INTERNATIONAL
Even as top global fashion brands such as Zara, Mango, Vero Moda, H&M, Forever 21 and Marks & Spencer vie for a share of the Indian market, the country’s textile sector continues to reel under the burden of mill closures and sagging exports. Data sourced from the textile ministry show that not only have exports of several types of textiles from India declined in the past three years, mill closures across the country, too, are at a record level. While in 2008, India had 381 closed textile mills, the number steadily rose to 593 by May this year. This means that almost 3 lakh textile mill workers remain unemployed, according to the government’s own figures. Ever since the government allowed Foreign Direct Investment (FDI) in single brand retail outlets - first at 51% in 2006 and later 100% in 2012- top global fashion brands have rushed into the country. While H&M has announced plans to invest Rs 730 crore to set up 50 stores in the country, the US-based fashion label Gap is reportedly eyeing a revenue of Rs 1,000 crore from the 40 stores it plans to open across 15 cities in the country in the next five to six years
Even the online fashion space has seen its fair share of action, including the acquisition, first of Myntra and later of Jabong by the country’s largest e-commerce company Flipkart in the recent times. None of this, however, seems to have helped in turning around the fortunes of the Indian textile sector. Among the states that have witnessed the highest number of mill shut downs are Tamil Nadu and Punjab. To be sure, although some other states like Madhya Pradesh, Gujarat, Maharashtra, Rajasthan, Andhra Pradesh and Telangana have seen new mills opening up, the growing number of shutdowns has meant that a third of the country’s mills have continued to remain shut in the past four to five years.
SOURCE: The VC Circle
The commerce ministry has relaxed certain norms to promote outbound shipments and manufactured products from export-oriented units (EoUs), software technology parks of India (STPIs) and electronic hardware technology parks (EHTPs). The norm of mandatory warehousing requirement for EoUs and software and electronic hardware technology parks has been done away with. The Directorate General of Foreign Trade (DGFT) has also eased rules for the existing EHTP and STP units to avail tax exemptions in the case of conversion or merger of EoU and vice versa. In a notification, the department said an EoU, which is into agriculture, aquaculture, horticulture and poultry, might be permitted to remove specified goods in connection with its activities for use "outside the premises of the unit". Earlier, it was allowed only for outside the bonded area. DGFT has said this in a notification, amending the foreign trade policy (2015-20). The EoU scheme, which was introduced in December 1980, had allowed manufacturing units in export processing zones to enjoy 100 per cent tax exemption on profits from overseas sale and duty-free import of raw material. As the scheme had a sunset clause, the tax benefits were stopped from March 2010. This scheme was utilised by small and medium enterprises to set up their units for the purpose of exports. Later, a committee had suggested steps, including tax incentives, to revive these units. The decision takes on significance as the country's exports, after rising for the first time in 19 months in June, shrank again in July. It contracted 6.84 per cent due to the decline in shipments of engineering goods and petroleum products.
SOURCE: The Business Standard
The decline in exports of textiles, leather and engineering goods is major concern as these are high-employment intensive sectors of exports, SC Ralhan, president, Federation of Indian Export Organisations (FIEO), said while reacting to the trade data of July 2016. In July 2016, India's exports were valued at $21.689 billion (Rs 145770.39 crore) which was 6.84 per cent lower in dollar terms (1.61 per cent lower in rupee terms) than the level of $23.281 billion (Rs 148149.92 crore) during July 2015, according to RBI figures. The decline in export reflect the contraction in global trade and leading exporting countries like China also witnessed similar decline in the month of July, 2016, said Ralhan. “Global trade uncertainties are increasing and Brexit has further compounded the same,” he added. The Rs 6,000 crore package recently given to the textiles sector will take some time before its effect is visible in exports, said Ralhan. “The new GST regulation will add to the competitiveness of exports through better rebating of taxes though many of the concerns of the export sector need to be addressed in the model GST law. The logistics cost is also likely to come down through a single market approach benefiting the export sector,” he said.
