In a bid to strengthen Standards for the textile industry, the Bureau of Indian Standards (BIS) is in the process of formulating Quality Control Orders (QCOs) for certain textile products which have a significant bearing on the consumers’ health and safety. These will also help in checking cheap imports that can endanger consumer health. BIS is also in the process of framing the next version of the Standards National Action Plan (SNAP) 2022-27 and the industry is looking forward to these developments to strengthen the quality benchmark of the industry, without any barriers to trade, especially with regard to access and availability of inputs that are import dependent. Industry has raised the concerns of the industry on the applicability of Standards on the final product or the raw materials and the time and cost involved in getting such certification processes. The industry stakeholders asked various questions on the different aspects of standardisations and QCOs and requested more time for implementation of the QCOs, given the time needed to align to the new requirements. In a webinar, organised by Confederation of Indian Textile Industry, in association with the BIS, awareness was created on new QCOs and Standards for the textile value chain. It was highlighted that The Standards and QCOs have become crucial for the industry as imports have risen manifolds in the last few years and therefore it becomes necessary to place such Standards and QCOs for India’s T&A Sector. T Rajkumar, Chairman, CITI; Rajiv Sharma, Deputy Director General, (Standardization); JK Gupta, Head-Textiles; Aditya Das, Scientist D, Bureau of Indian Standards (BIS); Ajit B Chavan, Secretary, Textiles Committee; Dr. Arindam Basu, DG, Northern India Textiles Research Association (NITRA); Durai Palanisamy, MD, Pallava Group and Dr. P.P. Raichurkar, Director, Man Made Textile Research Association (MANTRA) were the esteemed speakers for the event.
Source: Apparel Resources
Electricity output has grown around 11%; consumer durables and non-durables have contracted 6.7% and 2.4%, respectively Manufacturing is in much more pain than what was revealed by the year-on-year (YoY) growth in the Index of Industrial Production (IIP) data. While it grew 3.2 per cent in July YoY, the expansion was just 1.1 per cent, when compared with the same month in the pre-Covid year of 2019-20. The picture was different for the other two major segments of the IIP — mining and electricity. Though mining output contracted 3.3 per cent YoY in July, it has grown about 1 per cent compared with 2019-20. Electricity generation rose 2.3 per cent in July YoY, but it has grown almost 11 per cent over 2019- 20. Manufacturing rose 10 per cent in the first four months of FY23 on a yearly basis, but was up just 2.6 per cent when compared with the corresponding period of 2019-20. In a way, the data pertaining to manufacturing tells a story similar to what was revealed by the gross domestic product (GDP) data. Manufacturing gross value added (GVA) grew just 4.8 per cent, whereas overall GVA grew 12.7 per cent in the first quarter of the current financial year. It should be noted that manufacturing in IIP is in physical volume terms, while in GDP or GVA it is in value addition. Besides, IIP is used for the non-corporate and unorganised sector for measuring manufacturing in GVA, the rest is taken from stock exchanges. ICRA chief economist Aditi Nayar said the July manufacturing print in IIP is certainly tepid. “However, the high frequency indicators such as auto output and GST e-way bills are pointing towards a healthier August.” Dispatches at India’s top seven automotive companies rose 30.2 per cent year-on-year to 305,744 units from 234,743 units, shows the monthly sales data released by the companies. This is the sharpest year-on-year growth seen in the current fiscal with the exception of May, when the growth came on last year’s low base. As many as 78.2 million e-way bills were generated in August against 75.6 million in July. However, Nayar added a word of caution, “With the shift in consumption to services, industrial output growth is likely to be relatively modest in the immediate term.” The IIP and GDP numbers show that growth is not broad based, said Bank of Baroda’s chief economist Madan Sabnavis. “Right now, those related to infrastructure are doing well, while the consumption piece is still not in place,” he added. Infrastructure/construction output rose 3.9 per cent, while consumer non-durables contracted 2 per cent and consumer durables grew 2.4 per cent in July on a yearly basis. The growth stood at 7.1 per cent for infrastructure, but consumer non-durables and durables contracted 2.4 per cent and 6.7 per cent, respectively, this July compared with 2019-20. He said all sectors need to grow together for sustained growth. “That’s when we will see accelerated growth in IIP,” Sabnavis added.
