CEPA with UAE gave a boost to Indian entrepreneurs, deepened ties: PM Modi
Global majors finally return to Tiruppur after a long dry spell
Weaving a new story through Indian textiles
MSMEs in Haryana seek technical textiles lab along with testing and training facilities
India-UAE Business Council launched to boost bilateral trade and investment
Retailers, wholesalers top MSME registrations on Udyam portal: Govt data
India's economy to grow at 6% in 2023-24: Former NITI Aayog VC Rajiv Kumar
Scrapping fast fashion, stitching solutions
INTERNATIONAL
Exports to Thailand, Vietnam up as traditional markets shrink
Bank lending rate hikes hurt businesses in HCM City
Gov’t probes garment, textile, footwear manufacturing subcontracts
There is a way to decarbonize RMG manufacture
Why is Bangladesh facing a dollar crisis while others are not
NATIONAL
Prime Minister Narendra Modi on Sunday said the Comprehensive Economic Partnership Agreement (CEPA) with the UAE has given a boost to Indian entrepreneurs and also deepened ties with the Gulf country. India and the United Arab Emirates (UAE) inked a CEPA on February 18 last year to boost trade ties following a virtual summit between Prime Minister Modi and Crown Prince of Abu Dhabi Sheikh Mohammed bin Zayed Al Nahyan. Tagging a tweet by Commerce and Industries Minister Piyush Goyal in which he shared an article jointly written by UAE Minister of State for Foreign Trade Thani bin Ahmed Al Zeyoudi and him on one year of CEPA, Modi said the CEPA with the UAE has given a boost to Indian entrepreneurs and has also deepened our ties with UAE. The trade pact was signed last year by Commerce Minister Goyal and Economy Minister of the UAE Abdulla bin Touq Al Marri.
Source: Business-Standard
Following a gap of several months, global brands like Walmart have started lifting orders from Tiruppur’s garment makers, leading to growth in knitwear exports in January after five months. Knitwear exports from Tiruppur increased 1.5 per cent in dollar terms and 11.6 per cent in rupee terms in January.According to the Tiruppur Exporters’ Association (TEA), global majors have started placing more orders from the region. At one point, suffering from the aftershocks of demonetisation and the implementation of the goods and services tax, the garment units in Tiruppur had fallen silent during the pandemic as high yarn prices spun trouble for them. But it’s a different picture now. They have woven a revival story - are spinning dreams and have sewn the Covid wounds. “Walmart has started lifting orders from January. We have seen orders of about Rs 80-100 crore,” said Sivaswamy Sakthivel, executive secretary, TEA. “We are now getting orders from all the big brands like Primark and Walmart,” said K M Subramanian, president, TEA. In January, exports from Tiruppur increased 1.5 per cent - from $407 million in 2021-22 to $413 million in 2022-23. The rise in exports comes after a drop of 14.7 per cent in August, 30.7 per cent in September, 37.8 per cent in October, 6.9 per cent in November, and 12.9 per cent in December. The dip in exports was mainly due to waning demand from Europe and the US because of recession, inflation, and the Russia-Ukraine stand-off. According to industry experts, the pandemic created a tale of two economies: those who were able to save, and those who struggled to make ends meet. Personal health remained a priority, while fears over finances grew. Purchases were largely centred on the most basic needs, shopping more consciously, buying local, and embracing digital commerce in the period under review. In addition, volatility in cotton and yarn prices and competing countries, such as Bangladesh, Vietnam, and Thailand, quoting lesser prices for their garments affected demand before January. While exports saw a 0.9 per cent increase to $6.7 billion during the first 10 months of the financial year, notwithstanding the plunge in the last five months, exports from Tiruppur went up 3.4 per cent. The region’s exports increased to $3.713 billion between April and January of 2022-23, against $3.69 billion during the same period in 2021-22. Subramanian indicated that factories in Türkiye shutting down and a reduction in the inventory level of buyers, too, helped the region receive more orders. Of the total knitwear exports from India, 63 per cent goes to the US (34 per cent) and Europe (29 per cent), followed by 9 per cent to the UK. “When demand hit a lean patch, the spinning mills were caught in a tight knot, running only four/five days a week. Now, they run seven days a week. This means there is a pressing need and international entities are evincing keen interest,” added Sakthivel. According to TEA, the Christmas season and New Year sales have pushed up exports that were seen careening downhill. “Prices have also started to taper off with yarn prices down,” he said. For the entire country, readymade garment exports during the month declined 3.45 per cent to $1.493 billion, compared with $1.546 billion last year.
