However, Bangladesh has succeeded in garment exports, which is more labourintensive than spinning or home textiles, as the cost of labour is lower than India. India has gained an advantage over China and Vietnam in overall textile exports to the US because of lower power and water costs. Moreover, orders for spindles are shifting from China to other countries, especially India, after the US banned imports from the Chinese manufacturing hub of Xinjiang because the products were produced with forced labour. However, Bangladesh has succeeded in garment exports, which is more labour-intensive than spinning or home textiles, as the cost of labour is lower than India.
Source: Financial Express
Between rising inflation, continuing globalisation and the introduction of new business models, change is the only universal factor that the textile and fashion industry will witness in 2023. This article explores ten of the factors that will play key roles in changes to this industry and discusses how firms around the world can adapt to them. If the changes that the world has faced in the last several years have taught us anything, it’s that everything is connected. This planet is a closed system, and what one company does can easily have a lasting impact halfway across the globe. In this complex world, there is no single element that will revolutionise the world of textiles as the world welcomes the new year. A person can only examine each of these factors as part of a larger whole. However, it is critical for players in the textile industry to understand each of these factors that are changing the value chain. Renewed Focus on the Circular Economy Without a healthy, clean environment, the planet can have nothing else. The textile industry plays a major role in the resources the world uses. For instance: • It takes 22,500 litres of water to grow one kilogram of raw cotton.1 • Leaching of chemical dyes into groundwater can contaminate drinking water for years.2 • Fashion production comprises up to 10 per cent of humanity’s net carbon dioxide emissions.3 There are a variety of ways in which textile manufacturers can reduce their environmental footprint, and 2023 is the year that many of them are taking the plunge. One of the ways that manufacturers are maximising their positive impact is by opening their supply chains to include recycled and reused materials. Some companies are even utilising blockchain and Internet of Things technologies to ensure their long-term sustainability and allow consumers to track the origins of their clothing. Others are moving entirely away from the fast fashion business model, reducing the dual problems of wastage and oversupply. Meanwhile, an increasing number of clothing manufacturers have signed on to the Ellen MacArthur Foundation’s Jeans Redesign guidelines, which the Foundation most recently updated in 2021. These guidelines apply to the entire textile value chain, from growing and picking cotton to stitching jeans together, and their goal is to make jeans more reusable and recyclable from the beginning of the manufacturing process. Many other companies have even begun to offer clothing rental, subscription services, and peer-to-peer clothing sharing to help keep old clothing out of landfills. Some clothing retailers have started to expand their return and resale options, circularising the economy while still allowing consumers to purchase like-new items.
Source: The Hindu Business Line
Inflation is rising in almost every nation, and people are paying more for goods and services. As it happens with many systemic issues, the impact of inflation is not universal. For a very rich person, paying more for petrol is merely an annoyance, while for a poor person, the same difference in price can be the deciding factor in whether he can even go to work that day. With the increase in the cost of living, consumers are being forced to redefine their priorities. For many people, new fashion is low on the list of necessities. Consumers are wearing their clothing for a longer time, and they are investing more energy into repairing tears instead of replacing items. One study by Consumer Pulse in the United States found that the number of American consumers who have switched clothing brands or retailers in 2022 is greater today than it was before the pandemic began.4 Inflation isn’t only a problem on the consumer’s side, either. Apparel manufacturers and suppliers have to pay much more along all stages of their supply chains, from the cost of freight to wage increases for their workers. Many of them have no choice but to pass these costs down to their consumers, which in turn fuels the previously mentioned drive for clothing reuse and rental. The subsequent reduction in demand is placing textile producers on a knife-edge.
Increasing Demand for Luxury Fashion Humanity is full of contradictions.
On the one hand there are many consumers who are focused on reducing the amount they pay for clothing, on the other there has been a dramatic increase in the demand for luxury fashion. In 2023, this change in demand will force fashion designers and producers to rethink their strategies. Many of these luxuries are domestic. After facing two years of strict limits on international travel, some fashion designers have changed their focus to their home countries. Some innovators in the world of fashion have done this out of necessity. Others have done it out of a sense of national solidarity and pride. In both cases, it results in innovation and novel forms of luxury. In many cases, these novel forms of luxury feed into the circularisation of the global economy. Some luxury designers are turning to 3D printing and seaweed-based fabrics, while others like Stella McCartney are recycling cashmere from off-cuts. Advancements in technology have also allowed the popularisation of complex garments that were formerly the sole purview of the rich. Improvements in knitting machines, for example, have sped up the production of knitwear that used to be knitted by humans. Between 2020 and 2022, the world’s focus shifted to local designers and creators. The disruption to global shipping brought people’s attention to what they could acquire at home. With the dawn of the new year, these designers have started to utilise their newfound audience in hopes of growing their brands internationally. High-end textile and fashion providers, meanwhile, are being forced to reformulate their strategies yet again as the world reopened its borders. As people begin to travel to fashion hubs such as Milan once again, these cities need to prepare for the influx of shoppers.
The Lingering Impacts of Covid-19
COVID-19 has been the key driver of the global economy since the beginning of 2020, and it isn’t about to go anywhere. With vaccines and antiviral drugs available to help prevent its spread, the virus may have less of an impact on the apparel industry now than it did at the beginning of the pandemic. However, suppliers and manufacturers still need to account for its existence when making plans. In the early days of the pandemic, retailers were forced to shift to selling online and offering delivery and pickup of orders, and this trend is continuing even as people get vaccinated. Many fashion manufacturers who had shifted to also creating masks in 2020 will be moving their focus back to traditional fashion in 2023. One of the knock-on effects of living in a global economy is that a single COVID-19 outbreak in one factory can disrupt clothing sales halfway across the world. Shipping delays, understaffed retailers, and the rise in second-hand fashion have all permanently changed the global outlook on the textile industry.
Key Players Are Changing
Their Trade Policies All industry in the 21st century is global, and that has never been more evident than it is today. Every industry, no matter how small, depends on global trade and international cooperation. The ongoing Russian invasion of Ukraine has had a massive impact on the textile industry, since many countries have now suspended their textile exports to Russia. The invasion’s effect on fuel and oil prices is equally impactful on the price of clothing and fabric around the world. In addition, many countries are now implementing fair trade policies and even placing sanctions on textile exporters who have poor records on human rights. While larger importers (such as the United States) remain steadfastly focused on free trade, every change to the industry has greater significance than it did decades ago. As the world’s most populated nation, China has been taking many steps to change its domestic and international policies regarding textiles. From shutting down unauthorised factories that use toxic dyes to driving the rebound in demand for natural fibres, China is enacting sweeping changes to its trade policy. These policy changes are in turn altering how other countries do business. Many countries and regional trading blocs are also in the process of changing their trade policies to account for the continuing impacts of climate change. Canada and the European Union in particular are prioritising lower-emissions goods and services of all types and placing tariffs on technologies that are unfriendly to the climate. In addition, inflation is changing the outlook of entire governments and industries, not simply individuals. Many countries — especially smaller ones — are focusing inwards rather than placing their priority on importing new textile goods.
