Indian textile industry cautious as COVID-19 cases surge in China
Textile, apparel units in many states issue Covid advisory
PLI scheme for textiles attracts Rs 1,536 cr in investments: Government
Demand for additional coaches in trains to transport textile goods
Year-End- Review of Department of Textiles– 2022
Despite global headwinds, Indian economy among fastest growing in the world: Finance Ministry
DPIIT seeks views of different ministries on draft national retail trade policy
India to become $10-trillion economy by 2035: CEBR
Exports to Covid-hit China may contract at a faster pace
India-Australia FTA: All You Need To Know
INTERNATIONAL
China to continue to widen opening up, make cuts to negative list
Textile, apparel units in many states issue Covid advisory
Difficulties to remain for textile, garment exports in H1: insiders
Cambodia’s TG sector rising fast with 80% of exports to US
China Covid surge: Sick workers, falling demand forces factories to shut down
NATIONAL
Indian textile industry is cautious after a spike in COVID-19 cases in China. Industry and trade experts are currently assessing the actual risk from the pandemic and the disruption. Some traders said that manufacturers have reduced their purchases already. Government of India has also reinstated COVID-19 protocols and certain restrictions. Textile industry and trade are facing poor demand from the global market due to the economic slowdown and high inflation. Higher prices of cotton and other fibres are also pushing the cost of production up, thus squeezing the profit margins of manufacturers. The risk of the new COVID wave is another challenge for the industry, which is already dealing with unfavourable market conditions. Trade sources said that market sentiment further dampened after reports of COVID spike in China and rising risk in India. There is a general sense of uncertainty in trade because buyers and sellers are clueless about the future scenario of pandemic. Some experts are of the opinion that India might be a soft target of the pandemic because of its proximity to China, while others feel that India is already past its worst COVID wave that hit the country in April-June 2021. Traders said that trade activities will be disrupted only if lockdowns are imposed. “Manufacturers have reduced their purchases as they do not want to take more risk,” Nikhil Jain, a trader from Ludhiana, told Fibre2Fashion. They had already been facing losses due to low demand and the high cost of production. However, a Delhi-based trader was optimistic. He said that probably the situation will not deteriorate to the extent it did earlier. The things will be clearer in the next one or two weeks. Hopefully, the situation will be under control in China in the next few weeks and the impact of the present wave will be milder than before. A cotton trader from Bathinda was also optimistic as he hoped to get some advantage from the improving demand for Indian cotton and yarn after a disruption in the Chinese industry. He told Fibre2Fashion, “A sharp rise in COVID cases in China may disrupt the normal trade and industry. Probably, exports of cotton, yarn, and fabrics from China to India and other countries will be affected. Therefore, demand may divert to India which may help support the prices of textile products.”
Source: Fibre2Fashion
Labour-intensive textile, apparel, diamond and engineering units in states including Gujarat, Tamil Nadu and Maharashtra have issued advisories asking workers to abide by Covid-19 protocol so as to prevent a resurgence of the pandemic. The development comes in the wake of reports of mounting cases of the infection in China. The Surat Municipal Corporation held a meeting with representatives of textile and diamond trade to discuss the Covid-19 situation and said it is looking at how to provide booster doses to the workers. The diamond and textile units in Surat together employ about 2.8 million people. The Tiruppur Exporters Association issued an advisory to its 1.2 million workers and sought to allay fears about a fresh wave of the pandemic among migrant workers so that they do not leave their workplaces. “The workers in Surat and Mumbai units have started observing the Covid-19 protocol. For the gems and jewellery industry, the news of Covid-19 in China has not been a good one and it will impact our exports in the current fiscal,” said Vipul Shah, chairman, Gem & Jewellery Export Promotion Council.
Source: Economic times
The Rs 10,683-crore production-linked incentive scheme for India's textiles sector attracted investments of Rs 1,536 crore as approval letters were issued to 56 applicants who met the eligibility criteria, the government said on Monday. Applications under the PLI Scheme for textiles were received through a web portal from January 1, 2022, to February 28, 2022. The Centre launched the PLI Scheme with an approved outlay of Rs 10,683 crore to promote the production of MMF apparel, MMF fabrics and Products of Technical Textiles in the country to enable the textiles industry to achieve size and scale and to become competitive. "Selection Committee chaired by Secretary (Textiles) has selected 64 applicants under the scheme. 56 applicants have completed the mandatory criteria for the formation of a new company and approval letters have been issued to them. Investment to the tune of Rs 1,536 crore has been made so far," an official statement said. The ministry said that domestic cotton cultivation has increased by 5 per cent to 125.02 lakh hectares as against 119.10 lakh hectares during last year, and a brand named 'Kasturi Cotton India' for Indian cotton has been launched to encourage mechanized harvesting of cotton, improving its quality of cotton and reduce labour cost. Besides, 74 research proposals amounting to Rs 232 crore have been approved under National Technical Textile Mission (NTTM) for speciality fibre and technical textiles, the Textiles Ministry stated in the year-end review for the segment.
