India's exports have taken a knock with demand crashing in several developed world economies as record-high inflation and its stiff monetary antidote dent consumer sentiment. Many exporters say their factories are running at 25-50% capacity or have reduced the number of shifts to one from three earlier due to muted demand from the US and Europe. Despatches are delayed and order books have shrunk to 1-1.5 months from six months earlier, they told ET. "While the Indian and African markets are doing fine, the orders from the US and EU are not encouraging," said Onkar Singh Pahwa, chairman and managing director, Avon Cycles. "Our plant dedicated for the US and European markets is running at 50% capacity." Ludhiana Hand Tools Association president SC Ralhan said the production schedule was reduced from three shifts to one as many manufacturers are running lower capacities. "We expect the situation to remain grim till the Russia-Ukraine war is on. There is a 15% decline in our exports in the April-August period as compared to last year," he said. India's merchandise
Inventory Pile-up Exports of cotton yarn, fabric made-ups, and handloom products among others crashed 32.3% from a year ago. Engineering goods shipments dropped 14.6% in the month. In its World Economic Outlook report released in July, the IMFs estimated global growth at 3.2% for 2022 compared with 6.1% in 2021. Garment exporters said that the prolonged war has devastated demand from Europe, stranding most global retail clients with high inventory, depressing demand from India. Steep inflation and record-high energy prices are accentuating the demand slowdown. "Many manufacturing units are giving 2-3 days off to their workers every week," said Raja M Shanmugham, president, Tiruppur Exporters' Association. "Earlier, the regular shifts used to be eight hours but now it is tough to run even one shift as there is not much demand."
Credit Limit The association has sought an increase in credit limit to 50% from 30% under the Emergency Credit Line Guarantee Scheme. "Despatches are delayed and new orders are not coming. So we are running at 50-60% capacity, which used to be 85% earlier," said Sanjay Jain, managing director, TT Ltd, a garment manufacturer. Indications are that orders will get hit in the next few months on recessionary fears and high interest rates in developed markets, said Rafeeque Ahmed, chairman of Farida Group, one of India's largest shoe manufacturers and exporters. The group supplies brands such as Adidas, Clarks, Marks & Spencer, Debenhams and Bally Shoes. The Engineering Export Promotion Council attributed the slowdown in exports to lower demand from China and recessionary trends in major economies in the West along with the export duty on certain steel goods, including stainless steel products.
Source: Economic Times
The Indian ministry of textiles has recently indicated that it has almost finalised the states where mega textile parks under the PM Mega Integrated Textile Region and Apparel Parks (PM MITRA) will be set up. About 13 states had sent 18 proposals for the textile park. However, the ministry is inclined to select only one proposal from each state. The central Indian state of Madhya Pradesh has sent a maximum of four proposals, while Maharashtra and Karnataka have sent two each. In addition to the 18 proposals that were received and considered by the ministry for PM MITRA, the Punjab government has made a last-minute attempt by expressing a desire to set up a textile park at Fatehgarh Sahib district where it has earmarked 1,000 acres of land. Earlier, the state had scrapped the proposal to set up a mega textile park near Ludhiana after NGOs opposed the project as it would cause water pollution. Though Punjab chief minister Bhagwant Mann said that once the park is commissioned, it will make Punjab a ‘textile hub’ of the country, it remains to be seen whether Punjab will be able to secure a textile park under the Central government scheme. Punjab, specifically Ludhiana, is a very important textile hub. If the park is set up, it will boost the industry not only in Punjab, but also in the entire north India. Sanjay Garg, president of North India Textile Mills Association (NITMA) and managing director of Ludhiana-based Longowalia Yarns Ltd told Fibre2Fashion, “The decision to earmark land for textile park is a good decision. It will be a positive step for growth of industry in Punjab.”
Source: Fibre 2 Fashion
Boosting competitiveness is the key to enhancing exports. Inflation remains an issue but RBI should allow the rupee to gradually depreciate. India’s goods exports contracted by 1.1 per cent to USD 33 billion in August. Merchandise imports registered a growth of 37 per cent over August, 2021. While strong growth in imports is reflective of robust domestic demand, subdued exports indicate slowing global demand. As a consequence of weak exports and strong imports, the merchandise trade deficit has more than doubled since the same month of last year. Widening trade deficit will put pressure on the value of the rupee. While the world over countries are moving towards protectionism, gradual exchange rate depreciation, expediting Free Trade Agreements, lowering tariffs and addressing supply-side bottlenecks would help in addressing external sector challenges. What led to fall in exports? The year-on-year fall in exports was led by sectors such as engineering goods, gems and jewellery, readymade garments of textiles and cotton yarn. Engineering goods, which accounted for more than 25 per cent of total exports in 2021-22, saw the sharpest contraction of more than 14 per cent. Barring petroleum products, exports contracted by more than 2 per cent in August. The global economic outlook appears bleak, with growth in the two largest economies likely to slow down. The US is already in a technical recession, though there are mixed signals on whether the economy is actually in a recession. The latest remarks by the US Federal Reserve Chair indicate that the Fed will go in for sharper rate hikes to tame inflation. This is likely to further pose a drag on demand. Economic activity in China has slowed down significantly owing to its zero Covid policy and slump in the real estate sector. As an outcome, Indian exports to China dipped by a third in April-August as compared to the same period last year. The IMF’s July update to the World Economic Outlook has projected the volume of world trade to dip from 10.1 per cent in 2021 to 4.1 per cent in 2022 and further to 3.2 per cent in 2023. The recent imposition of export duties such as on finished steel is also likely to have an impact on exports. A 15 per cent export duty on steel will make Indian steel expensive abroad, thus forcing steel makers to supply domestically and limit exports.
