Synopsis: An official said the target is to bring all businesses with turnover above ₹1 crore under this framework by next fiscal year, which will further plug revenue leakages and improve compliance. Businesses with annual turnover of over ₹5 crore will have to move to e-invoicing under goods and services tax (GST) from January 1. The GST Network has asked its technology providers to make the portal ready to handle the increased capacity by December, a government official privy to the development, told ET. The official said the target is to bring all businesses with turnover above ₹1 crore under this framework by next fiscal year, which will further plug revenue leakages and improve compliance. The GST Council had decided to implement electronic invoice in a phased manner. The aim is to bring all the small businesses under the formal economy. "As per the GST Council recommendation, e-invoicing will become mandatory for businesses over ₹5 crore turnover from January 1," the official said. E-invoicing uses a standardised format that a machine can read. It would help in syncing sales data of a small business vendor and large corporate clients, which is used to claim tax credit. This, the official said, would help in swift detection of false ITC claims, broaden GST base and improve compliance. From October 1, businesses having aggregate annual turnover of Rs 10 crore and above have moved to e-invoicing for business-to-business (B2B) transactions. E-invoicing for B2B transactions was first made compulsory for companies with turnover of ₹500 crore from October 1, 2020. This threshold was then lowered to businesses with turnover of ₹100 crore from January 1, 2021 onwards and again was revised to companies having a turnover of ₹50 crore from April 1, 2021. From April 2022, it was extended to businesses with turnover above ₹20 crore.
Source: Economic Times
The Ministry of Textiles (MoT) celebrated World Cotton Day 2022, organising a national-level consultation on Sustainability in the textile value chain in India in collaboration with UN Environment Programme (UNEP) and Cotton Corporation of India (CCI). The UNEP and Textile committee have signed a co-operation agreement on designing a campaign on ‘Mainstreaming sustainability and circularity in Textile sector’. The main objective of the meeting was to put forward and discuss the sustainability initiatives across the textile value chain, digital interventions along with potential strategies for enhancing Sustainability/Circularity in the Indian textile value chain. Upendra Singh, Secretary, MoT who presided over the first session, during his address emphasised on the importance of sustainability and circularity in the textile value chain in India. He also pointed out that though the textile parks are equipped with CETP facilities, the textile industry is still facing problems in effluent management due to the unavailability of data on waste generation from the processing clusters. Prajakta Verma, Joint Secretary, MoT along with Shombi Sharp, UN Resident Coordinator; Atul Bagai, Head –UNEP India Country Office; Bhawna Singh, Assistant Director MOEFCC were also present during the event. Atul Bagai appreciated the unique initiatives being made by the Ministry of Textiles including the creation of sustainability cell within the Ministry. He highlighted the principle of Prakrathi Devo Bhav to enable a sustainable future. Pradeep Kumar Agarwal, CMD, CCI elaborated the new initiative of CCI for Traceability of Cotton Bales using Blockchain Technology in collaboration with Textile Committee followed by Shri Ajay Chavan, Secretary and CEO of Textile committee who briefed about blockchain enabled QR Code for live monitoring of cotton bale inventory.
Source: Apparel Resources
Union Minister for Commerce and Industry Piyush Goyal attended a roundtable conference of investors in Mumbai today. The 4th NICDC Investors' Roundtable Conference was organized by Maharashtra Industrial Township Limited (MITL). Making a strong pitch for Industrial Smart Cities like Aurangabad Industrial City (AURIC), Union Commerce Minister said “It makes eminent business sense to locate to modern industrial townships like AURIC. These industrial smart cities have been master-planned to international standards. Industries coming to these nodes will power the manufacturing sector in the country”. MITL’s flagship industrial area, the Aurangabad Industrial City or AURIC, is one of the most well-developed Industrial Smart Cities in the world. With dedicated residential spaces and investment of over Rs. 7,000 crores, it is a beacon of industrial development in the Marathwada region. AURIC has planned to develop a MITRA Textile Park with the support of Ministry of Textiles under the PM MITRA Scheme, a Mega Food Park and an International Convention Centre there, making it a truly global investment destination. Encouraging investors, the Minister said the Government is committed to keep logistics costs down and increase Ease of Doing Business. He assured that the Government will do everything to address the requirements of various stakeholders. Speaking about the National Single Window System for Business Approvals, the Union Minister said that Government’s aim behind Single Window System is to ensure that a person sitting anywhere in the world should be able to get all approvals to locate their business in India, buy land or set up business in the country, with a click of a button. National Industrial Corridor Development Corporation (NICDC) is a Special Purpose Vehicle that envisages to establish, promote and facilitate development of the National Industrial Corridor Development Programme, India’s most ambitious infrastructure programme aiming to develop new industrial cities as “smart cities” and converging next generation technologies across infrastructure sectors. The programme is aimed at providing impetus to planned urbanization in India with manufacturing as the key driver. Union Minister said the Central and state governments are working hand in hand to transform the country. Asserting his confidence in Maharashtra, he said “I am certain that under the current leadership, Maharashtra will once again prove itself to be the most industrialized, progressive and fastest growing state in the country.” Reiterating the significance of the infrastructure sector for economy, the Union Minister said that there are various examples wherein infrastructure has created power and economy and brought alive new opportunities. “We have nearly ₹111 Lakh crore National Infrastructure Pipeline and a large part of it is in Maharashtra. The metro project, the trans-harbour link, the coastal road project and the expansion of express ways are landmark projects that will benefit Maharashtra in a big way”. The Minister said that Macroeconomic fundamentals are strong, infrastructure is being built at a rapid pace and India is the destination the world is looking up to. “Together we can make India the future of the world”. Deputy Chief Minister of Maharashtra, Devendra Fadnavis said that Maharashtra aspires to be a trillion dollar economy in next 6 - 7 years. Addressing the investors, Devendra Fadnavis said: “We have tailor-made package of incentives for investors. We are also addressing the special needs of the industry.” MITL, formerly known as Aurangabad Industrial Township Limited, is a joint venture between Government of India and Government of Maharashtra.