Source: Business-Standard
The Art of Brocades’, an exhibition of textiles currently on view at the National Crafts Museum and Hastkala Academy in Delhi, doesn’t hold a ‘Look at me, I am nationalist’ flag. Nor does it make a slogan of the trending ‘sustainability-environmental activismmindfulness’ vocabulary. While its representations may intersect with some of these aspects, its essence is to highlight textiles for the design and weaving skills they embody. The same could be said for a display at the recently concluded India Art Fair called ‘Hanging by a Thread’ that is part of textile artist Lakshmi Madhavan’s ongoing work. A re-examination of her Malayali heritage through Kerala’s traditional Kasavu weave, Madhavan attempts to discover how a textile wears the body even as the body wears the textile. Who weaves it and how? She notes the influence of the rhythmic if monotonous clatter of the loom as the weaver’s body touches it and how that becomes a part of the textile’s narrative. Other instances emphasise this modernity in imagination and display in response to resurging interest in Indian crafts and textiles. Take the portraiture series presented by the Delhi Crafts Council and designer Swati Kalsi. Called ‘Portraiture in Embroidery’, the reversible portraits, which too were displayed at the India Art Fair, use the traditional craft of Chamba Rumal but in portraiture. Remarkably, the faces on these frames are of miniature artists from Mughal and Pahadi schools as well as their patrons. The hierarchies dominant in the past have been dismantled without any fuss. If you read these interpretations, they are an act of apolitical resistance to formerly established ideas. Resistance also against the western gaze that classified Indian textiles and crafts as exotic or ethnic. India wants to be noticed in the contemporary global universe but without the old need to appease. Its language of communicating through textiles has changed. Vayan’, which means the art of weaving in Hindi is the second in a series of three exhibitions curated by Mayank Mansingh Kaul with exhibition design by Reha Sodhi and presented by the Devi Art Foundation. The first was on cotton and the third on Ikat textiles will follow. Collectively, they offer a view of three robust textile traditions of India from the 19th century to now. It is not just the choice of textiles presented without chronological order or academic logic that speak of untried ways, it is also the way they are exhibited. Without wooden frames or lengthy captions, some are artistically suspended from a ceiling, others back-lit with strategic lighting design to reveal intricacies, yet others take three-dimensional, sculptural forms. These showcases argue for the skill of the weavers and the persistence of collectors, curators, patrons, archivists and design interventionists who have worked zealously to keep these pieces alive as objects of meaning. They offer curatorial navigations beyond who wore what in royal households, the politics of patronage, geographical biases or aligning the significance of a textile to a political era. Museums and textiles exhibitions across the world are experimenting with immersive display formats, challenging the process of rejection-selection to present history by prefacing it in untried ways. Also, by incorporating biodegradable and recyclable materials—design that argues for the future even as it shows the past. In India too, there are decolonising ripples. If textile politics is changing in the world, India is at the leadership table. Not just for the distinction of what it produces as that’s long been the case but for how it wants to memorialise and honour those skills. Some will call these practices ‘innovative’ but that is an underwhelming word for this new wave of work. What it communicates more persuasively is unshackled imagination, liberated from compulsions of appealing to political, casteist or corporate priorities. By focussing on skills — weaving, dyeing, painting, printing, embellishment — or allied cultural facets like the sound of a loom and its relationship with the body of the weaver, a contemporary narrative is provoked. It puts the past in direct dialogue with the future. In NovemberDecember, the Bengaluru-based Registry of Sarees, took an exhibition named ‘Red Lilies, Water Birds’ to Anegundi near Hampi. Using old village houses to display the woven textiles, it also invited local communities to revel in a collective legacy. By doing so, it consciously detached the experience of exhibitionworthy textiles from urban entitlement and dominance. That is an act of modernism, a pushback to elitist privilege. It combines a textiles history class with de-colonised action. Sustainability is also about sustaining artisans. It can be achieved not by just focussing on what they make but also on their personhood. Making a portrait of a miniature artist with Chamba Rumal embroidery is an argumentative way of underlining ‘India Modern’ in textiles and crafts. Surely, fashion contemporisation of crafts has its benefits. That’s when a brocade sari is turned into a pair of pants, a muslin dushala is tailored into a resort wear dress or decadent hand-embroideries are taken to New York boutiques and Paris couture shows. If that route of channelling India’s textile sophistication and acumen towards commercial gain finds rapt attention, then decoding them in accessible, digital friendly ways for ordinary Indian viewers, and the weavers themselves is argumentativeness worthy of applause.
Source: Times of India
Haryana Chief Minister Manohar Lal Khattar has been urged by the state’s MSME industries to set up a technical textiles centre which would include a testing and design lab as well as training facilities to ensure progress in the sector. These demands come ahead of the state budget which will be presented by the CM on 23rd February 2023. Rakesh Chhabra, President of Rai Industries Association, was quoted as saying, “We have CIPET at Murthal for Plastics, MSME Technology Centre at Rohtak for Metal Products. Similarly, we request a centre for Technical Textiles comprising of a lab for testing, a design studio, latest machinery for doing reverse sampling and training.” He, as a CEC member of Federation of Indian Micro and Small & Medium Enterprises (FISME), also submitted virtually a range of suggestions to the State Government during a pre-budget consultation recently held in the presence of the CM. He further added that Haryana needs 3-4 Entrepreneurship Development Institutes (EDI), so that there is a boost in skill development across the state. With respect to the need for training, he suggested the setting up of a Modern Skill Institute for Industrial Training where knowledge and expertise are imparted via courses on new systems and technologies including TS Quality Standards, Cost Audits and more.
