Prime Minister Shri Narendra Modi will launch the National Logistics Policy (NLP) on 17th September, 2022 at 5:30 PM at Vigyan Bhawan, New Delhi. The need for a national logistics policy was felt since the logistics cost in India is high as compared to other developed economies. It is imperative to reduce the logistics cost in India for improving the competitiveness of Indian goods both in domestic as well as export markets. Reduced logistics cost improves efficiency cutting across various sectors of the economy, encouraging value addition and enterprise. Since 2014, the government has put significant emphasis on improving both Ease of Doing Business and Ease of Living. National Logistics Policy, a comprehensive effort to address issues of high cost and inefficiency by laying down an overarching interdisciplinary, cross-sectoral and multi-jurisdictional framework for the development of the entire logistics ecosystem, is yet another step in this direction. The policy is an endeavour to improve competitiveness of Indian goods, enhancing economic growth and increasing employment opportunities. It has been the vision of the Prime Minister to develop world class modern infrastructure through integration of all stakeholders in holistic planning and implementation so that efficiency and synergy is achieved in the execution of the project. The PM GatiShakti - National Master Plan for muti-modal connectivity - launched by the Prime Minister last year, was a pioneering step in this direction. PM GatiShakti will get further boost and complementarity with the launch of National Logistics Policy.
Source: PIB
The Ministry of Textiles cleared 23 strategic research projects worth around INR 60 crores in the areas of Specialty fibres, Sustainable Textiles, Geotextiles, Mobiltech and Sports textiles under the chairmanship of Union Minister of Textiles, Shri Piyush Goyal, on 14th of September 2022. These strategic research projects fall under the Flagship Programme ‘National Technical Textiles Mission.’ Among these 23 Research projects, 12 Projects of Speciality Fibres having application areas in Agriculture, Smart Textiles, Healthcare, Strategic Application and Protective gears were cleared. 4 Projects from Sustainable Textiles having application area in Agriculture and Healthcare Sector were cleared. Also, 5 projects from Geotextile, 1 from Mobiltech and 1 from Sportech were cleared. Member NITI Aayog (Science & Tech) & Principle Scientific Advisor (PSA) provided inputs pertaining to Technical Textile for the meeting along with Line Ministries. Various leading Indian Institutes including IITs, Government Organizations, and Eminent Industrialists, among others participated in the session which cleared projects strategic for the development of Indian economy and a step in the direction of Atmanirbhar Bharat, especially in the Healthcare, Industrial and Protective, Energy Storage, Agriculture and Infrastructure. While addressing the esteemed group of Scientists and Technical Technologists, Shri Piyush Goyal said, “Industry and Academia connect is essential for the growth of research and development in the application areas of Technical Textiles in India. Building convergence with Academicians, Scientists and Researchers is the need of the hour.” Shri Piyush Goyal emphasised on the importance of contributions of technology and segment experts, scientists and academicians to India’s technical textiles future growth. Shri Piyush Goyal highlighted that the technological gap in the country needs to be addressed in the field of technical textiles. Identification of the area of research in technical textiles with industry interaction and promotional activities like conferences, exhibition, and buyer-seller meet to promote the use of Technical Textile in the country and to increase the exports to be the key focus areas.
Source: PIB
The Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry on Friday notified the changes to the policy. The central bank allowed authorised banks in India to open special rupee Vostro accounts of correspondent banks of any partner trading country to facilitate trade in the Indian currency. The government has amended the Foreign Trade Policy to allow international trade invoicing, payment and settlement in the Indian rupee, activating the mechanism announced by the Reserve Bank ofIndia (RBI) to facilitate trade in the domestic currency. The Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry on Friday notified the changes to the policy. The central bank allowed authorised banks in India to open special rupee Vostro accounts of correspondent banks of any partner trading country to facilitate trade in the Indian currency. Under the arrangement, Indian importers will make payment in rupees into the special Vostro account of the partner country bank against the invoices for the supply of goods or services from the overseas seller or supplier, the trade policy said. "Indian exporters undertaking exports of goods and services through this mechanism shall be paid the export proceeds in Indian Rupees from the balances in the designated special Vostro account of the correspondent bank of the partner country," it added. Finance minister Nirmala Sitharaman had last week held a meeting to review the proposed trade in rupee and asked banks to speed up the process of opening special rupee Vostro accounts. The department of commerce has also been asked to reach out to traders to encourage them to adopt this route.
Source: Economic Times
Minister of State for Commerce and Industry Anupriya Patel along with Pan Sorasak, Minister of Commerce, Cambodia, co-chaired the meeting Trade ministers of India and 10-nation bloc ASEAN have endorsed the scope of review of the trade pact to make the agreement more industry friendly, the commerce ministry said on Friday. The issue was discussed during the 19th ASEAN-India Economic Ministers' meeting in Siem Reap City, Cambodia. The review would make the agreement modern with contemporary trade facilitative practices, and streamlined customs and regulatory procedures. "The ministers endorsed the scope of the review of the ASEAN-India trade in goods agreement to make it more user-friendly, simple, and trade facilitative for businesses, as well as responsive to the current global and regional challenges including supply chain disruptions,' it said. The ministers also activated a joint committee to undertake the review of the agreement expeditiously. The Association of Southeast Asian Nations (ASEAN)-India trade-in goods agreement was signed on August 13, 2009 and came into force on January 1, 2010. Ten ASEAN countries are -- Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Minister of State for Commerce and Industry Anupriya Patel along with Pan Sorasak, Minister of Commerce, Cambodia, co-chaired the meeting. The two-way trade has reached USD 91.5 billion in 2021, 39.2 per cent up from 2020.