Source: PIB
MUMBAI: Large Indian lenders are reluctant to process direct rupee trade transactions with Russia months after the mechanism was put in place for fear of becoming the target of sanctions by the United States and Europe over the invasion of Ukraine, sources said. Two smaller lenders have moved to adopt the system after the Reserve Bank of India (RBI) said in July that it had set up an arrangement for international trade settlements in rupees with immediate effect. But bigger lenders with more exposure to the international financial system, and in particular the dollar, are worried their businesses could be disrupted if targeted by sanctions. Western sanctions to punish Russia for its invasion of Ukraine are trying to limit Moscow's access to foreign exchange, particularly the dollar. India has deep trade ties with Russia, and the rupee mechanism can help bypass the US dollar and the euro for settlements. An Indian diplomat in Russia said Russian banks had reached out to eight large Indian counterparts to set up rupee trade settlements, but the Indian banks had not responded. Some of these banks include the largest lender State Bank of India, Punjab National Bank, Bank of India, Bank of Baroda and Central Bank of India, the source said. None of these banks responded to e-mail requests seeking comment. But several sources at the banks privately confirmed they had decided not to use the structure, at least for now. One of them, a senior executive at a large state-owned bank, said using such a settlement mechanism could be a violation of some sanctions rules. "They (Western nations) can impose a sanction on us, it will be a major business and reputational loss," said the banker. Indian banks continue to settle trade with non-sanctioned Russian entities in dollars or euro, but the sources said they believe that settlements in rupees could come under greater scrutiny. Another banker said the new settlements system could raise questions in the West and could lead to sanctions. "The process of getting them lifted may take months and it is a risk banks are not willing to take," the source said. The United States imposed sanctions on major Russian banks, other institutions, President Vladimir Putin and oligarchs following the invasion of Ukraine, and anyone dealing with a sanctioned entity can also attract sanctions. A third source at a large Indian bank said the lack of liquidity in trade in the rouble compared with the more liquid rupee made it difficult to determine an accurate rouble-rupee exchange rate, another factor holding back Indian banks. Even if they managed to get over that hurdle, what could Russian banks do with a pool of rupees sitting in an account in India, the source asked. Indian banks do not have large rouble reserves, so could not offer a direct currency exchange. The two smaller Indian banks that have started the process of opening accounts to settle trade with Russia in rupees are private lender Yes Bank and state-owned lender UCO Bank. Yes Bank has tied up with the PSCB bank in St. Petersburg, the diplomatic source said. UCO Bank has obtained approval from the RBI to open a special rupee account for Russia's Gazprom bank, and its chief executive Soma Sankara Prasad told Reuters last month that it hopes to do so soon. Yes Bank, UCO Bank, the Indian Banks' Association and the finance ministry did not reply to e-mails seeking comment. According to government data, Indian imports from Russia hit $17.24 billion in April-August this fiscal year from about $3.2 billion a year earlier due to a sharp increase in oil purchases. Indian exports to Russia in April-August declined to $992.73 million compared to $1.31 billion in the same period last year.
