Even before the pandemic struck, textile and garment exports shrank 8.6% year on year to $33.7 billion in FY20. The government will likely relax two of the most critical criteria when it launches the second production-linked incentive (PLI 2.0) scheme for the labour-intensive textiles and garment sector, acceding to industry requests. It could allow cotton-based players to take advantage of the scheme, and drastically reduce the turnover and investment limits to enable even medium enterprises to set up units under it, sources told FE. The Centre had launched the first PLI scheme for only technical textiles and man-made fibre-based players who were willing to commit large-scale investment of at least Rs 100 crore and annual turnover of Rs 200 crore each. In the new PLI scheme for the sector, the minimum investment will likely be as low as Rs 15 crore for companies to qualify for the incentives. There could be two other investment brackets -Rs 30 crore and Rs 45 crore. The annual turnovers have to be double of the investment limits. However, the maximum incentive may be kept at 10%, against 15% in the PLI1.0. Of the Rs 10,863 crore allocated last year for the PLI scheme for the textiles and garments sector (for a five-year period), the incentive offtake under the first programme is expected to be about Rs 6,013 crore. This leaves the scope for another PLI scheme for the sector. Under the PLI 1.0, the government has already selected 61 companies – including Shahi Exports, Arvind Mills, Gokaldas Exports and Monte Carlo – under its first PLI scheme for man-made fibre and technical textiles products. Incentives of Rs 6,013 crore will be extended to them over five years. It (PLI 2.0) is still at the draft stage. Stakeholders are being consulted. A final decision will be taken in due course,” said an official source. The textiles and garments sector, comprising mainly MSMEs and dominated by cottonbased players, has been seeking the inclusion of cotton players, along with a reduction in high turnover and investments limits, in the PLI scheme, to benefit a wider pool of businesses. These demands, however, go against the government’s initial intent of luring mainly large companies to create few champions in key sectors through various PLI schemes. In textiles and garments, it also seeks to correct India’s historical policy bias towards cotton-based value chain that is, in fact, contrary to the global consumption pattern. The idea is to reclaim India’s export markets after ceding substantial ground to Bangladesh and Vietnam in recent years. But the likely change in the government stance comes from the realisation that its first PLI scheme for the sector kept out a significant number of players, mainly MSMEs. Given the employment potential of the sector, the government is considering the change, said the sources. Commerce, industry and textile minister Piyush Goyal had in June said the government was planning to roll out the second PLI scheme following good response to the first such programme. Even before the pandemic struck, textile and garment exports shrank 8.6% year on year to $33.7 billion in FY20. As such, the sector’s share in the overall merchandise exports has been sliding consistently in recent years, having dropped from as much as 13.7% in FY16 to just 10.8% in FY20, the lowest in around a decade. Last fiscal, such exports jumped by 41% to about $43 billion, albeit on a contracted base. However, such exports have come under pressure this fiscal, given the slowdown in key markets such as the US and the EU. They dropped over 4% on year until August this fiscal to almost $16 billion.
Source: Financial Express
The proposed comprehensive free trade pact between India and the United Kingdom, likely to be signed by next month’s end, could accelerate joint ventures and boost bilateral investments, the head of the body promoting bilateral trade said on Thursday. Richard Heald, executive chair of the UK India Business Council (UKIBC) said negotiation teams were working overnight to meet the deadline of Diwali, the Indian festival of lights falling on Oct. 24, as political leaders had already given a go-ahead. “Negotiations teams no more have negotiation rounds, they are working 24X7,” to finalise the pact, he told Reuters in an interview noting UK businesses looked forward to collaborating with Indian companies in renewable energy, autos, education, health care and defence sectors once the pact was signed. Prime Minister Narendra Modi earlier this month held a telephone conversation with his UK counterpart Liz Truss and exchanged views on further strengthening the IndiaUK comprehensive strategic partnership in all sectors. India expects to increase exports of leather, textiles, jewellery and food products besides more visas for Indian students and businesses. India’s merchandise exports to the UK rose over 28% to $10.5 billion in 2021/22 financial year ending March, while imports rose to $7 billion. Both countries launched negotiations in January this year for the trade pact that aims to double bilateral trade to $100 billion by 2030. UKIBC, which provides inputs to both countries on trade, expects the agreement would also address non-trading barriers and facilitate ease of doing business, besides “sensitive” issues of data protection as well, Heald said. “I can see there could be a chapter on continuing progress on ease of doing business and that would focus certainly on areas such as deregulation.” Leading Indian companies were already setting up research and design facilities in Britain to develop their own technologies, particularly for batteries for electric vehicles, and in other sectors like health care, he said. “It is that sort of facilitation that FTA can stimulate.”
