INTERNATIONAL
India's textile industry is facing unwelcome international scrutiny after Welspun India, the country's largest textiles exporter, was accused by a major U.S. retailer of passing off cheap cotton sheets as containing valuable fine Egyptian cotton. Welspun lost 36% of its market value in just two trading days on India's National Stock Exchange after the complaints by Target became public on Aug. 19, and its shares have continued to slide on news of reviews by Wal-mart and J.C. Penney, also major U.S. retailers. The shares closed at 57.85 rupees on Sept. 14, down 43.9% since the news broke. However, the Welspun debacle is only one of many serious issues facing the Indian textile industry, which is reeling from an increase of a third in the price of raw cotton over the last four months, caused by delayed rains and pest attacks on cotton fields. Spinning mills have reduced production by 15% to 20%, and the textile industry is calling on the government to help stabilize prices. But the crisis is emblematic of long-standing problems in the industry, which is highly fragmented, subject to volatile swings in prices because of antiquated trading systems, and ill-equipped to fend off growing competition from more efficient rivals such as Vietnam and Bangladesh.
India's cotton yields, already among the world's lowest, have fallen from 566kg per hectare in 2014 to 504kg in 2016 due to delayed rains and white fly problems in northern India and pink boll-worm attacks in Gujarat. As a result, raw cotton production is expected to fall to a five-year low of 33.8 million bales in the year to Sept.30 from 38 million bales a year earier, and cotton prices have jumped from $1.50 to $2 a kilogram. A bale of cotton weighs 170kg. Production could sink further still. In the year ending March 2017, the area under cotton cultivation is expected to shrink to 11 million hectares from 11.9 million in the previous year due to farmers' fears of winged pests, according to the Cotton Association of India. The textile industry's future is critical to India's social and economic prospects. It employs 45 million people, including the informal sector -- second only to agriculture -- and was recently the target of an $895 million package of incentives announced by the government with the aim of catalyzing investments of $12 billion over the next three years. The government has also sought to improve productivity by relaxing some labor regulations, including increasing the flexibility of working hours and encouraging the employment of more women. However, textile industry officials say multiple problems will have to be resolved for the sector to prosper, including a lack of reliable market data, which is blamed by the India Texpreneurs Federation, an association of textile companies, for compounding the price spike. "Inaccurate production data gives room to speculators to spread rumors of a shortage of cotton, causing extreme volatility in cotton prices," the federation said when officials met Textile Minister Smriti Irani in early September. Much of this problem is blamed on the government-run Cotton Advisory Board, which is responsible for collecting data on cotton production. Raja M. Shanmugam, chairman of Tiripur-based Knitwear Fashion and a former member of the CAB, told the Nikkei Asian Review that the board's methods are unscientific and open to manipulation. The CAB said in February that production this year would total 35.2 million bales, but five months later revised its estimate to 33.8 million bales, fueling speculation about the industry's problems.
Price volatility
The sector is also asking the government to take measures to protect it from price volatility. These would include using satellite imagery to estimate crop size accurately, rather than simply surveying market traders; sanctioning direct interventions in the market to support prices by buying cotton; and measures to reduce textile imports. As a first step, K. Selvaraju, secretary general of the South Indian Mills Association, has suggested that Tuticorin port in the southern state of Tamil Nadu should be declared a free port, which would not levy customs duties on goods in transit. This would allow exporters to hold imported cotton in the port area, and then to process and ship their products out duty free. "Malaysia and China already provide such facilities," he said. The industry is also in desperate need of consolidation, or help for companies that cannot cope alone. More than 80% of textile mills are small and medium sized enterprises that cannot compete against better-capitalized foreign rivals. At the last count, in June 2015, India had 1,954 SME textile mills with an average workforce of 400 employees. Of these, 962 were located in Tamil Nadu. Government data shows that more than 60 textile mills have gone out of business in the last three years.
Most companies do not have the ability to import cotton at short notice because they lack scale, cannot access credit or lack the skills to manage business risk. However, while most textile mills have reduced their production capacity, some have started importing cotton from Australia and West Africa, including small mills that traditionally bought from the local market. "Most of the mills, including small mills, are now meeting their requirements through imports for August and next month's production," said Prabhu Damodharan, secretary of the Texpreneurs Federation. B.K. Mishra, chairman of the government-run Cotton Corporation of India, which supports cotton growers, confirmed the increasing role of imports, telling the NAR in an interview that India has imported a record 1.5 million bales of cotton so far this year. The previous record was 1.4 million bales in 2012-2013.