Source: Business Standard
The International Financial Services Centres Authority (IFSCA) has launched the IFSCA FinTech Incentive Scheme to provide financial support to fintech activities in the form of specific grants. The overall objective is to promote the establishment of a world-class fintech hub at the Gujarat International Finance Tech-city (GIFT IFSCA) in India. The scheme was notified through the Gazette Notification number IFSCA/2021-22/GN/022 dated 2 February 2022. According to a press release, the initiative will be open to: • Domestic fintechs seeking access to overseas markets. • Domestic fintechs seeking listing on IFSCA-recognised stock exchanges. • Foreign fintechs seeking market access to IFSCA in India and work within the IFSCA’s regulatory framework. • Foreign fintechs seeking access to the domestic market under the inter-operable regulatory sandbox (IORS) framework. • Domestic fintechs extending business to the IFSCA either by way of authorisation or registration or through the regulatory sandbox. The types of incentives for eligible applicants are: Fintech Start-up Grant: this will be utilised to develop a product or a service and related ‘go-to market’ initiatives for a start-up with a novel fintech idea or solution with a focus on converting the idea into an MVP. Proof of Concept (PoC) Grant: this will be utilised to conduct a PoC by an early or mature fintech entity (FE) in domestic markets or overseas. Sandbox Grant: this will be utilised by FEs to experiment with innovative products or services in a sandbox. Green Fintech Grant: this will be utilised towards developing solutions facilitating sustainable finance and sustainability-linked finance, including environmental, social, and governance (ESG) investments. Accelerator Grant: this will be utilised to support accelerators at the IFSC for capacity building, building capabilities around mentors, and bringing investors/projects or PoC, tie-ups, etc. Listing Support Grant: this will support domestic FEs aspiring to go for listing on stock exchanges recognised by IFSCA. The grants contemplated under this scheme shall be available to eligible FEs who are part of the IFSCA’s Regulatory or innovative sandbox, or who are referred to the IFSCA under a fintech bridge arrangement with a counterpart regulator. Further, FEs that have either participated or are participating in any accelerator or cohort, or special programme supported or recognised by the IFSCA. Also, FEs who are referred to by the entities, including regulatory or supervisory bodies that have a memorandum of understanding (MoU) or special arrangement with the IFSCA. In April, the India Post Payments Bank (IPPB), an agency under the Department of Posts (DoP), launched an initiative, Fincluvation, to create and innovate solutions for financial inclusion by collaborating with the country’s fintech start-up community. As OpenGov Asia reported, Fincluvation is an “industry-first” initiative to serve as a powerful platform to mobilise the start-up community to build meaningful products that will broaden the reach of digital finance. With a combination of IPPB’s technology stack, DoP’s doorstep service network, and the techno-functional acumen of start-ups, the products of the initiative can deliver unmatched value to the citizens of the country. Successful pilots from the initiative can then mature into long-term partnerships. The global fintech market size was $110.57 billion in 2020 and is estimated to grow to $698.48 billion by 2030, growing at a CAGR of 20.3% from 2021 to 2030. Fintech increases the speed, transparency, and security of transactions, which is why governments and organisations around the world are looking to support, foster, and fund fintech solutions.
