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India Ratings and Research (Ind-Ra) opines headwinds will continue for the textile sector in FY24, in view of demand pressures. The sector continued to exhibit a revenue decline in 1QFY24. However, EBITDA margins have been buffered by a moderation in raw material prices. Led by the revenue decline, profitability is reeling under pressure, which coupled with significant capex plans has led to deterioration of credit metrics. This is reflected in Ind-Ra taking negative rating actions (rating downgrade or downward outlook revision) on 14 of the 45 textile entities reviewed in the past six months. Spinning and weaving segments have been the most affected. The sector outlook for FY24 remains deteriorating. Impact on Credit Ratings: Ind-Ra has reviewed 45 (excluding non-cooperative issuers) textile sector corporates in the past six months, and taken negative actions on 14 of them. The rating actions were primarily driven by pressure on operating margins, along with significant debt-funded capex and a decline in sales, leading to credit metrics deterioration. Cotton and man-made yarn are the major sub-segments facing the adverse rating actions, followed by fabric and garment manufacturers.
Source: TECOYA TREND
An exercise is going on to tweak the production linked incentive (PLI) schemes for those sectors which have not yet picked up well, a top official said here. PLI schemes for sectors which are not picking up well include textile products, highefficiency solar PV modules, advanced chemistry cell (ACC) batteries, and speciality steel, it may be noted here. Meanwhile, it may be recalled here that in view of the requests from the industry stakeholders', Ministry of Textiles had last month on 18th July decided to re-open the PLI Portal till 31st August 2023 for inviting applications from interested companies under PLI scheme of Textiles for MMF Apparel, MMF Fabrics and products of Technical Textiles. All the terms and conditions notified earlier vide notifications and guidelines shall be applicable. Earlier notifications are mentioned below: i. PLI-Textiles Scheme Gazette Notification dated September 24, 2021 ii. Scheme Guidelines for PLI-Textiles dated December 28, 2021 iii. Amendment Gazette Notification dated February 22, 2022 iv. Amendment Gazette Notification dated 09.06.2023 v. Amendment guidelines dated 09.06.2023
Source: TECOYA TREND
One would assume that developed economies of the world like the US or the would put up the maximum technical barriers to trade. But it is that has initiated the maximum number of measures since 2019. Of the 131 notifications (since WTO has to be informed about each such move), 71 have come from Uganda, which makes it 54% of the non-tariff barriers that have been notified, data collated by the Apparel Export Promotion Council showed. With 10, Ecuador is next, followed by China at eight. From Burundi to Brazil, 69% of non-tariff barriers that have come about in the last four years are related to garments or apparel. "Non-tariff measures like certifications, inspections, regulations, standards, sanitary and phytosanitary standards, and technical barriers to trade are by and large in conformity with WTO laws and agreements and it is only when these measures are used unfairly - in violation of WTO agreements to discriminate against imports and restrict market access - that these become non-tariff barriers hampering legitimate trade," said Mithileshwar Thakur, secretary general at AEPC. Thakur said some recent measures such as EU's carbon border adjustment mechanism or deforestation legislation are non-compliant with the WTO regime. While the government has been seeking to get trade partners to reduce import duties or tariffs, Indian exporters are increasingly facing non-tariff barriers, which negate the impact of duty cuts. These range from indicating the country of origin, as was the case with the EU in 2015, to this year's move by Senegal to mandate "quality control" for fabrics and finished products. A few months ago, the US asked all imports for clothing, gloves and mittens to comply with flammability norms, which required adherence with new testing rules and compliance. In Egypt, new regulations provide for registration of all factories exporting products to the Arab nation. For exporters, the headache is only increasing.
Source: Times of India
Officials said that the utilisation of the India-Australia Economic Cooperation and Trade Agreement (ECTA) is as high as 90% in around 113 products especially labour intensive ite where duties were reduced to nil from 5% under the pact. “ 90% of the exports of these products to Australia are happening through the FTA (free trade agreement) route,” said official. This assumes significance as India’s utilization rate of its FTAs has been historically due to documentation costs, lack of awareness and strict morphine norms. Above 90% of India’s exports of some textiles and certain engineering goods such as electrical transmission lines to Australia are happening through the trade agreement which came into effect December 29, 2012, meaning that exporters have begun benefiting from the pact. Officials said that the utilisation of the India-Australia Economic Cooperation and Trade Agreement (ECTA) is as high as 90% in around 113 products especially labour intensive items where duties were reduced to nil from 5% under the pact. “90% of the exports of these products to Australia are happening through the FTA (free trade agreement) route,” said an official.