Many in the industry blame foreign textile companies and traders for the industry's woes. Selvaraju said the sector is looking for cheap working capital and a regulated cotton market to provide a level playing field with foreign players. He said foreign competitors can access loans for as little as 2% interest compared to 15% in India. "At the very least, extend loans at lower cost to mills," he suggested. The government runs programs to support textile companies in upgrading technology and rehabilitating workers who are laid off, but does not provide direct financial assistance to the textile industry. However, the CCI supports farmers' incomes by buying and storing cotton at state-mandated minimum prices, which helps to set the lower bound for trading prices in the market, raising input costs for textile mills. The corporation has purchased 840,000 bales of cotton under this program so far this year, according to figures released in May. Stocks are eventually sold to traders and government-run mills, although the textile industry has asked the CCI to sell direct to small and medium-scale mills as well. Price setting is also complicated by the lack of a domestic cotton index that could be used a basis for hedging by traders. Selvaraju said that plans for an index have been under consideration by the government since 2008. Foreign traders have dominated the market since cotton was removed from a list of essential commodities in 2007, he said.
SOURCE: The Asian Nikkei Review
Craft revivalist and textile conservationist Madhu Jain, known for promoting indigenous forms of textile weaving and design in her almost 30 year-long career, says it's difficult to find good quality textiles in the Indian market nowadays. She also feels that unlike in the West, there is no quality control in India and this results into many problems. "Nowadays good quality textiles are becoming a rarity in Indian markets. Weavers and craftspeople are increasingly tech-savvy and know exactly what the current market influences are. A weaver can click on any website to see how much a kurti woven by him is selling for in the open market. And naturally, they want a piece of that pie as well," Jain told IANS in an interaction here. She explained how, if weavers don't get the rates, they know they should command, the result is a drop in quality. "Weavers don't want to spend hours over their looms producing fine products when they can get away with quicker weaves. And designers pick up whatever is available in the market. That's mass marketing." "People like me who go to the weavers and work closely with them, fall into the niche marketing space where our textiles are of high quality and demand a certain discernment that those who know their textiles will appreciate," Jain said and added that "unlike in the west, there is no quality control in India". She stressed on the need to enforce strict quality control in every aspect of production -- from the quality of textiles to the finish of the garment. "By this I'm including even the basic lining," she said. Jain's forte lies in developing textiles in distinctive combinations of two different weaving traditions to create new textiles, high on quality and design. She is proud that she has never comprised on fabric. "Most designers pick up ready, off-the-shelf fabrics. I never do that. At the risk of sounding arrogant, I'd stick my neck out to say that you'll never find textiles like mine anywhere. That's because as a craft revivalist and textile conservationist, my passion lies in design interventions." "I go to the grassroots and work directly with the weavers to produce new weaves and motifs," she said.
Jain feels that most designers are in fact "working as much with handlooms" as she hoped they will -- the irony being that the west loves Indian textiles. "Only a handful of designers work exclusively with organic handlooms," she said. "The west is increasingly attracted by the richness and sheer range of Indian weaves, and many of the biggest international design houses and designers have used Indian textiles to their advantage. Some of the famous names that come to mind are Ralph Lauren, Oscar de la Renta, Yves St Laurent, Calvin Klein, Giorgio Armani," added Jain. Her own latest Autumn 2016 collection offers saris in an Indo-Thai fusion of weaves and motifs. "These one-of-a-kind, limited edition saris were inspired by my natural proclivity towards creating fresh weaves as I never buy textiles that are already available in the market." Jain said, "This collection showcases the meticulousness with which I have successfully combined two different weaving styles into a single, organic entity, achieving a harmonious confluence of cultures." "The main body of the saris use the Thai weft style of Mudmee or Matmi, preferred by Thai nobility, while the pallus were inspired by the classic Pietra Dura inlay work found in the Taj Mahal. I'm proud to say that my bold experiment has paid off and I'm deeply satisfied by the result," she said.
SOURCE: The Business Standard
Textile sourcing and marketing specialist Texperts India has signed a memorandum of understanding (MoU) with the DKTE Society’s Textile & Engineering Institute (DKTE). These two organisations will collaborate with the aim of innovating, developing and commercialising new or existing products with new applications in the field of textiles. The purpose of the MoU is to stimulate and facilitate the research and development projects through knowledge and resources sharing to develop and commercialise new textile products. On its part, Texperts will share ideas and concepts for new developments; arranging raw materials as and when required; organise internship programs for DKTE students, visit DKTE to deliver guest lectures and lastly sponsor projects. DKTE will share knowledge and provide technical inputs; offer sampling support; initiate new product development; organise and conduct training programs for Texperts employees; do product analysis and attend quality complaints; and also host industrial seminars.