Changing composition of exports & sensitivity to global growth Textiles, leather, gems and jewellery featured as India’s traditional exports. In 2003, these constituted 60 per cent of non-oil exports. A recent study by Sajjid Chinoy and Toshi Jain shows that in recent years, Indian exports have become much more technology oriented. The share of engineering goods, electronics, and pharmaceuticals/chemical products constitute almost 60 per cent of the non-oil merchandise basket. The share of labour-intensive exports has fallen over the last few years. The change in the composition of exports has increased the sensitivity to global growth. Sectors such as engineering goods, pharmaceuticals are found to be much more sensitive to global demand. In contrast, India’s traditional exports (textiles, leather, gems, and jewelry) are found to be much less sensitive to global growth. Services exports have done well till now. They are seen to be more vulnerable to global recession woes than the merchandise exports.
Overvalued exchange rate & exports The other determinant of exports is the country’s Real Effective Exchange Rate (REER). The REER is a measure of the comparative strength of a nation’s currency against the currency of the nations it trades with. REER is used to determine whether a country’s currency is undervalued, overvalued or fair-valued. A value of 100 or around 100 means the currency is fairly valued. Despite the recent depreciation of the rupee, it is overvalued in REER terms. There is a scope for gradual depreciation based on the REER.
Defending rupee has its trade-offs The Reserve Bank of India (RBI) should allow the rupee to gradually depreciate. While the rupee has recently weakened, the pace of depreciation has been much lower than some of the other emerging economies. This is due to the RBI’s heavy market intervention in the form of dollar sales. Due to aggressive intervention, foreign exchange reserves have fallen to USD 560 billion for the fortnight ending August, 26th. In a week’s time, the forex reserves have dipped by USD 3 billion. Foreign exchange reserves have declined in 21 out of 27 weeks, since Russia invaded Ukraine. Depreciation could lead to imported inflation but that’s not the only factor driving the inflation. According to the RBI’s estimates, with every one rupee depreciation of the dollar-rupee rate, inflation rises by about 8-10 basis points. Thus, out of 7 per cent inflation rates, 50-60 basis points is attributable to rupee depreciation. Global shocks pose policy trade-offs. While defending the currency could limit imported inflation, it will have adverse implications for exports, labour-intensive sectors, jobs and growth.
Expediting Free Trade Agreements & supply side reforms Many of our competitor nations have Free Trade Agreements (FTA) that allow them greater market access. The government is also expediting FTAs as trade negotiations are underway with the UK, the EU, and other countries which are our traditional trading partners. Boosting competitiveness is the key to enhancing exports. While India has domestic manufacturing capabilities, access to raw materials and abundant workforce, it needs to work on improving logistics, fast-tracking clearances and approvals, and streamlining cost of credit and power.
Look for other drivers of growth The share of exports of goods and services to GDP rose from 11 per cent in 1998-99 to 25 per cent in 2013-14. Since then, exports’ share has seen a dip. Last year, India saw merchandise exports surge to USD 420 billion, but still the share of exports to GDP was 21.5 per cent. Amidst a wave of deglobalisation and slowing growth, exports cannot be the sole engine of growth. Domestic consumption and investment has the potential to improve India’s medium-term growth prospects.
Source: The Print
Reliance Industries Limited (RIL), India’s largest player in polyester value chain, has increased prices of purified terephthalic acid (PTA), monoethylene glycol (MEG) and MELT. RIL reviews global market conditions, price trend in China and fluctuation in crude oil prices to determine prices of raw materials. It had earlier decreased PSF price by ₹3 per kg. According to the market sources, RIL fixed PTA price at ₹85.60 (+0.50) per kg, MEG at ₹54.90 (+2.70) per kg and MELT ₹92.28 (₹1.35) per kg. New pricing of polyester raw materials will come into effect from tomorrow. In the beginning of this month, the company had decreased price of polyester spun fibre (PSF) by ₹3 per kg to ₹113 per kg from the previous price of ₹116 per kg.
Source: Fibre 2 Fashion
Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal said that India is on the path to become a powerhouse driving global growth by 2047. He said this while interacting with the Business Community of Southern California. In his address, the Minister said conclusion of the Indo-Pacific Economic Framework (IPEF) IPEF is an important milestone for free and fair trade with like minded countries, who share a common objective to have rule based international order and a transparent economic system. Politically stable and open economies in the Indo-pacific are coming together to expand economic activities amongst each other, he added. Addressing the gathering, Shri Goyal said the transformational work happening in India has taken the country to the 5th spot among world economies. Assessing the impact of the foundational changes and structural transformation that has happened in the last few years, Shri Goyal mentioned that CII estimates India in 2047 to be a USD 35-45 trillion economy, taking India into the league of developed nations. Emphasising that India today is a land of opportunities and a potential market for the business community in the US, he noted that India has the advantage of demographic dividend and its aspirational young population provides a huge opportunity for growth. Shri Goyal mentioned that India is also rapidly transitioning to clean energy, adding that we aspire to achieve 500 GW of green energy capacity by 2030. The Minister said that India’s Prime Minister Shri Narendra Modi has brought political stability to the country and under his leadership we have a government that is - decisive, willing to take strong decisions in the interest of prosperous india, balances public good and social welfare for needy deprived section and at the same time also empowering 1.3 billion citizens become better citizens and contribute to economic growth and development of the country. Speaking about welfare measures taken by the Government in the last few years, Shri Goyal said the government has been able to meet basic needs of people - food security- shelter and access to toilets. “We are proud to be the mother of all democracies. We are proud to have a vibrant judiciary and rule of law, robust media, and transparent Govt systems”, said Shri Goyal. Noting that India today has emerged as the trusted partner of the World, Shri Goyal said India has now emerged as a high-quality manufacturer of valuable goods and services, given the skillsets and the talent pool available across sectors- IT, textiles, hospitality, gems and jewellery and added that each one of these would provide an opportunity for investors looking to engage with India. Addressing the gathering, Shri Goyal said as we embark on our journey towards making India a developed nation by 2047, it is important for us to reflect on where we see India in the next 25 years. Recalling that Prime Minister Modi has recently emphasised on Kartavya, bringing a sense of duty to every countryman, Shri Goyal called upon all the stakeholders- Indians and Indian Diaspora, to take upon themselves the duty to work collectively and make collective efforts, towards the fulfilment of our resolve of becoming a prosperous and developed nation by 2047. The Minister concluded his address by urging everyone to use ODOP products for every occasion adding that if the Indian diaspora across the globe gives preference to Made in India products, crores of Indian artisans will be supported for a better tomorrow.
