The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 8 SEPTEMBER, 2016

NATIONAL

 

INTERNATIONAL

 

 

Textile Raw Material Price 2016-09-07

Item

Price

Unit

Fluctuation

Date

PSF

1012.17

USD/Ton

0%

9/7/2016

VSF

2464.56

USD/Ton

0.06%

9/7/2016

ASF

1886.60

USD/Ton

0%

9/7/2016

Polyester POY

1040.62

USD/Ton

-0.07%

9/7/2016

Nylon FDY

2365.73

USD/Ton

0%

9/7/2016

40D Spandex

4417.04

USD/Ton

1.03%

9/7/2016

Nylon DTY

2560.38

USD/Ton

0%

9/7/2016

Viscose Long Filament

5596.91

USD/Ton

0%

9/7/2016

Polyester DTY

1298.91

USD/Ton

0.99%

9/7/2016

Nylon POY

2036.33

USD/Ton

0.74%

9/7/2016

Acrylic Top 3D

2058.79

USD/Ton

0%

9/7/2016

Polyester FDY

1178.38

USD/Ton

0.90%

9/7/2016

30S Spun Rayon Yarn

3039.52

USD/Ton

0%

9/7/2016

32S Polyester Yarn

1721.90

USD/Ton

0%

9/7/2016

45S T/C Yarn

2403.17

USD/Ton

0%

9/7/2016

45S Polyester Yarn

1886.60

USD/Ton

0%

9/7/2016

T/C Yarn 65/35 32S

2260.92

USD/Ton

0%

9/7/2016

40S Rayon Yarn

3189.25

USD/Ton

0%

9/7/2016

T/R Yarn 65/35 32S

2380.71

USD/Ton

0%

9/7/2016

10S Denim Fabric

1.37

USD/Meter

0%

9/7/2016

32S Twill Fabric

0.84

USD/Meter

0%

9/7/2016

40S Combed Poplin

1.18

USD/Meter

0%

9/7/2016

30S Rayon Fabric

0.70

USD/Meter

0%

9/7/2016

45S T/C Fabric

0.67

USD/Meter

0%

9/7/2016

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14973 USD dtd 07/09/2016)

The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

 

Tamil Nadu textile workers demand enforcement of 30 percent pay hike

Hundreds of textile workers in Tamil Nadu have launched protests to demand that the first minimum wage increase in the southern state in more than 12 years is enforced. In July, the Madras High Court ordered a pay rise of up to 30 percent for hundreds of thousands of garment workers in Tamil Nadu, but appeals by manufacturers against the order have left workers in limbo, labour unionists said. Under the 1948 Minimum Wages Act, state governments are required to increase the basic minimum wage every five years to protect workers against labour exploitation, but textile manufacturers have repeatedly challenged pay rises in Tamil Nadu. "The government must enforce the minimum wage notification," said S Elizabeth Rani, general secretary of the Garment and Fashion Workers Union, in a statement. "Our wages have stagnated while the cost of living keeps increasing. Many of us are single parents and sole wage earners." About 50 protesting workers were arrested near the port city of Chennai last week before being released without charge.

Under the court ruling, workers would see their pay rise from a monthly average of 4,500 rupees to 6,500 rupees ($68 to $98) - which campaigners say is comparable to wages for textile jobs in most other states. But manufacturers in Tamil Nadu say the hike is too high, putting them at a disadvantage to competitors in other states. "States cannot have their own way of fixing wages without understanding the reality and the background," K.Venkatachalam, chief advisor of the Tamil Nadu Spinning Mills Association, told the Thomson Reuters Foundation. "If such decisions are taken, industries would attempt to move to a state where they feel comfortable with labour policies." India is one of the world's largest textile and garment manufacturers. The $40-billion-a-year industry employs around 45 million workers. Many of them are trapped in debt bondage, face abuse or are forced to work long hours in poor conditions, campaigners say. "Manufacturers must recognise that this is a labour intensive unit requiring highly skilled workers," said Sujata Mody, President of the Garment and Fashion Workers Union.