Source: Euro News
Pharma, G&J, marine, agri, textiles, leather, engineering, electronics and telecom, tourism, IT/ITES, health care, financial services to be focus sectors To inspire exporters to dream big, the new Foreign Trade Policy (2022-27), expected to be announced later this week, is likely to feature a ‘vision statement’ laying the roadmap for increasing India’s share in world trade to 10 per cent of global trade by 2047 and 3 per cent by 2027 from the existing 2.1 per cent, a source has said.
Source: The Hindu Business Line
The government has signed six MOUs with different companies to work on the production of textiles from natural resources. The Tamil Nadu is all set to invest in the upliftment of the state's textile industry. The announcement was made by the Department of Handlooms and Textiles during the twoday Global Spin Trade Conclave and Exhibition in Chennai. As per the department, it is invested to make the state leader in the Textile industry. As per the plan, the government shall be making a significant investment in the Textile industry to increase its productivity. In a bid to do this, it has signed six MOUs with different companies for producing textiles from natural fibers, using Kalamkari paintings in sarees, and so on. Talking to the media, M Vallalar, Commissioner of Textiles said that, "Tamil Nadu is not the leader in technical textiles. In fact, Tamil Nadu is lacking in technical textiles, but it is open to change and is welcoming investments. The State government is developing the technical textiles policy and the policy will soon be launched. Further, he said, at present, India lags behind China and Europe which are leading 50 percent of total global textile production. Hence, the department will be conducting regular seminars to attract investments from international technical textiles. He also lauded the state government's effort to launch the mini textile parks scheme. The government is going to offer a 50% subsidy to those companies that register under this park. He also invited entrepreneurs to invest in technical textiles production in the State. Rajeev Saxena, Minister of Textile also lauded the central government's effort to make a leader in the textile industry. The Indian government is also planning to organise an international seminar on technical textiles in the near future.
Source: One India
At the same time, fears of elevated import costs may force the fiscal authority to further initiate measures to ease supply-side bottlenecks in the domestic market to control price pressure. Any review of the hike in export duties on certain steel products and iron ore, and the ban on wheat and broken rice exports is unlikely to materialise anytime soon, despite industry demand. A weakening rupee, on the back of sticky wholesale price and retail inflation, will complicate the task of both the government and the Reserve Bank of India and may prompt the monetary policy committee (MPC) to go for another round of aggressive rate hike of 50 basis points or more, when it meets next week. At the same time, fears of elevated import costs may force the fiscal authority to further initiate measures to ease supply-side bottlenecks in the domestic market to control price pressure. Any review of the hike in export duties on certain steel products and iron ore, and the ban on wheat and broken rice exports is unlikely to materialise anytime soon, despite industry demand. Economists that FE spoke to said the depreciating rupee will also proportionately offset the benign impact of the recent easing in prices of certain commodities like oil and metals globally. The fears of “imported inflation” have intensified now, as purchases of commodities ranging from crude oil, edible oil, coal and fertilisers to finished products like electronics and capital goods from overseas are set to turn more expensive. High coal import costs may also feed into electricity rates. The rupee hit a fresh trough of 81.09 against the dollar on Friday, having lost 124 paise against the American currency in the last three sessions, as aggressive rate hikes by the US Federal Reserve and escalating geopolitical tension in Ukraine bridled risk appetite. Since the currency has breached the psychological 80-per-dollar barrier, it may fall further and find some support at 81.5 or 82, some analysts said. The pass-through of elevated input rates to output price is set to last longer than anticipated. Oil-marketing companies, which haven’t passed on the entire cost to consumers yet, are unlikely to cut petrol and diesel rates in sync with the drop in global crude oil prices, to recoup losses, the economists said. Devendra Kumar Pant, chief economist at India Ratings, said while most commodity prices globally have declined from their peaks, they are still elevated and are higher than the year-ago levels. A