SOURCE: Fibre2fashion
Union Textile Minister Smriti Zubin Irani inaugurated an Apparel and Garment Making Center on Tuesday at Gumin Nagar, Pasighat in presence of Chief Minister Pema Khandu, Union MoS for Home, Kiren Rijiju, MoS for Textile, Ajay Tamta, State’s Textile, Handicrafts and Cooperation, Minister Tapang Taloh and Lok Sabha MP, Ninong Ering. Union Minister Irani said that Arunachal Pradesh has the potential to promote the textiles sector and give a fillip to entrepreneurship and job creation. She informed that her ministry would set up six more incubation centers to bring modern ready-made garment industry in the state. This was one of the first organized efforts of Prime Minister Narendra Modi under the North East Region Textile Promotion Scheme (NERTPS) of the Ministry of Textiles. She extended her gratitude to the state government for its active support and cooperation without which the mission would not have been possible. Congratulating the entrepreneurs who would be running the facility, the Minister assured all possible support to them in making the units commercially viable and self-sustainable. It would give an opportunity to local entrepreneurs to convert their ideas and designs into flourishing businesses and opportunities to the unemployed trained youths and provide a fillip to the traditional sectors like handlooms and handicrafts to convert the traditional designs into modern garments and market opportunities, asserted the Union Minister. She further added that she has directed her ministry to promote single window clearances, and reduce paperwork to the minimum wherever possible. She has already begun work on creating infrastructure for skills development and textile manufacturing, job creations and market linkages etc after recent announcement of Rs.6000 crore package by the union government. Development of the Northeast region is high on the list of priorities but this will need concerted efforts in the face of the various obstacles that tend to derail economic development in the NER. The local products can get tremendous demands in national and international markets if properly channelized. She also stated of holding a meeting with Chief Minister Pema Khandu, MoS Rijiju, MP Ninong Ering and state’s Textile Minister Taloh soon to find out way and means to boost textile sector in the state.
Speaking during the function, Chief Minister Pema Khandu has appealed to the youths to give up the pursuit of government jobs and become self-employed and also employ others with their skills and knowledge. They should take interest in entrepreneurships and promote export of indigenous products. Commissioner Textile, T Taggu in his address presented a detail report on establishment of the Apparel and Garment Making Centre, Pasighat. The incubation center has three units. Unit for skill development awarded to Technopact Advisors Pvt. Ltd, Gurgaon, second and third units awarded to Elam Industries Pvt. Ltd Pasighat and Viraj Export Pvt. Ltd respectively. The purpose of the incubation center is to impart training to youths of the state for their self employment. The mode of 200 trainees batch selection would be from all districts of the state. Earlier, Minister Tapang Taloh appreciated the work of NBCC for timely completion of the Centre. The women folks of East Siang District are traditional weavers but they used old traditional methods of weaving and produced in small amount which are consumed locally. The traditional exquisite designs and motifs, which are incorporated by the weavers in the products using the traditional loin loom, is a tedious and time consuming process. Now they will get proper training and scopes in this field.
SOURCE: Yarns&Fibers
Though the commerce ministry’s Cabinet note, going by a news report in The Indian Express, wants a ‘formal institutional mechanism’ to determine the right value of the rupee, it would be naïve to hold an overvalued rupee as responsible for India’s poor exports performance—except for June, India’s exports have been contracting for 18 straight months now. Certainly, an overvalued currency makes exports more expensive and is a deterrent, but it is unlikely that prices are as important a factor in poor exports performance as compared to several others. In the boom years of 2004-08 when Indian exports grew by over 25% annually, the rupee appreciated significantly, from 48.3 to the dollar in FY03 to 40.2 in FY08—the reason why the prices of Indian exports rising didn’t lead to a contraction was that this was also the time when the global economy and trade was booming; during that period, global GDP rose 4.7% and trade 7.8% as compared to 3.1% and 2.7% today.
But, the argument goes, the value of the currency becomes very important especially at a time when global growth and import demand is muted. While the specifics will be different for each commodity, a good example in this context is textile and apparel exports to the US—the EU is a bad example since it gives duty benefits to exports from poorer countries and this distorts the exports performance. Between July 2015 and July 2016, Vietnam’s exports to the US rose 6.1% and those from Bangladesh rose 6.8% while those from India rose a mere 0.8%. During this period, the rupee depreciated 2.1% against the dollar, the Bangladeshi taka depreciated 0.7% while the Vietnamese dong appreciated a little less than 1%.
Though it deals with only apparel exports, a World Bank report, From Stitches to Riches? offers an explanation while pointing out that, in the post-MFA period of 2005-12, India’s apparel exports rose just 3.7% a year versus 18% for Vietnam, 15.7% for Bangladesh and a healthy 6.9% for China which already had a very large export base by 2005. For one, hourly wages in India were $1.06 in 2012 versus $0.51 in Bangladesh, productivity was lower (India is ranked #6 in a buyer perception survey versus #3 for Vietnam), it has longer lead times in deliveries (India is ranked #6 versus #2 for Vietnam) and has a poor presence in synthetic fibres compounded by high import tariffs on them. While the competitive position will differ in different export areas, a lot also depends on how well integrated Indian firms are in global supply chains as also the quality of India’s products—in the refinery space, with Reliance’s refinery among the top in the world, India is very competitive while in the case of automobiles, being part of Suzuki or Hyundai’s export chain is a big positive. A competitive currency will obviously help boost exports, but at a time when FDI and FII flows are strong, weakening the currency will require RBI to buy dollars which implies a cost and can trigger competitive devaluation by other countries—apart from the fact that a weaker rupee is also more inflationary, it also hits companies with high foreign debt.
