The industry is very confident about its future growth and with more integrated and scaled-up units coming up in the upcoming years, the Indian T&A industry is looking towards entering a golden eras, asserts T Rajkumar. India’s Textile & Apparel (T&A) Industry is one of the oldest industries and has a formidable presence in the national economy. Indian T&A industry is the second largest in the world after China and spans across the entire value chain. T&A sector is the 2nd largest employment-providing sector in India after agriculture. It provides direct and indirect employment to more than 10 crore people including a large number of women and the rural population. Indian T&A industry is self-reliant i.e., from the production of raw materials to the delivery of finished products, with substantial value-addition at each stage of processing. In terms of raw material availability, India is the largest producer of Cotton & Jute in the world and is the 2nd largest producer of Polyester, Silk, and Fibre in the world. India’s total T&A market size is estimated to be about $ 170 billion with export accounting for about 25% of the total market size. The last few years have been quite challenging for the Indian T&A industry with Indian T&A exports declining to about $ 30.9 billion in 2020- 21 from levels of $ 37.5 bn in 2018-19, however, as a result of timely decisive policy support from the Government, Indian T&A industry could bounce back and during 2021-22, India could achieve its highest ever T&A exports of about $ 43.4 billion which also accounted for about 10.3% of India’s total merchandise exports during the year. With about 26% market share in India’s Total T&A exports to World during 2021, the USA was the major market for Indian exports followed by EU-27 and Bangladesh with about 17% and 10.3% share respectively. Looking at the importance of the Indian Textile & Apparel sector towards making India’s development inclusive and participative, the Government’s central focus has been on increasing textile manufacturing by building the best-in-class manufacturing infrastructure, upgradation of technology fostering innovation, enhancing skills and traditional strengths in the textile sector. The Government of India is looking towards increasing Indian T&A exports to $100 bn by 2025-26 and has brought out a series of policy measures to achieve the same. Traditionally, India is known for its cotton-based T&A products while, the world over, demand for MMF products is increasing with consumption of MMF fibres outpacing the natural fibre during the last one decade. India has not been able to capitalize on the MMF opportunities which have arisen in the global arena. However, in recent times the industry has seen an increasing realization of this opportunity and taken strides to tap it. The Government is also providing conducive policy support to the industry in this direction and has recently announced the Production Linked Incentive (PLI) Scheme focused on MMF and Technical Textiles.The selection of 64 textiles companies under the PLI scheme shows the keenness of the Indian T&A Industry in the scheme. The Government’s plan to set up 7 Mega Integrated Textile Region and Apparel (PM MITRA) Parks with a total outlay of Rs. 4,445 crore will also help the Indian T&A industry to have world-class industrial infrastructure which would attract cutting edge technology and boost FDI and local investment in the textiles sector. Several states such as Tamil Nadu, Punjab, Odisha, Andhra Pradesh, Gujarat, Rajasthan, Assam, Karnataka, Madhya Pradesh, and Telangana have already expressed their interest for the PM MITRA. Since cotton is the major base for the Indian T&A industry, huge price volatility in the cotton value chain especially during the last 1 year has impacted the smooth production planning of the Indian T&A sector. India despite being the largest producer of cotton in the world, is unable to pass on the benefit of cheaper cotton to its domestic textile & apparel industry. This year we are witnessing a never-before situation wherein prices of Indian cotton are much higher than the international cotton prices.To deal with the issues related to the supply chain of cotton and also to scale up the cotton productivity, the Ministry of Textiles has recently formed a Textile Advisory Group (TAG) under the chairmanship of Suresh Kotak. Besides this, various international developments have led to political instability, higher logistics costs, higher crude prices, currency fluctuations, etc., which have emerged as a challenge for the Indian Textile Sector. However, besides all the challenges, the Indian T&A industry has kept its momentum going and in 2021, India made a jump of two places and emerged as the 4th largest exporter of Textile & Products in the world from its earlier position of 6th largest exporter of T&A in the world. Recently, India has been able to sign trade agreements with UAE and Australia and is very optimistic about trade agreements with UK, EU, Canada and various GCC countries which will enable India to increase its market share in these markets. The Indian Textile & Apparel Industry is very confident about its future growth and with more integrated and scaled-up units coming up in the upcoming years, the Indian T&A industry is looking towards entering a golden era wherein it can realise its true potential and can lead towards the new paradigms of growth.