weak rupee further aggravates this situation. “Even with flat yearon-year growth in the dollar prices, currency weakness (in India) will add to inflation (compared with a year before),” Pant said. DK Joshi, chief economist at Crisil, said: “Weakening of the rupee, if sustained, will raise the imported component of inflation by partly offsetting some of the gains from the recent decline in crude and commodity prices. (However) A transitory episode of the rupee weakening is unlikely to have any noticeable impact on inflation.” Retail inflation reversed a three-month declining trend and rose to 7% in August, from 6.71% in the previous month. Aurodeep Nandi, India economist at Nomura, said, “Typically, a 5% depreciation of the rupee has an inflationary impact of around 20 basis points, so it somewhat adds to upside risks to inflation, although we do not think it stands to materially disrupt the current trajectory. We expect CPI inflation to average 6.8% in FY23 (against 5.5% in FY22).” Yes Bank chief economist Indranil Pan said the good thing now is that commodity prices globally have come down due to recession fears (else inflation fears would have been even higher). “Further, there are moderations to the food inflation and some indications are seen with respect to supply chains easing,” he said. Pan conceded that there is still a long way to go for the full unwind to happen and for inflation to come down globally. “In India, the government has also stepped in strongly to help the RBI in its fight to contain inflation. We continue to expect inflation at an average of 6.7% for FY23 (against 5.5% in FY22),” he added.
Source: Financial Express
Reliance Industries Limited (RIL), India’s largest player in polyester value chain, has lowered the prices of purified terephthalic acid (PTA), monoethylene glycol (MEG) and MELT. According to trade sources, drop in prices of polyester raw materials were due to dip in sea freight charges and cheaper crude oil. Last week, RIL had raised prices of MEG and MELT. According to the market sources, RIL fixed PTA price at ₹84.10 per kg (-1.50), MEG at ₹56.60 per kg (-0.80) and MELT ₹91.57 per kg (-1.56). New pricing of polyester raw materials will come into effect from the coming Saturday, i.e., September 24, 2022. In the beginning of second fortnight of this month, the company had decreased the price of polyester spun fibre (PSF) by ₹3 per kg to ₹110 per kg from the previous price of ₹113 per kg. The market takes cue from the prices of RIL. The company reviews global market conditions, price trend in China and fluctuation in crude oil prices to determine prices of polyester raw materials.
Source: Fibre 2 Fashion
Ease of doing business for MSMEs: PM Modi also requested people to pledge to “intensify the campaign’ on the occasion of Gandhi Jayanti this year by purchasing local products. Ease of doing business for MSMEs: Prime Minister Narendra Modi on Sunday urged people to ‘break all records’ in buying khadi products and handicrafts this festive season as part of the Vocal for Local campaign. In his monthly radio programme Mann Ki Baat, PM Modi said “this campaign is also special because during the Azadi Ka Amrit Mahotsav, we are also onwards with the goal of a self-reliant India. Which, in the real sense, will be a true tribute to the freedom fighters. That’s why I request you to break all the records this time to buy these products of Khadi, handloom or handicrafts.” PM Modi also requested people to pledge to “intensify the campaign’ on the occasion of Gandhi Jayanti this year by purchasing local products. “After all, the true joy of this festival is also when everyone becomes a part of it. Therefore, people associated with the work of local products also have to be supported by us. A good way is to include these types of products in whatever gifts we give during the festival,” he added. The Prime Minister urged the use of non-plastic bags to promote traditional bags made of jute, cotton, banana fibre, etc. The festive season this year is expected to see 28 per cent growth in e-commerce sales to $11.8 billion from last year’s festive season, according to consulting firm Redseer. The first week of the festival season, which began with online sales by Amazon and Flipkart on September 23, is expected to garner sales of $5.9 billion. Fashion, mobiles, electronics, and large appliances are expected to be among the top categories. Meanwhile, khadi and village industries had clocked Rs 1.15 lakh crore turnover in FY22 on the back of the government’s aim to promote khadi, compared to Rs 95,741 crore in FY21. In June this year, Textiles Minister Piyush noted that the government has a database of 30 lakh artisans and “if we could focus on increasing the income of the artisan by even Rs 1000 per month, it could lead to transformation in their lives.” Handicraft exports had surged from Rs 25,680 crore in 2020-21 to Rs 33,253 crore in 2021-22