Source: PIB
Prime Minister Narendra Modi will visit Uzbekistan on September 15-16 to attend the Shanghai Cooperation Organization Summit where leaders are expected to review the grouping's activities Prime Minister Narendra Modi will visit Uzbekistan on September 15-16 to attend the Shanghai Cooperation Organization Summit where leaders are expected to review the grouping's activities over the past two decades and discuss the prospects of multilateral cooperation. The summit will be attended by leaders of SCO member states, observer states, Secretary General of the SCO, Executive Director of the SCO Regional Anti-Terrorist Structure (RATS), President of Turkmenistan and other invited guests, a Ministry of External Affairs statement said. At the invitation of Uzbekistan President Shavkat Mirziyoyev, Prime Minister Modi will be visiting Samarkand on September 15-16 to attend the 22nd Meeting of the Council of Heads of State of the Shanghai Cooperation Organization (SCO), it said. During the summit, the leaders are expected to review the organisation's activities over the past two decades and discuss the state and prospects of multilateral cooperation in the future, the statement said. Topical issues of regional and global importance are also expected to be discussed at the meeting, it said. The prime minister is also likely to hold a few bilateral meetings on the sidelines of the summit.
Source: Business Standard
Goyal has been on a visit to San Francisco and Los Angeles this week to attend the IndiaUS Strategic Partnership Forum conference in San Francisco and the IPEF meeting. Commerce and industry minister Piyush Goyal has said India and the US will soon hold the next ministerial-level meeting of the Trade Policy Forum (TPF) in America to further deepen bilateral trade and investment. Briefing reporters here on the sidelines of the Indo Pacific Economic Framework for Prosperity (IPEF) ministerial, Goyal said teams of officials from both the countries will firm up more deliverables and newer areas of engagements. In November last year, Goyal and US Trade Representative (USTR) Katherine Tai had revived the TPF after a gap of four years. Both the sides had wanted to resolve all outstanding issues relating to goods, services, investments and intellectual property rights. Goyal has been on a visit to San Francisco and Los Angeles this week to attend the India-US Strategic Partnership Forum conference in San Francisco and the IPEF meeting. Goyal also held a bilateral meeting with USTR Katherine Tai and US commerce secretary Gina Raimondo. Commenting on the issue of digital economy, Goyal said that he had informed both Tai and Raimondo that India was looking to have very contemporary and modern laws in the digital space while maintaining high levels of data privacy for its citizens. “India is a big provider of technology services and we have a shared interest to have a very good understanding of the laws because we have a great interest in export services also,” he added. Asked if he discussed the issue of the restoration of trade benefits under the GSP (Generalised System of Preferences) programme of the US, Goyal said: “I don’t think that’s an issue anymore. None of our exports have been affected by the GSP. So, I think that’s not an issue; that we have even discussed in recent times, including today.” India had exported $6.3 billion of goods to the US under the GSP programme in 2018. Separately, Goyal also held meetings with his counterparts from Japan and Vietnam to further bolster bilateral trade.