The Southern Gujarat Chamber of Commerce and Industry (SGCCI) on Monday urged the Railways to add additional coaches in trains to ensure cost-effective transport of textile goods from Surat to other destinations in the country. A joint meeting to discuss transportation of goods through railway and postal department was chaired by SGCCI president Himanshu Bodawala and attended by the Federation of Surat Textile Traders Association (FOSTTA) president Manoj Agrawal, executive director of Railway Board (strategic planning and implementation) GVL Satya Kumar, Surat railway station director Mukesh Kumar and regional director of South Gujarat Post services Dr Shivram among others. Raising the demand for additional coaches, Bodawala said that there will be no shortage of parcels of textile goods and a collection point should be set up at the market area by railway and postal department. “Special trains should be operated to major cities across the country and additional bogies should be added to existing long distance trains… so that textile parcels can be delivered easily and safely to major markets,” he said. The Railway started textile parcel goods services from Surat to Varanasi in October 2022 for which train number 9011 runs regularly from Udhna railway station in Surat to Varanasi. Union Minister of State for Railways and Textiles Darshana Jardosh flagged off a “textile parcel special parcel train” from Surat to Bihar in September 2021 but was stopped later. A special textile parcel train was sent to Kolkata last year, services of which stopped later. Claiming that the present mode of sending parcels through road incurs high cost and time, Agrawal said, “If a permanent solution is arrived at by railway goods transport facility, it will benefit both the Railways and textile traders.” Railway Board official Kumar who was at the meeting said, “We have got good response for the service from Surat to Varanasi… The Railways and postal department are working together to regularise the transportation of textile goods by January 2023. Railway authorities have made a mobile application for textile traders to make bookings.”
From receiving proposals under PM Mitra to investment under PLI Scheme, it was an eventful year for Ministry of Textiles. The Ministry provided financial assistance to handloom sector and organized several Handicraft exhibitions.
Some of the key initiatives and achievements of the Ministry in the year 2022 are:
PLI Scheme
Government has launched the Production Linked Incentive (PLI) Scheme with an approved outlay of Rs.10,683 crore to promote production of MMF Apparel, MMF Fabrics and Products of Technical Textiles in the country to enable Textiles Industry to achieve size and scale and to become competitive. Applications under PLI Scheme for Textiles were received through web portal from 01.01.2022 to 28.02.2022. A total of 67 applications have been received. Selection Committee chaired by Secretary (Textiles) has selected 64 applicants under the scheme. 56 applicants have completed the mandatory criteria for formation of a new company and approval letters have been issued to them. Investment to the tune of Rs. 1536 crore approximately has been made so far. Quality Control Order wrt VSF is under issuance.
PM MITRA
The Government had approved setting up of 7 (seven) PM Mega Integrated Textile Region and Apparel (PM MITRA) Parks to develop world class infrastructure including plug and play facility with an outlay of Rs. 4445 crore for a period up-to 2027-28. The guidelines in respect of scheme have been published and there have been multiple interactions with State Governments for inviting proposals. In response 18 proposals from 13 States have been received. National Conference was organized on 04.05.2022 for discussion on proposals with the Senior Officers from State Governments and Industry Associations. Evaluation of proposed PM MITRA park sites was done through Gati Shakti portal to understand locational advantage. As of now detailed scrutiny for selection of sites through challenge matrix is underway.
National Technical Textile Mission (NTTM)
Under NTTM, 74 research proposals valuing Rs.232 cr have been approved in the category of speciality fibre and technical textile. For market development and promotion of technical textiles, 4 major conferences have been organised viz. (i) International conference with CII in Delhi on 12/03/22, (ii) Conference on Geotech and Agrotech with ICC at Imphal on 23/08/2022, (iii) National conclave on protective textiles on 16/11/2022 at Delhi and (iv) International conference with CII and Govt. of TN on 25-26 November 2022 in Chennai. 31 new HSN codes have been developed in the technical textiles sector. SRTEPC have been assigned the role of export promotion council for technical textiles.
