“UNION BUDGET FOR 2023-24 – POSITIVE & GROWTH-ORIENTED”, CHAIRMAN, SRTEPC
Demand for flags, dhotis and towels picks up in Erode
Deep dive into the budget from the textile and apparel industry’s perspective
No data maintained on raw material price effect on MSMEs: MoS MSME Bhanu Pratap Singh Verma
Budget to support growth, tame inflation
Monthly GST revenue at Rs 1.50 lakh cr to be new normal next fiscal: CBIC chief
INTERNATIONAL
Inditex expands its return fee to home market
Report highlights need for advances in protective clothing
Sustainable Apparel Coalition hosts Planet Textiles at ITMA 2023
Next Level Apparel and GK Global Form Strategic Nearshore Fabric Supply Partnership
NATIONAL
The Hon’ble Union Finance Minister Smt. Nirmala Sitharaman announced the Union Budget for 2023-24 in the parliament yesterday. “The Budget is Positive, Pragmatic and Growth oriented and reflects optimism as far as the future is concerned", said Shri DhirajShah, Chairman of The Synthetic& Rayon Textiles Export Promotion Council (SRTEPC). The budget has extended the date of Incorporation for Income Tax benefits to Start-ups from 31st March, 2023 to 31st March, 2024. This will encourage investments in the Textile sector according to Chairman, SRTEPC. Increase in the budget allocationsforthe RODTEPand ROSCTL Schemes will lead to increase in the rates of duty credit scrips under these schemes which will lead to an increase in the overall exports, said Shri Shah. Further according to Shri Dhiraj Shah, increase in funds allocation for the ATUF Scheme will help in clearing the pending cases. The Chairman, SRTEPC, expressed his confidence that the announcements in the Union Budget for 2023-24 will lead to the improvement in business sentiments and overall development of the Country including employment generation.
Source: Business-Standard
With political parties intensifying their campaign for the byelection to the Erode (East) Assembly constituency, the demand for flags of political parties, dhotis, saris and towels has picked up in markets here. The bypoll, necessitated by the death of former MLA E. Thirumahan Everaa, is scheduled for February 27 and most of the parties had announced their candidates for the election. Party flags of various sizes, dhotis, saris, towels, caps and other campaigning materials have started to arrive at the textile shops in the city. “We did not expect the announcement for the election within a short period. But, we have placed orders and deliveries have started”, said P. Murugan, a wholesaler at Panneerselvam Park. Shops selling these materials are located at Kongalamman Kovil Street, Manikoondu, Thiruvenkatasamy Street, Venkatachalam Street and in market areas. Traders said that the sales have picked up. Six candidates file papers for Erode (East) Assembly constituency on second day “Not only the major political parties purchase flags and other materials, other parties too purchase materials”, said another wholesaler P. Shanmugam. Party functionaries and cadre prefer dhotis, saris and towels printed with party flags that are available at an affordable price. “We sell in bulk and also in retail to the cadre”, he added. Since the cost of labour and printing charges have gone up, the price of dhotis and saris had also gone up by over 20% when compared to the previous election. Since it is not summer, sale of caps did not pick up, while sale of mufflers, shawls and white shirts have improved.
Erode East bypoll | O. Panneerselvam accuses Edappadi K. Palaniswami of ‘abusing’ the process of the Supreme Court
With three weeks left for the election and parties intensifying their campaign, the election fever has started and sales are expected to increase further in the coming days, asserted another trader at Manikoondu area. “Most of the candidates focus on door-to-door campaigns and flags play a major role in seeking the attention of the electors”, the trader added.
K. Selvaraj, president of the Erode Gani Market Weekly All Textile Merchants’ Association told The Hindu that sale of dhotis and saris of two major political parties have picked up and are expected to go up further in the coming days.
