Govt may rejig textile duty to raise export competitiveness
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The government is likely to announce adjustments in the duty structure for the $200-billion Indian apparel and textile sector in the Union budget next month in a bid to improve Indian competitiveness in cash-strapped Western markets, a senior government official said. Textile manufacturers say they have been forced to cut production days due to high cotton prices. At the same time, exports of cotton yarn—a key raw material —are expected to register a degrowth of 28-30% in FY23 due to weakening global demand. “Our thinking is to avoid inverted [duty] structure in trade and to make sure that if it is necessary to import raw material, the price should not be excessive, which will make our final product uncompetitive," said the official cited above. To be sure, higher cotton production in the new cotton season of 2022-23 could yet ease cotton prices. Mismatch in demand and supply during the ongoing financial year had driven Indian cotton prices to a record high of ₹1 lakh per candy at one point. As a result, imports recorded a sharp growth. Imports of ‘Cotton Raw & Waste’ jumped 260% to $1.3 billion between April and November 2022, compared to $361.83 million during the comparable period a year ago. “Meanwhile, we are taking steps to boost the production of cotton by implementing newer techniques for efficient farming. Branding activity of Indian varieties of cotton, such as ‘Kasturi cotton’ is also taken up in collaboration with the industry, which will have a long-term positive impact on the industry. Free trade agreements, especially with the EU, UK and Australia, will open up large markets for Indian textile products," the official added. Seeking an exemption from import duty on cotton, Atul S. Ganatra, president of the Cotton Association of India, said, “the government has imposed an 11% import duty on cotton from 2 February 2021. This has drastically eroded the competitiveness of our value-added products in the international markets, and our textile industry, which is the second largest employment provider in the country, is now constrained to work with only 50% of its installed capacity." Expressing concern over the availability of extra-long staple (ELS) cotton in the country, the association said that every year India requires around 2 million bales of extra-long staple cotton but produces around half a million and that cotton farmers should be given additional MSP to boost ELS cotton production. “We have been seeking removal of duty on cotton …largely on extra-long-staple cotton which India does not have…as cotton prices are under stress. And the import of this does not in any way impact the farmer... so the sensitivity for it is also not there. Raw materials like these are very seasonal, and it is very critical to the value chain. It can be a very calibrated move also," said Chandrima Chatterjee, secretary general of the Confederation of Indian Textile Industry (CITI). Industry representatives also said that there exists a tax anomaly that falls under the ambit of the GST council, which needs correction. Mint reported last year that the GST Council had decided to put on hold a decision to raise the tax rate on several items in the textiles and apparel industry amid pressure from businesses. Finance minister Nirmala Sitharaman had said the GST Council decided to retain the status quo refraining from implementing a planned correction of tax anomaly in the textile sector that warranted an increase in the tax rate from 5% to 12% from 1 January last year. Queries sent to the ministries of commerce and industry and textile remained unanswered till press time.
Source: live mint
Aashish Vij, Group Director of Pan Overseas, a Panipatbased seller of floor coverings and chenille bedspreads, has seen a 35-40% drop in his textile export business this year. Vij, who gets 80% of his business from the US market, attributes this to a number of reasons, including higher grocery bills in US, soaring raw material prices, high inventory levels and a cut back in discretionary spends. “Immediately after the pandemic crisis abated in 2021, the market really boomed. But it has slowed in this financial year. The next six months will be very important. We have to wait and watch. If things keep going on at this pace, many of us will have to exit our business,” he says. The exporter’s views are reflective of the problems hurting India’s $200-billion textile industry. The segment is grappling with a situation where big markets such as the US and Europe are tightening their purse strings amid high inflationary pressures. This seems to have had a large impact on textiles. Though the Indian economy remains relatively strong and is an outperformer among the major economies, the textile sector is a notable exception, says a Reuters news report. Order flow suggests the downturn will continue well into 2023, raising the risk of layoffs in an industry that employs more than 45 million people. “Exports, which constitute about 22% of the industry, have fallen for five months in a row — declining over 15% year-on-year in November to $3.1 billion,” the report adds. With discretionary spending down and buyers spending only on essentials, textiles are not getting as much of a preference as earlier. Also, more focus on cotton textiles over the years has created a dent in demand as newer segments have come up. The textile and apparel sector is integral to India’s export growth as it has about 10.33% share in the export basket, according to official statistics. Therefore, the dismal numbers paint a bleak picture. What is making textile exports from India lose their competitiveness? Change of mindset Atul Gupta, Partner, Deloitte India, says textiles have not really helped in pushing our exports up; in fact, its share in the export basket has just reduced over the years. One of the main reasons is the thought process that cotton textiles alone will get us through. “The world has moved on to man-made fibre (MMF). That is one area where we don’t have a distinct advantage. We don't have a big share in technical textiles, home textiles, fabrics, etc, compared to yarn and readymade garments where we have a bigger hold,” he says. The MMF segment accounts for 70% share in global fibre consumption, with demand for it steadily increasing in the world market. Gupta emphasises that India’s product mix needs to be realigned with global market demand. Only then will the textile sector see some changes for the better. “That is where innovativeness, superior design and value addition is more substantial. There is no point in fulfilling the cotton fibre demand of the world without any superior quality. Cotton yarn is an ‘also-ran’ product. We are competing with everyone in that segment,” he says. Incidentally, the Production Linked Incentive (PLI) Scheme for textiles in 2021, with a budgetary outlay of Rs 10,683 crore, is seeking to fill this gap by promoting domestic production of high-value MMF fabric, garments and technical textiles. “The incentive structure has been so formulated that industry will be encouraged to invest in fresh capacities in these segments. This will give a major push to growing the high-value MMF segment, which will complement the efforts of cotton and other natural fibre-based textiles industry in generating new opportunities for employment and trade,” a Press Information Bureau release had stated. The scheme had received 67 applications and 61 were approved. The approved proposals are expected to bring in investment of Rs 19,077 crore and a projected turnover is Rs 1,84,917 crore over 5 years. The estimated direct employment is 2,40,134, according to the April 2022 PIB release. Gupta says that while these are steps in the right direction, these alone won’t help make India a leading textile exporter. “Even for textile machinery, we are dependent on overseas manufacturers and suppliers. Our top exporters don’t even use any Indian machinery. They use imported ones. We are still a rudimentary market. We need to get out of the mindset that textiles, as an industry, has to be labour intensive. Instead, a focus on modernisation and digitisation should be the key so that our products are superior in quality and get better visibility,” he adds. More value addition Industry experts are of the view that India also has an opportunity to scale up in categories that have traditionally not been our forte. KK Lalpuria, Executive Director and CEO, Indo CountIndustries, a Kolhapurbased home textile manufacturer specialising in bed linen, draws attention to higher value-added products that can hold India in good stead. “India is not doing well in certain categories of exports such as swimwear, lounge wear, athletic wear, leisure wear. We are not participating in those categories but more in basics like t-shirts and other simpler products in apparel. Our presence has been more in low-hanging fruits. Now there is an opportunity to achieve the numbers China had done in the past by participating in the relevant categories. We have a chance to gain much more market share,” he says. Reflecting on the recent trend in the textile sector, Lalpuria says that it is evident that the trajectory has been on a downward curve. This despite the fact that it is the holiday season — traditionally the time for robust sales in stores. “November showed more of a downward trend than September or October. In the quest to liquidate inventory, retailers came up with discounts from October onwards and everyone finished shopping before the season itself. However, on the bright side, we are hearing that the inventory pipeline of brands and retailers is drying up. If that is the case, things should start normalising post-holiday season,” he adds. Anomalies in export But besides such factors, there are other aspects as well that don’t make it a level playing field for India’s textile exports. Lalpuria refers to the anomalies in export, which make it difficult for industry players to compete with international counterparts on an equal footing. “For instance, Bangladesh, Vietnam and Pakistan have duty-free access to Europe and the UK, whereas India is paying a 9.6% duty. Once FTAs (free trade agreements) with the EU, the UK and Canada are implemented, Indian textiles will have the opportunity to gain further market share. These should be signed quickly as time is of essence. India should not lose out on that,” he says. The FTA with the UK is expected to give a fillip to Indian exports in a range of labour-intensive sectors such as leather, textile, jewellery and processed agriproducts. It also aims to double bilateral trade between India and the UK by 2030. Affirming such views, Gupta of Deloitte India says that FTAs can help the sector to a great extent as the country suffers on custom duty rates. “FTAs or bilateral trade treaties will help in doing away with the uncompetitiveness that we face vis-a-via the competing economies. That is why FTAs are important,” he says. Getting through the crisis In the meantime, exporters have lined up strategies to tide through this lean period. Pan Overseas’ Vij has tried some innovations to diversify its core offerings. “We provide anti-skid treatment to our bath rugs. We imported more specialised machines to improve our quality and got a good response on it. We introduced the product in more colours. This helped us get more market. Besides this, we took our floor covering capability and transformed it into making storage products — essentially baskets and containers. That has given us a tremendous response,” he says. The exporter says they had not thought of such addons earlier as floor coverings were running at full capacity. “This was the time to use spare capacity towards more innovative lines. I turned my rug capacity into making baskets.” Home furnishings brand Maspar Living is looking at geographies beyond the US and the UK to capture a wider customer base right now. “We are getting to other markets such as the UAE and Africa. We have a wider customer base across countries and we are consciously looking at that as well,” says Abhinav Mahajan, MD, Maspar Living. With India nursing an ambition to achieve $100 billion in textile exports by 2030, a rehaul of strategies and policies will play a pivotal role in meeting such objectives. A recovery in the sector may not be immediately visible, experts say, but there are reasons to be bullish about the next financial year. “As inflationary conditions cool off and retailers exhaust their stocks, added by the growing preference of importers to move away at least part of their sourcing from China, Indian textile exporters should see good demand from the second half of 2023,” says Arun Roongta, MD of HGH India, a trade show platform for home textiles, home décor, houseware and gifts.
