The problem of inverted duty structure arises when the finished product is at a lower tax bracket compared to the input raw materials The Committee on Labour, Textiles and Skill Development has endorsed the need to rationalise duties on raw material inputs to man-made textiles to correct the inverted duty structure, a year after a similar decision was reversed by the Goods and Services Tax (GST) Council. In its report on the development of man-made fibre (MMF), the committee noted that the differential GST structure currently in place at various stages of MMF production is hindering the Indian textile and apparel industry. “The committee is of the firm view that there is a need to rationalise duties on raw material inputs to man-made textiles. Further, since the differential tariff rates and inverted duty structure are hindering the Indian textile and apparel industry to compete with global counterparts, the committee urges the ministry to follow up on the matter at the appropriate fora,” it observed in its report. At the 45th meeting of the GST Council in September last year, the Council had decided for GST rate changes to rectify the inverted duty structure in the textile sector. Subsequently, the rate for textiles of any value was raised to 12 per cent, effective from January 1 this year. Earlier the GST rate was 5 per cent for sale value up to Rs 1,000 per piece in the case of apparel. However, the decision was deferred by the GST Council at its 46th meeting in December last year as traders and a few states demanded roll-back. The problem of inverted duty structure arises when the finished product is at a lower tax bracket, compared to raw material input. This usually leads to a rise in the rate of the finished product. There has not been much opposition to the rate hike in footwear, compared to textiles. Abhishek Jain, partner, indirect tax at KPMG India, said if the raw material rate is brought down to 5 per cent for MMF, from the present-day 12 per cent, it would be welcomed by the textile industry. “This will give it the necessary leg-up to compete with global counterparts,” he added.
Source: Business Standard
Importers will have to furnish additional information at Customs Automated System and while filing a bill of entry in case of "specified goods" The Central Board of Indirect Taxes and Customs (CBIC) has released the draft rules pertaining to the Customs Valuation of imported goods, which will effectively implement the amendment proposed in Section 14 of the Customs Act which deals with valuation of imported goods. The specified goods will be the list of items, selected by the Board where it has reason to believe that the value of such goods may not be declared truthfully or accurately. According to the draft the list of such goods will be prepared and recommended by a screening committee and evaluation committee. The list may include or remove an item vide a notification and the screening committee will keep on reviewing the list every six months.
Source: The Hindu
The meeting assumes significance as India's exports contracted by 3.52 per cent to USD 32.62 billion in September against USD 33.81 billion in the same month last year, while the trade deficit widened to USD 26.72 billion during the last month. Commerce and Industry Minister Piyush Goyal will meet different export promotion councils on October 7 to discuss ways to promote the growth rate in the country's outbound shipments, an official said. The meeting assumes significance as India's exports contracted by 3.52 per cent to USD 32.62 billion in September against USD 33.81 billion in the same month last year, while the trade deficit widened to USD 26.72 billion during the last month. Representatives from export bodies, including the Federation of Indian Export Organisations, Apparel Export Promotion Council and Council for Leather Exports, would participate in the meeting, the official said. According to an export council, issues which would figure in the meeting include export credit refinance facility, increase in interest subsidy rates, removal of GST (Goods and Services Tax) on exports freight, exports benefits for rupee shipments to Russia and other countries, and removal of exports duty on some products. Exporters have urged the government to continue with the GST exemption on export freight. "This is a serious issue for us. We are already facing global headwinds and high inflationary pressure. The GST exemption is more crucial in the current scenario as container rates are already very high," an exporter said, adding that airfreight is already very high in comparison to sea freight. The exemption from GST on export freight was introduced in 2018. It ended on September 30. It was extended twice. Exporters now have to pay 18 per cent GST on export ocean freight for which they can claim a refund.