Amended Technology Upgradation Fund Scheme (ATUFS)
Investment of Rs.10,218 crore confirmed by the industry in 2443 subsidy cases. A total of Rs. 621.41 crore subsidy was released in 3159 cases under Amended Technology Upgradation Fund Scheme and Special campaigns organized at major clusters for settling backlog cases.
SAMARTH
A total of 73919 persons (SC: 18194, ST:8877 and Women: 64352) have been provided training of which 38823 persons were provided placement under SAMARTH – Scheme for Capacity Building in Textile Sector
National Institute of Fashion Technology (NIFT)
A new Campus at Daman was made operational for the academic session 2022-23. Moreover new Campus Buildings for Bhopal and Srinagar are also coming up.
Silk Sector
The total Raw Silk production was 28106 MT. R&D projects numbering 44 were initiated and 23 were concluded with the achievement of training 9777 persons in various activities related to silk sector.
Jute Sector
JUTE-ICARE (Improved Cultivation And Advanced Retting Exercise) Scheme: covers 170 jute growing blocks with 1,89,483 hectare had benefitted 4,20,309 jute farmers. Export Performance has improved due to Market Development & Promotion Scheme (MDPS) as export performance rose by 38% from the last year with current value at Rs. 3786 crore. The value of exported Jute Diversified Products is Rs. 1744 crore with increasing trend by 46% from the last year. A total quantity of around 26.87 lakh bales of jute bags worth Rs.9.80 thousand crores (approx.) have been indented.
Cotton Sector
Cotton cultivation has been increased by 5% to 125.02 lakh hectare as against 119.10 lakh hectare during last year. Brand named KASTURI COTTON INDIA for Indian cotton has been launched and to encourage mechanized harvesting of cotton, improving quality of cotton and to reduce labour cost. Further 75000 hand held kapas plucker machines are being distributed.
Wool Sector
Projects to Animal/Sheep Husbandry Dept., Leh have been approved of revolving fund of Rs.2 Cr for procurement of pashmina wool, distribution of 400 portable tents to Nomads of Leh in order to improve living conditions. Further construction of 300 Predator proof corrals for safety of pashmina goat along with project to procure 50 sheep shearing machines to Uttarakhand
Handloom Sector
Financial assistance of Rs.76.60 Crore has been provided to 91 Handloom Clusters. 1,109 weavers provided improved looms and accessories under HSS. Skill up-gradation training was imparted to 2,107 handloom workers under Handloom Clusters of National Handloom Development Programme. Assistance amounting to Rs.18.49 crore has been released for 141 marketing events. Moreover assistance of Rs.10.40 crore has also been released for various activities sanctioned to Mega Handloom Clusters under Comprehensive Handloom Cluster Development Scheme. 102.05 lakh kg of yarn was supplied under transport subsidy component, 73.79 lakh kg of yarn supplied under-price subsidy component and total of 175.84 lakh kg of yarn supplied under Raw Material Supply Scheme (RMSS).
Handicrafts Sector
A total of 272 marketing events were organized, benefiting 19330 artisans. Pahchan cards were issued to 30 lakh artisan and uploaded on public domain. 52 artisan Producer Companies were formed and supported. 418 training programme and Design workshops were conducted benefiting 12480 artisans. Modern Toolkit were distributed to 13579 artisans. Shilp Guru & National Awards for the years 2017,2018 & 2019 were awarded to 108 artisans.