Source: The Economic Times
Commerce and industry minister Piyush Goyal will be on a three-day visit to the US, where he will meet the heads of top multinational companies. The minister will also attend the 13th Trade Policy Forum (TPF) that aims to expand economic ties between the two nations. “He (Goyal) will attend the 13th Trade Policy Forum in Washington DC on January 11. Before delegation-level talks, he will also hold a one-to-one meeting with USTR (US Trade Representative) Ambassador Katherine Tai,” an official statement said on Sunday. The TPF aims to iron out key trade and investment-related issues between India and its largest trade partner — the US. Bilateral merchandise trade during April-October stood at $77.25 billion. The US is also the biggest destination for India’s exports. Established in 2005, India-US TPF held its 12th ministerial-level meeting in New Delhi in November, 2021. It was after a four-year gap. Under the TPF, there are working groups on five broad areas including agriculture, non-agriculture goods, services, investment, and intellectual property. In the last meeting, both the nations discussed their view on potential ‘targeted tariff reductions’. The TPF will be co-chaired by Goyal and Tai. “Working groups were reactivated after the last ministerial. TPF is a platform for continuous engagement between the two countries in the area of trade. It is also to further the trade and investment relations between the two countries. Both the countries are looking forward to the meeting and confident of making progress on trade issues,” the statement said. While the agenda of the TPF is unknown, Business Standard last week reported that in the sidelines of the meeting, India may propose out-of-court settlement to the US. This is in regard to the case where the World Trade Organization’s (WTO’s) dispute panel in 2019 had agreed with the US that India provides export subsidies to its exporters. In the first leg of his visit, the minister will travel to New York to interact with the heads of key multinationals. Goyal will participate in community events, join roundtable meetings with business leaders and think tanks and visit industries. In Washington DC, Goyal will also have a bilateral meeting with US Secretary of Commerce Gina Raimondo. There will also be interaction with some captains of industry.
Source: business-standard
Did you know that India and Australia have entered into an Economic Cooperation and Trade Agreement? Yes, the #IndAusECTA was signed last year, on 2nd April, 2022; after Ratification and Exchange of Written Instruments, the Agreement has come into force on 29th December 2022.
A Win-Win for both India and Australia
It helps matters that Australia exports largely raw materials to India, while India exports finished goods. The ECTA builds on this complementarity, creating win-win opportunities for the two countries. Here is what Additional Secretary, Department of Commerce and Industry, Rajesh Agrawal says: “The Department of Commerce has achieved the unique distinction of operationalizing two Trade Agreements this year - India UAE FTA and Ind – Aus ECTA. The coming into force of Ind – Aus ECTA brings together two major economies of the world - India the 5th largest economy and Australia the 14th largest economy. Since the trade between the two countries is hugely complementary, this offers opportunities on both sides and will pave the way for a win-win solution for both India and Australia.” So, what are these complementarities? Before we explore that, let us look at the current position of trade between the two countries, the before-position so to say, to understand how the picture will change in wake of the agreement.
Current trade trends between India and Australia
India’s imports from Australia amount to 17 US $ billion while its exports to Australia amount to 10.5 US $ billion. However, what we need to realize that India’s imports from Australia are primarily (96%) raw materials & intermediate goods. They are highly concentrated in Coal (74% of Australia’s exports to India) out of which 71.4% is coking coal. On the other hand, India’s exports to Australia are broad-based and dominated by finished products (consumer goods). India also spends $ 4 bn approx. each year on education of students in Australia. The above composition of our bilateral trade is very well reflected in the statements made by the Union Commerce and Industry Minister Piyush Goyal, during the event held in Mumbai on December 29, 2022, the day the agreement came into force. “There is a lot of potential for exporting finished goods to Australia, since they hardly manufacture anything, they are largely a raw material and intermediate producing country, we will get cheaper raw materials which will not only make us more competitive globally but also enable us to serve Indian consumers better; enabling us to provide more quality goods at more affordable prices.” “Australia, which is largely dependent on imports, will benefit hugely, they will soon start seeing a lot more finished goods coming in from India, providing huge amount of work and job opportunities in both goods and services, provided by Indian talent.”
The #IndAusECTA covers the following major areas:
The Agreement will benefit various labor-intensive Indian sectors that are currently subjected to 5% import duty by Australia. The agreement will result in immediate market access at zero duty to 98.3% of tariff lines accounting for 96.4% of India’s exports to Australia in value terms. The remaining 1.7% lines are to be made zero duty lines over 5 years. Overall, Australia is offering duty elimination on 100% of its tariff lines.
Cheaper Raw Materials, Faster ApprovaI for Medicines
Immediate duty-free access covers all labour-intensive sectors such as Textiles and Apparel, Agricultural and Fish products, Leather, Footwear, Furniture, many Engineering Products, Jewelry and select Pharmaceuticals. As a result, many industries such as steel, aluminium, garments and others will get cheaper raw materials which will enable them to become competitive. Both sides have also agreed to a separate Annex on Pharmaceutical products under this agreement, which will enable fast-track approval for patented, generic and biosimilar medicines.
90% of Australian exports by value to get zero duty access to Indian market
India is offering zero duty access to 90% value of products from Australia (including coal). Zero duty on 85.3 % value of products will be offered immediately while zero duty on 3.67 % value of products will be offered progressively over 3, 5, 7 and 10 years. India has offered concessions on Tariff lines of export interest to Australia like Coking coal and Thermal coal, Wines, Agricultural products – 7 of them with TRQ (Cotton, Almonds shelled and in shell, Mandarin, Oranges, Lentils, Pear), Metals (Aluminium, Copper, Nickel, Iron & Steel) and Minerals (Manganese Ore, Calcined Alumina). Many sensitive products such as milk and other dairy products, wheat, sugar, iron ore, apple, walnuts and others, have been kept in India’s Exclusion list.
10 Lakh More Jobs, 10 Billion Dollar More Exports in Five Years
Immediate Duty-Free Access is projected to potentially create 10 lakh jobs in India and additional exports of $ 10 bn from India to Australia in the next five years.