Source: Economic Times
The exemption from GST on export freight, introduced in 2018, ended on September 30 after being extended twice. Exporters now have to pay 18% GST on export ocean freight for which they can claim a refund. "The global trade is entering into a very difficult phase as countries are facing high inflation and impending recession affecting demand. The rate of growth in exports is also coming down as can be seen in export growth rate from April-August 2022," FIEO said. Exporters have sought an extension of previously granted exemption from Goods and Services Tax (GST) on exportfreight, citing that a non-extension will add to their liquidity challenges. In a letter to finance minister Nirmala Sitharaman on Sunday, the Federation of Indian Export Organisations (FIEO) said that overseas freights have increased 300-350% from pre-Covid level and refund of GST through input tax credit comes with a lag of two-three months, which affects cash flows. The exemption from GST on export freight, introduced in 2018, ended on September 30 after being extended twice. Exporters now have to pay 18% GST on export ocean freight for which they can claim a refund "The global trade is entering into a very difficult phase as countries are facing high inflation and impending recession affecting demand. The rate of growth in exports is also coming down as can be seen in export growth rate from April August 2022," FIEO said.
Source: Economic Times
While garment units claim poor demand, mill owners complain there is a supply glut of cotton candy in the market. The price of cotton yarn has come down to Rs 360 per kg from Rs 400, across all categories, due to poor demand. Speaking to TNIE, Tiruppur Exporters and Manufacturer Association president MP Muthurathinam said, “The primary reason for the fall in price is that small and mediumsized garment units have reduced consumption over the last several months. This resulted in stockpiling up with mills, Many mills are unable to sell more than 50% of yarn. To clear stock, they have reduced the price.” E Devaraj, the proprietor of Sixer Garment, said, “Garment units could not afford the high price and suspended procurement. When demand is low, it is natural for prices to come down. More importantly, there are no orders from North and Western India, so garment units are working with minimal workforce and time-based schedules. Despite the fall, many units still feel the price is a bit high.” While garment units claim poor demand, mill owners complain there is a supply glut of cotton candy in the market. South India Spinners Association (SISPA) general secretary P Jagathish said, “The price of cotton candy was above Rs 1 lakh three months ago, but dropped to Rs 75,000 a few days back. This is mainly due to fear of fresh cotton arrival in the market. Less offtake from garment units is also a reason for the price fall.” An official from the Department of Textile, Tamil Nadu, said, “We received information that cotton production in northern India is likely to increase in the coming season. The arrival of fresh harvest is expected to gather pace this month, Procurement from garment units is low and this has caused yarn prices to fall.”
Source: The Hindu
Gujarat corners 13 projects, the highest Madhya Pradesh has bagged the highest amount of investment, to the tune of Rs 3,513 crore under the production linked incentive (PLI) scheme for the textile sector, data from a recent parliamentary panel report shows. The standing committee on labour, textiles and skill development in its report on the man-made fibres (MMF) was informed by the textile ministry earlier this year that out of 67 applicants, 64 projects with a proposed investment of Rs 19,798 crore were approved by a selection committee under the PLI scheme. While Gujarat saw the highest number of proposed projects (13), Madhya Pradesh cornered the highest amount of proposed investment (Rs 3,513 crore). The government approved the PLI Scheme for textile products in September last year with an aim to promote MMF apparel, MMF fabrics, products of technical textiles and to enhance manufacturing capabilities and exports from the country of select MMF products with an approved outlay of Rs 10,683 crore. “Selected companies would be eligible to get incentives on achieving threshold investment to promote size and scale, competitiveness and generate employment by overcoming constraints like lack of economies of scale, defective fabrics and non-compliance to International standards”, the committee noted. The scheme has two parts. Under Part-1, the minimum investment required is Rs 300 crore and 15 per cent incentive will be provided on attaining required turnover in the first year. Under Part-2, the minimum investment is Rs 100 crore and 11 per cent incentive will be provided on attaining required turnover in the first year. Additionally, the incentive will be reduced by one percentage point every year from second year onwards till the fifth year under both parts of the Scheme. Under the scheme, 14 projects with a minimum investment of Rs 300 crore were approved, with a proposed investment of Rs 10,518 crore and with a potential to generate 98,088 jobs, the textile ministry informed the committee. Also, 50 projects with a minimum investment of Rs 100 crore were approved, with a proposed investment of 9,280 crore and with a potential to generate 147,274 jobs. Noting that technical textiles is a high technology sunrise sector, the committee called upon the ministry to intensify the efforts for the development and expansion of Technical textiles. “The Committee would also like the Ministry to explore the feasibility of exploring PPP models and strategic market partnerships with Global players for acquiring technical know-how so as to strengthen the development of an indigenous industry towards transforming India into a global manufacturing hub for technical textiles”, noted the ministry.