Source: PIB
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Despite global economy experiencing several challenges, including the Russia-Ukraine conflict, the slowdown in China, persistently high inflation and tightening financial conditions, India continues to be one of the fastest growing economies in the world, sources in the Finance Ministry have said. As per the World Economic Outlook (WEO) October 2022 report of the IMF, the economies around the world were facing recessionary trends due to the aforementioned reasons. The slowdown of global output had also made IMF lower the growth forecast for India's economy, sources informed, adding that domestic economy was projected to grow 6.8 per cent in 2022 and 6.1 per cent in 2023. However despite this, the government is of the opinion that India's economy was better off than many globally. The WEO report also said that geopolitical factors were weighing heavily on global growth, especially in advanced economies. Owing to these unfavourable developments, the IMF had projected global growth to slow from 6 per cent in 2021 to 3.2 per cent in 2022 and 2.7 per cent in 2023. For advanced economies, the growth was projected to decline from 5.2 per cent in 2021 to 2.4 per cent in 2022 and 1.1 per cent in 2023. The corresponding growth for emerging market and developing economies had been projected at 3.7 percent in 2022 and 2023, down from 6.6 per cent in 2021. Sources in the Finance Ministry said that several measures had been taken to stabilise economic growth. In the Union Budget 2021-22, increase in capex budget by 34.5 per cent over 2020-21 was announced. The expansion of the production linked incentive (PLI) scheme to 14 sectors and introduction of Mega Investment Textile Parks (MITRA) were announced. Other major reforms were also introduced to promote domestic manufacturing, including national monetisation pipeline of public sector assets, privatisation of public sector banks and insurance companies, reforms-based result-linked power distribution sector scheme, increasing of FDI in insurance sector from 49 per cent to 74 per cent, and rationalisation of custom duties. In the Union Budget 2022-23, the capex budget was again increased by 35.4 per cent over the previous year, 'PM Gati (NS:GATI) Shakti' was launched for integrated planning of infrastructure and synchronised project implementation across all concerned central ministries, departments and state governments, and emergency credit line guarantee scheme was extended to provide continued support to MSMEs, among others.
Source: The in.investing.com
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The Department for Promotion of Industry and Internal Trade (DPIIT) has sought the views of 16 departments and ministries on its draft national retailtrade policy, which is aimed at the overall development of all formats of the sector, an official said. After getting comments from all the departments and ministries, DPIIT would seek approval of the Union Cabinet on the policy, the official added. The policy would focus on formulating strategies to provide a globally competitive and sustainable environment for the overall development of retail trade through targeted efforts. The objectives of the policy include ensuring easy and quick access to affordable credit, facilitating modernization and digitisation of retail trade by promoting modern technology and superior infrastructural support; development of physical infrastructure across the distribution chain; promotion of skill development and improve labour productivity, and providing an effective consultative and grievance redressal mechanism for the sector. India is the world's fifth-largest global destination in the retail space. According to a report of CII-Kearney on retail, a cohesive national retail policy can help generate 30 lakh more jobs by 2024. The report was released in November 2020. The retail industry is likely to see 10 per cent annual growth to reach about USD 2 trillion by 2032, according to a BCG-RAI report. Besides the retail policy, the DPIIT is also working on formulating a national e-commerce policy to promote the growth of the online retail sector in the country. A new industrial policy is also on the anvil, the official said. This will be the third industrial policy after the first in 1956 and the second in 1991.
Source: Economic times
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India will become the third economic superpower by 2037 and a $10-trillion economy by 2035, Centre for Economics and Business Research (CEBR), a leading London-based consultancy, has said. Published on Monday, the report said the world is moving towards recession. However, over the next five years, the annual rate of India's GDP growth is expected to average 6.4%, after which it is expected to grow at average 6.5% in the subsequent nine years. "This growth trajectory will see India rise from fifth place on the World Economic League Table in 2022 to third in the global rankings by 2037," it said According to the report, the pandemic had a particularly devastating effect in absolute terms and India had the third highest death toll globally, yet the economy bounced back. "In 2035, we forecast that India will become the third $10-trillion economy. Although there are political factors that could hold India back, it has demographics on its side," the report said. The report also played down concerns over high inflation, saying it has remained lower than in most other large economies. Much of India's current inflation rate reflects higher food prices, an erratic item but one that also accounts for a larger share of the consumer basket than in any other G20 country, CEBR added.