Source: Economic Times
Reddy said non-oil trade is still dominated by gems & jewellery which constitutes around a third of the total trade, which has grown by 33 per cent to USD 1.4 billion. Companies from the UAE that have invested in India are Mubadala, DP World, Sharaf Group, Lulu Group, Emaar Properties, RAK Ceramics. The UAE expects trade with India to cross USD 100 billion-mark over the next 2-3 years, boosted by the comprehensive economic partnership agreement. The IndoUAE trade stood at USD 73 billion in FY22, which got a major fillip since the two nations signed the comprehensive economic partnership agreement (CEPA) on May 1, 2022. Between FY21 and FY22, the overall trade rose 68 per cent to USD 73 billion, after declining for two years. But the trend has reversed since the signing of CEPA. The bilateral trade has increased markedly with total value of non-oil trade at USD 29.5 billion in first six months of 2022, growing 22 per cent over the same period in 2021. Non-oil exports too rose 31 per cent with total value reaching USD 2.7 billion between May and June, junior foreign trade minister of the UAE, Thani Bin Ahmed Al Zeyoudi, told the Indo-UAE economic forum organized by industry lobby CII here. "Though we've set a five-year deadline to take the UAE-India bilateral trade to USD 100 billion from what it is now, going by the way trade has been growing since the signing of the CEPA, I am confident that we'll achieve the target much earlier, say over the next two-three years," Zeyoudi told PTI later during an interaction. The minister said trade is still dominated by oil, which constitutes 62 per cent of the overall trade value and only 38 per cent are non-oil trade now. But he expressed hope that CEPA will change this over the years. The minister also said while non-oil trade balance is still in favour of India by a whisker, overall, India has a trade deficit of USD 17 billion in FY22, led vastly by large oil imports. During the first half of 2022, bilateral non-oil trade grew 22 per cent to USD 29.5 billion, the minister said. The UAE minister also said, his country's cumulative investments in India is over USD 20 billion, of which USD 14.4 billion are FDI, making the UAE the eighth largest FDI source for India. In April-June this year, FDI flows into the country from the UAE stood at USD 2.14 billion. Zeyoudi also said his country is open to invest in the now-stalled West Coast Refinery if India revives the 60-million tonne refinery involving over Rs 3 lakh crore investment. Addressing another session at the same forum, joint secretary in the commerce ministry Srikar Reddy said, since the CEPA, overall exports from the country to the UAE rose 16 per cent to USD 10.46 billion from USD 9 billion between May and August, which is commendable given the decline in overall global trade during the period. Reddy also said exports under the CEPA have been outpacing the country's overall exports by 5:1. On the other hand, nonoil exports to the UAE grew 14 per cent. Reddy said non-oil trade is still dominated by gems & jewellery which constitutes around a third of the total trade, which has grown by 33 per cent to USD 1.4 billion. Companies from the UAE that have invested in India are Mubadala, DP World, Sharaf Group, Lulu Group, Emaar Properties, RAK Ceramics. Companies from India that have invested in the UAE are ONGC & Petro Resources, Tata Motors, Larsen & Tourbo Middle East, Oberoi Group, Zuari Agro Chemicals, Essar Steel Manufacturing Company.
Source: Economic Times
They seek release of arrears from Central, State governments Textile mills across the State have declared a lockdown citing global recession. In Andhra Pradesh, there are 125 textile mills with a combined capacity of 35 lakh spindles. Speaking to reporters on Tuesday, Andhra Pradesh Textile Mills Association chairman Lanka Raghurami Reddy said that the Indian textile industry was facing the worst crisis in its history. “The recession which has set into the industry has now turned into an alltime low due to soaring cotton prices, increase in bank interest rate, high transportation cost and shortage of power and labour. In Andhra Pradesh, only 100 textile mills are running to a capacity of 40%. “Earlier, we were able to run textile mills with 50% capacity, but now we decided to close down due to soaring operational costs and losses. We want to continue but we have no way out. Thousands of workers are losing their livelihood,” said Mr. Raghurami Reddy. One of the main reasons is the sluggish demand and fall in prices of cotton. Thousands of bales are lying in cold storages due to lack of demand. “We also urge the Centre to regulate MCX trading and control the middlemen who are buying cotton at lower prices,” said Mr. Reddy. The entry of multinational giants into the market has hit the domestic textile industry, the largest organised labour sector in the country, and has given scope for speculation resulting in the steep hike of cotton prices. For instance, in spite of the record bumper crop of 3.15 crore bales during the current season as against the requirement of 2.4 crore bales, cotton prices have shot up by 40% to 50%, he said. The association also demanded that Central and State governments release the pending arrears. “We thank Chief Minister Y.S. Jagan Mohan Reddy for releasing ₹237 crore in September 2021 and now our arrears are close to ₹1,400 crore. We urge the Central and State governments to release the remaining arrears,” said Mr. Reddy.