SOURCE: The Reuters

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Govt on the verge of implementing GST of 12% for textile industry

The government has so far incentivized the textile industry that has been one of the largest contributors to the country’s exports and provider of jobs to million. The latest being the R6,000-crore textile booster package in June this year, which has increased the duty drawback significantly. Indirect taxes, being transaction-based, play an important role in the growth of any industry. At present, the government are on the verge of witnessing the implementation of the most awaited indirect tax reform in India, the GST, expected to be a growth stimulator. But whether this growth stimulator will support the booming textile industry in India or will it take it to a new low is a wait a watch situation. At present the textile industry is plagued with several issues including classification disputes (fabric versus garment), differential taxation of cotton and man-made fibre, higher rate for composite mills than power looms, and so on. On a positive side, GST could be a timely solution by bringing uniformity and a level-playing field for textile players in all segments of the industry.

Considering the textile industry is tilted towards domestic market—with the industry coming under the GST net—domestic textile players would be able to take full credit of input tax as their sales would be liable to GST. This will reduce the cost of capital investment and encourage domestic textile players. The new tax regime should positively influence exporters, as exports would be zero-rated and input tax credit would be fully available to textile exporters, though increasing working capital requirements in the interim. But the applicable duty drawback scheme at high rates will have no relevance under GST; this could be a dampener. GST would undoubtedly make the textile industry more organized and regulated, thus compelling non-compliant textile players to become GST-compliant to ensure free flow of credit and competitiveness in the market.

On the other side, the proposed GST rate of 12% is likely to have a negative impact on the textile industry, the worst being the cotton value chain which is currently leviable to zero excise duty under the optional scheme. The textile industry is a beneficiary of several exemptions (for instance, central excise and VAT exemption) through the value chain, thereby reducing the tax incidence to an average rate of 8.9%. Additionally, the current rate of tax on branded apparels is much lower than the proposed 12% GST. The textile industry is one of the most price-sensitive industries and such a high and sudden increase in the tax rate would severely reduce competitiveness in the domestic market on account of working capital blockage and expensive final product. The timing of the booster package is, therefore, crucial for the future of this sector, which has not seen investments for years. It is important for the government and the GST Council that will be formed sometime in September to have a focused approach towards certain sectors like textile, which contributes significantly to the economy. The GST Council should be careful while imposing the rate of 12% on this industry and come up with a specific implementation plan of lower/standard rate of GST in a phased manner. While GST is considered to be the new and refined way of life in the indirect tax space, specific considerations and concerns have to be addressed to ensure sustainability and competitiveness of the textile industry, and to facilitate this industry to reach its potential. It is important for this industry to have enough breathing time to cope with higher tax rate. While under GST the concept of outright exemption is unlikely, in order to ensure profitability and sustainable growth path for the industry, the government could consider increasing specific subsidies beyond the current plan.

SOURCE: Yarns&Fibers

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CBEC scraps norms, brings relief to EOUs, STPs

On July 29, the Central Board of Excise and Customs (CBEC) came out with notifications and circular 35/2016 removing the requirement of customs warehousing and bonding of duty-free goods for export-oriented units (EOU), software technology parks (STP) and electronic hardware technology parks (EHTP). This move will benefit around 2,000 EOUs and more than 3,000 STP units operating in India. Cumulative export of goods and services by EOU and STP units adds up to more than $60 billion and contributes around 15% to India’s export of goods and services. Removing the customs warehousing requirement will have a positive impact in reducing the cost of compliance for sizeable business community dealing with export of goods and services.

The change and its constructive consequence

The change is far-reaching; however, the benefits of change will play out very differently for service exporting STP units and merchandise exporting EOUs. STP units will potentially realise freedom from excise-related compliances of obtaining central excise registration, manufacturing under bond licence from customs and filing ER2, though technically the EOU will never be involved in manufacturing of goods. STP units, being exporters of software and services, were for ages operating under the hangover of manufacturing-related regulations, which never made sense, but nevertheless continued because of a change-averse government. STP units and services exporters would deeply appreciate the change for the better.

