Meanwhile, it also expects that the energy- and mineral-producing regions of the Middle East and Africa too will achieve moderate growth. About the US, it said the ongoing tightening financial conditions due to monetary policy tightening will tip the US economy into a "mild recession" starting in the fourth quarter of 2022 and extending through the second quarter of 2023. Asia-Pacific region, which produces 35 per cent of the world GDP, is expected to dominate global economic growth in 2023, supported by regional free-trade agreements, efficient supply chains, and competitive costs, said S&P Global Market Intelligence. "Southeast Asia and India will benefit from trade diversification away from mainland China," it said in a note on Wednesday. Meanwhile, it also expects that the energy- and mineral-producing regions of the Middle East and Africa too will achieve moderate growth. About the US, it said the ongoing tightening financial conditions due to monetary policy tightening will tip the US economy into a "mild recession" starting in the fourth quarter of 2022 and extending through the second quarter of 2023. This month, it revised down US real GDP growth in 2023 from 0.9 to (-) 0.5 per cent. "The initial recovery is sluggish, leading to real GDP growth of just 1.3% in 2024. The recession will bring reversals in employment and industrial production, which posted solid gains through the third quarter of 2022. We project the US unemployment rate to rise from 3.5 per cent in September to 6.0 per cent at the end of 2023." On global inflation, it said that while achieving central bank inflation targets will be a multiyear process, there are possibilities for "significant progress" in 2023. Global consumer price inflation is projected to slow from 7.7 per cent in 2022 to 5.1 per cent in 2023 and 3.0 per cent in 2024, provided inflation in the advanced economies settles at 2.1 per cent. Global real GDP growth is projected to slow from 5.9 per cent in 2021 to 2.8 per cent this year and 1.4 per cent in 2023, thus averting an "outright recession", it said. Recessions now appear likely in Europe and North America--economies that produce half of the global output--in late 2022 and early 2023. "Global economic conditions continue to deteriorate as inflation remains uncomfortably high and financial market conditions tighten. The months ahead will likely bring recessions in Europe, the United States, Canada, and parts of Latin America. With moderate growth in Asia Pacific, the Middle East, and Africa, the world economy can avoid a downturn, but growth will be minimal," said Sara Johnson, Executive Director, Economic Research, at S&P Global Market Intelligence.
Source: Economic Times
Suella Braverman’s scepticism about the FTA’s Mode 4, based on the failure of the Migration and Mobility Partnership, is misplaced and conflates two distinct concepts. Two controversial issues ended up putting a spanner on the Diwali deadline for the UKIndia FTA—the depth of commitments on movement of natural persons and impediments to flow of data. Suella Braverman, in her first stint as the British as concerns that Indians tend to overstay their visas stirred up strong emotions on both sides. On the data issue, India’s requirements for data localisation are perceived by the UK as an impediment for cross-border data flows. There are ways to address both issues effectively for meaningful FTA commitments. This is particularly important since both have significant implications for trade in services under the FTA, an area in which the Indian government has estimated an export target of $350 billion in the current fiscal. Unlike the unidimensional method of merchandise trade, which occurs with goods crossing borders of the exporting country into the importing country, trade in services can occur through four modes of supply— *Mode 1, “cross-border supply of services: where an Indian service supplier supplies services through electronic means to the service consumer in the UK. The IT industry has been one of the biggest beneficiaries of this mode of supply. *Mode 2, or “consumption abroad”, where a service consumer of UK (the importing country), visits the India to avail of services, for example, tourism and healthcare services. *Mode 3, or “commercial presence”, is the most easily understood and measurable mode of trade in services, wherein an Indian services company invests in the UK. *Mode 4 involves the temporary movement of Indian service professionals to the UK to supply services for a specified duration. For Modes 1, 3 and 4, India has a positive balance of trade, and on Mode 2, both countries have similar exports. The two sticky issues, data localisation and visas, impact Mode 1 and Mode 4, respectively. Let us consider data localisation. This refers to requirements for storage and/or processing of data within the territory of a country, which is what lies at the heart of any Mode 1 delivery of services, whether it be IT, financial, educational, or any other. The policy rationale for data localisation is that this would facilitate law enforcement, as well as enable harnessing the economic potential of any data. India’s data protection law, which was expected to clarify the extent of localisation, is likely to see the light of day only in 2023. The current legal mandate for local storage of data in India is only with respect to personal financial data (used by credit card companies). But India is unlikely to commit cross border data flows under any FTA when the domestic legal framework is yet to fully evolve. However, data protection does not mean that there cannot be cross-border data flows for trade purposes. Take the example of the EU’s General Data Protection Regulation (GDPR), which sets a high level of protection for personal data. EU’s FTAs allow for transfer and storage of data to those countries which it has recognised as having a level of data protection adequate to its own. EU has recognised the data protection laws of Argentina, Canada, South Korea and the UK, among others, as “adequate”. For other countries, alternate pathways for data flows, including through contractual arrangements, is possible. Given the close linkage between cross-border data flows and Mode 1, an area where both India and UK have an aggressive interest, both countries should consider an interim arrangement, which can be reviewed once India’s data protection law comes into force. On the second issue of visas, Ms. Braverman’s skepticism of the FTA pertains to Mode 4, or the temporary presence of natural persons to provide services. Her concern is that the India-UK Migration and Mobility Partnership (MMP), entered into last year, had not worked well. This concern is misplaced and conflates two distinct concepts: Mode 4 under the FTA refers to the “temporary” presence of natural persons to deliver a service; it has nothing to do with mobility, employment and migration which is the domain of the MMP. In fact, the India-UK MMP specifically excludes trade in services through movement of natural persons, which it states will be part of the FTA commitments. The services chapter of the India-UK FTA, as is the practice in FTAs, would likely exclude any entry into the employment market and permanent migration into the UK. In fact, the UK is well-positioned to enforce this distinction with its special category of visas titled the “Global Business Mobility Service Supplier route”, which is geared to service sectors where the UK has taken commitments under an FTA. With a strong base of skilled professionals, India is well-positioned to further enhance its tactical advantages in Mode 4 under the proposed FTA. for this, dealing with Mode 4 as distinct from the MMP, is crucial. Trade in services is central to any meaningful FTA. Clear and innovative solutions, both at the conceptual and at the level of drafting commitments, are needed to make it meaningful for both India and the UK.