Source: The retail.economictimes.indiatimes.com
The State government has allocated ₹10.5 crore as working capital for textile mills under the Industries department. Five mills, which had remained closed, would now begin functioning, following the fund infusion, said a press release from the department. The mills to reopen are the Prabhuram Mills in Alappuzha, Kottayam Textiles in Kottayam, Edarikkode Textiles in Malappuram, Sitharam Textiles in Thrissur district, and the Thrissur Cooperative Spinning Mills. Industries Minister P. Rajeeve said that the government was committed to the protection of public and cooperative sectors, and would extend all possible support for this purpose.
Source: The Hindu.com
A common thread in India’s G20 Presidency agenda is 'How to prepare for a better tomorrow for all', stated Union Finance and Corporate Affairs Minister Nirmala Sitharaman today. The finance track has seen the delivery of a sizeable number of outcomes, most of which will contribute towards addressing the present and emerging global economic challenges. India has piloted a huge amount of work in various tracks in more than eight months since India assumed G-20 Presidency, she added. “So far we have ensured that geo-political differences do not supersede the core G20 mandate of international co operation”, she further said. The Union Finance Minister was delivering the keynote address virtually, in a seminar on ‘Global Economy: Challenges, Opportunities and the Way Forward’ jointly organized by the Department of Economic Affairs, Ministry of Finance and Reserve Bank of India, under the aegis of Finance Track of India’s G-20 Presidency, in Mumbai today. The seminar organized as a part of the International Financial Architecture (IFA) and the Frameworks Working Group under India's G-20 Presidency, in run-up to the G-20 Leaders’ Summit in September 2023, had three sessions on: ‘Development financing for the 21st century and financing of Global Public Goods’, ‘Managing Global Debt Vulnerabilities’ and ‘Key Global Risks: Inflation, Financial Stability and Climate Change’. The Finance Minister stated that primary focus of the Indian G-20 Presidency in 2023 has been to strengthen Multilateral Development Banks (MDBs), to address the shared global challenges of the 21st century which they are facing. But, MDBs are also facing increasing demands from donor and borrowing countries to expand their lending operations beyond their core development mandates. However, MDBs are not currently equipped to address this rising demand for their resources adequately, she added. The Finance Minister said, another issue discussed in the G-20 Finance Track is 'Escalation of Debt Issues in Vulnerable Economies', which poses significant economic risks to their sustainable development. The Indian G-20 Presidency has given great importance to the management of global debt vulnerabilities, demonstrating a commitment to voicing the concerns of the Global South, she stated. Finance Minister also stated that, under the G-20 India Presidency, the digital public infrastructure has been integrated into G-20 discussions with member countries recognizing its capacity to enhance productivity and to accelerate financial inclusion. Finance Minister also stated that “the upcoming synthesis paper developed by the IMF and the FSB, coupled with a roadmap will be instrumental in shaping future regulatory measures for crypto- assets”.
Strengthening Multilateral Development Banks: Speaking about the issues faced by MDBs, Finance Minister said, after decades of integration, the global economy is starting to witness increasing fragmentation and unravelling multilateralism and that is affecting the MDBs. Finance Minister Nirmala Sitharaman said, the Indian G-20 Presidency had set up an Independent Expert Group on Strengthening MDBs. The Expert Group, in the Volume-I of their Report has proposed a triple agenda, comprising three crucial recommendations for the MDBs, which are as follows: i) To tackle global challenges, alongside their core mission of poverty reduction and shared prosperity ii) To triple their sustainable lending level by 2030 iii) To enhance their financial strength to capital adequacy improvements and general capital increases. Finance Minister Nirmala Sitharaman said that, implementing these recommendations within each MDB's governance framework can significantly enhance their capacity to address diverse financing challenges in the future with a focus on the priorities of the Global South The Vol. II of the Report is expected to be submitted before the 4th Working Group and Ministerial Meeting of the G-20 Finance Track in October, 2023.