Source: Financial Express
“Make In India has substantial accomplishments across 27 sectors. These include strategic sectors of manufacturing and services as well,” the commerce and industry ministry said in a statement. The government on Saturday said that the ‘Make in India’ initiate to boost manufacturing in the country completes eight years on September 25 with annual foreign direct investment (FDI) doubling to $83 billion. It also said that on the back of economic reforms and Ease of Doing Business in recent years, India is on track to attract $100 billion FDI in the current fiscal. Make In India has substantial accomplishments across 27 sectors. These include strategic sectors of manufacturing and services as well,” the commerce and industry ministry said in a statement. FDI inflows in India were at $45.15 billion in 2014-2015 and have since consecutively reached record FDI inflows for eight years, it said. The year 2021-22 recorded the highest ever FDI at $83.6 billion. This FDI has come from 101 countries, and invested across 31 UTs and States and 57 sectors in the country,” it said. There are several trends that mark a shift in Indian manufacturing, which includes increase in domestic value addition & local sourcing, a greater focus on R & D, innovation and sustainability measures. It said the the Production Linked Incentive (PLI) scheme across 14 key manufacturing sectors was launched in 2020-21 is a big boost to the Make in India initiative. The PLI scheme incentivises domestic production in strategic growth sectors where India has comparative advantage. This includes strengthening domestic manufacturing, forming resilient supply chains, making Indian industries more competitive and boosting the export potential. The PLI scheme is expected to generate significant gains for production and employment, with benefits extending to the MSME eco-system. Recognising the importance of semiconductors in the world economy, the government has launched a $10 billion incentive scheme to build a semiconductor, display and design ecosystem in India. Complemented by sincere efforts of domestic toy manufacturers, the growth of the Indian toy industry has been remarkable in less than two years despite the Covid-19 pandemic.
Source: Economic Times
An Australian delegation, comprising 106 companies, will visit India this week to explore supply partnerships with companies, including Ola Electric Mobility, Tata Chemicals and Aditya Birla Group. The Australian companies will also scout for opportunities in critical minerals, digital health, infrastructure and agri-food sectors. The initiative is part of the Australia India Business Exchange (AIBX) programme. The delegation will be led by the Australian Trade and Investment Commission (Austrade). In April, India and Australia had signed the Economic Cooperation and Partnership Agreement (ECTA). The interim trade agreement was to be followed by a comprehensive deal by the end of this year. However, the deal is now likely to be implemented by February after the Australian Parliament ratifies it in January, said Denise Eaton, trade and investment commissioner, Australia in an interview. She attributed the delay to elections and forming of a new government in Australia. “The visit is about progressing the ECTA signed in April and will help Australia access India’s market…It offers Australian exporters an enhanced opportunity for trade diversification," said Eaton. The delegation will visit Ola’s new battery Innovation Centre in Bengaluru and its future factory in Tamil Nadu, she said. It will explore commercial and economic collaboration in the critical minerals sector, including lithium, graphite, cobalt, nickel, and titanium, she said. Under ECTA, India has either eliminated, or greatly reduced tariffs on minerals, creating opportunities for both Australian and Indian companies. It complements India’s renewable energy objective of becoming carbon neutral by 2030. India is Australia’s eighth-largest trading partner, and the in the energy and resources market, India is its fifth largest exporting market. “So, this is all about building on the discussions and the relationships that have taken place to date to ensure we have some economic and commercial collaborations or strengthening that collaboration," said Eaton. A report by Austrade in 2021, titled “Unlocking Australia-India critical minerals partnership potential", had identified critical minerals of importance to both nations such as lithium, graphite, cobalt, nickel, titanium, and vanadium, besides light and heavy rare earths. “They are in monitors, in our headphones, in electric vehicles and alloys that go in defence equipment and aerospace sectors. They also go in solar panels and wind turbines," said Eaton.