EOUs will also be benefited to the extent that redundancy of compliances under relevant customs notification and customs warehousing regulations has been cut down. EOU, STP and EHTP units will no longer be required to file bond bill of entry and maintain records related to customs warehousing and bonds for posterity. Till date, burdensome procedures required the units to maintain records of capital goods imports for as many years as they continued to be in existence. The disconnect between customs compliance record-keeping and asset control processes in the companies often resulted in companies being required to pay customs duty with interest even in cases where capital goods would have become technologically-redundant. Going forward, at the time of import, the importer would have to file bill of entry for home consumption; though accountability will continue to ensure that duty-free goods are used for the stated purpose, failing which duty and interest will become payable.

Driver for change—ease of doing business

Driver for the above change is the government’s single-minded pursuit of improving India’s global ranking in the ease-of-doing-business index and to position India as the preferred place of doing business for global organisations. It seems that the doctrine of ‘ease of doing business’ has taken the place of the proverbial North Star. It will continue to guide the process of rationalisation of government policy, action and administration.

Method of change

The simplicity of the logic of cutting through duplicity of controls—redundancy of duplicity of customs notification 52/2003 and customs warehousing related controls—is the most powerful aspect of the way change has been sold to the government and also communicated in the circular. The circular goes on to state that “in case of the above-referred units, the need for duty deferment is obviated as the goods procured by them are exempt from duties of customs, under Notification 52/2003-Customs.” Through a sharp, swift and simple stroke of argument, the circular passes a strong stricture on the legacy of such burdensome requirements being enforced on export-oriented units for the past few decades. Hopefully, such swift and bold moves will become the trend for re-looking at redundant regulatory controls.

It is interesting to observe the forced sunset clause in the circular, which states that “as a consequence, these units shall stand delicensed as warehouses under Customs Act, 1962, with effect from 13th August, 2016.” As the shelf life of secondary legislation is limited, the Tax Administration Reform Commission (TARC), which submitted its report to the finance minister in 2014, had recommended a one-time review of all the tax administrative rules, regulations, notifications, circular etc, to evaluate what is relevant and, hence, should survive and force a sunset on the rest. It seems that CBEC is selectively and constructively adopting the recommendation of TARC.

However, such a forced sunset clause does not play out very well on the ground and the benefit of such changes are evident only in due course of time. It has been observed that CBEC came up with similar sunset timelines in the case of special valuation branch (SVB) related procedure, dealing with customs valuation in case of related-party transaction. Full benefits of it are yet to be realised by the potential beneficiaries and it is told that CBEC has, recently, organised a meeting with top officials—commissioners and additional commissioners—of respective SVB jurisdictions at the North Block, on July 27, to try and iron out the differences so that the industry can enjoy the well-intentioned benefit from the government’s constructive change initiative.

Challenge and the way forward

Benefits of EOU and STP units flow through a complex maze of benefits under the foreign trade policy, various state VAT legislations, CST, central excise legislation and service tax regulation. The current change has only touched upon the customs notification 52/2003. For the full benefit of the spirit of ease of doing business to play out, all other legislations would be required to adapt to the change in spirit of governing EOU and STP units. The ministry of commerce should quickly lap up the change and drive it to its logical end. Specifically, EOU and STP units do claim central excise benefit on duty-free, local procurements, hence the corresponding central excise notification allowing benefit of duty for domestic procurement will also require a change.