Source: Economic times
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A sustained surge in Covid cases in China could further exacerbate a contraction in India’s exports to its fourth-largest market in the coming months, as order flow has already been faltering at a steady pace, trade sources told FE. Some exporters now forecast a 40-45% crash in exports to China this fiscal from $21.3 billion in FY22 if the Covid surge continues through January. Between April and October, India’s exports to China shrank 37.2% from a year before to $8.84 billion, far underperforming a 12.5% rise in the country’s overall merchandise despatches (See chart). In October, the contraction in exports to Beijing was as high as 44.2% to $1 billion, according to official data. It has already started weighing on the country’s overall merchandise exports, which shrank 16.7% in October and barely rose in November. China typically sources from India a lot of raw materials and intermediate inputs–including cotton, iron ore and iron & steel–and limited finished products, such as select capital goods. Ajay Sahai, director general at the Federation of Indian Exports Organisation, said, given that the world’s second-largest economy had already been slowing down, its appetite for raw inputs had remained limited this fiscal. “The latest Covid surge just made the matter worse. There has been a huge fall in India’s exports of cotton, aluminium, copper, iron ore and iron & steel products to China. However, the marine segment has still done reasonably well,” he added. Of course, the crash in iron ore and steel product exports to China have also been caused by a steep hike in export duties on these products in May to rein in inflation. Of course, the duty hikes were rolled back last month. Arun Kumar Garodia, chairman of the engineering exporters’ body EEPC India, said: “Our exports to China in December may fall at a steeper pace than in November.” Engineering exports to China crashed by 40% in November, far worse than a 0.3% fall in total such exports during the month to $8.1 billion. Thanks to the global turmoil and the Covid surge in China, India’s engineering exports, which account for roughly a fourth of the overall merchandise despatches, may even drop from the last year’s level of $112 billion, he added. However, Garodia expected Covid cases in China to ease from January, which should bring back some normalcy in exports to the neighbour. According to a Bloomberg News report on December 23, almost 37 million people in China might have been infected with Covid-19 on a single day last week. About 248 million people, almost 18% of China’s population, may have contracted the virus in the first 20 days of December, the report said, citing minutes from a meeting of China’s National Health Commission. China’s business confidence eased to its lowest in close to 10 years, a survey by World Economics showed on Monday. While Beijing scrapped its zero-Covid policy of lockdowns and massive testing on December 7 due to growing public protests, it comes hardly as a solace, as the numbers of those tested positive have kept rising. The good thing is ports are still functioning and goods are still being despatched to China, trade sources said. “However, there is no guarantee that they will remain so in the coming weeks. Order flow has slowed dramatically in many segments, although in some other segments, such as food and pharmaceuticals, they are still flowing in. The situation is very uncertain,” said the chief of a state-run export promotion council. R Uday Bhaskar, director general at the Pharmaceutical Export Promotion Council, said, the Covid situation in China is being closely watched. “Pharma exports to China, however, haven’t been affected much so far,” he added. This is partly due to the surge in Covid, said another industry executives. The fall in overall exports to China until October this fiscal was driven by a plunge in supplies of ores, slag & ash (80.8%), iron & steel (79.2%), aluminium and such articles (83.9%), cotton (94.4%), copper and articles (67.9%) and electrical machinery, equipment, etc (40.1%). The World Bank last week slashed its growth forecasts for China to 2.7% for 2022 from 4.3% predicted in June and to 4.3% for 2023 from 8.1%, thanks to the escalating Covid situation.
Source: Financial express
The Central Board of Indirect Taxes and Customs, India has notified the Rules of Origin for the India-Australia trade pact that is set to kick off on 29 December 2022. This relates to the eligibility requirement so as to claim the preferential customs duty on trade in goods, under the economic cooperation and trade agreement (ECTA).
The agreement was signed by the then Australian Minister for Trade, Tourism and Investment and India’s Minister of Commerce and Industry, Consumer Affairs and Food and Public Distribution and Textiles of India on 2 April 2022.
What is a Free Trade Agreement (FTA)?
The India-Australia Economic Cooperation and Trade Agreement (AI-ECTA) is a free trade agreement to facilitate trade between the two countries. Under an FTA, two countries agree to reduce or regulate customs duties substantially and work around regulatory laws, subsidies, and quotas on products under the trade agreements. The agreement is a kind of preferential deal that will benefit both parties.
The two parties also have to negotiate the rules of origin, that is, determine if products are eligible for reduced or zero duty under the mutually agreed FTA rules.
Why is this deal good news?
Australia can serve as a goldmine for Indian exporters, given that the former is trying to reduce its dependence on China. There have been several informal bans on Australian goods, and China's crippling sanctions on barley and wine, in addition to dumping allegations. Given this situation, Australia is looking to double-trade with India in the near future, which stood at USD 27.5 billion in 2021 in terms of merchandise and services.
The Australian Parliament had given a thumbs up to the India-Australia FTA. This move has been taken positively by India given that it is the first FTA with a developed country (except India-Japan). Most of the FTAs previously have been mainly with South Asian countries. This trade deal is expected to more than double the trade to 60 Bn USD in the next five years.