Source: The Hindu
The proposed policy aims to establish UP as an internationally competitive investment destination, generating employment and stoking sustainable economic growth. The Uttar Pradesh government will promote private industrial parks in the state to catalyse the manufacturing sector under the ambitious ‘Make in UP’ theme. These parks would be facilitated in the vicinity of state expressways and freight corridors for extracting maximum benefit due to brisk connectivity. According to the draft New UP Industrial Policy 2022, the state would provide an array of incentives to the private industrial parks, especially in the backward Purvanchal (Eastern UP) and Bundelkhand regions. The proposed policy aims to establish UP as an internationally competitive investment destination, generating employment and stoking sustainable economic growth. The state government has taken a 360-degree approach to foster a competitive industrial ecosystem so that UP becomes a trillion-dollar economy in the next few years. The draft policy, which is likely to be approved by the state Cabinet soon, proposes to develop industrial land bank and integrated manufacturing clusters. The Land Pooling Policy 2020 will be fortified to enable creation of land bank. UP Infrastructure & Industrial Development Commissioner Arvind Kumar said UP had emerged as one of India’s fastest-growing economies and a preferred destination for industrial investments owing to the pro-active governance and ‘doing business’ environment. Depending upon project size and region, the various sops include capital subsidy of 25 per cent on fixed capital investment/land cost apart from 100 per cent exemption on stamp duty on the purchase of land by the private developer. “The draft policy provides option-based incentive models to enable the state as a competitive and attractive investment destination to industry players of all sectors,” ‘Invest UP’ CEO Abhishek Prakash said. To expedite industrial land acquisition, the policy offers hassle-free licensing for acquiring land by private developers and fast-tracking land allotment for premium investment projects. These measures are expected to promote ‘Make in UP’ and create world-class industrial infrastructure for sustainable and balanced regional industrialisation in the state. Meanwhile, the government will develop sector specific parks & clusters viz. medical device park, textile parks, toy park, food processing parks, IT parks, etc. through various models, including public private partnership. To expand the industrial land basket, the government will not only acquire fresh land but also repurpose the swathes of defunct industrial units. Earlier, UP Industrial Development Minister Nand Gopal Nandi had said the government would utilise the land of defunct textile mills, estimated to be almost 1,500 acres, for fresh allotment to suitable investors. Home India Unlikely To Be Immune From Global Slowdown: Report
Source: Business Standard
"As global demand slows down, India is unlikely to be immune with the trade and capital channel being the key risks and determinants of India’s growth," as per the report Even as economic activities in India have seen sharp increases in terms of growth rate, the recovery to above pre-Covid levels is incomplete and India is unlikely to be immune from the global slowdown, said the Kotak Mahindra Bank in a report. The report said that through this recovery, exports and investments have been the mainstay. Global shocks propagate to the domestic economy through four key channels — trade flows, commodity prices, capital flows and financial sector "As global demand slows down, India is unlikely to be immune with the trade and capital channel being the key risks and determinants of India’s growth," it added. As per the data, India is not a major global exporter (around 2.2 per cent of world exports) and even in terms of contribution to gross domestic product (GDP), it remains relatively low compared to other countries. However, the trade channel will impact India to some extent. The United States (US) and the European Union (EU) — five together account for around 30 per cent of India’s total exports. Also, a large part of the global exports is dependent on the US and Europe, which in turn will have an indirect impact on India too. "Our analysis indicates that a fraction of USD 150-160 billion of goods exports could be at risk from both direct and indirect impact," it added. However, not all sectors see an equal impact due to recession. Historically, discretionary consumption items have exhibited more volatility than staples. The report states, "If we look at previous recessions/slowdown, sectors such as auto and ancillaries, metals, textiles, etc. have been affected, while gems and jewelry, chemicals, and pharmaceuticals have been rather robust." Since the pandemic, India has seen sharp increases in the export value of gems and jewelry, textiles, metal products, mobile phones, etc. buoyed by the robust global demand. According to the Gems and Jewellery Export Promotion Council (GJEPC), the total export of gems and jewellryy grew by 6.7 per cent year-on-year to Rs 26,418.84 crore in August 2022. While certain segments may see an immediate contraction, quick monetary policy action by central banks often bolsters the demand side, the report revealed. Exports, to that extent, over a few quarters do not exhibit any sustained contraction. However, if central banks were to delay monetary policy support, even in the face of recession (amid inflationary concerns), the impact on trade might be more sustained, as per the report. The effect of the export slowdown will be felt in the domestic economy as well. While India is not heavily dependent on exports for growth, a large part of exports is driven by the labour-intensive micro, small and medium enterprises (MSMEs) — around 45 per cent of exports in FY2022. "We note that the US and major European economies contribute nearly 50 per cent of the exports by MSMEs," the bank added in the report. The report also mentioned that a slowdown in exports will have ramifications for domestic demand through consumption (especially discretionary consumption) and investments. The impact on the production side would be felt through manufacturing and wholesale/retail trade. Further, if the global situation were to exacerbate and affect MSMEs substantially, its impact may be felt in the financial sector too with some slowdown in credit and pressure on asset quality. Hence, Kotak maintained its FY2023-24 real GDP growth estimates at 6.8 per cent and 6 per cent with downside risks in the near term given the external sector headwinds. Few other agencies have cut India's gross domestic product (GDP) growth forecast amid higher inflation and rising policy interest rates. On 06 October, the World Bank curtailed its growth forecast for India for 2022-23 to 6.5 per cent year-on-year from a previous estimate of 7.5 per cent. Ealier, American credit rating agency, S&P Global Ratings on Monday estimated India's economic growth at 7.3 per cent in the current fiscal with downside risks. In its economic outlook for the Asia Pacific, the agency said that we have retained our growth outlook for India at 7.3 per cent for the fiscal year 2022-2023 and 6.5 per cent for the next fiscal year. It also mentioned that inflation is likely to remain above the Reserve Bank of India's (RBI's) upper tolerance threshold of 6 per cent till December 2022. Indian economic growth in 2023 will get support from domestic demand recovery after the Covid-19 pandemic, the report said. Also, the Asian Development Bank (ADB) downgraded India's economic growth projection for 2022-23 to 7 per cent from 7.2 per cent. According to the bank, the step came due to the higher-than-expected inflation in India and monetary tightening by the Reserve Bank of India. The ADB said in a report that the Indian economy grew 13.5 per cent year-on-year (YoY) in the first quarter of 2022-23, Witnessing strong growth in services. Meanwhile, Fitch also slashed India’s GDP growth forecast to 7 per cent in the financial year 2023 compared with 7.8 per cent in its earlier projection. The move came on the back of a global slowdown and tighter monetary policy.