 

A change of this magnitude requires a special focus and attention to transitional provisions—as to how would the processes flow once the goods are considered ‘deemed de-bonded’ after August 13. Field formations of CBEC, especially central excise jurisdictions responsible for administrative control of the units, may face practical challenge in ensuring smooth transition to the new era for EOU, STP administration. Also, EOU and STP units will have to undertake mammoth efforts to reconcile, clear and close the past while start reporting in the new format provided in the circular. In our view, the ultimate test of any change is the positive user experience it creates for its potential beneficiaries. Industry will wait and watch the outcome of this change for which the die has been cast by CBEC. It’s a great move from CBEC, but it will require a good follow through and adoption by all the stakeholders in order to be able to deliver on the promise.

SOURCE: The Financial Express

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Government taking a relook at free trade agreements: Nirmala Sitharaman

Government is reviewing FTAs that India has signed with trading partners after the industry voiced concerns about benefits of these pacts for domestic players. Commerce and Industry Minister Nirmala Sitharaman said many industry representatives have conveyed that free trade agreements (FTAs) signed earlier have not necessarily benefited Indian companies more. She said one reason is inadequate awareness about those pacts. “Our exporters have not had the opportunity to fully exploit the FTAs to their favour. As a result, many exports that could have happened to these countries (like Asean) have really not happened. That is one of the reasons,” she said here at The Economist India Summit 2016 here. “So, we are reviewing the FTAs, along with industry sectors. Industry is participating in it.”

India has implemented these agreements with several countries, including Asean, Japan, Korea and Singapore. It is also negotiating similar pacts with several regions, including the European Union, Australia, New Zealand and Canada. For example, the domestic steel industry has time and again raised the issue of increasing imports from Japan and Korea and had demanded removal of this commodity from the purview of the FTA.

Talking about India’s FTA with 10-nation bloc Asean, Sitharaman said the pact with this region was signed separately for goods and services. Services is important for India as it contributes over 55 per cent to the country’s GDP and unfortunately “India could not leverage its strength in services and get the benefits that could flow otherwise from the goods agreement (with Asean)”. India, the minister said, is negotiating in great detail the mega deal, Regional Comprehensive Regional Comprehensive Economic Partnership (RCEP). Asked about her recent meetings with the UK trade minister, she said Secretary of State for International Trade Liam Fox is keen to strengthen trade ties with India and India should have eventually an FTA with the UK. “We have put in place a working group which will go into the details of this relationship in order to see where possibilities exist for furthering (trade ties),” she added. She made it clear that FTA negotiations formally can happen only after the UK’s exit from the EU.

SOURCE: The Financial Express

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Why model GST law does not give confidence to exporting community

GST will be a game-changing reform for the Indian economy which promises a common Indian market and reduction of cascading effect of tax on the cost of goods and services. GST will have a far-reaching impact on almost all aspects of business operations in the country; for instance, impact on pricing of products and services, supply-chain optimisation, IT systems, policies and processes, accounting and tax compliance systems, etc. More specifically, in the context of indirect taxes, GST will impact tax structure, incidence, computation, payment, compliance, credit utilisation and reporting leading to a complete overhaul of the current indirect tax system of any organisation operating in India. The Model GST Law released on June 14 has attempted to address indirect tax disputes currently prevailing in the technology sector.

Foremost, it has attempted to address the historical dispute of levy of dual indirect taxes (VAT vis-a-vis service tax) on right to use intangibles such as IT software, trademarks, etc. ‘Service’ has been defined to include intangible property and the definition of ‘goods’ excludes intangibles. Additionally, the transfer of right to use any goods has been defined as a deemed service. This clear articulation should put to rest the historic dual treatment of software and other intangibles as both ‘goods’ and ‘services’. While doing so, ambiguity still persists where intangibles are supplied on a tangible medium which could be a point of representation by the industry.

Further, the place of supply for B2B transactions being linked to the location of service recipient with no exceptions being carved for IT/ITeS services, online information and database access services, intermediary services and performance-based services (like IT maintenance and testing services) is another welcome move from service exporters’ perspective. ‘Zero-rating’ has been rightly preserved for export of goods and services. However, it appears that no scheme for upfront GST exemption/zero-rating is in the offing for supply of goods and services to exporters of services (i.e. STP, SEZ, EHTP and EOU units engaged in exports), leading to additional working capital requirement for such units. As things stand, it seems that these units would be given the same treatment as a DTA exporter and will be required to claim refund of the unutilised input GST credits. Hence, it is worthwhile for the industry to represent on such discontinuance of benefits.