Source: Indian Textile Journal
The interim trade deal with Australia is also yet to be ratified by the Australian Parliament and has been delayed due to the elections. Goyal said new trade minister Don Farrell is likely to be in India later this month. The Indo-Pacific Economic Framework (IPEF) will open up opportunities for countries like India to work in partnership with other like-minded nations and ensure that supply chains remain open and businesses don't suffer, particularly during difficult times, commerce and industry minister Piyush Goyal said a day ahead of the two-day IPEF ministerial meeting starting in Los Angeles from Thursday. "I do see that the US and India are getting closer together. I do see that our relations are strengthening by the day in terms of two Quads now. One with Japan, Australia and other with Israel and UAE. We have the two plus two ministerial dialogue which has become very robust and vibrant," said Goyal. "Our engagement in several areas is expanding several geopolitical areas, sensitive areas. We continue to grow this relationship and the leaders of both countries, businesses in both countries and people are closer than ever before. He said the IPEF will cement trade ties between the two countries. The minister is visiting San Francisco and Los Angeles from September 5-10 to attend the India-US Strategic Partnership Forum conference and IPEF ministerial meeting, along with meeting with leaders from top technology companies and startups and members of the Indian diaspora. During the IPEF, Goyal will meet the US secretary of commerce and US trade representative, and also hold bilateral meetings with officials from countries such as Japan and Australia. Speaking on whether a review of the free trade agreement (FTA) with Japan is on the cards, he said it is "quite long overdue". "I will raise that issue with my counterpart from Japan," he added. The interim trade deal with Australia is also yet to be ratified by the Australian Parliament and has been delayed due to the elections. Goyal said new trade minister Don Farrell is likely to be in India later this month. "We'll be meeting and having discussions, but he has already assured we met me at the WTO meetings that they are very pleased with the outcome of the Indo-Australian negotiations and the free trade agreement, the ECTA (Australia- India Economic Cooperation Agreement) that we finalised and that they will be putting it through parliament soon. And I'm told the tentative timelines are the end of this year. It will be cleared through their parliament," said Goyal.
Source: Economic Times
A department of justice (DoJ) report says that the time taken to settle business disputes at the commercial courts in Mumbai and Delhi has come down by 50%, from 1,445 days in 2020 to 626 days for Mumbai and 744 days for Delhi. The report, titled Reduction in Time Taken for Trial and Judgment in Dedicated Commercial Courts, calls for celebration. It also calls for greater resolve to better the results. We know that delays in settling business disputes at the courts increase costs and deter investors. However, looking at the example of the Indian textile sector, it can be seen that delays have a much worse effect. They stunt the growth of the industry and prevent it from adopting global best practices. In the late 1980s, India and China exported less than $5 billion worth of textiles and apparel. Today, with exports of $320 billion, China has captured half the world trade in the sector, while India struggles at $40 billion. Weak contract enforcement is one of the crucial reasons for this disparity. In the 1980s, Europe and America were the largest buyers of textiles, but they used to buy limited quantities through a country-specific quota system. The system changed in 1995 when developed countries agreed to phase out quotas in the next 10 years. India, China, and other developing countries were now free to export as much as possible. As the competition intensified, a new business model took shape where timely enforcement of contracts was paramount. European and American firms did not want to deal directly with Indian and Chinese textile firms. They worked through intermediaries known as buying agents. The buying agents would collect orders from European and American firms and distribute these to the sourcing agents located in the supplier countries, who would then distribute orders to local firms for textiles and apparel making. The system worked on three contracts—between the buyer and buying agent, the buying and sourcing agent, and the sourcing agent and production firms. The success of this system required timely deliveries of agreed quality products as specified in the contracts. In case of any dispute, the courts were to settle the dispute quickly, and this was our weak point. Without efficient contract enforcement and long delays at the courts, the sourcing agents could not enforce the quality and service levels of the production firms. The word was soon out, keeping big global agents away and thereby preventing buying and sourcing agents’ ecosystem growth in India. The results were disastrous. The garment firms had to contact buyers directly, but they could only reach a limited number of buyers. Most were unwilling to deal with unknown firms. The absence of an agent ecosystem not only hurts exports but also increases imports. In a garment value chain, fibre is converted into yarn, yarn into the fabric, and fabric into the garment. With lakhs of firms for each stage, a garment-maker may not know the supplier producing the desired quality fabric. Such matchmaking is the task of the agent/aggregators. Since we did not have an efficient contract enforcement system, the ecosystem could not develop. The result? Fabric-makers do not buy yarn as they do not get orders for the supply of fabric from garment-makers, so we export yarn, and our garment-makers import most fabric. With idle fabric-makers, the supply chain remains fragmented. While India dithered in according priority to commercial disputes, China mastered the new rules. Chinese textile’s rapid growth in the 1990s is attributed to mastering the agent-aggregator system. The textile industry’s story applies to many other sectors. The Indian electronics sector remains similarly fragmented internally due to a lack of agents and matchmakers. In all, more than one crore commercial cases are pending in courts, with over 40 lakh economic cases pending in five major high courts alone. Over 200,000 cases are pending in appellate tribunals that deal with high-stakes business issues. The key tribunals relate to telecom, environment, electricity, income tax, consumer disputes, customs excise, and service tax. How was time cut in the disposal of cases? The digital transformation of commercial courts made this possible. The amendment in the Code of Civil Procedure, 1908, by the Commercial Courts Act, 2015, provided the legal basis. The new system allows for online filing of cases, e-payment of court fees, and issuance of e-summons. It also allows random allocation of cases to judges, hearing and pre-trial conferences, and the use of Electronic Case Management. Adjournments delayed the cases. These have been limited to three a case. However, work needs to be done to reach global benchmarks—like that of Singapore (164 days) and South Korea (229 days). Adopting a computer-compatible contract format will cut time and cost, as the aggrieved party currently spends one-third of the claim value on the lawyer, court fees, etc. Calcutta transformed from a sleepy village to a prosperous trading city in the mid-18th century when the British East India Company set up fast-track commercial courts for quick disposal of contract disputes. This attracted the most prosperous local and international traders to set shop in Calcutta. Data should be published for all commercial courts; now, data is available only for Mumbai and Delhi. Cutting the time taken from the filing of a case to obtaining a judgment and enforcing a contract in India from 1,445 days to 700 showed that the government got the strategy right, but the textile industry’s example tells that we have a long way to go. India must go all out to improve the contract enforcement system. It will be a reform to unlock the full value of all other reforms. The author is Former Indian Trade Services officer, writing on technology and trade.