Impact on education
As per the Australian Trade and Investment Commission (Austrade), the number of students joining Australian universities at pre-pandemic stood at over 52,000 as of June 2022. These numbers are close to the pre-pandemic levels of over 60,000 in 2020. This is in contrast to Chinese students whose enrolment has declined given the Covid management policies of the country, which include travel restrictions. The strengthening of trade and growing confidence between the two countries
Critical minerals partnership
These include elements like Graphite, Lithium, Cobalt, and the like. They are crucial elements for manufacturing Electric Vehicle (EV) batteries and transitioning to renewables. Australia has 21 out of 49 minerals that are critical to decarbonisation. This trade deal will be mutually beneficial to both parties when it comes to critical minerals, given that India will diversify its sources and Australia will diversify its markets. Further, Australia is also India’s largest supplier of cooking coal which is used in steel and iron manufacturing. The reduction of duties following the FTAs will have a cascading impact on reducing the cost of iron and steel goods on the common man.
The wine advantage
Australia will be the major winner here. As per Austrade In 2021, Australia was India’s largest source of wine imports. Australia has a 43 per cent share of the Indian market valued at a record USD 12 million. Exports are also off to a record start in 2022. The reduction in trade barriers following the FTA will help further export Australian wine.ndia wine imports from 2016 to 2021 in Mn USD. Even though wine is not the first choice of alcoholic beverage among Indians, it is slowly catching up, with an estimated market growth of 8 per cent.
Labour intensive sectors
India here has a greater edge as it will promote labour-intensive products such as footwear, pharmaceuticals, jewellery, textiles, furniture, etc. among thousands of other smaller sectors. As per some estimates, Australia is offering 96.4 per cent benefits to exports from day one. This deal is one of the pivotal economic developments for India in the decade and has serious
Source: Business world
INTERNATIONAL
China will continue to widen opening-up and guide foreign firms to invest in areas like energy conservation, modern services and advanced manufacturing in its market next year, according to the ministry of commerce. The government will make appropriate reductions to the negative list for foreign investment, said ministry spokeswoman Shu Jueting. China will actively seek to join high-standard economic and trade agreements, follow relevant rules, regulations, management and standards, and steadily expand institutional opening-up, the official said. The Central Economic Work Conference, which concluded last week in Beijing, pledged to make more efforts to attract and utilise foreign capital, widen market access and grant foreign-funded enterprises national treatment. "China will continue to optimise the structure of foreign investment, implement the new version of the cataloguw of industries to encourage foreign investment and guide global businesses to invest in key areas including high-end manufacturing, modern services, environmental protection, and technological innovation in 2023," she told an online news conference. The ministry said the actual use of foreign direct investment on the Chinese mainland expanded by 9.9 per cent on a yearly basis to 1.16 trillion yuan ($165.99 billion) during the January-November period, while investment from South Korea and Germany climbed by 122.1 per cent and 52.6 per cent year on year respectively. Shu said China will intensify efforts to conduct trials on advanced platforms like pilot free trade zones and national economic and technological development zones, and accelerate the replication and promotion of pilot experience in other parts of the country next year, official Chinese media reported. Foreign-funded companies in China saw their export value grow 2.4 per cent year on year to 6.87 trillion yuan during the January-November period, said the general administration of customs.
Source: Fibre2Fashion
Labour-intensive textile, apparel, diamond and engineering units in states including Gujarat, Tamil Nadu and Maharashtra have issued advisories asking workers to abide by Covid-19 protocol so as to prevent a resurgence of the pandemic. The development comes in the wake of reports of mounting cases of the infection in China. The Surat Municipal Corporation held a meeting with representatives of textile and diamond trade to discuss the Covid-19 situation and said it is looking at how to provide booster doses to the workers. The diamond and textile units in Surat together employ about 2.8 million people. The Tiruppur Exporters Association issued an advisory to its 1.2 million workers and sought to allay fears about a fresh wave of the pandemic among migrant workers so that they do not leave their workplaces. “The workers in Surat and Mumbai units have started observing the Covid-19 protocol. For the gems and jewellery industry, the news of Covid-19 in China has not been a good one and it will impact our exports in the current fiscal,” said Vipul Shah, chairman, Gem & Jewellery Export Promotion Council.