Source: Open Gov Asia
Indian ambassador to Israel said greater trade between Israel and the UAE will also benefit Indian companies, as many Indian firms have set up base in the Emirates or established manufacturing units there The work being done by India and Israel to conclude a free trade agreement and enhance air connectivity is expected to drive trade and business, India’s ambassador to Israel Sanjeev Singla said. At the same time, India, Israel and the United Arab Emirates (UAE) can use their mutual strengths to enhance the competitiveness of their economies, Singla said during an interaction with a joint business delegation from India and the UAE. “The discussions on the free trade agreement between India and Israel will catalyse the ground for greater bilateral trade,” Singla said. “Separately, we are also working towards enhancing direct air connectivity from Israel to various cities in India which should be a welcome development for the business communities.” India is currently Israel’s second-largest trading partner in Asia. Greater trade between Israel and the UAE will also benefit Indian companies, as many Indian firms have set up base in the Emirates or established manufacturing units there either as joint ventures or within special economic zones (SEZs), Singla said. These units are in areas such as cement, building materials, textiles, engineering products, and consumer electronics. Highlighting the areas of cooperation, Singla said: “We have been trying to encourage joint investments in six mutually identified areas – water, energy, transportation, space, health and food security.” He added, “Israel’s strengths in niche technology, India’s sheer size and depth of the economy, its human resource pool and manufacturing scale, and the UAE’s capabilities in logistics and investments are complementary not only for our economies but also the region at large.” Mohamed Al Khaja, the UAE’s ambassador to Israel, who also participated in the interaction emphasised the growing relations between the Emirates and Israel and said, “Since the signing of the CEPA (Comprehensive Economic Partnership Agreement) with Israel, there’s been a major interest among companies in both countries to make use of the opportunities that present themselves while taking people-to-people ties to another level.” The joint business delegation included 45 Indian members and 10 members from the UAE. Rajan Navani, the leader of the Indian delegation and managing director of Jetline Industries, highlighted the positive outcomes of growing ties between India and Israel. “Israel has taken a strategic decision to strengthen economic relations with India. This has facilitated the expansion of Indian software giants in the Israeli market,” he said. Bilateral trade has diversified into sectors such as pharmaceuticals, agriculture, IT and telecom and homeland security, he said. India and the UAE signed a CEPA in February, giving a fillip to already strong cooperation in trade and energy. India, Israel and the UAE have been working on enhancing their trade investment ties, including through the I2U2 grouping, which brings them together with the US.
Source: Hindustan Times
According to experts, the move is significant because of the fact that high logistics cost bring down competitiveness of domestic goods in the international market. India's national logistics policy will be released by Prime Minister Modi on September 17. The policy was first announced in Budget 2020. The aim of the new policy is to facilitate seamless movement of goods across the country, Commerce and Industry Minister Piyush Goyal said. "On September 17, the prime minister is going to release the country's logistics policy," Goyal said while addressing the members of the Board of Trade. The expected focus areas in the policy include process re-engineering, digitisation, multi-modal transport, etc. According to experts, the move is significant because of the fact that high logistics cost bring down competitiveness of domestic goods in the international market. The government has repeatedly emphasised on the need to bring down logistics cost in the country from the current levels of 13-14 per cent of GDP. According to the govt, improving the sector will facilitate 10 per cent decrease in indirect logistics cost leading to a 5 to 8 per cent rise in exports. This is a complex sector with more than 20 government agencies, 40 PGAs (Partner Government Agencies), 37 export promotion councils, 500 certifications, over 10,000 commodities, and $160 billion market size. It also involves 200 shipping agencies, 36 logistics services, 129 ICDs (Inland Container Depots), 168 CFSs (Container Freight Stations), 50 IT ecosystems, banks and insurance agencies. The worth of Indian logistics market is estimated at over $200 billion. The sector provides livelihood to more than 22 million people.
Source: Financial Express
Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal today said that exports have been one of the most defining features of the government's efforts to make India a developed country by 2047, a vision articulated by PM Shri Narendra Modi, in his Independence Day address to the nation this year. Shri Goyal said this in his opening remarks at the meeting of the reconstituted Board of Trade in New Delhi. The Minister said that global confidence in India’s prospects for growth were truly immense and called on the domestic industry to overcome all weaknesses when it comes to grabbing the plethora of growth opportunities available to the nation. The world is already looking at India as a super power, he added. Shri Goyal highlighted that in the last few years there has been an attempt for foundational transformation in India which has hastened India's march to be a developed nation. Calling for transparent, consistent, honest policies, the Minister said that government’s policies must be robust enough to deliver what was promised to the people. Shri Goyal also spoke of the need to find ways to encourage people to comply and bring in transparency and ease of doing business. India should become an honest country, he added. Commerce and Industry Minister Shri Goyal announced that Prime Minister Shri Narendra Modi will release the Logistics Policy on 17th September. Stating that Trade is a strong pillar to achieve the five vows that Prime Minister Narendra Modi spoke of on 15th August, Shri Goyal expressed confidence that today's meeting reflects the collective belief of all of us in working towards achieving a developed India. Shri Goyal stressed on the need to enter into more FTAs with developed nations. He urged participants of the