Source: Financial Express
India and China bilateral trade continued to boom, crossing $100 billion for the second year in the first nine months of 2022 while India's trade deficit climbed to over $75 billion India and China bilateral trade continued to boom, crossing USD 100 billion for the second year in the first nine months of 2022 while India's trade deficit climbed to over USD 75 billion, according to trade data released by Chinese customs. The total bilateral trade, amidst the military standoff in eastern Ladakh, went up to USD 103.63 billion, registering a 14.6 per cent increase compared to last year during the same period. China's exports to India climbed to USD 89.66 billion, registering an increase of 31 per cent, data released by China's General Administration of Customs (GAC) said. However, India's exports in the past nine months stood at USD 13.97 billion, registering a decline of 36.4 per cent. As a result, the total trade deficit went up to over USD 75.69 billion. Last year, the India-China bilateral trade hit a record high of over USD 125 billion crossing the USD 100 billion mark in a year when the relations touched a new low due to the standoff by the militaries in eastern Ladakh. Last year, China's exports to India went up by 46.2 per cent to USD 97.52 billion while India's exports to China grew by 34.2 per cent to USD 28.14 billion. The trade deficit for India stood at USD 69.38 billion in 2021.
Source: Business Standard
China to focus on artificial intelligence, aerospace technology, and life and health sciences; less reliance on debt and real estate for growth It is well recognised that, over the last 30 years, China has been growing at a scorching rate (often double-digit) to become the world’s second largest economy with a current GDP value of about $18 Trillion. The growth was substantially debt-driven and with massive flow of investment in fixed assets, which translated to commodity consumption. This approach helped the Asian behemoth become a major producer, processor, consumer, and importer or exporter of a wide variety of commodities covering energy products, industrial metals, and agricultural goods. This converted China into a low-cost manufacturing hub and an exporting juggernaut, as an analyst observed. Around 15 years ago, China’s policymakers decided to shift focus from investment-led growth to consumption-led growth to ensure that the benefits of economic growth spread more equitably among the population. But the consumption to GDP ratio has stagnated around 55 percent while the investment to GDP ratio has remained steady but with declining return on investment.
Economic slowdown
In recent years, China has been facing an economic slowdown with growth gradually tapering down to less than 6 per cent. For 2022, the GDP growth projection is less than 4 per cent. Currently, China is struggling with growth because of multiple factors, including restrictions due to zero-tolerance to Covid policy (lockdowns and restricted mobility), less-favourable demographics, and importantly, continuing trade war with the US since 2017-2018. It is this background that the recently concluded 20th Communist Party Congress triggered anticipation of a new economic paradigm that may potentially impact commodity markets. China is arguably the ‘mover and shaker’ of the world commodity markets. The market participants found the Congress deliberations did not result in any significant change to economic policy. Yet, some trends are clear. China is facing a slew of challenges, including real estate downturn, power shortages, and weakening currency (Yuan). A combination of the three will adversely impact the Asian major’s commodity production, consumption, and import. To be sure, China is the world’s largest producer of steel (accounting for close to 50 per cent of global production), a significant producer and consumer of many base metals and the largest importer of crude oil, coal, iron ore, soybean, and cotton, to name a few.
High-quality development
Now, China looks set to go through a major economic transition under President Xi Jinping’s third term as the undisputed leader. ‘High-quality development’ is the new paradigm. The country wants to make rapid technology-driven progress and will focus on artificial intelligence, aerospace technology, and life and health sciences. In other words, there will be less reliance on debt and real estate for growth. Going forward, China’s commodity intensity of growth may not wane, but the new emphasis on ‘quality of growth’ will mean reduced reliance on commodities and a sharper focus on technology. The emphasis on export is sure to continue but it will be for higher-valueadded products rather than lower-value-added ones.
Commodity intensive growth
On the other hand, India finds herself today where China was 25 years ago. In the next two decades, our growth will be substantially commodity intensive. For rapid economic growth, energy consumption is inevitable. Massive investment is planned for infrastructure sector development and multiple logistics options. For the success of these initiatives, we need a policy environment that encourages investment in the exploration and utilization of finite resources like minerals and metals, as well as a boost to renewable energy. ‘Sustained growth in sustainable ways’ is the way forward.