Source : Economic times
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The textile and garment sector has predicted that difficulties will remain for its exports in the first half of 2023, but there are also silver linings it can pin hopes on. The Vietnam National Textile and Garment Group (Vinatex) said though forecasts had been made early, its members were still surprised at unpredictable changes in 2022 such as the Russia - Ukraine conflict and surges in oil prices, inflation, and interest rates, which have caused demand to nose-dive in importing markets. Yet Vinatex estimated its 2022 consolidated revenue at over 19.53 trillion VND (826.84 million USD), up 15% from last year and 8% higher than the target, and consolidated profit at more than 1 trillion VND, up 14.6% from the target. These figures are assessed as encouraging amid numerous market difficulties. Pointing out three scenarios, Vinatex President Le Tien Truong said in the best-case one – the global economy will have become stable and geopolitical conflicts been over by the end of the second quarter - exports next year may go up 4 - 5% from 2022. In the middle-case scenario – instabilities will linger on, inflation remain, and interest rates still increase until Q3 - exports may stay unchanged compared to this year. And in the worst-case one where the world economy will enter a recession, the 2023 revenue may be about 5% lower than that of this year. Meanwhile, the Vietnam Textile and Apparel Association (VITAS) has forecast its export revenue this year is likely to stand at nearly 44.5 billion USD, up 10% from 2021. For 2023, textile and garment exports may reach 47 - 48 billion USD in the positive scenario and 45 - 46 billion USD in the lower-case scenario, Vinatex noted, adding that how enterprises adapt to changes in markets will affect their growth in any circumstance. In the positive scenario – instabilities in the global market will be brought under control, all activities of the sector may have recovered by the end of next year’s Q1. In such case, 48 billion USD in revenue is achievable. However, VITAS President Vu Duc Giang said, in the second scenario under which the global market will recover in the latter half of 2023, export turnover may reach 45 billion USD. In the current context, when international markets do not place long-term textile and garment orders, businesses can switch to producing lower-value items. In 2022, as they have started to diversify markets and products, growth is still sustained. In any scenario, textile and garment markets will be unable to bounce back at least in the first half of 2023. However, experts held that there are still certain bright spots next year, noting the COVID-19 pandemic is being put under control, the world getting used to a new normal, the Asia-Pacific predicted to be the fastest-growing region in 2023, China easing the zero-COVID policy, and logistics costs showing signs of declining./.
Source: The en.vietnamplus.vn
Rising demand from the US has contributed to faster growth of the travel goods (TG) industry in Cambodia in comparison to the garment industry for some time, reveal recent estimates. According to the Garment Footwear and Travel (GFT) Goods Brief jointly released recently by the European Chamber of Commerce (EuroCham) and the Textile, Apparel, Footwear & Travel Goods Association in Cambodia (TAFTAC), 80 percent of Cambodia’s overall TG exports were shipped to the US in 2021, compared to only 20 percent in 2012. This equates to an average growth rate of 102 percent per year in exports to the US over the 2017-2021 period. Compared to this, only six percent of TG exports were destined for the European Union (EU) in 2021, with the remaining 14 percent exported to other markets. In 2021, relative to 2020, overall GFT exports increased by 15 percent, while TG exports alone increased by 55 percent, data from the General Department of Customs and Excise (GDCE) showed. Thanks to the comparably low export share of Cambodian TG to the EU, the partial withdrawal of the EU’s Everything But Arms (EBA) initiative in 2020 had a relatively small impact on Cambodia’s TG sector as a whole, the sector brief pointed out. However, the EBA withdrawal did decrease the share of Cambodian TG products destined for the EU. With five product tariff lines affected by the partial withdrawal, the EU went from being the destination of 12 percent of Cambodia’s TG exports in 2019, to just six percent in 2021 (or seven percent when including the UK). TG sector growth was also accompanied by an expansion in the number of officially registered travel goods factories, as well as an increase in the number of workers employed. While in 2019, 46,207 TG workers worked in 91 factories, in 2021, that number increased to 84,686 workers across 121 registered factories. The year 2022 has seen somewhat of a consolidation period. Although there was a slight decline in the number of registered TG factories to 114 in 2022, the number of employees has increased to 98,282. TG factory payroll also increased in line with export value and the number of employees. The annual payroll of the travel goods sector rose from $130 million in 2019 to $285 million in 2021. Both nominal and real average monthly earnings (including overtime and allowances) of workers in the TG sector have also grown gradually over this period. The nominal monthly earnings of Cambodia’s TG workers rose from $235 in 2019 to $238 in 2020 and further to $278 in 2021. They decreased slightly to $276 in Q1, 2022. Looking forward, the government’s swift and competent management of the pandemic has undoubtedly supported a faster recovery than otherwise might have been expected, the sector brief noted. The expansion of the US trade preference programme, the Generalized System of Preferences (GSP), in 2016 has been a major contributor to the exponential growth of Cambodia’s travel goods sector, as it rose from a 0.02 percent global market share in 2012 to a 1.6 percent share in 2021. Although these preferential treatments may lead to short- and medium-term economic growth (and have indeed led to long-term economic growth in the past), they also leave Cambodia’s GFT sector vulnerable to external shocks such as the non-renewal of GSP. Speaking to Khmer Times, recently, senior economist and Director General of the Institute of China Studies at the Royal Academy of Cambodia, Ky Sereyvath, too echoed these sentiments saying that diversifying the export markets and products is key for Cambodia to remain competitive in the world market.