Board of Trade meeting to focus on the possibilities each sector has in FTAs. Concluding his address, Shri Goyal said all the issues raised by the participants will be addressed and the suggestions made by them in the Meeting today will be considered. The Board of Trade meeting focused on export target setting, the new Foreign Trade Policy (FTP) (2022-27), and the strategies and measures to be taken in order to take forward domestic manufacturing and exports. Board of Trade (BOT) has been constituted by merging Council for Trade Development and Promotion with Board of Trade vide notification No. 11/2015-20 dt 17th July 2019. The Board of Trade, inter alia, advises the Government on policy measures connected with the Foreign Trade Policy in order to achieve the objectives of boosting India’s trade. It provides a platform to state governments and UTs for articulating state-oriented perspectives on Trade Policy. It also acts as a platform to Government of India for appraising State Governments and UTs about international developments affecting India’s trade. It is an important mechanism for deliberations on trade related issues with industry bodies, associations, export promotion councils, and state and UT governments. There were 29 new non-official members who were also invited for the first time in this Board of Trade meeting. During the Board of Trade meeting, presentations were made on a variety of subjects such as India’s Import/ Export Performance, restructuring of the Department of Commerce, FTAs and way forward, States export performance, District as Export Hubs, new proposed Foreign Trade Policy, trade remedial, trade facilitation measures undertaken by customs, Government e-Marketplace etc. Ministers from states made interventions in the meeting, giving their state-specific suggestions, and also expressed their support to the central government initiatives in promoting the external trade. The inaugural ceremony saw the participation of Ministers of State for Commerce and Industry, Shri Som Parkash and Ms. Anupriya Patel, Commerce Secretary, Shri BVR Subrahmanyam, Revenue Secretary, Shri Tarun Bajaj, Director General of Foreign Trade, Shri Santosh Sarangi, Secretary Dpt of Financial Services, Sanjay Malhotra, Member Customs, Rajiv Talwar and other senior officials and members of Indian industry. The meeting was attended by Various State Ministers and other senior officials of key line ministries and States, all major trade and industry bodies, Export Promotion Councils and industry associations.
Source: PIB
Why so hesitant to invest, Sitharaman asks business houses. Finance minister Nirmala Sitharaman on Tuesday asked India Inc as to what holds it back from investing in manufacturing when foreign investors are bullish about India. She also wondered if corporate India, just like Lord Hanuman, needs to be reminded of its immense ability. Speaking at the Mindmine Summit here, Sitharaman said the growing confidence of overseas investors in India is reflected in sustained inflows of foreign direct investments and foreign portfolio investments, in addition to greater participation in the stock markets. “I would equally want to know from Indian industry why they are hesitant (to invest). We will do everything to get industry to invest…(but) I want to hear from India Inc what’s stopping you,” she said. “Is it like Hanuman? You (India Inc) don’t believe in your own capacity, in your own strength and there has to be someone standing next to you and say ‘you are Hanuman, do it’… That person can’t certainly be the government,” Sitharaman said. “This is the time for India and we can’t miss the bus.” The minister’s statement comes at a time when private investments have remained elusive in recent years or are limited to a few sectors. This has forced the public sector to do the heavy lifting for heralding an investment-led economic revival through enhanced capital spending in the aftermath of the pandemic. Although gross fixed capital formation in the June quarter jumped 20.1% from a year before, against 5.1% in the previous quarter, it was driven substantially by the public sector, especially the Centre’s budgetary capex. The share of manufacturing in the country’s GDP, too, has remained stagnant at about 16-17% for decades now. Efforts by successive governments to raise it to about 25% of GDP have hardly yielded any result. The PLI scheme is yet another attempt to spur domestic manufacturing in a big way and create few global champions in over a dozen sectors identified under it. Many foreign companies, Sitharaman said, are seeking to relocate from China and India is emerging as a favourite destination for them. They are drawn to India not just by recent policies like the production-linked incentive schemes and a cut in the corporate tax rate but also by the overall ecosystem that supports businesses, Sitharaman said. Many countries show interest in rupee trade The finance minister said many countries have expressed interest for settling bilateral trade with India in the rupee after the Reserve Bank of India announced a mechanism in July to facilitate it. This step, among others, is towards full capital account convertibility. “It isn’t the rouble-rupee trade, which was the old format. Now this (bilateral rupee trade) formulation, which I am glad the RBI has come up at a time, which is so critical,” she said in response to a question as to whether India was ready for full capital account convertibility. The mechanism to facilitate the settlement of international trade in the rupee is ‘opening the Indian economy more than what can be imagined’. “Post-pandemic, India is coming up with so many out-of-the-box solutions…I would like to highlight the fact that we are a lot more open economy now, we are a lot more open in the way we are talking to countries, we are willing to have our digital platform become interoperable between countries to enable cross-border transactions,” she said. On July 11, the central bank notified the new arrangement to promote trade growth by reducing the dependence on hard currency, with emphasis on exports from India and to support the increasing interest of global trading community in the rupee. For the settlement of trade transactions, the banks concerned will need special rupee Vostro accounts of correspondent banks of the trading partner. “Indian importers undertaking imports through this mechanism shall make payment in rupee which shall be credited into the special Vostro account of the correspondent bank of the partner country, against the invoices for the supply of goods or services from the overseas seller /supplier,” the RBI said.
