INTERNATIONAL
Online systems, transparency and high accountability is a pre-requisite for ease of doing business, asserted Dr. Kavita Gupta, Textile Commissioner, here. In an exclusive talk with Tecoya Trend, Dr. Gupta informed that Ministry of Textiles through Office of Textile Commissioner and Textiles Committee has taken various measures for implementation of Indian Governments’ much appreciated scheme for ease of doing business. The key areas, informed Dr. Gupta, in which measures have been taken by the Office of Textile Commissioner include: Online Hank Yarn Returns and Self Certification; i-ATUFS; Facilities for import and export and to reduce the turn-around time in sample testing; Star Rating of Ginning and Pressing Factories; Package of Garment Sector under ATUFS; Labour issues addressed in the Package for Garment Sector under ATUFS; Margin Money Subsidy (MMS) under TUFS for
Powerloom and other MSME units and; Collection of Statistics on Cotton.
Textile Commissioner informed that World Bank will be releasing the Doing Business Report 2017 in the month of October this year. The World Bank team is visiting India for one week in Delhi and Mumbai and will be meeting all stakeholders including Government officials, consultants as well as users. India Government, Dr. Gupta said, has taken number of progressive steps to improve India’s performance and in Doing Business Report 2017 and following steps have been taken by Ministry of Textiles through office of Textile Commissioner:
1. Online Hank Yarn Return and self certification:
Textile Commissioner has amended the existing Hank Yarn Packing Notification No. 04/TDRO/8/2010 dated 31.03.2010, vide Notification No. 05/TDRO/8/2015 dated 02.09.2015, in terms of which the Quarterly Hank Yarn Return is necessarily required to be submitted on-line only. Accordingly, at present all the yarn manufacturing units are submitting the mandatory quarterly hank yarn packing returns duly signed by Chartered Accountant and self-certified by them (unit) through online web portal only, which reduces the time and unnecessary burdens to the Yarn Manufacturing Units/Industries and make submission easy.
2. i-ATUFS:
Towards the objectives of Ease of Doing Business, Textile Commissioner Office has developed i-TUFS software with timelines for each activities and automatic alert mechanisms so as to ensure that the timelines are adhered to at each level at which the activity is to be performed. The same would also have First-In-First-Out (FIFO) system with prioritization for energy saving machines. All UIDs are being issued in this manner, using this software. Through this software now individual beneficiary will submit the details immediately after sanction of the term loan by the specified banks under the scheme for issuance of UIDs. The individual beneficiary now can track its cases and claims thereof of the all loan accounts under TUFS from i-TUFS system itself. Similarly for RR-TUFS also, i-TUFS software provides facility to the entrepreneurs/ units to upload their application directly to the Textile Commissioner. This in fact enabled a number of units to take benefit of RR-TUFS even in the cases where bank had not uploaded their applications.
3. Facilities for import and export and to reduce the turn around time in sample testing :
Textiles Committee which has currently 16 laboratories across India, has proposed to establish 5 more laboratories at Cochin, JNPT, Tuticorin, Bangalore Airport and Indore, in addition to upgrading its existing laboratories at Hyderabad, Kanpur and Ahmedabad to facilitate the import and export and also to reduce the turn around time. Textiles Committee has already undertaken the infrastructure work and procurement of various required instruments and the Laboratories scheduled to be operational by October ’16 at Cochin and December’16 at JNPT respectively. Textiles Committee Laboratories are committed to issue test reports related to mandatory tests in imported textile consignments within 48 hours as stipulated by Task Force. Textiles Committee has created facilities to receive samples from imported consignments on 24 x 7 basis. Textiles Committee has already initiated online acceptance of testing charges with the help of State Bank of India. Laboratories of Textiles Committee are linked to ICE Gateway of Indian Customs for online transmission of test reports through VPN connectivity. Trial run has been conducted for exchange of information between Customs and Textiles Committee. Shortly, all the communications between Customs and Textiles Committee with reference to testing of imported consignment for mandatory and other parameters will be through this VPN connectivity.
4. Star Rating of Ginning & Pressing Factories:
Since the year 2009 the scheme is being implemented by Textiles Committee for Star Rating of modernized ginning and pressing factories through out the country. Rating is the process of placing modernization ginning & pressing units into classes between Five Star to Single Star, based on the quality of infrastructure comprising (i) machinery, (ii) civil structural items & (iii) management practices including contamination level in ginned cotton. The rating assigned to the unit will be performance indicator that will be of concern and interest to both the cotton trade and textile mills alike since the quality of the cotton processed in the ginnery will greatly depend on excellence of its infrastructure. The scheme is in voluntary mode. Till June 2016, total 1057 modernized G & P units have been registered. Out of these registered units 1017 units has already been assessed for star rating and 24 units awarded highest Five Star rating, 110 units awarded Four Star rating , 256 units got Three Star Rating and the remaining units are awarded less than Three Star.