Source: Financial Express
Trade agreements are a part of India’s broader strategy to almost triple its exports to $2 trillion by 2030. India is hopeful of wrapping up negotiations for two more free trade agreements (FTAs) by the end of this year, on top of the two deals — with the UAE and Australia — that were clinched earlier this year, according to commerce and industry minister Piyush Goyal. New Delhi and London have been eyeing an FTA by Diwali (October 24), while another trade deal with Canada is expected to be sealed by December. Addressing an event hosted by the US-India Strategic Partnership Forum in Los Angeles, Goyal said India and the US, too, desire to further bolster economic relations and strategic partnership. The US is India’s largest export destination. Its exports to the US jumped almost 48% on year in FY22 (albeit on a favourable base) to $76 billion, while its imports surged 50% to $43 billion. Moreover, India and the GCC (Gulf Cooperation Council) members have almost finalised the terms of reference for launching trade negotiations soon, the minister said. The GCC comprises six countries — Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. Trade agreements are a part of India’s broader strategy to almost triple its exports to $2 trillion by 2030. New Delhi’s FTA negotiations with key economies gained traction after it pulled out of the Beijing-dominated RCEP talks in November 2019. India signed an FTA with the UAE in February, its first with any economy in a decade, and a ‘substantial’ interim trade deal with Australia in April. Goyal highlighted India’s bid to firm up FTAs with a number of advanced economies, including the UK, Canada and the EU, and the opportunities these deals will create, especially in labour-intensive sectors like textiles and garments. The country is on course to emerge as a $30-trillion economy in the next 25-30 years, he said, exhorting the Indian diaspora to take advantage of the immense investment opportunities that the country presents. Although the Diwali deadline for the FTA with the UK was set in April, the political churnings in London following the resignation of then prime minister Boris Johnson slowed down the pace of talks a tad. Moreover, with the death of Queen Elizabeth-II and the consequent 10 days of national mourning in the UK, the final leg of the negotiations may see a delay of a few days. Nevertheless, official sources expect negotiations to gather pace once the mourning period is over so that the Diwali deadline is adhered to. The formal negotiations for the FTA with the UK started in January, which could ultimately cover more than 90% of tariff lines. Both sides aim to double bilateral trade of both goods and services to about $100 billion by 2030. Key goods that are shipped to the UK include garments, pharmaceuticals and electrical machinery. But the India-UK trade is dominated by services, which make up about 70% of the overall annual commerce. As for the FTA with Canada, both the countries resumed negotiations for it in April after a gap of almost five years and agreed to intensify work towards ensuring greater market access. This FTA will likely include high level commitments in goods, services, rules of origin, technical barriers to trade, and dispute settlement. India’s exports to Canada stood at $3.8 billion in FY22, while its imports hit $3.1 billion. Major exports include pharmaceuticals, chemicals, garments, gem & jewellery and steel.
Source: Business Standard
The commerce ministry is in the process of studying in greater detail the report on its restructuring and there is a plan to set up a trade promotion body, Union minister Piyush Goyal said The commerce ministry is in the process of studying in greater detail the report on its restructuring and there is a plan to set up a trade promotion body, Union minister Piyush Goyal said on Sunday. The ministry is working to redesign the Department of Commerce as India is targeting exports of goods and services to USD 2 trillion by 2030. The restructuring rests on pillars like increasing India's share in global trade, assuming leadership roles in multilateral organisations, creating 100 Indian brands as global champions, and setting up economic zones in India to strengthen the manufacturing base and attract greater investments. "We are in the process in the commerce ministry to redesign the structure of the ministry. And one of the ideas before us is to set up a trade promotion body, similar to Invest India, which will promote trade from India, for India," he told reporters here. Invest India, under the ministry, is an agency which facilitates investments into the country. He added that the Directorate General of Foreign Trade (DGFT), which currently looks after exports, import related issues, will have certain other roles more like a facilitation unit and trade promotion body will focus on promotion. "Ideally, we would like to pattern it (trade promotion body) on the lines of Invest India with a flavour of independence, autonomy and like a private sector organisation so that it can genuinely work in close partnership with business and industry worldwide," Goyal said. Last month the minister released the 'Department of Commerce Restructuring Dossier' in New Delhi. "We have just received a report suggesting the new form of the ministry. And we now go through the process of studying the report in great detail and coming up with the overall plan for restructuring and rewriting the way commerce ministry functions," he said. The 14 volumes of the report has defined the role of each section within the department and lays down the expected outcomes and key performance indicators. When asked about the new foreign trade policy, Goyal said that the ministry is working on the contours of the policy. The existing policy (2015-20) will end on September 30. The new policy is expected to be released before that. In the policy, the government announces support measures for both goods and services exporters. During April-August 2022-23, exports registered a growth of 17.12 per cent to USD 192.59 billion. Imports during the five-month period of this fiscal grew by 45.64 per cent to USD 317.81 billion, according to a preliminary data of the ministry. Trade deficit widened to USD 125.22 billion in April-August this fiscal as against USD 53.78 billion in the same period last year.
Source: Business Standard
The United States is extremely favourable towards India expanding its trade and investment and wishes to further the resilient supply chains between the two nations, according to Piyush Goyal, Indian minister of commerce and industry, who recently attended the first in-person ministerial meeting of the India-Pacific Economic Forum (IPEF) in Los Angeles. Goyal met US commerce secretary Gina Raimondo and US trade representative Katherine Tai on the sidelines of the meeting. Ahead of the meeting, he met Australian trade minister Don Farrell as well. “Discussed further deepening of India-US trade and investment ties as we look to build resilient global supply chains”, the minister tweeted. Goyal, who also holds the portfolios of consumer affairs, food and public distribution and textiles, assured that India will take decisions on different aspects of the frameworks of IPEF based on its national interest, according to an official release. “India recommits to its efforts for a free, open and inclusive Indo-Pacific as we head into the ministerial meeting of the Indo-Pacific Economic Framework for Prosperity,” he said in another tweet. He also met Japanese minister for economy, trade and industry Yasutoshi Nishimura and Vietnam's minister of industry and trade Nguyen Hong Dien.