SOURCE: The Financial Express
Prime Minister Narendra Modi today reviewed preparations for roll out of the new Goods and Services Tax (GST) regime, possibly from April 1 next year, with Finance Minister Arun Jaitley and his team making a presentation on the milestones achieved and the road ahead. Jaitley, along with Finance Secretary Ashok Lavasa and Revenue Secretary Hasmukh Adhia, made a presentation to the Prime Minister on the state of readiness for creation of a national sales tax (or GST), the biggest tax reform since the Independence. The presentation came within days of the Union Cabinet approving setting up of all powerful GST Council, which will decide on the tax rate, exempted goods and the threshold. Official sources said besides listing milestones achieved so far, the presentation detailed the steps to follow including the timetable to get the supporting legislations approved. Sources said the Prime Minister wanted to understand the main areas where he should focus his mind on. Also, he wanted an update on the revenue neutral rate, IT backbone being developed and concerns of the states. The first meeting of the GST Council, which will be headed by Finance Minister, will be held on September 22-23, and the panel is to give its recommendations on the tax rate and other provisions within 60 days. The Prime Minister was also briefed about the widespread demand for keeping GST rate at 18-19 per cent, expectations of states from the new regime and the impact of different tax slabs on the Centre in terms of compensation it has to pay states for loss of revenue.
The government is keen to implement the new regime from April 1 so as to ensure a smooth rollover to the changed tax structure from the beginning of the new fiscal and avoid mid-year alterations. Sources said GST implementation is running ahead of schedule so far, within more than anticipated number of states ratifying the Constitutional amendment within the 30-day timeline set by the Centre. The focus now shifts to creating the IT infrastructure and preparing traders, businessmen and companies to smoothly shift to the new taxation regime that will subsume an array of central and state levies including central excise duty, service tax, VAT and entry tax. Parallely, the supporting legislations — Central GST (CGST) and Integrated GST (IGST) — details the tax rates, exempted goods and bands, is planned to be approved in the Winter Session of Parliament in November, sources said. The GST Council, which will have representative of all states and UTs, will make recommendations on the goods and services that may be subjected or exempted from GST, model GST laws, principles that govern Place of Supply, threshold limits, GST rates including the floor rates with bands, special rates for raising additional resources during natural calamities/disasters and special provisions for certain States. While the Centre will have one-third vote in the GST Council, states together will have a two-third say. To adopt a resolution, three-fourth majority would be required.
GST, which was first proposed a decade back, is seen as potentially transformative for India’s economy, adding as much as 2 percentage points to the GDP while also improving the ease of doing business and encourage investment in manufacturing. It is also expected to result in greater tax compliance, boosting government revenues. The GST will replace more than a dozen levies central and state levies, including central excise duty, service tax and central sales tax as well as VAT on sale of goods and entry tax, to make movement of goods seamless across 1.3 billion market. Instead of the good being taxed multiple times at different rates, under the new GST regime goods would be taxed at point of consumption.
SOURCE: The Financial Express
With GST round the corner, companies are already reviewing and analysing the actual impact on their supply-chains. Unlike the existing regime, GST would be a destination-based consumption tax and the tax would accrue to the state where the goods/services are consumed. In this regard, the Model GST law lays down detailed provisions with respect to determination of actual ‘place of supply’ (PoS).
While the service industry is required to undertake such analysis under the existing service tax regime as well, it would be completely new for the manufacturing/trading industry. The correct determination of PoS would be critical to enable identification of whether a supply (of goods) transaction is an inter-state transaction chargeable to ISGT or intra-state transaction chargeable to CGST and SGST or a zero-rated exports transaction. The onus for such determination is on the supplier and any wrong characterisation would mean incorrect payment of taxes. The model GST laws currently do not provide for any mechanism for self-adjustment of incorrect payment of taxes. Accordingly, in such a situation the supplier would be required to first deposit correct IGST or CGST/SGST (as the case may be) and claim refund thereafter.
With this background, it is pertinent to note that in terms of the model GST laws, the PoS for transactions involving movement of goods, whether by the supplier or recipient or any other person, shall be the place where the movement of goods terminates for delivery to the recipient.