Source: Business Standard
Haryana Chief Minister Manohar Lal Khattar on Tuesday said that his government has undertaken a number of initiatives to make the state a leading investment destination and to create a seamless business environment. Haryana Chief Minister Manohar Lal Khattar on Tuesday said that his government has undertaken a number of initiatives to make the state a leading investment destination and to create a seamless business environment. To attract investments, Khattar is currently on a visit to roadshow was organized in Dubai on Tuesday to attract investors. According to an official statement here, the roadshow which was organized by the state government drew an overwhelmingly enthusiastic response from the business community of the UAE. Deputy Chief Minister, Dushyant Chautala, Chief Principal Secretary to Chief Minister, D S Dhesi, Additional Chief Secretary, Industries and Commerce Department, Anand Mohan Sharan, are among those who are part of the delegation. During the roadshow marketing of key marque projects of the State such as the Global City at Gurugram, Integrated MultiModal Logistics Hub at Nangal Chaudhary, Integrated Aviation Hub and the Integrated Manufacturing Cluster at Hisar, and Electronics Manufacturing Cluster at Sohna was done, it said. In his address, the Chief Minister spoke about different initiatives such as sector-focused investor-friendly policies, investor facilitation cell, single roof clearance mechanism, time-bound delivery of services and grievance redressal system etc. to facilitate businesses. Such and several other initiatives have been undertaken by the state government making Haryana emerge as a leading destination and creating a seamless business environment, he said. Khattar shared his vision of developing the State with an intensive focus on modern technology fields, future-oriented industries, low carbon green infrastructure and ease of living. He also highlighted the economic and cultural relationship between UAE and India. Khattar invited the UAE-based investment community to invest in the different projects of the State and further build long-lasting bonds on the seeds of trust and cooperation between the State and UAE. During his Dubai visit, the Chief Minister conducted a detailed discussion on the key investment opportunities in the State with the Abu Dhabi Investment Authority, a sovereign state-owned wealth fund. The discussion focused on promoting Haryana as a leading investment destination and marketing key marque projects of the State such as the Global City at Gurugram, Integrated Multi-Modal Logistics Hub at Nangal Chaudhary, Integrated Aviation Hub and the Integrated Manufacturing Cluster at Hisar among others. These projects will create employment opportunities, and will further boost trade, investment & economy of Haryana. It will also transform the State into a Global logistics, warehousing and retail hub, said Khattar. The 'Global City and Logistics Hub' project is being developed by the Haryana State Industrial and Infrastructure Development Corporation and is aimed at redefining the concept of urban development. Meanwhile, the roadshow started off with a welcome address by the Consul General, Consulate General of India, Dubai, Additional Chief Secretary, Industries and Commerce, Anand Mohan Sharan. Later, MD, Haryana State Industrial & Infrastructure Development Corporation Ltd. Vikas Gupta gave a detailed presentation on the key investment opportunities in Haryana. In the presentation, it was highlighted how Haryana with its unique strategic locational advantage, robust industrial infrastructure of 34 Industrial Model Townships and Industrial Estates spread over 28,540 acres, strong connectivity, robust policy frameworks and a large pool of skilled manpower has emerged as one of India's most industrialized states and a leader in the automobile, IT/ITeS, electronics, food processing, logistics and textile sectors.