Benefits under Trade in Services
More than 1 lakh Indian students in Australia to benefit from post-study work visa
The commitments made by Australia under Trade in Services are the best it has made in trade agreements till now and match its recent FTA with the UK. Australia has committed its schedule in the negative list and has also made wide-ranging commitments in around 135 sub sectors with Most Favoured Nation (MFN) status in around 120 sub-sectors. The Agreement provides for an Annual Quota of 1,800 for Yoga teachers and Indian Chefs. Post study work visa (18 months – 4 years) will be made available for Indian students. This will benefit more than 1,00,000 Indian students in Australia. Along with this, the #IndAusECTA makes an arrangement for Work and Holiday Visa for young professionals.
Australian services to get Negative List Treatment after 5 Years
India has for the first time agreed to Negative listing after 5 years of coming into force of the Agreement. (But what is negative listing? Under the negative listing approach, a country treats imported and locally produced goods / services equally in all areas, and areas where this is not done are listed – in the negative list - as exceptions. So, in this case, India would provide this treatment to services exports from Australia, after a period of 5 years.) India is also making a commitment to Australia in around 103 Service Sub-Sectors with Most Favoured Nation status in around 31 Service Sub-sectors for the first time. Australia gets commitments in banking, insurance, other financial services, business services. The Agreement opens avenues for investment in computer related services, telecom, construction, health & environmental services. All these are similar to past FTAs signed by India. Commitments have also been made to pursue Mutual Recognition Agreements (MRAs) in professional services in 12 Months. Protective Features to guard against Unintended Consequences The #IndAusECTA also has certain ‘protective features’ aimed at guarding both countries against unintended consequences on trade; let us examine what they are.
The following protective features have been put into place keeping in mind any concern on leakage / diversion of products made in a third country, to India through Australia.
The Agreement has removed the discrepancies with regard to use of Double Taxation Avoidance Agreement for taxation of Indian firm royalties, fees and charges. Australia has no domestic provision for charging tax on royalties, fees and charges by firms sending these to parent companies. A provision in the Double Taxation Avoidance Agreement (DTAA) was used to tax this remittance. However, as an outcome of Ind - Aus ECTA, Australia has made changes in its tax laws, removing this discrepancy. This will eliminate Double taxation from 1st April 2023. As a result, the IT sector can earn higher profits and become competitive. This is what the Union Minister for Commerce and Industry Piyush Goyal has had to say on this: “The Agreement will also eliminate Double taxation on IT services which were making us less competitive and making us less profitable in IT sector, the double taxation has now been removed by amending the law, from 1st April, double taxation for IT sector will be over, we will save millions and millions of dollars right now, and over a billion dollars going forward, maybe 5 - 7 years going forward, giving us competitive edge and also creating a lot many jobs.” An Agreement Suiting the Specific Requirements of Indian Economy Great care has been taken in negotiating the agreement to suit the peculiarities of the Indian economy. Here are some of its beneficial features: India has not provided access and kept out milk and other dairy products, wheat, sugar, iron ore, apple and walnuts from its offers to Australia. This is normally impossible as these are the major exports of Australia. Australia hopes for gains for its products such as Coal and Wines plus a few quotas in agriculture / horticulture products (almonds, cotton, lentil, pears, oranges, etc.) which are already being imported. Australia has offered Zero duty access to 100% of its lines & trade whereas India has so far offered only 70% of its lines for duty free/ reduced duty access to Australia. India can benefit hugely in the pharmaceutical sector. Through the Agreement, drugs approved in other developed jurisdictions will get quicker approval in Australia. This will enable easy penetration of the Australian medical market (India is just 3%). Major gains are expected for India’s labour-intensive sectors such as textiles/ apparel, leather/ footwear, gems and jewellery, fish products, machinery and electrical goods. They will gain duty free access on par with Vietnam and other countries, making them competitive. Liberal grant of work visas to students, employee/ worker visas, agriculture worker visas. This agreement hopes to encourage other developed countries such as UK, Canada, Europe to sign similar agreements with India. The Agreement allows India to overcome any loss it would have incurred as a result of walking out of RCEP, which was virtually an FTA with China. Total India – Australia trade expected to cross US $ 45-50 billion by 2035 As a result of the aforementioned provisions, projections point to a number of long-term gains for the Indian economy. The coming into force of the India Australia ECTA is expected to consolidate and help in the growth of market share of Indian products and services. New markets for Indian goods in Australia are also likely to emerge. There is an expected growth in pharmaceutical products with the easing of Australian regulatory processes. There is expected to be a vertical movement in value chains with the increasing presence of higher value products of advanced technology. Exports are expected to increase by 10 billion by 2026-27 with a creation of approximately 10 lakh jobs. The total bilateral trade is expected to cross US $ 45-50 billion by 2035. It is expected that there will be enhanced job opportunities for Indians in Australia and increased remittance and investment flows to India from Australia. Governments of both India and Australia have worked together to achieve this milestone and are optimistic about its consequences not only for the trade between the two countries but also for further strengthening the bilateral relations. Australian Prime Minister, Anthony Albanese notes that the agreement will deliver new opportunities to Australian businesses. He says that, accepting the invitation of the Prime Minister of India, he is going to visit India in March with a business delegation committed to improve the trade between the two countries. Responding to his Australian counterpart, Prime Minister Narendra Modi observes that the coming into force of the ECTA is a watershed moment, which will unlock the enormous potential of our trade and economic ties and boost businesses on both sides. Addressing the media briefing to mark the coming into force of the #IndAusECTA, Union Minister for Commerce and Industry Piyush Goyal said that the ECTA has been negotiated with the speed of Brett Lee and the perfection of Sachin Tendulkar and is a labour of love between the two countries. The Minister further assured that the Indian government will continue to negotiate for a bright future for the people of the country, for innovation, education, health and technology.Writing about the Agreement, Senator the HON Don Farrel, Minister of Trade and Tourism, Australian Government has said that India’s youthful population, diversified economy and growth trajectory present significant opportunities for Australian businesses, including in education, agriculture, energy, resources, tourism, healthcare, financial services, infrastructure, science and innovation and sport.