Source: Financial Express
Make-in-Odisha summit to be held in Bhubaneswar between Nov 30 and Dec 4 Chief Minister Naveen Patnaik arrived in Mumbai on Tuesday to address the investors’ meet and attend the investment roadshow as part of the upcoming third edition of Make-in-Odisha conclave later this year. Industry leaders like Mahindra group, Waaree Energies, Nilkamal, JM Baxi group, L&T, Supreme Industries, Apar Industries, STT Global Data Centres, SBI, HDFC and ICICI Bank would be having one-on-one meeting with the CM on Wednesday. After the meeting, Naveen will address the investors’ meet being held to apprise investors about the mega industrial conclave and invite them to the event. Odisha’s flagship investment summit is scheduled to be held at Bhubaneswar between November 30 and December 4. Odisha aims to attract investments across diverse sectors such as chemicals and petrochemicals, textiles and apparel, ITeS, financial services, food processing and other new age sectors like green hydrogen and green ammonia, datacentres, EV and EV component manufacturing. On the eve of the Mumbai roadshow, Chief Secretary Suresh Chandra Mahapatra interacted with officials of the industrial houses. He explained them the industrial ecosystem in Odisha with incomparable enabling policies, arrangements, unique subsidy support, and hand-holding institutional support from inception to commissioning and to ever growing continuance. The Chief Secretary also apprised them about the wide-range of scopes available in various sectors for rewarding investment. The State government has created excellent infrastructure, readily available land bank, quality power supply, sector specific industrial zones with ease of doing business normative patterns, Mahapatra added.Principal Secretary of Industries department Hemant Sharma was also present.
Source: New Indian Express
May hold first bilateral meeting with Chinese President Xi since 2019 Building stronger intra-regional trade and connectivity in the wake of the Covid-19 pandemic, and greater cooperation on health care will be on Prime Minister Narendra Modi’s agenda at the 22nd Shanghai Cooperation Organisation (SCO) Summit that begins on Thursday, officials said. Scheduled to be held in Samarkand, Uzbekistan, the two-day summit will be the first inperson meeting of most national leaders. Establishing a stronger alliance that pushes for reform of the World Trade Organization (WTO) will also be pushed by India, officials added. Bilateral meetings with Chinese President Xi Jinping and Russian President Vladimir Putin would be the high point of Modi’s visit. The SCO is a political, economic, and security alliance of eight nations, historically led by Russia and China. It is considered the most important conclave in the Central Asian region, where other nations have significant interest in trade, connectivity, and resource extraction. Set to be the fifth summit that India participates in as a full-fledged member, the 2022 summit will also see India assume the rotational presidency of the SCO. New Delhi may also offer a glimpse of what it intends to focus on, during its tenure over the next one year. India has prioritised securing greater trade with Central Asian nations in the past few years. This is because India’s trade with the region stands at $2 billion, while that of China is at $100 billion, according to official estimates. New Delhi is also looking for ways to expand the $1 billion line of credit it announced in 2020 for infrastructure development projects in the region. As had been the case earlier, the summit may see New Delhi hard pressed to steer clear of discussing China’s flagship Belt and Road Initiative (BRI) project, which has promised immense economic growth to the landlocked region. Beijing has already invested more than $200 billion through the initiative, according to the New York-based Council on Foreign Relations. “While China has now abandoned its efforts to bring India to the discussion table on the BRI, it has protested India’s denouncing of the project,” a Ministry of External Affairs (MEA) official said. New Delhi has stressed that the BRI violates