Source: Financial Express
For Bangladesh, the potential of additional exports to India could range from $3 billion to $5 billion in a time span of 10 years India’s exports to Bangladesh may increase by additional $10 billion in a time span of five years if both countries sign a free trade agreement (FTA), the joint study conducted by both countries for the proposed Comprehensive Economic Partnership Agreement (CEPA) said. “Due to the possible bilateral trade agreement, there exists a potential of additional export from India to Bangladesh, ranging from $4 billion to $10 billion. This export potential in addition to existing exports could be achieved by India in a time span of five years,” a copy of the joint study reviewed by Business Standard showed. Similarly, for Bangladesh, the potential of additional exports to India could range from $3 billion to $5 billion in a time span of 10 years.” The total additional potential bilateral gains in trade in goods due to a possible CEPA ranges between $7 billion to $15 billion,” the report said. India’s largest increase in exports to Bangladesh will be observed for motor vehicles, cotton, man-made filaments, albuminoidal substances, electrical machineries and equipment, iron and steel, knitted or crocheted fabrics, plastic goods, machineries and mechanical appliances, paper, and paper products. For Bangladesh, export gains could occur in board categories such as textile and apparel goods, containers of iron/steel, wooden furniture, parts of machineries, plain woven fabrics of cotton, plastic products, chocolates, inorganic chemicals, finished leather, leather bags, footwear, processed foods such as biscuits among others. In a joint statement after the meeting between visiting Bangladesh Prime Minister Sheikh Hasina and Prime Minister Narendra Modi, both sides said the two leaders welcomed the recent finalisation of a Joint Feasibility Study that recommended that CEPA will be beneficial for both the countries. “They directed trade officials on both sides to start negotiations within the calendar year 2022 and to complete these at the earliest, in time for Bangladesh’s final graduation from LDC (least developed country) status,” it added. Bangladesh is on track to graduating from LDC status in 2026 after which it will no longer be eligible to continue to put high tariffs and will have to provide duty-free quotafree market access to India under the existing (South Asian Free Trade Area) SAFTA commitments. The joint study said though gains for Bangladesh’s exports to the Indian market from a CEPA will not be large as it is already enjoying duty free quota free market access, the FTA will be crucial for it from the perspective that it is soon going to lose the LDC status. The bilateral trade between India and Bangladesh has been growing significantly over the past few years with India enjoying the second-largest trade surplus with its eastern neighbor after the US. Bangladesh became India’s fourth-largest export destination in FY22, jumping five places in two years. Nisha Taneja, professor at ICRIER, said the India-Bangladesh CEPA would not only lead to enhanced trade but was also likely to have wider economic benefits for the BBIN (Bangladesh, Bhutan, India, and Nepal) sub-region and the BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) region. “The CEPA will become the cornerstone for India’s Act East Policy as it would integrate India’s northeast region to the hinterland and to the neighbouring countries as well. CEPA will also encourage the development of global and regional value chains through greater investment flows. Removing regulatory barriers will lead to enhanced trade in services in health, education, IT and tourism. A sector which holds immense potential is e-commerce — the two countries could work together to address regulatory issues which would smoothen and enhance cross-border e-commerce trade,” she said.