As regards the IT hardware sector, discontinuation of concessional duty benefits currently available to manufacturers of mobile phones, tablets, etc, could have a tax-cost impact. The good news is that, with various taxes which were currently not available as credit (like CST) being subsumed into GST, this would help unlock the cascading impact in the value-chain and, thereby, reduce the impact of incremental tax rates on such final product, if any.

Moreover, the apprehension of a decentralised registration and compliances in each state of operation appears to be confirmed by the Model GST Law. Consequently, service providers may need to value and discharge GST in each state of operation in respect of services delivered under a single contract (like multi-state contracts) from multiple offices across the country. Also, splitting the contract or contract value state-wise can entail practical challenges in monetising the value of services delivered from each location. GST could also entail for careful planning of the supply chain to ensure that GST credits are not accumulated or lost.

The Model GST law has attempted to address various issues plaguing the technology sector. However, it does not seem to inspire required level of confidence to the exporting community, particularly export-oriented units set up basis a promise of tax and duty exemptions. Given that the ‘Revenue-Neutral Rate’ report suggests a lower rate for merit/essential goods, it remains to be seen whether the expectations of the IT industry for a merit rate are met. Since the rolling out of GST seems to be closer to reality with a target date of April 1, 2017, companies have already commenced working towards the transition to GST, and for the ones that have not yet started, would need to have a plan to address the challenges of crash-landing into the GST regime. Given the far-reaching impact of GST across the business organisation and its value-chain across businesses, as part of the process towards effective GST transition, companies may need to adopt a comprehensive business transformation approach. This would involve a business impact analysis, reviewing business delivery and supply-chain models, engaging with the government on issues of representation, preparing IT systems to be GST-compliant, reviewing and aligning the policies, processes and controls across the business organisation to GST requirements, and plan an effective change management programme. This would ensure zero business disruption and 100% GST compliance.

SOURCE: The Financial Express

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April 1 deadline for GST a stiff target: Jaitley

Union Finance Minister Arun Jaitley on Wednesday said the April 1, 2017, deadline to roll out the goods and services tax (GST) was stiff, as there were a few hurdles ahead. He added the Centre and states were “running against time”, and there were issues, which the proposed GST Council needed to address. “After the notification and constitution of the GST Council, there are obviously some pending issues, which the council will have to resolve. So we have September and October, and, parts of November to do that,” said Jaitley at the The Economist India Summit in the national Capital. Later, a senior finance ministry official said there were three issues — GST rates, dual control over assessment and scrutiny of assessees, and geographical or area-based exemptions. “If we are able to successfully transact those issues, the pieces of legislation would be introduced in Parliament in the winter session. Looking ahead, it’s very stiff. We are running against time,” said Jaitley. More than half the states have ratified the Constitution amendment Bill, passed by Parliament on August 6. Only the President’s assent is left to make it a law. After the GST, Jaitley said, his primary concern was the health of public sector banks. “If you were to ask me, after the passage and maybe possible implementation of GST, what would be my priority at the moment, it is certainly the health of public sector banks (PSBs),” he said. The FM, however, ruled out privatisation of the public sector banks, adding public sentiment was against it. “To reach a particular level of reform, you have to evolve into that stage of public opinion... In funding a large part of the social sector in India, public sector banks, despite competition, had a far larger contribution,” he said. Jaitley was also very confident about the benefits of GST in the long run — plugging leakages and reducing the tax rate over time. “In the long run, it will probably stabilise the tax rates and move them down. It will also bring a lot of equity within the country in terms of the consuming states being financially empowered more,” he said.