Source: Economic Times
India has always been one of the most prominent players in merchandise exports since the days of the British era. The merchandise export industry saw a phenomenal increase of 44.6 percent and 34.6 per cent over 2020-21 and 2019-20, respectively, crossing the USD 400 Billion milestones in financial year 2021-2022 as per the Ministry of Commerce & Industry of India. An initiative that highly contributed to those numbers is the government of India’s focus on the “Make in India ” policy to support small manufacturers and vendors of the country through ‘Atmanirbhar Bharat’. This initiative became one of the core ways that helped strengthen our economy through merchandise export. However, before deep diving into the why’s, we need to take a step back and understand whether India is still poised to enhance its exports and continue its move towards its Atmanirbhar Bharat. One way of looking at it is through sustained support provided by our merchandising exports in promoting local manufacturers that have the potential to scale up globally. These are primarily in textiles, pharmaceuticals, mobile, and electronic equipment, among others. With global manufacturer’s now moving out of China and setting up their companies in India, it offers India more opportunities to boost the economy. Additionally, these developments have helped provide more employment opportunities, thus contributing significantly to revenue generation. Another factor that individuals can look at is India’s huge demographic dividend – fuelled with talent, skills and employable youth, making it the golden time to leverage. In reference to the above points, it is safe to say that the current decade marks the beginning for India to become the largest hub for merchandise exports; however, it is a new journey on its own. The country will tackle several challenges before it reaches its milestone. These challenges include checks on quality maintenance, i.e. states that there should be a proper quality check which means training and monitoring erring exporters who do not meet the parameters of quality & standards. The process will also ensure higher Indian merchandise demand from foreign buyers. India should strengthen its infrastructure to support manufacturers investing in sustainable product development. In addition, a significant change that can no longer be considered an isolated event is the adoption of digitalization. Technology has transformed how consumers eat, shop, and pay, and now, the next revolution will be in B2B infrastructure creation using technology. This dynamic sector has been growing exponentially with tech adoption – opening several avenues for businesses across sectors to invest in B2B opportunities. Furthermore, the e-commerce industry has provided a rapid scale for Indian MSMEs to sell globally. As India strides toward becoming a USD 5 Trillion economy by 2025, exports will play a significant role in achieving the dream. Today, India has the resources to emerge as an export hub – and we must collectively look at supporting the ecosystem. Policymakers should look at creating policies in a way that India becomes an attractive trade partner for MNCs and, at the same time, strengthen domestic manufacturers to make India a global export hub.
Source: Times of India
In line with the rising presence of Indian conglomerates and with the change in the business ecosystem globally, the Centre has done well to simplify the 18-year old overseas investment regulatory framework Overseas investment from India is one of the key steps for entering new global ‘bazaars’ and making India’s presence felt in the global arena. The Covid-19 pandemic caused some turbulence, but recently, a positive upward trend has been witnessed in these outbound investments because of a stable economy and favorable market conditions. According to the department of economic affairs, India’s overseas investment stood at $17.54 billion in FY22 compared to $12.36 billion in FY21. In FY23 (April-June 2022), it stood at $2.94 billion. During the last four months of the current financial year, Singapore was the top preferred investment destination, followed by the US and Mauritius. In line with the increasing global presence of the Indian conglomerates and with the change in the business ecosystem globally, the government started simplifying the 18 year old overseas investment regulatory framework last year by issuing the draft guidelines. On August 22, the Centre revamped the overseas investment guidelines with a vision to unfold a liberal architecture of self-regulation keeping in mind the evolving business needs in an increasingly integrated international market, thereby aligning with the present business and economic dynamics. With the introduction of these new guidelines, an effort is being made by the regulators to streamline the existing framework to align with the global scenario and overcome practical challenges faced by the stakeholders in the erstwhile regime by introducing new concepts to eliminate ambiguity. By putting disinvestment and write-off transactions under the automatic route, the government has acknowledged the risk of undertaking overseas business and promoting the ease of business for Indian corporates.
Liberalising investment criteria Indian investor organisations can invest up to four times their net worth. The definition of ‘net-worth’ was restrictive in the erstwhile regime; start-ups receiving funds through share premium found it challenging to use share premium while making overseas direct investments (ODIs). The new regime has liberalised the scope of ‘net-worth’ by including share premium and enhancing the investable limit resulting in new avenues for those Indian start-ups to explore new overseas jurisdictions and build their businesses aboard.
NOC required for default/under investigation cases In case the Indian investor is classified as a non-performing asset/bank defaulter or is under investigation by any financial sector regulator or investigating agency, an NOC is mandated to be procured and the bank/regulator is required to respond to the NOC request within 60 days, given that banks and investigative agencies are in a better position to assess the fact pattern depending on the nature of investigations and a 60- day timeline would ensure quick decision making.