Escalation of Debt Issues in Vulnerable Economies: Finance Minister said, “We have made significant efforts in providing momentum for debt treatment for some countries”. She urged the international community to collaborate and find stronger ways to coordinate debt restructuring for low income, vulnerable and middle income countries facing debt distress. Finance Minister Nirmala Sitharaman further said, G-20 also stresses on the criticality of debt vulnerability in low and middle income countries through an effective, comprehensive and systematic approach. By restructuring existing debts and enhancing access to affordable finance, the international community can contribute to releasing financial resources in debtor countries to shield vulnerable populations from economic hardships.
Digital Public Infrastructure (DPI): In her address, the Finance Minister also said, unlocking the full potential of digital progress for all is essential for a fair and inclusive future in this era of technological transformation. She said, despite notable advancements, disparities in access, usage and quality of financial services persists among vulnerable populations and micro, small and medium enterprises. Finance Minister further said, G-20 policy recommendations for advancing financial inclusions and productivity gains through DPI, meticulously developed under India's leadership have garnered unanimous acceptance across G-20 members. These can guide both G-20 and non-G-20 countries in harnessing DPI for inclusive and robust growth. “We are striving to lay the foundation for a robust regulatory landscape that encourages innovative, while ensuring macro-economic and financial stability”, the Minister added.
Infrastructure Financing: Nirmala Sitharaman also stated, Indian G-20 Presidency has also emphasized innovative financial models to mobilize private sector investments and address infrastructure financing gaps which is crucial for building future cities. “We have laid the groundwork for G-20 principles for financing cities of tomorrow. This framework holds the potential to guide MDBs and other development financing institutions, in their planning and financing of sustainable urban infrastructure”, she said. RBI Governor Shaktikanta Das in his closing remarks said, today's panel discussion topics are priorities under India's G-20 Presidency. Policymakers across the world today are grappling with multifarious and intertwined challenges in ensuring post-pandemic recovery in the face of elevated inflation, financial market vulnerabilities, reduced policy headroom and geo-political tensions. In this milieu, India's G-20 Presidency aims at enhancing global cooperation to face such challenges, he stated.
Source: PIB
Sanjeev Arora, member of upper house (Rajya Sabha) has raised the issue of spinning mills in Ludhiana. He drew the attention of the Government towards a matter which has severely affected the working and survival of spinning mills in Ludhiana. Sanjeev said that through various forums and platforms, he has been receiving appeals to impose anti-dumping duty (ADD) on import of polyester spun yarn (PSY) under ASEAN Free Trade Agreement (FTA) and making import of cotton duty free as this will provide a level playing field for all the stakeholders in the textile sector. He underlined that it is shocking to learn that the Central Government, after considering the final findings of the designated authority, has decided not to accept the aforesaid recommendations. As per him, the Government’s decision of not imposing definitive anti-dumping duty on imports of “Polyester Yarn (Polyester Spun Yarn)” originating in or exported from China PR, Indonesia, Nepal and Vietnam has cast a shadow on the domestic weaving sector which is mainly dependent of various types of synthetic yarns. He also urged the Government for removal of 11 per cent import duty on raw cotton which was introduced in October 2021, the BIS standard on polyester spun yarn (IS 17265) had been repeatedly postponed and the next date for the implementation of the same has been fixed for 5th October.