Source: The khmertimeskh
Many people in China have been forced indoors as a result of the Covid-19 infection's rapid spread, and stores and eateries are now deserted. Because more employees are getting sick, factories and businesses are also being forced to close or reduce production, according to CNN. Beijing abruptly relaxed its strict zero-Covid policy, which was already having a negative impact on the Chinese economy. Due to widespread lockdowns in November, retail sales fell, and unemployment rose to its highest point in six months. In the first few weeks of December, sales of homes and cars declined. The China Passenger Car Association's most recent statistics show that automakers sold 946,000 vehicles from December 1 to December 18, a 15% decrease from the same period last year. According to Chinese financial data provider Wind, the 30 largest cities' home sales by floor area fell 44% from the same week a year ago. According to CNN, home sales in Tier-1 cities like Beijing and Shanghai dropped 53% last week compared to the same period last year. Chinese media has reported that numerous factories have been forced to close for weeks due to employee sickness and a lack of orders. In order to celebrate the Chinese New Year, employees at a number of furniture factories in the eastern Jiangsu province have been told to take an early and extended vacation, according to Caixin on Monday. The Lunar New Year holiday this year takes place between January 21 and January 27. The spread of Covid cases throughout China is severely straining the nation's economy. Since the world's second-largest economy drastically eased its Covid restrictions earlier this month, there has been no clear data on the extent of the virus' spread on the national level. But several cities and provinces have said they were seeing tens of thousands of new cases per day. Analysts from Capital Economics in a research note last week said, “The number of people on the streets has dropped off sharply from already subdued levels across the country." He asserted that this drop will affect demand. When Beijing abruptly changed course from its strict zero-Covid policy, the Chinese economy was already in a precarious position. Due to widespread lockdowns, retail sales decreased in November, and unemployment rose to its highest level in six months. Leading figures have recently hinted that they will return their attention to growth in the coming year and have staked their bets on the easing of pandemic restrictions to boost the economy, according to CNN. However, the numbers don't seem encouraging. Movements among people have also fallen significantly. According to Wind data, the number of subway trips has decreased by about 60% in major cities since the middle of this month compared to the same time last year. Statistics from the transportation ministry and the postal service regulator show that both truck cargo volumes and delivery orders nationwide decreased in the previous week, as reported by CNN. As more workers are unable to work, BYD, the nation's largest producer of electric vehicles, announced it would have to reduce production by 2,000 to 3,000 vehicles per day. Lian Yubo, vice president of BYD said that the company's monthly production is likely to fall short of target by 20,000 to 30,000 vehicles for December. According to the Securities Daily, a newspaper published by the state-owned Henan Daily Press Group last week, as many as 60% of textile and dyeing businesses in the coastal provinces of Guangdong, Zhejiang, and Shandong — which are the main manufacturing centres of the nation — have declared they will halt production and take a lengthy vacation lasting two months. Capital Economics analysts stated ,China's conflict with Covid may be at its "most dangerous" in the coming weeks. Any regions of the country that are not currently experiencing a significant Covid wave are likely to do so soon, they predicted, as the migration to rural areas ahead of Lunar New Year has begun. Apart from economic figures China is in extreme stress with the nationwide Covid wave, as the medical facilities are not being able to accommodate so many patients swarming n the hospitals treatment. Moreover crematoriums are also getting crowded with furnaces burning overtime and people waiting in quesues with bodies to send off their loved ones.
Source: live mint
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