Continued Globalisation of Value Chains
The global economy is not a simple chain, where one thing leads to another, causing a single net effect. Instead, it is a web, and every one of its elements is interweaved. The more the world globalises its value chains, the more complex this web becomes — and the more problems can be caused by a single disruption to those chains. The very shape of these global value chains has changed in the last few decades, and the rate of that change is only increasing with time. Businesses are compartmentalising and subdividing the products and services they offer. While small businesses have kept their focus on domestic production, the increase in globalisation has led to more large companies outsourcing early aspects of their work to foreign countries. Instead of a vertical value chain, they are increasingly relying on a lateral one. In addition, the globalisation of value chains has led to an increasing gap between the needs of textile manufacturers and textile importers. Importers are consolidating the number of countries they get their textiles and materials from, even as they expand the amount of material they buy. Textile manufacturers, then, are feeling the impact of this consolidation. Some manufacturers are even being forced to open factories in neighbouring countries to preserve the client relationships that keep them in operation
Greenwashing vs. Sustainability
Consumers are making more environmentally focused choices than they used to, and as the 2020s move forward, industries across the globe are being forced to address their impact on the environment. They generally have two methods of doing this: embracing sustainability or improving their optics. In an industry that has such a dramatic impact on the planet, textile manufacturers are not exempt from this choice. The manufacturers that focus on sustainability are making a variety of changes to their methods and processes, including relying on renewable materials, obtaining certification from standards such as the Global Organic Textile Standard, and improving transparency in their supply chains. Some manufacturers are doing this willingly. Others are making the move to comply with new regulations in regions like the United Kingdom and the European Union. When they engage in greenwashing, textile brands make unsubstantiated claims about the eco-friendliness of their products. They may make claims that their textiles are GOTScertified when in fact only their raw materials are, or boast about using recycled materials while still relying on toxic heavy metals in their dyes. Manufacturers will commonly make unverifiable claims about the materials they use, for instance stating that they are “organic” without any certification to back up their claim. The more greenwashing techniques they encounter in daily life, the better consumers become at seeing through them. The textile companies that aim for long-term success are the ones that can prove their green values to consumers. Some textile manufacturers have introduced mobile apps that can track the origins of their fabric using blockchain technology. Others have begun to provide transparency and traceability statements on their websites. In all cases, the textile companies that can back up their claims with credible results are the ones that tend to come out as winners. Using standardisation tools such as the Higg Index and product passports is one of the most effective ways for brands to demonstrate this commitment. These technologies can account for factors such as working conditions in factories as well. Greenwashing doesn’t just do direct harm to the environment. It also damages the credibility of the textile producers who are focusing on improving the footprint of their industry. As textile value chains trend toward creating meaningful change, key figures in the industry need to decide where their loyalties lie and act accordingly.
New And Emerging Business Models
If there is one common thread that ties millennia of human history together, it is innovation. Humans are endlessly creative. No recession, pandemic, or other catastrophe will ever be able to change that. The world of textiles and fabric is no exception to this principle. Over the last several years, many companies have joined the industry to take advantage of the shift towards the circular economy. This goes beyond reselling and reusing clothing, however. One study by United States firm Deloitte estimates that alternative models of commerce could account for a 9 per cent share of the industry by the end of 2023 and a 30 per cent share by 2030.5 Whether they are using social media as a platform for buying and selling clothing or creating fully customised apparel, retailers have begun to truly embrace these alternative models. Some examples of this innovation include: • Clothing subscription and other rental “re-commerce” models • Consumer customisation of apparel • Custom printed, one-of-a-kind products Advancements in technology are introducing even more innovation in textiles. From 3D printed fabrics to direct purchasing on social media networks, expect these trends to continue in the future. Predicting their impacts on the textile and fabric industries is difficult, but one thing holds true: they will have an impact. This means that textile and clothing producers need to stay abreast of these innovations, put serious thought into implementing them and then embrace them if they want to stay afloat in the changing global economy.
Logistical Gridlock Across Industries
The latest technological advancements are affecting every industry differently. The same developments that strongly benefit one industry can actively harm another. Although these shifts are causing changes in the way companies do business, the infrastructure that supports these companies has remained the same as it was a decade ago or longer. For example, the majority of the world’s commerce travels over the sea for at least part of its route. This requires robust ports, cranes and trucking infrastructure on both ends of the shipping route. Without major expansions to this infrastructure around the world, there is a hard limit on the volume of goods that can be shipped by sea, and many of these ports are in urban centres with no room to expand. Ports such as Auckland have circumvented this by installing self-driving cranes that can move and stack shipping containers more quickly, but many other ports cannot afford these upgrades. Likewise, the world has only a fixed amount of road and rail infrastructure. Expanding busy roads is not always a feasible solution, and when it is, these additions in turn contribute to the amount of traffic congestion in the area. Expanding rail access takes even longer, and there are still functional limits on the number of trains that can use a set of tracks. As a result, many shipping companies are now being forced to make difficult decisions about what they ship. This gridlock has been one of the major drivers of rising prices. As the world’s population crosses over eight billion, this demand will only increase.
The Growing Talent Deficit
Since the beginning of 2020, the textile and fashion industries have become acutely aware of the talent deficit they are facing. As 2023 dawns, this deficit is only increasing. Although the era of legally enforced remote work is ending, many job seekers who can work from their homes are prioritising jobs that allow them this benefit. Throughout the supply chain, the companies that allow their employees the ability to work remotely are outperforming their competitors. Many fashion houses, including Tapestry, have made remote work a permanent benefit. The talent deficit may be impacting multiple industries, but textiles and fashion are among the hardest ones hit thanks to consumers’ and job seekers’ renewed focus on environmental sustainability and good working conditions. Labour forces are organising, demanding safer environments and increased pay. Companies that cannot provide these improved conditions are struggling to hire, let alone keep their employees. With the growth of the internet, job seekers also gain the ability to communicate with each other about the working conditions and bypass applying for these companies in the first place. Millennials, in particular, are avoiding employment with firms that have poor standards for social responsibility. As this generation enters its prime years, employers are being forced to keep up. One 2016 study by Cone Communications demonstrated that even before the pandemic struck, three-quarters of United States millennials considered their potential employers’ environmental and social commitments when job searching.6 Nearly two-thirds of them would refuse employment at firms without strong social responsibility policies. Companies across the fashion and textile industries are in for a surprise if they don’t think this percentage has grown. Many brands have experienced this effect at high levels, as well. The companies that survive 2023 will undoubtedly be the ones that can learn from, and adapt to, this new set of ideals. Other Elements to Consider About The Textile Value Chain In 2023 The textile value chain was incredibly complex even before the 21st century began, and as new technologies are developed, that complexity will only increase. Fashion and textile brands need to be able to adapt to these technologies as they are introduced. The shift to online commerce, especially over social media, brings another concern for the industry: cybersecurity. It is critical for companies to prevent data breaches before they happen, rather than scrambling to fix them afterwards. If they are to truly embrace these changes to the landscape of the industry, they need experts to set them up for success. Ultimately, players across the textile, apparel and fashion industries need to embrace flexibility above all. The amount of change to these industries has been immense, but the rate of change within them is only growing. The ability to adapt to the changing climate, both literally and figuratively, will separate successful companies from ones that fail.