Source: Business Standard
Indian commerce, industry and textiles minister Piyush Goyal has indicated that he will urge Japan to review the existing Comprehensive Economic Partnership Agreement (CEPA), which was signed in 2011. Goyal is scheduled to meet his Japanese counterpart today. Trade data shows the need for a review as Indian textiles have not penetrated the Japanese market. Goyal has indicated that he will push Nishimura Yasutosh, Japan’s minister of economy, trade and industry to review the trade deal. Goyal was asked by reporters during his visit to Los Angeles if a review of the trade deal with Japan is on the cards, to which he replied, “I think that’s quite long overdue, and I am going to raise that issue with my counterpart from Japan. He has just taken over some time back as a new minister. So, I will be taking up that issue.” Normally, during a review of any existing trade agreement, the signatory countries seek more market access for their respective domestic products and resolve issues which are creating hurdles in trade. As far as textiles is concerned, the CEPA did not work for India in the last one decade. India could not breach even one per cent market share in Japan’s garment imports. According to Fibre2Fashion’s market insight tool TexPro, India exported garments of $225.875 million in 2021, which was mere 0.95 per cent of total garment imports of $23,804 billion by Japan. Japan remained over dependent on China with 58.39 per cent ($13.878 billion) garment imports. Vietnam, Bangladesh, Cambodia, Indonesia, Italy, Myanmar and Thailand were ahead of India in terms of garment exports to Japan. India could supply only 1.63 per cent of home textiles to Japan, out of its total import of $5.307 billion. India’s export of textile products like yarn, fabrics and fibre was also negligible. Some trade experts, however, feel that Indian exporters are unable to meet quality standards of Japanese buyers, which is the core issue.
Source: Fibre 2 Fashion
Textiles is one of the priority sectors where Odisha hopes to achieve exponential growth in the coming years, Odisha's Handlooms, Textiles & Handicrafts minister of state Rita Sahu Wednesday said, urging investors in the apparel and textile sector to set shop in the state. Addressing a Roadshow in Kolkata focusing on Textiles, which is a lead-up to the third Make in Odisha Conclave which is happening in November – December 2022, the minister exhorted investors to go to Odisha and check the ecosystem and the investorfriendly policy support for potential investors. She said the Odisha government has taken proactive measures to broad base the industrial ecosystem in the state, including the identification of priority and focus sectors, development of sectoral policies, and development of sectoral industrial parks and infrastructure among others. The state government is developing a Petroleum, Chemical, and Petrochemical Investment Region (PCPIR) in Paradeep with IOCL as the anchor tenant, she said. "I would urge investors in the technical textile sector to come to Odisha and explore our latest offerings in this geography," Sahu said. The government is developing a technical textile park in association with Indian Oil with a state-of-the-art facility and best-in-class facilitation at Bhadrak, which is close to Kolkata and West Bengal in general, she highlighted. Odisha's Handlooms, Textiles & Handicrafts Department Commissioner-cum-Secretary said it is interesting that several decades ago, Odisha had a large number of cooperatives in the spinning, power loom, and textile mills space which were supported and promoted by the Government. "Most of them were closed down, and learning from that experience, the Odisha government is looking to create enabling conditions and leave it to professionals to do the actual business." While Odisha has always been known for its magnificent handloom industry, the government is now firmly focusing on technical textiles as well. She mentioned the proposed Mega Textile Park at Gopalpur in a 1000 acres land parcel with all international standard common facilities for the units in the Park under Centre's MITRA scheme. She added: “Make in Odisha Conclave’22, our flagship investment summit has been conceptualized to not just showcase these vast existing and emerging opportunities in Odisha but also to build a platform for global leaders to discuss the future of business, trade and commerce, skilling and much more.” Director of Odisha's Directorate of Textiles & Handlooms Susanta Kumar Dash said that the state has built sectoral industrial parks like a technical textile park, mega textile parks etc. and investment regions with plug-and-play facilities and best-in-class infrastructure, simplified processes, and instituted one of the best single window systems for investor facilitation, Go-Swift. Dash said that the recently started World Skills Centre in partnership with the Asian Development Bank (ADB) and the Institute of Technical Education Services (ITEES), Singapore is India’s first and one-of-its-kind skill premier institutes to impart advanced skills and create globally employable youth in the State. While the Roadshow was attended by more than 150 delegates, representatives of 15 textile and apparel industries had a one-to-one meeting with the senior government delegation from the HT&H Department, Government of Odisha.