Source: Live Mint
Saree is the most dominating product in the global Indian apparel market. According to an analysis of market data, the annual market growth of saree is estimated at 8.06 per cent YoY during the period 2018-2023. Saree’s market share was 19,187.50 million metres (42.22 per cent) out of total Indian apparel market of 45,535.83 million metres in 2021. The global market size of saree was 13,217.34 million metres in 2016. The market size will reach 22,546.37 million metres in 2023 with an annual growth rate of 8.06 per cent during 2018-2023, according to market data of Fibre2Fashion’s market insight tool TexPro. There are few other textiles products that are likely to have double digit annual growth during 2018-2023 in the Indian apparel market. These are Jeans (13.77 per cent), underwear/panties (13.41 per cent), T-shirt (12.41 per cent), brassieres (12.06 per cent), frocks (11.60 per cent) and salwar, kameez & LDM (10.12 per cent), as per TexPro. The total market size of Indian apparel will grow annually at 8.48 per cent during 2018- 2023 and will reach at 53,951.10 million metres from 35,915.97 million metres in 2018. The market size was 30,851.57 million metres in 2016.
Source: Fibre 2 Fashion
Indonesian Trade Minister Zulkifli Hasan met with Canadian Minister of Trade, Small Business, Export Promotion, and International Trade, Mary Ng, in Nusa Dua, Bali, to discuss strengthening trade relations between the two countries. The meeting was related to the framework of the Indonesia-Canada Comprehensive Economic Partnership Agreement (ICA-CEPA) on which the third round of negotiations will be held virtually from October 31–November 4, 2022. “The meeting was productive and both parties showed the flexibility to find common ground on various issues. Several working groups will hold an intercession before the third round of negotiations to speed up the progress of the negotiations," Hasan informed in Bali on Friday. The meeting was held on the sidelines of the G20 Trade, Investment, and Industry Ministerial Meeting (TIIMM) in Nusa Dua, Badung, Bali, from September 21–23. During the meeting, the two ministers discussed improving trade relations between Indonesia and Canada, in bilateral, regional, and multilateral forums. Canada also expressed interest in bringing beef and live cattle to Indonesia. Hasan lauded Canada's openness and flexibility in approaching Indonesia, in particular, on new issues negotiated at the ICA-CEPA, such as employment, environment, and inclusive trade. "Therefore, negotiations need to be continued in a collaborative spirit," he said. The trade minister welcomed Canada's interest in bringing beef and live cattle to Indonesia. However, to supply meat, Canada will have to meet health regulations, product safety, and halal requirements formulated by the Ministry of Agriculture and the Ministry of Religious Affairs, he said. "For this reason, Canada should coordinate with the Ministry of Agriculture and the Halal Product Assurance Agency of the Religious Affairs Ministry to be able to immediately supply the meat to Indonesia," Hasan informed. In the January–July 2022 period, the total trade between Indonesia and Canada was recorded at US$2.41 billion, up 38.03 percent from the same period in 2021. Meanwhile, in 2021, the total trade between the two countries reached US$3.12 billion, an increase of 29.57 percent from US$2.40 billion the previous year. Indonesia's main exports to Canada include natural rubber, textiles, vehicle parts, rubber tires, and footwear. Meanwhile, Indonesia's main imports from Canada include wheat and machinery, mineral fertilizers, chemical wood powder, soybeans, and iron ore. In the field of investment, Canada occupies the 17th position as a source of foreign direct investment for Indonesia. In 2021, the country recorded an investment of US$182.1 million in 126 projects in the main mining sector; housing, industrial, and office areas; as well as other services. In the five years from 2017 to 2021, Canada invested a total of US$800 million in 691 projects in Indonesia.
Source: Live Mint
A High powered business delegation from India’s Dhronacharya International Business Council, will be in Sri Lanka from September 27 to explore trade and investment opportunities in Sri Lanka. Business delegates are composed of importers/exporters and potential investors from the industry mix of food & agricultural products trading, textile manufacturers, auto component manufacturers, IT products and services, civil construction, building materials, electrical services, media equipment, and engineering institutions owners etc. The National Chamber of Commerce of Sri Lanka will host this delegation on September 28 and will conduct a B2B session for the Sri Lankan corporate/business community from 4.00 p.m. onwards at the National Chamber Auditorium.