Source: The Hindu Business Line
Trade blocs. In a world where trade is being increasingly weaponised, India must craft its free trade pacts carefully The global trade order is undergoing a tectonic shift exacerbated by recent geopolitical events. Most ideas that shaped the world after WWII are being rewritten, and new global alliances are emerging. Following the two world wars, the overwhelming consensus among economists and policymakers across the world was to increase international economic cooperation. More trade raises the cost of future wars, so it was viewed as a means to achieve global peace. While this philosophy resulted in continuous reductions in global tariffs and increased international trade, recent geopolitical events have reversed this trend. Nations are weaponising trade, which is leading to the formation of new economic blocs around the world. This opens the door for India to integrate into the new global supply chains. India has already begun to reap the benefits of the new global order. For example, consider the manufacturing of mobile phones. India was an importer of mobile phones until recently. Today, all of Apple’s contract manufacturers (Foxconn, Wistron, Pegatron), Samsung, and others have established manufacturing facilities in India, transforming the country into a major mobile phone export hub. While domestic policy reforms such as the Production Linked Incentive (PLI) have significantly aided in developing this domestic manufacturing capability, long-term export growth will depend on our exporters gaining preferential market access. The following are the primary reasons why India needs to negotiate and sign trade agreements. (i) The PLI industrial policy has increased domestic manufacturing capacity; (ii) Historically labour-intensive industries such as textiles and leather are unable to compete in global markets; (iii) Encourage investment from countries decoupling from China; (iv) Expand India’s import base; (v) Integrate into the new global supply chain order that is emerging. The government launched the ambitious PLI scheme in November 2020 to boost the country’s manufacturing sector. The scheme targeted 14 key sectors and implemented a $27-billion incentive scheme to help the country build a solid manufacturing base. According to reports, the scheme will generate $520 billion in manufacturing output over the next five years. To channel this production into exports, the government should give its manufacturers preferential market access. The lack of an Free Trade Agreement (FTA) with any of its three major export trading partners will pressure manufacturers who want to export their products in the future.
Labour-intensive sectors As a lower-middle-income country, India benefits from significant labour cost arbitrage compared to other countries. However, due to increased competition from countries such as Bangladesh and Vietnam, its exports of labour-intensive products have suffered. Furthermore, Bangladesh and Vietnam benefit from preferential tariff rates nearly 10 per cent lower than Indian exports to the most lucrative markets, such as Europe. This has significantly impacted the growth of these sectors, resulting in an outflow of investments from India. An FTA with partners such as the EU can quickly revitalise these labourintensive sectors and result in massive job creation in the country.
Invite investments The Covid-19 outbreak and subsequent lockdowns imposed in countries to protect public health priorities exposed the risks associated with global supply chains. Over-reliance on single geography for manufacturing resulted in supply chain shocks that took months to resolve. For example, according to reports, iPhone maker Apple lost $8 billion in revenue due to supply chain constraints. This has resulted in the China+1 strategy being implemented in all boardrooms worldwide. Signing FTAs will not only provide our partner countries and firms with a stable trade regime but will also signal to the rest of the world that India means business. In the long run, this will bring in investments that could leave China and help strengthen India’s domestic manufacturing sector.
Diversify India’s imports From a macroeconomic standpoint, India has consistently run a current account deficit. Furthermore, India’s CAD is expected to worsen this year, possibly reaching -3.0 per cent. A significant portion of the CAD is due to a trade imbalance with China. While there are no quick fixes for this long-term structural problem, an FTA with like-minded countries will redirect India’s imports of certain products away from China and toward more friendly nations. While this may not reduce our overall trade deficit, it could reduce our reliance on some critical Chinese products and protect us from future Chinese import shocks. The US is attempting to re-establish critical supply chain components within its borders. Europe is developing new energy sources and markets to reduce its reliance on Russian energy. Moreover, the supply chains of developed Asian countries are decoupling from those of China. All of these factors will rewrite the future of supply chains for many existing and emerging sectors worldwide. Most importantly, this will allow India to integrate into these supply chains through customised mutually beneficial FTAs with friendly nations. Trade is not a zero-sum game. While most Indian researchers focus on trade balance as a single variable determining the success of FTAs, the second-order effects of trade are frequently overlooked. Furthermore, the signing of FTAs should be complementary and be accompanied with proper implementation of structural domestic reforms. Our previous round of FTAs was not accompanied with such reforms. However, the political vision for FTAs is not only clear this time, but the necessary domestic reforms have already been laid out in the form of PLI, labour code reforms, logistics policy etc. As a result, India is extremely well prepared to capitalise on this window of opportunity in both the international and domestic segments. The signing of FTAs with the United Arab Emirates and Australia demonstrates the government’s determination to capitalise on emerging global trends, while also safeguarding domestic interests. Similarly, the other major trade negotiations must also be completed in a timely fashion to signal to the rest of the world that India is a serious global trade player. Kumar is a Ph.D Scholar at IIFT; Gopalakrishnan is Former Head, Trade and Commerce, NITI Aayog.
Source: The Hindu Business Line
Union Commerce and Industry Minister Piyush Goyal on Monday reviewed the progress of PM GatiShakti mission with senior officials from eight infrastructure ministries. Since its launch in October 2021, infrastructure projects approved by the Union Cabinet have either been completed or are already under implementation, according to a statement from the ministry of commerce and industry. The Network Planning Group (NPG) under the PM GatiShakti institutional structure has held 41 meetings in the past one year, the commerce and industry ministry said in a statement. Sixty-one project proposals pertaining to road, railways, natural gas, ports and urban infrastructure have been evaluated in terms of optimising PM GatiShakti principles and recommended by NPG for implementation in the coming years, the statement reads. “It was informed that 12 Social Sector Ministries ministry of housing and urban affairs, department of school education and literacy, department of higher education, ministry of women and child development, and ministry of tribal affairs, among others, were in advanced stages of data integration in the National Master Plan (NMP) Platform," it said in a statement. Ministries were requested to identify attributes for data layers, which will enhance the NMP platform, the statement said. Over 1,900 layers of data, including that of land, ports, forests and highways, are available on the portal. Ministries have developed necessary mechanisms for validating and standardising data on their respective portals. According to the ministry, this was helping in optimumplanning and sound decision-making across all layers of governance. With India now holding the G20 Presidency, creating a resilient and efficient logistics ecosystem and promoting seamless multimodal international transportation and transit is being put on international priority. As part of the Trade and Investment Working Group (TIWG), “Logistics for Trade" has been identified as one of the priority issues. During the meeting, various ministries made presentations and deliberated their progress and achievements under PM GatiShakti. The value addition brought to planning of infrastructure ministries was discussed and best practices identified and showcased. The ministries that participated in the review were the ministry of railways, the ministry of road transport and highways, the ministry of ports, shipping and waterways, the ministry of civil aviation, ministry of power, the department of telecommunication, the ministry of petroleum and natural gas, the ministry of natural and renewable energy, textile and steel.