Source: Business Standard
Maharashtra Textile Minister Chandrakant Patil has announced that the State Government will help the ailing textile mills as it is one of the major employment generating sectors. He further added that after agriculture, the textile sector provides the highest employment opportunities but many cotton mills and power looms are unable to operate due to various issues. Many cotton mills in the state have been in trouble since last many years. While some have shut their operations, others are on their way to closure. Maharashtra accounts for about 65 million kg of cotton production, which is 25 per cent of the country’s total. He concluded that he would visit the textile mills to understand the operational problem to resolve the issues.
Source: Apparel Resources
Ease of doing business for MSMEs: The state’s first Handicrafts Policy was also launched to boost employment opportunities for craftsmen and artisans. Ease of doing business for MSMEs: Rajasthan’s Industries and Commerce Minister Shakuntala Rawat on Saturday launched the state’s MSME Policy 2022 to provide financial and technical assistance with a conducive regulatory environment in order to enhance the contribution of MSMEs to the state’s Gross Domestic Product (GSDP) as well as exports. The policy envisaged the setting up of 20,000 new MSME units with a cumulative investment of Rs 10,000 crores and employment generation for 1 lakh people, said a statement by the state’s Department of Information and Public Relations. The policy also proposed to facilitate 9,000 MSMEs to obtain Zero Defect Zero Effect (ZED) certification. Launched in October 2016 by Prime Minister Narendra Modi, the ZED certification aims to help reduce wastage in the manufacturing process substantially, increase the productivity of MSMEs, enhance their environmental consciousness, save energy, expand their markets, etc., in order to boost MSMEs’ competitiveness. The minister, speaking at the Udyog Ratna and Export Promotion Awards in Jaipur, also launched the state’s first Handicrafts Policy to boost employment opportunities for craftsmen and artisans. Rawat said the policy will benefit artisans involved in textile, metal, wood, carpet, ceramic and clay, painting, leather craft, jewellery etc., and more than 50,000 new employment opportunities will be available in the coming five years. She added the policy aims at providing better marketing arrangements for the upliftment of handicrafts, reviving traditional and extinct arts, and creating new job opportunities. Industries and Commerce Department’s additional chief secretary Vinu Gupta said MSMEs are critical for last mile industrial development and employment generation in the state. The secretary said investment agreements worth Rs 11 lakh crore have been signed so far for the upcoming Invest Rajasthan summit scheduled on October 7 and October 8. Invest Rajasthan is the state’s investor outreach programme comprising domestic, national and international investor meets, embassy connect programs and virtual seminars to attract investments across sectors. According to the MSME Ministry’s 2021-22 annual report, Rajasthan had the ninth highest population of MSMEs with 26.87 lakh enterprises, contributing 4 per cent to India’s overall MSME base of 6.33 crore. In terms of employment, Rajasthan MSMEs employed 46.33 lakh people
Source: Financial Express
• President William Ruto said in his inauguration speech that the government will roll out labour intensive agro-processing industrialisation programme • This will start with the Dongo Kundu and Naivasha Industrial Parks, he said Kenya and India have partnered to promote trade and investment in the textile and manufacturing industry. The Kenya National Chamber of Commerce and Industry has signed a deal with an Indian company to facilitate this. KNCCI will become an official partner in the preparation and planning of the of India International Textile and Manufacturing Expo. This is set to take place in India from December 8 to 13. In his inauguration speech, President William Ruto singled out the textiles and apparel sector. He said his government “will leverage on competitive advantage in leather and textiles to roll out a labour-intensive agro-processing industrialisation programme". “This will start with the Dongo Kundu and Naivasha Industrial Parks,” he said. Industrialisation CS Betty Maina said the textiles and apparel sector is estimated to account for six per cent of the overall manufacturing sector. The sector contributes 0.6 per cent to Kenya’s GDP. “With a large and well-established apparel subsector, Kenya has become a leading exporter in Africa and top exporter to the US under the African Growth and Opportunity Act (AGOA),” the CS said. Her speech was read by Patricia Aruwa, deputy director Industries, on Friday during the ITME networking programme in Nairobi. According to the International Trade Centre (ITC), East Africa has become an emerging hub in Africa for sourcing apparel, and buyers have increasingly established regional sourcing offices in Kenya. Richard Ngatia, the chamber president, said the manufacturing and textile sector is expected to contribute significantly towards the attainment of Vision 2030. “The aim is to raise the share of the sector to GDP from the current 8.3 per cent to 15 per cent,” Ngatia. “As KNCCI, our focus is to urge private investors in the textile industry to take advantage of the opportunity as Kenya aims to increase the industry investment from $350 million to $2 billion and create 500,000 cotton jobs and 100,000 new apparel jobs,” he said. Ngatia said Kenya needs to create more business linkages with relevant Indian businesses and enterprises to increase the level of export. He urged private investors to take advantage of the deal to increase their levels of investment in manufacturing and textile industry. “This is a remarkable opportunity for Kenyan and Indian Investors in the textile and manufacturing industry to promote trade and investment for mutual benefit,” he said. “It is, therefore, our sole responsibility to ensure that we derive substantial benefit out of the upcoming expo,” he said.
