the report. "India needs to launch a new set of sector- and location-specific growth initiatives to reframe some of its key industrial and regional policies," said the report. "Sector- and location-specific initiatives can identify the specific needs of individual clusters and regions and then select from generic policy tools to pursue a coherent strategy for growth and competitiveness upgrading." The report also said that India needs enabling social policies that enhance the employability of labour market entrants and reduce barriers for job seekers. These policies will address urgent social needs across the country and trigger job creation opportunities, it said. While poverty in India has fallen over time, inequality has increased with high gains for individuals at the top of the income distribution, it said. "Social progress is lagging behind average prosperity, with dramatic weaknesses in environmental quality and the quality of basic education. Social policies have become less distortive, more targeted, and more focused on mobilizing bottom-up upgrading," said the report. India's productivity growth has seen robust increase over the years and matched the gross domestic product (GDP) growth, it said, but labour mobilisation remains low, especially for women. "(Labour mobilisation) has been falling over time, especially since 2005 when job creation dramatically decreased... Large firms have driven productivity growth but not job creation and the majority of employees are stuck in small, low productivity, and low growth firms," said the report. It also said that India has made headway in many areas. For instance, the country now produces sufficient electricity to serve nationwide demand, it said, and in education, enrolment rates have been going up and more children are being offered the opportunity of schooling. But the benefits of these improvements too often fail to materialize because of distorted market structures or inefficient governance and incentive systems," said the report. It also pointed out that India performs well in terms of sophisticated dimensions of competitiveness, which usually include high skill industries like technology. The report said that those industries that already have the assets and capabilities to compete globally are doing well. "Those that depend on more basic qualities of the business environment, however, find it hard to take the first steps towards the modern economy," it said.
Source: Economic Times
Indonesia’s parliament has approved the country’s membership in the Regional Comprehensive Economic Partnership (RCEP) trade pact and becomes the latest country in ASEAN to join in what is the world’s largest free trade agreement. The RCEP is estimated to cover 30 percent of the global GDP of US$25.8 trillion, and comprise 30 percent of the world’s population. While Indonesian exports will benefit from the reduction in tariffs between RCEP members, the country’s downstream industries are also well poised to receive greater investments. Supported by an abundance of natural resources, Indonesia is actively seeking to climb up the global value chain – transitioning from an exporter of raw commodities to a producer of high-value products. Indonesia, Southeast Asia’s largest economy, ratified its membership in the Regional Comprehensive Economic Partnership (RCEP) on August 30, 2022, and becomes the latest country in ASEAN to ratify this trade agreement. The RCEP is estimated to cover 30 percent of the global GDP of US$25.8 trillion, and comprise 30 percent of the world’s population. With the RCEP set to eliminate 92 percent of tariffs on goods traded among its 15 members, Indonesian lawmakers have expressed concerns that this could trigger an influx of imported goods and thus impact the competitiveness of local businesses, particularly micro and small medium enterprises (MSME). However, with President Joko Widodo’s coalition controlling 80 percent of parliament, ratification of the RCEP is only a matter of time. Indonesia’s Chief Economics Minister, Airlangga Hartarto, expects the country to book a trade deficit in the early period after implementation, but by 2040, the RCEP could boost the country’s trade surplus by US$979 million, more than double the current trade surplus of US$383 million. Further, Indonesia could see GDP growth by 0.07 percentage points and an increase in exports and imports by US$5 billion and US$4 billion, respectively. The country’s protectionist policies have made it difficult for foreign investments to enter the country. Indonesia struggled to capture a significant share of the investment and production from businesses moving out of China due to the US-China trade war. The government has since introduced the Omnibus Law in late 2020 which removes bureaucratic inefficiencies, simplifies business licensing requirements, and liberalized more industries to attract