Source: The Hindu Business Line
Handlooms and Textiles Minister KT Rama Rao on Wednesday launched a scathing attack on the Narendra Modi government for hampering efforts of the Telangana government to empower weavers, by imposing a five per cent GST on handloom products. Welcoming former MP and BJP senior leader, Rapolu Anand Bhaskar, into the party fold at Telangana Bhavan here on Wednesday, Rama Rao said the handlooms and textiles sector was the second largest employer in the country after the agriculture sector. “But the Modi government has no policy for encouraging the sector except for slogans like ‘Farm to Fabric’ and ‘Farm to Fashion’. As a result, smaller countries like Bangladesh are far ahead of India in terms of textiles production,” he said. The Minister reminded that the State government was implementing numerous schemes including supply of yarn and other raw materials at 40 per cent subsidy, thrift and insurance schemes, apart from providing necessary financial support in times of need. The State government was also setting up the Kakatiya Mega Textile Park in Warangal, apart from other initiatives. He said despite repeated requests from Chief Minister K Chandrashekhar Rao, there was no support from the Centre. “Instead of supporting our endeavours, the BJP government is creating hurdles. The union government is neither extending any support for the Kakatiya Mega Texile Park citing lack of any provisions nor is willing to sanction a mega powerloom cluster. Instead, the Centre has cancelled eight schemes including supply of subsidised raw materials, closing of All India Handloom Board and All India Handicrafts Board among others,” he said. Speaking on the occasion, Rapolu Anand Bhaskar said Chief Minister K Chandrashekhar Rao had turned agriculture into a remunerative profession for farmers by taking up irrigation projects in an unprecedented manner. He said the Chief Minister had developed Telangana into a progressive State and would become a formidable alternative force to the BJP in the national politics as well.
Source: India TV News
The situation is rather grave, prompting Stalin to write to Modi to intervene in the matter; multiple reasons have led to the MSMEs facing a crisis Tamil Nadu’s Tirupur garment exporting unit hub has weathered many significant challenges in the past, ranging from the 2008 economic crisis to a 2011 Madras high court ruling against its effluent discharging plants to demonetisation, GST and the COVID-19 pandemic. But, just as the global demand for garment exports was picking up as the pandemic receded, the units were once again severely crippled by skyrocketing yarn prices. The price of yarn, which was around ₹220 per kg (30s count), jumped to ₹440 per kg in April and May this year. Unable to manufacture garments with these spiralling prices of yarn, a key raw material in garment manufacturing, these Tirupur units, which are 90 per cent MSMEs (micro, small and medium enterprises), were unable to negotiate better prices with foreign buyers and began to reduce production and buy yarn from mills. Despite these problems, the Tirupur units contributed around 54.2 per cent of the country’s textile exports last financial year. The garments cluster generated exports to the tune of ₹33,525 crore ($4.51 billion) in FY22.
Orders decline, demand falls Now, the Russia-Ukraine war and the economic slowdown in the US have plunged these MSMEs into a liquidity crisis. According to a letter written by Tamil Nadu Chief Minister MK Stalin to Prime Minister Narendra Modi, orders for the summer season have declined by around 40 per cent as compared to last year. Pointing out that Tirupur garment exporting units and their supplier MSMEs are staring at a financial crisis, Stalin said he understood that the “month-on-month growth rate in readymade garment exports is showing a sharp decline”. Tirupur is one of India’s largest knitwear exporting clusters that caters to US, UK and European markets, and MSMEs constitute 95 per cent of the exporting units in this cluster, he pointed out. “It is reported that orders for the summer season have now declined by around 40 per cent compared to last year,” the CM said in his letter. While some units have even shut down for short periods, the majority are working for just four or five days in a week. Earlier, the regular shifts used to be eight hours but now it is tough to run even one shift as there is not much demand, Raja M Shanmugam, president of the Tirupur Exporters’ Association (TEA), told the media.
Exports to plunge Further, he said that earlier despite higher prices, there was an increase in demand during the first five months. “Now, we are seeing a higher decline in orders for the coming months. We expect a 30-40 per cent fall in total exports for the year due to the ongoing global scenario,” he asserted. The reduction in purchasing power of the people in foreign and domestic markets has played a huge role in stalling production. Reports quoted exporters as saying that the clothes already produced and exported have remained unsold due to poor demand. According to Tirupur Exporters And Manufacturers Association (TEAMA) President Muthu Rathinam, competitors such as Bangladesh, Vietnam, Ethiopia and China benefited from high yarn prices in India and received orders in the ongoing season. The Indian exporters could not quote convenient prices. Even the few big domestic garment manufacturing units such as Lux, Amul and Dixcy, which manufacture garments to the tune of ₹10,000 crores per year, have to contend with huge stocks of pre-made clothes, said news reports.
Global issues
Even as the Tirupur knitwear exporting MSMEs were fighting off the double whammy of the COVID pandemic and cotton yarn price hike, the Russia-Ukraine War has worsened the situation in the EU, US and UK markets, said Shanmugham. This has led to a situation where the units have few booking orders and a lot of unsold stocks. The prolonged war has hit demand from Europe, with most global retail clients with high inventory. And, the US economic slowdown is also causing trouble for advance orders. Out of Tirupur’s monthly revenue of ₹3,000 crore, the US contributes earning of ₹1,000 crore.