Source: The Star
India’s growth is critically dependent on being globally competitive in both manufacturing and services Three years ago, India abruptly walked out of the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement among 15 nations, including China. The RCEP trade negotiations had been going on for nearly 10 years, during which India had been an active and enthusiastic participant. The present RCEP grouping represents about 30 per cent of global GDP and is rising. Intra RCEP trade without India is worth 2.3 trillion dollars. The RCEP agreement finally came into force on January 1 this year (they were waiting and hoping India would join). This agreement encompasses broad areas of cooperation and seeks to eliminate nearly 90 per cent of all tariffs, making it a sort of economic union. India’s apprehension and eventually not joining was perhaps due to a fear that Chinese goods would enter duty-free into India, swamping the home market. But our trade deficit with China has been growing steadily for the past three years, and even total trade volume has increased, notwithstanding the clash in Ladakh. India’s GDP growth also seems to be back on track toward a 7 or 7.5 per cent growth. India will eventually benefit from the ‘China plus one’ strategy of many global investors, as they seek to set up factories outside China, in other countries like Vietnam, Thailand or even India. By not signing the RCEP, India may have dented its chances of attracting investments in various parts of the manufacturing supply chain in sectors like electronics, textiles and automotive. That is because when investors choose to locate their investments, which span a whole value chain, and when the chain has to cross boundaries, they would choose to be inside RCEP territory to enable seamless movement of the goods. If India is outside the RCEP, it poses a disadvantage for investors in value chains, when the rest of the chain is in RCEP countries. So, by narrowly focusing only on the trade deficit aspect of RCEP, India may have missed the value chain bus. Also keep in mind, India already had a free trade agreement in place with 12 out of 15 countries before its decision to walk out. It has now also signed a free trade agreement with Australia, the 13th out of the 15 RCEP nations. There are three big trade groupings in the world which straddle big parts of Asia. Apart from the RCEP, the other two are the Comprehensive and Progressive agreement for Trans Pacific Partnership (CPTPP) and the Indo Pacific Economic Framework (IPEF). The IPEF, launched recently in May, includes 14 countries, and the CPTPP includes 11 countries. Australia, New Zealand, Malaysia, Singapore, Vietnam, Japan and Brunei are members of all three groupings. India is not present in two out of the three. China of course is not in the IPEF or the CPTPP, because these two groupings were brought together explicitly to keep China out. The CPTPP is a modified version of the TPP, which was led by the US under the leadership of President Barack Obama. But under President Donald Trump, the US withdrew from the TPP and has not rejoined the newly named CPTPP. It was meant not just to be a trade agreement, but to influence and shape the emerging trade rules in the Asian region, and to counter the clout of China. Thus it has provisions which cover investment rules, labour and environmental standards, greater integration of manufacturing value chains and so on. The CPTPP is ambitious and is now alluring enough for even China to be knocking on its doors. South Korea and the United Kingdom may be seeking entry too. Note that Japan now has a free trade agreement with the European Union since 2018. That means the EU too has a foot in. The United States is paying a price by being outside CPTPP (and of course the Chinadominated RCEP), in terms of lost trade opportunities, and decreased geopolitical clout. That explains the aggressive initiative it has taken in the formation of IPEF. This 14- nation grouping represents 28 per cent of GDP and a substantial trade volume too. It has four pillars, comprising trade, supply chains, tax & anti-corruption, and clean energy. The IPEF allows members to opt out of any pillar. Here, too, India displayed some squeamishness by opting out of the trade pillar. India’s trade minister said that since there were issues like labour and environmental standards, digital trade and public procurement involved, and around which there was no consensus among IPEF members, India had chosen to opt out. He also hinted that higher labour standards imposed by countries like the US and Japan could be detrimental to developing countries like India. That was effectively implying that India would choose to adhere to lower labour protection standards, or allow more “dirty” industries with lax environmental standards, to gain a competitive advantage in global trade. But those days are gone. And India has de facto agreed to harmonise labour and environmental standards with the West, since it is also pursuing a free trade agreement with the European Union. So what is the point of staying out of the trade pillar? Indeed, right after opting out of the RCEP, India has aggressively pursued bilateral free trade agreements with Australia, the United Kingdom, the UAE, Canada and the EU. Why then the hesitation when signing with regional and multilateral treaties like the IPEF? India’s growth is critically dependent on being globally competitive in both manufacturing and services. We also have to be committed to the principle of openness in international trade. Our tariffs should be moderate, and we have to desist from frequent and instinctive protective measures to shield our domestic industry from global competition. And with our commitment to employment generation (not just value addition), India can benefit more from global engagement. The window of opportunity due to ‘China plus one’ will not be open forever. Labour-intensive exports give us our competitive edge, be it in textiles, tourism, agro-processing or software services at the higher end. It is in our interest to embrace free or nearly-free trade across all sectors. In a world slowing down due to a recession, even if our share of trade goes up from 3% to 4%, that would be a huge boost for the Indian economy. And that is eminently feasible only if we are less afraid of open and free trade.
Source: Free press Journal
India's foreign exchange reserves fell further to a near two-year low of $550.87 billion as of September 9, from $553.11 billion a week earlier, RBI said The country's foreign exchange reserves declined by USD 2.234 billion to stand at USD 550.871 billion for the week ended September 9, the Reserve Bank of India (RBI) said on Friday. In the previous reporting week, the reserves had dropped by USD 7.941 billion to USD 553.105 billion. The fall in the reserves during the reporting week was on account of a dip in the foreign currency assets (FCAs), a major component of the overall reserves, according to the Weekly Statistical Supplement released by the RBI. The FCAs decreased by USD 2.519 billion to USD 489.598 billion in the reporting week. Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves. The value of the gold reserves increased by USD 340 million to USD 38.644 billion, the data showed. The Special Drawing Rights (SDRs) dropped by USD 63 million to USD 17.719 billion. The country's reserve position with the IMF was up by USD 8 million to USD 4.91 billion in the reporting week, as per the data.