its sovereignty, with the China-Pakistan Economic Corridor (CPEC) passing through Pakistan-occupied Kashmir. Bilateral meetings Modi will meet Xi in person for the first time since the 2019 BRICS Summit in Brazil. Since then, Indian and Chinese troops have faced off in a series of deadly skirmishes as a result of multiple Chinese intrusions in Ladakh and Sikkim. “A lot of bilateral diplomacy has gone into de-escalating the situation and the upcoming meeting between the leaders will be crucial in confirming this, face to face,” the official said. He added that the process of disengagement between Indian and Chinese troops in the Gogra-Hot Springs area in Eastern Ladakh was expedited keeping the leaders’ meeting in mind. However, the bilateral meet with China is still set to be frosty as India has also continued to up the ante against the import of Chinese products, cracked down on Chinese firms operating in India, and has joined the US-backed Indo-Pacific Economic Framework to establish alternative supply chains for key commodities. Meanwhile, a bilateral meeting with Pakistan Prime Minister Shehbaz Sharif, which had been untenable from the beginning, will now definitely not take place, the official said. Sharif remains busy in managing the humanitarian crisis emerging out of the devastating floods in Pakistan, and only confirmed his visit to the summit two days back. Though it remains unconfirmed at this point, Modi is also expected to hold his first ever bilateral meeting with Iranian President Ebrahim Raisi. “Any such meeting will focus on the Chabahar port and the International North South Transport Corridor (INSTC), and the series of associated logistical and financial challenges that have cropped up,” another MEA official said. Regional platform The SCO is the world’s largest regional organisation, covering approximately 40 per cent of the world’s population, and more than 30 per cent of global gross domestic product. Formed in 2001 in Shanghai by Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, and China, the SCO was initially set up to reduce military build-up in the region. It also committed to non-intervention by member states in each other’s internal affairs under the pretext of human rights. This is the reason why India doesn’t comment on reported atrocities against Uyghur, Tibetan, and other minorities in China. In 2017, India and Pakistan both joined the SCO as full members. At this year’s summit, Iran may officially begin its entry into the SCO by signing a memorandum of commitment.
Source: Business Standard
The Bangladesh Textile Mills Association (BTMA) recently expressed concern that the situation of most commercial banks being averse to opening letter of credit (LC) under the Export Development Fund (EDF), usance paid at sight (UPAS) and deferred payment systems due to dollar shortage may lead to suspension of production of basic raw material for apparel. Domestic spinners may continue production activities for the next three months till the existing raw materials stock lasts, it said. The Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) also admitted facing similar problems. In a letter to the central bank, signed by BTMA president Mohammad Ali Khokon, the association said factories could not import required raw materials like cotton, polyester staple fibre (PSF) and viscose staple fibre (VSF) to feed the readymade garment (RMG) exporters despite receiving orders. "Declining stocks of raw materials amid commercial banks' unwillingness to open LCs might severely hamper production and exports of textile and apparel items," Bangladeshi media reports quoted the letter as saying. Textile mills need to have raw material stocks for at least four to five months for uninterrupted production and export activities, he pointed out, explaining that it also takes three to four months to get imported raw materials. The production disruption would not only deepen the existing dollar crisis, but also hit export earnings, the association cautions, fearing unemployment as well. BTMA requested the central bank to take necessary measures and instruct the commercial banks accordingly.