Source: The Hindu
A quick look at the budgetary allocation shows that there is more than a 20 per cent increase in budgetary grants for the textile industry which could be used for the growth of the industry. The total grant for textiles for the year 2023-24 is fixed at Rs. 4,389.34 crore which is about 22.6 per cent higher than the revised budget grant for 2022-23. In the present budget, a grant of Rs. 200 crore has been kept for PM MITRA Parks, while for PLI Scheme, the grant is budgeted at Rs. 5 crore. Higher budgetary allocations are for schemes promoting capacity building and investments like National Technical Textiles Mission (NTTM), PM-MITRA and textile development cluster scheme. There are a few more good decisions taken in this budget. Overall this budget is a positive, growth-oriented and forward-looking budget. The focus on infrastructure, investment, green growth, youth power and inclusive development will boost India’s journey to be the fastest-growing robust economy. The announcement to cover more sectors under the PLI scheme and support to the MSME sector will help thrust exports and investment in the country. But at the same time, some of the decisions will have their negative impact also. The Government could have avoided the increase in the Basic Customs Duty on textile machinery from 5 per cent to 7.5 per cent as the country is not even producing 20 per cent of the machinery requirement. This will impact the new investments planned in this sector. Industry has urged retaining 5 per cent import duty for all types of textile machineries for the next three years or till the domestic manufacturers establish themselves to meet the domestic demand. This will have some impact on the global competitiveness and also the recently announced PLI Scheme and PM MITRA Scheme in the absence of Technology Upgradation Fund Scheme which was in vogue from 1st April 1999 to 31st March 2022. There has been no announcement on the continuance of ATUF Scheme in the Union Budget and it is being hoped that Government would announce something with regard to it in near future. The increase in allocation for the MAI Scheme from Rs. 160 crore in 2022-23 to Rs. 200 crore in 2023-24 is a welcome one but this may not be adequate as the global trade shows are increasingly giving opportunities for showcasing which need to be exploited. A planned scheme for aggressive overseas marketing may be notified with a sizable corpus to encourage exporters to showcase globally.
Textile and apparel Industry got (direct/indirect)
Increased 38 per cent allocation of ATUFs from Rs.650 crore in 2022-23 to Rs.900 crore in 2023-24; this will help in the release of payment for pending cases faster. To enhance the productivity of extra-long staple (ELS) cotton, the Government will adopt a cluster-based and value chain approach through Public Private Partnerships (PPPs). This will facilitate collaboration between farmers, state and industry for input supplies, extension services and market linkages. In the long run, it will be helping garment industry provide raw material security. Five new HS Codes for cotton have been identified for further classification of cotton as per staple length. This will help in calibrating policy support for the segments which are import dependent or need further incentivisation. The support for the procurement of cotton by the Cotton Corporation under the Price Support Scheme is withdraw. Although it is difficult to predict the impact at this stage, a chunk of industry feels that it looks like the Government is trying to move towards price discovery and self-sustainable farm-to-factory cotton movement. Fund for RoDTEP scheme has been increased from Rs.13,699 crore in 2022-23 to Rs.15,069 crore in 2023-24. The allocation for RoSCTL scheme is increased from Rs.7,641 crore for 2022-23 to Rs.8,405 crore for 2023-24. Rs 9,000-crore corpus for a revamped credit guarantee scheme will alleviate the stress of small and medium enterprises. It will enable additional collateral-free guaranteed credit of Rs. 2 lakh crore reducing the cost of the credit by about 1 per cent. The textile industry would be the major beneficiary out of the scheme since more than 80 per cent of the textile units come under the MSME category. The increased allocation for the Interest Equalisation Scheme (IES) from Rs. 2376 crore in 2022-23 to Rs. 2932 crore in 2023-24, which is up by 23 per cent, will help support exports. The focus on building a green infrastructure will go a long run in reducing our carbon footprints and making textile and apparel facilities sustainable. The Government has identified 100 critical transport infrastructure projects, for last and first mile connectivity for ports, and will be undertaking investment of Rs. 75,000 crore (incl. Rs. 15,000 crore from private sources), and will promote coastal shipping for passengers and freight. Launch of Pradhan Mantri Kaushal Vikas Yojana 4.0 will further facilitate skilling lakhs of youth with Industry 4.0 courses like coding, AI, robotics, mechatronics, IOT, 3D printing, drones and soft skills. The focus on quality education, skilling and training will help in creating a credible workforce which will be fit to the industry quickly, ensuring a strong backup to the manufacturing jobs. The Direct Benefit Transfer under pan-India National Apprenticeship promotion scheme has been rolled out. The establishment of Skill India International Centres would further prepare a skilled workforce for international opportunities. 50 years interest free loan to states to incentivise infrastructure investment, highest capital outlay for Railways, 100 infrastructure projects in port will have a positive impact on overall business and the employment sector. States will be encouraged to set up a Unity Mall in their state capital or most prominent tourism centre or the financial capital for promotion and sale of their own ODOPs (one district, one product), GI products and other handicraft products, and for providing space for such products of all other states.