The phrases used in the aforementioned provision, i.e., ‘supply involving movement’, ‘movement by recipient’ or ‘termination of movement for delivery to the recipient’ have not been defined under the model GST laws. Being open to interpretation, the aforesaid provision raises various questions. For example, a factory in state X makes a supply on ‘ex-works’ basis to recipient located in state Y. The recipient collects the goods from the factory in X and thereafter takes the goods to Y. In such a case, whether such transaction would be an intra-state supply as the goods were delivered to the recipient in X and the movement was only a post-delivery movement, or an inter-state supply as the goods were moved by the recipient to Y. Similarly, the said provision would need some elucidation to determine the status of movement, where a carrier appointed by recipient takes delivery of such goods from supplier. It is currently unclear if delivery of goods to such carrier would qualify as constructive delivery of goods to the recipient.
While interpreting the aforesaid provision, in case it is assumed that any movement of goods after the delivery of goods to recipient is not relevant for determining PoS, it would make the phrase ‘whether by the supplier or recipient or any other person’ redundant and otiose. Accordingly, harmonious reading of the provision would suggest that movement of goods by or on behalf of the recipient is also to be considered while determining the PoS.
However, such harmonious interpretation would still leave room for interpretational issues. Such as how would the supplier determine the correct PoS in case the recipient undertakes any movement or changes the destination of movement without the knowledge of supplier? Additionally, whether any movement of goods across the state borders post an over-the-counter sale would be relevant in determining the correct PoS?
While the enthusiasm of the Centre to work towards speedy introduction of GST is commendable, it is imperative that such interpretational issues are addressed by the Government in a timely manner so companies are ready for transition in time and any unwarranted litigation is avoided.
SOURCE: The Financial Express
The Vibrant Gujarat Summit in January could be the first occasion to showcase to the international community the issues related to Goods and Services Tax (GST) and its implementation, a senior state official has said. “In January Vibrant Gujarat Global Summit is one occasion that basically all these issues (related to GST) could be discussed and showcased,” Bharat Lal, Resident Commissioner, Gujarat told Indian reporters here. Leading a high-level Gujarat delegation, Lal is currently on a week-long trip to North America – the US and Canada – holding road shows and meeting business leaders and officials on the next edition of the Vibrant Gujarat Global Summit from January 11 to January 13.
Scheduled to be inaugurated by the Prime Minister Narendra Modi on January 10, the mega event is likely to be attended by several heads of States and Cabinet ranking ministers from more than two and half dozen countries. With the theme of ‘Connecting India to the World’, the Government of Gujarat has invited all Chief Ministers so that other states could benefit from the presence of hundreds of top business executives from across the world, who are keen on investing in India. “This summit is not focused only on Gujarat. This is focused on all India,” he said.
Delegates from 110 to 120 countries are expected to attend the eight edition of the Vibrant Gujarat Summit. Based on initial feedback, Lal said a number of Governors from the United States are likely to attend the event. “It is open to every State. They can do their business there,” he said. “We expect that various union ministers, ministries would be present,” he said. For the first time about 10 prominent Nobel Laureate have been invited to attend the Vibrant Gujarat Summit. “Idea is the Nobel Laureates who have done great work in innovation, science, physics, chemistry and medicine and their discoveries have led to invention, if they come to Vibrant Gujarat, they speak and conduct seminars they would be beneficial to India,” he observed. Ahead of the January event, officials from Gujarat are travelling to 23 countries, from where they expect foreign direct investment to flow into the country.
Responding to questions, Lal said there is a “great enthusiasm” among foreign companies about India and in the last two years it has created a buzz around the world. “India is now a preferred destination for foreign investors,” he noted based on his interaction with corporate leaders in the US and Canada. “Generally people have very very positive thing to talk about India. People are very bullish about India. India is a happening place. “There is a wind of change in India. There is a lot of enthusiasm. People want to invest in India. This would be visible in the Vibrant Gujarat Summit,” Lal said.
SOURCE: The Financial Express
The rupee lost ground in the past week as it fell about a per cent to test the psychological 67 mark. The currency touched a high of 66.32 against the dollar on September 7 and reversed sharply lower from there. The Boston Federal Reserve Bank President’s comment on Friday indicating that the strengthening US economy and the job market have kept the doors open for another rate hike this year triggered a sharp sell-off in the equity markets and other risky assets. As a result, the dollar strengthened and the rupee lost sheen. The rupee fell to a low of 67.03 on Wednesday and then recovered slightly to close at 66.89, down 0.78 per cent for the week. The domestic macroeconomic data releases in the past week were mixed. The Consumer Price Index (CPI) eased to 5.05 per cent in August from 6.07 per cent in July, thereby raising hopes of another 25-basis point rate cut by the Reserve Bank of India. However, the Wholesale Price Index (WPI) inflation rose to 3.74 per cent in August from 3.55 per cent the month earlier. Also, the Index of Industrial Production (IIP) contracted 2.4 per cent in July. The major event that the global markets will be waiting to see in the coming week will the US Federal Reserve meeting on September 21. Any hint of a possibility of another rate hike this year could boost the dollar. In such a scenario, the rupee may tumble sharply below 67 and target 68 levels. The dollar index (95.5) has reversed sharply higher from its crucial support level of 94.5. The immediate outlook is positive. A rise to test the 96-96.1 resistance zone looks likely in the near term. A strong break above 96.1 will see the upmove extending to 96.5 initially. Further break above 96.5 may target 97 levels in the short term.