Permitting indirect investment back to India In many cases, the regulators have witnessed that the outbound investment is resulting in inbound investment. The same was on account of the business and structuring needs of the companies. Under erstwhile regulations, the same was not expressly restricted; however, it was not considered a bonafide business. Acknowledging the business requirement and experience gained under the old regime, Indian investors have now been permitted to invest in a foreign investee entity that has investments or invests in India up to two layers of subsidiaries without seeking any prior RBI approval.
Safeguarding our economic interests. The new guidelines aim to safeguard India’s economic interest while undertaking overseas investments. Indian investors can use only ‘owned funds’ for investing in foreign start-ups, given the risky nature of business. The foreign investee entity other than the strategic sector should have ‘limited liability’. The option to pay consideration for acquiring foreign securities on deferred payment basis now available subject to fulfilment of certain terms. Permissibility has been granted to restructure balance for loss-making investments.
Late Submission Fees To reduce the compliance burden, the RBI has introduced late submission fees (LSF) instead of a formal compounding process. The same facility of LSF applies to contraventions committed under the erstwhile regulatory framework too. RBI has simplified, streamlined, and liberalised the existing framework for overseas investments. Permitting ODI/FDI structures and changes in the net-worth definition may help not only in raising funds overseas but also increase the ability of Indian entities to invest. It will also give flexibility to the Indian entities to list overseas entity Additionally, by permitting non-financial entities to invest in foreign financial entities or the International Financial Services Centre, a new avenue has been added for Indian companies to enter overseas financial space. The guidelines have been perceived positively by all stakeholders and will boost overseas investment by Indian investors.
Source: Financial Express
The global textiles industry is producing more than ever before but shifts from conventional materials to lower-impact alternatives have stagnated, according to a report published Wednesday by non-profit Textile Exchange. The annual market analysis found that global fibre production reached an all-time high of 113 million tonnes in 2021, after a slight decline in 2020 due to the pandemic. It’s expected to keep growing to 149 million tonnes by 2030. That’s bad news for the industry’s climate goals. Without drastic changes to reduce volumes, substitute conventional fibres for lower-impact, or “preferred,” alternatives and foster innovation within the next eight years, the apparel, textiles, footwear and homeware industries will fail to slash greenhouse gas emissions at the raw materials stage in line with efforts to limit global warming to 1.5 degrees C, the report said. While overall volumes are growing, the proportion of fibres with a lower environmental impact remains largely the same. “We’re seeing still-good numbers, but we’re not seeing the scale of growth that we need,” said Textile Exchange chief strategy officer Ashley Gill. Recycled fibres, for example, made up 8.9 percent of all raw materials in 2021, up from 8.4 percent the year prior. Most of that volume is down to polyester made from used plastic bottles, which usually can’t be recycled again once they enter the textile supply chain. Much like in previous years, fibres made from recycled textile waste make up less than 1 percent of the global market. In some cases, uptake of preferred fibres is in decline. Cotton from recognised preferred sources, such as organic, FairTrade or regenerative farms, saw a decrease in market share after years of growth, making up 24 percent of all cotton compared to 27 percent the previous year. Fossil fuel-based polyester, meanwhile, accounts for 54 percent of all fibres (up from 52 percent in 2020) and is only projected to grow its market share throughout this decade. A range of external pressures — from changing weather patterns to socio-political challenges — is likely behind this, said Gill. The squeeze on raw material and energy costs is also a key factor, as lower-impact or innovative alternatives to conventional materials typically come at a premium. “We know that the low price of fossil-based polyester makes that a really compelling option,” she added. Policy shifts, such as regulatory moves in the EU to introduce improved eco-design and due diligence, pre-competitive industry collaboration and incentives for farmers to make the shift to better practices are all important levers for accelerating uptake of better materials, said Gill. But the industry also needs to find ways to decouple value from growth in the coming years, namely by curbing the production of new fibres and quickly scaling textile recycling technology (and the necessary supporting infrastructure) to recapture value from existing materials. “[It] really does require a departure from business as usual,” said Gill.