Source: India Blooms
September GST collections seen around Rs 1.5 trillion E-way bills generated by businesses for the movement of goods in August touched an all-time high of 78.21 million, up 19% on the year, suggesting an acceleration of shipments as the festival season commenced. The rise in e-way bills, which commenced in 2018, in August suggests that goods and services tax (GST) collections will continue to be robust at about Rs 1.5 trillion in September. It was 78.16 million in March 2022, resulting in a record Rs 1.68 trillion gross GST receipts (reflecting March transactions). Given the buoyancy in GST collections due to increased compliance, FY23 gross GST receipts may exceed the target by Rs 3 trillion, of which the Centre may account for Rs 1.4 trillion extra in gross receipts. “Automotive sales have picked up substantially in August. Also, wholesalers are stocking up for the festive season which has already begun with Ganesh Puja,” All India Transporters Welfare Association (AITWA) joint secretary Abhishek Gupta said. Intra-state e-way bills, generated when moving goods within a state, crossed 48.83 million in August while inter-state e-way bills stood at 29.38 million. An e-way bill is a document required to be generated from the GST portal before the commencement of movement of goods having a value above Rs 50,000 and Rs 1,00,000 for inter-state and intra-state, respectively. Given that an incipient pick-up in consumption has resulted in a more-than proportionate jump in GST revenues, a stronger economic recovery could allow the collections to settle at an elevated level, proving the high revenue productivity of the broad-based consumption.
Source: Financial Express
CEA, an advisory body to the power ministry, said in a draft plan India's power demand would reach 1,874 bn units during the year ending March 2027, compared with over 1,320 bn units in 2021/22 India expects annual electricity demand to grow at an average of 7.2% over five years ending March 2027, a draft government plan showed, nearly double the growth rate of over 4% seen during the five years to March 2022. The Central Electricity Authority (CEA), an advisory body to the power ministry, said in a draft plan India's power demand would reach 1,874 billion units during the year ending March 2027, compared with over 1,320 billion units in 2021/22. India would add power generation capacity of 165.3 gigawatts (GW) over five years ending March 2027, most of which would be renewable energy, according to the plan. That would represent a 41% increase from current installed capacity of 404.1 GW. An economic slowdown followed by the imposition of nationwide lockdowns to prevent the spread of the coronavirus has slowed the pace of India's power demand growth in recent years. Despite being the world's third largest greenhouse gas emitter, India's per capita power demand and emissions are much lower than most Western countries. India, along with China, accounts for a lion's share of global renewable energy addition. New solar plants would make up 92.6 GW and wind power would make up 25 GW, while coal-fired capacity already under construction would account for 25.8 GW and nuclear plants for another 7 GW, the CEA said. India will also retire 11 coal-fired plants with a combined capacity of 4.62 GW over five years ending March 2027, the government said. Coal would still remain the mainstay of India's power generation and requirement of the fuel for power generation is seen rising 3.8%, according to the draft plan. Coal currently accounts for half of India's installed capacity and 75% of electricity generation.
Source: Business Standard
The industry is very confident about its future growth and with more integrated and scaled-up units coming up in the upcoming years, the Indian T&A industry is looking towards entering a golden eras, asserts T Rajkumar. India’s Textile & Apparel (T&A) Industry is one of the oldest industries and has a formidable presence in the national economy. Indian T&A industry is the second largest in the world after China and spans across the entire value chain. T&A sector is the 2nd largest employment-providing sector in India after agriculture. It provides direct and indirect employment to more than 10 crore people including a large number of women and the rural population. Indian T&A industry is self-reliant i.e., from the production of raw materials to the delivery of finished products, with substantial value-addition at each stage of processing. In terms of raw material availability, India is the largest producer of Cotton & Jute in the world and is the 2nd largest producer of Polyester, Silk, and Fibre in the world. India’s total T&A market size is estimated to be about $ 170 billion with export accounting for about 25% of the total market size. The last few years have been quite challenging for the Indian T&A industry with Indian T&A exports declining to about $ 30.9 billion in 2020- 21 from levels of $ 37.5 bn in 2018-19, however, as a result of timely decisive policy support from the Government, Indian T&A industry could bounce back and during 2021-22, India could achieve its highest ever T&A exports of about $ 43.4 billion which also accounted for about 10.3% of India’s total merchandise exports during the year. With about 26% market share in India’s Total T&A exports to World during 2021, the USA was the major market for Indian exports followed by EU-27 and Bangladesh with about 17% and 10.3% share respectively. Looking at the importance of the Indian Textile & Apparel sector towards making India’s development inclusive and participative, the Government’s central focus has been on increasing textile manufacturing by building the best-in-class manufacturing infrastructure, upgradation of technology fostering innovation, enhancing skills and traditional strengths in the textile sector. The Government of India is looking towards increasing Indian T&A exports to $100 bn by 2025-26 and has brought out a series of policy measures to achieve the same. Traditionally, India is known for its cotton-based T&A products while, the world over, demand for MMF products is increasing with consumption of MMF fibres outpacing the natural fibre during the last one decade. India has not been able to capitalize on the MMF opportunities which have arisen in the global arena. However, in recent times the industry has seen an increasing realization of this opportunity and taken strides to tap it. The Government is also providing conducive policy support to the industry in this direction and has