Rupee outlook
The sharp reversal last week from the high of 66.32 is a negative for the rupee. Immediate resistance is at 66.65, which has to be broken for the currency to gain strength. As long as the rupee trades below 66.65, a test of the key support at 67.2 is likely in the near term. A strong break below 67.2 may increase the likelihood of the currency falling to 67.5 or even 68 in the short term. On the other hand, if the rupee manages to break above the immediate support at 66.65, it can strengthen to 66.5 and 66.3 thereafter. It will also keep the possibility of the currency testing the key medium-term trend-deciding resistance level of 66, alive. If the rupee manages to breach this hurdle at 66, it can strengthen to 65 over the medium term. But, a reversal from 66 can see the rupee weakening to 66.5 or even lower thereafter. Such a reversal may keep the currency in the 66-68 range for some time over the medium term.
SOURCE: The Hindu Business Line
The US today expressed willingness to have a bilateral investment treaty with India that will boost investor confidence and help increase size of bilateral trade. “I continue to believe that a bilateral investment treaty between the two countries will help boost investor confidence… and establish effective dispute resolution so that companies and investors searching for destination can put their money,” US Ambassador to India Richard Verma said. “I feel they want to know if there is a treaty or a system in place where they can resolve disputes and protect their investments. And we don’t have that with India. We have bilateral investment treaty with dozens of other countries, but we would like to certainly have one with India.” Verma was speaking at the 12th Indo-US Economic Summit organised by the North India Council of Indo-American Chamber of Commerce (AICC-NIC). He also said there is a need to push innovation in India so that the target of raising the bilateral trade size to USD 500 billion could be met. India and the US are targeting a four-fold jump in bilateral trade to USD 500 billion in the near future, which stood at nearly USD 110 billion in 2015. According to Verma, unless there is a push for innovation, it will take years to reach that figure. “We would have to use the latest technology and innovation both at the level of the government and the private sector,” he added. Also, he stressed on the need to have strong intellectual property regime so that the interests of the innovators could be protected. “If we want the best innovative technology, we would need an IPR regime to protect it. A policy reform like the Bankruptcy Bill will be helpful to first-time innovators,” Verma said.
Verma also lauded India’s recent reforms, including the GST Bill, Bankruptcy Bill and widening up of FDI in defence, banking and insurance sectors. The US Ambassador said India is a country of immense potential as it is expected to become the world’s third-largest economy by 2030. At present, India is US’ 5th largest FDI investor. “We have been discussing diverse topics which are vital to bilateral relations between India and the US from the economic point of view, promotion of business and commerce between the two countries,” said Lalit Bhasin, Summit Chair and Regional President, AICC-NIC. This time, he said, the topics under discussion cover Indian media and entertainment industry, defence, food processing and development of inland waterways.
SOURCE: The Financial Express
Afghan President Ashraf Ghani today set a target of $10 billion for bilateral trade and investment with India in five years, underlining the importance of a concrete road map for future collaboration. He marked out retail, power, pharmaceuticals, solar energy, water management, ports and skill development as areas that hold immense potential. “You spoke of a road map. Let’s start with a target of $10 billion in trade and investment, five years and we are going to realise it,” Ghani said at a business meet here. India-Afghanistan bilateral trade stood at $643 million in 2015-16. The President proposed formation of a taskforce between the industry chambers of the two countries and governments for laying a concrete road map of future collaboration. The visiting Afghan President thanked Prime Minister Narendra Modi for allocation of $1 billion for Afghanistan’s capacity and capability-building in education, health, agriculture, skill development, women empowerment, energy, infrastructure and strengthening of democratic institutions. “Committing a billion dollars to the future of Afghanistan is not just a commitment of money, it is a statement of confidence of belief in a strategic partnership,” he acknowledged.