Industry Reacts
“The budget has focused on growth potential of the Indian economy by focusing on investment and infrastructure to help the country remain as the fastest growing economy as projected by the international institutions,” Dr A Sakthivel, President, FIEO “It’s a forward-looking, growth-oriented budget. Change in the direct tax will boost saving and make our economy resilient to face the tough time. Removing a large number of compliances converting over 3400 legal provisions into decriminalisation and amending 42 Central Acts, will help smooth revival of businesses,” Narendra Goenka, Chairman, AEPC “CITI termed the budget as pragmatic and futuristic laying a strong foundation for India @100! The new AI-driven data collection of agricultural products will also help in better crop estimation and lend predictability to cotton prices,” T. Rajkumar, Chairman, CITI “The Government has given thrust for inclusive growth, infrastructure and investment green growth, skill development, etc., that would greatly help the highly labour, power and capital-intensive textile industry,” Ravi Sam, Chairman, SIMA “The priority given to infrastructure development will go a long way for reduction of logistics cost, a major need for the exporting units. The focus given on green growth, is a major discussion point by the knitwear industry now in Tirupur cluster,” K.M.Subramanian, President, TEA “As expected nothing really for Textile Industry in budget except more disposable income in hands of consumers due to tax cuts plus with inflation taming means more consumption. The separate HS Codes for ELS Cotton indicates the intent of the Government to differentiate the same in import duty going ahead,” Sanjay K Jain, MD TT Ltd & Chairman, ICC National Textiles Committee “The Government’s initiative of creating a special accelerator fund for agriculture is a step towards turning agri-tech into a sunrise sector for investments. The decision to relax taxation for start-ups for up to 10 years, coupled with the setting up of bio-hubs in rural areas, will greatly ease the process of setting up units in villages. Our efforts to improve the supply-chain network for all our stakeholders in the natural fibre ecosystem supply chain receives a major boost from the decision to support collaborative projects between farmers, states and businesses to provide input supply extension services and market connections. Besides providing direct access to global markets, ready access to the internet will expose the farming community to the best trade and agricultural practices the world over. The promise of financial assistance to traditional artisans such as weavers, who are ReshaMandi’s strategic stakeholders and partners, is a decision we welcome with much delight,” Mayank Tiwari, Founder and CEO, ReshaMandi “It is encouraging to see that key pillars of growth include skilling and job creation, opportunities and reduction of compliance burden for small entrepreneurs and the empowerment of women entrepreneurs. This is consistent with our expectations of including incentives to enable the empowerment of women entrepreneurs in Tier-2, Tier-3 and Tier-4. Reduced tax burden for small entrepreneurs will mean reduced supply-chain costs and hence more competitive markets. Steps like carry forward of losses for start-ups in case of shareholding, extension of date of incorporation amongst other steps is a step forward for the start-up ecosystem,” Abhay Batra, Co- Founder & CFO, Clovia “The 8.25 % custom duty will be implemented on all types of high-speed weaving machines imported from any country. The overall capital investment will be expensive by 8.25%, which will hamper the growth in installing the high speed weaving machines. Surat will face heat of this decision,” Ashish Gujarati, President, The Pandesara Weavers Co-op Society Ltd. “The proposal on increased spends on capex will keep the wheels of growth in motion. The reduction in personal income tax slab and eliminating deductions will help in bringing in more spends and marginally higher dispensable incomes. Currently we are facing tepid demand due to recessionary pressures; both overseas and in our country. We therefore welcome the budget this year as it is focused on growth, economic progress, modernisation and sustainability,” Sanjay Vakharia, CEO, Spykar Lifestyle “At the macro level, with an increase in income tax exemption limits and rationalisation/reduction in income tax slabs and rates, there will be more money in the hands of the aspiring middle-class and will lead to higher consumption which augurs very well for boosting the much needed retail demand,” Priyavrata Mafatlal, Vice-Chairman, Arvind Mafatlal Group “There are certain announcements that may benefit the handicrafts sector which include PM Vishwakarma Kaushal Samman, wherein a package for artisans has been conceptualised which would certainly help in the capacity building of the artisans engaged in the sector. Initiatives like reduction in cost of credit by 1 per cent through infusion of Rs.9000 crore corpus for the MSMEs would help the sector,” Raj Kumar Malhotra, Chairman-EPCH