recently announced the Production Linked Incentive (PLI) Scheme focused on MMF and Technical Textiles.The selection of 64 textiles companies under the PLI scheme shows the keenness of the Indian T&A Industry in the scheme. The Government’s plan to set up 7 Mega Integrated Textile Region and Apparel (PM MITRA) Parks with a total outlay of Rs. 4,445 crore will also help the Indian T&A industry to have world-class industrial infrastructure which would attract cutting edge technology and boost FDI and local investment in the textiles sector. Several states such as Tamil Nadu, Punjab, Odisha, Andhra Pradesh, Gujarat, Rajasthan, Assam, Karnataka, Madhya Pradesh, and Telangana have already expressed their interest for the PM MITRA. Since cotton is the major base for the Indian T&A industry, huge price volatility in the cotton value chain especially during the last 1 year has impacted the smooth production planning of the Indian T&A sector. India despite being the largest producer of cotton in the world, is unable to pass on the benefit of cheaper cotton to its domestic textile & apparel industry. This year we are witnessing a never-before situation wherein prices of Indian cotton are much higher than the international cotton prices.To deal with the issues related to the supply chain of cotton and also to scale up the cotton productivity, the Ministry of Textiles has recently formed a Textile Advisory Group (TAG) under the chairmanship of Suresh Kotak. Besides this, various international developments have led to political instability, higher logistics costs, higher crude prices, currency fluctuations, etc., which have emerged as a challenge for the Indian Textile Sector. However, besides all the challenges, the Indian T&A industry has kept its momentum going and in 2021, India made a jump of two places and emerged as the 4th largest exporter of Textile & Products in the world from its earlier position of 6th largest exporter of T&A in the world. Recently, India has been able to sign trade agreements with UAE and Australia and is very optimistic about trade agreements with UK, EU, Canada and various GCC countries which will enable India to increase its market share in these markets. The Indian Textile & Apparel Industry is very confident about its future growth and with more integrated and scaled-up units coming up in the upcoming years, the Indian T&A industry is looking towards entering a golden era wherein it can realise its true potential and can lead towards the new paradigms of growth.
Source: Indian Textile Journal
The textile industry plays a significant role in the economic growth of Pakistan as it contributes 60% to the total exports of the country. Tariq Tayyab, the additional secretary of the Pakistan Textile Exporters Association (PTEA), told WealthPK that the textile sector formed 8.5% of the gross domestic product of the country and its share was 1.7% of the total trade of Pakistan with the world. “This data depicts the importance of this industry for the economic growth of Pakistan,” he added. He said that presently the industry was being affected badly by the shortage of major energy inputs including natural gas and electricity. “Both are vital for the smooth, economic and efficient operation of the textile plant. Shortage of any one of them can affect the efficiency of machinery,” he added. Tariq Tayyab said that the government had given a concession to the textile industry in bills of electricity and gas. However, he said that power and gas outages negatively impacted the sector. “We are unable to run our plants at the maximum installed capacity. Our industry has the potential to export items worth $25 billion annually. However, we can’t achieve this target owing to the shortage of energy,” he added. He said that the textile exporters were also faced with the lengthy and complex procedure of sales tax refunds. “The long and complex procedures of the sales tax refunds cause problems in cash flow to exporters. Our exporters have to waste time and energy in completing such procedures instead of utilising the same for improvement of their products,” he added. Tariq Tayyab said that the textile industry was dependent on the supply of cotton. “Unfortunately, research and development are not given due importance in Pakistan, particularly in the cotton sector. Due to the low quality and obviously low profitability of cotton, farmers are switching over to other crops. As a result, the textile industry faces a shortage of cotton,” he added. He said that cost of production was also increasing rapidly that is affecting exports. He said that Pakistani exporters could not compete with their rivals in the international market owing to the high cost of production. He said that high energy tariffs, shortage of fuel for machines, high rate of taxes and lack of skilled labour were the main causes of the increase in the cost of production. “Due to these issues, our textile industry is unable to compete with our neighbouring countries like Bangladesh,” he added. Tariq Tayyab said that Bangladesh was exporting textile products worth $65 billion annually. “It is greater than our total exports. We have the potential of doing more than $25 billion business but our utilisation is only 75% to 80% of the total capacity,” he told WealthPK. The textile industry of Pakistan is haunted by the high cost of production owing to an increase in electricity rates, a hike in interest rates, a shortage of energy, the devaluation of the Pakistani rupee, increased input costs, political unrest and the abolishment of subsidies. Pakistan is the eighth-largest exporter of textile goods in Asia. It has been ranked third in cotton consumption and fourth in cotton production. About 40% of the labour force in the country is associated with the textile sector, accounting for 46% of the entire manufacturing sector. The global recession has also left negative impacts on the textile sector of Pakistan. The government and other stakeholders need to join hands for the resolution of these issues to enable the industry to utilise its full capacity for the economic growth of the country. According to the Pakistan Bureau of statistics, the volume of Pakistan’s textile exports rose by 25.43% in the first nine months of the financial year 2021-22 year. Pakistan earned $14.242 billion through the export of textile products in the first nine months of the financial year 2021-22 as compared to $11.355 billion during the corresponding period in the fiscal year 2020-21, according to the PBS report, available with Wealth PK.