Source: PIB
Jammu and Kashmir is one of the world's silk cocoon and yarn producing union territory. Sericulture is an agro-cottage, forest-based and labour-intensive industry in J&K that contributes significantly to economic development and sustainable livelihood. The mulberry crop is the foundation of sericulture resource as a food plant for silkworms. It is directly responsible for creation of silk cocoons. Mulberry plant cultivation, silkworm rearing to produce silk cocoons, cocoon reeling to untwist silk filament, yarn manufacture, weaving, and silk fabric processing are all intertwined. Sericulture in Jammu and Kashmir generates income for farm households throughout the year mainly in spring and autumn season. Farmers have been discouraged from participating in sericulture due to shrinking mulberry area, inadequate extension and support and marketing challenges, but now sericulture is experiencing a renaissance as a result of the World Bank's assistance for the Kashmir valley in reviving the glory of the silk industry, which encourages farmers and stakeholders to participate in this sector In 2020-21 Jammu and Kashmir produced 798 metric tonnes of silk cocoons production and has seen annual compound growth rate of 2.59% which shows positive growth rate from 1990-91 to 2020-21. Sericulture is a unique end-to-end sustainable sector with minimal environmental impact when supply chain management is carefully managed. UNESCO established the Silk Road Programme in 1989 to provide a platform for highlighting transformative impact of silk trade through the cultural interchange that occurred as traders exchanged silk from China across Asia, Europe, and Africa. Sericulture in Jammu and Kashmir can be profitable on both local, artisanal and industrial sizes. Over millennia, sericulture has brought enormous economic benefits to local economies and has been a significant contributor to expanding trade networks and globalisation. Today, UNESCO has designated sericulture as an Intangible Cultural Heritage. During the J&K Trade & Export Policy 2018-28, the government published a pamphlet titled â Reliving & Reviving Jammu and Kashmir Silk, which discusses the significance and promotion of the silk sector. Sericulture generates an annual income of Rs 2027 lakh with 3.6 lakh man days in 2880 villages and 34000 households in J &K. The most prevalent method of silk fibre harvesting for the textile industry is reeling, in which the cocoon with pupae within is placed in boiling water and silk is unwound from the cocoon and rewound onto a cone or spindle like a bobbin of thread. Sericulture has the potential for a sustainable, circular economy, providing benefits to farmers and communities worldwide. The silk industry is crucial for small and marginalised households' sustainable livelihood. Jammu and Kashmir is an Indian bivoltine sericulture union territory with a variety of agro-climatic zones and mulberry genetic resources that are well-known around the world for producing excellent and appealing silken products. The union territory has enormous potential to manufacture and use raw silk locally, establishing a strong backward and forward connection that can revitalise our industrial sector, enhance the sericulture industry for cocoon growers, and create sustainable growth that coordinate cocoon silk production and marketing through comprehensive effective supply chain collaborations and management. Silk products have a ready market in Kashmir, both domestically and globally; however, the government must pay close attention to this enterprise if weavers' socioeconomic situation is to improve. With the purpose of enhancing quality and production, the Central Silk Board developed Silk Samagra for sericulture growth in the country, including Jammu & Kashmir. It encourages Kashmiri crafts and cultural industries which promotes adventure tourism and ensures sustainable livelihood in Jammu and Kashmir. Kashmir valley reeled silk has a shine and is well-known throughout the world because it has a longer fibre length than spun silk. All we need are 'Growers' to plant mulberry trees and rear Silk cocoons, which will give our industry a boost. Kashmir is well-known for its silk carpets of outstanding quality and ingenuity are woven by silk carpet weavers and have impacted countries throughout Central Asia. Kashmiri carpets already received GI labelling, increasing global demand for these products have gained international acclaim and carved out a position for themselves due to its beauty, resilience, and longevity which ensures sustainable income. The filatures produce basic raw material for the silk industry's weaving segment, which is mostly sold to Rajabagh Silk Factory and Bari Brahmana silk factory. A limited fraction of it is also sold on a quota basis to private unit holders. The government has already announced numerous small initiatives, such as free plant material and the distribution of free rearing kits, which producers use during the cocoon rearing process. Sericulture, with its sectoral portions of production, allows sustainable growth and inclusive development of an area by providing livelihood security to many population segments specialised in cultivation, raising, reeling, and weaving. With all of the characteristics of the silk business listed above, it is acceptable to declare sericulture an excellent industry for a sustainable future.
Source: Greater Kashmir
Fashion brands sourcing clothes from Bangladesh for the British market reportedly paid the factories below the cost of production, found a study by the University of Aberdeen alongside UK-based justice charity Transform Trade. A total of 1,000 factories were surveyed for the study and found that many were paid the same prices as before the pandemic two years ago - despite soaring costs of materials. The report looked at the period from March 2020 to December 2021. "Two years on from the start of the pandemic, Bangladeshi garment workers were not being paid enough to live on, with one in five manufacturers struggling to pay minimum wage while many fashion brands which use Bangladeshi labour increased their profits," said Muhammad Azizul Islam, a professor of sustainability accounting and transparency at University of Aberdeen and the project's lead. "Inflation rates soaring around the world are likely to have exacerbated this even further," he added. He also said larger brands buying from many factories were engaging in unfair purchasing practices more frequently than smaller brands, according to suppliers. One in five factory surveyed for the research said they struggled to pay Bangladesh's £2.30 a day minimum wage. The study found that 90% of larger high street brands buying from four or more factories were reported as engaging in unfair purchasing practices; which included cancellations, failure to pay, delays in payment, and discount demands; with knock-on effects including forced overtime and harassment.
Several retailers denied the claims made in the report.
"Retailers say in their reports that they have a commitment to the workers and they have made progress, but transparency is a big problem in the sector and it is difficult to establish if certain products are ethically produced," Professor Muhammad Azizul Islam further said.
Source: Tbsnews
A few companies are in talks with the Madhya Pradesh government to set up a hub for developing a supply chain for textiles, said Invest India chief operations officer (COO) Priya Rawat. Invest India is a national investment promotion agency under the ministry of commerce and industry. "We are also looking to set up hubs for the entire supply chain of textiles from farms to factories in MP. We are in talks with the companies and in due course these investments will be announced. We are waiting for the companies to make announcements," said Rawat. She said Invest India is working very closely with all states including MP and handhold them to get access to the right information for investing. Investors are looking at opportunities in MP in the field of textiles, infrastructure for allied industries like chemicals and food processing. All of these sectors have lots of opportunities available," said Rawat. Rawat said that FDI policies across many sectors have been relaxed in the past 8 years to make doing business easier. "We are looking at FDI, investors and domestic companies taking advantage of the opportunities available in India," said Rawat.
Source: Times of India