According to TEA, the US contributed around 40 per cent of exports from the region, while for Europe it was 35 per cent last year. Any supply disruption or demand dip in the EU and the UK may wipe out business of more than ₹1,200 crore per month, the exporters told reporters. Garment manufacturers in Tirupur admitted that knitwear sales have stagnated in the past as well affecting production and employment opportunities, but this time the situation is grave. Exports from Tirupur had gone down from ₹27,500 in FY20 to ₹25,000 crore in FY21. It was expected to go up around ₹36,000 crore before the Ukraine crisis hit the export garment industry. This self-started cluster located 500 km in the southwest of Chennai, generates an annual turnover of $4 billion and employs around 700,000 people. It manufactures and exports cotton and cotton-blend T-shirts, dresses, sweatshirts, pullovers and other knitted clothes, mainly to the US, Europe, Australia and Canada. It accounts for a fourth of the country’s total garment exports.
Stalin’s intervention
Stalin, in his letter to Modi, sought a special Emergency Credit Line Guarantee Scheme (ECLGS) for the MSMEs in the garment sector immediately, to help them tide over the current crisis. In his letter, he listed multiple factors, including the economic impact of COVID-19, and the Russia-Ukraine war and the anticipated economic slowdown in the West, as the reasons for the crisis. The question remains whether the Tirupur MSMEs will again show resilience and be able to come out of this crisis like they have done in the past.
Source: The Federal
Africa is emerging as a major apparel producing and supplying hub in the world. Textile manufacturing is now shifting from Asia to Africa due to cost saturation in the former continent, said experts at the Asian Sustainable Textile Summit last month. Apparel exports from Africa crossed $2 billion for the first time in the first quarter (Q1) of this year. The shipment reached $2.083 billion in the period and slipped slightly to $1.953 billion in the second quarter of 2022. The exports had fallen to $0.764 billion in the second quarter of 2020 due to the pandemic. The continent exported apparel worth $1.380 billion in Q1 2021, according to Fibre2Fashion’s market insight tool TexPro. Apparel exports quickly recovered from the disruption in Q2 2020 and reached $1.667 billion in the third quarter and $1.597 billion in the fourth quarter of the same year. In 2021, Africa’s exports stood at $1.674 billion in Q1, $1.703 billion in Q2, $1.923 billion in Q3 and $1.989 billion in Q4. The figures suggest that the exports from Africa are increasing gradually. The annual exports also show gradual growth as the continent exported apparel worth $7.291 billion in 2021, $5.409 billion in 2020, $6.561 billion in 2019 and $6.442 billion in 2018, as per TexPro. Experts felt in the summit held in New Delhi in September 2022 that higher cost of production is driving textile manufacturing towards emerging markets. Earlier, the developed world was a major manufacturing hub. But the industry shifted to the developing world and Asia became a prominent supplier. Now, the industry is shifting towards lesser developed countries, so Africa is emerging as a new manufacturing hub.
Source: Fibre 2 Fashion
Describing India as an "economic superpower", Britain said on Wednesday that it was working towards the "best" Free Trade Agreement (FTA) that is beneficial to both the countries. India and Britain launched negotiations for the FTA in January with an aim to conclude talks by Diwali but the deadline was missed due to a lack of consensus on issues. "We have already closed the majority of Chapters and look forward to the next round of talks shortly," Secretary of State for International Trade Greg Hands said while replying to a question from Nick Thomas-Symonds, Shadow international trade secretary. A "strong FTA can strengthen the economic links between UK and India, boosting the UK economy by more than 3 billion pounds by 2035, helping families and communities," he said. He said that the FTA can cut red tapes, make it cheaper for UK companies to sell into India's dynamic market , helping drive growth and support jobs across every nation and region. Greater access could help UK businesses over a billion more consumers including India's growing middle class estimated to reach a quarter of a billion by year 2050 and give them a competitive edge over other countries that don't have a deal with India. An FTA with India that supports the Government growth strategy by taking advantage of the UK's status as an independent trading nation, championing free trade that benefits the whole of the UK, he said. We remain clear that we are working towards the best deal that is beneficial to both sides and won't sign until we have a deal that is fair, reciprocal and ultimately in the best interest of UK people and UK economy," he said. At the outset, he said India is of course an "economic superpower" projected to be the world's third largest economic power by 2050. "To improve access to this dynamic market, a huge opportunity for UK businesses, building on a trading relationship worth more than 24 billion pounds in 2021. That is why we are negotiating a trade agreement that works for both the countries," he added. Symonds also asked Hands to agree home secretary Suella Braverman has "completely undermined the UK government's negotiations" and asked whether she will withdraw those comments - and whether a future target date for the deal has been agreed. Hands responded by saying the majority of the chapters on the deal - 16 chapters across 26 policy areas - have been agreed so far. On Braverman's visa comments, he said she was referring to mode 4 arrangements, which relate to business visas not for permanent settlement. "That remains an area of active negotiation", he added. The India-UK free trade deal, which has missed the Diwali deadline, is likely to get the much-needed impetus with Rishi Sunak taking over as Britain's first Indian-origin Prime Minister as experts see political stability in the UK giving momentum to negotiations. Sunak, in his previous role as Chancellor of the Exchequer, had expressed support for the FTA as he saw enormous opportunities for both countries in the fintech and insurance sectors. According to the experts, political stability in the UK now would help fast-track the negotiations for the pact, which could potentially double bilateral trade by 2030. The total trade between India and the UK stood at USD 17.5 billion in 2021-22. India has in recent times signed trade deals with the United Arab Emirates and Australia but talks with the UK had hit a snag over easier access to Indian skilled workers. New Delhi is also seeking to claw back payments made by Indian workers towards Britain's social security system as part of the deal. In a free trade agreement, two countries either eliminate or significantly reduce customs duties on the maximum number of goods traded between them, besides easing norms for promoting investments and services trade. The UK is also a key investor in India. New Delhi attracted foreign direct investment of USD 1.64 billion in 2021-22. The figure was about USD 32 billion between April 2000 and March 2022.