Source: The Nation
The Bangladesh Bank recently allowed exporters to retain the value-added portion of export proceeds—the part of the export receipts available after import bills of exporters for back-to-back letters of credit are settled—in US dollars for 30 days instead of 15 days. The decision will help exporters tackle the losses from the USD-taka exchange rate fluctuation. The central bank also permitted exporters to transfer the value-added portion of export proceeds to other banks for the settlement of import bills or liabilities of the Export Development Fund. It had instructed exporters in May to sell their export proceeds to the same banks through which they ship goods as many of them sold the dollars to the lenders that offered the higher rate, creating indiscipline in the foreign exchange (forex) market. The bank asked exporters in August not to retain the value-added portion for more than 15 days to make the domestic forex market stable. The country’s forex market has been facing an unstable situation for several months due to high import bills, prompting the bank to ask exporters to encash their value-added amount within 15 days. The measure helped the banking sector receive additional US dollars. As the volatility has eased to some degree recently, the central bank has extended the period for exporters to retain the greenback, according to Bangladeshi media reports
Source: Fibre 2 Fashion
Import and export activities between Vietnam and the United Arab Emirates (UAE) have earned an estimated $3.3 billion during January to August 2022. Vietnam has attained a trade surplus of around $3 billion for the same period. The UAE offers opportunities for Vietnamese businesses to increase exports to the Middle East and Africa, according to the Vietnamese Trade Office (VTO) in the UAE. Domestic firms set out suitable strategies for exports to the UAE which gathers many rivals due to its openness, the VTO said as per Vietnamese media reports. The VTO advised Vietnamese enterprises to carefully screen potential partners and select safe payment methods to avoid any trade frauds. The VTO also recommended trade promotion agencies to increase investment and trade forums with the involvement of enterprises from both Vietnam and the UAE and representatives from local management agencies. The office also suggested enabling Vietnamese firms to take part in international exhibitions and fairs in Dubai. Introducing and developing direct transport routes will also facilitate reducing transport expenses to a large extent, added the VTO.
Source: Fibre 2 Fashion
To have operational efficiency and better controls, 39 DTY machines are being envisaged towards balancing equipment for value-addition in a new subsidiary, Indorama Ventures Yarns Private Limited Indo Rama Synthetics (India) Ltd. (Indo Rama) has approved an expansion plan of Rs 600 crore towards the addition of balancing equipment for value-addition and diversifying into 700 TPD PET resin manufacturing facility at its Butibori plant. The capital expenditure of PET resin business is being envisaged in Indorama Yarns Private Limited, wholly owned subsidiary of the company. To have operational efficiency and better controls, 39 (initially 50) DTY machines are being envisaged towards balancing equipment for value-addition in a new subsidiary, Indorama Ventures Yarns Private Limited, incorporated on July 5, 2021. The commercial production for the growth projects is likely to be started in a phased manner up to the fourth quarter of the financial year 2022-23. Incorporated in 1986, Indo Rama has emerged as one of the largest dedicated polyester manufacturers in India. With more than three decades of market presence, it is India’s most cost-efficient polyester producers. The company’s investments in innovation and capacity expansion allow it to integrate value for its large customer base. Indo Rama has an integrated production facility in Butibori, near Nagpur, Maharashtra. The company has clocked turnover of Rs 3,901.13 crore during FY 2021-22. Commenting on this development, Chairman and Managing Director Om Prakash Lohia said, “We believe polyester will be the ‘fibre of future’, which encouraged us to foray into this business with confidence. Our well-defined quality and process management systems have enabled us to enjoy global presence.” Trends Shaping the Industry Manmade fibre (MMF) demand has been rising in recent years due to the increased consumption of nonwovens and technical textiles. Demand is also being driven by the rapid shift in fashion trends and increased brand consciousness. Apart from industry trends, government initiatives like the PLI scheme and National Technical Textile Mission are supporting the textile industry quite significantly. “Building on the strong performance of FY 2022, we are now in a comfortable position to capitalise on the emerging opportunities with the ongoing growth capex plan of Rs 600 crore. We have prioritized expanding and revamping our facilities, enhancing the product portfolio with high-value products, and improving operation efficiency through optimum utilisation of resources,” Lohia said. Industries’ Structure and Development India is the second-largest producer of polyester and viscose globally. Polyester and viscose together account for around 94% of the domestic MMF sector in terms of volume. Polyester makes up roughly 77.5% of the total, with viscose accounting for the rest. MMF