Source: Apparel resources
Marking the first anniversary of the India-UAE Comprehensive Economic Partnership Agreement (CEPA), the two sides have launched the UAE chapter of their joint business chamber to bolster economic ties and facilitate enhancing bilateral trade and investment. India and the United Arab Emirates (UAE) inked a CEPA on February 18 last year to boost trade ties following a virtual summit between Prime Minister Narendra Modi and Crown Prince of Abu Dhabi Sheikh Mohammed bin Zayed Al Nahyan. The UAE India Business Council - UAE Chapter (UIBC-UC) was launched on Saturday by Thani bin Ahmed Al Zeyoudi, UAE Minister of State for Foreign Trade, in the presence of Ambassador of India to the UAE, Sunjay Sudhir, Consul General of India in Dubai Aman Puri and founding members of the UBIC-UC. The two nations aim to increase bilateral trade to USD 100 billion and attract USD 75 billion in investment from the UAE to India. The UIBC-UC is poised to play a crucial role in supporting both governments in achieving these objectives and maximising the potential of the UAE-India relationship. By leveraging the strong bond between the two nations, the council brings together key partners and stakeholders from both nations and will serve as a valuable source of policy guidance, fostering innovative collaboration between Emirati and Indian businesses. Speaking on this occasion, Minister Zeyoudi highlighted that the establishment of the UAE Chapter of the UAE India Business Council marks a significant moment in the deepening of the relationship between the United Arab Emirates and India. He also mentioned that the Council will play a critical role in supporting the two governments in their joint mission to boost bilateral trade and investment. He expressed confidence that it will catalyse innovative collaboration between our two great nations. Ambassador Sudhir said, "The launch today marks a significant milestone in the strengthening of the relationship between the United Arab Emirates and India." The UIBC-UC will serve as the counterpart organisation to the UIBC India Chapter, which was established in New Delhi on September 3, 2015, by Sheikh Abdullah bin Zayed Al Nahyan, UAE Minister for Foreign Affairs and International Cooperation, and Sushma Swaraj, then Minister of External ffairs of India. The UAE India Business Council - UAE Chapter (UIBC-UC) has been set up with the approval of UAE's Ministry of Foreign Affairs and International Cooperation and the Ministry of External Affairs, Government of India. The UIBC-UC will operate under the supervision of the Federation of UAE Chambers of Commerce & Industry and has been registered as a legal and financial entity with the Dubai Chamber of Commerce. The council will have its office in Abu Dhabi and will be a pan UAE body focussing on promoting trade and investment relations between the UAE and India. Membership to UIBC-UC will be by invitation only, and institutional members will be invited over time. Faizal Kottikollon, Chairman, of KEF Holdings, who has been appointed as the Chairman of UIBC-UC, said the council's focus will be to identify significant strategic projects that can be undertaken by both countries. "This includes investments in large infrastructure projects in India, advancements in manufacturing and technology, and providing Indian manufacturers with the ability to use the UAE as a base for their global expansion," he said. Rizwan Soomar, CEO & MD (India Subcontinent) at DP World, will serve as the Co-Chairman of UIBC-UC. Major General (Retd.) Sharafuddin Sharaf, who serves as the Chairman of the UIBC India Chapter, will also hold the position of Vice Chairman of UIBC-UC. The founding members of the UIBC-UC from the UAE side are Mubadala - Sovereign Wealth Fund of the UAE, Wizz Financial, DP World, EMAAR, Emirates Airlines, and Emirates NBD Bank. From the Indian side, large conglomerates such as TATA, Reliance, and Adani as well as tech innovators like OLA, Zerodha, Udaan, and EaseMyTrip along with prominent Indian entrepreneur led Corporations based in the UAE such as KEF Holdings, Buimerc Corporation, Apparel Group, EFS and Lulu Financial are represented.
Source: Economic times
Ease of doing business for MSMEs: Retail and wholesale traders reinstated under the MSME category by the government in July 2021 are topping the table of top 10 segments or sub-sectors in the MSME sector based on the number of registrations on the Udyam portal. As of February 2, 2023, out of around 1.38 crore Udyamregistered MSMEs, the top 10 categories or segments contributed for 96.47 lakh registrations, of which 19.7 lakh – maximum registrations – were of retail traders and 12.3 lakh, second highest number of registrations, were of wholesale traders except those dealing with motor vehicles and motorcycles, according to the data shared by the minister of state in the MSME ministry Bhanu Pratap Singh Verma in a written reply to a question in the Rajya Sabha recently. Importantly, retail and wholesale trades were added to the MSME definition for priority sector lending benefits from banks. According to the Reserve Bank of India’s latest data, the gross bank credit (non-priority) deployed to the retail and wholesale trade in the country in December 2022 jumped 13.7 per cent year-onyear (YoY) to Rs 7.68 lakh crore from 14.7 per cent during December 2021 at Rs 6.75 lakh crore. The government had further eased credit access for retail and wholesale traders by treating them at par with other borrowers with respect to loans under the credit guarantee scheme of the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). With the circular issued on November 30, 2022 by CGTMSE, the credit limit for MSEs into retail and wholesale trade with guarantee cover was increased from Rs 1 crore to Rs 2 crore Sabha on MSME registrations by the minister of state in the MSME ministry, Bhanu Pratap Singh Verma, were food products manufacturers (11.6 lakh), companies in land transport and transport via pipelines (10.9 lakh), food and beverage service activities (10.2 lakh), other personal service activities (10.1 lakh), other manufacturing activities (6.31 lakh), manufacturers of textiles (5.99 lakh), other professional, scientific and technical activities (4.50 lakh), manufacturers of wearing apparels (4.43 lakh).