foreign investments. Investments in Indonesia’s downstream industries Importantly for Indonesia, the RCEP presents an opportunity to better integrate Indonesia into regional value chains and attract investments into its industries, especially manufacturing, which accounts for 20 percent of GDP. The government aims for Indonesia to become a manufacturing hub that rivals Germany and South Korea. Indonesia’s main areas of production are textiles and garments, electronics, automotive, footwear, food and beverages, and chemicals. The country’s trade-to-GDP ratio is 40 percent, lower than the global average of 55 to 60 percent, highlighting that Indonesia is poorly integrated with global supply and value chains. During the 1990s, Indonesia saw large-scale industrialization due to deregulation and a policy shift towards export-oriented industries. However, the country was slow in accumulating technology and reskilling its human resources, leading it to fall behind in its manufacturing competitiveness compared to Singapore, Malaysia, and Thailand. Indonesia’s strength lies in its extensive natural resources and the processing industries associated with them. Membership in the RCEP can incentivize new investments and partnerships to obtain the technology and resources for expanding industrial capabilities and promoting innovation, besides enabling the climb up the value chain. Incubating emerging value chains Indonesia is keen to diversify its manufacturing sector and the RCEP can help transform the country into a producer of high-value products. Incubating new and emerging value chains will be vital if the country wants to increase the contribution of the manufacturing sector to GDP to 25 percent from 20 percent by 2030. One such example of an emerging value chain the country is exploring is the establishment of an electric vehicle battery plant – the first in Southeast Asia — and marking a milestone in the country’s drive to becoming a global EV battery supplier and establishing a comprehensive EV supply chain. Indonesia has significant nickel reserves – approximately 24 percent of the world’s reserves – and is a vital component of EV batteries. Moreover, the country’s Grasberg mine located in Papua province, has the second-largest reserve of copper in the world, another key component of EV batteries. When fully operational in 2023, the plant is expected to produce 10-gigawatt hours of lithium-ion battery cells for 150,000 EVs. The digital economy Another emerging value chain is the digital economy, which saw a growth of 49 percent in gross merchandise value (GMV) between 2020 and 2021 due to the pandemic. A report by Bain & Company, Google, and Temasek predicts that Indonesia’s digital economy will have a GMV of US$146 billion by 2025, the largest in ASEAN. Since the start of the pandemic, the country saw 21 million new digital consumers and 72 percent were from non-metro areas, showcasing the growing penetration of the digital economy. E-commerce remains the main growth driver showcasing a growth of 52 percent from GMV of US$35 billion in 2020 to US$53 billion in 2021. The country is also home to nine tech unicorns, with GoTo — one of the largest — listed on the Indonesian Stock Exchange, raising some US$1.1 billion in April 2022. By the day’s end, GoTo’s market capitalization was US$32 billion. Commodities are still of huge importance to the economy Indonesia hopes that the RCEP will allow for greater investments into its downstream industries, particularly in commodities processing. Oil and gas and minerals play a significant role in Indonesia’s economy and constitute a major source of revenue for the government. The government is planning to ‘hit the brakes’ on the exports of almost all commodities. Unprocessed nickel was banned from being exported since January 2021 and the ban on raw bauxite shipments will begin in 2023, followed by raw tin exports in 2024. To put in perspective, in addition to having the world’s largest nickel reserves, Indonesia is the second-largest producer of tin, the third-largest producer of coal, and the fifthlargest producer of bauxite. In January 2022, the government imposed a one-month ban on thermal coal exports to avail of a domestic shortage. The ban caused market prices in Asia to jump to US$160 per ton, but it did protect Indonesian consumers from a surge in energy prices. Further, the government recently stopped the exports of crude palm oil and palm oil products to rein in high domestic prices. Indonesia is the world’s largest producer of crude palm oil, accounting for 60 percent of the global share. The President believes that preventing raw material exports until 2024 will triple Indonesia’s GDP by 2030. In terms of Purchasing Power Parity (PPP), the country is already ranked seventh behind Germany and Russia, but ahead of France, the UK, and Brazil. Infrastructure spending To