is generally used to make non-cotton and blended fabrics, which are then utilised in ready-to-wear clothing, home textiles, and other industrial textiles. The MMF textile industry in India is self-reliant across the value chain right from raw materials to garments. It is poised to grow at 5-6% YoY. India produces almost all types of synthetic fibres, be it polyester, viscose, nylon, or acrylic. MMF export stood at USD 4.8 billion in 2021. India stands 6th in exports of MMF textiles accounting for 16% of the share in the global MMF textile market. USA, Europe, the UAE and Turkey are leading markets for India’s manmade textile exports. Outlook Increased use of nonwovens and technical textiles, changing consumer trends such as an increased emphasis on fitness and hygiene, rising brand consciousness, rapidly changing fashion trends, and increasing women’s participation in the workforce are all expected to boost demand for manmade fibres in India. Strong policy support from the government leads to bright prospects for the MMF market in India. Allowance of 100% FDI (automatic route) in the textile and apparel sector marked an FDI of about USD 3,930.33 million in 2021. By 2040, it is expected that the consumption of polyester globally will be approximately three times that of cotton fibre. Hence, MMF will be one of the most attractive segments for future investments. India has abolished the anti-dumping duty on purified terephthalic acid, spandex and viscose staple fibres which are the key raw materials for manmade fibre. Rationalisation of GST on the manmade fibre value chain will help to boost the growth of the manmade fibre sector. Also, the National Technical Textiles Mission has been adopted with a total outlay of USD 194 million in February 2020. This has been set up for a four-year implementation period from FY 2020-21 to FY 2023-24. The adoption of the PLI scheme for textiles is aimed at growing MMF and technical textiles components of the textile value chain. Manufacturing MMF apparel, MMF fabrics, and segments or products of technical textiles in India will receive incentives totalling Rs 10,683 crore over five years. This will provide a significant boost to the highvalue MMF segment, creating new employment and trade prospects. The high prices of cotton are also adding fuel to the growth of the MMF textile sector. The government has come up with the PM Mitra Park scheme and other new schemes like RoDTEP, RoSCTL and ATUFS to boost the textile sector in India.
Source: Indian Textile Magazine
The growth rate of Bangladesh’s apparel exports to the United States dropped sharply in July as buyers decreased orders due to a slowdown in the world’s biggest economy. Bangladesh’s apparel exports to the US in July registered 22.1 per cent growth compared with that of the same month of 2021, which was the lowest in the past seven months of 2022, according to the latest US Department of Commerce’s Office of Textiles and Apparel data. Bangladesh’s single-month apparel export earnings from the US in July grew by $125.44 million to $693.28 million from $567.84 million in the same month of the previous year. The OTEXA data showed that the monthly export growth was 66.20 per cent in June, 38.59 in May, 74.34 in April, 96.09 in March, 43.17 in February and 45.48 in January. The data showed that Bangladesh’s apparel exports to the US in January-July of 2022 increased by 54.43 per cent to $5.71 billion from $3.67 billion in the same period of 2021. Exporters said that export growth in the US, the largest export destination for Bangladesh, would decrease more in the coming months as the sales of apparel products dropped on the market due to high inflation. Moreover, the prices of RMG products increased on the global market due to the price hike of raw materials, but the unit prices of products started decreasing as the raw material prices went down in recent months, said Mahmud Hasan Khan Babu, managing director of Rising Group. ‘I think apparel export growth to the US market will decrease more in the coming months amid recession fears,’ he said. Babu, also a former vice-president of the Bangladesh Garment Manufacturers and Exporters Association, said that most of the buyers decreased the volume of their orders and the trend might continue until December. The data showed that the total US imports of RMG from the world in the first seven months of 2022 increased by 39.06 per cent to $58.91 billion compared with that of $42.066 billion in the same period of the previous year. According to the US data, Bangladesh’s position remained unchanged as the thirdlargest apparel exporters in the market with China and Vietnam occupying the first and the second highest positions respectively. The US apparel imports from China in January-July of 2022 grew by 40.01 per cent to $12.79 billion from $9.13 billion in the same period of 2021. RMG imports by the US from Vietnam in the seven months of 2022 increased by $35.30 per cent to $10.92 billion from $8.07 billion in the same period of the past year. India’s RMG exports to the US market in the January-July of 2022 grew by 59.39 per cent to $3.69 billion from $2.31 billion in the same period of the previous year. RMG imports by the US from Indonesia in the first seven months of 2022 increased by 59.69 per cent to $3.41 billion while the imports from Cambodia grew by 55.90 per cent to $2.58 billion in the same period, the data showed.
Source: Fibre 2 Fashion