Source: Apparel resources
Trade, import and export for MSMEs: Minister of State for MSMEs Bhanu Pratap Singh Verma informed Lok Sabha on Thursday the MSME ministry does not maintain data with respect to the effect of raw material prices on production or aggregate demand of MSME products. The minister was responding to a question on whether the government is aware of the price of raw materials such as metals, plastics, etc., for MSMEs and if so, whether the raw material prices have affected MSMEs’ production. Verma said the government has taken several steps for raw material support to MSMEs such as providing financial assistance under the Raw Material Assistance (RMA) Scheme of National Small Industries Corporation Limited (NSIC), exemption on basic custom duty on steel scrap till March 31, 2023, TMT bars below 8 mm exempted from the purview of the Quality Control Order and waived off import duty for several raw materials like coking coal, ferro-nickel etc. Importantly, the annual rate of inflation based on the Wholesale Price Index (WPI) stood at 4.95 per cent for December 2022 over December 2021 against 5.85 per cent recorded in November 2022 and 8.67 per cent in October 2022, reflecting a decline in commodity prices. According to a commerce ministry’s statement, the decline in the rate of inflation in December 2022 was primarily led by a fall in prices of food articles, mineral oils, crude petroleum & natural gas, food products, textiles and chemicals & chemical products. WPI is the amount wholesalers or factories pay. A rising WPI indicates wholesalers are paying more for raw materials. Meanwhile, India last year had signed two trade deals with the UAE and Australia. Particularly with respect to the trade deal with Australia — India has offered concessions on tariff lines of products including coking coal and thermal coal, wines, agricultural products including cotton, almonds shelled and in shell, oranges, etc., metals including aluminium, copper, nickel, iron and steel, and minerals such as manganese ore and calcined alumina. Merchandise imports from Australia consist largely of raw materials, minerals and intermediate goods. 74 per cent of it is coal and 71 per cent of coal is coking coal other than tanning, dyeing extracts, pigments, which will help Indian MSMEs and others in sectors such as steel, aluminium, garments, etc., to become competitive in manufacturing with 90 per cent value of imports from Australia getting zero duty access to the Indian market.
Source: Financial express
The continued focus on infrastructure capex by the government, along with the positive surprise on personal tax rates to strengthen consumption, will accelerate the country’s economic growth in the future. With more funds being allocated to defence, railways and affordable housing schemes, private capex will also get an impetus amid global headwinds. The Budget’s focus on supporting the domestic economy will clearly boost our growth as well as create a positive image for the country among foreign investors, given the current concerns around global headline events. Moreover, the major shake-up in income tax will increase spending power and contribute to economic growth. Global investors are focusing on emerging markets and India is on their radar. This Budget will ensure India is back on the investment map for foreign portfolio investors. It may happen in the second half of calendar year 2023, when the earnings upgrades start to happen. However, market valuation, which seems high right now, could be a roadblock for many investors in the short term. On the other hand, what Indian investors will take note of is that the Budget was not so populist, especially considering the many state elections lined up this year as well as the upcoming general elections early next year.So, all in all, investors are welcoming the domestic-led growth proposal and liking the continuity of previous Budgets with the focus on bringing down the fiscal deficit.