Source: Business Standard
Alarm bells sounded for China's $18 trillion economy when trade data last week showed export growth well short of expectations and slowing for the first time in four months Alarm bells sounded for China's $18 trillion economy when trade data last week showed export growth well short of expectations and slowing for the first time in four months. BEIJING: China's exporters – the last reliable pillar of the world's second-largest economy as it struggled with the pandemic, weak consumption and a property crisis – are warning of hard times ahead as softer overseas markets force them to shed workers, shift to lower-value goods and even rent out their factories. Alarm bells sounded for China's $18 trillion economy when trade data last week showed export growth well short of expectations and slowing for the first time in four months. Those alarms are echoing in workshops across eastern and southern China's manufacturing hubs, in industries from machinery parts and textiles to high-tech home appliances, where businesses are scaling back while export orders dry up. "It is very likely China's exports will slow further or even contract in the coming months, as leading economic indicators point to a global growth slowdown or even recession," said Nie Wen, a Shanghai-based economist at Hwabao Trust. Exports are vital to China more than ever, with all other pillars of its economy on shaky ground. Nie estimates exports will account for 30-40% of China's GDP growth this year, up from 20% last year, even as outbound shipments slow. "We had no export orders in the first eight months at all," said Yang Bingben, 35, whose company makes industrial-use valves in eastern China's export and manufacturing hub of Wenzhou. He has let go all but 17 of his 150 workers and rented out most of his 7,500-squaremeter (80,730 square foot) plant. He sees little hope for the fourth quarter, typically his busiest season, and expects sales this year to drop 50-65% from last year, with the stalling domestic economy unable to take up any slack from the slump in exports. To support the sector, export tax rebates have been expanded, and a cabinet meeting chaired by Premier Li Keqiang on Tuesday pledged support for exporters and importers to secure orders, expand markets and improve the efficiency of port operations and logistics. China over the years has moved to ease its economy's reliance on exports for growth, and reduce its exposure to global factors beyond its control, while some low-cost manufacturing has been shifting to other countries such as Vietnam as China grows richer and its costs rise. In the five years before the pandemic, from 2014 to 2019, the share of exports in China's GDP shrank to 18.4% from 23.5%, according to World Bank figures. But that share edged back up with the emergence of COVID-19, reaching 20% last year, in part as locked-down, homebound consumers worldwide snapped up China's electronics and household goods. That also helped to buoy China's overall economic growth. The pandemic has come back to bite China this year, however. Its strict efforts to contain domestic COVID outbreaks led to lockdowns that disrupted supply chains and shipping. But much more ominous for exporters, they say, has been the slowdown in overseas demand, as the pandemic's fallout and the Ukraine conflict fuel inflation and tighter monetary policies that are depressing global growth. "Sliding demand for robot vacuum cleaners in Europe is beyond our expectation this year, with customers placing fewer orders and unwilling to buy expensive products," said Qi Yong, a Shenzhen-based exporter of smart home electronics. "Compared with 2020 and 2021, this year is the harder one, full of unprecedented hardship," he said. While shipments picked up this month in the run-up to Christmas, he said, sales may still drop 20% in the third quarter from a year earlier. He has cut 30% of his staff, to around 200, and may lay off more workers if business conditions require it. These retrenchments put further pressure on policymakers searching for new sources of growth in an economy burdened by a yearlong property slump and disruptions from Beijing's zero-COVID policy. Chinese companies involved in exporting and importing goods and services employ onefifth of China's workforce, supplying 180 million jobs. Some exporters are adjusting their operations in response to the slump by producing cheaper goods, but this too will eat into revenue. Miao Yujie, who runs an export company in eastern China's Hangzhou, said he has started to use cheaper raw materials and to produce lower-value electronics goods and clothing that would appeal to inflation-wary, price-conscious consumers. "There will be a big drop in exports in the second half of the year," Miao said.