Source: Apparel Resources
The government is expected to disburse about Rs 13,000 crore to eligible firms seeking benefits under the production linked incentive (PLI) schemes, even though an exercise is going on to tweak the scheme for those sectors which have not yet picked up well, a top official said on Friday. Secretary in the Department for promotion of Industry and Internal Trade (DPIIT) Rajesh Kumar Singh said that from the current year onwards, the disbursal number will be significantly larger.The government disbursed only Rs 2,900 crore till March 2023 out of Rs 3,400 crore claims received under the scheme so far. The scheme was announced in 2021 for 14 sectors such as telecommunications, white goods, textiles, manufacturing of medical devices, automobiles, speciality steel, food products, high-efficiency solar PV modules, advanced chemistry cell battery, drones and pharma with an outlay of Rs 1.97 lakh crore. Asked about when the full fund would be disbursed, Singh said: “It is difficult to say as so many factors come into play. But we expect that during the tenure of the scheme, a good part (of that) will get exhausted.” Savings from the scheme, he said, are already being considered for other PLI schemes or for restructured PLI schemes. When asked about the restructured PLI schemes, the secretary said those are under various stages of inter-ministerial consultation. “There are some course-corrections or tweaking that are required. Some are minor, some are major and that will require higher level approvals,” he said. PLI schemes for sectors which are not picking up well include high-efficiency solar PV modules, advanced chemistry cell (ACC) batteries, textile products and speciality steel. On the other hand, the scheme is doing good in sectors such as electronics, pharma, medical devices, telecom, food processing, and white goods. The government is trying to sort out issues such as timely processing of claims, visa-related matters where vendors require Chinese professionals’ expertise, and delay in getting environmental clearances that have been raised by the stakeholders of production-linked incentive (PLI) schemes. The purpose of the schemes is to attract investments in key sectors and cutting-edge technology; ensure efficiency and bring economies of size and scale in the manufacturing sector; and make Indian companies and manufacturers globally competitive. These schemes for all 14 sectors have been notified by the concerned ministries/ departments after due approval. These schemes are in various stages of implementation. Out of the 733 applications selected under 14 sectors, 176 MSMEs are among the beneficiaries. Singh also said that Rs 78,000 crore actual investments have already happened and “we have already generated sales of over Rs 6 lakh crore”, exports are boosted overall by Rs 2.6 lakh crore till 2022-23 adding about 4 lakh employment. When asked about extending the PLI scheme for more sectors like toys, the secretary said an inter-ministerial process is on for that.On the recent decision to impose import curbs on laptops and computers, Singh said: “On the icensing part, I think the government has made it clear that it is going to be a liberalised licensing regime. so I do not think there is much concern about that now”. After imposing the curbs on August 3, the government deferred the implementation of the order till October 31. About the e-commerce policy and rules, he said: “We are in the process of finalizing it… I cannot give you details.” He said that the public consultation part is over on that and it will happen soon. On the ‘fallback liability’ clause in e-commerce rules, he said: “Whatever we will do will be in line with international best practices.” The government had released draft e-commerce rules on June 21, 2021. In that, one of the proposals stated that a marketplace e-commerce entity will be subject to a ‘fallback liability’ when a seller registered on its platform fails to deliver the goods or services ordered by a consumer due to negligent conduct, omission or commission of any act by such seller.
Source: Financial Express
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The textile yarn market is projected to grow from USD 14.4 Billion in 2023 to USD 18.5 Billion by 2028, at a CAGR of 5.1%, according to the report on "Global Textile Yarn Market by Source (Chemical, Plant, Animal), Type (Artificial, Natural), Application (Apparel, Home Textile, Industrial), and Region (North America, Europe, Asia Pacific, Rest of the World) - Forecast to 2028" released by ResearchAndMarkets.com's. The report states that the increasing global population, coupled with urbanization trends, has a direct impact on the textile yarn market. As more people move to urban areas, the demand for textiles and textile products rises, creating a higher demand for textile yarns. The cotton yarn segment in plant yarn type is expected to account for the largest share in 2023. Based on plant sources, the cotton segment is projected to lead the textile yarn market during the forecast period. Cotton yarn holds a significant position in the textile industry and has experienced substantial demand, growth, and dominance over the years. Cotton yarn is particularly dominant in the clothing industry due to its favorable properties for making comfortable and breathable garments. It is the preferred choice for manufacturing a wide range of clothing items, including t-shirts, jeans, dresses, shirts, and innerwear. The demand for cotton yarn in the clothing sector remains consistently high. Home textile is one of the segments that is projected to grow in the application segment during the forecast period. Based on the application segment, the home textile segment is projected to grow during the forecast period. Home textiles encompass a wide range of textile products used in residential settings, including bedding, curtains, upholstery fabrics, towels, rugs, and more. Home textiles play a vital role in enhancing the aesthetic appeal and functionality of homes. They are used for various purposes, such as providing comfort, adding decorative elements, and improving the overall ambiance of living spaces. Textile yarns are essential components in the production of home textile products, as they form the foundation for weaving or knitting fabrics used in these applications. China is expected to account for the largest market share in Asia-Pacific in 2023. China possesses a significant manufacturing capacity for textile yarn production. The country has a well-established and extensive textile industry, with numerous spinning mills and yarn manufacturers. Its large-scale production capabilities allow China to meet both domestic and international demand for textile yarns. China's textile industry benefits from cost-effective production. The country has access to abundant raw materials, such as cotton and synthetic fibers, at competitive prices. Additionally, China has established a strong infrastructure for textile manufacturing, including welldeveloped supply chains and efficient production processes. These factors enable Chinese manufacturers to offer competitive pricing for textile yarns.