SOURCE: Fibre2fashion
Gartex 2016, a comprehensive tradeshow on garment textile machinery makes its much-awaited debut this year with more than 100 exhibitors lined-up to participate in the 3-day show to be held at Pragati Maidan, New Delhi. The Show hopes to accelerate technological advances in the Indian textile & garments industry through the showcase of high-quality, high-speed and competitively-priced products. The show is targeted to address the interests of those who wish to reach out to the textile and garment machinery & accessories market in India. Acting as the definitive gateway to provide excellent quality and one-stop selling and sourcing platform, the event will showcase products, services and technologies related to the complete production chain. Occupying 6,000 sqm of exhibition area, Gartex will display and promote new technology and state-of-the-art equipment, materials and services in hopes to accelerate technological advances in the Indian textile & garment industry. The comprehensive tradeshow will incorporate 3 distinct sections: Digitex, Fashion 'Fabs' Show and Trims Expo, which will each focus on distinct product categories for easy sourcing and enquiries. This includes products and services related to garment & textile machinery, digital textile printers, embroidery equipment, testing equipment & controls, special inks & dyes, embellishments, assortment of fabrics and allied services.
Gartex provide a unique platform for national & international suppliers and trade visitors to expand their business opportunities in the garment and textile industry in India; the show will witness new product launches and live demos of equipment & techniques by some of the biggest manufacturers in the industry. Gartex is the only show where one can source complete garment manufacturing solutions from companies Pan India under one roof, thereby making it a definitive gateway into the garment and textile industry of India. Gartex will be held from Saturday, August 27, 2016 to Monday, August 29, 2016 at Pragati Maidan, New Delhi, India.
SOURCE: Yarns&Fibers
India has helped Egypt upgrade one of its largest vocational textile training centres with a $1 million support to equip the centre with latest technologies. “Egypt was identified by India as one of the countries for setting up of a vocational training centre (VTC) at the India-Africa Forum Summit with an outlay of $1 million,” the Indian Embassy in Cairo said in a statement. The upgraded centre in Shoubra El Kheima, Cairo, was inaugurated by Indian ambassador to Egypt Sanjay Bhattacharyya, in presence of Egyptian minister of trade and industry Tarek Kabil and minister of international cooperation Sahar Nasr. The VTC, which trains around 350 students each year, has been upgraded with latest technologies in spinning, weaving, dyeing and printing. It will offer several courses in textile sector. The upgradation project was implemented by India's National Small Industries Corporation (NSIC), which will also provide consultancy for the operations of VTC for the next three years. The upgraded VTC will provide new skills, raise productivity, generate jobs and raise the GDP of the country, the statement said.
SOURCE: Fibre2fashion
A new report by Ministry of Shipping has said that Sagarmala project can save up to Rs 35,000-40,000 crore by 2025 per annum for India by optimizing logistics flows for key commodities. The study, published on the official website, says that augmenting operational efficiency of ports and optimizing logistics evacuation can be a big boost to Indian trade. Citing the example of maritime nations such as China, South Korea and Japan, the report says that ‘port-led development’ can be effectively used to save money. The new project aims to augment operational efficiency of ports & optimizing of logistics evacuation can give boost to Indian trade and help seize the big opportunity of growth in Indian cargo traffic at ports which is estimated to increase to 2.5 bn MMTPA by 2025. Key task identified for the new project includes promoting of coastal shipping of bulk commodities like coal, setting-up coastal clusters for bulk commodities like cement and steel and providing last-mile connectivity of ports with national highways and railway network. The project also aims to establishing a new transshipment port, creating dedicated coastal berths ports for coastal shipping, setting up storage capacities at origin-destination ports to shorten turnaround time and developing adequate ship-repair facilities in the maritime states. It also targets big savings on logistic costs and making Indian goods more competitive in the global markets and hence drive its port-led-development agenda under Sagarmala. Sagarmala is India’s ambitious project through which a 7,500-km coastline will be built to give a $110 million boost to the merchandise exports and increase coastal shipping volumes by as much as five times of the current levels. Nitin Gadkari, minister for shipping, road transport and highways, recently said that the project has a potential to create 10-million jobs. The National Perspective Programme for Sagarmala was launched here by Prime Minister Narendra Modi in the month of April.
SOURCE: The Financial Express
Various measures initiated by New Mangalore Port Trust (NMPT) for maritime infrastructure development will help boost the growth of export-import trade, according to PC Parida, Chairman of NMPT. Speaking after unfurling the national flag on Monday, he said the mechanisation of cargo handling and container handling facilities at New Mangalore Port will bring investment of Rs. 750 crore in public-private partnership mode. Establishment of the collection centre of a laboratory to test edible oil, chemicals and food items handled at the port will reduce the transaction cost and time. Parida said NNMPT has taken all steps to harness solar energy by installing a 1.1 MW rooftop solar plant and a 4 MW solar plant on its premises. The port is aiming to be a green port by 2017 getting its entire power requirement from the non-conventional energy resources, he said. On the other maritime projects in Karnataka, he said work on a deep-draft port with modern infrastructure is in progress in Uttara Kannada district under the Sagarmala project of the Central government. The fisheries harbour project at Kulai in Mangaluru, which is being taken up under Sagarmala, will be the gift to the fishermen of Dakshina Kannada, he added.