Source: PIB
On the exchange rate, the report said the rupee was holding its poise, with adequate supplies of dollars The economy is poised to shrug off the modest tapering of the growth momentum in the first quarter, according to the Reserve Bank of India’s (RBI’s) state of the economy report, which has also hinted at a further tightening of the monetary policy, with the emphasis being on keeping inflation expectations anchored. “… front-loading of monetary policy actions can keep inflation expectations firmly anchored and reduce the medium-term growth sacrifice,” it said. The economy grew 13.5 per cent, lower than the RBI’s estimate of 16.2 per cent, in the first quarter this fiscal year. “Inflation remains elevated and above the tolerance level, underscoring the need for monetary policy to keep second order effects contained and inflation expectations firmly anchored,” the report said. The RBI has hiked the policy repo rate by 140 basis points to 5.4 per cent since May this year while the inflation rate has stayed stubbornly above its upper tolerance limit of 6 per cent. The consumer price index-based (CPIbased) inflation rate increased to 7 per cent YoY in August, staying above the upper tolerance limit of the central bank for the first eight months of 2022. “Loss of momentum in global economic activity may be taking the edge off inflation, which remains elevated. The Indian economy is poised to shrug off the modest tapering of growth momentum in the first quarter of 2022-23,” the report said. The report, authored by the RBI staff, including Deputy Governor (in charge of monetary policy) Michael Patra, observed aggregate demand was firm and poised to expand as the festival season set in. “Domestic financial conditions remain supportive of growth impulses,” it said. The state of the economy report in August had said CPI inflation had peaked that month. Referring to that observation, the September report said while inflation in August was “in line with that prognosis”, the fading away of the base effects pushed the headline inflation rate up by 30 basis points relative to July. “There is, however, a resurgence of food price pressures, mainly stemming from cereals even as fuel and core components provided a modest measure of respite,” it said. “With base effects being favourable in the second half of 2022-23, inflation should moderate, although upside risks are in the air.” The report also noted globally the slowdown in activity was taking the bite off inflation, proved by the estimated calculation that global inflation eased in July 2022 to 0.3 per cent on a monthly basis from an average of 0.7 per cent a month in the first half of the year. Commenting on domestic growth prospects, the report highlighted that the foodgrains production target of 328 million tonnes for 2022-23, only 4 per cent above last year’s output, appeared to be in striking range. The momentum of industrial production did turn negative in July 2022, but that was after seven months of continuous increase, it said. “Domestic financial conditions are engendering an environment in which the impulses of growth can be nurtured and strengthened,” the report said while observing bank credit was accelerating every fortnight and banks had beefed up efforts to mobilise deposits to fund credit growth. Metropolitan branches of banks, which account for over 60 per cent of bank credit and over half of bank deposits, have been the major drivers of growth in the banking business, the report said. Median term-deposit rates -- card rates on fresh retail deposits -- have increased by 24 bps between April and August 2022. The increase in interest rates on bulk deposits is even higher. “(The available) information indicates that major banks have increased their bulk deposit rates (1 to 2 year tenor) by up to 200 bps since April 2022,” the report said. On the exchange rate, the report said the rupee was holding its poise, with adequate supplies of dollars. “While on exchange rates, it is worthwhile noting in passing that India has the fifth largest reserves and is the fifth largest economy of the world – up from 6th – with a GDP of US $3.5 trillion in FY2022. Hence, there can be no disagreement with the statement of the Managing Director, IMF, that India continues to be a bright spot in the global economy, despite the global uncertainty and headwinds,” the report said. Foreign exchange reserves at $553.1 billion on September 2, 2022, were equivalent to nine months’ imports projected for 2022-23. The latest data released by the RBI on Friday showed the reserves were at $550.8 billion as on September 9.
Source: Business Standard
Pakistan’s trade with Southeast Asian bloc less than 1% Indonesia is a gateway to the $2.9 trillion economy of Asean region and Pakistan should tap it for trade and exports by developing close cooperation with Jakarta, said Indonesian Ambassador to Pakistan Adam M Tugio. Speaking at the PakistanIndonesia Joint Business Forum, organised by the Islamabad Chamber of Commerce and Industry (ICCI), the envoy said that China was enjoying bilateral trade of around $600 billion with the Association of Southeast Asian Nations (Asean), but Pakistan Asean bilateral trade stood negligible at less than 1%, which should be increased to achieve better results. He stressed the need for promoting cooperation among women entrepreneurs of Pakistan, Indonesia and Asean bloc that would give a boost to trade among those countries. “Indonesian embassy plans to organise a dialogue on economy involving B2B and G2G meetings besides holding an exhibition of products of both countries to highlight their potential,” said Tugio. The two sides identified real estate, construction, mines and minerals, textile, information technology, ecommerce, infrastructure development, tourism, women entrepreneurship, youth development and spices as potential areas of mutual cooperation. Big names in the real estate sector including J7 Group, Fair Deal, Star Marketing, Elaan Marketing and 5G Group gave presentations on their projects to highlight the opportunities of joint ventures and investment for Indonesian investors. Speaking on the occasion, ICCI President Muhammad Shakeel Munir pointed out that the combined population of Pakistan and Indonesia provided a huge market of around 500 million people, but their bilateral trade of around $4 billion didn’t reflect the actual potential. He underscored the need for diversification of trade and asked the two countries to finalise a free trade agreement to reduce trade barriers and boost commerce. Munir called for regular exchange of trade delegations to explore all untapped areas of cooperation between the two countries.