Source: Business of Fashion
Malaysia has ratified the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). This follows the government’s submission of the instrument of ratification for the agreement to New Zealand, the CPTPP depositary, on Sept 30, 2022, said the International Trade and Industry Ministry (MITI). In a statement on Wednesday (Oct 5), MITI said the ratification comes after years of detailed deliberation, extensive consultations and careful assessment by the government. In light of the findings of the cost-benefit analysis (CBA), it is clear that the benefits accruing from the ratification of the CPTPP far outweigh any potential costs that may arise from the implementation of this agreement, it said. “In sum, the CPTPP places Malaysia in a strategic position, elevating our competitiveness in the global arena. "As a bloc that advances regional economic integration, the CPTPP is also a testament to the significance of the multilateral trading system," it added. MITI said the CPTPP broadens Malaysia's access to new markets such as Canada, Mexico and Peru, which are not covered by any existing free trade agreement, providing access to a wider range of high-quality raw materials at competitive prices, and increases the country's attractiveness as an investment destination. It said the CPTPP also offers technical assistance and capacity building programmes that are aimed at improving and developing local sectoral capabilities in key industrial areas such as automotive, electrical and electronics, chemicals, optical and scientific equipment as well as medical devices. “The CPTTP will also elevate Malaysia's prominence as a global trading economy and total trade is expected to increase to US$655.9 billion (RM3.04 trillion) in 2030. "In addition, the CBA’s findings also indicate that Malaysia’s exports are projected to reach US$354.7 billion in 2030, with trade balance remaining in strong surplus at 8.5% of gross domestic product for the same year," the ministry said. MITI said under the CPTPP, by Jan 1, 2033, almost 100% of Malaysian exports to all CPTPP countries will enjoy duty-free treatment. “As a matter of fact, as soon as the CPTPP enters into force for Malaysia, all our exports to Australia and Singapore will readily enter these markets without being subjected to any duties. “Subsequently, in 2024 and 2029, all Malaysian products exported to New Zealand and Canada, respectively, will enter these countries duty-free,” it added. Meanwhile, high duties on key Malaysian exports to Canada and Mexico, which currently range from 15% to 30%, will be eliminated immediately. “This essentially means that Malaysian exporters will enjoy duty-free treatment on products such as automotive parts and components, plastics products, surgical gloves, rubber products, textiles and clothing, cocoa products and food items,” MITI said. In the processed food and beverages sector, Malaysian exporters will be able to expand their businesses into Canada, Mexico, Japan and Peru. “Since current duties for this sector can go up to 313.5% in Canada, 158% in Mexico, 52.5% in Japan and 17% in Peru, Malaysian exporters will benefit from significant reductions in import duties, under the CPTPP. “For these countries, all duties currently imposed on processed food and beverages will be eliminated by the year 2028 (Canada), 2032 (Mexico), 2038 (Japan) and 2033 (Peru),” it added. Moreover, MITI said, the CPTPP contains trade-facilitative rules of origin (ROO) that are designed to support modern business practices and further promote deeper integration of Malaysian businesses into regional supply chains. "The agreement allows Malaysian manufacturers to source raw materials from all CPTPP countries for purposes of fulfilling the ROO requirements and, consequently, qualifying for reduction and elimination of import duties," it said. Meanwhile, Malaysian companies will also have immediate access to the government procurement (GP) markets of other CPTPP countries at much lower thresholds, as compared to the high thresholds committed by Malaysia, MITI said. It said the CPTPP GP market, excluding Malaysia, is estimated at US$1.5 trillion, with abundant opportunities in countries such as Japan (valued at US$838.7 billion), Canada (US$233 billion) and Australia (US$227.6 billion). The CPTPP further promotes exports of services, including through mutual recognition of professional qualifications, licensing or registration, which will facilitate greater regulatory alignment among the CPTPP countries. “As a result of this, services suppliers from Malaysia will be able to expand their exports to CPTPP countries, either as firms or individuals. "For example, Malaysian accountants, architects, construction managers, engineers, dentists, doctors, nurses, quantity surveyors, and veterinarians are expected to benefit from the facilitation mechanisms offered by the CPTPP, including enhanced mobility through transparent rules governing movement of professionals across borders," MITI said.