SOURCE: The Hindu Business Line
The country’s economic recovery is expected to accelerate in the long-term on the back of rise in purchasing power, consumption growth and monetary policy easing, while inflation is seen below 5 per cent over the next two years, says a Morgan Stanley report. “We believe this will be a longer duration expansion cycle with GDP growth expected to accelerate and inflation expected to remain at or below 5 per cent over the next two years,” Morgan Stanley said in a research note. According to the global financial services major, the recovery in the Indian economy will be led by domestic demand, with factors like consumption, public capex and foreign investment playing the key part.
Five factors that will drive consumption growth sustainably higher going forward include, sustained moderation in inflation and improvement in purchasing power; trailing monetary policy easing and expectation of more easing; pay commission-related wage hikes for government employees; pick-up in job growth; potential improvement in the rural sector if the weather becomes supportive. According to the global financial services major, the macro environment has seen steady improvement in the last two years, however, the pace of growth recovery has been slower than anticipated.
Morgan Stanley expects inflation to be sustainably lower at 4.5 per cent year-on-year in quarter ended March 2017, as drivers of both food and non-food inflation are likely to remain supportive of a deceleration in inflation. Though the RBI has highlighted that risks to inflation trajectory could emanate from food prices, impact of 7th Pay Commission and possible impact from GST, Morgan Stanley believes that risks from these remain manageable. “We continue to believe that CPI inflation will remain on the path of moderation, reaching 4.5 per cent year-on-year by March. In our view, all the drivers of inflation (commodity prices, wage costs, fiscal consolidation, property prices) will remain benign, leading to a sustained deceleration in inflation trajectory,” the report said. On RBI’s policy stance, the report said, “Based on our inflation forecast and the RBI’s stated real rates target of 1.5-2 per cent, we expect another 50 bps of rate cuts in this fiscal year. We see a high probability of RBI reducing rates in the October meeting (full impact of monsoon season will be known).” RBI Governor Raghuram Rajan in his last monetary policy review on August 9 left interest rates unchanged citing “upside risks” to inflation but said the central bank’s stance remains “accommodative”. Expecting “upside” risk to his March inflation target of 5 per cent due to pay hike of central government employees following the 7th Pay Commission and sticky core inflation, which excludes food and fuel, he kept benchmark repurchase rate at five-year low of 6.50 per cent.
SOURCE: The Financial Express
The Indian rupee on Tuesday closed stronger against the US dollar, tracking the gains in its Asian peers. The home currency closed at 66.77 a dollar, up 0.19% from its previous close of 66.89. The rupee opened at 66.85 a dollar and touched a high and a low of 66.74 and 66.93, respectively. Japanese yen and Korean won led the rally in Asian currencies on confidence that the US will keep borrowing costs lower for longer. Japanese yen was up 1.3%, South Korean won 0.85%, Philippines peso 0.57%, Malaysian ringgit 0.45%, Singapore dollar 0.41%, China offshore 0.32%, China renminbi 0.30%, Taiwan dollar 0.29% and Thai baht 0.12%. The 10-year bond yield closed at 7.105%, from its Friday’s close of 7.103%. Bond yields and prices move in opposite directions. India’s Wholesale Price Index (WPI)-based inflation shot up to 3.55% in July from 1.62% a month ago on the back of rising prices of food and non-food articles. During the month, food inflation picked up 11.82% from 8.18% a month ago, while inflation for non-food articles rose 9.49% in July against 5.72% in the previous month.
On Friday, the government said the Consumer Price Index (CPI) was at 6.07% in July from 5.77% in June on the back of rising food prices, despite above-normal monsoon rainfall. The Index of Industrial Production (IIP) picked up in June to 2.1% from 1.1% a month ago on the back of mining and electricity output. India’s merchandise exports fell once again in July by 6.84% to $21.7 billion. Imports during the month also declined by 19.03% to $29.5 billion. Trade deficit fell to $7.8 billion against $13.09 billion a year ago and $8.12 billion a month ago. Gold imports declined 64% to $1.1 billion. India’s benchmark Sensex index fell 0.31%, or 87.79 points, to close at 28,064.61. So far this year, it has gained 7.46%. So far this year, the rupee is down 0.92%, while foreign institutional investors have bought $5.42 billion in equity and sold $1.16 million in debt markets. The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.632, down 1.04% from its previous close of 95.629. Traders are cautious as the US Federal Reserve on Wednesday will release minutes of its July meeting that could provide clues on its plans to raise interest rates and its view on the health of the economy.