Source: Financial express
Synopsis Monthly GST collection is expected to average around Rs 1.50 lakh crore and it will be the 'new normal' in FY24 in view of concerted efforts to check evasion and bring new businesses within the GST net, Central Board of Indirect Taxes and Customs (CBIC) chief Vivek Johri said on Thursday. Monthly GST collection is expected to average around Rs 1.50 lakh crore and it will be the 'new normal' in FY24 in view of concerted efforts to check evasion and bring new businesses within the GST net, Central Board ofIndirect Taxes and Customs (CBIC) chief Vivek Johri said on Thursday. In an interview to PTI, Johri said the GST and Customs revenue collection numbers as given in Budget 2023- 24 are realistic based on nominal GDP growth and import trends, respectively and the indirecttax collection target set for next fiscal will be achieved. Johri said CBIC has drawn up a strategy to augment GST mop-up by way of stricter audit and scrutiny of tax returns, enforcement action against fake billing and input tax credit claims. "We will focus on increasing the taxpayer base. Even though the growth in taxpayer base has been quite good, we have more than doubled the number of taxpayers from the time we started GST, we feel there are some sectors which have much more potential to increase the taxpayer population. "So I feel we have not reached the saturation level and there is scope for increasing the revenue," Johri said. GST collection in current fiscal year is likely to average around Rs 1.45 lakh crore. The mop-up in January came in as the second highest ever at around Rs 1.56 lakh crore, the highest being Rs 1.68 lakh crore in April 2022. Asked if in next fiscal year, Rs 1.50 lakh crore could be the new normal for monthly GST collection, Johri said "Yes, that I'm confident of". "There is further scope for growth in GST revenues." The 2023-24 Budget has projected 12 per cent growth in GST revenue at Rs 9.56 lakh crore. The revised estimate for current fiscal pegs GST mop-up at Rs 8.54 lakh crore, up from Rs 7.80 lakh crore originally estimated in the Budget last year.
Source: Economic Times
INTERNATIONAL
Zara parent Inditex since May has been charging online shoppers in select regions for returning unwanted items. On Thursday the group said it would expand the charge to its home base of Spain, one of its core markets. A fee of 1,95 euros will be deducted from a processed refund, unless goods are dropped off at a physical store. The cost of returns is invariably high for retailers, with some estimating processing one return costs between 10 and 20 dollars, not including the freight. Other estimates say it is up to 66 percent of the product price. Either way, it is a financial crux for most retailers, specifically for fast fashion brands who have lower margins. This is one of the reasons Primark has opted to not sell clothing and accessories via e-commerce. Zara, Uniqlo and Next are some of the high street giants charging for returns in select markets.
Environmental impact
Clothing comprises the largest share of EU textile consumption (81 percent) fostering the trend of using garments for ever shorter periods before disposing them. This spurs unsustainable patterns of overproduction and overconsumption, says the EU Commission, which is aiming to ‘drive fast fashion out of fashion.’ The Commission wants to minimise the rate of returns, stating it will assess in its Transition Pathway for the Textiles Ecosystem, how emerging technologies, such as digital precision technologies, could reduce the high percentage of returns of clothing bought online, encourage on-demand custom manufacturing, and in this way improve the efficiencies of industrial processes and reduce the carbon footprint of e-commerce. The consumption of clothing and footwear is expected to increase by 63 percent by 2030, from 62 million tonnes now to 102 million tonnes in 2030, show figures from the European Commission. In the EU, the consumption of textiles, most of which are imported, now accounts on average for the fourth highest negative impact on the environment and on climate change and third highest for water and land use from a global life cycle perspective. About 5.8 million tonnes of textiles are discarded every year in the EU, approximately 11kg per person, and every second somewhere in the world a truckload of textiles is landfilled or incinerated.
Source: Fashion united
Manufacturers of military clothing and equipment are facing mounting pressure to innovate, according to Military clothing and equipment: escalating global tensions spur investment – a 51-page report from the global business information company Textiles Intelligence. This pressure has intensified as armed forces worldwide brace for conflict in the wake of the war in Ukraine and as opposition forces make significant advances in the development of new technologies and weaponry redundant. In response, manufacturers are working on new technologies which can provide effective protection of personnel, especially during combat – including next-generation body armour, uniforms capable of concealing thermal signatures and wearable devices that can optimise performance.