Objectives of rating are as under:
5. Package for Garment Sector under ATUFS :
In the meeting of the Union Cabinet held on 22.06.2016, under the Chairmanship of Prime Minister, additional incentives for textile and apparel sector has been approved. The additional incentives Ease of doing biz in textile and clothing sector Continued from Page 1 Col 6 inter-alia cover providing production incentive through Technology Up-gradation Fund Scheme (TUFS) linked Capital Subsidy. At present, under ATUFS, 15% Capital Investment Subsidy (CIS) is provided to the garmenting sector on capital investment for eligible machines, with a cap of Rs. 30 crores. An additional subsidy of 10% will be provided to garmenting units enhancing the cap to Rs. 50 crores, based on achievement of the projected production and employment generation, as given in the Detailed Project Report (DPR). The package would promote employment generation, economies of scale and boost exports. It is expected that one crore jobs will be generated in the textile and apparel industry over next 3 years. The steps will lead to a cumulative increase of US$ 30 bn. In exports and investment of Rs. 74,000 crores over next 3 years. The majority of new jobs are likely to go to women since the garment industry employs nearly 70% women workforce. Thus, the package would help in social transformation through women empowerment. Enhancing duty drawback coverage: In a first of its kind move, a new scheme will be introduced to refund the state levies which were not refunded so far. This move is expected to cost the exchequer Rs. 5500 crores but will greatly boost the competitiveness of Indian exports in foreign markets. Drawback at All Industries Rate to be given for domestic duty paid inputs even when fabrics are imported under Advance Authorization Scheme.
Enhancing scope of Section 80JJAA of Income Tax Act: Looking at the seasonal nature of garment industry, the provision of 240 days under Section 80JJAA of Income Tax Act would be
relaxed to 150 days for garment industry.
6. Labour issues addressed in the package for Garment Sector under ATUFS are:
A. Employee Provident Fund Scheme Reforms
B. Increasing overtime caps
C. Introduction of fixed term employment
7. Margin Money Subsidy (MMS) under TUFS for Powerloom & other MSME units:
8. Collection of Statistics on Cotton:
Ministry of Textiles, Govt. of India, has issued a Notification No.S.O.786 (E) dated 27th Feb, 2013 appointing the Textile Commissioner as the Statistical Officer in respect of the Geographical units falling under the Jurisdiction of Regional offices for collection of statistics related to cotton from the Independent Ginning factories, Independent Pressing factories, Cotton Ginning & Pressing factories, Traders, Surgical Cotton or Cotton Wadding manufacturing units and Cotton Textile Mills. Accordingly, all Independent Ginning factories, Independent Pressing factories, Cotton Ginning & Pressing factories, Traders, Surgical Cotton or Cotton Wadding manufacturing units and Cotton Textile Mills have to submit the monthly returns to the Textile Commissioner through its Regional Offices. In this regard, web based system for registration of the units and filing of monthly statistical returns online have been developed by Office of the Textile Commissioner.
SOURCE: The Tecoya Trend
The Union government has launched special package for employment generation and promotion of exports in the textile sector, Minister of State for Textiles Ajay Tamta said in a written reply to a question in the Lok Sabha on Thursday. “The government has recently launched special package for employment generation and promotion of exports in textile and apparel sector,” Tamta said. The government has been taking various steps to boost the sector, the minister said. “In order to achieve sustainable growth, modernization, value addition, increase in exports and for overall development of the textile sector in the country, the government has been implementing various policy initiatives and schemes,” he said. The Technology Upgradation Fund Scheme (TUFS), schemes for the development of the powerloom sector, for technical textiles and for integrated textile parks (SITP) are the major schemes which has been launched to boost the sector, the minister said. The Integrated Skill Development Scheme(ISDS), Integrated Processing Development Scheme (IPDS), National Handloom Development Progarmme (NHDP) and the Comprehensive Handloom Cluster Development Scheme (CHCDS) are among other major schemes, he added.