fully benefit from the RCEP, Indonesia must continue its infrastructure spending as connectivity issues still plague businesses in the country. Indonesia’s non-tariff trade costs with China are higher compared to its peers Malaysia and Vietnam. One of President Joko Widodo’s signature campaign promises has been to improve the country’s infrastructure. When he won his second term in 2019, the President announced a raft of infrastructure projects worth US$400 billion, comprising 25 new airports and the development of over 2,000km of new highways, among others. In addition, the government is building a new US$35 billion capital city. These initiatives will require major investments, presenting ample opportunities for RCEP member countries. Benefitting from Indonesia’s huge domestic market RCEP members can benefit from exporting to Indonesia’s huge domestic market of over 270 million people. Coupled with 70 million middle-class consumers, some 60 percent of GDP is derived from domestic consumption. Foreign investors will find potential growth in numerous sectors from modern retail to food and beverages to fashion. Growing purchasing power has seen multinationals such as McDonald’s, KFC, Burger King, and Coca-Cola have a foothold in the country while modern retail outlets have expanded from Greater Jakarta to second-tier cities like Bandung and Surabaya. Many multinationals have also benefited from having a first-mover advantage in staying compliant with Indonesia’s Halal certification laws. The country is the world’s largest Halal consumer market with Indonesian Muslims expected to spend US$247 billion on Halal food and beverages alone by 2025. Other beneficiaries of this spending include Australia’s cattle industry. Indonesia imports 500,000 heads of cattle from Australia annually, which comprises of 62 percent Australia’s total live cattle exports. The Omnibus Law At the heart of Indonesia’s ongoing reforms is the Omnibus Law. Launched in 2020, the law amends over 70 existing laws with its primary aim to stimulate domestic and foreign investment by simplifying business licensing requirements, liberalizing industries, and streamlining the labor law, among others. The Law has liberalized over 245 business lines including sectors such as healthcare, aviation, energy, and telecommunications through a positive investment list. Moreover, to maximize tax revenue collection, the Law has overhauled Indonesia’s existing tax structure in which local tax residents will only need to use their national identity card as their tax number.
Source: ASEAN Briefing
AB 1817 now sits on Governor’s desk awaiting approval or veto A bill to end the use of perfluoroalkyl and polyfluoroalkyl substances (PFAS) “forever” chemicals in new fabrics and textiles in California was passed by the Assembly Tuesday. Assembly Bill 1817, authored by Assemblyman Phil Ting (D-San Francisco), would prohibit any person from manufacturing, distributing, selling, or offering for sale in the state any new, not previously owned, textile articles that contain regulated PFAS and requires a manufacturer to use the least toxic alternative when removing regulated PFAS in textile articles to comply with the bill. AB 1817, also known as The Safer Clothes and Textiles Act, would also require manufacturers to provide those that offer the product for sale or distribution in the state with a certificate of compliance stating that the textile article is in compliance with these provisions and does not contain any regulated PFAS. Exemptions to the bill would include many textiles and fabrics used for safety reasons where PFAS fire retardant qualities and other benefits would prove to be invaluable, including vehicle component parts, PPE, military clothing, industrial filters, and lab clothing. Should AB 1817 be signed into law, it would become active beginning January 1, 2025. Assemblyman Ting wrote the bill due to growing concern over the use of PFAS chemicals, which are used in everything from fire retardants to non-stick pans, and how they relate to increased environmental and health risks including kidney and liver damage, decreased immune system function, interference with vaccine uptake, developmental and reproductive harm, and increased risk of cancer and asthma. While PFAS regulations in California have been growing in the last several years, including bills limiting the chemical from being in everything from food packaging to cosmetics, fabrics and textiles had only seen a few limitations, such as having PFAS in things intended for infants and babies. However, with concerns over PFAS still growing, Ting decided to have a bill cover all clothing and textiles due to safer alternatives being available that aren’t PFAS. “California has already enacted a series of laws to protect consumers and the environment from the hazardous impacts of PFAS, including a bill I successfully