Source: Financial express
India is likely to clock 6 per cent growth rate next fiscal and the country can persevere with a high growth rate because of several reforms undertaken during the last eight years by the Narendra Modi government, former Niti Aayog Vice Chairman Rajiv Kumar said on Sunday. Kumar further said major risks going forward will emerge from a synchronized downturn in the North American and European economies. "India has a good opportunity to persevere with a high growth rate because of the reforms undertaken during the last eight years. We will manage to grow at 6 per cent in 2023-24," he told PTI in an interview. According to Kumar, there are several downside risks, especially in the context of an uncertain global situation. "These will have to be tackled through careful policy measures designed to support our export efforts and at the same time improve the flow of private investment both from domestic sources as well as from foreign sources," he said. The Reserve Bank has projected India's economic growth at 6.4 per cent for 2023-24, broadly in line with the estimate of the Economic Survey tabled in Parliament. Gross Domestic Product (GDP) growth is estimated at 7 per cent in 2022-23, according to the first advance estimate of the National Statistical Office (NSO). The Economic Survey 2022-23 projected a baseline GDP growth of 6.5 per cent in real terms for the next fiscal. Replying to a question on high inflation, Kumar said the Reserve Bank has said that it will ensure that inflation rate is brought under control. "Also a good winter crop will help in keeping the food prices low," he noted. The RBI lowered the consumer price inflation (CPI) forecast to 6.5 per cent for the current fiscal from 6.7 per cent. India's retail inflation in January was 6.52 per cent. To a question on India's rising trade deficit with China, Kumar suggested that New Delhi should re-engage with Beijing on finding greater market opportunities and access in the Chinese market. "There are several products which India can export more to China.”That will require a considered re-engagement," he emphasised. According to Kumar, it would be feasible for India to restrict imports from China because most imported products are quite essential imports. Indian and Chinese troops clashed along the Line of Actual Control (LAC) in the Tawang sector of Arunachal Pradesh on December 9, 2022 and the face-off resulted in "minor injuries to a few personnel from both sides. According to recent data released by the Chinese customs, the trade between India and China touched an all-time high of USD 135.98 billion in 2022, while New Delhi's trade deficit with Beijing crossed the USD 100 billion mark for the first time despite frosty bilateral relations. Replying to a question on the Adani crisis, Kumar said a robust public-private partnership is essential for developing infrastructure at the rate required. "I don't think that one such incident with a private family company will hamper that effort. "... There are a large number of private sector companies who have participated in infrastructure development in the past and will continue to do so going forward," he observed. Adani group has been under severe pressure since the US short-seller Hindenburg Research on January 24, accused it of accounting fraud and stock manipulation, allegations that the conglomerate has denied as "malicious", "baseless" and a "calculated attack on India". While listed companies of the group lost over USD 125 billion in market value in three weeks, opposition parties inside and outside Parliament attacked the BJP government for the meteoric rise of the ports-to-energy conglomerate. Stocks of most group firms have recovered in the last couple of days.
Source: Business-Standard
Leftover fabrics from factory floors, a well-worn cotton sari passed on through generations, and the promise of an ear eager to listen this makes up Oh Scrap Madras’ line of four dolls crafted with upcycled fabric. Four employees recently stitched up the idea of the 11-inch dolls during a conversation at the citybased brand’s office. Hours of toying with design ideas led to the creation of the confident bespectacled Lolita, meticulous Louise with a handy pocket, pig-tailed Lola with a yellow bowtie and Lili who loves laughter. The comfort dolls, priced at `800 each, hope to help buyers ferry through anxious and fearful times, say Oh Scrap Madras founders designer-stylist Priyanjoli Basu and researcher Dominique Lopez. Bye, bye Barbie Established in 2019, the sustainable firm intends to create products from textile waste. In a world that feeds on fast fashion and capsule collections, they craft clothes, hairbands, and other items from used fabric, and provide long-term solutions to garment waste. Their most recent concoction, the line of dolls, arrives at their customer’s doorstep after two days of toil. The firm has roped in 10 women, mostly housewives, from economically backward communities to work with stitching, cutting fabrics, and production work. Three years ago, the company started with just two women, laugh the founders, adding that much of the brand’s growth occurred during Covid-19 when they began stitching masks and mulling ideas of emotional support dolls. “We’ve grown through word of mouth and found more women in and around Chennai. We want to continue growing this way because we were not scouting out for women looking for jobs. They came to us because they not only wanted a skill, but also to work from home and have a source of income,” says Priyanjoli. As for the idea of soft toys, that came from being parents, they say. “We wanted to make interesting-looking dolls. The dolls are all not Barbie-looking ones with modellike features but are unique. Most women have started relating to dolls and objects that are more personal now compared to what we were growing up with. There was the idea of creating more modern dolls,” explain the founders. Priyanjoli adds their target audience also includes adults that gift these dolls to their friends. “This doll symbolises that even if you’re alone, there’s somebody there. Often, friends are not physically around each other but when you meet them, you want to give them something that they will remember you by. It comes from a place of being thoughtful.” Cut from different fabrics Each doll is unique; none are crafted from the same fabric or contain the same stuffing. “It is tough to design with scraps because you have to repeat those designs. The product will have a similar texture or colour palette or print, but they’re never the same. For example, if we make a small blue Japanese flower, we find all the shades of that blue to make multiple such clips to sell online and to be able to cater to an online audience,” the women tell CE. The brand’s fabric is sourced from factories and designers but recently, individuals began contributing textiles. “This started during Covid-19. Everyone started cleaning out their cupboards and had time to think and be minimalistic in lifestyle choices. People who are emotional about something they bought, they wanted that piece to be a part of their house, and they recycle them into products,” they say Behind their long line of upcycled, zero-waste, and sustainable products is a segregation process where each textile and garment are examined. Then a deliberation process: whether the fabric is to be donated, going to become an upcycled product, or thrifted. “We decide the product depending on the size and the material of the fabric that we get so that we are not creating more waste out of it,” points out Priyanjoli. Need for textile waste laws Speaking about the importance of being conscious of climate change and waste management, the founders argue that people need to understand what has gone into making a product and avoid over-purchasing. Priyanjoli also mentions segregation needs to be taken seriously at the state level. “While Chennai municipality pays a lot more attention to the waste segregation process, the state government is not there yet. It has to be a collective effort to have an impact.” Currently, as their dolls have hit the online market, Dominique and Priyanjoli are back on the drawing board. The two entrepreneurs are brainstorming alternative products to plastic toys, educational ones, and sensory toys with different fabrics.