Source: Economic Times
Vietnam’s textile and garment exports decreased by 27 per cent, which is almost $1.2 billion, in September 2022 to $3.2 billion month-over-month (MoM). China, South Korea, Japan, the US, and Europe showed a steep drop in exports because of weaker purchasing power due to rising inflation and other uncertainties. “There are uncertainties running up to the end of the year, especially the Russia-Ukraine conflict and material price fluctuations,” chairman of the Vietnam National Textile and Garment Group (Vinatex) Le Tien Truong was quoted as saying by Vietnamese media reports. “Enterprises are seeking ways to diversify material supply sources as well as export markets because when material sufficiency is ensured, they can boost shipments to many markets, thus helping guarantee production stability, supply chain, and sustainable exports.” The USD/VND exchange rate is expected to continue to drop in the second half of 2022, negatively affecting businesses, particularly those with high expenses calculated in US dollars, noted capital market company Saigon Securities Incorporation (SSI).
Source: Fibre2fashion
Ambassador of the European Union Dr. Riina Kionka has called for effective implementation of the 27 international conventions as Pakistan’s present GSP Plus status is going to be reviewed in Dec 2023 and more labour and human rights conventions will be added for their implementation. The European Union Ambassador stated this during her visit to a number of garments’ manufacturing units along with the PRGMEA executive committee members, Central Chairman Mubashar Naseer Butt and vice chairman Waseem Akhtar Khan where she also appreciated their performance, calling for product diversity and more valueaddition to exploit the full potential of market access to the countries under GSP Plus present regime. Later in a meeting held here at PRGMEA Office, both sides discussed in detail the role of SME sector in economic growth, technical education, skills development, EU support for Pakistan in TVET sector and promotion of women skilled force. The PRGMEA and the EU agreed to work on women entrepreneurship, better labour laws and promotion of SME sector along with other projects. The ambassador discussed various ideas for providing support to the SME sector, with the focus on creating linkages within the EU to open new markets for the products. Dr. Riina Kionka said that the EU is the biggest export market for Pakistani goods, as it accounts for about one-third of all Pakistani exports. She said the EU can assist Pakistan to expand its exports and uplift its industry through collaboration with the PRGMEA. The Ambassador appreciated the role of PRGMEA in boosting industrial activities in the region and added that her embassy would be in touch with the it to increase the bilateral ties. Other participants of the meeting included PRGMEA ex-chairman Sajid Saleem Minhas, Dr. Mufeez ul Islam, Ahmad Hanif, Irfan Khurshid, Muhammad Ali and Hina Asif. Addressing the meeting, PRGMEA Central Chairman Mubashar Naseer Butt and vice chairman Waseem Akhtar Khan said that Pakistan attaches great importance to its partnership with the European Union, as the European Union is one of the largest trading partners of Pakistan. PRGMEA Central Chairman said that GSP+ has increased EU-Pakistan bilateral trade; valued at €12.2 billion 2021 as compared to €6.9 billion, representing an increase of 78%. Mubashar Butt said that the GSP Plus status is very beneficial for the economy of Pakistan as it has played an important role in the expansion of bilateral trade. He said that trade with EU under GSP+ is of critical importance for Pakistan’s economic and social stability and prosperity. He said that GSP Plus is a constructive engagement for the betterment of our economy and promoting economic agenda. The scheme has a positive synergy with government’s social agenda. As a result of improved market access, Compound Annual Growth Rate (CAGR) for Pakistan’s exports to EU increased to 7% in the post GSP+ period as compared to 4% in the 5 years preceding GSP. On this occasion, PRGMEA vice chairman Waseem Akhtar observed that the GSP Plus benefits to Pakistan are the tariff free access to the largest market for textile and apparel and a solid platform and incentive structure to drive further reforms in the industry and the country. In the same way, the benefits to EU are reliable, cost competitive supply of textiles to EU businesses and consumers and a sustainable, ethical and increasingly traceable textile value chain. EU-Pakistan GSP+ relationship has the power to transform Pakistan’s economy and society while delivering on EU goals, he added. Mubashar Butt said that Pakistan’s textile and apparel industry is the backbone of the economy, constituting 8.5% of GDP, 40% of the industrial labor force and more than 60% of the country’s exports while it’s manufacturing share is 46%. The export of readymade garments exhibited an increase of 28.75% to $3.9 billion during fiscal year 2021-2022 compared with $3.03 billion in the preceding fiscal year. The Value-added Garments sector is the major tax payer, largest employment generator in the whole textile chain.