championed just last year prohibiting its use in paper-based food packaging,” said Assemblyman Ting earlier this year. “These efforts center on the premise that prevention is the best cure, and my bill would extend this same logic to the textile industry to reduce the harm these substances can cause. There are safer alternatives manufacturers can use.” The latest potential PFAS regulation in California Supporters of the bill, which includes health and environmental groups, specifically noted risks through PFAS being in drinking water and other areas. “The Safer Clothes and Textiles Act will help protect all Californians, our drinking water, and our environment,” added Director of State Health Policy for the Natural Resources Defense Council (NRDC) Avinash Kar. However, many businesses and companies have come out in opposition to the bill, with many protesting that the tight regulations will bring havoc to interstate commerce, difference of regulations between states, weaker products without PFAS, heavy economic impact, and confusing new regulations for everyone involved in the making and transportation of goods. “California once again rushes headfirst into passing a bill without looking at all possible outcomes of it,” said Vincent Gatineau, a consumer product legislation lobbyist, to the Globe on Wednesday. “You can spend a lot of time learning the best and safest ways to dive into a pool, but first you need to check that it isn’t the shallow end. That’s essentially bills like AB 1917 and others surrounding PFAS. There are health risks surrounding them but you need to look at other things too, like what the economic impact will be. Like what the manufacturing impact will be. If companies can’t continue making these products, they’ll either move out of California or close down. There’s a lot to this, and the people behind it just don’t seem to care.” While the bill was vigorously opposed by GOP Assemblymembers and Senators at every vote, either voting “no” or abstaining, the bill still had enough support from Democrats to pass. This culminated in the 56-2 with 22 abstention Assembly vote on Tuesday, bringing the bill to Governor Newsom’s desk. Newsom’s yea or nay on the bill is expected to come in the coming days.
Source: California Globe
Sri Lanka’s earnings from the merchandise exports exceeded US$ 1 billion for the third consecutive month in July 2022 as revenue from exports increased by 2.25 percent Year-on-Year (y-o-y) to US$ 1.123 billion in the month, mainly due to the increase in earnings from export of apparel and textiles. Major Exports in July 2022 Major product sectors except Rubber based products, Coconut based Products and Spices & Concentrates; Apparel & Textiles, Tea, Electrical & Electronic components, Diamonds, Gems & Jewellery and Food & Beverages as shown in the table 1 below, recorded increased exports in July 2022. Exports of Apparel & Textiles increased by 21.55% y-o-y to US$ 550.05 million in July 2022. The increase was driven by both Apparel and Textiles. Export earnings from tea in July 2022 which made up 11% of merchandise exports, increased by 2.08% y-o-y to US$ 117.52 million. This was mainly due to the higher Export of tea packets (13.57%). Export earnings from the Electrical & Electronics Components increased by 4.36 % y-o-y to US$ 41.18 million in July 2022 with strong performance in exports of Insulated Wires & Cables (8.26%) and Other Electrical & Electronic Products (15.5%). However, export earnings from Rubber and Rubber Finished products have decreased by 7.67% y-o-y to $ 89.24 million in July 2022, with poor performance in exports of Industrial & Surgical Gloves of Rubber (-20.96%). On monthly analysis, except shell products export earnings of kernel products and fiber products categorized under the Coconut based products decreased by 25.62% and 15.45% respectively in July 2022 compared to July 2021. Export earnings from Seafood decreased by 48.99% to US$ 20.65 million in July 2022 compared to July 2021. Except shrimps, export earnings from Frozen fish and Fresh fish decreased by 59.5% and 61.36% respectively in July 2022. Further, export earnings from Ornamental fish decreased by 72.47% to US$ 1.36 million in July 2022 compared to July 2021. In addition, export earnings from Spices and Essential Oils decreased by 26.2% to US$ 33.91 million in the month of July 2022 compared to month of July 2021 due to the poor performance in export of Cinnamon (-17.45%), Pepper (-38.36%), Oleoresins (- 4.78%) and cloves (-51.87%). Major Exports during the period of January – July 2022 For the period of January - July 2022, merchandise exports increased by 11.8% to US$ 7,604.12 Million compared to the corresponding period of 2021. Major product sectors except Tea, Rubber-based products and Spices & Concentrates; Apparel & Textiles, Coconut based products, Electronics & Electronic Components, Gems & Jewellery, Food & Beverages and Seafood as shown in the table 1 below, recorded increased exports. Apparel & Textile exports increased by 20.01% to US$ 3,517.44 million during the period of January to July 2022 compared to the same period of 2021. Except Made-up Clothing Accessories (-7.07%), Woven fabrics (-17.52%), Yarn (-1.48%) and Textile Floor Coverings (-5.88%); exports of other sub categories of Apparel & Textiles sector increased. For the period of January to July 2022, export earnings from Coconut & Coconut based products expanded by 7.98% to US$ 501.47 million. Earnings from all the major categories of Coconut based products increased during the period of January – July 2022 compared with the corresponding period of 2021 due to the improved performance in export of Liquid Coconut Milk, Cocopeat, Mattress Fiber, Activated Carbon, Coconut Oil and Desiccated Coconut. Meanwhile earnings from export of Electrical and Electronic Components (EEC) increased by 11.53 % to US$ 269.3 million in the period of January to July 2022 compared to the corresponding period of 2021. Export of Insulated wires increased by 17 % in during the period of January to July 2022 to US$ 47.62 million compared with the corresponding period of previous year. In addition, export of Switches, Boards & Panels, Electrical Transformers and Other Electrical & Electronic Products increased by 3.27%, 13.13% and 10.03 % respectively during the period of January to July 2022 compared with the corresponding period of previous year. Export earnings from Seafood increased by 10.88% to US$ 162.82 million in the period of January to July 2022 compared to year 2021 due to the better performance in all the sub categories except Frozen Fish and Lobsters; Fresh Fish (27.96) and Prawns (67.47%). However, earnings from export of ornamental fish marginally decreased by 1.03% to US$ 11.52 million during the period of January to July 2022 compared to year 2022. Moreover, export earnings from Tea decreased by 9.24% to US$ 694.9 million during the period of January to July 2022 compared with the corresponding period of 2021. Exports of all the sub categories of tea sector except Tea Bags; Tea packets (-7.99%), Bulk Tea (-10.14 %,), Instant Tea (-25.11%) and Green Tea (-35.11%) decreased during the period of January to July 2022 compared with the same period of 2021. Export earnings from Rubber & Rubber finished products slightly decreased by 1.74 % to US$ 605.85 million in January – July 2022 compared with the same period of 2021 attributed to lower exports of Industrial & surgical Gloves (-16.8%). However, exports of Pneumatic & Retreated Rubber Tires & Tubes increased by 7.26% during the period of January to July 2022 compared with the same period of 2021. Sri Lanka’s Export Performance in Major Markets Strong Export Growth was recorded for the top 10 export markets in the period of January to July 2022. The single largest export destination of the United States of America recorded US$ 1,988.43 million worth of exports in the period of January to July 2022 – a significant year-on-year increase of 21.89 % in comparison to US$ 1,631.36 million recorded in 2021. Exports to the United Kingdom as the second largest trading partner recorded an increase of 14.59 % to US$ 602.01 million during the period of January to July 2022 compared with the corresponding period of the previous year. Exports to FTA Partners During the period of January to July 2022, exports to Free Trade Agreement (FTA) partners accounted for 7.2% of total merchandise exports increased by 13.73 % to US$ 547.4 million. Although Exports to India increased by 16.6 % y-o-y to US$ 500.75 million, exports to Pakistan decreased by 10.02% to US$ 46.65 million during the period of January to July 2022 compared with the corresponding period of 2021. Increased Exports to India is mainly supported by increased exports of Animal Feed (15.8%), Arecanuts (86.64%) and Textile (35.65%) in January - July 2022. Sri Lanka’s Export Performance in Regions On a region wise comparison exports to all regions except CIS countries increased during the period of January to July 2022 compared with the corresponding period of 2021. During the period of January to July 2022, breakdown of exports to the top five EU markets which accounted for 80% of Sri Lanka’s total exports to the EU were; Germany US$ 450.51million (increased by 7.83 %), Italy US$ 359.21 million (increased by 10.5%), Netherlands US$ 233.88 million (increased by 0.77%), Belgium US$ 186.35 million (decreased by 0.1 %) and France US$ 153.79 million. (increased by 14.91%). Export of Services The estimated value of services exports for the period of Jan-July 2022 was 1,146 Million dollars, increasing 5.39 % over the corresponding period of 2021. The services exports estimated by EDB consists of ICT/BPM, Construction, Financial services and Transport & Logistics.