Source: Fibre 2 Fashion
India has made powerful efforts to grow its economy and emerge as a higher-income country, S Jaishankar said, expressing hope that it will be the fastest growing major economy in the world this year India has made powerful efforts to grow its economy and emerge as a higher-income country, External Affairs Minister S Jaishankar has said, expressing hope that it will be the fastest growing major economy in the world this year with at least 7 per cent growth despite the challenges posed by the Ukraine crisis. Jaishankar arrived here on Saturday on a three-day visit to Saudi Arabia to discuss ways to further strengthen relations between the two countries. It is his first visit to Saudi Arabia as External Affairs Minister. "Began my visit to Saudi Arabia with interaction with our community. Appreciated the contribution of our Diaspora in facing national challenges. Spoke to them about our country's resilience, especially during the time of the Covid and national transformation that is underway in India," Jaishankar tweeted. Addressing the Indian community here on Saturday, Jaishankar said: "India thinks about the ways in which it can change its credit, banking, education and labour policy." He said that India has made powerful efforts to grow its economy and move towards becoming a higher-income country. "A lot of this required a vision, prudent management of our fiscal resources," he said. "Many big reforms have taken place and we can see the result of that in two very interesting developments. In the year ending March 31, 2021 we have posted the highest export that we have ever done. Our total exports were USD 670 billion. Trade in goods stood at USD 400 billion, he said. He pointed out that the world is facing many challenges, like rising food, oil and shipping prices due to the Ukraine crisis. "But we are still very confident that India will be the fastest growing major economy in the world this year. We will get at least 7 per cent growth," he said. Jaishankar stressed that the idea of India as a trading power has become credible today. He said that India's economic recovery after Covid is worth studying. He said many nations spent a lot of money during the Covid period. "I would say like a knee-jerk...they were in a hurry to respond to the crisis situation. So they did not all of them necessarily use their funds and resources wisely," Jaishanakar said. He said India instead focussed on creating a safety net. He was there was a programme to give free ration to 80 crore people. "No country in the world has done it," he said. There is programme to give money to the bank account of 40 crore people. He also lauded India's efforts to deal with the Covid crisis. He said at the onset of the pandemic, India did not make masks and ventilators. He said people did not know about PPE kits. "We could not only make what 1.3 billion people needed, but we could also set up centres of dedicated treatment for people who came down with Covid," the minister said. India was able to produce Covid vaccines in large numbers. "There were made in India vaccines available for 1.3 billion people," he said. I go for tours and see that people of several countries have not been vaccinated as they did not have them. Countries which had everything but still people are not vaccinated, the minister said, adding that India was able to close this gap with continued efforts. Jaishankar also lauded the growing ties between India and Saudi Arabia. He said during the Covid crisis, "We saw our international friendships also deliver at that point of time." "Saudi Arabia was very helpful and provided supplies of oxygen. Two years of Covid are when the country was tested but we came through," said Jaishankar. Speaking about the key role the Indian diaspora plays in the ties between the two countries, Jaishankar said, "In many ways, all of you shaped the image of India and what Saudis think about India and what we are about." "Consciously or unconsciously, all of you through your achievements, contributions, profession, and friendships have collectively built up what is the total Saudi perception of India. For that, your country will be always grateful," he said. "One of our foreign policy priorities is to ensure that our people get good treatment abroad," he said. Speaking about Vande Bharat Mission to evacuate Indians stranded in various nations during the Covid crisis, Jaishankar said: "We brought back 70 million people under the Vande Bharat Mission from all over the world. No one has done that, it is the biggest evacuation and was done during the Covid-19 pandemic. That is India that the world sees today." During his interaction with the community, he spoke about universalising wellness and yoga. "Spreading wellness and yoga, we would definitely encourage," he said in response to a question. He said under the new education policy, India is striving to rapidly expand higher education. On a question about having an Indian cultural centre in Saudi Arabia, Jaishankar said he will take this concern on board.
Source: Business Standard
Inter-ministerial consultations are progressing on revising the WPI base year from 2011- 12 to 2017-18 Inter-ministerial consultations are progressing on revising the Wholesale Price Index (WPI) base year from 2011-12 to 2017-18, a top government official has said. Revising base year to 2017-18 for computation of wholesale inflation would help in presenting a more realistic picture of the price situation in the country. The Department for Promotion of Industry and Internal Trade (DPIIT) in June last year issued a draft technical report of a working group, which suggests revising the base year of wholesale price index and addition of about 480 new items such as medicinal plants, pen drive, lifts, gymnasium equipment and certain motorcycle engines in the new series. The draft report was placed in public domain and its feedbacks were considered before finalisation of the report. "The working group submitted its report in June. ...Now inter-ministerial consultation is in progress," DPIIT secretary Anurag Jain told PTI. In the case of agriculture commodities, new items such as medicinal plants like isabgol, aloe vera and menthol; fennel seed and methi seed, mushroom and watermelon were proposed to be added in the new series subject to availability of data. At present, the index has a total of 697 items, including primary articles (117), fuel and power (16), and manufactured products (564). In the new series, a total of 1,176 items in these three categories have been proposed -- primary articles (131), fuel and power (19), and manufactured products (1,026). According to the draft report, in the current series of WPI, the electricity index is computed based on the price quotations of power generating stations only from hydro and thermal power stations. Now it is proposed to build three indices -- hydro, thermal and solar electricity. Thermal electricity is further bifurcated into thermal coal and gas. WPI revision is a periodic exercise. Current revision process of WPI considering base year 2017-18 has been undertaken to incorporate the structural changes in the economy. Two major indices are used for tracking price movement -- Wholesale Price Index (WPI) and Consumer Price Index (CPI). While the WPI measures price movement of goods in wholesale markets, the CPI tracks inflation at retail level and also includes certain services. WPI is a key indicator to measure the average change in prices of a fixed set of commodities at the initial stage of a commercial transaction over a given period of time with reference to a base year. Ever since the introduction of the WPI in 1942 with the base year 1939, seven revisions have taken place introducing new base years - 1952-53, 1961-62, 1970-71, 1981-82, 1993- 94, 2004-05 and 2011-12, Jain said. The current WPI base year 2011-12 series was launched in May 2017. The wholesale price-based inflation eased to a five-month low of 13.93 per cent in July on easing prices of food articles and manufactured products. The WPI-based inflation softened for the second consecutive month in July, raising hopes of further decline in wholesale prices in the months to come.