Source: The Edge Markets
Estimate for 2022 revised upwards to 3.5% but growth expected to lose momentum in second half Indian exporters need to brace up for more struggle in the new year as world merchandise trade volume growth is likely to slow to 1 per cent in 2023, down from the previous forecast of 3 per cent made in April this year, per fresh estimates released by the WTO on Wednesday. This is due to multiple shocks including the Ukraine war, high energy prices, inflation, and monetary tightening, it said. Trade growth to slowdown While global trade in goods in 2022 is now predicted to grow at 3.5 per cent--better than the 3 per cent estimated in April--it is expected to lose momentum in the second half of 2023 , the report pointed out. Slowdown in exports is expected in 2023 as import demand is likely to soften in major economies with growth slowing down for different reasons. “In Europe, high energy prices stemming from the Russia-Ukraine war will squeeze household spending and raise manufacturing costs. In the United States, monetary policy tightening will hit interest-sensitive spending in areas such as housing, motor vehicles and fixed investment,” the WTO report said. China’s continued struggle with COVID-19 outbreaks and production disruptions paired with weak external demand has also been identified as a major factor for trade growth slowing down. Growing import bills for fuels, food and fertilizers could lead to food insecurity and debt distress in developing countries, the report warned. India’s Sept exports drop In India, exporters are already facing the fallout of a deceleration in global demand. The country’s exports declined by 3.52 per cent to $32.62 billion in September 2022, while the trade deficit widened to $26.72 billion, per preliminary data released by the Commerce Department earlier this month. Although exports during April-September 2022-23 increased by 15.54 per cent to $229.05 billion, growth in July and August have been marginal. The decline in exports of engineering goods, apparels and textiles sectors was of particular concern as these sectors are key to huge employment, according to exporters’ body FIEO. Forecast The WTO’s current forecast of 3.5 per cent growth in the volume of world merchandise trade in 2022 is slightly higher than previous estimate of 3 per cent mostly due to statistical revisions and the availability of new data, the report said The Middle East is expected to record the strongest export growth of any WTO region this year (14.6 per cent), followed by Africa (6 per cent), North America (3.4 per cent), Asia (2.9 per cent), Europe (1.8 per cent) and South America (1.6 per cent). In contrast, CIS exports are estimated to decline by 5.8 per cent this year.
Source: The Hindu Business Line
New research suggests that 23% of low value post-consumer textiles collected in Europe has the potential for fibre-to-fibre recycling but this would require major investment and a suite of policy and industry changes. The Sorting for Circularity Europe project conducted analysis in Belgium, Germany, the Netherlands, Poland, Spain, and the United Kingdom in what is said to be the most comprehensive and representative snapshot of the composition of post-consumer textiles (PCT) generated in the region. Using near-infrared technology to determine composition, researchers analysed a total of 21 tonnes of post-consumer garments. Of the 2 116 000 tones of PCT collected each year in the six countries, 494 000 tonnes was considered suitable for recycling and fitting the current specifications of mechanical and chemical recyclers. This means that 23% has the potential to be redirected to fibreto-fibre recycling, whereas the current total is just 2%. A major hurdle identified by the research is that feedstock prices for current destinations (such as wipers) are more economically viable than those offered for fibreto-fibre recycling. ‘However, this might change as current recycling technologies are scaled and further investment is made in order to integrate operations related to automated sorting and removal of disruptors to the sorting process,’ the report says. ‘Overall, a sound business case is required in order to retain sorting capacity in Europe.’ The report notes: ‘To support the retention and further development of this sorting capacity in Europe, policy and upcoming legislation will play a key role in ensuring the environmental, social and financial sustainability of these stages of the clothing and textiles value chain.’ Sorting for Circularity Europe is backed by Fashion for Good, an industry umbrella organisation supported by founding partner Laudes Foundation, co-founder William McDonough and a host of corporate partners including Adidas, Chanel, Levi Strauss and Patagonia.