SOURCE: The Live Mint
Truck rentals on medium-haul and long-haul routes fell two per cent after the Rs 2 per litre drop in diesel prices from Tuesday. The fall in rentals comes on top of the 1.5 per cent drop in the first week of August after a similar drop in diesel prices on August 1, taking the total decline to 3.5 per cent this month. The softness in truck rentals is largely due to poor availability of goods and drop in arrivals of fruit and vegetables because of rains, says S P Singh, senior fellow at Indian Foundation of Transport Research and Training (IFTRT). Rentals had dropped 1-1.5 per cent on trunk roads in July due to 25 per cent drop in the arrivals of fruit and vegetables, a similar drop in arrival of pulses in wholesale markets, and weak activity in core and manufacturing sectors. Trunk road is an important main road used for long-distance travel. Diesel prices fell Rs 0.91 per litre in July and the Rs 2.01 per litre cut in diesel prices from August 1 was expected to push down rentals by 2-2.5 per cent. As rentals and revenues of transporters have come under stress over the past 12 weeks, sales of heavy-duty trucks are likely to be hit. IFTRT's interface with automobile makers, dealers, and truck finance business reveals that till mid-August, actual funding has been 40-50 per cent lower than previous month. IFTRT estimates that unsold inventory with truck dealers by the end of the month may go up to four weeks' level against 10 days' level in March; and truck manufacturers output and sales may drop by at least 15-20 per cent each for August, even as fleet owners fear GST (goods and services tax) rollout may hit fleet use. Despite a sluggish economy, sales of medium and heavy commercial vehicles (5-49 tonne trucks) grew 20-22 per cent for 21 months and touched 278,000 units in the year ended March 2016. This is largely attributed to a low base effect a year ago.
SOURCE: The Business Standard
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$ 46.51 per barrel (bbl) on 16.08.2016. This was higher than the price of US$ 45.38 per bbl on previous publishing day of 15.08.2016.
In rupee terms, the price of Indian Basket increased to Rs. 3111.15 per bbl on 16.08.2016 as compared to Rs. 3032.70 per bbl on 15.08.2016. Rupee closed weaker at Rs. 66.90 per US$ on 16.08.2016 as against Rs. 66.83 per US$ on 15.08.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on August 16, 2016 (Previous trading day i.e. 15.08.2016) |
Pricing Fortnight for 16.08.2016 (July 28, 2016 to Aug 10, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
46.51 (45.83) |
40.73 |
|
(Rs/bbl |
3111.15 (3032.70) |
2723.62 |
|
|
Exchange Rate |
(Rs/$) |
66.90 (66.83) |
66.87 |
SOURCE: PIB
Malaysia’s textile and apparel exports rose 10% to RM6.99bil in the first half (H1) of 2016 from RM6.33bil a year ago, Deputy International Trade and Industry Minister Datuk Ahmad Maslan said. He said the surge was driven by increasing global demand for high quality textile and clothing from Malaysia, as well as rising purchasing power in major importing countries, namely the US, European Union (EU) countries, and Canada. “The demand for textile and apparels is expected to increase to US$160bil (RM638.3bil) at the end of 2018. “In terms of volume, the global demand is expected to reach 30 million tonnes by 2018, with Asia being a major source of imports from the US and EU nations,” he told reporters after visiting a textile mill owned by D & Y Textile (M) Sdn Bhd in the Sedenak Industrial Park in Kulai on Tuesday. Meanwhile, Ahmad said 970 garment and textile factories were registered with the ministry, of which over 400 were making ready-made garments, 80 thread and 108 knitted fabric. In addition, textile factories in the country are also manufacturing woven fabric and textile accessories, zippers and labels, he added.