The Budget for 2023-24 should unveil a scheme to make lower-rated corporate bonds viable and announce steps to relax labour laws to enable firms to set up new manufacturing units under production-linked incentive (PLI) schemes, analysts said. Incentives for sates to undertake urban governance reforms can lead to a boom in the real estate sector as well. While the Centre will keep its capex momentum, analysts reckon that private investment will hinge on resolving these issues, along with easier land availability for industrial purposes. “The government should create a fund to give first-loss guarantee to low investment grade corporate bonds (rated A and BBB). This will catalyse private investment in the economy,” Ajit Pai, Strategy Lead Partner, Government and Public Sector, EY India, said. The costs for the scheme for three to five years won’t be much given that higher economic growth would lead to lower defaults, he said. While AAA and AA-rated bond yields are around 8%, for A and BBB-rated, it could be 12-13%. So, most of the corporates rely on bank loans, which worked out cheaper at around 9-10%. The government guarantee could enable lower investment-grade corporates to borrow at the same rates as AAA or AA-rated firms. India does not have a deep corporate bond market, and large investors, including insurers and pension funds, have mandates to invest only in highly rated papers. As a result, 95% of the bond issuances in India are in the AAA and AA rating categories while it is less than 5% in US and globally less than 35%. “Companies moving to the corporate bond market will also create more space for bank lending to the MSMEs,” Pai added. Such a bond guarantee will also act as a booster shot for the Rs 111 trillion National Infrastructure Pipeline with identified projects including brownfield projects during FY21-FY25. While the Centre (39%) and the states (40%) are expected to have an almost equal share in implementing the infrastructure pipeline, the private sector was expected to account for 21%. The Reserve Bank of India has already increased the repo rate by 190 bps in H1FY23 and 35 bps in Q3FY23, further hikes are anticipated in the current fiscal to rein in inflation. Analysts reckon that cost of funds is a major stumbling block in taking advantage of the Rs 1.97 trillion incentives announced under PLIs for 14 sectors in the past two years. However, these have not taken off in most sectors except to some extent in mobiles, electronics and textiles. Yet, the government might announce more PLIs in the budget in areas such as speciality chemicals and electrolysers. According to Bank of Baroda chief economist Madan Sabnavis, the government should extend a PLI scheme to small and medium enterprises as well even though it would work with a lag. “The government can also consider SME parks which foster growth of SMEs in a cluster where there are tax breaks and provision of infrastructure which finally gets linked to exports,” Sabnavis said. Among other suggestions, Sabnavis said the government should bring in an investment allowance which allows offsets from profit before tax (PBT) if invested in the next 365 days in capital assets. One of the key impediments in firms going for Greenfield projects or expansion of brownfield projects is the labour laws. Even though the government has subsumed 44 labour laws into four Codes to improve the ease of doing business and attract investment for spurring growth, these have not yet been notified. The Labour Code on Industrial Relations will allow firms employing up to 300 people — against 100 now — to retrench/lay off workers and/or shut shop without government approval. Due to stringent labour laws, textile and apparel factories in India on average employ 40-60 people in a unit compared with 2,000 in Bangladesh and thereby losing the market space to the neighbouring country. “PLI schemes are likely to help the country in achieving the goal of manufacturing, employment, investment and localisation. A single portal for PLI schemes with standard processes across various schemes is likely to help the industry and the government to monitor the effectiveness of these schemes,” Saurabh Agarwal, Tax Partner, EY India, said. A majority of the companies had opted for a “wait and watch” approach during the first half (H1) of this fiscal on low capacity-utilisation and largely uncertain business environment. The average capacity utilisation in manufacturing is over 70% and reflects a sustained economic activity in the sector, while the growth momentum is likely to sustain for another 6-9 months, according to a Ficci report. India Ratings chief economist DK Pant said demand stability is a pre-condition for investment revival. “While the PFCE has breached the pre-Covid level, sustained growth of it and exports growth will have larger bearing on investment demand,” Pant said. The upswing in public sector capex led by the Centre in the past few years is likely to be sustained next year as well, albeit at a slower growth rate due to the government’s desire to trim bloated fiscal deficit (from FY23BE of 6.4% to around 5.5-5.8% in FY24). A lower deficit would create space for the private sector to borrow more funds from the market. The Modi Government is clearly in favour of decreasing the revenue expenditure while maintaining the requisite expenditure for subsidies and schemes for the poor, farmers, scheduled castes and tribes, Sandeep Vempati, Economist and Joint Convenor of Telangana BJP, said. The capital expenditure increased from 12.31% of total expenditure in FY18 to 19% in FY23 while the revenue expenditure decreased from 87.69% to 81% for the above-referenced period, he said. “The expenditure for Budget for 2023-24 could be Rs 45 trillion (up 7.3% over likely FY23RE of Rs 41.95 trillion) with revenue expenditure as Rs 35 trillion and capital expenditure as Rs 10 trillion (from Rs 7.5 trillion in FY23). The share of revenue and capital expenditure would be 77.78% to 22.22%,” Vempati said. The gross fixed capital formation (investment) to GDP ratio increased to 34.6% in Q2 FY23 from 33.4% in Q2 FY22 owing to a strong capital expenditure push by the central government, state governments, CPSEs and bodies like NHAI and the railways. The public capex (Centre, states and CPSEs) has increased by over 50% in five years through FY23 as the government has been banking all these years to push economic growth in the absence of strong private capex. Besides, the `6 trillion brownfield asset monetisation under the National Monetisation Pipeline in four years through FY25, a senior official said the Centre should also accelerate the monetisation of land by the defence, railways, salt commissioner, CPSEs and other central government agencies to make available lakhs of acres of land for public and private sector projects. Similarly, the government should offer more incentives to states to carry out urban sector reforms such as allowing higher FSI (Floor Space Index) limits to revitalize the real estate sector.
Source: Financial express
The Bangladesh Garment Accessories and Packaging Manufacturers and Exporters Association wants the authority to approve the raw material import entitlement of RMG accessories to avoid harassment, complications and delay. The association has also sought the government's policy support including the extension of trade licence validity to five years instead of the existing one year. Moazzem Hossain Moti, president of the organisation, made these demands at a press conference at a hotel in Karwan Bazar of the capital on Sunday.The press conference was organised to inform about the four-day exhibition International Garment Accessories & Packaging Expo (GAPEXPO), to be held from 11 January at the International Convention City, Bashundhara (ICCB). The expo will feature machineries of garment accessories and various types of yarns among other RMG accessories. The RMG accessories makers have been seeking the authority to determine raw material import entitlement as the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and the Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) currently have the power to issue utility declaration for raw material import. As a result, about 3,000 garment exporters who are members of these two organisations do not have to approach the Customs Bond Commissionerate of the National Board of Revenue (NBR) for entitlement permission. Besides, there are allegations that exporters face harassment and have to bear extra expenses while securing utility permission from the customs.
The RMG accessories makers brought up the issues at the press conference.
"There is a notification in this regard (which empowers this organisation to issue utility permission). But it was not implemented," said Moazzem Hossain Moti. "If the raw material cannot be imported on time due to complications, the purchase order is cancelled. We call on the authorities to make the association the utility permission issuing authority instead of the customs," he said. Besides, up to 32 licences are required from various agencies and renewing them every year costs both time and money, pointed out the RMG accessories association president. The association currently has 1,900 member factories, of which about 1,500 are operational. Currently, the investment in the garment accessories and packaging sector is Tk40,000 crore. Some 7 lakh workers are employed in the sector, which has been exporting $7 billion worth of products on an average in recent years. The local accessories manufactures are currently meeting 90% demand of the garments accessories while they have the capacity to meet 100% of the industry's demand.
Four expos on accessories, machinery, tech and textiles
The four exhibitions to be held under GAPEXPO are Garment Technology Show Bangladesh (GTB), Garment Accessories and Packaging Show, International Yarn and Fabrics Show and Indian Textile and Trade Fair, Bangladesh. Among them, Indian Textile and Trade Fair, Bangladesh is going to be held for the first time. ASK Trade and Exhibition Private Limited's managing director Bhuiyan Tipu Sultan said, "The latest machinery used in the garment and accessories sector of Bangladesh will be brought to this exhibition. A variety of bridal wear will be showcased, especially with different types of yarns, fabrics as well as bridal ones made using lace, lace materials and accessories. Some 65 companies from Gujarat, India are going to participate in the exhibition. A total of 250 exhibitors will display their products and technologies in 650 stalls at this year's exhibition, in which companies from 18 countries will participate, according to the organisers. ASK Trade and Exhibition Private Limited Nandagopal K, BGAPMEA vice president Mohammad Belal, Zahir Uddin Haider spoke at the press conference among others.