A finance ministry officials hinted the central GST and integrated GST Bills could be money Bills. Taxation Bills have never been financial Bills in history. He also said a proposal is under consideration to tax those industries which avail benefits under area-based exemptions and then reimburse them. “In order to maintain uniformity under the GST, all units availing area-based exemptions will be asked to pay tax and get a refund.” Currently, there are two types of area-based exemption schemes in operation. While manufacturing units in Jammu and Kashmir and the Northeast get excise benefit by way of refunds, those in Himachal Pradesh and Uttarakhand get an outright exemption. The revenue foregone by the Centre through area-based excise duty exemptions was Rs 19,120 crore in 2015-16. While key Opposition party Congress wants the GST rate at less-than-20 per cent, states are calling for a more-than-20-per cent GST rate. The Congress and the other Opposition parties also want the GST Bills to be financial Bills, as the government does not have a majority in the Rajya Sabha. The upper House does not have the authority to change a money Bill.

Chief Economic Advisor Arvind Subramanian, in his report on GST, has recommended a standard GST rate of 17-18 per cent based on the revenue neutral rate of 15-15.5 per cent. The official quoted above also pointed out it was not necessary to approach the Cabinet for the constitution of the GST council as Parliament has already passed the Constitution amendment Bill, which has a provision for this. The council will be chaired by the Union finance minister, with the minister of state for finance in charge of revenue, and state finance ministers or any other minister nominated by the states as members. The vice-chairperson will be selected by consensus for a specified period.

Committing to "many more reforms", Economic Affairs Secretary Shaktikanta Das said implementation of GST will bring small and medium enterprises (SMEs) into the national value chain. "The government is aware that many more reforms need to be taken. After implementation of GST, it should be easier for SMEs to become part of entire national value chain... Next challenge would be how to make SMEs part of global value chain," he said at the same event. Jaitley said after the GST roll-out, improving the health of PSBs would be the government’s top priority. He said a large number of steps have been initiated to reduce the ballooning non-performing assets.  But ruling out privatisation of banks, he said public and political opinion was still to converge to a point where one could start thinking of privatising the banking sector. Jaitley said some state-run banks would be consolidated and would continue to function in the present state. The government would reduce its stake in IDBI Bank to 49 per cent. “We are trying to consolidate some of the banks, which may otherwise find it difficult in a competitive environment.” State Bank of India, the country’s largest lender, is in the process of merging five of its subsidiaries — the State Bank of Bikaner and Jaipur, State Bank of Travancore, State Bank of Patiala, State Bank of Hyderabad, and State Bank of Maharashtra and Bharatiya Mahila Bank — with itself. The net combined loss for the 25 listed PSBs was Rs 1,193 crore in the first quarter ended June 2016 against a net profit of Rs 9,449 crore in April-June 2015. Stressed assets in the banking system rose to 12 per cent in June 2016 from 11.4 per cent at the end of March 2016, reflecting pressure on state-owned banks.

SOURCE: The Business Standard

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FTA negotiations with India complicated: Australia

Describing the ongoing Free Trade Agreement (FTA) negotiations with India as "complicated", Australian Trade Minister Steve Ciobo today indicated that the deal was now not a top priority for his government in the short term. "On India, this is a complicated negotiation. Although the original aspiration was to knock it over in 12 months, that hasn't been possible," Ciobo told a TV channel here. "We're now in the process of undertaking a stocktake about where negotiations are at," he said adding that "so I'll keep pursuing India, but that's not our key priority." The minister said that the key priority in the short term for the Australian government was to sign a FTA deal with Indonesia and in this term was to focus on what Australia can do with Indonesia. Ciobo's comments came two days after Prime Minister Narendra Modi held bilateral talks with his Australian counterpart Malcolm Turnbull on the sidelines of the G20 Summit in Hangzhou, China. The talks for Comprehensive Economic Cooperation Agreement (CECA) or FTA between the two sides started in 2011 in a bid to boost bilateral trade and investment. Both sides were expecting to conclude negotiations by December 2015, however, there were differences in areas like duty cut on dairy products and wines. Several rounds of negotiations have been completed for liberalising trade and services regime, besides removing non-tariff barriers and encouraging investments.