Source: Economic Times
A month ago, after three generations of warp and weft, the 12 power looms at P Sampath Kumar’s weaving facility in Somanur fell silent. Today, they lie in pieces, stripped of their glory and history, outside a scrap dealer’s shop, waiting to be sold in weight to the highest bidder. “I joined my family weaving business 20 years ago,” says Sampath. “I didn’t think I would be the one to shut it down.” The 42-year-old weaver from Coimbatore says he was left with no choice but to sell his power loom units to pay off mounting debt. “There is simply no money in the profession for weavers like us. The profit is too little to survive on.” The business was going well until a few years ago, says Sampath, until weavers got hit with decreasing labour charges, demonetisation, GST implementation, the Covid lockdown, and the hike in prices of raw material. “The hits just kept coming one after the other. There was no respite,” says Sampath. The last one was the surge in power charges that came into effect in in September. Sampath says he hasn’t recovered the cost of his looms in the sale. “They cost `6 lakh when they were bought decades ago. And now I sold them for a mere`4 lakh. Now that the looms are sold I will rent out the room. I need the income,” he says, staring at the bare walls of his facility. Across Coimbatore and Tirupur districts, considered the hub of textile spinning and weaving mills, weavers are selling their power looms at throwaway prices to scrap dealers. “I used to sleep to the sound of my power loom whirring in the background. The loom was a part of my family,” says K Jagathese. “It broke my heart to sell it for scrap, but I had no choice as I was drowning in losses. We need subsidies from the government if we are going to restart.” Several weavers, says Jagathese, have given up the trade and are working on farms or at construction sites as daily wage labourers. While the weavers are torn between losses and holding on to their trade, business is booming for scrap dealers. K Boopathy, a power loom scrap dealer in Sengathurai village in Coimbatore, says 50 units are brought to his godown almost every day. While a new power loom costs somewhere between `1 lakh and `1.35 lakh, Boopathy dissembles the old ones and sells them by weight. A power loom unit weighs from 600kg to 800kg, and dealers like Boopathy get `40 a kilo. “After disassembling the whole power loom unit, we check to see if any parts can be reused because that fetches good money as well.” E Boopathy, treasurer of the Somanur power loom units association, says 95% of the power loom units in Coimbatore and Tirupur districts are into ‘job work’, which means they work on orders sourced from master weavers and garment manufacturing companies. “Shortly after the power tariff increase was announced, we met government officials asking that the power loom sector be exempted. We pleaded with them not to implement the proposed tariff as it would severely affect the jobworking power looms in Coimbatore and Tirupur districts. We also petitioned for better pay for outsourced work. But our requests were just not heeded,” he says. “Weavers who quit the business do not want their children to take up this profession. The weavers have been demanding a hike in labour charges, a continuous supply of raw material at an affordable price, and exempting the business from the recent power hike to make it viable for them to keep the business alive.
Source: Times of India
Centre may not roll back customs duty exemptions in the Union budget significantly but may increase duty rates on specific sectors to promote local production The government is unlikely to roll back customs duty exemptions in the Union budget significantly but may increase duty rates on specific sectors to promote local production, a person familiar with the discussions in the government said. In the current year’s budget, the government announced the removal of duty concessions for nearly 400 items, including capital goods, farm products, medical devices, and textiles, to discourage imports and support domestic production, as seen in the previous two budgets. “That exercise was undertaken after public consultation and has been completed. No further removal of exemptions is thought of at this juncture," the person said, declining to be named. Duty concessions on highly advanced industrial machines will continue. In addition, the strategy of lowering import duties on selected raw materials to promote local value-addition and support some export industries will continue, the person said. However, the government is likely to increase import duties in sectors where productionlinked incentives are being considered so that the overall regulatory framework promotes domestic manufacturing. These include sectors such as furniture and certain chemicals, said a second person, who also spoke on condition of anonymity. Increasing duty on finished products where the government wants local manufacturing to come up has been a key element of the customs policy in the past few years at a time tariffs have become a major policy instrument for many countries to protect local industry. By raising import duties, the government aims to increase the prices of imported products, making local production more lucrative. It will also encourage foreign investment in domestic production facilities, creating jobs locally. In addition, the central government is considering increases in customs duties in several sectors to make free trade agreements with India more attractive to global trading partners and give the government a stronger negotiating position for such deals. India is negotiating free trade agreements with various countries, including the UK and European Union, after implementing a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates on 1 May and an early harvest deal with Australia on 29 December. An email sent to the spokesperson for the finance ministry seeking comments for the story on 20 December remained unanswered at the time of publishing. The customs duty changes in the Union budget should be carefully calibrated considering the recently concluded free trade agreements and those at the discussion stage, said M.S. Mani, partner at Deloitte India. Experts also expect measures that would improve the ease of doing business and facilitate trade. “The government had in the past offered amnesty schemes in the case of income tax as well as service tax and central excise (Sabka Viswas scheme). It would be desirable to offer a similar scheme for customs duty-related disputes," said Abhishek Jain, tax partner at KPMG. Due to an anticipated global demand slowdown, the government’s customs duty revenue is at risk of slowing down in the next fiscal year. Customs duty receipts till October remained around 58% of the ₹2.13 trillion full-year target.
Source: Live Mint
To strengthen Telangana’s textiles and handloom sector, Minister KT Rama Rao has urged the central government to allocate Rs 900 crore in the union budget towards infrastructure for the Kakatiya Mega Textiles Park and other programmes. He appealed to recognise powerloom sector in Sircilla as mega powerloom cluster which has over 25,000 powerloom machines and be allotted Rs 100 crore. The minister alleged that multiple appeals by the state government to strengthen the sector were not favourably considered by the Centre. The state government was establishing Kakatiya Mega Textiles Park in Warangal considering the importance of infrastructure to usher in rapid progress of the handloom sector, he said. He also urged the central government to grant Indian Institute of Handloom Technology to the state as over 40,000 handloom weavers are in different parts of Telangana, with most in Yadadri Bhuvanagiri, Gadwal, Warangal, Rajanna Sircilla and Karimnagar.