Source: Business World
A good response is being expected from the industry as the exhibition conducted every 4 years was this time being held after six years owing to the COVID pandemic. The 11th edition of India ITME (international textile machinery exhibition) will be held in Noida, Uttar Pradesh, from December 8. The 6-day expo is expected to host over 1,100 exhibitors from 72 countries, including Australia, Slovakia, South Korea, Spain, Sweden, the UK, and the USA apart from India, said chairman of India ITME Society S Hari Shankar to reporters here on Monday. A good response is being expected from the industry as the exhibition conducted every 4 years was this time being held after six years owing to the COVID pandemic, he said. ITME would offer opportunities to interact with the biggest and the best of the machinery manufacturers in the industry and meet agents, dealers, government officials on one platform, he added.
Source: Outlook India
The Minister of Trade and Industry, Mr Alan Kyerematen, has engaged with textiles wholesalers and retailers on the implementation of the Textiles Tax Stamps Policy. The engagement forms part of a public education campaign towards the launch and implementation of the policy before the close of the year. It follows an earlier engagement with importers in May 2022. The Minister, at the engagement, said the education and sensitisation exercise showed Government’s commitment to addressing the challenges of the textiles industry, developing and harnessing the significant potentials the sector offered. He noted that the local demand for African prints was about 120 million yards per annum-about 65 per cent imported. Mr Kyerematen recalled the vibrancy of the Ghanaian textiles industry some three decades ago, which had been dampened by the influx of pirated designs and infringements on trademarks of local textile manufacturers. He said the Government, since 2018 had taken strategic steps and implemented policies to give lasting solutions to the challenges and make the local textile industry thrive under the Industrial Transformation Agenda. The measures were also to strengthen the textiles sector and position it to create millions of well-paid jobs for Ghanaians. The measures include the introduction and implementation of textiles tax stamps; import management systems; and the introduction of Designated Entry Corridors (Tema Port and Aflao Border for textile imports). Others include the provision of incentive packages for local manufacturers to make them competitive; attracting foreign textile manufacturers to set up or relocate their plants to Ghana; and the reconstitution of the task force to embark on effective market monitoring and surveillance. The Minister was optimistic that the policy measures would lead to the development of local textile firms and reduction in the importation of pirated textiles by promoting local manufacturing. He was hopeful that the policies would also help to streamline the importation of textiles and further ensure that all the players involved in the textiles industry benefited. The roll-out of the textiles tax stamps is expected to begin on November 1, 2022. The implementation modalities will include having textiles stamps affixed on all textile prints traded in Ghana. The wholesalers and retailers engaged the sector Ministry, Ministry of Finance, Ghana Revenue Authority-Domestic Tax Revenue Division, Intellectual Property Office and Ghana Standards Authority on other issues in the sector.
Source: Ghana Business News
The European Commission is developing a sustainable textile strategy to divert as many items as possible from both store shelves and people's closets into recycling and reuse programs by 2030. The EU is also planning to set a limit to "fast fashion" import. Currently, each person in the European Union discards annually about 11 kilograms of textiles, mostly clothing. Several studies indicate that clothing that has been worn only seven to 10 times is frequently discarded. This is completely untenable. The European Commission is therefore developing a textile strategy. According to the proposed plan, all textiles sold on the EU market by 2030 must be durable and recyclable. "Clothing should be made from eco-friendly fibers: these are recycled fibers, free of harmful compounds and produced with environmental and social rights in mind," Vivian Loonela, the head of the European Commission's Estonian representation, told ERR. This includes a reduction in the flow of fast textile production chains into the EU. While "quick fashion" is less expensive, the products are often of lower quality and have a higher environmental impact, Loonela explained. "The spring strategy presented by the Commission elaborates on the following goals: to reduce the number of collections per year, take responsibility, act to minimize one's carbon and environmental footprint. It is also important to think about where these products are manufactured and the employment conditions of the workers." There are no intentions to expand the quota system already applied to textile industry. Another major issue is the disposal of textile waste. Textile consumption is the third most negatively affected factor within the Union, after water and land use, and the fourth most detrimental factor on the environment and climate change at large. "It has been agreed that beginning from 2025, separate pickup of textile waste will be mandated everywhere in the European Union. Member states are now incorporating these guidelines into their legal frameworks." Textile waste is a quickly growing export item, in particular to non-European countries. Loonela said the Commission has proposed restrictions on that as well. "If they are to be exported from the OECD, the world's richest economies, this should only be done if the destination country notifies the Commission that it is willing to accept the waste and can handle it responsibly. It shouldn't be the case that clothing is piled up in the European Union and then dumped somewhere in third countries." All of these anticipated improvements could bring about the creation of platforms for clothing exchange and renting, for example. "We've done a lot of good work in Estonia with the European Commission Representation, the Reuse Centre and Reet Aus to show people how textile sorting works and how old textiles could be recycled into new: what could be thrown away and what should be reused, and people have responded positively." Member states are now discussing the proposed plan. Loonela added that the EU Council will likely adopt the policy by the end of the year.