Source: Tbs news
The only significant policy initiative that the post pandemic Indian economy has seen from the Government has been an openness to use Industrial Policy as a tool for economic development. This has predictably elicited howls of protest and indignation from Economists who have classified this “inward" view of the economy as a violation of the Washington Consensus which recommends free trade, strong institutions and a mildly indifferent government as the only cure to poverty and destitution in less developed economies. India’s policy initiatives, radical by historical standards, have been criticized on three main grounds. One, Industrial Policy has historically failed. Second, Industrial policy fails because bureaucrats can not allocate resources as well as markets can and hence can’t pick “winners". And, lastly, because of the above two reasons Industrial Policy is essentially a “Freebie" scheme that allows large industrialists/monopolists to extract rents from the state. While these arguments are repeated ad nauseam at every forum, very little evidence is provided to support them. Let us first look at the first assertion that Industrial Policy has failed historically. This argument is backed by pointing to the rapid improvement in living standards of many countries (largely Western) under a free trade regime. There are several flaws in this argument. The primary one being that for a less developed country to draw lessons from developed countries, it should look at policies employed by developed countries when they were underdeveloped and not when they had already Industrialized. Empirically speaking all advanced economies have employed Industrial Policy aggressively and sometimes violently to achieve industrialized status. While this holds true for all developed countries, in the interest of space, let us look at the case of the two bastions of free trade and capitalism, the UK and the US. No Industrial policy tool is as hated and scorned by free trade economists as Tariffs. Yet both the UK and US were heavy users of tariffs to protect their infant industries when they were underdeveloped. In a brilliant book, “Kicking Away the Ladder", Ha Joon Chang shows that average import tariffs on manufactured goods in the UK were 55% till 1820 when the UK acquired technological and industrial dominance over the world. A key feature of the UK tariff policy was to allow duty free import of raw materials but impose heavy tariffs on finished goods to encourage value addition in the UK. Heavy restrictions were also imposed on finished imports from colonies like India (Calico Act) and British merchandise was given duty free access to Indian markets in the spirit of 18th century “Free Trade". The result was the total decimation of the Indian Textile Industry which at that time was widely acknowledged as the most sophisticated in the world and the emergence of Manchester as a textile cluster with 45% of British textile exports going to India. Many other non-tariff instruments were also used to promote domestic industry such as the Navigation Act which mandated that trade with Britain must be conducted on British ships. Perhaps no other country in the world has used tariffs for industrialization quite like the land of the free - The United States of America. In fact, so pervasive was Industrial Policy in the 19th and early 20th century US that Economic historian Paul Bairoch calls America the “Mother Country and the Bastion of Protectionism". Alexander Hamilton, one of the founding fathers of America and the first Secretary of the Treasury wrote a magnificent treatise on Industrial Policy in general and Tariffs in particular as a tool for development and christened it “The Report on Manufactures". America doggedly followed the treatise for much of its history and had close to 50% tariffs on manufactured goods till 1940s when its Industrial dominance became unchallenged and it could afford to promote “free trade". In 1875, the US had a per capita GDP that was 3/4th of the UK, then the richest country in the world and yet it had tariffs of 50%. Compared to this when India joined the WTO it had to bring down its Tariffs to 32% despite having a per capita income that was a tiny fraction of the US. Another feature of the US Industrial Policy was the theft of technology and weak copyright laws. Free Trade economists have the knack of getting their knickers in a twist over violation of IPR by less developed countries like India. Yet the US till 1891 (when it was relatively rich) did not acknowledge foreign copyrights and US “inventors" could make merry with foreign technology behind a protective tariff wall. These anecdotes do not even scratch the surface of the scale and scope of Industrial policy that was employed by developed countries when they were in the same or even much higher state of development than India. Even now, not taking into account the half a trillion of Industrial subsidies through the recently promulgated IRA and CHIPS Act, America spends close to 1% of its massive 23 trillion GDP on Industrial policy. In fact, an oft repeated quip about American Industrial Policy is that America’s greatest Industrial Policy is to convince the world that it does not have an Industrial Policy. In sum, unlike free trade economists would have us believe, Industrial policy is not back in fashion. This is because Industrial policy was never out of fashion. It was and remains an integral part of any country’s development strategy. Doubts about its utility are quite misplaced since the greatest economies of the world have used it and continue to use it aggressively. There are several examples of countries that have failed to develop without a coherent Industrial policy (India) but no example of a country that has achieved advanced status without it. The standard strategy followed by these advanced countries has been to use Industrial policy to achieve technological dominance and then advocate free trade from a position of industrial suzerainty to the detriment of less developed countries like India. While India is late to this game, a coherent Industrial policy is critical to our ambitions. The second part of this article will explore in detail the strategic design of Industrial policy and features/instruments of Industrial policy that differentiate resounding success (Japan, Korea, Taiwan) from pleasant mediocrity (Thailand, Malaysia) and lessons for us from these cases.
Source: live mint
India’s real gross domestic product (GDP) or GDP at constant (2011-12) prices in fiscal 2022-23 (FY23) is estimated at ₹157.60 lakh crore, as against the provisional estimate of GDP for FY22 of ₹147.36 lakh crore, released on May 31 last year. The growth in real GDP during FY23 is estimated at 7 per cent compared to 8.7 per cent in FY22, according to the National Statistical Office (NSO). Nominal GDP or GDP at current prices in the FY23 is estimated at ₹273.08 lakh crore against the provisional estimate of GDP for FY22 of ₹236.65 lakh crore released last May. The growth in nominal GDP during FY23 is estimated at 15.4 per cent compared to 19.5 per cent in FY22. NSO under the ministry of statistics and programme implementation released the first advance estimates of national income at both constant (2011-12) and current prices, for fiscal 2022-23 recently.
Source: Fibre2Fashion
India’s National Single Window System (NSWS) portal for various central and state/UTs clearances has hit a new milestone by crossing 75,000 approvals. The NSWS has so far received 4,20,000 unique visitors from 157 countries since its inception. The portal is envisioned as a one-stop shop for investors for taking all the regulatory approvals and services related to investments. More than 1,50,000 investors have used the KYA (Know Your Approvals) Module of the NSWS to know the list of approvals they require for their specific business cases. A total of 75,599 approvals have been granted out of over 1,23,000 applications received, according to a press release by the Indian ministry of commerce and industry. Out of these, 57,850 approvals have been approved by the commerce and industry ministry. The consumer affairs ministry has approved 17,150 plus approvals applied through NSWS. NSWS is providing a single interface to apply for all G2B clearances from various ministries/departments as well as eliminating duplication of work by auto-populating form fields across different approvals based on single investor profiles. Launched by Union minister Piyush Goyal in September 2021, the NSWS allows investors to apply for approvals from 27 central ministries/departments and 19 states/UTs on the portal.
Source: Fibre2Fashion
INTERNATIONAL
Apparel exports from Turkiye increased by 7.3 per cent year-on-year in January-November 2022, as per the data from the Turkish Statistical Institute and the country’s ministry of trade. During the first eleven months of the current year, Turkiye exported apparel worth $17.881 billion, compared to the exports of $16.663 billion during the same period of 2021. Category-wise, exports of knitted and crocheted clothing and accessories (HS chapter 61) earned $10.122 billion in January-November 2022, registering a growth of 3.3 per cent over $9.800 billion earned during the same months of the previous year. Exports of non-knitted apparel and accessories (HS chapter 62) were valued at $7.759 billion, showing an increase of 13 per cent compared to $6.863 billion exports in January-November 2021. Meanwhile, Turkiye’s imports of cotton, cotton yarn and cotton textiles (HS chapter 52) increased by a sharp 38.1 per cent to $4.541 billion over $3.289 billion in the first eleven months of 2021. In October 2022, the latest month for which the data is available, Turkiye’s exports of knitted and crocheted clothing and accessories (HS chapter 61) were affected by the global economic slowdown and low demand. The exports decreased by 8.8 per cent year-on-year (YoY) to $0.873 billion. On the other hand, the shipment of non-knitted apparel and accessories (HS chapter 62) also noticed a negative growth of 6.4 per cent in the same month. Last year, Turkiye’s total exports of knitted and crocheted clothing and accessories (HS chapter 61) and non-knitted apparel and accessories (HS chapter 62) were valued at $18.294 billion.
Source: Fibre2Fashion
Cambodia and Indonesia expect to increase their bilateral trade to $1 billion this year as the latter becomes the latest member to join the Regional Comprehensive Economic Partnership (RCEP). As far as the textile sector is concerned, both countries are competitors in the world market and their bilateral trade of apparel, fabrics and yarn was limited and need based. Cambodia’s apparel exports to Indonesia were worth $22.292 million in 2019, which fell to $14.156 million in 2020 due to the pandemic. The shipment increased to $16.144 million in 2021 and amounted to $14.781 million in the first ten months of 2022, according to Fibre2Fashion’s market insight tool TexPro. The exports in the full year 2022 may surpass the figures of 2021 but may not reach the pre-COVID levels. Cambodia’s apparel imports from Indonesia were negligible. Cambodia’s home textile exports to Indonesia jumped to $2.086 million in 2020 but ended up being negligible in 2021 and 2022. Its import of home textiles from Indonesia was also insignificant, as per TexPro. Coming to the textile trade, Cambodia’s export of fabric to Indonesia increased in the recent years, reaching $9.998 million in the first ten months of 2022 against $7.329 million in 2021 and $2.575 million in 2020. Fabric imports from Indonesia to Cambodia were at $11.308 million in 2020 but declined to $7.864 million in 2021 before falling further to $3.976 million in the first ten months of 2022. Yarn imports from Indonesia to Cambodia noticed a downtrend in the recent years.