Source: KNN India
The India-Australia Economic Cooperation and Trade Agreement (ECTA), which could double bilateral trade to almost $50 billion in the next five years, entered into force on December 29, 2022. After years of negotiations, this trade agreement was signed this year on April 2. The negotiations for the ECTA began in 2011, were formally re-launched on September 30, 2021, and settled on a fast-track basis by the end of March 2022. India's goods exports to Australia stood at $7.5 billion and imports from the country aggregated to $15.2 billion in 2021-22. It is expected that the ECTA will lead to $10 billion jump in India’s merchandise exports by 2026-27. Besides providing cheaper raw materials to many sectors including steel and coal from Australia, the ECTA would also facilitate increased investments from Australia and will support the Indian manufacturing sector. The ECTA is expected to benefit the Indian economy in over 6,000 sectors. Under the agreement, over 96.4 per cent of Indian goods will get zero-duty access from day one. There will be immediate zero duty on 85 per cent of Australian exports from the first day, and zero to low duty on 30 per cent tariff lines in 3-10 years. The rationalisation or elimination of tariffs will also promote investments in both countries. The agreement covers the entire range of trade and commercial relations, removing trade barriers, and opening a variety of opportunities for both goods and services. Australia trades in around 6,500 tariff lines while India has about 11,500 tariff lines. Previously, most of the Indian exports attracted 4-5 per cent customs duty in Australia, due to which India faced a significant disadvantage compared to the countries having free trade agreements with Australia, such as China, Vietnam, and Bangladesh. The ECTA will enable Indian exports to compete with these nations in the Australian market. It is believed that the agreement will help in raising bilateral trade from $27 billion to $45-50 billion in the next five years. About 96 per cent of Australia’s exports to India comprised of raw materials and intermediate products, thus the tariff concessions offered by India will allow domestic industries to get cheaper raw materials and enhance their competitiveness. It is also the first trade agreement to be signed by India which has a compulsory review mechanism i.e., it will evaluate the impact of the agreement post 15 years of implementation. Textiles and apparel: India exported $541.88 million worth of textile and apparel products to Australia in the first ten months of 2022, up 5.93 per cent compared to $511.53 million in the same period in 2021. The export basket of India mainly consisted of home textile products and apparel products. In the home textiles segment, bed and bath linen (11.45 per cent), furnishing articles (8.67 per cent), and sacks & bags (6.01 per cent) were among the major products that were imported from India in 2022. Curtains and drapes in home textiles is where Indian exports to Australia currently lack, though they are supplied to other countries on a massive scale. The newly enacted FTA has paved an opportunity for India to boost its curtains and drapes exports to Australia by upscaling its existing product portfolio quality. Similarly, in the apparel segment, India currently lacks in the supply of women’s intimate wear to Australia due to competitive pricing offered by Sri Lanka, but there could be a potential boost in this category after the new FTA. India has the potential to meet the textile and apparel demand of the Australian market in desired quantity and quality. The agreement will do away with the duty disadvantage faced by Indian textile and apparel exporters. Dutyfree access to home textile and apparel products will bring Indian exports at par with their global rivals and make Indian products competitive in the international market. India’s textile and apparel exports to Australia contribute 5.51 per cent of the total Australian textile and apparel imports and were valued at $604.4 million in 2021. Given the current global economic challenges and the increasing need to diversify supply chains, Indian textile and apparel manufacturers are likely to benefit from this agreement. Currently, India exports a large proportion of its low-value-added commodities such as yarn and fabrics to China, Bangladesh, and Vietnam which use them to produce high-value finished goods and export it to countries such as Australia and other potential FTA partners. With the removal of these tariff barriers through this agreement, India will increase the production of value-added finished goods in the domestic market while increasing the proportion of high-value products in its overall export basket. Leather and footwear: The ECTA will certainly boost India’s footwear and leather exports. Indian products currently have 3-5 per cent market share in the about $2 billion Australian market of footwear and leather accessories, which is largely dominated by China. After duty-free exports, Indian products can compete with Chinese products, and exports are expected to go up by 25 per cent. The agreement will allow products and services not currently exported to Australia to enter the Australian market. ECTA is a stepping-stone towards a full Australia-India Comprehensive Economic Cooperation Agreement (CECA) which will be slated upon outcomes of ECTA and will address deeper market access in new areas including digital trade, government procurement, and cooperation.
Source: Fibre 2 Fashion
The state MSME department has launched West Bengal Textile Incentive Scheme (WBTIS), 2022, intending to extend fiscal incentives to textile sector industries across the entire value chain starting from fibre to stitched garments, to set up and expand such units in the state. An eligible textile Industry in the state will be entitled to state capital investment subsidy for its approved project which will vary from a maximum of Rs 20 crore to 50 crore and there will be a 100 per cent waiver of electricity duty for 5 years from the date of commencement of production subject to a maximum of Rs 100 lakh per year. An eligible textile Industry under WBTIS 2022 for its approved project will be entitled to a power subsidy on electricity consumption for 5 years from the date of commencement of production from any licensee power supplier on a reimbursement basis. For garment manufacturing units the subsidy will be to the tune of Rs 50 lakh per annum for 5 years while in types of various manufacturing activities like spinning (short staple and long staple), weaving and knitting, circular knitting, dyeing and processing of fibers, yarn, fabric and garment, technical textile (Agrotech, Buildtech, Indutech, Geotech, and Meditech) and non-woven fabric manufacturing, polymerisation, texturising and twisting the upper limit of subsidy will be Rs 1 crore per annum for five years. It will be entitled to reimbursement of 100 per cent of the stamp duty and registration fee paid by it as well as a 100 per cent waiver of fees for conversion and mutation of the land as approved in the project. "The focus is on accelerated and focused development of the textiles sector across the state and to maximize the utilisation of resources, generate new employment and widen the area of operation to make the state emerge as the preferred destination for investment in the textile sector," a senior official of MSME department said. The WBTIS 2022 for textiles shall generally apply to industries in the manufacturing and processing of textiles, apparel and technical textiles products which have started production on or after April 1, 2022. However, textile units in the MSME sector will have the option to apply either under this scheme or under the existing "Banglashree" Scheme, 2020, unless notified otherwise. An eligible textile industry will be entitled to a reimbursement of 50 per cent of the cost of an energy audit undertaken by a certified agency for its approved project. The reimbursement will be made after the implementation of the recommendations with an upper limit of Rs 2 lakh.