SOURCE: The Statesman
As many as 17 cotton and man-made fibre textile mills spread over 8 states closed between June last year and May this year. "The major reported reasons for closure include financial problems due to inadequate working capital, insufficient cash flow, increase in cost of product, squeezed profit margin, stressed assets etc," Minister of State for Textiles Ajay Tamta said in a written reply to the Lok Sabha. He said the ministry has no scheme for providing finance and technical support for the revival of closed mills. These 17 mills were present in eight states including six in Tamil Nadu, three each in Andhra Pradesh and Karnataka and one each in Telangana, Haryana, Maharashtra, Rajasthan and Uttar Pradesh. At present, there are 1,420 cotton/man-made fibre textile mills (non-SSI), including mills of national textile corporation, operating in the country. Replying to a separate question, Tamta said the Department of Agriculture is implementing Cotton Development Programme with focus on cropping system approach under National Food Security Mission in 15 major cotton growing states.
SOURCE: The Economic Times
Indian spinning industry is the most developed segment of the textile and clothing value chain. It is a global market leader with 30% exportable surplus going to countries across the globe. There also seems no dearth of incentives from either the centre or state government. While these facts could be the envy of any sector, industry insiders say excessive and prolonged incentives are proving to be the bane of spinning industry, which is saddled with overcapacity and forced to export at very low costs to keep the units functioning. Although, it seems to be an industry needing no assistance, as the Government (Central & states) has given it a lot of incentives over the years making it among the best in the world, yet it has been classified as a “stressed industry” by the banking sector, said Sanjay K Jain, the President of Northern India Textile Mills Association (NITMA). “The excessive and long term continuation of incentives has been the bane of the industry. It has grown no doubt but more on incentives rather than fundamentals,” Jain said in an article, 'SOS – Yarn spinning companies in distress.'
Spinning mills have had a harrowing experience in the country over the past couple of years despite cotton prices ruling low due to a skewed demand supply imbalance created as a result of opening of new spinning mills in some states (viable due to incentives rather than fundamentals), slow local demand, poor monsoon for two or more years, and overall subdued sentiments in the world. “Exports too have failed to cheer us up due to the disadvantage created by FTAs or Free trade Agreements of competitors such as China with the big buying nations and we as usual not able to break any ice anywhere,” he said, adding “It's true that spinning industry does not need investment incentives anymore but it surely needs incentives to export”. Even though the Central government has realized this and put an end to incentives for installing more machinery and mills, some state governments such as Gujarat Maharashtra, Andhra, Rajasthan, and Madhya Pradesh continue to do so at the cost of valuable public money. It's practically irresistible for one to not invest in spinning capacities, given the unplanned and illogical incentives that state governments are continuing with, he said explaining how the problem gets compounded further due to lack of authentic data on cotton production and available stocks. Often wrong and misleading cotton estimates from popular agencies/associations — give a false notion that the country has enough cotton. For instance, crop size in 2015-16 substantially lower than estimated, caught the spinners unaware.
Jain is also critical of the role of Cotton Corporation of India (CCI), especially while disposing of stocks: Describing the CCI “as a trader without any vision of price stabilisation, industry service etc., he said this year small open bids were made by traders for CCI cotton raising the price level everyday which acted as a market indicator for price levels. “MCX/NCDEX is for hedging and price discovery, however it is 99% run by traders and speculators (many who have nothing to do with cotton) and hence disrupts the physical market equilibrium. No action was taken to rein steep rises in short time, allowing a free run to bulls,” he said adding that curbing volatility of any nature is one of the prime roles of a regulator. For all the hype created over incentives under the TUF or Technology Upgradation Fund, the NITMA President said delayed TUF payments resulted in beneficiary companies being penalised for system errors while seeking claims. To add to their woes, retrospective amendments were made to deny benefits to spinners under Incremental Export Incentives forcing them to go to court for justice.
Seeking export incentives for yarn, Jain pointed out that all segments of the textile value chain were given concessions under the MEIS (Merchandise Exports from India Scheme) and Interest subvention except yarn. True, yarn does not qualify as merchandise, but neither is it a product for consumption by end user industry in India, he said. “India leads in yarn exports not because we are the best, but because spinners have no choice but to undercut and sell yarn in exports to offload the excess spinning capacity,” he remarked candidly. “Today the way the spinning industry is placed, there seems no hope for the industry – we have excess capacity, which has to be dumped into China at below cost prices to keep the mills running. High fixed costs makes production cuts difficult. As a result NPAs are increasing, mills are partially or fully closing down on the one hand while new ones are coming up on the other hand (due to incentives). “Old and new mills have a cost differential of 10% in an industry, which doesn't even have a consistent net profit margin of 5%,” he said expressing disappointment that the government is sitting quiet on it hoping that the balance will set in as value addition industries and units grow down the vertical. In the wake of unprecedented rise in cotton prices this year, only the big mills that had stocked cotton were making big gains, but the health of the majority has gone critical, the NITMA President said expressing the hope that the new Union minister would address their concerns on a priority basis. NITMA's wish list includes grant of MEIS and interest subvention for yarn industry w.e.f. April 1, 2016, formulation of a comprehensive, scientific and unbiased system for crop forecast and arrivals, creating of an All India policy to ensure a holistic development of the entire textile industry in a balanced manner to enable judicious use of government money. To enable maximum advantage of exports, it also wants the Directorate General of Foreign Trade (DGFT) to provide data of cotton and yarn exports/imports on real time basis.