Source: Fibre2Fashion
China’s Belt and Road Initiative (BRI), the Cambodia-China Free Trade Agreement (CCFTA) and the Regional Comprehensive Economic Partnership (RCEP) have played a key role in boosting Cambodia’s socio-economic and trade development and will help further attract more Chinese investors, according to government officials in capital Phnom Penh. The three have laid a strong foundation for Cambodia and China to broaden their cooperation in economic, trade and investment, Kao Kosal, director general of the General Directorate of Trade Promotion under the Cambodian ministry of commerce, said. “They have provided and will continue to provide great benefits to Cambodia’s socioeconomic development in the long term,” he said at a Cambodia-Guangxi Zhuang Autonomous Region business forum in Phnom Penh. Suon Sophal, director of the department of public relations and promotion of private investment at the Council for the Development of Cambodia, said the three are the key factors attracting Chinese investors to the Southeast Asian nation, a news agency reported. “RCEP has not only promoted greater regional economic integration, but also underscored the unwavering commitment of all member countries to free trade and multilateralism,” Joseph Matthews, a senior professor at the BELTEI International University in Phnom Penh, told the news agency.
Source: Fibre2Fashion
Any increase in the retail tariffs of electricity will drive up the production cost and lead to a further spiral in inflation, worsening the condition of lower-income groups, said presidents of two chambers today. "A hike in electricity tariff will only exacerbate inflation and increase the sufferings of lower-income people," said Anwar-ul Alam Chowdhury (Parvez), president of the Bangladesh Chamber of Industries (BCI). He made the remarks while speaking to The Daily Star after a technical evaluation committee of the Bangladesh Energy Regulatory Commission (BERC) yesterday recommended raising retail electricity prices by 15 per cent. The Bangladesh Power Development Board (BPDB) has sought the tariff adjustment. It came at a time when inflation, despite easing in recent months, in Bangladesh has continued to persist at over 8 per cent. "If the BPDB does not want to increase suffering, it should rather reduce the prices by increasing its efficiency. Profit does not come by hiking prices, but rather by improving efficiency. We have reasonable doubts about its competitiveness," Parvez said. "It is high time to enhance efficiency." Parvez said there is a slowdown in the global economy and there is fear of a recession in Europe. "At a time when sustaining exports is a challenge, hiking the electricity price will increase the cost of production." The BCI president demanded a reduction in wastage and a cut in the value-added tax, and other taxes to keep prices at tolerable levels so that industries can survive and low-income groups don't suffer. "When concerns regarding a global recession loom large, the spike in tariffs of electricity will lead to a hike in the cost of production," said Faruque Hassan, president of the Bangladesh Garment Manufacturers & Exporters Association (BGMEA). "Rather than hiking prices, they should cut the system loss. Still, there are a lot of illegal electricity connections. So, if the government disconnects the illegal connections, the cost that has increased will be covered." The BGMEA chief said instead of increasing electricity prices, the government may consider raising the price of gas to some extent and ensure the supply of the fuel to industries in a bid to enable them to produce more.
Source: The daily star
The government has extended a suspension of “advance income tax” until the end of 2025 for eligible textile-related enterprises, a good deal of which have been hurt by a drop in orders as a result of global economic headwinds linked to the ongoing Ukraine crisis. The decision comes after the Textile, Apparel, Footwear and Travel Goods Association in Cambodia (TAFTAC) in October asked the Ministry of Economy and Finance to extend the “Suspension of Advance Income Tax of Enterprises in the Textile and Garment Industry”. In a prakas that it issued on January 6, the finance ministry noted that at least some of the eligibility criteria are based on scale and scope of operations, sustainability and worker support. It listed textiles, garments, bags, footwear and hats as possible items that can be produced by entities entitled to the tax break. Cambodia Footwear Association president Ly Kunthai told The Post on January 8 that the move would ease the burden on the sector, which he stressed is experiencing “severe declines”. “This tax break, although not much, illustrates the government’s focus on the private sector,” he said. According to Kunthai, the tax break represents just “one per cent” of business expenses, whereas 30-40 per cent declines in purchase orders are not uncommon among these enterprises, putting their workers at significant risk of layoffs. Worse still, these “sharp drops” in orders will most likely persist throughout 2023, he portended. “Some factories may be temporarily closed and jobs will be cut, due to the Russian-Ukrainian war’s effects on the incomes of the peoples of Europe and the US, some of our biggest markets,” he said. Royal Academy of Cambodia economics researcher Ky Sereyvath drew attention to the fact that the Ukraine and Covid-19 crises have weakened global economic growth, driving up prices for fuel and commodities across the world, eroding incomes and forcing consumers to cut back on spending, particularly so in Europe and the US. “All of these measures taken by the government have truly contributed to the sustainability of industries” as well as to safeguarding local employment, “although global economic conditions have yet to improve”, he said. Cambodia exported $10.092 billion worth of garments, footwear and other textile-related items in January-November 2022, up 17.62 per cent year-on-year, General Department of Customs and Excise (GDCE) statistics indicate. The aforementioned category of items, corresponding to chapters 61-64 of the harmonised tariff schedule, accounted for 49.33 per cent of the value of the Kingdom’s total exports over the 11-month period, or $20.458 billion. In November alone, chapter 61-64 exports came to $757.68 million, down 1.5 per cent year-on-year, but up 7.54 per cent month-on-month, ending a series of monthly declines seen since a peak of $1.320 billion recorded in July. Overall, the monthly average in the second half of the year (January-November) stands at $927.84 million, up 2.10 per cent from the corresponding figure for the first half of the year, or $908.77 million.
Source: The daily star
Prime Minister Sheikh Hasina today emphasised the necessity of boosting trade cooperation between Bangladesh and Brazil as there is a huge prospect of expansion of trade and business between the two countries. She made the remarks when Brazilian Ambassador to Bangladesh Paulo Fernando Dias Feres paid a courtesy call on her at Gono Bhaban. Prime Minister's speech writer Md Nazrul Islam briefed reporters after the meeting. Hasina requested the Brazilian government to take steps over the expansion of bilateral trade and business. She stressed on signing preferential trade agreement (PTA) or free trade agreement (FTA) with Brazil and three other MERCOSUR (Southern common market) countries -- Argentina, Paraguay and Uruguay -- soon. She also emphasised on enhancing agricultural cooperation between Bangladesh and Brazil. Regarding pharmaceuticals, a major Bangladeshi export item to Brazilian market, she said the pharmaceutical items are now facing some restrictions over the registration process in the Brazilian market. She asked the Brazilian authority to ease the restrictions. About the Rohingya issue, Hasina said Bangladesh is providing shelter to more than 11 lakh displaced Rohingya people, which has become a big burden for the country. She said the displaced Rohingya population continues to go high with the births of 30,000 babies every year. The premier asked Brazil to play a strong role in the United Nations Security Council over the Rohingya issue. She congratulated new Brazilian President Luiz Inacio Lula da Silva. Hasina expressed shock at the death of Brazilian football legend Pelé as well as conveyed sympathy to his family and the people of Brazil. The Brazilian ambassador said Bangladeshi RMG products have a great demand in Brazilian market. Brazil can be a big market for Bangladeshi RMG products, he added. He said there is a huge scope to strengthen the bilateral cooperation between the two countries particularly over trade and technology. Prime Minister's Ambassador-at-Large Mohammad Ziauddin, Principal Secretary M Tofazzel Hossain Miah and Foreign Senior Secretary Masud Bin Momen were present.