Source: Millennium Post
Local industry associations and industry delegations aim to discuss business opportunities and investments in key sectors like – food processing, pharmaceuticals, textile, confectionery and agri equipment with industries and non-resident Indians in the mega events happening next week in Indore. With focus on tapping broader markets and investments for local businesses and manufacturing units, industry associations and business delegations have geared up to discuss sector wise investment opportunities. Local industries have also planned factory and industrial area visits for interested industrialists and investors. Around 350 international buyers are expected to attend the Investors’ summit and participate in the Business-to-business (B2B), Business to government (B2G) meetings. An exporter and a member of an export promotion council Suber Rampurwala said, “The meet should yield something for local industries and businesses. Keeping this in mind, four areas have been identified on which business will be discussed. Engineering, pharmaceuticals, textile and agro.” Rampurwala said, the aim of meeting business delegates to attract investments and give a fillip to local industries by tapping opportunities. Manufacturers will get an opportunity to showcase their products to vendors. A vendor development meet will also be organised in the investors’ summit, said officials from the industry department where product manufacturers and suppliers will have oneon-one meetings. According to the Industrial Policy and Investment Promotion Department, buyer-seller meets, vendor development programmes, interactions with export promotion councils are also planned to boost the B2B interaction and lead to export promotion. Moreover, there are 19 sector specific sessions wherein a distinguished panel will deliberate on the opportunities for the state. Tarun Vyas, secretary, Association of Industries Madhya Pradesh said, “We have linedup meetings with industrialists of Mauritius and Netherland. We will take them for factory visits. Interactive sessions are planned in Pravasi Bhartiya Diwas and Investors’ summit.” Vyas said, the association will focus on furniture, confectionery, textile, agro, pharmaceuticals, agri equipment and plastic sectors for attracting business.
Source: Times of India
Ease of Doing Business for MSMEs: The Ministry of Textiles could also contemplate setting up an Integrated Textile Trade Facilitation Centre to market the products of Karur, suggested the memorandum by Karur Textile Manufacturer Expansion Association. Ease of Doing Business for MSMEs: The textile manufacturers and exporters of Karur, Tamil Nadu appealed to the union Ministry of Textiles to establish a textile wet processing park in the city, as per a report by The Hindu. The industry association, Karur Textile Manufacturer Expansion Association had organised an interactive session wherein they raised the request for the park with Textile Ministry officials including Rohit Kansal, Additional Secretary, Textiles and Prajakta L. Verma, Joint Secretary, Textiles, New Delhi. A memorandum stating the need to set up a Common Effluent Treatment Plant (CETP) was also submitted to the officials, the report noted. It was recommended that the plant should be a part of the textile wet processing park to encourage more MSEs to set up their units in the park while reducing the cost of wet process for the exporters, manufacturers, making them competitive in the global market. Besides, the Ministry of Textiles should also establish an Integrated Textile Trade Facilitation Centre to market the products of Karur, suggested the memorandum. The Karur textile clusters have shown phenomenal growth in the last few years leading to an increase in demand for skilled labour force. Considering the multiple challenges the exporters in Karur face, the Textile Ministry should meet the demands of the association in order to achieve Rs 25,000 crore sales turnover by 2030, the report said. The requests were made by M. Natchimuthu, P. Gopalakrishnan, and S. Sivakumar, functionaries of the textile association. Meanwhile, in November, Tamil Nadu received 100 applications from the representatives of the textiles units to set up mini textile parks across the state. Out of these, 43 are from Karur district, informed handlooms and textiles minister, R Gandhi, as per another report by The Hindu.
Source: Financial Express
Traditionally, Bangladesh has been more dependent on India for its yarn and fibre. However, owing to price dynamics, China has now emerged as a major yarn supplier to Bangladesh. On an annual basis, yarn exports from China to Bangladesh are increasing for the past few years, except for a dip registered in 2020 due to the COVID-19 pandemic. The prices of cotton and cotton yarn witnessed unprecedented rise in India and the global market this year. On the one hand, higher cotton yarn prices in India forced importers of Bangladesh to look elsewhere, while on the other, the US ban on cotton and cotton products originating from Xinjiang region caused decline in prices of yarn and fibre in China. China exported yarn worth $1,265.464 million during January-October 2022, which is comparable to $1,358.100 million of 2021. In volume terms, China exported 348.438 million kg yarn during the first ten months of the current year, compared to 418.562 million kg yarn in 2021, according to Fibre2Fashion’s market insight tool TexPro. China’s yarn export to Bangladesh dipped to $835.451 million (302.216 million kg) in the pandemic year 2020. Before COVID, the shipment was $1,068.588 million in 2019, $1,211.957 million in 2018 and $928.314 million in 2017. On a monthly basis, export peaked in March 2022 when China exported yarn worth $169.991 million to Bangladesh, as per TexPro.
Source: Fibre2 Fashion
China’s exports to other members of the Regional Comprehensive Economic Partnership (RCEP) increased by 17.7 per cent year-on-year 6 trillion yuan during the first 11 months of current year, according to data from the country’s ministry of commerce. China’s total trade with RCEP partners grew at 7.9 per cent year-on-year to 11.8 trillion yuan. The RCEP is a free trade agreement among the Asia-Pacific nations of Australia, Brunei, Cambodia, China, Indonesia, Japan, South Korea, Laos, Malaysia, Myanmar, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. The agreement came into effect from January 1, 2022. China’s trade with RCEP countries accounted for 30.7 per cent of its total foreign trade during January-November 2022, data from the ministry showed. Releasing the data, ministry spokesperson Shu Jueting said that the ministry will continue to work with relevant departments to promote the high-quality implementation of the RCEP and other free trade agreements. Further, the ministry will take the RCEP as a new starting point to negotiate and sign more free trade agreements.
Source: Fibre2 Fashion
Trade volume between Cambodia and China reached $14.5 billion this year, an increase of 19 percent compared to last year, said Prime Minister Hun Sen today. Addressing a groundbreaking ceremony for the upgrading of National Road No. 21 and No. 2 in Kampot and Kep provinces, Mr Hun Sen said, “This year, the trade volume between the two countries reached $14.5 billion, an increase of 19 percent, and I believe that in the future we will be able to import more goods to the Chinese market.” The premier further said the record trade volume was achieved “mostly through the Cambodia-China Free Trade Agreement, which China has favoured for 97.53 percent of Cambodia’s exports, the highest level of free trade agreements between China and other countries.” Cambodia’s exports to China garments include garment products and agricultural products like rice, rubber, bananas, cassava and cashew nuts. Similarly, imports from China include investment and production products such as cotton, textiles, cotton, metal, construction materials, appliances and electronics, plastics, aluminum, furniture, paper and cardboard. The Cambodia-China Free Trade Agreement entered into force in January 2022. Hong Vannak, an Economic Researcher at the Royal Academy of Cambodia told Khmer Times, “The free trade agreement between Cambodia and China has boosted bilateral trade significantly. In the future, both the RCEP and the CCFTA will provide many benefits in finding a wide range of markets with tariff preferences. Trade agreements will be an important catalyst in boosting national economic growth.”