Source: ERR News
North India’s cotton yarn market witnessed a mixed trend today. Prices remained stable in Delhi, while Ludhiana noted a fall of ₹5 per kg due to imports of cheaper cotton garments in India. Trade sources said that cotton yarn market is not getting support despite an improvement in cotton prices. However, mills are making efforts to increase yarn prices. Cotton yarn prices fell in Ludhiana as the market is concerned about the import of cheaper cotton garments from China that may impact the entire textile value chain of India. It is important to note that cotton and cotton yarn prices recorded a steep fall in China after the US imposed a ban on cotton originating in the Xinjiang region. “Volume of imports is yet to be ascertained. But the initial report regarding Chinese imports is worrisome for the domestic market and the industry at large. Indian government must act quickly to protect the domestic industry, trade, and farmers,” a trader from Ludhiana market told Fibre2Fashion. In the Ludhiana market, cotton yarn eased by ₹5 per kg. 30 count cotton combed yarn was sold at ₹310-320 per kg (GST inclusive), according to Fibre2Fashion’s market insight tool TexPro. 20 and 25 count combed yarn were traded at ₹295-305 per kg and ₹300-310 per kg respectively. Carded yarn of 30 count was quoted at ₹265-275 per kg. In Delhi, cotton yarn prices remained stable amid low demand, while cotton prices improved due to a lower production estimate. According to a trader from Delhi, mills are trying to increase the prices of cotton yarn, but the buyers are not willing to pay more. In the Delhi market, 30 count combed yarn was traded at ₹310-315 per kg (GST extra), 40 count combed at ₹345-350 per kg, 30 count carded at ₹280-285 per kg and 40 count carded at ₹315-320 per kg, as per TexPro. The recycled yarn prices remained stable in the Panipat market. It is mainly used in home furnishing and to make coarse fabrics. Demand for recycled yarn is yet to pick up as there were no activities on the exports front. Exporters are struggling to get new orders due to the economic slowdown in foreign markets. The ban on coal-based dyeing units in Panipat has been relaxed till the end of December this year, thus recycled yarn supply remained stable in the market. In Panipat, 10s recycled yarn (white) was traded at ₹86-92 per kg (excluding GST) after a decline of ₹1-2 per kg. But 10s recycled yarn (coloured - high quality) steadied at ₹100-105 per kg, 10s recycled yarn (coloured - low quality) was sold at ₹80-85 per kg and 20s recycled high quality PC yarn (coloured) at ₹105-110 per kg. 30 count recycled yarn was sold at ₹155-160 per kg and 10s optical yarn was traded at ₹100-110 per kg. Comber prices were ruling at ₹120-125 per kg and the same decreased to ₹115-120 per kg in south India. Recycled polyester fibre (PET bottle fibre) was at ₹88-90 per kg. North India’s cotton prices increased due to low crop estimate and cloudy weather. North India’s cotton production estimate for the new marketing season 2022-23 (October-September) has been lowered by around 10 lakh bales of 170 kg to 51 lakh bales by Bathinda based Indian Cotton Association Ltd (ICAL). The region comprises Punjab, Haryana, upper Rajasthan and lower Rajasthan. Daily arrival in north India decreased to 10,000-11,000 bales. Cotton was traded at ₹7,200-7,250 per maund of 37.2 kg for ready trade. The prices gained ₹75 per maund since last Friday.
Source: Fibre2 Fashion
China’s e-commerce logistics index in September 2022 has increased to 108.1 after a decline seen in August. The recent surge in the country’s e-commerce logistics index pushes it close to the 108.9 mark in February 2022, according to a joint survey by the China Federation of Logistics and Purchasing (CFLP) and e-commerce giant JD.com. Several logistics indexes have bounced back after a boost in business operations and market demand. “The rebound can be attributed to the steady recovery of household consumption, rapid growth in energy and logistics, implementation of macro policies, and the restoration of the logistics supply capacity,” China Logistics Information Centre researcher Hu Han was quoted as saying by several Chinese media reports. “The country’s logistics infrastructure was smooth overall in September,” added Hu. “The rapid recovery of business volume and new order sub-indexes indicate the strong resilience of the e-commerce express network.” Experts anticipate China’s logistics operations in the fourth quarter to be impacted by the comeback of COVID-19 cases in different parts of the country, complex international economic conditions, and low demand.