Stating that Afghanistan had invested over $30 million in its airports, Ghani proposed formation of a joint cargo company with India. He also spoke of Afghan fruits that can be made affordable for middle class and low-income Indian households. Noting that the Kandahar airport has “first-grade cold storage capabilities”, Ghani sought investment from Indian supermarket chains. In an apparent jibe at Pakistan, Ghani said: “My request is for 4-5 major Indian supermarket chains to free us from the constraints of those neighbours who do not wish us well.” Pegging the Afghan medicine market at roughly $658 million a year, Ghani reached out to “five of the best Indian pharmaceutical companies” for proposals to supply medicines, underlining their criticality for Afghan soldiers. He even assured the Indian side that there is no constraint on transport of pharmaceuticals by air. The Afghan President hoped that India will play a crucial role in skill development in Afghanistan’s carpet industry.
Referring to opportunities Afghanistan presents for the gold and jewellery sector, Ghani said: “We want to make sure the contracts given for gold are given transparently, but the gold sector is up for investment as is the precious stone sector.” Noting that Afghanistan is interested in establishing dry ports with facilities like SEZs, which could connect to countries such as China and Iran, Ghani sought India’s engagement in this regard. Ghani also proposed collaboration with India in generation of power and water management, seeking support from the Indian power industry in exploration of turbine engine standards. He also described solar energy as “a crucial area of collaboration” while pitching for a cluster development approach in skill development. Ghani made a reference to Afghanistan’s enormous mineral wealth and said the news about gas is “beginning to look good”. General (retd) V K Singh, Minister of State for External Affairs, said the strategic partnership between India and Afghanistan has been growing steadily and now is the time to boost this relationship by taking trade and investment between the two countries to “the next level”. He exhorted the private sector to explore new avenues for partnership between the two countries and engage in creating capabilities and capacities, allowing Afghanistan to rebuild its economy and provide job opportunities to its citizens.
SOURCE: The Financial Express
India and Afghanistan today called for expediting a trilateral pact using Chabahar port in Iran to boost regional connectivity. Prime Minister Narendra Modi and visiting Afghan President Ashraf Ghani, during their talks here, stressed that expediting the pact would also augment connectivity among the three nations. “Expeditious implementation of the trilateral agreement involving Afghanistan, India and Iran, signed in May 2016, using Chabahar will augment connectivity within and of the region,” a joint statement said here. The leaders appreciated the recent decision taken by the three countries to convene a joint forum involving important stakeholders, including from business and industry, it added. “Both leaders welcomed intensification in the interaction involving India and Afghanistan with regional and other countries and international organisations to foster peace, stability and development in Afghanistan,” the statement said. A “milestone” pact on the strategic Chabahar Port in southern Iran, which will give India access to Afghanistan and Europe bypassing Pakistan, was inked by India and Iran in May this year after detailed discussions between Modi and Iranian President Hassan Rouhani. Besides the bilateral pact to develop the Chabahar port for which India will invest $500 million, a trilateral Agreement on Transport and Transit Corridor was also signed by India, Afghanistan and Iran, which Prime Minister Modi has said could “alter the course of the history of the region”. The trilateral pact, linked to Chabahar port development, was signed later by India, Iran and Afghanistan in the presence of Modi, Rouhani and Afghan President Ashraf Ghani. The key agreement signed was a contract for development of Phase I of the Chabahar port on the southern coast of Iran by an Indian joint venture. Chabahar port, located in the Sistan-Balochistan province on the energy-rich Persian Gulf nation’s southern coast, lies outside the Persian Gulf and is easily accessed from India’s western coast, bypassing Pakistan. “The bilateral agreement to develop the Chabahar port and related infrastructure and availability of about $500 million from India for this purpose is an important milestone,” Modi had said in joint media interaction with Rouhani.
SOURCE: The Financial Express
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 44.66 per barrel (bbl) on 13.09.2016. This was lower than the price of US$ 46.43 per bbl on previous publishing day of 09.09.2016.