Source: New Indian Express
INTERNATIONAL
Cambodia’s exports to neighbouring Thailand and Vietnam surged in January this year compared to the same period last year in sharp contrast to the country’s exports to traditionally strong markets such as China and the US declining during the period. According to the data of the General Department of Customs and Excise (GDCE), the exports to Thailand spiked by 22.8 percent to $107 million and to Vietnam by 10.7 percent to $172 million in January 2023 compared to January 2022. The exports to China declined by 22.2 percent to reach $81 million and by 23 percent to the US earning $562 over the same period. Despite the decline in exports, the US remained the biggest market for Cambodian goods with a share of 35.9 percent in January. China’s share declined to 5.2 percent from 5.7 during the same period. Vietnam was the second biggest export market of Cambodia in January this year with a share of 11 percent and Thailand was the third with a share of 6.9 percent. Japan came fourth and China stood at fifth. The Kingdom’s exports to Japan also showed a growth of 6.8 percent and reached $104 million in January 2023 from $98 million in January 2022. Another market that proved to be good for Cambodia this January was Australia where the country dispatched goods worth $32 million as against $30 million in January 2022, showing a growth of 7.1 percent over the period. The exports to India grew by 101.7 percent to reach $22 million and Taiwan by 34.1 percent to move to $9 million. In fact, Cambodia’s overall foreign trade (exports and imports together) declined by 29 percent in January 2023 compared to the same period in 2022 and recorded $3.4 billion, according to the GDCE data. While Cambodia’s exports netted $1.5 billion during the period, a decrease of 14 percent, the imports decreased by 37.5 percent to reach $1.9 billion. Meanwhile, Thailand is planning to organise a series of activities to stimulate exports this year and Cambodia is one of the target markets, in addition to Laos, Myanmar and Vietnam. The country also wants to expand its markets in the Middle East, South Asia and China as well. According to Thailand’s International Trade Promotion Department under the Ministry of Commerce, the export promotion activities comprise trade missions, participation in international trade fairs, business matching as well as in-store promotions at leading department stores and in e-commerce. Specialised units were set up by the ministry last year to spur exports, tackle obstacles to trade and curb the negative impact of a global economic slowdown in 2023, according to media reports. The ministry will also organise international trade fairs in Thailand. The Commerce Ministry’s target is to increase Thailand’s exports by 1- 2 percent this year to $290-293 billion, up from $287 billion last year. Cambodia’s main exports to Thailand include textiles, agricultural products, gems, raw materials and semi-finished products, while the imports include fish, meat, vegetables, automobiles, organic fertilisers, foodstuffs, and construction materials. Rubber and agricultural products constitute the biggest export items of Cambodia to Vietnam.
Source: The khmertimeskh
Lending interest rates have surpassed the 10 per cent mark, piling pressure on many businesses in dire need of funding, a conference has heard. Most rates were now above 10 per cent, Nguyễn Ngọc Hòa, president of the HCM City Union of Business Associations, told the conference held on February 17 to discuss solutions to promote the city's economic growth. “High borrowing costs are a big challenge for businesses.” Many find it very difficult to get loans, with banks claiming they have run out of credit quotas and demanding collateral that businesses often lack, according to Hòa. The 2 per cent interest rate subsidy the Government is offering for enterprises, co-operatives and business households is not easy to get due to tortuous paperwork and inspections. To meet the demand for funding and support financially constrained businesses, it is vital to cut interest rates and enlarge credit quotas. "The Government needs to keep value-added tax rate at 8 per cent for all sectors until the end of this year," he recommended. Lý Kim Chi, president of the HCM City Food and Foodstuff Association, said businesses in the food processing industry had seen steady growth and operated at peak capacity since the beginning of this year. Some companies had export orders that could take several months to fulfil. Amid the current two-digit interest rates, rising costs of raw materials, water and electricity, companies had been struggling to stabilise production and had little hope of making profits. “Businesses need support in terms of interest rates to overcome challenges and expand their business, she added. Đỗ Phước Tống, president of the HCM City Mechanical - Electrical Enterprises Association, said there were policies to extend credit to the industry at low interest rates, but it was extremely difficult and took much time to actually get a loan. Some business owners had to sell their houses to repay loans and avoid defaults, he added.
Increasing signs of economic slowdown
A survey of enterprises by the city Union of Business Associations found that business activities had slowed down since the fourth quarter of last year. Only a fifth of respondents reported an increase in revenues in the fourth quarter compared to a fourth the previous quarter. The number of businesses paying average monthly salaries of more than VNĐ10 million (US$420) fell to 65 per cent from 80 per cent in the second quarter of 2022. Some required their employees to work in shifts or go on furlough due to lack of orders. In two of the main export markets for Việt Nam’s textiles and garments, the EU and the US, demand declined by 60 per cent and 30-40 per cent, according to the HCM City Association of Garment, Textile, Embroidery and Knitting. Businesses’ inventories have risen by 20-25 per cent amid limited or no orders since the fourth quarter of last year. Nguyễn Văn Nên, Secretary of the city Party Committee, said administrative reform, digital transformation and investment promotion would be speeded up to boost the economy. The city planned to restore its investment stimulus programme to help businesses access funding for production and expansion amid the economic uncertainty. He called on the business community to strive to overcome challenges and inform the city People’s Committee if there are inappropriate policies that hinder economic growth.