Source: Fibre 2 Fashion
Clothing and footwear manufacturing is characterised by a globalised “value chain”, in which each phase of production is concentrated in a different region. Giant retailers in the developed economies make huge fortunes in concert with smallerscale textile and garment factories, the bulk of them in Asia and other parts of the global South. The factory owners act as junior partners in a global network of profiteering. Far from liberating some of the world’s poorest people, export-oriented development has brought luxury for a privileged few but plunged millions into a vast matrix of exploitation. Hundreds of millions of workers are involved in making garments in some way, united by an enormous value chain that spans tiny, impoverished farms, large sweatshop factories and the shopping malls of Sydney, Shanghai and New York. At each step, individual capitalists endeavour to squeeze out as much profit as possible for themselves. There is a fortune to be made. According to one estimate, clothing and footwear are a US$1.55 trillion retail market. Lower down the value chain, industry analyst IBISWorld puts the total wholesale value of manufactured garments at around US$850 billion, a lucrative trade for aspiring capitalists in the global South. The creation of this wealth begins with the production of fibres such as cotton, jute and polyester, which are turned into textiles to be cut and assembled into garments. Cotton is by far the most popular natural fibre, most of which is produced in China, India, Pakistan, the United States and Brazil. Brazilian and American cotton is produced by large, mechanised farms. In Asia, it’s a different story. Industry group Better Cotton estimates there are 5.8 million smallholder cotton farmers in India and another 1.5 million in Pakistan. The Discover Natural Fibres Initiative estimates that total employment in natural fibre production, including parttime and seasonal workers, is a staggering 300 million people. Smallholding cotton farmers are extremely poor. Indian daily the Hindu last year reported that average income for Indian farmers was A$5 per day. Fluctuations in global prices, which are under downward pressure from mechanised production, can drastically impact farmers’ lives. According to the International Labour Organization, in India children often work on these farms, and many farmers are forced to work as casual labourers to supplement their low incomes. Polyester, a petroleum-based plastic and the most common synthetic material used in garment manufacturing, is produced and processed in factories in China, Taiwan, India, South Korea and Japan. Production for textiles consumes more than 300 million barrels of oil annually. Most of the fibres are bought and processed, not by big global brands, but by regional capitalists. Often these bosses directly own both textile weaving and garment manufacturing plants, “vertically integrating” production to cut out the middleman and leave higher margins for the bosses when they eventually on-sell to wholesalers or retailers. The process of turning fibres into usable textiles employs 50 million people in India and more than 150 million in China. The cutting and assembling of garments are concentrated in the same areas of the world. China produces 52.2 percent of the world’s garment products, other producers being Germany, Bangladesh, Vietnam, India, Italy, Turkey, the United States, Hong Kong and Spain. European exporters, home to high-end brands, are disproportionately represented in value terms, but the bulk of the volume of exports is from Asian countries. Textile and garment production has a distinctive lack of monopolies. No one retailer controls even a single percentage of global market share, and at the manufacturing stage there is a glut of middle-sized factories. The wide range of suppliers available to multinational retailers creates a ruthless competition for contracts, which in turn creates huge downward pressure on wages and working conditions. Big companies stock their shelves by making contracts with hundreds, sometimes thousands, of these factories. Swedish retailer H&M, with 4,702 stores in six continents, for example, claims on its website that it is supplied directly by 1,519 factories, concentrated in Bangladesh and China, where more than 1.5 million workers are involved in producing for its range. Hundreds more factories supply it indirectly through textile weaving and dyeing. Making clothes and shoes is labour-intensive. Workers bear the brunt of the competitive drive of factory owners, who deliberately target oppressed sections of the workforce, such as women and refugees, to keep costs low. Many Syrian refugees work in Turkey, for example, where informal work is the norm and few official work permits have been granted, according to the Business Social Compliance Initiative. Modern sweatshops break down the work process into simple, repetitive actions to increase the pace of production for each worker. Workers don’t produce clothes so much as parts of them—collars, pockets, sleeves. Over and over. Conditions are often terrible and shortcuts on safety are common, as a spate of factory catastrophes in Bangladesh testifies. Local bosses and big international retailers work together to ensure a steady supply of orders, backed up by governments eager to expand export industries. In Bangladesh, for example, the Observatory of Economic Complexity estimates that textiles and garments make up 90 percent of exports. Both major parties in the country are thoroughly in bed with the industry; as recently as 2015, almost 10 percent of all Bangladeshi parliamentarians were textile and garment factory owners. Retailers are in on it too. Helena Helmersson, H&M’s current CEO, cut her teeth in Dhaka, Bangladesh, in the mid-2000s as a production manager overseeing the supply chain. This was a period before even minimal regulatory standards were introduced following the 2012 Tazreen Fashion fire that killed 117 people, and