SOURCE: Fibre2fashion
The sharp rise of over 35 per cent in domestic cotton prices since May 2016 will squeeze ginners and spinners profitability by over 15 per cent, says India Ratings and Research (Ind-Ra). Ind-Ra expects prices to remain elevated around the current levels of Rs 120/kg - Rs 127/kg till the end of the cotton crop year of September 2016. The spike in cotton prices has been due to the 7.4 per cent yoy fall in its production domestically at 35.2 million bales in crop year October 2015 to September 2016 (CY16), as per the Cotton Advisory Board estimates and globally by 18 per cent yoy to 98.1 million bales in CY16, as per the United States Department of Agriculture. Ind-Ra expects profitability of pure cotton ginners and spinners will be lower by at least 15 per cent, on account of their inability to pass on this steep increase in cotton prices to their customers, due to decreasing cotton demand and increased competitiveness of manmade fibre. "Demand for manmade or blended fibres has been rising due to the fall in crude prices and lower exports of raw cotton in 2016. In fact, in spite of lower production in CY16 as compared to CY13, the prices have consistently remained lower than the peak of CY13, on account of decreasing demand for cotton," stated an Ind-Ra release. The increase in prices will impact small textile players the most, since cotton is the key raw material and it will also lower their inventory holding capacity. Ginners and spinners are most likely to be affected, however, some organised spinning units with interchangeability from cotton to blended or manmade yarn, will be able to adapt. Also players which stocked up cotton at lower prices in March-April 2016 are better placed. Further, fabric manufacturers are likely to be affected the least, on account of their better interchangeable use of looms.
According to Ind-Ra, cotton traders are likely to perform substantially better in CY17, on account of inventory gains from existing stock at lower prices of below Rs 34,000 per candy (one candy is 356 kg) in March (last month of the cotton production season) and having sold at higher realisations of above Rs 36,000 per candy post May, up to Rs. 42,000 per candy in June. The lower production of cotton in India is mainly due to two consecutive bad monsoons and damaged cotton crop, caused by the pink bollworm pest in central and southern belt in India and due to whitefly pest attacks in northern India. Ind-Ra expects the acreage under cotton cultivation to fall in CY17 from 119 lakh hectares in CY16 (provisional as per Cotton Advisory Board), despite higher realisations. Fear of losses from pest attacks and due to the lack of alternatives to biotech cotton hybrids, acreage is likely to decline. This may push up cotton prices further, however increasing demand for manmade fibre, will contain the price rise. The recent government directive to Cotton Corporation of India to sell its entire cotton stock acquired through the minimum support price scheme to micro, small, medium scale spinning units will help contain the price rise of cotton. "However, cotton prices will not see any steep decrease, till the arrival of the next cotton crop, since the prices already factor in the release of stock from inventory," the release stated.
SOURCE: The Economic Times
Texvalley, one of the largest wholesale textile markets in the country, will organise its first ever 'Diwali Booking Conference' christened 'The Textile & Garment Fair 2016 (TGF 2016)' from August 10-12, 2016, at Texvalley Main Mall. The three-day 'good-value-for-money' event is expected to witness participation of nearly 150 branded readymade garment manufacturers. Wholesale buyers from throughout the country are likely to visit the fair, which will exclusively cater to the approaching festival season needs. “We are planning this event in a scale that will make TGF the most popular show for Diwali collections year-after-year,” said DP Kumar, executive director of Erode Textile Mall Pvt. Ltd, which owns Texvalley. “The TGF is part of our constant effort to create sustainable business value for both buyers and sellers by creating a favourable transaction environment in a world-class ambience that helps to build long-term business relationships,” Kumar added.