Source: Tribune
Regional trade not only offers the promise of economic growth but also acts as a cushion against incidents of climate disaster. Businessmen in Pakistan, hit by the recent flash floods, have urged the government to open trade with India through the Wagah border. The corridor is one of the most efficient trade routes to help with mitigating food insecurity and the economic crisis currently developing. Businessmen Group (BMG) Chairman, Zubair Motiwala and Karachi Chamber of Commerce and Industry (KCCI) President, Muhammad Idrees appealed to the government to “immediately allow the import of raw cotton and food items, including vegetables, fruits, grains and other essential products, from India through the Wagah border as Pakistan faces severe shortages caused by the devastating floods.” The BMG chairman pointed out that “in addition to the devastation caused and losses of up to billions of rupees, a food crisis has also been triggered as agricultural crops, land and livestock have been damaged and remain inundated.” “Raw cotton, dates, chilies, cauliflower, onions and other fruits and vegetables in Sindh and Balochistan have been destroyed. Therefore, it has become inevitable to open up the Wagah border and allow imports of agricultural crops from India so that our country’s food needs can be met. This offers us supplies within the shortest possible time at competitive rates from our neighbouring country,” he added. Speaking to the Express Tribune, Saqib Hussain, Senior Equity Analyst at Alpha Capital, said that “Due to shortages, food inflation was around 5% in the last two months, but due to the influx of vegetables from Afghanistan, prices have fallen.” “If the government allows further imports, it will cool down our inflation outlook going forward,” he added. “Moreover, Pakistan can import cotton from its neighbouring country as we are short on cotton, which is a basic raw material for the export-oriented textile industry. We have lost 20% of our cotton crop so we may need to import 6 million cotton bales. Textile companies are under the pressure of order completion and we fear that our companies will lose some orders and that impact will be apparent in next quarter’s results,” explained Saqib. The KCCI president Idrees stressed that the “government has to act promptly and sensibly in this regard to avert a severe food crisis. According to estimates, 65% of Pakistan’s main food crops including 80% of its wheat, rice and raw cotton have been completely swept away by the floods. In addition, more than three million livestock have also died.” “Given this scenario, the wisest move would be to import these products from India with lower logistic cost and time as compared to other countries,” he proposed. Pakistan Businesses Forum (PBF) CEO, Ahmad Jawad said, “Indian agricultural products can also be sourced from Dubai to improve the supply situation in the domestic market, in case Islamabad does not allow direct trade with India.” “However, that is not a cost-effective option,” he warned. “A better alternative is to import these products directly through the Wagah border, to save both time and money,” explained Jawad. AKD Securities CEO, Farid Alam also agreed with this proposal. “India is a big producer of vegetables and they are cost effective too. Plus, the freight cost is always the lowest in regional trade. However, the government should be careful in estimating the import demand and should ensure that inventories imported are used to manage supplydemand gaps only.” Highlighting that the sharp hike in the price of vegetables, and other commodities, made them unaffordable for the common man, Idrees stressed that, “The government must immediately allow agricultural imports from India so that prices can stabilise and people are saved from hunger and starvation.”
Source: Fashion United
The Free Trade Agreement (FTA) between India and Sri Lanka was the first-ever bilateral trade agreement for both countries, signed in 1998 and enforced in 2000. The pact is aimed at further boosting the economic ties between the two countries by liberalising trade norms The Free Trade Agreement (FTA) between India and Sri Lanka was the first-ever bilateral trade agreement for both countries, signed in 1998 and enforced in 2000. The pact is aimed at further boosting the economic ties between the two countries by liberalising trade norms. Sri Lanka is keen to upgrade the Indo-Lanka Free Trade Agreement into a comprehensive economic and technological partnership, President Ranil Wickremesinghe said on Friday, asserting that the work which started in 2018 and 2019 has not found much progress. The Free Trade Agreement (FTA) between India and Sri Lanka was the first-ever bilateral trade agreement for both countries, signed in 1998 and enforced in 2000. The pact is aimed at further boosting the economic ties between the two countries by liberalising trade norms. "Sri Lanka and India gradually have to wean themselves out of the barriers to investment and the non-tariff barriers to trade especially in relation to Sri Lanka Indo economic relations," Wickremesinghe said while addressing a gathering of the Sri Lanka-India Society to mark the 75th anniversary of Indian Independence. He said the future relations of India with its neighbours will be determined by trade integration. "Trade integration gives an economic base. The common economic base is a prerequisite for better national security and better political relations," he said. The first such step would be to revive and upgrade the FTA into a comprehensive economic and technological partnership. The FTA-related work which started in 2018 and 2019 has not found much progress, he said. Wickremesinghe said the second step was to look at all the projects which India and Sri Lanka had agreed to, but got delayed at the Sri Lankan end. Two key such projects are the power grid connection between India and Sri Lanka, offshore wind energy, a solar power plant at Sampur in the eastern province and renewable energy projects on three islands of Jaffna in the north, he said. "We have a tremendous scope of potential renewable energy, and India has stepped in first. There'll be others. But from Puttlam to Mullativu, if we exploit renewable energy and go in for green hydrogen and also provide power to India, you will see the upliftment of the Northern economy, which had not happened earlier. "The big impact on the northern economy and the implementation. Then we come to promoting Indian higher education institutes to come into Sri Lanka, especially Jaffna is one area we have identified, again another development," he said. Wickremesinghe referred to the Trincomalee oil storage tank farm development with India. "We are developing logistics because of the fact that we are one of the main ports for India and Bangladesh. So together with India, Adani Group has already taken over part of the West terminal of the south port," he said. Adani Group sealed a deal with Sri Lanka to develop and run the strategic Colombo Port's Western Container Terminal in September last year.