Source: Colombo Page
In the second half this year, China will augment its implementation of a proactive fiscal policy, according to a report from the Chinese finance ministry. The government will continue to implement its combination of tax and fee cuts, and urge localities to roll out supporting measures to ease the burden on market entities, the report said. The country will better utilise local government bonds and enhance coordination between fiscal and monetary policies as well as the implementation of policy-based and developmental financial instruments to advance investment, employment and consumption, the report said. The government has rolled out a slew of measures, including tax and fee cuts, since the year began to secure people's livelihoods and stabilise the macroeconomy, it said. In the first half of the year, tax refunds totaling 1.85 trillion yuan ($268.89 billion) were returned to taxpayers, and the re-guarantee business of the national financing guarantee fund hit 596.2 billion yuan, an increase of 85 per cent year on year, official Chinese media reported citing the report.
Source: Fibre 2 Fashion
Egyptian MP Abdel-Basit al-Sharqawy, member of the Housing Committee in the House of Representatives, said that government efforts to establish the largest spinning and weaving factory in the world in the al-Mahalla City, is a good gesture to restore this industry to its leadership in Egypt. Sharqawy indicated that this giant national project is a culmination to the national strategy set by the government for the development of spinning, weaving and readymade garments industry in Egypt. He stressed, in a statement, that Egypt in the past was one of the first countries in the spinning and weaving industry, and cultivated cotton of all kinds, and today the Egyptian government is regaining its leadership, especially in light of the RussianUkrainian war, which made the world needs cotton and agricultural crops. Sharqawy explained that this project will revive the local product and contribute to the development of the Egyptian product to be able to compete in the local and international markets. He said that the demand for the Egyptian cotton product was high in the past, and everyone preferred to buy it because of its quality and the beauty of its manufacture, which will contribute to reviving this industry again. Sharqawy added that this project will have repercussions on the national economy and support it through opportunities to increase the volume of production of the spinning industry, as well as reduce unemployment rates and reduce imports from abroad. He pointed out that this factory is located on an area of 62,000 square meters, and will include the latest equipment and machines in this field, as well as the use of the best international expertise in order to be able to deal in the industry with all types of cotton, especially long-staple and extra-long cotton
Source: Egypt Independent
China continues to be the top trading partner of the Association of Southeast Asian Nations (ASEAN) for 13 years in a row as trade carried out between both the parties from January to July 2022 amounted to $544.9 billion, which was an increase of 13.1 percent year-on-year. Bilateral trade between China and ASEAN accounted for 15 per cent of the country's total foreign trade. The cumulative investment between ASEAN and its largest trading partner had crossed $340 billion as of the end of July 2022, Chinese media reports said quoting assistant commerce minister of China Li Fei. Chinese companies have also contracted infrastructure projects in ASEAN nations with a cumulative turnover exceeding $380 billion by the end of July 2022. China will roll out measures, including professional online and offline trade matching and investment coordination services, to facilitate cooperation with ASEAN amid the upcoming 19th China-ASEAN Expo, added Li. China is set to offer special measures for goods from ASEAN countries regarding purchasing, transportation, customs clearance, duty-free services, and more. The 19th China-ASEAN Expo will be held from September 16-19, 2022, in Nanning, the capital city of China’s Guangxi Zhuang autonomous region.