CNTs For example, research into the potential of nanomaterials for use in the manufacture of uniforms which can conceal thermal signatures has shown promise. Carbon nanotubes (CNTs) and graphene, in particular, possess excellent mechanical and thermal properties which enable them to absorb and dissipate radiation emitted by infrared radar systems. As a result, research is being conducted into textile coatings which contain CNTs and graphene. It is thought that military personnel wearing uniforms treated with such coatings could display much smaller thermal signatures than military personnel wearing conventional uniforms. An alternative field of research which has shown early promise is the potential of metamaterials in the manufacture of uniforms. Metamaterials are capable of redirecting or bending light and electromagnetic (EM) radiation, effectively rendering objects invisible. Global demand for such innovations is expected to rise over the period between 2020 and 2028 as a result of escalating political tensions worldwide and the expansion and modernisation of military forces in several countries. Despite an increase in demand for innovation in military clothing and equipment, significant challenges will be presented by scaling the production of new and complex technologies – not least because of the high costs of doing so. Furthermore, there are disparities between, on one hand, the desired performance of some technologies for use in the manufacture of military uniforms, and on the other, their availability because of budgetary and technological constraints. These disparities will prove considerable.
Source: Innovation in Textiles
Planet Textile is a licensed NCL News & Media brand and this year will see the Sac present a two-day event at the Textile and Garment Technology Exhibition, (ITMA 2023) where attendees will have a chance to explore, connect with global peers and exchange ideas on how mass action can help change and create a long-lasting manufacturing process. The Textile and Garment Technology Exhibition, (ITMA 2023) will be held on June 12-13 at the Fiera Milan Rho exhibition centre in Italy. Visitors to the Planet Textile event will have access to the latest updates on the SAC’s Higg index suite of tools, plus those relevant to its independent, third-party evaluation. Lee Green, senior director, communications, at the Sustainable Apparel Coalition, said: “We are living in a climate emergency. There is an urgent need to accelerate action and spur global change; we believe in the power of collaboration and collective action to achieve this. “As such, we are delighted to be hosting this year’s Planet Textiles at ITMA 2023 and in collaboration with MCL News. Planet Textiles is renowned within the industry as a key sustainability event, so we have a lot of responsibility to ensure we deliver the very best program and speakers in Milan.” Registrations for Planet Textiles 2023 will open on January 31. To learn more, visit the SAC’s dedicated event content.
Source: Just-style
Next Level Apparel (NLA) today announced a strategic partnership with GK Global (GK) to provide nearshore fabric. The combination of NLA, a top provider of premium blank apparel and GK, a diversified global textiles company, is the latest advancement toward 100% U.S. grown cotton for NLA’s entire apparel line. “There are many benefits of this partnership with GK, including shorter lead times and reduced exposure to geopolitical risks,” said NLA CEO Randy Hales. “Bringing our fabric production closer to home allows us to have complete supply chain transparency, including upstream traceability to the cotton.” Founded in 2003, NLA is a leading designer, manufacturer and supplier of premium blank apparel for the printwear, retail, brand specialty and other decorated apparel markets. “In 2022 GK invested more than $236 million (USD) aimed at expanding our world-class operations and allowing us to bring the full strength of our global supply chain to our relationship with NLA,” said GK Chairman Yusuf Amdani. “We are proud to partner with the leading printwear brand and to grow together by delivering the highest quality and responsibly sourced products available in the market today.” GK's Textile operations were established in Central America and Mexico more than three decades ago. At that time the company was one of the first foreign textile investors in Honduras, and since then has established vertically integrated production covering all facets of the textile supply chain to include innovative and sustainable fibers, yarns, fabrics, and garment manufacturing. Next Level Apparel is a design innovator, industry leader and top supplier of premium blank apparel. NLA put its stamp on the map as a blank apparel pioneer in the printwear industry by answering the call to its customers’ need for a Sublimation T-shirt. The company’s passion for exceptional craftsmanship catalyzed the development of more styles and ultimately formed the Next Level Apparel® brand – putting the customer first, always, and in all ways. The company’s tagline, “Ready to Inspire,”™ is a commitment to finding new ways to make it easier for customers to keep their shelves fully stocked with thoughtfully designed premium blank apparel that offers exceptional printability. NLA is committed to sustainable, legally compliant, and ethical operations worldwide. GK Global is a private multinational company with operations in textiles, real estate, technology, agriculture, and lifestyle supported by operations in nine countries across the globe. Built on a foundation of pioneering and innovative spirit combined with a forward-thinking pulse and drive toward sustainability that generates real change and a better quality of life in the long term locally, nationally, and globally.
Source: business wire