Source: Economic Times
In the US and Europe, a recession is coming. As an apparel maker, I can already feel the early signs of a storm heading our way. Orders have been decreasing for many of us in the industry since this summer, after picking up dramatically at the back end of last year. The issues around a recession are well-documented. High and rising inflation in the US and much of Europe; soaring energy prices that are placing businesses and households under huge financial strain; fallout from the pandemic, which means many governments have huge debts and are unable to do much more to bail out economies – all of these are factors. Most seasoned economic observers believe that 2023 will be tough. Perhaps the garment industry in Bangladesh could use the next 12-18 months to think carefully about which markets it targets. At the moment, there is a strong argument for suggesting it has too many of its eggs in one or two baskets, leaving it massively overexposed. Allow me to explain. At present, around 60 percent of Bangladesh's garment exports go to the EU. Twenty percent go to the US. The rest are exported globally. These figures have changed slightly in recent years, with the EU gaining a larger share (up from around 52 percent over the past decade) at the expense of the US, where exports have fallen in terms of market share. But between the two, these markets have for some time represented 80 percent of garment exports from Bangladesh. Is this healthy? On the one hand, it is a cause for celebration that we have been so successful in penetrating these two huge markets. On the other hand, no business wants to become over-reliant on certain customers or, in this case, certain regions of the world. This is why I believe, as apparel makers, we should begin to focus more heavily on new and emerging markets. Two obvious examples are India and China, although there are others such as Australia and South America. China and India are the only countries in the world with a population size of over a billion. China's population is around 1.4 billion, while India's population is approximately 1.39 billion. Together, the two countries make up around 36 percent of world population. To offer some perspective, the entire continent of Europe makes up only nine percent of the global population. This alone should be enough to make exporters sit up and take notice. More important than this, however, is spending power, which is increasing in both China and India. China is now the largest middle class market globally, with over 900 million people. According to some estimates, this middle class collectively spends more than USD 20 billion per day. There's more. China's middle class is expected to expand in the next few years. The World Bank suggests China's middle class is expected to grow by six percent and reach over 1.2 billion by 2030. By this year, it is estimated that the middle-class spending share in China will be 87 percent. This is a huge amount of spending power for Bangladeshi exporters to tap into. India's growing middle class also offers huge promise. India's middle class is expected to have a growth rate of 8.5 percent until 2030, according to the World Bank. At the present time, the middle-class population in India is almost 400 million. Obviously this is not as big as China's, but this figure is set to double between now and 2030, giving India a middle class population of 800 million within eight years. The middle-class spending share in India is currently over 70 percent and by 2030, the spending share of India's middle class is projected to reach over 80 percent. This distinction of middle class is important. As middle class populations grow, spending power increases. Countries with higher middle class populations have a higher propensity to import foreign goods. Expect imports into China and India to steadily increase over the next few years. So what next? I was encouraged recently to follow Prime Minister Sheikh Hasina's fourday trip to India. This is seen by many observers as the beginning of growing bilateral cooperation between the two neighbours. Much of the talk will have been about inward investment opportunities, but garment makers in Bangladesh should be following such talks closely. There is no reason why Bangladeshi garment makers should not view India as an opportunity for growth. We could also be doing more to increase our presence in China. China obviously has its own textile industry already, but this should not rule it out as an export opportunity for Bangladesh. In fact, we can compete very well with China on price and, in any case, China's textile sector is very focused on high-end and technical textiles. Bangladeshi garment makers could complement this work. In the coming months and years, I see a huge opportunity for Bangladesh to extend its export reach way beyond the US and EU. By limiting ourselves to these two markets, we are missing out on a whole world of opportunities. We are also leaving ourselves hugely exposed to economic shocks in the Western world. This is an unhealthy situation. As the last few years and the pandemic have shown, nobody can ever be quite sure of how global events might unfold in the future. It pays to hedge your bets as an exporter.
Source: The Daily Star
Last month, when gas wholesale prices reached the record level of 340€/MWh[1] – triggering also sky-high electricity prices – the European textiles industry called on the European Union to adopt a wholesale price cap for gas, the revision of the merit-order principle in the electricity market, support for SMEs and a single European strategy. On 14 September 2022, on the occasion of the State of the Union address by President Von der Leyen, the Commission announced initiatives aimed at tackling the dramatic energy crisis that the Europe is facing. We, the European associations representing the whole textiles’ ecosystem, welcome these proposals by the Commission to change the TTF benchmark parameters and decouple the TTF from the electricity market and the revision of the merit-order principle for the electricity market, which is no longer serving the purpose it was designed for. We also welcome the proposal to amend the state-aid framework that, in our view, should include the textiles finishing, the textiles services and the nonwoven sectors as well as a simplification of the application requirements. Furthermore, we call for a uniform implementation across the EU. However, we acknowledge that the Commission proposal lacks in ambition and – if confirmed – it will come at the cost of losing European industrial capacity and European jobs. Ultimately, Europe will remain without its integrated textiles ecosystem, as we know it today, and no mean to translate into reality the EU textiles strategy, for more sustainable and circular textiles products. An ambitious and meaningful European price cap on the wholesale price of natural gas is absolutely necessary. Europe is running out of time to save its own industry. It is now time to act swiftly, decisively in unity and solidarity at European level. We understand a very high price cap has been so far discussed among Ministries and that is not reassuring for companies across Europe: if any cap is, as expected, above 100/MWh, these businesses will collapse. Already in March 2022, with EU gas wholesale prices at 200€/MWh, the business case for keeping textiles production was no longer there. To date, natural gas wholesale prices have reached the level of 340€/MWh[2], more than 15 times higher compared to 2021[3]! Currently, many businesses have suspended their production processes to avoid the loss of tens of thousands of euros every day. We hope this will not become the new normal and – to reduce the likelihood of such a scenario – we call on the Commission, the EU Council and the Parliament to swiftly adopt decisive, impactful and concrete actions to tackle the energy crisis and ensure the survival of the European industry. Given the dire international competition in which the EU textiles industry operates, it is not possible to just pass on the increased costs to consumers. Yet, with these sky-high prices, our companies cannot afford to absorb those costs. The EU textiles companies are mainly SMEs that do not have the financial structure to absorb such a shock. In contrast with such reality in Europe, the wholesale price of gas in the US and China is 10€/MWh, whereas in Turkey the price is 25€/MWh. If the EU does not act, our international competitors will easily replace us in the market, resulting in the deindustrialisation of Europe and a worsened reliance on foreign imports of essential products. Specific segments of the textile industry are particularly vulnerable: • The man-made fibres (MMF) industry for instance is an energy intensive sector and a major consumer of natural gas and electricity in the manufacturing of its fibres. Not only is it being affected by higher energy process, it is also experiencing shortages and sharply rising costs of its raw materials. • For the nonwovens segment, production processes – which use both fibres and filaments extruded in situ – are also highly dependent on gas and electricity. Polymers melting and extrusion, fibres carding, web-forming, web-bonding and drying are energy-intensive techniques. Nonwoven materials can be found in many applications crucial to citizens like in healthcare (face masks) or automotive (batteries). • It also is to be noted that for some segments the use of gas has no technological substitute: for example, the dyeing and finishing production units make very intense use of gas. These production units are mainly composed by boilers and driers, which only work on gas and there is no alternative technology. • The textile services sector is also struggling: with the critical nature of the service they provide, they require a considerable amount of energy to keep services, particularly hospitals and care homes stocked with lifesaving material as well as clothing and bed linens for the patients themselves. Losing these businesses would cause a lack of clothing for healthcare professionals, including protective sanitary gowns for surgeons, nurses and doctors, uniforms including other forms of personal protective equipment.