Source: Fibre 2 Fashion
Vietnam’s textile and garment industry is set to earn US$45 billion in exports in 2022, compared to US$40.4 billion last year, Vice Chairman of the Vietnam Textile and Apparel Association (VITAS) Truong Van Cam said. According to Vietnam news agency (VNA), he said the industry has been expanding fast over the last five years, at 20 to 26 per cent annually. Vietnam is currently the world’s third largest exporter in this sector. The country’s textile and garment products are holding a global market share of 5.2 percent with the biggest importers being the US, the Republic of Korea, Japan, and Europe, it added. Cam said in order to sustain the growth trend, the State should quickly disburse the financial aid package for enterprises and reform the mindset in attracting investment to textile and garment material production. Meanwhile, businesses should adopt green manufacturing practices, including reducing and recycling waste, to meet the growing preference for environmentally friendly products, he added. -Bernama.
Source: The Sun Daily
In June this year Bangladesh wrote a golden chapter of history when the Chinese-built Padma Bridge opened to traffic. Prime Minister Sheikh Hasina inaugurated the 6.15-km bridge plaque and a beautiful mural, the bottom of which showcases exquisite motifs of Jamdani saree, a traditional women wear that has already been recognized as a Geographical Indication or GI product of Bangladesh. Tens of thousands of Bangladeshi people are directly and indirectly involved in production of Jamdani, which has also been recognized as a UNESCO Intangible Cultural Heritage of Humanity. Jamdani is considered as a surviving variety of a fine muslin textile (figured with different patterns) produced for centuries in the present day Rupganj area of Narayanganj district in Bangladesh on the bank of Shitalakhwa river on the outskirts of capital Dhaka. Weavers in the key center known for the world famous Jamdani textiles has now been making annually hundreds of thousands of pieces of Jamdani which is typically woven using a mixture of cotton and gold thread with geometric and floral designs. Owing to the colonial import policies favoring industrially manufactured textiles, the Bengali jamdani and muslin industries were almost dying in subsequent centuries. But in the recent years, the production of jamdani has witnessed a great revival in Bangladesh. Weavers there said that a wide variety of cheap and available Chinese materials for making exquisite motifs, woven on the loom, could revive the past glory of the Jamdani saree. Md Milon is a weaver who learned how to weave Jamdani at the age of seven. When he was 12 or 13 years old while working in workshops, one day he asked his father to bring him a loom so that he can do his own business venture. "I'm doing well now at my own workshop," said the weaver with indomitable spirit. "Now eight or nine handlooms are running at my workshop," he told Xinhua recently, giving full credit to the Chinese materials for his business successes in Jamdani production. "The products that we need to work, like a tool you see in my hand, have the local name of Kontu (weaving tool), this is also from China, then Makku (weaving tool), it also comes from China," said the weaver-turned trader. Showing a silk thread, he said this is also from China. "The colors we use are different quality colors, different yarns, they all come from China because the quality of the Chinese materials is good, people of our country use more, that's why we use Chinese materials to produce our products." Apart from this, Milon said, "The glue we use here is also from China. Without Chinese materials, our products are not developed, that's why we use Chinese materials more, the most." Sultana Jannat Shiksha is a female entrepreneur. She runs a shop namely "Purnatha Shilpshala" which mainly deals with indigenous products, notably Jamdani sarees made on handlooms. "I usually buy Jamdani sarees from this village," she said, "Here the weavers make jamdani. I can buy directly from the weavers. I can see the quality myself." Usually Chinese colors (dye) are of good quality, she said, adding, "I check whether they use that. I pay attention to this." Yarn and other materials, such as nylon and silk thread used in making jamdani, are usually procured from China, she noted. "I check whether it is being used properly." If the yarn is strong, the weave is good, especially if the saree is made of fine yarn, then it is durable," she said, "I try to give the best to my customers. That is why I myself visit the weavers' factory and try to buy the sarees I like most." Md Asadullah is a weaver and trader as well. He has been doing this work since his childhood and was abroad for some time. After returning from abroad he engaged himself in this trade. "The raw material we use, silk yarn, comes from China, the other yarns we get are the products of our country," said the trader. He said China's silk yarn is of very good quality. "We get better materials at lower prices from China, and weavers are comfortable working with Chinese materials." Meanwhile, he said they would like to take advantage of the duty-free (Bangladeshi export) facilities offered by China. "We want these sarees (jamdani fabrics), produced by us, to be sold in the Chinese market."
Source: Global Times