SOURCE: The Star
According to Xinjiang Aksu Economic and Information Commission, fixed-asset investment of Aksu's textile and apparel industry ammounted to 4.571 billion yuan in the first half year of 2016, a growth of 6.92 times. In Aksu Textile Industrial City, the fixed-asset investment approached 4.384 billion yuan, up 8.2 times. The total industrial output value of textile and apparel industry totaled 1.411 billion yuan, an increase of 34% and the industrial added value reached 0.37 billion yuan, an increase of 45.2% year on year. By now, 107 textile and apparel enterprises have set up in Aksu, with the spinning capacity to start operation at 1.30 million spindles and the spinning capacity under construction at 1.50 million spindles. By 2016, Aksu will have 2.80 million spindles of spinning capacity to start operation, 3,160 sets of looms, 35.10 million pieces of apparel (home textiles) and 2,650 sets of hosiery machines.
SOURCE: The CCF Group
Texhong Textile Group, one of the world's largest yarn suppliers, has been aggressively building up production capabilities in Trans Pacific Partnership signatory Vietnam. For Texhong Textile Group, investing in Vietnam was a strategic move to circumvent the adverse impact of its home country not being part of the TTP. But now, even as uncertainty looms over the free trade pact amid open opposition by both major-party U.S. presidential candidates, the Chinese company is firmly committed to further expansion in its southern neighbor. Founder and Chairman Hong Tianzhu said that one of the main intentions of investing there is to deal with the trade agreement. Execution of the TPP will pose new challenges to China's textile and apparel enterprises, so the company is building up its Vietnam operation with respect to the cost advantages and prospects of the pact. Co-CEO Zhu Yongxiang said that even without the TPP, the competitiveness of the Vietnam operation is very strong, among all Southeast Asian nations and even compared to Chinese production bases. Vietnamese production has at least three advantages besides the TPP, Zhu pointed out. One is relatively favorable trade relations with the world vis-a-vis China. Even before the TPP, tariffs on yarns exported from Vietnam to Japan, South Korea and Europe were lower compared with exporting them from Chinese factories. Production costs are another advantage. Compared to China, its labor, electricity and other costs are lower in Vietnam. In addition, the factory's location is very good for the group's overall operation. Its Vietnamese production complex sits in Quang Ninh Province, which is adjacent to China's Guangxi Zhuang Autonomous Region. This enables the company to include its Vietnamese factory in a production chain already established in southern China. And being close to the port makes exporting convenient. The company's expansion in Vietnam continues with its new yarn production line there will be in full swing during the second half. Upon completion, the company's yarn production in Vietnam is expected to become almost on a par with its Chinese operation.
Manufacturing is going downstream beyond yarn. Production equipment with an annual capacity of 60 million meters of gray fabric, 40 million meters of woven dyed fabric, and 7 million pieces of garments will be installed by around November and begin full operation early next year. The productivity of a number of lines in Vietnam has exceeded that of those in China, Zhu said. In the meantime, studies of other Southeast Asian locations have only reinforced Vietnam's advantages. The co-CEO acknowledged that Vietnam will be the future first choice for further production expansion. First-half revenue announced Monday came to 5.82 billion yuan ($877 million), up 20% on the year. Net profit attributable to shareholders grew 56% to 456 million yuan. Segment revenue from yarn in Vietnam, including internal transactions, now accounts for 21% of the total. In terms of assets, the Vietnam operation adds up to more than 4 billion yuan, constituting a third of the group as a whole.
SOURCE: Yarns&Fibers
Tanzania is becoming a major focus of most investors from Africa and the world. A delegation of bankers and entrepreneurs from South Africa visited the Tanzania Export Processing Zone Authority (EPZA) to explore investment opportunities. The delegation toured the Tanzania Tooku Garments Co. Ltd; a textile industry which is operating at Benjamin William Mkapa Special Economic Zones, producing a range of textile products especially jeans and shirts for exports. Apart from Benjamin William Mkapa Special Economic Zones, others are Hifadhi EPZ, Vector Health EPZ, Arusha, Kamal Industrial Park and Tooku Garmets. The Investment and Promotion Manager at the Export Processing Zones Authority (EPZA), Ms Grace Lemunge, welcomed the delegation stating that the special economic zones (SEZs) are geographically designated areas set aside in the country for specifically target economic activities, with support through special economic zone arrangements, including laws and systems, which are often different from those applied in other areas. Around 144 companies have invested in various economic zones, where 44 percent are foreign and 56 percent are local. The Frontier Advisor, Deloitte, Mr Martyn Davies in Dar es Salaam said that the eastern part of Africa has been drawing attentions of potential investors not only from Africa but all over the world due to the new investment opportunities in areas of gas and oil, mining and agriculture too.
SOURCE: Yarns& Fibers