Source: Fibre 2 Fashion
Export-oriented businesses now fear that they might miss shipment deadlines as their sourcing of necessary raw materials are now facing disruptions as some banks are refusing to open LCs on account of dollar shortages and non-settlements of previous loans taken from Export Development Fund (EDF) with export proceeds, according to industry people. On top of it, a number of exporters now see their borrowing from the EDF inadequate because raw material prices have gone up in the global market and the US dollar continues to gain against taka, a dozen of entrepreneurs and business leaders told The Business Standard. As a result, timely deliveries for ordered goods have become uncertain, they noted. The looming raw material crisis will deal a serious blow to apparel makers who are already grappling with buyers' requests for delayed shipments, said Faruque Hassan, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). "Buyers might either cancel orders or seek discounts if we fail to meet shipment deadlines," he also said. Businesses dealing with the domestic market are now facing a problem as well. Local market suppliers are dealing with banks who are unwilling to handle their LCs because they pay in local currency and they fear a raw material crisis in the not too distant future, Saleudh Zaman Khan Jitu, managing director of NZ Tex Group, told TBS. Textile millers need to have a stock of raw materials for at least four-five months to keep production humming and keep apparel manufacturers well supplied, he said, adding, "So, we have to open an LC every month. If we cannot now source raw materials, our supplies of yarns and fabrics to garment manufacturers will be disrupted, which will lead to a delay in shipments hurting their business." Bangladesh Textile Mills Association (BTMA) has made a complaint to the Bangladesh Bank that many banks are unwilling to open import LCs under the EDF, deferred payment and UPAS systems. Monsoor Ahmed, additional director and CEO (in Charge) of BTMA, said a few of their members, including Noman Group, informed them that pointing out the ongoing dollar crisis, banks are reluctant to open LCs against imports of essential raw materials, such as cotton and fibre, which are needed to feed export-oriented garment factories. They have sought the central bank's intervention in this regard, he added. Seeking anonymity, an official at Noman Group said, "A leading bank is refusing to open an LC on various excuses. We can continue production for the next three months with the cotton we now have in our stock." BKMEA executive president Mohammad Hatem told TBS that they have a good number of work orders but they cannot open LCs. "We might lose our buyers if we cannot source necessary raw materials right now." Contacted, Mohammad Sirajul Islam, central bank spokesperson and also an executive director of the Bangladesh Bank, told TBS that the Bangladesh Bank cannot force any banks for opening LCs. It is totally up to the bankers and customers. "If we get any specific allegation against any banks about an intentional delay in opening LCs, we will look into it," he noted. In the meantime, exporters find themselves in another trouble as a few buyers are demanding that product prices be lowered in line with the local currency devaluation, Shams Mahmud, managing director of Shasha Denim, told TBS. "That is why some of us cannot cash in on the taka devaluation benefit," he said, fearing that global cotton prices might spiral out of control because its production might fall caused by drought in many countries and floods in Pakistan. In the last one year, cotton prices have doubled. Its price in international futures markets remained at $1.2-$1.6 per pound on Tuesday. But yarn prices stood at $4.50 per kg in the local markets, according to BTMA. The ongoing fuel crisis does not offer any hope for the manufacturers. The gas crisis continues to hurt textiles and apparel industries in Gazipur and Narayanganj. Some textiles saw their production come to a halt. Saleudh Zaman Khan Jitu, a vertical woven textile manufacturer in Bangladesh with five units, said his monthly minimum operational costs stand at Tk30 crore even if production remains closed, while his current monthly income has come down to Tk6 crore owing to the serious gas crisis. Officials at Titas Gas Transmission and Distribution Limited said lower supplies from the national grid is the main reason for the gas shortage. Engr Md Haronur Rashid Mullah, managing director at Titas Gas, told TBS that the current situation only can be improved if they receive a higher volume of gas from the national gas grid. Apart from this, the crisis can also be minimised if power plants take a lesser volume of gas, which is only possible during winter," he added. At present, Titas Gas has a daily demand of 1,800 million cubic feet (mmcf) daily to feed its 28.74 lakh consumers. But the largest gas distribution company is now receiving only 1,400mmcf from the gas transmission company. At the same period last year, Titas gas used to receive around 1,700mmcf of gas when the country used to import around 600mmcf gas from LNG sources. But now, only 480mmcf of LNG is being injected into the national grid. Subsequently, the total gas supply in the country dropped to 2,792mmcf, which was 3,011mmcf in September last year. Moreover, the ongoing power outages have put manufacturers in a tight corner. Al Shahriar Ahmed, managing director of Indet Group, said their cost for diesel-run generators has gone up to Tk18 lakh a month, while they spent Tk30 lakh in the entire year of 2021.