SOURCE: The Economic Times

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Global Crude oil price of Indian Basket was US$ 44.76 per bbl on 07.09.2016

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$ 44.76 per barrel (bbl) on 07.09.2016. This was higher than the price of US$ 44.36 per bbl on previous publishing day of 06.09.2016.

In rupee terms, the price of Indian Basket increased to Rs. 2970.45 per bbl on 07.09.2016 as compared to Rs. 2951.90 per bbl on 06.09.2016. Rupee closed stronger at Rs. 66.36 per US$ on 07.09.2016 as against Rs. 66.55 per US$ on 06.09.2016. The table below gives details in this regard:

 Particulars

Unit

Price on September 07, 2016 (Previous trading day i.e. 06.09.2016)

Pricing Fortnight for 01.09.2016

(Aug 11, 2016 to Aug 29, 2016)

Crude Oil (Indian Basket)

($/bbl)

44.76              (44.36)

46.20

(Rs/bbl

2970.45        (2951.90)

3095.40

Exchange Rate

(Rs/$)

66.36             (66.55)

67.00

 

SOURCE: PIB

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New textile investors enter local market : Rwanda

The government has signed agreements with two investors to establish new clothing and shoe factories at the newly-demarcated ‘Apparel Manufacturing Zone’ at the Kigali Special Economic Zone. The first agreement was signed between the Ministry of Trade and Industry and Prime Economic Zones Ltd, for 5 hectares of land. The second was signed between the ministry and two investors in the apparel manufacturing industry (Albert Supplies Ltd and Rwantan Ltd). The Apparel Manufacturing Zone (AMZ) currently occupies 5 hectares in Kigali Special Economic Zone. The Government land is to be given to investors engaged in apparel production, requiring them to pay for it over a period of 20 years as a way of encouraging them to invest in the country. “We realised that one of the major challenges for the investors is that they find it hard to acquire land in the economic zone where a hectare of land costs up to Rwf430 million. This would make them spend a lot of money in buying land and the related processes. So we decided to help them so that their investment will remain in securing machinery and other needed capital,” said François Kanimba, the minister for trade and industry.

‘Strategic intervention’

The minister said the move was one of the strategic interventions taken by the Government to develop and strengthen the capacity of production units engaged in textiles, and leather production and consequently limit consumption of imported used clothings. Albert Nsengiyumva, the director of Albert Supplies Ltd, said the factory will produce different types of high quality clothes and employ up to 2,000 people. He said the investment in the factory for the start is Rwf10 billion and by July next year, finished products will have been put on market. Bede Bedetse, a Burundian who manages Rwantan, a leather products manufacturing company, said they will produce different types of affordable leather products, including belts and footwear. Kanimba used the opportunity to also call on other investors to take advantage of the AMZ land opportunity while the land is still available. Out of the 5 hectares of land, only two-and-a-half remain. Other textile factories in the country include C&H Made in Rwanda and Utexrwa, one of the oldest companies in Rwanda.

SOURCE: The Newtimes

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Technology upgradation fund scheme formulated to facilitate textile sector: pakistan

The government has formulated a Technology Up-gradation Fund (TUF) Scheme to facilitate textile sector. Currently, the scheme is under process in State Bank of Pakistan, sources at Textile Industry Division said. Highlighting the measures introduced to facilitate the said sector, the sources said facility of duty free import of textile machinery will continue during 2016-17. The government had allocated Rs. 6 billion for Textile Policy initiatives for 2016-17 while support schemes would also continue during this year which include: Sales Tax of five export oriented sectors namely textile, leather, sports goods, surgical goods and carpets had been made part of zero rated tax regime from July 1, 2016 while all the pending sales tax refunds till April 30 whose RPOs have been approved, will be paid. The existing scheme on Drawback of Local Taxes (DLT) will also continue in 2016-17. The sources said in 2014-15, the government reduced mark-up rate on exports finance from 9.4 % to 7.5%. This rate was reduced in February 2015 to 6.0 %, and it was further brought down to 4.5 % from July 1, 2015.