Source: Islamabad Post
The Netherlands has emerged as India’s third-largest export destination, ahead of China and Bangladesh. It has moved up two spots in the list of India’s top ten export destinations since FY22. The Netherlands has emerged as India’s third-largest export destination, ahead of China and Bangladesh. It has moved up two spots in the list of India’s top ten export destinations since FY22, thanks to a 106% surge in dispatches until August this fiscal from a year before to $7.5 billion. The Other Surprises: What comes as a greater surprise is that Brazil, which occupied the 21st spot in FY22, is now India’s 8th biggest export market. Similarly, Indonesia has moved up seven notches to grab the 7th position. However, amid a demand slowdown, only two European nations—the Netherlands and the UK–are among India’s top ten markets, against 4 in FY22. Germany and Belgium, which featured in the list last fiscal, are out of it now. Meanwhile, the US and the UAE continue to be the largest and second-largest export destinations, respectively, for India. The exports to the US climbed 18.3% until August to $35.2 billion, while those to the UAE shot up 27.3% to $13.8 billion. The Main Constituents: India’s exports to the Netherlands were driven mostly by a 238% jump in dispatches of oil products until August this fiscal to $3.67 billion. Even supplies of chemicals ($513 million) and pharmaceuticals ($219 million) remained substantial. Meanwhile, exports to Indonesia jumped 43% to $4.8 billion. The supplies to this ASEAN country were dominated by petroleum products, which jumped 144% on year up to August this fiscal to $1.8 billion. The other key products were cereals, sugar and chemicals. The shipment to Brazil swelled 70.9% in the first five months of this fiscal to $4.7 billion. The exports were driven by a 299% jump in supplies of petroleum products to $2.3 billion, followed by those of certain chemicals ($684 million) and automobiles, auto parts and allied products ($233 million). While Bangladesh has restricted its imports to mainly essential products to conserve dollars in the wake of a foreign exchange crisis there, even then exports to Bangladesh rose 8.7% to $5.8 billion. China-Concern: China is still battling the pandemic. So, India’s exports to China contracted sharply by 35.6% until August this fiscal to $6.8 billion. In contrast, India’s merchandise exports to all destinations grew 19.5% in the first five months of this fiscal to $196.5 billion. India’s Export Performance: The Goods And Services Nexus: The government aims at making India an export hub, to help boost job creation. The export-to-GDP ratio has risen fast since the early 1990s and now stands broadly at par with China. The large share of services in total exports however stands out: while India has performed very well in exporting IT services, exports of goods have lagged behind. Exports of labour-intensive manufacturing products could grow faster and contribute to job creation. The 2019 OECD Economic Survey of India discusses policies to make India’s exports more competitive. Performance of services exports has been stellar. India’s share of world services trade more than quadrupled from 0.5% in 1995 to 3.5% in 2018 and India has become a major exporter of business services, notably in the Information, Communication and Technology (ICT) sector. Medical and wellness tourism is also performing well, with patients seeking high-quality medical treatment at competitive prices in some Indian hospitals. Exports of goods have displayed mixed results. India has gained market shares for some skill- and capital-intensive goods, including pharmaceuticals and refined oil. However, performance in exporting textiles, leather and agricultural products has disappointed. Looking at the labour-intensive components of the textile sector (including garment) provides an illustration: Vietnam now has a larger market share. India could make exports a new growth engine: India’s trade prospects are relatively positive as it has specialised in sectors which will likely be in high demand in the future (e.g. ICT services, pharmaceuticals and medical devices) and in fast growing destinations (with a large share of its exports to emerging market economies). To unlock its potential to seize market shares in the labour-intensive manufacturing segment, India should modernise labour and land regulations, address infrastructure bottlenecks and open up further the services sector to trade and investment. Better and less expensive services – financial, marketing, distribution, legal, transport, etc. – will increase competitiveness in the manufacturing sector, boost job creation and meet the aspirations of women and new comers on the labour market.