To attract high quality buyers to visit TGF 2016, Texvalley is offering a range of free 'business comfort' services to the visiting buyers such as transport and logistics, accommodation, food and administrative support. Buyers are being provided with a 'Smart Card' that enables them to get a host of privileges such as bonus points, lucky draw, loyalty programmes, rewards and incentives, Kumar informed. In view of the recent announcement of a special package of measures for the textile sector by the Central government, Texvalley has embarked on a slew of measures for the benefit of its members. This includes establishing a B2B Trade Portal for textile and garment product categories, setting up a modern Digital Design Studio, launching an Innovation Entrepreneurship Centre, partnering with SITRA to set up a Test & Training Centre, and collaborating with Fibre2Fashion to set up a B2C web store covering Amazon, Flipkart, Ebay, Jabong, etc.
SOURCE: Fibre2fashion
UK are looking at partnership programmes with Andhra Pradesh in traditional textile and educational relationship besides a few other areas in this State, said Alan Gemmell OBE, Director of the British Council in India, who was in the city on Wednesday as part of his introduction visit to the southern States where the British Council can collaborate on wide-ranging issues. Accompanied by Andrew McAllister, Deputy High Commissioner, British Deputy High Commission, Hyderabad, and a few other officials, Mr. Gammell had a meeting with Chief Minister Chandrababu Naidu. Referring to the new State, Mr. Gammell said that the Council was looking at business in a range of sectors like agriculture, health and especially education. Andhra Pradesh had the advantage of a long coastline and mineral wealth. Referring to his scheduled meeting with the Higher Education Minister and the Vice-Chancellors of Universities in the State, he pointed to the tie-up with over 30 British Universities in a range of areas. Mr. Gemmell said that training of English teachers in Government schools is yet another project the U.K. Government implements in India.
SOURCE: Yarns&Fibers
With Foreign Direct Investment inflows rising by 37% from $ 62.39 billion to $ 85.75 billion between October 2014 and May 2016, India has been ranked 3rd in the list of top prospective host economies for 2016-18, Parliament was informed. During the period, FDI equity inflow increased by 46% from $ 42.31 billion to $ 61.58 billion compared to previous 20 months (February, 2013 to September, 2014), prior to the launch of the Prime Minister's ambitious “Make in India” initiative aimed at promoting the country as an important investment destination and a global hub for manufacturing, design, and innovation. India has also been ranked 3rd in the list of top prospective host economies for 2016-18 in the World Investment Report (WIR) 2016 of UNCTAD, Union Minster of state for Commerce and Industry, Nirmala Sitharaman said in a written reply in Rajya Sabha. FDI equity inflow for the textiles sector during the post make in India launch period was $366.90 million, the Minster stated and clarified that company wise classification of the investment based on the programme is not maintained centrally. However, sector-wise details of investment received through Foreign Direct Investment (FDI) equity inflows after launch of `Make in India' programme in September, 2014, are detailed Annexure-I, that can be accessed at http://pib.nic.in/newsite/erelease.aspx?relid=0/147320
To further boost the investment environment and attract more FDI, the Government is taking various measures like relaxing rules in many sectors and improving the ease of doing business in the country. While, steps are being taken for development of support infrastructure to facilitate setting up of industries such as transport infrastructure, utility infrastructure etc, the Department of Industrial Policy and Promotion (DIPP) has advised ministries and state Governments to simplify and rationalize the regulatory environment through business process reengineering and use of information technology, she said.
SOURCE: Fibre2fashion
Pakistan in the current fiscal year likely to replace India as the major exporter of cotton by shifting to United States for its cotton imports with after the commodity’s prices of the world’s second biggest producer increased, an industry official said. The US exports are forecast to jump one million bales to 11.5 million bales in 2016/17 as the report expects higher production in the US due to better crop. Asif Inam, vice chairman at All Pakistan Textile Mills Association said that the country imported 2.5 million bales from India so far this year out of the total imports of three million bales to meet the shortfall. But, now the US is likely to emerge as the leading cotton supplier to Pakistan as its prices are competitive compared to Indian one. The Indian cotton prices increased 35 percent within the last 15 days due to low sowing reports. The price is eight to ten percent higher as compared to the international market. An official at the Pakistan Agriculture Research said that the local mills haven’t booked any more cotton from India as they have shifted to the US cotton. Industry officials expect cotton production between 11.2 and 11.8 million bales for the current season subject to improvement in yield and no major pest attacks. The cotton harvest reached only 9.786 million bales during 2015/16 season ended in mid April against the previous year’s 14.863 million bales. The local consumption for the last year stood at over 14 million bales. The United States Department of Agriculture (USDA) estimated the crop inventory at 2.5 million bales, which will be adequate for the next two and half months. According to an analyst, local mills will not cancel Indian orders, but there is a possibility that sellers in the neighbouring country might cancel orders by paying the market difference. The US cotton is also affected by the current wave of price flair. But, still Pakistan ranked as the fourth largest export destination of the US fibre, according to the data on the US export sales for the week ended July 7. Local cotton prices surged at the seasonal high of Rs7,125/maund on Wednesday. The Karachi Cotton Association surged the spot rate to Rs6,650/maund. The spot rate at the Karachi Cotton Exchange sharply accelerated Rs1,000/maund since the start of the previous week. The rally puts mills on panic as beginning stocks held by ginneries are on the decline due to tight supplies, analyst Naseem Usman at KCA said. The state-owned Trading Corporation of Pakistan has zero stocks.