the 2013 Rana Plaza collapse that left 1,134 dead. Today, H&M employs up to 2,000 people to work with suppliers to keep production running smoothly. Recent workers’ protests, a series of high-profile factory accidents and international criticism have forced some changes to the industry. The old strategy of keeping suppliers at arm’s length to deny the use of sweated labour has been replaced by glamorous sounding international agreements, including a “transparency pledge” that commits manufacturers to disclosing their supply chains publicly. Ultimately, although these agreements represent some progress, they can gloss over the ongoing poverty and hazards faced by garment workers. Integration of suppliers in the underdeveloped world and major companies in the advanced economies is facilitated by compacts such as the European Union’s “Everything But Arms” (EBA) agreement, which removes all tariffs on imports from the “least developed countries”, incentivising retailers to secure supplies from the poorest countries in the world. Touted as a way to overcome “structural impediments to sustainable development”, in reality such agreements are just another way to enrich the bosses. In the case of Myanmar, the 2012 EBA agreement signed in the aftermath of the country’s partial transition to democracy helped drive a fivefold increase in the country’s garment and textile exports. Garments and textiles are now the country’s biggest exports, accounting for approximately a third of its total exports, according to the Observatory of Economic Complexity. The EU is the destination for 70 percent of these exports, which supply major brands such as H&M and Adidas. However, the conditions remain shocking in factories contracted by big companies. Ninety percent of Myanmar’s 700,000 garment and textile workers are young women, a majority of them drawn into urban areas from the countryside as the sector expanded over the past decade. The minimum wage is a meagre US$95 a month, just over a quarter of the Asia Floor Wage Alliance’s estimate for a monthly living wage of US$367. When the military overthrew the government in February 2021, the industry’s fundamental class divisions were laid bare. Myanmar’s garment factories came grinding to a halt as hundreds of thousands of women workers joined a mass strike wave for democracy. They faced reprisals from bosses and the state alike. Al Jazeera reported last year that supervisors at the GY Sen Apparel Company, which manufactures garments for Irish brand Primark, locked nearly 1,000 workers inside their factory in retaliation for their participation in pro-democracy strikes. For all the EU’s posturing and imposing of four separate rounds of sanctions on Myanmar’s military government, it has stubbornly refused demands from both Myanmar’s independent garment workers’ unions and the global trade union body IndustriALL to withdraw the EBA agreement, unwilling to impose any restriction that would harm the interests of European clothing retailers. Adidas, which boasts on its website of its “concern for the well-being of workers in our factories”, admits in its own, publicly available 2022 supply chain report that it still contracts to six Myanmar firms, employing more than 19,000 workers to make clothes and footwear under the dictatorship. Likewise, H&M, which placed a temporary and theatrical pause on imports from Myanmar after the coup, took less than three months to begin ordering from the country again. Like their counterparts in the factories of Asia, workers in the clothing retail industry in the West are exploited too. They are some of the lowest-paid workers in the developed economies. In the United States, the average weekly income for apparel retail store workers in 2019 was a measly US$314. The Australian Bureau of Statistics identifies retail as having the second-lowest pay in the country. According to the Australian Bulletin of Labour, women make up 92 percent of the clothing retail workforce. The concentration of women in low-paid industries such as retail is one of the pillars upholding the gender pay gap. Where retail trade unions have attempted to fight for better conditions, they have encountered resistance from global giants. New Zealand news outlet Stuff reported that, in 2019, staff at Auckland and Christchurch H&M stores were suspended for wearing union stickers as part of a campaign to win a living wage. Despite the industry sprawling across borders and seas, the same dynamic of exploitation is replicated at every stage. Aside from clothes, the end products of this exploitative chain are the capitalists that the industry enriches. Among them are the mid-level capitalists of the global South, who own and oversee the regimented workhouses that churn out cheap clothing. By global standards they might seem insignificant, but in countries such as Bangladesh, where garment workers earn a paltry US$94 per month, their fortunes are staggering. At the very pinnacle are some of the world’s richest people. Sweden’s richest man is former H&M chairperson Stefan Persson, who boasts a net wealth of US$21.2 billion according to the Bloomberg Billionaires List. His children, simply by virtue of being born, are each worth more than US$1.5 billion. Unlike those who labour in fields and factories their entire working lives to make ends meet, Persson’s kids are free to pursue frivolous ventures, like producing films in the case of young Tom Persson. They have never picked nor processed cotton and would not know warp from weft; although European CEO magazine reassures its readers that Karl-Johan Persson indeed “spent summer holidays working in H&M stores” before, miraculously, “at just 25 years of age and with very little commercial experience under his belt, he was sitting on the boards of directors of H&M subsidiaries”, before becoming the company’s CEO in a stunning display of meritocratic achievement. As CEO, he was immediately preceded by his father. His grandfather founded H&M in 1947.
Source: Red Flag