Source: Recycling International
Zara and Bershka brand owner, Inditex, has signed a new agreement with IndustriALL Global Union for the defence of decent work in global supply chains. Inditex signed the Global Framework Agreement (GFA) in 2007, through which almost three million people globally have benefitted from better working conditions. It was described as “a world first” and IndustriAll says it is still seen as a benchmark in the defence of decent work in global supply chains. In commemoration of the anniversary, both parties are signing a new protocol reinforcing their commitment to continue engaging in mature industrial relations that aim to safeguard worker well-being. This week, Oscar García Maceiras, CEO of Inditex, and Atle Høie, IndustriALL Global Union general secretary, signed the new protocol, which furthers social dialogue by reinforcing the Global Union Committee and its coordinating bodies, specifically establishing new mechanisms for cementing the role of the local unions for a better understanding of what the workers making the clothes need. Under the new protocol, Inditex and IndustriALL will formulate a joint work plan which will focus on continued respect for the freedom of association, the right to collective bargaining and the provision of training to worker representatives, the textile group’s suppliers and its supply chain factory workers. Inditex and IndustriALL are also making progress on a new workplace access protocol, which aims to learn about and monitor working conditions in the factories in Inditex’s supply chain, in order to understand the workers’ needs and to respond to them. Atle Høie, IndustriALL general secretary, said: “Signing the GFA with Inditex was a breakthrough that has since lead the way for more responsible sourcing and proper industrial relations in the sector. It is fitting that we celebrate the first 15 years by signing a protocol that takes our relationship to a new level in terms of respect for fundamental trade union rights. The fact that we agree with Inditex to increase the role of our local and national unions and to firmly defend their right to organize and bargain collectively in the supply chains gives hope to many.” Óscar García Maceiras, CEO of Inditex, added: “The protocol signed today, commemorating the 15th anniversary of the Framework Agreement between Inditex and IndustriALL, evidences our determination to strengthen respect for fundamental labour rights across our production chain and marks a fresh milestone in both organisations’ ongoing mission of improving the lives of the women and men who populate it.” GFAs are designed to protect the interests of workers employed in all operations of the multinational companies who sign them, and are negotiated at a global level between trade unions and companies. They establish best standards on trade union rights, on health and safety, and on the labour relations principles adhered to by the company in its global operations, regardless of the standards existing in a particular country. The joint declaration pledges to respect freedom of association and collective bargaining rights, giving workers the right to join a union to advance their interests. It promotes social dialogue at all levels, and commits both organisations to working with governments and business organisations in source countries. The new agreement marks a new milestone in the relationship between Inditex and IndustriALL, which began 15 years ago. The Agreement was a significant step forward for the industry, providing a major boost to its sustainability and a very real chance to improve working conditions for the nearly three million people who work in the factories producing for the Spanish multinational globally. Inditex is one of the world’s largest fashion retailers, with eight brands – Zara, Pull&Bear, Massimo Dutti, Bershka, Stradivarius, Oysho, Zara Home and Uterqüe. Felix Peinado, director for the ILO in Spain, present at the signing ceremony, said: “In the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, ILO urges companies, in collaboration with their workers’ representatives, to enter into international framework agreements to commit to applying principles of decent work along their supply chains in all countries. Spanish unions Comisiones Obreras and UGT, together with Inditex, have been frontrunners in Spain with this agreement. I could not be prouder of this agreement or happier to celebrate its anniversary. The agreement is an example of how, with the combined commitment and hard work of companies and their workers’ representatives, it is possible to forge better working conditions around the world.”
Source: Just-Style
SgT Group, a specialist in textile quality management, has opened a new laboratory in Dhaka, Bangladesh. The laboratory is designed to boost the industry’s textile and apparel quality management. “SgT - a world leader in quality management solutions specialising in textiles and apparel - is proud to announce the opening of its new laboratory in Dhaka, the capital of Bangladesh,” the business announced in a press release on October 5. “This milestone further strengthens SgT’s commitment to supporting its customers’ global sourcing strategy with a one-stop shop solution covering compliance, performance, and quality. The laboratory offers agile, tailor-made solutions that go beyond the pass–fail approach, with wide-ranging technical expertise and a high level of service.” The opening ceremony for the laboratory was attended by over 100 members of the textile and apparel industry, according to SgT. The new location is part of SgT’s worldwide network of laboratories and mixes global technology with local experts. SgT Group was founded in 1990 as an independent solution provider and the business is wholly owned by Worms Safety, a global alliance of specialist companies across specific product categories with expert knowledge of regulatory compliance, safety, and quality. SgT’s clients include leading international retailers, manufacturers and importers of ready-to-wear, children’s clothing, workwear, outdoor clothing, sportswear, underwear, and luxury clothing, according to Worms Safety.
Source: Fashion Network