SOURCE: Yarns&Fibers
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 43.96 per barrel (bbl) on 21.07.2016. This was higher than the price of US$ 43.68 per bbl on previous publishing day of 20.07.2016.
In rupee terms, the price of Indian Basket increased to Rs. 2954.40 per bbl on 21.07.2016 as compared to Rs. 2934.22 per bbl on 20.07.2016. Rupee closed weaker at Rs. 67.20 per US$ on 21.07.2016 as against Rs. 67.17 per US$ on 20.07.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on July 21, 2016 (Previous trading day i.e. 20.07.2016) |
Pricing Fortnight for 16.07.2016 (June 29, 2016 to July 13, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
43.96 (43.68) |
45.17 |
|
(Rs/bbl |
2954.40 (2934.22) |
3043.55 |
|
|
Exchange Rate |
(Rs/$) |
67.20 (67.17) |
67.38 |
SOURCE: PIB
Given the IMF’s record in lowering its growth projections each time it makes a new forecast—the 2016 global GDP growth forecast of 3.8% in April 2015 was lowered to 3.2% in April—it was hardly surprising it has done this again, lowering the 2016 projection to 3.1%. More so since, though global markets have recovered from their manic phase immediately after the Brexit vote, as the World Economic Outlook says, there is no way of knowing how markets will react once Brexit actually happens and whether the damage will be contained.
In the perfect scenario where the fallout if restricted to the UK losing large parts of its financial sector to Europe, all that happens is that the UK’s growth forecast for next year gets cut by around one percentage point, or maybe more with successive IMF forecasts. But were Europe’s unresolved banking crisis to unravel with more countries wanting to exit—especially the ones with the weaker banks whose bonds are largely held by Germany—the resultant stress would be much larger as well as widespread. IMF’s severe stress situation sees global growth in 2017 slowing from around 3.4% to 3.1%—while the IMF says it looks less likely right now, the fact is no one knows just where the stresses will show up.
More worrying is the fact that in even the IMF’s benign scenario, global trade volumes are seen as slowing 40bps from the projected 3.1%—in the case of emerging and developing markets, the growth estimates are cut by 50bps. The resultant growth is still higher than that in 2015, and may be some relief for India’s exports which has been declining for over a year, but keep in mind chief economic advisor Arvind Subramanian’s recent comment that it was unlikely India could sustain even an 8% growth without a very significant exports performance.
The IMF’s 2017 trade forecast of a 3.9% growth for emerging economies looks encouraging, but this is well below the 9-10% levels of the glory days of 2003-07 as a result of which India’s exports could grow at 24%+ levels. Couple this with the fact that gross fixed capital formation has contracted 1.5% in the three months to March this year, for the first time in seven years, and the picture starts looking that much less reassuring—though the government is trying to spend more in capital formation, there is just that much it can do.
SOURCE: The Financial Express
The All Pakistan Textile Mills Association (Aptma) on Thursday urged the government to immediately remove 4 per cent customs duty and 5pc sales tax on cotton imports to help the spinning industry stay competitive. On the other hand, the Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) has sought immediate removal of 10pc regulatory duty, customs duty and other taxes on the import of yarn form all countries. Aptma Chairman Tariq Saud in a statement said the government had imposed regulatory duty because Indian mills were dumping cotton yarn into Pakistan. This was the only protection available to the Pakistani industry, he said. Mr Saud said the policy had proved successful and garment exports registered a 5pc increase. India, on the other hand, imposed a 26pc import duty on Pakistani cotton yarn. “Unless we get reciprocal market access, there is no other way except keeping the regulatory duty on imported yarn.” He added that duty taxes remission on exports (DTRE) had surged by over 800pc for which “we have no protection”. “High cost of doing business and tariff subsidy to yarn exporters of India have also crippled Pakistan’s textile industry, especially the spinning and weaving industry,” he said. He also reminded that exports of cotton yarn plunged by 32pc year-on-year during the first 11 months of 2015-16, mainly due to non-availability of raw cotton because of 35pc fall in output and import duty of 4pc and sales tax of 5pc on imports.