Source: Business Standard
The weavers came together to form the KWCS and establish powerloom units at the textile park, said officials. After a wait of over six years, the Kakatiya Weavers Cooperative Society (KWCS) has finally begun saree production at the Kakatiya Mega Textile Park. However, the park is yet to be officially inaugurated by Handlooms and Textile Minister KT Rama Rao. Situated on the Outer Ring Road (ORR) in Madikonda village of Hanamkonda district, the textile park has over 364 power loom units spread over 60 acres of area. It provides direct employment to 5,000 people while 4,000 others are indirectly employed. The officials of Telangana State Industrial Infrastructure Corporation (TSIIC) said 364 weaver families came forward to set up power loom units for which the government body handed over 60 acres of land with layout and basic facilities like roads, street lights, and drainage. The weavers came together to form the KWCS and establish power loom units at the textile park, said officials. Speaking to TNIE, KWCS president Darga Swamy said the 364 members of the society had returned to their native place after learning the techniques in Surat, Gujarat. The State government helped the weavers become entrepreneurs with their own power looms, he added. He said the Central government gives a subsidy of Rs 8 crore through the Ministry of Micro, Small, and Medium Enterprises (MSMEs), and Rs 2 crore from the society is invested for the development of the textile park. He said 364 clusters were successfully set up with the support of the State government and handed over to beneficiaries. Each unit is spread over 450 square metres, he added. As many as 160 weavers received bank loan approval and installed the machinery and equipment to start the power loom, while the remaining 200 members are waiting for loan approval from their respective banks. The weavers have started manufacturing sarees in their units, said Swamy. Booming Madikonda With the setting up of IT companies and other industries, Madikonda is set to become an employment hub. The air and train connectivity due to its proximity to Warangal will only aid Warangal’s growth. Residents believe that once the Kakatiya Mega Textile Park opens formally, it will provide employment to many people.
Source: New Indian Express
Rita Sahu, Odisha’s minister of state (independent charge) for handlooms, textiles and handicrafts, recently urged investors in the apparel and textile sector to visit the state to check the ecosystem and the investor-friendly policy support. She was addressing a roadshow organised in Kolkata by her department ahead of the Make in Odisha conclave. Textiles is a focus area where Odisha hopes to achieve exponential growth in the coming years and the state government has taken proactive measures to broaden the base of the industrial ecosystem, she said. Some such measures include the identification of priority and focus sectors, development of sectoral policies, and development of sectoral industrial parks and infrastructure, she said. The roadshow was attended by more than 150 delegates and representatives of 15 textile and apparel companies, according to media reports.
Source: Fibre 2 Fashion
BGMEA President Faruque Hassan paid a courtesy call on Ambassador of Indonesia to Bangladesh Heru Hartanto Subolo at the embassy on 11 September. BGMEA Vice President Shahidullah Azim, Director Barrister Vidiya Amrit Khan and Chair of BGMEA Standing Committee on Foreign Affairs Shams Mahmud were also present on the occasion. They discussed various trade-related issues with special emphasis on possible avenues of collaboration between Bangladesh and Indonesia to unlock mutual trade potential. They also talked about how both countries can complement each other for the development of the RMG and textile industry. BGMEA President Faruque Hassan said Bangladesh and Indonesia need to view each other as comprehensive friends and partners, and expand collaboration to prosper together. He said, collaborative engagement is needed to identify the opportunities and ways to realise them. "Bangladesh's RMG sector has attached due importance to diversification of products, especially high-value non-cotton apparels and technical textiles. "While the Indonesian textile sector can meet the demand of Bangladesh's RMG sector for man-made fibre, Indonesia can import ready-made garments from Bangladesh. "It would create a win-win situation for both countries," he added. The BGMEA president invited the ambassador to the "Made in Bangladesh Week" and also Indonesian RMG and textile businessmen to participate in the weeklong event. BGMEA, in partnership with Bangladesh Apparel Exchange will organise the mega event in Dhaka on 12-18 November this year to promote the apparel industry of Bangladesh globally and showcase its strengths.