SOURCE: The Business Recorder

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US textile & apparel exports down 7.66% in Jan-July '16

The exports of textile and apparel from United States were down 7.66 per cent year-on-year in the first seven months of this year. The value of exports stood at $12.934 billion during January-July 2016 compared to $14 billion in the corresponding period last year, according to data from the Office of Textiles and Apparel, US department of commerce. Category-wise, apparel exports declined by 8.5 per cent year-on-year to $3.239 billion, while textile mill products dipped 7.37 per cent to $9.694 billion during the first seven months of 2016. Among apparel, the highest growth of 15.33 per cent was registered in exports of men's and boys' woven shirts, whereas a maximum decline of 38.95 per cent was seen in exports of women's and girls' suits. Among textile mill products, yarn exports declined by 9.72 per cent year-on-year to $2.648 billion, while fabric and made-up article exports decreased by 7.02 per cent and 5.06 per cent respectively to $5 billion and $2.045 billion.

Country-wise, Mexico and Canada together accounted for nearly half of the total US textile and clothing exports during the period under review. The US supplied $3.482 billion worth of textiles and apparel to Mexico during the seven-month period, followed by $2.927 billion to Canada and $876 million to Honduras. In recent years, the US textile and clothing exports have remained in the range of $22-25 billion per annum. In 2011, they stood at $22.432 billion, while the figure was $22.656 billion in 2012, $23.665 billion in 2013, $24.418 billion in 2014 and $23.737 billion in 2015.

SOURCE: Fibre2fashion

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Pak’s textile machinery imports surge to US$44mn in first month of this FY

Pakistan’s textile machinery imports have surged by six percent to US$44 million in the first month of fiscal year 2016-17 on last year, as per new statistics from the Pakistan Bureau of Statistics. On a monthly basis, textile machinery imports in Pakistan went up from US$42 million in July 2015. IGATEX Pakistan has become an increasingly significant textile and garment machinery and accessories exhibitions in South Asia with its scale setting new records year by year. Organizers of the annual IGATEX textile machinery and accessories exhibition in Pakistan are expecting successful 2017 and 2018 editions after announcing the date and venue for both shows.

Following the reported success of this year’s edition, the following two are billed as being a platform to increase the awareness of textile machinery and technology innovations across Pakistan. The 2016 and 2017 trade shows, which are both set to take place at the Karachi Expo Centre on 26 – 29 April respectively, claim to welcome over 550 exhibitors from around 35 countries annually, with a number of versatile machinery models debuted for visitors on the show floor.

Speaking about the announcement of the next two shows, Saleem Khan Tanoli, CEO of FAKT Exhibitions (organisers of IGATEX Pakistan) said that this show has played a pivotal role in the development of Pakistan’s textile industry by introducing efficient machinery to local manufacturers and the event is bound to bore succession and growth for the industry. The event is known to not only introduce newest expertise, but also improvise trade benefits and increase foreign investments and spending through business visits by international delegates.

SOURCE: Yarns&Fibers

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Chinese textile firm may invest $100mn in Indonesia

Jiangsu Dongqun Investment Holding, a China based textile and apparel manufacturer has articulated interest in investing $100 million to build and start a textile production facility in Indonesia. This was informed by Indonesian industry minister Airlangga Hartarto, after a meeting with Jiangsu Dongqun officials at their headquarters in China. According to the minister, he offered various options to the company to set up the factory, including the Kendal Industrial Park in Central Java, since the park has lots of land and also offers skilled labour. "We also persuaded them to partner with Indonesian companies, while being committed to boost textile industry prospects with tax holidays, subsidies and lower gas prices,” Airlangga said.

SOURCE: Fibre2fashion

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