In another statement, Prgmea chief coordinator Ijaz Khokhar said the apparel industry had been facing severe shortage of cotton yarn at a time when international buyers were planning to place orders for Christmas. He said the local garment industry was not capable of entertaining the international market generally due to price factor and especially because of artificial shortage of cotton yarn created by the spinning as well as ginning industry which were holding stock in the hope of further hike in rates. “Overburdened by more than 11pc multiple taxes and utility cost, the apparel industry demands at least 15pc special support to stay in the international exports market. Otherwise, all current business will be shifted to other countries,” he said. He requested the prime minister to direct the ministries concerned to focus on the value-added sector and prepare a solid strategy to help the industry stay afloat.
SOURCE: The Dawn
Vietnam’s textile and garment exports grew in the first half of this year, but local firms face difficulties in obtaining production and export contracts for the second half of 2016, according to the Ministry of Industry and Trade (MoIT). To support local firms, MoIT has proposed the development of large textile and garment industrial zones (IZs) on 500 – 1000 hectare to attract local and foreign investment in dyeing, and fabric and yarn production. The ministry has also proposed that the government provide full support for the building of textile and garment industrial zones located in provinces and cities experiencing socioeconomic difficulties in order to create conditions for the success of small and medium startups enterprises, according to the ministry. The proposal also targets the development of transport infrastructure connecting the large industrial zones to ports and logistic centres to reduce transportation costs. The Vienam Textile and Apparel Association (Vitas), which sent to the Government a document detailing the difficulties of textile and garment enterprises and proposed solutions, supports the Industrial zones (IZ) plan proposed byMoIT. To this, Vitas suggested the Government should provide credit for enterprises to build waste water treatment centres at those industrial zones. According to the ministry reports, six percent export increase in the first half of this year to US$12.8 billion. The industry also saw growth in export value to its major markets, including the US, increasing by 5.9 per cent to $4.29 billion; Japan with an increase of 2.9 per cent to $1.04 billion; South Korea with exports 15.58 per cent higher at $764.9 million.
Nguyen Thi Huyen, Director of the Garment 10 Joint Stock Company, said that she was not optimistic about production by the end of the year, while Brexit is expected to harm the price competition for garment exports. According to Tran Van Khang, Director of Dong Binh JSC, there has been a lack of export orders since the beginning of the year, triggering stiff competition among domestic manufacturers for customers. His firm experienced a 30-percent drop in the number of orders in the first five months, for which he blamed overstocking and falling demand in import markets. In addition, export prices have plunged by 10-15 percent, while the firm still has to pay wages, insurance and transportation costs, which are on the rise, he added. Phi Viet Trinh, Deputy Director of Ho Guom Garment SJC, said that the company's overseas orders fell significantly in March and April, and only started to rebound in June. Several trade deals, including the Trans-Pacific Partnership (TPP) and the Vietnam-EU Free Trade Agreement, have not yet come into effect so that Vietnam's garment customers could not benefit from a preferential tax regime and turned to other foreign manufacturers with more tariff advantages. The Chairman of Vitas, Vu Duc Giang said that many of Vietnam's traditional customers shifted their orders to Myanmar, Laos and Cambodia, which enjoy reduced import duties in the US and the EU, the two largest buyers of Vietnamese garments.
SOURCE: Yarns&Fibers
Bangladesh has seen increased garment exports to 11 new destinations since 2009, including Japan and China, partly because of the government’s financial incentives for new markets. The stimulus package has been working well, said Mahmud Hasan Khan, vice-president of Bangladesh Garment Manufacturers and Exporters Association. The two new markets Japan and China are promising markets for Bangladesh. Garment exports to China and Japan, soared in fiscal 2015-16 — the strongest sign yet of the growing stature of Bangladesh’s apparel sector in global trade. According to data from the Export Promotion Bureau, last fiscal year, garment exports to Japan stood at $774.47 million, up 18.68 percent year-on-year and some $341.22 million of garment items were shipped to China in fiscal 2015-16, an increase of 11.9 percent from a year earlier. The reason for the uptick is the recent relaxation of the rules of origin (RoO) by the governments of the two countries. The RoOs are the criteria used to determine the national source of a product, and they vary from country to country. Their importance is derived from the fact that duties and restrictions in several cases depend on the source of import. For instance, Bangladesh has duty-free access for its garment products, even for items made from imported fabrics, to the Japanese market. The country has been enjoying duty benefits on its woven garment exports to Japan for many years now, and from April last year, its knitwear shipments were given the same privilege. Japan’s apparel market is worth about $40 billion a year, and traditionally nearly 80 percent of it is catered by Chinese imports. In 2008, the Japanese government adopted the ‘China plus One’ policy to reduce the overdependence on China, following which its traders started sourcing garment items from other countries such as Bangladesh, Vietnam and Cambodia.