Source: TBS News
China’s export growth slowed more than expected in August and imports stagnated, a sign of a darkening global economic picture and weak domestic growth hit by Covid lockdowns and a property slump. The European Central Bank delivered an unprecedented three-quarter-point interestrate hike this week, and another steep adjustment next month remains a distinct possibility in an escalating assault on rampant inflation. Newly appointed UK Prime Minister Liz Truss laid out plans to rescue an economy in its worse state since the 1970s. On Thursday, Britons were shaken by news of the passing of Queen Elizabeth II. In Asia, China’s economy showed more signs of weakening as export growth slowed, while Japanese households cut back on spending. Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy: The ECB hiked interest rates by a historic amount and President Christine Lagarde hinted it could do the same again as part of “several” future moves. A second 75 basispoints hike next month would match the two most-recent moves by the Federal Reserve, illustrating the more aggressive approach adopted by ECB officials of late as inflation in the 19-nation euro zone breaks record after record. UK Prime Minister Truss, the self-styled “disruptor-in-chief” says she’s ready for unpopular decisions as she responds to the full-throttled cost-of-living crisis facing households and businesses. Both measures may upset markets over fears of stoking inflation. European households will benefit from at least 376 billion euros ($375 billion) in government aid to stem whopping energy bills this winter, yet there’s a risk the smorgasbord of spending won’t bring enough relief. This winter will be grim across the continent. The UK, which already has the highest electricity costs in Europe, is set to see winter bills rocket by about 178%. China’s export growth slowed more than expected in August and imports stagnated, a sign of a darkening global economic picture and weak domestic growth hit by Covid lockdowns and a property slump. Taiwan’s consumer inflation cooled significantly in August, taking some of the pressure off the central bank as it tries to balance raising interest rates against the need to support the economy. Japan’s households cut back on spending in July while real wages fell again amid a surge in virus cases and a steady increase in the cost of living, suggesting the country’s recovery path is still shaky. Household net worth declined in the second quarter by the most on record as aggressive action by the Fed to tame rapid inflation sent stocks plunging. The $6.1 trillion drop pushed net worth down to $143.8 trillion, the lowest in a year. The latest uptick in labor-force participation may not last long -- the rate is projected to drop to 60.1% in 2031, compared to 61.7% in 2021, according to a report from the Bureau of Labor Statistics. That’d be the lowest since early 1973. Russia may face a longer and deeper recession as the impact of US and European sanctions spreads, handicapping sectors that the country has relied on for years to power its economy, according to an internal report prepared for the government. Two of the three scenarios in the report show the contraction accelerating next year, with the economy returning to the prewar level only at the end of the decade or later. Mexico’s annual inflation surged to the fastest pace since late 2000 in August even as US price growth begins to ease. Inflation has continued surging despite the central bank’s 10 straight rate hikes totaling 450 basis points since June last year. China’s government data show foreign investment into the economy grew by almost a fifth this year, yet, a look below the 17.3% expansion in the first seven months of the year shows much of the investment into China actually comes from Hong Kong. Foreign companies are still putting new money into China, although the size and speed of that expansion is not as big as some of Beijing’s officials suggest. As Wall Street firms order employees back to the office, the option of working from home remains more popular than ever all over the world, according to a new study. About one-third of US workers would quit or start looking for another job if told to return to the workplace five days a week, higher than the global average.
Source: Economic Times
The European Central Bank, which oversees economic policy for the 19 nations that use the euro, took an aggressive step to combat inflation, matching its biggest ever rate increase of three-quarters of a percentage point. Russia’s invasion of Ukraine and the continuing effects of the pandemic have hobbled countries around the globe, but the relentless series of crises has hit Europe the hardest, causing the steepest jump in energy prices, some of the highest inflation rates and the biggest risk of recession. The fallout from the war is menacing the continent with what some fear could become its most challenging economic and financial crisis in decades. While growth is slowing worldwide, “in Europe it’s altogether more serious because it’s driven by a more fundamental deterioration,” said Neil Shearing, group chief economist at Capital Economics. Real incomes and living standards are falling, he added. “Europe and Britain are just worse off.” Just how steep a challenge was sharply underlined Thursday. The European Central Bank, which oversees economic policy for the 19 nations that use the euro, took an aggressive step to combat inflation, matching its biggest ever rate increase of threequarters of a percentage point. At the same time, it acknowledged the severe impact of the energy crisis and issued a dour forecast for growth. “It’s a really dark downside scenario,” ECB President Christine Lagarde said at a news conference. On Friday, ministers of the European Union are set to meet to debate a plan to intervene in the energy markets in a bid to tame prices. They will discuss strategies that could include price caps and mandatory cuts in energy usage. Several countries, including Germany, the region’s largest economy, built up a decadeslong dependence on Russian energy. The eightfold increase in natural gas prices since the war began presents a historic threat to Europe’s industrial might, living standards, and social peace and cohesion. Plans for factory closings, rolling blackouts and rationing are being drawn up in case of severe shortages this winter. The risk of sinking incomes, growing inequality and rising social tensions could lead “not only to a fractured society but a fractured world,” said Ian Goldin, a professor of globalization and development at Oxford University. “We haven’t faced anything like this since the 1970s, and it’s not ending soon.” Other regions of the world are also being squeezed, although some of the causes — and prospects — differ. Higher interest rates, which are being deployed aggressively to quell inflation, are trimming consumer spending and growth in the United States. Still, the U.S. labor market remains strong and the economy is moving forward. China, a powerful engine of global growth and a major market for European exports such as cars, machinery and food, is facing its own set of problems. Beijing’s policy of continuing to freeze all activity during COVID-19 outbreaks has repeatedly paralyzed large swaths of the economy and added to worldwide supply chain disruptions. In the last few weeks alone, dozens of cities and more than 300 million people have been under full or partial lockdowns. Extreme heat and drought have hamstrung hydro .. A troubled real estate market has added to the economic instability in China. Hundreds of thousands of people are refusing to pay their mortgages because they have lost confidence that developers will ever deliver their unfinished housing