Source: The daily star
The High Court has allowed Far Chemical Industries Limited – a publicly listed textile-based chemical firm – to merge with the non-listed SF Textile Industries Limited. After the merger, the new entity will be known as Far Chemical Industries Limited. According to a stock exchange filing by Far Chemical on Sunday, all existing equity shares of both Far Chemical and SF Textile will be cancelled. And, all the assets and liabilities of SF Textile will be transferred to Far Chemical as per the terms of the Scheme of Amalgamation. As per the amalgamation rules, Far Chemical's existing shareholders will get the shares at a 1:3 ratio. In simple words, they will get one new share of post-merger Far Chemical, against their three shares held in the company before the merger. The pre-merger Far Chemical currently has 218,093,423 ordinary shares. For the share allocation at 1:3 ratio, 72,697,808 new shares will be issued at Tk10 each by the post-merger Far Chemical. On the other hand, SF Textile's existing shareholders will get the shares at a 1:1.96 ratio. This means, they will get one new share of post-merger Far Chemical against their 1.96 shares held in SF Textile before merger. At present, SF Textile has 157,695,630 ordinary shares. For the 1:1.96 share allocation, the post-merger Far Chemical will issue 80,399,525 new shares at Tk10 each. Hence, the total number of shares of the new entity Far Chemical Industries will be 1,530,973,330, and its paid-up capital will be Tk153 crore. The new entity's authorised capital will be Tk501 crore – Tk300 crore of pre-merger Far Chemical plus Tk201 crore of SF Textile – as per the High Court's order. Sudeep Banik, a manager of Far Group, said "We have already applied to the Bangladesh Securities and Exchange Commission (BSEC) and other stakeholders after getting approval from the High Court". "We will be able to complete the amalgamation after the BSEC's approval," he added. In November 2021, Far Chemical announced its amalgamation with SF Textile. Earlier, it also decided to shift its factory from Cumilla EPZ to its premises at Rupganj, Narayanganj. SF Textile is a 100% export-oriented yarn-spinning company that has been in operation since 2016. The production capacity of the company is 42,250 spindles of cotton, viscose, and CVC yarn. The company did not take any decision yet about the utilisation of its EPZ land. Far Chemical Industries is a concern of the Far Group. The group was established in 1993 based on the 100% export-oriented sweater industry. The group has two other firms – ML Dyeing and RN Spinning Mills – that are listed in the capital market. For the 2021-22 fiscal year, Far Chemical recommended no dividend for its shareholders. From July to March 2022, its revenue stood at Tk3.49 crore, which was Tk48.61 crore in the same period of the previous year. During the period, its net loss was Tk7.22 crore and loss per share was Tk0.33. As of November 2022, the sponsors and directors jointly held 30.24%, institutions 13.77%, and the general public 55.99% shares in Far Chemical. The last trading price of each share of the company Tk10.60 on Sunday at the Dhaka Stock Exchange.
Source: Tbs news
Four-international trade shows on Garment machinery and allied products will begin in the capital on Wednesday, 11 January. These tradeshows are- 20th edition of GTB 2023 – Garment Technology Show Bangladesh 2023, 12th edition of GAP Expo 2023 – International Garment Accessories & Packaging Expo jointly organised with Bangladesh Garment Accessories Packaging Manufacturers & Exporters Association, Maiden edition ITTF Bangladesh 2023 – India Textile Trade Fair Bangladesh 2023 jointly organised with South Gujarat Chamber of Commerce & Industry (SGCCI) concurrent with International Yarn & Fabrics Expo are being held under one platform catering to the sourcing needs of RMG sector. Multiple International Trade Shows focused on Garment Machinery, Yarn & Fabrics, Garment Accessories & Packaging aiding the sourcing needs of the Bangladesh RMG sector are scheduled to be held between January 11 and 14 at the International Convention City, Bashundhara, Dhaka. These four exhibitions to be held over four days will be open to all from 10 am to 7 pm every day. the organizers of the exhibition- ASK Trade & Exhibitions Pvt Ltd presented these facts at a press conference at Hotel La Vinci in the capital. For the past 20 years GTB 2023 has been bringing the Global Technology Players under one roof showcasing the cutting-edge Sewing, Finishing, Embroidery machinery and spares & Allied Products, thus making it a preferred choice of RMG makers to visit and source their needs.Now rechristened as GTB 2023 – Garment Technology Bangladesh 2023 will be visited by decision makers, technical heads and sourcing team and the trade from across the country to source Technology, Machinery, Allied Products & Spares. “GTB began its journey when the RMG Exports was $1.8 Billion and has been the technology platform for the RMG makers, aiding the sector in its growth over the years” informed Tipu Sultan Bhuiyan, Managing Director of ASK Trade & Exhibitions Pvt Ltd, organisers of the event. “As the RMG sector in the country is looking for opportunities in the value-added garments and move up the value chain though product diversification and new market penetration, the 20th edition of GTB 2023 will showcase cutting-edge technology for the sector to modernise and upgrade and serve our objective of bringing global technology closer to the doorsteps of the local industry”, Said Tipu Sultan. 12th edition of GAP Expo 2023 is the Largest & Comprehensive Garments Accessories & Packaging Exposition of Bangladesh. showcasing products, machineries & raw materials. Bangladesh Garments Accessories & Packaging Manufacturers & Exporters Association (BGAPMEA) represents about 1800+ Garments Accessories & Packaging firms of the country. The Garments Accessories & Packaging Industry acts as a backward linkage industry for the RMG sector which employs more than 500,000 people. “I extend greetings to RMG exporters, other related exporters & buying houses who will be visiting the show to witness latest innovations & latest collection of our members and let us all work for the progress of our sector” said Mohammad Moazzem Hossain Mati - President BGAPMEA Maiden edition of ITTF Bangladesh 2023, India Textile Trade Fair Bangladesh 2023 is being organised jointly with South Gujarat Chamber of Commerce and Industry (SGCCI) will have on display a wide variety of Yarn, Fabrics, dress materials with various blends, Bridal wear, Laces, Zari Materials and Accessories meant for the Garment Manufacturers & Exporters including the Boutiques and domestic brands along with embroidered and sportswear meant for the domestic market by leading manufacturers from India providing an excellent sourcing opportunity.
Exhibit Profile at ITTF Bangladesh 2023
Fabrics: Man-made, Synthetic, Natural and Blended fibres in Woven and Knits for men's, women's and kid's wear. Fine Yarn-dyed Shirting, Wool, Polyester-Wool and Polyester Viscose Suiting, Pure and blended Linen, Denims, Cotton twills and drills etc., Fine high-end Silks, Silk Cotton, Rayon, Polyester, Nylon, Polyester Net Fabrics, Fancy Jacquard Fabrics, Embroidered Fabrics, zari Fabrics, Fabrics for Ethnic Garments, Digital Printed Fabrics, Foil Printed Fabrics, Screen Printed Fabrics, Muslin, ModdChander, Snatoon, Updada Cotton Silk.
Dress Materials: In Prints & Solids, Embroidered, Denim, Cotton Twills & Drills, Dyed work sarees, Printed sarees, Fancy fabrics, Lehengas, Plain Sarees, Handwork Sarees.
Garments: Ethnic & Sportswear, Embroidered Garments, Kurthi 3 piece with Duppatta
Trims & Embellishments: Fancy Lace, Zari Lace, Trimmings, Braids, Latkan Laces Elastic Tapes, Covered Rubber Elastic Thread, Shoe Elastic Tapes, Jacquard Elastic Tapes, Polyester Rigio Tapes, Gym Wrist Support, Surgical Elastic Tapes. Rubber Thread, Narrow Fabrics.
Sectoral Update:
In the fiscal year 2021-22, Bangladesh has crossed the milestone of $50 billion in exports for the first time. Bangladesh’s exports increased by 35.47 percent in one fiscal year. From July 2021 to June 2022, Bangladesh exported goods worth $52.08 billion in a total of 12 months, of which $42.61 billion was from ready-made garments, which accounted for 81.81 percent of total exports in the just-ended fiscal year. In the previous fiscal year, apparel exports were worth $31.45 billion. The main reason for the success of the RMG sector in Bangladesh in the last financial year was the diversification of export destinations. Bangladesh’s RMG industry is present in 11 countries with billion-dollar exports. Out of the 11 countries in Bangladesh’s billion-dollar export list, seven are EU countries. Woven and knitted apparel, clothing accessories and home textile exports together accounted for 85.36 per cent of Bangladesh’s total exports of $16.853 billion during July-October 2022. RMG exports from Bangladesh had witnessed an increase of 35.47 per cent to $42.613 billion in fiscal 2021-22 compared to exports of $31.456 billion in fiscal 2020-21. Bangladesh had achieved an all-time high in terms of value of RMG exports in 2021-22. The total exports also breached the target of $43.500 billion with 19.73 per cent rise during the period.
Source: Rtv online