Source: TECOYA TREND
The Global Organic Textile Standard (GOTS) has started the Organisation for Economic Co-operation and Development (OECD) Alignment Assessment process for GOTS version 7.0 and says this means it can continue to set the standard for responsible and sustainable practices in the textile industry. According to GOTS, its participation in the OECD Alignment Assessment process demonstrates its commitment to sustainable business practises and efforts to comply with the elaborate international standards for ethical apparel and footwear due diligence. The OECD Alignment Assessment is a multi-stage process that includes evaluations of standards, implementation, and credibility. According to GOTS, its participation in the evaluation demonstrates its commitment to sustainable practises in accordance with the OECD Due Diligence Guidance. The German Federal Ministry for Economic Cooperation and Development has been supporting the process since it began in July 2023, and it is anticipated to be completed in January 2024. With its most current version 7.0, textile firms will have access to a six-step due diligence procedure that will help them identify, evaluate, and reduce negative effects across their supply chains. Ruslan Alyamkin, responsible for standard development and implementation (social responsibility) at GOTS, underlines the transformative power of the criteria and says, “The Due Diligence Criteria are not just guidelines, they are a powerful tool for real change.”
Source: Apparel Resources
Bestseller, a renowned global retail brand, has chosen Leapwork as its preferred partner for automating testing processes across its Point of Sale and e-commerce systems. The collaboration aims to uphold a seamless shopping experience for customers on a global scale. By integrating Leapwork’s advanced automation capabilities, Bestseller seeks to enhance its commitment to delivering superior customer experiences by streamlining Quality Assurance (QA) procedures. This strategic move will enable Bestseller to achieve continuous and comprehensive end-to-end testing across various Microsoft Dynamics 365 applications. This approach is designed to mitigate potential disruptions during routine software updates, ensuring a consistently reliable shopping environment. Operating in 70 countries, including 17,000 multi-brand and department stores along with 3,000 Bestseller branded stores, Bestseller’s omnichannel retail model necessitates a sophisticated technological infrastructure. The ability to conduct testing across diverse technologies and integrations is pivotal for processes like order fulfillment. Kim Guldager, Product Owner at Bestseller, emphasises the role of Leapwork in maintaining the efficient operation of essential systems and processes that underpin exceptional global customer experiences and contribute to the overall success of the business. Recognising Bestseller’s strong emphasis on customer experience, Leapwork’s Co-Founder and CEO, Christian Brink Frederiksen, emphasis the significance of test coverage in sustaining such excellence. Leapwork’s focus on facilitating rapid automation deployment supports retailers in reducing technology debt and opportunity costs, thereby placing customer experience at the forefront of business priorities.
Source: Apparel Resources
Supply chain technology provider Sedex has secured funding from a private equity investor and part of Lloyds Banking Group, LDC to support its mission of driving sustainability in supply chains. According to Sedex, with LDC’s advice, it will continue to invest in improving its platform, tools, and professional services, utilising the power of data and technology for the benefit of its members, and bolstering its aspirations for worldwide expansion. edex CEO Jon Hancock said, more sophisticated solutions are needed that can adapt across the depth of all of the company’s supply chains and the scope of the ESG issues that its members must deal with. He is certain Sedex will deliver these. In order to uphold its founding objectives and declared goal and to improve the social and environmental sustainability of global supply chains, the company also intends to create a Special Purpose Trust. At LDC in London, investment executive Francesca Speke, investment manager Dan Gluckman, and investment director Joe Tager oversaw the acquisition. Additionally, LDC is supporting the current management team by adding software industry veteran David Murray, LDC CEO Toby Rougier, and Joe Tager to Sedex’s board as non-executive directors. Steven Esom will continue to serve as Sedex’s chair.
Source: Apparel Resources