Source: Daily News
The Philippine Exporters Confederation Inc. (PHILEXPORT) recently said at least nine multinational corporations have expressed keen interest to set up textile or garment units in the country as part of their expansion plans. Four are from Cambodia, three from India and two from Vietnam, Robert Young, PHILEXPORT trustee for textile, yarn and fabric, said. Potential investors will conduct an ocular trip for assessment—probably before the year ends—which will be followed by a project study, Young, who is also president of the Foreign Buyers Association of the Philippines (FOBAP), said. These companies indicated their intentions to invest in the Philippine garments and textile industry during their one-on-one business-to-business (B2B) meeting as part of the 54th ASEAN Economic Ministers Meeting and related meetings held in Cambodia this month. He said these planned investments are expected to generate about 9,000 jobs initially, and raise annual garments and textile exports by $500 million. An ideal textile fabric mill would have an investment of minimum $1 million, while a garment apparel factory would be from $300,000 to $500,000, Young was quoted as saying by a Philippine media report. The country’s garments and textile industry exports are estimated at $1.5 billion, with an annual growth rate of 10 per cent.
Source: Fibre 2 Fashion
Economic growth in China is expected to moderate to 3.3 per cent this year, amid restrictions related to the COVID-19 pandemic and tepid consumer demand, according to a new report by the Asian Development Bank (ADB). China’s economy is forecast to grow 4.5 per cent in 2023, according to the recently released Asian Development Outlook (ADO) 2022 Update. The COVID-19 pandemic continues to weigh on consumer confidence in China. External trade is projected to moderate in the second half of 2022, as demand for consumer goods softens in advanced economies amid rising inflation and energy prices. “Growth has slowed sharply as COVID-19 lockdowns disrupted economic activity,” ADB Officer-in-Charge for China Hao Zhang said in a press release. “However, we expect economic growth to pick up in the second half of this year, with services recovering in line with improving household demand.” Consumer price inflation in China is forecast to average 2.3 per cent in 2022 and 2.5 per cent in 2023. Risks to China’s outlook include renewed outbreaks of COVID-19, which have prevented domestic consumer demand from fully recovering; further deterioration in the property market; and mounting risks in the financial system—especially at smaller banks, which could temporarily disrupt the market and trigger policy interventions. Strains on global value chains, caused by temporary supply shortages or transport bottlenecks, and slower-than-expected growth in advanced economies could also further dampen external trade.
Source: Fibre 2 Fashion
Experts have advised Vietnamese textile-garment and leather-footwear firms to improve the sustainability of their production for export to the European Union (EU) after the European Commission (EC) proposed the goods must comply with ecological design criteria. Experts have advised Vietnamese textile-garment and leather-footwear firms to improve the sustainability of their production for export to the European Union (EU) after the European Commission (EC) proposed the goods must comply with ecological design criteria. Earlier this year, the EC proposed a new strategy to make textiles more durable, repairable, reusable and recyclable, to tackle fast fashion, textile waste and the destruction of unsold textiles, and ensure their production takes place in full respect of social rights. Europe is a traditional and key market for Vietnam’s textile and footwear industries, especially with the EU-Vietnam Free Trade Agreement (EVFTA). Phan Thi Thanh Xuan, Vice Chairwoman and Secretary General of the Vietnam Leather Footwear and Handbag Association (LEFASO), said to meet the EU market’s requirements, local businesses must improve the quality of their human resources and production facilities, and employ clean energy and green technology. Xuan noted the leather and footwear industry has so far made good use of the EVFTA. Turnover from shipments to the EU now makes up 30% of Vietnam's total export value, an increase from the previous proportion of 25-28%. Regarding exports to the bloc, in addition to ensuring product origin and the use of recycled materials, meeting labour and environmental standards is essential, she said. Echoing the view, Vu Duc Giang, Chairman of the Vietnam Textile and Apparel Association (VITAS), said an important solution is to invest in technology because it will help solve the labour deficit and environmental problems. According to Giang, the number of textile enterprises using clean energy has increased to 60-65%, either via buying electricity or investing in installing solar energy projects. Giang predicted that in the next five to seven years, 100% of textile and garment companies can fully meet the clean energy target. Experts said in the long run, improving product quality is key to ensuring sustainable export growth. The work requires efforts from enterprises and state management agencies, and incentives to encourage investment in supporting industries and material supply centres. The EU is tightening standards on environmental protection, so localities should promote the building of modern specialised waste treatment systems, they advised.
Source: Vietnam Plus