Source: Adda 247
During the first nine months of this year, Sri Lanka has managed to earn US$ 10 billion from merchandise exports, the Sri Lanka Exports Development Board (EDB) said in its performance report for the month of September. Sri Lanka has managed to earn an export income of US$ 9,996.19 million during first 9 months of 2022, which is an increase of 11.83 percent compared to the US$ 8,938.49 million earned during the same period in 2021, according to the Export Development Board. Earnings from the merchandise exports increased by 5.75 % year-onyear to US$ 1,093.98 million in September 2022 as per the data released by the Sri Lanka Customs. This was mainly due to the increase in export earnings from Apparel and Textiles, Tea, Gems and Jewellery, Electrical and Electronic Components and Spices and Essential Oils, EDB said. Major Exports in September 2022 Major product sectors except Coconut based Products; Apparel & Textiles, Tea, Electrical & Electronic components, Spices & Concentrates Diamonds, Gems & Jewellery, Food & Beverages, Ornamental fish and Other export crops as shown in the table 1 below, recorded increased exports in September 2022. Exports of Apparel & Textiles increased by 5 % y-o-y to US$ 479.88 million in September 2022. The increase was driven by both Apparel and Textiles. Export earnings from tea in September 2022 which made up 11% of merchandise exports, increased by 11.63% y-o-y to US$ 117.82 million. This was mainly due to the higher Export of bulk tea (11.95%) and tea packets (6.98%). Export earnings from Rubber and Rubber Finished products have decreased by 16.91% y-o-y to US$ 82.19 million in September 2022, with poor performance in exports of Pneumatic & Retreated Rubber Tyres & Tubes (-4.67%) and export of Industrial & surgical gloves (-39.12%). Export earnings from the Electrical & Electronics Components increased by 42.13 % y-oy to US$ 57.27 million in September 2022 with strong performance in exports of Insulated Wires & Cables (42.13%) and Other Electrical & Electronic Products (45.56%). Export earnings from Seafood decreased by 25% to US$ 16.95 million in September 2022 compared to September 2021. Except Shrimps & lobsters, export earnings from Frozen fish and Crabs increased by 2.68% and 94.03% respectively in September 2022. However, export earnings from Ornamental fish increased by 37.6% to US$ 1.72 million in September 2022 compared to September 2021. In addition, export earnings from Spices and Essential Oils increased by 9.29% to US$ 40.84 million in the month of September 2022 compared to month of September 2021 due to the better performance in export of Cinnamon (14.0%) and Pepper (4.37%). On monthly analysis, except shell products export earnings of kernel products and fiber products categorized under the Coconut based products decreased by 11.95% and 11.62% respectively in September 2022 compared to September 2021. Major Exports during the period of January – September 2022 For the period of January - September 2022, merchandise exports increased by 11.83% to US$ 9,996.19 Million compared to the corresponding period of 2021. Major product sectors except Tea, Rubber-based products and Spices & Concentrates; Apparel & Textiles, Coconut based products, Electrical & Electronic Components, Gems & Jewellery, Food & Beverages and Other export crops as shown in the table 1 below, recorded increased exports. Apparel & Textile exports increased by 17.61% to US$ 4,562.67 million during the period of January to September 2022 compared to the same period of 2021. Except Made-up Clothing Accessories (-9.36%), Yarn (-13.5%) and Made-up Textile Articles (-2.94%); exports of other sub categories of Apparel & Textiles sector increased. Export earnings from Rubber & Rubber finished products decreased by 2.18% to US$ 787.87 million in January – September 2022 compared with the same period of 2021 attributed to lower exports of Industrial & surgical Gloves (-20.87%). However, exports of Pneumatic & Retreated Rubber Tyres & Tubes increased by 7.26 % during the period of January to September 2022 compared with the same period of 2021. Meanwhile earnings from export of Electrical and Electronic Components (EEC) increased by 16.08 % to US$ 488.67 million in the period of January to September 2022 compared to the corresponding period of 2021. Export of Insulated wires increased by 18.55 % in during the period of January to September 2022 to US$ 62.25 million compared with the corresponding period of previous year. In addition, export of Printed Circuits, Switches/ Boards & Panels, Electrical Transformers and Other Electrical & Electronic Products increased by 43.43%, 6.04%, 10.32% and 15.16 % respectively during the period of January to September 2022 compared with the corresponding period of previous year. Export earnings from Seafood increased by 9.17% to US$ 205.31 million in the period of January to September 2022 compared to year 2021 due to the better performance in all the sub categories except Lobsters; Frozen Fish (4.24%), Fresh Fish (23.34%) and Prawns (18.18%). In addition, earnings from export of ornamental fish increased by 12.27% to US$ 15.55 million during the period of January to September 2022 compared to the corresponding period of the year 2021. For the period of January to September2022, export earnings from Coconut & Coconut based products expanded by 4.9 % to US$ 638.58 million. Earnings from all the major categories of Coconut based products increased during the period of January – September 2022 compared with the corresponding period of 2021 due to the improved performance in export of Liquid Coconut Milk, Cocopeat, Brooms & Brushes, Mattress Fiber, Activated Carbon, Coconut Oil and Desiccated Coconut. However, export earnings from Tea decreased by 5.27% to US$ 937.14 million during the period of January to September 2022 compared with the corresponding period of 2021. Exports of all the sub categories of tea sector except Tea Bags; Tea packets (- 5.87%), Bulk Tea (-5.15%,), Instant Tea (-17.37%) and Green Tea (-48.96%) decreased during the period of January to September 2022 compared with the same period of 2021. Export earnings from Spices and Essential Oils decreased by 14.21% to US$ 275.24 million in the period of January to September 2022 compared to year 2021 due to the poor performance in all the sub categories; Cinnamon (-1.28%), pepper (-17.0%), cloves (-57.46%), nutmeg & mace (-9.72%), cardamom (-64.29%) and essential oils (-27.52%). Sri Lanka’s Export Performance in Major Markets Strong Export Growth recorded for top 15 export markets in the period of January to September 2022. The single largest export destination of United States of America recorded US$ 2,582.91million worth of exports in the period of January