Source: Khmer Times
Economists say on IMF’s recession projection Bangladesh is unlikely to fall into any recession but its economic growth may slow down in 2023 because of high inflation, dollar crisis and problems in the banking sector, said economists yesterday. And these challenges, particularly the dollar crisis and problems in the banking sector, are not going to dissipate soon. Rather, those are going to be a drag on the economy, they said. They shared their views over IMF Managing Director Kristalina Georgievas stating recently that a third of the world's economies would hit recession in 2023 as the main engines of global growth – the US, Europe and China – were all experience weakening activity. "Even countries that are not in recession, it would feel like recession for hundreds of millions of people," she said in an interview on the CBS Sunday morning news program "Face the Nation". The warnings come at a time when Bangladesh faces various challenges -- elevated inflation, dollar crisis, energy shortage and problems in the banking sector – which it has not encountered in recent decades. Earlier this week, Bangladesh Bank and the Export Promotion Bureau released remittances, balance of payments and export earnings data, which are expected to ease pressure on the country's foreign exchange reserves. Ahsan H Mansur, executive director of the Policy Research Institute (PRI) of Bangladesh, said the country's situation was not that bad in context to the global scenario. "But our economic growth will go down to 5.5 per cent to 6 per cent this fiscal year because of the slowing down of economic activities," he said, citing a consistent decline in the manufacturing index for the last three months. International Monetary Fund (IMF) in October last year cut Bangladesh's growth forecast to 6 per cent for fiscal year 2022-2023 from its previous projection of 6.7 per cent, citing high energy, food prices and interest rates, inflation and the Russia-Ukraine war. Mansur said Bangladesh's exports have grown in December while remittance inflow did not decelerate. However, the foreign exchange market is unlikely to become stable soon until the problems of short-term debt overhang and settlement of letters of credit (LCs) are resolved, he said. "The dollar crisis is likely to continue for more days," he said. "Secondly, the situation of the banking sector is getting worse. It is not clear where the end of this problem is. Instability in these two sectors is likely to continue," he said. However, the good thing is that commodity prices are falling internationally, said Mansur. "We will get some relief. Domestic production of rice and vegetables has been good so far. Overall, inflation is expected to be in the downturn," he said. "Overall, it would not be wise to think that our crisis will be over immediately," he added. Mirza Azizul Islam, a former finance and planning adviser to a caretaker government, said he does not see any possibility of a recession in Bangladesh. "Recession means two consecutive quarters of negative growth. We will not face this sort of situation," he said. Mustafizur Rahman, a distinguished fellow of the Centre for Policy Dialogue, said the IMF's warning was not good news for Bangladesh as it was connected to the global economy through various ways, particularly exports. Recession in major economies may also affect foreign aid and foreign direct investment here, he said. However, as a big portion of the Bangladesh economy is dependent on the domestic market, emphasis should be given on ensuring an adequate supply of gas and electricity to keep production unaffected in factories, he said. At the same time, the country needs to focus on the Asian and regional markets to diversify destinations of products as chances of a recession in the Asian market are low, he said. So, production in the export market-oriented factories should be kept uninterrupted, he said.
Source: Fibre 2 Fashion
Eurozone’s manufacturing downturn eased further, as the sector’s purchasing managers' index (PMI) reached a three-month high of 47.8 in December 2022, according to a report by S&P Global. The region’s PMI reading in November 2022 was 47.1. Moreover, Eurozone’s final manufacturing output index in December 2022 reached 47.8, a sixmonth high. The ease of manufacturing downturn in the final month of the year was due to softening inflationary pressures and more stable supply-chain conditions creating some respite for goods producers. Weakness in client demand remained evident through slumping new order intakes, leading firms to make further inroads into their backlogs instead. Nevertheless, employment growth continued, while business confidence also edged up to a seven-month high, as per S&P Global’s Eurozone Manufacturing PMI report. Market groups data showed continued deteriorations across consumer and intermediate goods makers, while capital goods producers recorded a marginal improvement. All of the monitored eurozone constituents (which together account for an estimated 89 per cent of eurozone manufacturing activity) registered a manufacturing PMI below the crucial 50 mark in December, signalling broad-based weakness. That said, downturns eased with the exception of Greece, which saw a sharper decline in December 2022. Eurozone manufacturing output fell in December, marking a seventh successive month of contraction. However, the decrease was only moderate and the weakest since June. The drop in production coincided with a further slump in new order inflows as demand for eurozone goods remained generally subdued. In line with the trend in output, the decline in factory sales weakened since November and was the softest in four months. A slower fall in new export business also helped to alleviate the downturn in overall order books. In the absence of new business growth, eurozone manufacturers turned attention to their incomplete workloads. The latest survey data pointed to a sharp monthly fall in backlogs in December. Eurozone goods producers subsequently tapered their hiring activity, with the rate of job creation slowing to a 22-month low. To adjust to lower demand, eurozone manufacturers cut their purchases of raw materials and other components at the end of the year. The reduction was steep, but the slowest in three months. Falling input demand helped take pressure off suppliers, with average input lead times stabilising in December amid reports of improving raw material availability. Stocks of purchases also increased in December, despite the sharp drop in purchasing activity. The rate of accumulation was only marginal and the weakest in 15 months. Meanwhile, following the historically strong expansions in post-production inventories seen in recent months, December data showed the weakest increase over the current seven-month sequence. Inflationary pressures eased across the euro area manufacturing sector in December. The rate of input cost inflation was still sharp, but the weakest since November 2020. Output charges were subsequently raised to a weaker extent as some companies chose to pass through lower expenses to their clients. Overall, the increase in selling charges was the slowest since March 2021. Finally, business confidence improved for a second month in a row, rising further from October’s two-and-a-half-year low. In fact, future output expectations moved back into optimistic territory for the first time since August. Nevertheless, business sentiment remained historically subdued as inflation, high energy bills, and recession risks clouded the outlook.
Source: Fibre 2 Fashion
Inditex opted in fiscal year 2021, which closed at the end of January 2022, to increase its production in Spain. Thus, the group's own plants in Galicia increased their manufacturing by 13% (in turnover) compared to 2019, the fiscal year prior to the pandemic. In 2021, the group's Spanish factories (located in the Galician towns of Arteixo and Narón) invoiced the company 1.17 billion euros, a figure that contrasts with the 1.03 billion in 2019, according to the economic newspaper Expansión based on the accounts filed with the Mercantile Registry. This production figure is the highest in the last five years and double that of 2020, the year of the outbreak of the pandemic. The increase in Inditex's production in Spain stems from complications in the global supply chain (especially in Asian markets). This has led the group to focus on what it considers to be local production, which accounts for 60% of its purchases and comprises Spain, Portugal, Turkey and Morocco. The textile giant has 10 of its own production plants in Galicia, which set the group's standard for the rest of its suppliers and manufacturers. In global terms, the company worked with 1,790 suppliers worldwide and 8746 mills in the last financial year, mostly in apparel, spinning and weaving, but also in non-textile products, printing, finishing, washing, dyeing and cutting. In the Spanish market, the Galician company purchased goods from 162 external suppliers. Inditex, which had a total turnover of 27.72 billion euros in 2021, closed the first nine months of fiscal year 2022 with a net profit of 3.10 billion euros and sales of 23.1 billion euros, up 19% compared to the same period of the previous year. Another Spanish textile giant, Mango, recently released its list of tier 3 fabric and fittings suppliers as part of its "Sustainable Vision 2030" sustainability strategy. According to this list, the company works with a total of 169 factories in Spain.