Source: The Ein news
The commission for manufacturing subcontract management in the garment and textile industry under the Ministry of Commerce (MoC) has launched an investigation into the business agreements after concerns were flagged by the American Apparel & Footwear Association (AAFA) over the alleged abuse of labour principles, said a senior official of MoC. AAFA represents more than 1,000 world-famous brands, retailers and manufacturers. It is the trusted public and political voice of the apparel and footwear industry based in Washington DC and with a presence across the globe. Talking to Khmer Times yesterday, an MoC official said that the commission held its first meeting with representatives of the US-based association – AAFA – on Thursday last week, to address their concerns over possible cases of abuse of labour principles in implementing manufacturing subcontracts between international buyers and manufacturers in Cambodia. Sok Sopheak, MoC’s Secretary of State, told Khmer Times that the commission arranged meetings to address AAFA’s concerns about forced, unclean or under-aged labour or others prohibited by laws that could be practised in manufacturing apparel, textile and footwear for exporting to countries that are its members’ markets. “We would go down to find the truth and examine documents, do necessary investigation and question manufacturers to provide answers to us and prove that they did not flout the established rules. We shall provide the AAFA with clarifications, said Sopheak, who is also the chairman of the commission for sub-contract management in the garment and textile industry. Sopheak also pointed out that AAFA is comprised of many members who are importers and buyers of apparel, textile and footwear products from different places all over the world and they are multinational companies. “They usually buy these goods from places for profits,” said Sopheak, who chaired the meeting attended by officials from other ministries. The first meeting with AAFA’s representatives was also attended by officials from the Ministry of Labour and Vocational Training, Ministry of Interior, General Department of Prisons, Correctional Centres 1 and 2 and many other members of the commission for manufacturing sub-contract management in garment and textile industry in Cambodia. “We would go down and check places that are suspicious. We cannot come to any conclusion with a single visit. There are mechanisms to follow depending on relevant documents including subcontracts. All these cannot be revealed to the news consumption as they are procedures to be followed for investigation,” Sopheak said cautiously. Subcontracting refers to making a contract between a person or a group of people who are in need of external assistance or outsources to manufacture or produce goods for their clients or buyers and another person or group of people who provide those assistance or outsourcing services for a period of time at an agreed fee, which is enumerated in the civil code, Sopheak explained. “They are concerned about forced, unclean or under-aged labour or others that are prohibited by the laws concerned and its possible involvement in manufacturing for exporting or importing. They are our buyers, but if the goods are manufactured in unhygienic conditions, they would not make purchases from us as they represent importers from most places in the world,” he said. Members gain unparalleled access to information and exclusive insights on regulation and policy, and premier opportunities for networking and collaboration. The outcome of the first meeting would be compiled as a report and submitted to Sar Kheng, Deputy Prime Minister and Minister of Interior and Minister of Labour and Vocational Training, said the MoC release on Friday last week, adding that the investigation results would be submitted at the commission’s next meetings. “Members of the commission have participated in responding to challenges and suggestions with high responsibility in consistence with the policy of the government that prohibits employing labour of imprisoned persons to manufacture goods for export,” the release pointed out, adding that a protocol will be prepared for the commission to comply with the future needs. AAFA stands at the forefront as a leader in positive change for the apparel and footwear industry. With integrity and purpose, AAFA delivers a unified voice on key legislative and regulatory issues. AAFA enables a collaborative forum to promote best practices and innovation. AAFA’s comprehensive work ensures the continued success and growth of the apparel and footwear industry, its suppliers, and its customers. “For example, I am seeking to buy rice paddy from someone, but that person uses intimidation on farmers and he or she wants to sell those rice paddy to me. If I am aware of these actions, I would not want to make profit from such actions of doing business because I want to make profits from the sale of goods that are clean and fairly produced with integrity,” Sopheak said.
Source: The khmertimeskh.com
How can Bangladesh decarbonise its garment industry? How can we reduce CO2 emissions associated with our industry? What do we, as manufacturers, need to do to enable our clients to meet their net zero targets? I hear lots of talk about the need to reduce supply chain emissions in the fashion industry. But I have yet to know of any meaningful, practical solutions. However, a recent study caught my eye. The study assessed the potential impact of electrifying textile and apparel supply chains. The study was commissioned by the Outdoor Industry Association and funded by US-American clothing brand Patagonia. The study explored the potentials of saving energy, reducing CO2 emissions, and the costs for electrification technology pathways. It was based on evidence gathered from the textile industries of China, Japan, and Taiwan. Though it is a shame that the RMG industry of Bangladesh was not studied under this project, the researchers say their findings are applicable to other countries. They essentially wanted to gain insight into reducing emissions in the apparel industry's supply chain by shifting from carbon-intensive thermal heating processes (currently powered by fossil fuels) to more efficient and cleaner electrified processes where low- or zero-carbon electricity is used. A major challenge for the global textile industry in lowering its carbon footprint is its heavy reliance on thermal energy – steam and hot water – for industrial processes. Bangladesh's own garment industry is no stranger to the use of such processes. In textile plants, heat is often delivered as steam that is mainly generated by combustion boilers using fossil fuels. A significant amount of thermal energy is lost during steam generation and distribution (around 25 to 30 percent). This is a dreadful level of waste, and we have to accept that the clothing production process in its present format is highly inefficient. The aforementioned study has identified and analysed four separate electrification pathways which are believed to have the ability to lower the CO2 footprint of the textile industry. These tested pathways are: 1) industrial heat pumps (only for the textile wet-processing industry); 2) electric steam boilers; 3) electric thermal oil boilers; and 4) electric processing equipment (only for seven textile wet-processing processes). One of the main findings of this study was that shifting to industrial heat pumps can lead to substantial energy reductions, reduced CO2 emissions, and lower costs compared to conventional systems. In fact, the broader results showed that electrification can substantially decrease the total annual energy