On the other hand, Bangladesh’s garment exports to China also increased last fiscal year as the Chinese government awarded duty-free facility to 4,721 items. China, despite being the largest apparel manufacturer in the world, is emerging as a major export destination for Bangladesh owing to its fast-expanding middle-class population. At present, the majority of the Chinese garment makers produce high-end products for Western retailers, as they do not deem the $150 billion local market to be lucrative enough. The development has opened doors for Bangladeshi garment manufacturers to grab a larger share of the Chinese market. The International Textile Manufacturers Federation also recently advised Bangladesh to focus more on the growing Asian markets of India and China, where the retail value of garment and textile consumption will more than double to $750 billion by 2020. However, garment exports to the other promising Asian market of India have not been increasing much thanks to the countervailing duty imposed by the neighbouring country’s government on Bangladeshi apparel products. Although garment exports to India soared 30.86 percent to $136.42 million in fiscal 2015-16 from a year earlier, the value is too little. Bangladesh considers the EU, the US and Canada as its traditional export destinations, and shipments to these markets have been increasing for many years now.
SOURCE: Yarns&Fibers
Trade and Industry Cabinet Secretary Adam Mohamed during a meeting with Iranian minister of Trade and Mining Mohammed Reza who is in Kenya seeking investment opportunity said that Kenya is particularly leveraging on Iran’s expertise in the textile and oil and gas sectors to develop strong local industries and seeks to enrich trade ties between the two countries. The meeting is a follow-up of a memorandum of cooperation signed between the two countries during the 10th ministerial meeting of the World Trade Organization. The bilateral partnership comes a time when Kenya has ramped up its business environment, proposed tax incentives for Export based industries like special economic zones in Mombasa, Lamu and Kisumu. Kenya and Iran will look to build their trade portfolio in agro-processing, textiles, leather, management and constructive materials. Mr. Reza said that through these discussions they can explore alternative industries to expand their trade ties like ICT, textile and leather among others. They look forward to increased interaction in the coming months and years. Iran is currently a large importer of Kenyan tea, horticulture and a major exporter of oil to Kenya as it has plans to expand its reach in East Africa. According to the Iranian trade minister, Iran is targeting better relations with Africa and Kenya competitive positioning in Africa is crucial in this agenda.
SOURCE: Yarns&Fibers
Nine companies from Pakistan will participate in Intertextile Shanghai Home Textiles exhibition schedule to be held from August 24 to 27, in Shanghai. Asia's leading exhibition for home textiles industry will accommodate around 1,400 international and domestic suppliers. Products including upholstery fabrics and other home related items including bedding and toweling, carpets and rugs, sun-protection systems and curtain accessories, digital printing and original service designs and artwork will be on display. In 2015, 1402 exhibitors and 42,048 visitors visited the event. Pakistani companies which will participate in the expo include: Al Karam Towels, Bari Mills, Haroon Corporation, Hassan Textile, Crescent Textile Mills, International Textile and MK Sons. Through TDAP - four exhibitors in textile, two in carpet and three direct exhibitors. Intertextile Shanghai Home Textiles - Autumn Edition is organised by Messe Frankfurt (HK) Ltd, the Sub-Council of textile industry, CCPIT, and the China Home Textile Association (CHTA).
SOURCE: The Business Recorder
Morocco has conducted a large-scale communication campaign at Première Vision New York to highlight the textile industry’s potential. Première Vision New York, held on July 19-20, is a leading event for several years now for fabrics, textile designs and accessories. Leading textile and fashion magazine “WWD” has published a three-page special feature touting the opportunities of the textile sector, which is the largest employer in Morocco with 175,000 jobs and 1,600 businesses. In a story designed to the textile industry in Morocco, the magazine writes that the production units are able to manufacture one billion pieces per year, including 600 million in sub-contracting and 300 million in co-contracting. In terms of labor, Morocco has 2,000 engineers and more than 30,000 technicians, adds the magazine. Première Vision New York presented collections from 352 exhibitors, along with numerous seminars, fashion exhibitions and special creative collaborations. Première Vision has become a sourcing destination for leather buyers and industry professionals looking for new quality solutions and full packaging manufacturing services.
SOURCE: The Morocco World News