Source: TBS News
China’s e-commerce logistics index for August 2022 decreased by 2.2 points to 104.2 points, compared to July 2022, owning to a rise in COVID-19 cases in the country. A survey, which was jointly carried out by the China Federation of Logistics and Purchasing and e-commerce giant JD.com, calculated the index. The study ascribed the decline in e-commerce logistics businesses in China in August to the interruptions resulting from COVID-19 in market demand and supply, according to Chinese media reports. However, the survey expects a positive outlook for the index in September 2022, as the reopening of schools in the coming days may create a conducive environment for the ecommerce logistics industry. The index is based on the statistics of January 2015 with the starting point at 100.
Source: Fibre 2 Fashion
The clothing and textile sector in Pakistan is anticipating a drop of at least 30% in the value of exports after the recent floods wiped out much of the country’s usually plentiful cotton crop, and the sector is seeking out strategies to buy cheaper cotton abroad. Textile and garment exports from Pakistan amounted to US$21bn in the fiscal year 2021-22, said the All Pakistan Textile Mills Association (APTMA), but now, due to the devastation caused by flooding, industry experts fear a probable cancellation of many export orders by international brands. With more than 40% cotton production in Sindh province, southern parts of the Punjab province and parts of Balochistan inundated, the APTMA and other industries fear the textile and garment exports may fall from shrinking production and increased costs, with APTMA noting this will hit “the government’s vision to achieve the export volume of US$50bn in the coming years”. With the view to fostering exports and boosting the economy of the country, last month (August) APTMA unveiled a plan to launch a roadmap to achieve US$50bn in exports by increasing the country’s stitching-focused clothing manufacturing sector to process an additional US$3bn worth of yarn and fabrics. In this way, it would boost Pakistan’s value-added garments for export, generating an additional income of US$10bn. But Emad Raza, chairman of the Manufacturers and Exporters Association of Ferozepur Road (MEFRA), in Lahore, said the floods may put such plans in jeopardy. At least a 30% to 35% decline is now foreseen in the exports of garments and textiles in the current fiscal year ending 30 June 2023, he said. “We can’t make [artificial] fibre indigenously, therefore cotton is our real strength and since a major chunk of the cotton crop is destroyed in Punjab and Sindh provinces – the country’s two major cotton producing areas – due to flooding, we need to import cotton that would definitely increase the cost of our production,” he told Just Style. The Pakistan Textile Exporters Association has suggested to the country’s federal minister for finance and revenue Miftah Ismail to allow cotton imports from neighbouring India as it would be cheaper compared to cotton imports from Central Asia countries and other locations. However, the government has yet to take a decision in this direction. The problem here is that Pakistan suspended trade with India after New Delhi abolished the autonomous (and disputed) state of Jammu and Kashmir in 2019 and replaced it with two union territories with less powerful local governance. Emad argued the government should allow cotton imports via the Wagah border crossing between Lahore and Amritsar, which would cost Pakistan’s textile industry much less than importing the commodity via Dubai, the most likely alternative. The government should consider the proposal seriously, if it still wants to increase exports from US$21bn to US$26bn by 2025, shortening the time cotton can be imported as well as reducing costs, he said. According to Emad, the floods have devastated Pakistan’s clothing and textile sector supply chain and could – if the cotton shortage is not managed properly – increase unemployment. This would pile pressure on the government of Prime Minister Shehbaz Sharif, who only assumed office in April (2022), after toppling the administration led by ex-PM Imran Khan, who has been campaigning effectively against his rivals. The government is also dealing with annual inflation of 27.2% (as of August) and highinterest rates (15%), said Emad. These floods also followed torrential rains that hit onethird of the country, damaging crops, roads and communication networks. Pakistan media reports have estimated the damage caused by these floods at US$12.5bn. Tahir Manzoor Chaudhry, former vice chairman of Lahore Chamber of Commerce and Industry, has estimated the losses at US$18bn, saying this is a “preliminary estimate while the magnitude might go far beyond that when final figures are compiled by the concerned government institutions.” “It is a very difficult time for the industry,” therefore, the government should convince richer countries to provide more financial aid, while announcing incentives for exporters in terms of taxes and customs duties, among other measures, Tahir suggested.
Source: Just Style