demand in the textile industry under all four electrification technology pathways. For instance, the total technical annual energy saving potential through the application of industrial heat pumps in textile wet-processing plants (assuming a 100 percent adoption rate) is estimated to be around 270, 7.0, and 7.3 petajoules (PJ) in China, Japan, and Taiwan, respectively. This is equal to around one-third of the total fuel used in the textile industry in these three economies! In terms of the impact on CO2 emissions resulting from electrification, this is highly dependent on the carbon intensity of the electricity used with the electrified process. The study looks at CO2 emissions reductions resulting from electrification under each of the four electrification technology pathways in 2050. It found, for example, the total annual CO2 emissions reduction potential from 100 percent adoption of electric steam boilers or industrial heat pumps in the Chinese textile industry is around 29.8 and 24.9 million tonne (Mt) of CO2, respectively, per year in 2050. These are equal to around 59 percent and 49 percent of total fuel-related annual CO2 emissions from the textile industry in China in 2021. These are remarkable figures, and the options outlined in this study surely demand further investigation by industry leaders and regulators in Bangladesh. So, how can Bangladesh shift to production processes which reduce emissions and use less energy? Fortunately, the authors of this study have made some practical recommendations. The first is to increase renewable electricity generation. Suppliers in Bangladesh should be working closely with fashion retailers to increase investment in onsite and offsite renewable electricity generation projects. This includes collaboration with government officials and power utilities as well as industry groups to communicate private sector demand for increased access to renewable electricity supply. A second recommendation is to enhance and modernise the electric grid. The study states that, as more renewable electricity is generated, it is important to ensure these additional renewable resources can connect to the transmission and distribution system. This will require grid upgrades that can manage the overall increased clean electricity volume alongside the distributed renewable generation. Enhancements should also include resilience measures to protect against severe weather threats to the grid – an issue we are too familiar with in Bangladesh. The study emphasises on the need to promote the development of electrification technology and its adoption in the textile sector. Apparel brands can also provide financial incentives to their textile suppliers to encourage the electrification of process heating in their plants. Such collaboration between Bangladeshi suppliers and our customers to promote electrisation technology is something we would like to see more of. The final recommendation is to promote pilot and demonstration projects. The researchers suggest that working in partnership with various stakeholders, textile brands and manufacturers should prioritise the further development, demonstration, and scaling of the new electrification pathways focusing first where reduction potentials are greatest and most immediate – that is, heat pumps and drying and heat setting equipment. Despite a lack of practical solutions being offered on how we can decarbonise garment supply chains, we now have guidance based on real-life examples, including best practice recommendations. At the very least, our industry should be taking a closer look into whether any of these solutions can be implemented. Why not start in 2023? Mostafiz Uddin is the managing director of Denim Expert Limited. He is also the founder and CEO of Bangladesh Denim Expo and Bangladesh Apparel Exchange (BAE).
Source: The dailystar
"Please give us dollars. We cannot open Letters of Credit to import raw materials." The statement was made by a top businessman who is involved in diversified sectors - from steel to cement, textile, financial institution and others. The situation looks bleak when we see drug makers facing the same crisis and saying they won't be able to produce drugs if the situation doesn't improve soon. Consumer products giants, who are the most sought-after clients by banks in normal times, are struggling to import essential commodities. Even importers of some crucial medical products such as blood bags are not getting dollars to open LCs. Why? It doesn't require tens of millions of dollars to import those. Bangladesh needs only nine lakh bags per year, with each bag costing less than TK100, for a total of less than TK10 crore, or approximately $1 million. But banks are unable to provide this paltry sum. Hundred percent import-oriented businesses are in desperation as they are not receiving any dollars, making it difficult for them to survive. Apart from a few exporters who have enough dollars to meet their own needs, businesses have been suffering from the lack of greenbacks for the last six months. Businesses fear that the situation may not improve even in the next few months, as the International Monetary Fund has asked the Bangladesh Bank to increase its foreign exchange reserves. This means that the BB may not be able to supply enough dollars to meet the demand. In comparison to Bangladesh, India is managing its financial situation better even though they have similar economic indicators such as per capita income, proportionate GDP, and comparable exports and imports. Why is Bangladesh facing these challenges, even though the situation is far better than that of Pakistan and Sri Lanka? The ongoing crisis has exposed several weaknesses in Bangladesh's financial management. The country has seen a decrease in its foreign exchange reserves and the local currency, the taka, has depreciated against the dollar by over 20% in six months, causing difficulties for businesses and importers who are struggling to acquire the greenback.
Why Bangladesh is feeling the pinch and others aren't
One major factor contributing to Bangladesh's financial crisis is the country's overreliance on imports and the lack of local production of raw materials and goods, putting a strain on the country's foreign exchange reserves. Bangladesh has to import almost everything – from food grains to sugar, edible oil, spices, petroleum products, fertiliser, cotton, yarn, chemicals, machines, raw materials for all kinds of manufacturing units, spices and more. When the Russia-Ukraine war began in February last year, prices of commodities skyrocketed along with a disruption of the supply chain. Consequently, Bangladesh's import bills for FY22 surged to $82.49 billion, a 36% growth from a year ago. In comparison, import has gone down significantly this year – less than $6 billion per month from an average of over $7 billion last year - and the prices of some commodities are on a decline. So what is the problem now? Why is the situation not improving yet? According to bankers, the pressure on foreign exchange is still there because of the payment obligations against the LCs they had opened several months ago. Naser Ezaz Bijoy, CEO of Standard Chartered Bangladesh (SCB) and president of the Foreign Investors Chamber of Commerce and Industry (FICCI), said the good news is that new LC issuance has come down in recent months. But it may take a few more months to clear the payments against LCs issued before September 2022. According to him, the next few months are crucial to ensure the stability in the foreign exchange market which will require maintaining the momentum of export growth in the face of the looming risk of recession in Europe and America.