Source: Fashion United
War-hit Ukraine’s textile imports are back on track. Latest figures indicate that normal trading activities have been restored, at least for textile imports. The monthly imports of apparel are now close to the pre-war levels and amounted to $71.808 million in June 2022. Home textile imports are also rising but are still below the pre-war levels. Ukraine’s apparel imports were $71.808 million in June 2022 which is close to the imports of January 2022 when the figure touched $72.603 million, according to Fibre2Fashion’s market insight tool TexPro. The apparel imports slowed to $59.438 million in February and $17.296 million in March 2022, however, they recovered to $64.288 million in April and were at $63,843 in May 2022. The imports decreased to $349.278 million in January-June 2022 from $507.941 million during the same period last year. The country’s total apparel imports were valued at $861.902 million in 2021, $706.261 million in 2020, $767.132 million in 2019 and $502.617 million in 2018. The country’s home textile imports were $23.947 million in June 2022 which has recovered but still well below the imports of $33.445 million in January 2022. The home textile imports were slightly better in February at $34.371 million but reduced to $3.730 million in March 2022. It recovered again to reach $9.841 million in April and $18.685 in May 2022, as per TexPro. Home textile imports decreased to $124.021 million in January-June 2022 from $219.799 million during the corresponding period of last year. The country’s total home textile imports were valued at $397.697 million in 2021, $402.092 million in 2020, $390.740 million in 2019 and $312.246 million in 2018.
Source: Fibre 2 Fashion
Việt Nam's economy has a positive outlook for 2022 despite the emergence of Omicron subvariants, global geopolitical tensions and mounting input costs, according to Nguyễn Quốc Việt, deputy head of the Vietnam Institute for Economic and Policy Research. He was speaking at the workshop "Inflation in 2022: Impacts and policy recommendations" held yesterday. Việt said inflationary pressures have begun to build up but the situation is under control so far. Eight-month Consumer Price Index (CPI) rose by just 2.58 per cent year-on-year, well under the target of 4 per cent. GDP growth hit 7.7 per cent in Q2, the highest quarterly growth in ten years. Eightmonth Index of Industrial Production was 8.3 per cent higher than the same period in 2021. Exports fared quite well amid the global trade downturn with an eight-month revenue of US$250.8 billion, up 17.3 per cent year-on-year. Of which, textiles are expected to keep riding high in the rest of 2022 thanks to free trade agreements. He opined that the inflationary pressures would abate should global food and fuel prices cool down and supply chain disruptions improve in the short term. He forecast Việt Nam's inflation would stay at around 3.3 and 3.8 per cent this year. Regarding the disparity between consumers' perceived inflation and the General Statistics Office (GSO)'s estimated inflation, Việt told Việt Nam News that the disparity can be attributed to the under-weighting of fuels, foods, and transportation costs in the CPI basket. "The weights assigned to fuels, foods, and transportation costs in CPI basket in Việt Nam are lower than those in ASEAN+3," he said. Cấn Văn Lực, chief economist of the BIDV, suggested the use of the Producer Price Index and Core Inflation in addition to CPI to trace the real causes of inflation, which could be cost-push or monetary. He said inflation in Việt Nam has not reached its peak due to time lags and forecast that inflation would rise further towards year-end. Regarding weights assigned to items in the CPI basket, he said the weights are adjusted in every five years. For example, the weight of foods is 33.6 per cent currently, against the previous weight of 36 per cent. He also opined that the Government has done quite well in curbing inflation via fuel price stabilisation and food supply control. The two measures were highly effective against rising prices because transportation costs, food prices and construction material prices made up 90 per cent of the rise in CPI. Economic expert Vũ Đình Ánh asserted that Việt Nam put macro-economic stability at the top of the agenda. Fast economic growth at the cost of stability is never an option. "We have had to pay a heavy price for the macro-economic instability between 2006 and 2011," he said. The expert is all for higher caps on credit growth. He underscored credit growth caps as an administrative tool to raise total credits, which, he believed, is safer than marketbased tools in term of systematic stability. He also said the tool could facilitate banking system's restructuring by giving higher credit quotas to healthy banks and lower credit quotas to less heathy ones, thereby encouraging sector competition.
Source: EIN News