units. Trade with the rest of the world took a hit in August, and overall economic growth, although likely to outrun rates in the United States and Europe, looks as if it will slip to its slowest pace in a decade this year. The prospect has prompted China’s to cut interest rates in hopes of stimulating the economy. “The global economy is undoubtedly slowing,” said Gregory Daco, chief economist at the global consulting firm EY- Parthenon, but it’s “happening at different speeds.” In other parts of the world, countries that are able to supply vital materials and goods — particularly energy producers in the Middle East and North Africa — are seeing windfall gains. And India and Indonesia are growing at unexpectedly fast paces as domestic demand increases and multinational companies look to vary their supply chains. Vietnam, too, is benefiting as manufacturers switch operations to its shores. Even so, China, the eurozone and the United States together account for roughly twothirds of the planet’s economic activity, and if those powerhouses all slow down, it will be hard for any country to remain insulated from the fallout. Poorer people, who spend much more of their total incomes on food and energy, are being hit hardest. In Europe, anxiety about frigid living rooms, shuttered production lines and head-spinning energy bills this winter ratcheted up this week after Gazprom, Russia’s state-owned energy company, declared it would not resume the flow of natural gas through its Nord Stream 1 pipeline until Europe lifted Ukraine-related sanctions. Some European leaders are becoming more confident that Russia’s attempts to use gas exports for leverage will have diminishing returns. EU nations have been aggressively seeking alternative sources of energy, making progress in reducing their reliance on Russia, while stocking up their reserves to make it through the winter. But few believe the economy will be spared pain. Daily average electricity prices in Western Europe have reached record levels, according to Rystad Energy, surging
Source: New York Times
Bangladesh’s apparel export to USA in July registered 22.1 per cent growth compared with that of the same month of last year, which is lowest in the past seven months of the current year. Media reports claimed this citing the latest US Department of Commerce’s Office of Textiles and Apparel (OTEXA) data while underlining growth rate of the country’s (Bangladesh’s) apparel exports to US dropped sharply in July consequent to the buyers decreasing orders. Reports further added Bangladesh’s single-month garment export earnings from USA this July grew by US $ 125.44 million to US $ 693.28 million from what was US $ 567.84 million in the same month of 2021 even if as per OTEXA data the monthly export growth in June was 66.20 per cent, 38.59 in May, 74.34 in April, 96.09 in March, 43.17 in February and 45.48 in January. Meanwhile, speaking to the media, Managing Director of Rising Group, Mahmud Hasan Khan Babu, reportedly, expressed apprehensions that‘ apparel export growth to the US market will decrease in the coming months amidst recession fears’.
Source: Apparel Resources
All the attention devoted to inflation slaying is muting some disturbing signs on the growth side of the equation As policy makers vie to claim the mantle of hawk-in-chief, spare a thought for what we like to think of as the recovery. It’s hard to think of an economy that’s traveling comfortably, let alone doing well. All the attention devoted to inflation slaying is muting some disturbing signs on the growth side of the equation. Many central bankers say the best way to safeguard the economy is to contain price rises. They are really referring to prospects over the medium-to-long term. Their insistence on ratcheting up interest rates in big steps and lecturing about the bad old days of the 1970s — when borrowing costs were relaxed too soon and high inflation became entrenched — means that faltering growth now is a secondary concern, at best. Authorities aren’t quite saying an imminent downdraft is a fair price to pay. Perhaps they don’t have to. Some important ingredients are present, nonetheless. The past week has been a tough one for optimists: China’s export growth slowed dramatically in August and imports barely stayed the right side of zero. While Beijing’s strict Covid strategy bears some blame for this poor outcome, it’s worth remembering that trade had been a bright spot for China’s otherwise troubled economy even as some major urban centers were locked down. All that monetary tightening outside China — Beijing is scrambling to put a floor under growth — might be starting to bite. That’s the point. A weakening global picture is hurting the place that so often made world growth look good. Beyond China, powerhouses in Asia are suffering. Surveys of purchasing managers in Taiwan and South Korea showed manufacturing contracting. Factories tapped the brakes in Japan, too, but remained in expansion mode. So profound has been the shift to inflation-fighting in the euro zone that it was easy to miss the significant cuts to growth forecasts unveiled by the European Central Bank on Thursday. Gross domestic product will likely increase 0.9% in 2023, the ECB said, a projection that is still more optimistic than most predictions. Bloomberg Economics sees an advance of only 0.4%. The region’s energy crisis makes a contraction before the end of next year a fair bet. None of this is deterring the ECB from entertaining another jumbo rate hike to follow Thursday’s 75-basis point move. “Inflation remains far too high,” ECB President Christine Lagarde said. Federal Reserve chair Jerome Powell stuck to his hawkish line the same day, speaking of the need to act “forthrightly, strongly.” He broke little new ground, but hardened expectations of a third consecutive 75-basis point hike next week. Will anyone stand up for growth or countenance the prospect of overkill? That’s what makes a speech the previous day by Lael Brainard so interesting. The Fed vice chair didn’t break with the party line, nor could she be expected to, but she did shade around the edges of the bank’s uber-hawkish stance. Brainard said borrowing costs need to turn restrictive, while conceding risks would become more two-sided in the future. “The rapidity of the tightening cycle and its global nature, as well as the uncertainty around the pace at which the effects of tighter financial conditions are working their way through aggregate demand, create risks associated with over-tightening,” she told a conference in New York. Brainard is probably the most internationally minded member of the Fed’s leadership team. She was the Treasury’s top financial diplomat and has tried to steer the central bank to a greater appreciation that what happens beyond America’s shores matters. When she was chair, Janet Yellen took umbrage with the idea that economic expansions die of old age. That’s a myth, she declared in 2015 after the Fed hiked rates for the first time in almost a decade. Her predecessor, Ben Bernanke, has quipped that central banks tend to murder them. Will the current global version survive infancy, much less reach adolescence? If not, post-Covid supply-chain travails and inflation should be added to the rap sheet. China’s economy pulled out of 2020’s tailspin sooner than its peers and had a robust year to follow. That reflation has run its course, and policy makers across the globe should be more concerned. The almost uniform desire to “front load” tightening is likely accelerating a downturn that just seems to be shrugged off as the price of doing business. The workshop of the world is sending an S.O.S. If you want some bucking up, read Brainard’s speech. At least someone is paying attention.
Source: Business Standard