Were BB measures enough and effective?
In May last year, the Bangladesh Bank first imposed restrictions on imports of some goods. It enhanced the margin for opening LCs at a minimum 75% for motor cars, home appliances, electronics and electrical products. For all other goods, the margin was set at 50% excluding baby food, essential food items and fuel, life-saving medicines, local and export-oriented industries and agriculture related products. Later, the LC margin was increased to 100% for some goods, such as motor cars. Treasury bankers said the practice of restricting imports by increasing the LC margin is an old concept. In the past, some countries have used this policy with some success. For example, in the 1980s, India increased LC margins to curb imports and boost domestic production. The policy was successful in reducing imports and increasing domestic production, but it also led to a shortage of certain imported goods and higher prices for consumers. But Bangladesh's present crisis is with the dollars and not the taka. Importers who are ready to import with even 100% LC margin are not getting the greenback from banks. The 1997 financial crisis in Southeast Asia, also known as the Asian financial crisis, had a profound impact on the region's economies. To manage their exchange rates during the crisis, different economies in Southeast Asia employed different strategies. For example, countries, such as Malaysia and the Philippines, had floating exchange rate systems, which allowed their currencies to fluctuate in response to market forces. To stem the outflow of capital and support their currencies, these countries intervened in the foreign exchange market by selling their own currency and buying foreign currency. They also implemented capital controls to limit the movement of funds in and out of the country. At that time, Singapore adopted a basket peg for its currency rather than a single currency. This provided some flexibility for the country to manage its exchange rate during the crisis as it allowed the central bank to adjust the weight of different currencies in the basket to respond to market conditions.
Should Bangladesh go for a market-based exchange rate?
Bangladesh introduced floating exchange (market-based) rate in 2003, but it was never market-driven as the BB always controlled it. While controlling the exchange rate can have benefits, such as competitiveness, stability and supporting the monetary policy stance, it can also have significant drawbacks, including depleting foreign exchange reserves and inefficiency. Analysts and bankers have long been saying that the exchange rate should be left to the market, but the BB did not pay heed to their call until August last year when they felt that they could not supply enough dollars from the reserves to meet the market demand. But that was also a puzzling decision as BB allowed banks and foreign exchange dealers to introduce three exchange rates – one each for remitters, exporters and importers.
Should Bangladesh adopt a basket to peg its currency?
Bangladesh pegs its currency, the taka, to the US dollar, meaning that the value of the taka is fixed relative to the US dollar, and the Bangladesh Bank actively manages the exchange rate to maintain the peg. In practice, this involves buying or selling dollars in the foreign exchange market to keep the exchange rate within a narrow band. The single currency peg provided a stable exchange rate, which helped the country to reduce inflation and promote economic growth by providing a predictable environment for businesses and investors. Advantages of pegging to a basket of currencies include reduced dependence on a single currency, which can help to mitigate exchange rate volatility, and improved diversification of the economy. On the other hand, a basket peg can be more difficult to manage and can result in a less stable exchange rate if the currencies in the basket are not well-aligned. Ultimately, the decision of whether to switch to a basket peg will depend on the specific economic and financial circumstances in Bangladesh, and the trade-offs between stability, diversification, and manageability of the exchange rate. It is important for policymakers to carefully consider the benefits and drawbacks of each approach before making a decision.
Did Bangladesh do enough to bring in remittance?
Bangladesh received nearly $25 billion from expatriates in the pandemic-hit FY21 and it came down to $21 billion in FY22 despite raising cash incentive to 2.5% from 2%. In the first seven months of the ongoing fiscal year (FY23), $12.45 billion came into the country. Some 11 lakh Bangladeshis left the country for overseas employment only in 2022, but it is yet to be reflected in the inflow of remittances. Everyone – including central bankers, finance ministry officials, commercial bankers and economists – was talking about channelling remittances through banks instead of Hundi (informal channel). It seems we are serious about rhetoric not actions. Take the cases of some countries that took initiatives to boost the inflow of remittances in a bid to manage their depleting foreign reserves and exchange rate volatility. Mexico has implemented various measures to encourage the use of formal channels for remittances, including tax incentives for banks that offer remittance services. The Egyptian government has taken steps to promote the use of formal remittance channels and has established a remittance clearing house to improve the speed and efficiency of remittances. The Central Bank of the Philippines has implemented policies to encourage the use of formal channels for remittances, such as banks and money transfer operators, to improve the monitoring and stability of the inflow of remittances. The Indian government has taken steps to streamline the remittance process, including simplifying regulations and reducing the cost of remitting money. These measures have helped to increase the inflow of remittances and improve the stability of foreign reserves and exchange rates in these countries. However, it is important to note that each country's situation is unique, and the specific measures that work best will depend on the country's circumstances. There should be a remittance campaign to bring in money from the overseas Bangladeshis, according to prominent businessman Kutubuddin Ahmed, founder chairman of Envoy Textiles and Sheltech. He said in the 1990s India took several steps to make it easier for Indians living abroad to send money back to India, including offering incentives and simplifying the process. The aim was to increase the inflow of foreign currency and improve the country's foreign exchange reserves, which were depleted due to high trade deficits and the high demand for foreign currencies. The campaign was successful and India was able to shore up its foreign currency reserves, stabilise its currency, and address the crisis.
Source: The tbsnews