to September 2022 – a significant year on year increase of 18.73 % in comparison to US$ 2,175.46 million recorded in 2021. Exports to United Kingdom as the second largest trading partner recorded an increase of 11.68 % to US$ 758.93 million during the period of January to September 2022 compared with the corresponding period of previous year. Exports to FTA Partners During the period of January to September 2022, exports to Free Trade Agreement (FTA) partners accounted for 7 % of total merchandise exports with an increase of 10.25 % and amounting to US$ 700.53 million. Although Exports to India has increased by 13.24 % y-o-y to US$ 642.03 million, exports to Pakistan has decreased by 14.59% to US$ 58.5 million during the period compared to the corresponding period of 2021. Growth in Exports to India was mainly supported by increased exports of Animal Feed (14.69%), Arecanuts (69.85%), Woven fabrics (77.45%) and Wood pulp (33.85%) from January - September 2022. Sri Lanka’s Export Performance in Regions Following table indicates the comparison of region wise exports during the period of January to September2020, 2021 & 2022. The EU accounted for 22.93 % of total Sri Lanka’s merchandise exports. On a region wise comparison exports to all regions except CIS countries increased during the period of January to September 2022 compared with the corresponding period of 2021. During the period of January to September 2022, breakdown of exports to the top five EU markets which accounted for 78 % of Sri Lanka’s total exports to the EU were; Germany US$ 567.93 million (increased by 4.22 %), Italy US$ 477.24 million (increased by 13.98 %), Netherlands US$ 304.93 million (decreased by 0.35 %), Belgium US$ 240.22 million (decreased by 1.19 %) and France US$ 199.88 million. (increased by 15.2 %). Export of Services The estimated value of services exports for the period of January - September 2022 was 1,455.75 Million dollars, increasing 3.8 % over the corresponding period of 2021. The services exports estimated by EDB consists of ICT/BPM, Construction, Financial services and Transport & Logistics.
Source: Colombo Page
Sustainability remains a ‘hot topic’ within the fashion industry and its ever-shifting environmental, social and political landscape. As manufacturers, brands, and retailers launch more products which are labelled ‘eco-conscious,’ ‘environmentally friendly,’ or ‘sustainable’, the number of greenwashing accusations has also been substantially increasing. From household names to fast-fashion retailers and luxury brands, companies have been called out for greenwashing in its many forms, including false product material labeling and misleading sustainable claims. Misleading claims go even further when you consider the complexity of the global supply chains brands and retailers work within. Since globalized mass production remains the norm within fashion, the immediate need for increased transparency is only exacerbated. This makes traceability throughout the entire supply chain, from the yarn spinner to the retailer, critical for a truly sustainable fashion industry. Only by enabling complete visibility at every stage of garment production, can manufacturers and brands establish a clear overview of how, where, and with which materials the garment is made. A transparent overview not only helps combat greenwashing, but also establishes a strong trust that is fundamental to all stakeholders for building reliable sustainability credentials. This is where companies like leading fiber manufacturer Lenzing see digitalization as a necessity to the cause. Spurred on by the pandemic, technological solutions are helping manufacturers gain visibility into their supply chains. Market offerings that help verify the origins of fiber materials or fabric production have now made it easier for manufacturers and retailers to gain more transparency in their supply chains. Achieving transparency and traceability in supply chains with digital solutions To drive this, Lenzing follows a four-pillar approach to help create a more sustainable fashion and textile industry that revolves around traceability and transparency. Lenzing’s fiber identification technology and E-Branding Service are the foundation of its unique approach to transparency, while supply chain collaboration and downstream value chain tracking via blockchain helps maximum traceability. Beginning with the innovative production process that makes fibers identifiable even in fabrics and garments, Lenzing’s fiber identification technology is able to verify usage of its fibers across the textile value chain. This allows full fiber origin traceability, providing brands and retailers with the assurance that their products are made of authentic TENCEL™ branded fibers that are produced in facilities that meet high environmental standards. Tapping into the blockchain- based tracking system powered by TextileGenesis™, Lenzing’s partner brands can trace each step of production from fiber to retail. In addition, Lenzing's ongoing collaboration with the supply chain enables end-to-end planning, agility and responsiveness guided by the objective to reduce environmental impact. Communicate fiber authenticity with support from the E-Branding Service To couple ongoing efforts to ensure traceability, Lenzing goes one step further with the introduction of an E-Branding Service platform that provides value-added service and support to the value chain. Developed as a one-stop online solution, the Lenzing EBranding Service platform enables customers along its value chain and brand partners to apply for fabric certification and product licenses, and download brand assets for marketing purposes. Fiber verification is a key component of the E-Branding Service platform as it requires internal testing of the fabrics to assure authentic TENCEL™ branded fibers are used. With the fabric certification number, users of the E-Branding Service platform can apply for product licenses to use TENCEL™ brand assets for product labelling or promotional content. Apart from ready- made product hangtags for in-store promotions, in line with the increase in online shopping, Lenzing also offers a Digital Hangtag tool on the EBranding Service platform, so brands can help consumers easily find products made with TENCEL™ branded fibers, learn more about the garment and make informed purchase decisions when shopping online. Everything is done online via the E-Branding Service platform, allowing partners to use its services anytime anywhere. To enhance user experience, the E-Branding Service platform is constantly updated to bring greater convenience to users. Stay tuned to more updates as Lenzing continues to refine its services to digitalize the textile industry.
Source: Adda 247