Source: Fashion Network
Information from the Statistics and Census Service (DSEC) indicated that total merchandise export amounted to MOP1.40 billion in November 2022, up by 18.1% yearon-year. Value of re-exports (MOP1.20 billion) expanded by 20.0%, of which re-exports of Non-diamond jewellery and Machines, apparatus & parts jumped by 374.7% and 172.2% respectively, while those of Articles for casino and Watches declined by 77.5% and 30.5% respectively. Value of domestic exports (MOP205 million) rose by 7.8%, of which domestic exports of Pharmaceutical products & organic chemicals grew by 31.8% while those of Garments decreased by 29.9%. Meanwhile, total merchandise import went down by 16.7% year-on-year to MOP12.98 billion; imports of Perfumes, Beauty, cosmetic & skincare products and Mobile phones dropped by 56.8%, 55.8% and 34.6% respectively, whereas imports of Gold jewellery and Food & beverages rose by 25.0% and 16.3% respectively. Merchandise trade deficit in November 2022 totalled MOP11.57 billion. From January to November this year, total value of merchandise export increased by 6.4% year-on-year to MOP12.70 billion, of which value of re-exports (MOP10.84 billion) and domestic exports (MOP1.86 billion) rose by 7.2% and 2.1% respectively. Total value of merchandise import decreased by 8.1% year-on-year to MOP127.95 billion. For the first eleven months of 2022, merchandise trade deficit totalled MOP115.25 billion, down by MOP12.02 billion from MOP127.26 billion a year earlier. Analysed by destination, merchandise export to Hong Kong (MOP9.74 billion) grew by 15.9% year-on-year from January to November 2022, whereas exports to the USA (MOP577 million) and the EU (MOP160 million) decreased by 10.2% and 7.1% respectively. Exports to mainland China fell by 28.3% year-on-year to MOP1.22 billion, of which exports to the Nine Provinces of the Pan Pearl River Delta (MOP1.06 billion) shrank by 30.6%. Meanwhile, exports to the Belt and Road Countries (MOP449 million) expanded by 65.7%, while exports to the Portuguese-speaking Countries (MOP2 million) tumbled by 74.2%. Exports of Textiles & garments went up by 13.9% year-on-year to MOP1.65 billion while exports of Non-textiles rose by 5.4% to MOP11.05 billion. By place of origin, merchandise import from the EU (MOP41.97 billion) and mainland China (MOP38.93 billion) in the first eleven months of 2022 decreased by 6.1% and 11.5% respectively year-on-year. In contrast, imports from the Belt and Road Countries (MOP23.62 billion) and the Portuguese-speaking Countries (MOP958 million) increased by 4.9% and 49.0% respectively. Analysed by place of consignment, merchandise import from Hong Kong (MOP107.55 billion) fell by 10.4% year-on-year. Meanwhile, imports from mainland China grew by 7.3% to MOP15.88 billion, with imports from the Nine Provinces of the Pan Pearl River Delta (MOP15.16 billion) rising by 4.8%. Imports of Consumer goods went down by 7.2% to MOP93.03 billion, of which imports of Beauty, cosmetic & skincare products (MOP18.12 billion) and Watches (MOP9.01 billion) dropped by 24.7% and 16.7% respectively; on the other hand, imports of Food & beverages (MOP17.57 billion) rose by 30.2%. Imports of Fuels & lubricants (MOP5.74 billion) went up by 4.9%, whereas imports of Mobile phones (MOP10.28 billion) and Construction materials (MOP2.67 billion) dipped by 37.9% and 1.7% respectively. External merchandise trade totalled MOP140.64 billion from January to November 2022, down by 6.9% compared with MOP151.13 billion a year earlier.
Source: EIN News
•China’s mechanical and electrical manufacturing, together with the textile industry, will be most affected by persistent stagflation in the European Union, said a new report • In the first 11 months of 2022, the European Union was the second largest destination for China’s exports after the United States with shipments valued at US$517.9 billion Persistent stagflation in the European Union is set to drag down China’s export growth by around two percentage points in 2023, adding more uncertainties to its postcoronavirus recovery, according to a new report. Mechanical and electrical manufacturing, together with the textile industry, will be the most affected sectors, the report from Haitong Securities published on Thursday said. In the first 11 months of 2022, the European Union was the second largest destination for China’s exports after the United States with shipments valued at US$517.9 billion, accounting for 15.8 per cent of total exports, according to the Post’s calculations based on data from China Customs. But as the European Union’s economic growth will face greater downward pressure amid ongoing uncertainties caused by soaring energy prices, stagflation – which is a combination of high inflation and economic stagnation – may continue in 2023, according to the report. “Under the influence of high inflation and the continuous interest rate hike by the European Central Bank, consumption may remain sluggish, and the willingness of enterprises to produce and invest will also continue to be under pressure,” the report said. The European Commission has estimated that the European Union’s gross domestic product growth will drop to 0.3 per cent next year, down from 3.3 per cent in 2022. Inflation, meanwhile, is expected to decline from 9.3 per cent in 2022 to 7 per cent next year. “In the case of the EU’s economic slowdown next year, industries such as electromechanical products that are greatly affected by the slowdown in external demand and account for a high proportion of exports may have a greater drag on China’s exports,” the report added, with nearly half of China’s exports to the European Union belonging to mechanical and electrical products, according to customs data. “For industries such as computer, electronic and optical product manufacturing industries that are greatly affected by investment demand, their exports may bear even greater pressure.” As China took a U-turn on its stringent zero-Covid policy earlier this month, Beijing has shifted its focus to bringing the economy back on track amid a sudden reopening. But economists said the role of exports, which have been a major engine for China’s economy in the past two years, could be minimal – if not a drag – on growth in 2023 amid dwindling external demand, geopolitical tensions and the recovery of manufacturing sectors in other countries. China’s overall exports fell by 8.7 per cent last month from a year earlier to US$296 billion, after declining by 0.3 per cent in October, data from China Customs showed. Exports to the European Union have also declined for two consecutive months, falling by 10.62 per cent in November compared to the same time last year. Chinese shipments to the United States also tumbled by 25.43 per cent to US$40.8 billion in November compared to the same period last year – representing the fourth straight monthly decline. Beijing vowed to “continue to play the role of export in supporting the economy” during the tone-setting central economic work conference earlier this month.
Source: SCMP