In rupee terms, the price of Indian Basket decreased to Rs. 2987.78 per bbl on 13.09.2016 as compared to Rs. 3089.77 per bbl on 09.09.2016. Rupee closed at Rs. 66.90 per US$ on 13.09.2016. The table below gives details in this regard:
|
Particulars |
Unit |
Price on September 13, 2016 (Previous trading day i.e. 09.09.2016) |
Pricing Fortnight for 01.09.2016 (Aug 11, 2016 to Aug 29, 2016) |
|
Crude Oil (Indian Basket) |
($/bbl) |
44.66 (46.43) |
46.20 |
|
(Rs/bbl |
2987.78 (3089.77) |
3095.40 |
|
|
Exchange Rate |
(Rs/$) |
66.90 |
67.00 |
SOURCE: PIB
The Eurasian Economic Commission (EEC) has recently approved changes to the technical regulations of the Customs Union 'on safety of the production of light industry'. This will simplify procedures for certification of compliance for textiles, apparel and accessories. The EEC oversees the Customs Union consisting of Russia, Belarus, Kazakhstan and Armenia. The changes made by the EEC apply to carpets, matt, felt, nonwoven materials, and their products. For these products, EEC requirements with respect to biological and chemical safety were termed excessive by the European Union. Now, they have been made simpler, in particular by removing 'hygroscopicity' regulation for table and kitchen linen and 'air permeability' regulation for blankets and pillows. The EEC has also amended the certification procedure of conformity with mandatory requirements. Table and kitchen linens, handkerchiefs, swimwear, towels and sheets, and scarfs are currently subject to compliance certificate. Post-amendment, they will be subject to declaration. Similarly, for large businesses with their own laboratories, the procedure for obtaining compliance documents will become considerably simpler. For underwear, corsetry and bathing products, the compliance assessment shall be in the form of certification. The technical error in standardising of water-washable chromium mass fraction in fur products has been corrected. The correct value shall not exceed 3.0 mg/kg. “The changes have made it possible to balance the Technical Regulations, take into account the practice of its application by all market participants, and simplify access of safe finished products to the markets,” said EEC minister for technical regulation Valery Koreshkov. The minister mentioned that an applicant can now use test certificates of materials and components from which they are manufactured as evidence of compliance of the finished products. All these changes will come into effect in 12 months from the date of the publication of the EEC.
SOURCE: Fibre2fashion
Gelvenor Textiles, a South African fabric engineering company, wants to develop applications for commercial use of its K27 textile technology. For this purpose, it has joined hands with The Innovation Hub's OpenIX to invite business ideas from various enterprises. The firm will collaborate with the winners to develop and market their products. The plain weave K27 fabric is woven using high tenacity nylon yarn and coated with a silicone elastomer for a high strength to weight ratio. Some of the unique properties of the fabric include self-repair characteristics, puncture and tear resistance, shape memory as well as chemical, water and UV resistance. The company has already identified some possible applications of the fabric which include creating protective wear for marine and military personnel, camping equipment and self-healing linings for water containers and gas tanks. The K27 fabric can also be used for making patient transfer slides, parachutes, wing suits, hot air balloon envelopes, PPE for factory and healthcare workers and more.
But, to find more possible application of the fabric, the companies are inviting proposals from small, medium and micro-sized enterprises (SMMEs) and research groups. Participants based in or willing to set up operations in the South African province of Gauteng will be preferred, however, innovative proposals from other locations will also be considered, Innovation Hub said on its website. Solution providers based in Gauteng will be eligible for proof of concept funding from The Innovation Hub to support the development of their product and business model. The Innovation Hub said that the proposed solutions will be judged on their value propositions and scientific merits. The participating SMMEs should also present data to support their claims and should be willing to work as a team with the challenge owner's staff.
SOURCE: Fibre2fashion
The £97m Textiles Growth Programme has been launched focused on Greater Manchester, Lancashire and West Yorkshire where the UK’s historic textile and clothing sector and homeware manufacturing is concentrated to support capital projects, skills training and research and development. The programme is aimed at businesses within the textiles sector, and covers manufacturers from carpets to clothing, as well as industry suppliers, such as textile machinery manufacturers and designers. A combination of capital and revenue grants are available for projects related to new or improved premises, plant, machinery, equipment, energy efficiency, workforce training, research and development and products. One of the companies to benefit from the programme so far is Grafea, which makes a range of high-end leather bags, rucksacks and satchels for luxury markets in Italy, China, Russia and America from their site in Dukinfield in Tameside, Manchester. As the popularity of their products grew, directors Yanni and Charis Kioupouroglou recognised the need for a significant expansion programme, including the purchase of new equipment so they could increase production capacity and cater for the growing demand. The duo decided to apply for support through the Textiles Growth Programme have since worked with a number of growth hub services, including UKTI, who have helped the company expand into new premises and grow their presence overseas. Charis said that he would highly recommend the Business Growth Hub and UKTI to anyone running a business. Their support in accessing finance and grants, and practical help with exporting and website, has been pivotal in growing the business.
SOURCE: Yarns&Fibers
Cotton Incorporated will be presenting fabric samples dyed with the EarthColors cotton-derived dye at the Premiere Vision trade fair taking place in Paris, France September 12 through 14. The new dye uses by-products of cotton harvesting as a base instead of oil to give knit and woven cotton fabrics dyed in a variety of warm, soft, natural brown shades. The new dyes offer both sustainability and traceability for retailers and brands. Cotton Inc and Archroma have joined forces to develop the first ever cellulosic textile dyes derived from cotton biomass, the technology to dye cotton from cotton. It is the latest addition to Archroma’s ‘EarthColors’ range of sulphur-based dyes that are derived from waste biomass, as opposed to being synthesized using oil-based derivatives. A new dyestuff based on cotton waste which can be used to dye cellulosic fabrics has been developed by Archroma in conjunction with Cotton Inc., the US-based cotton research and promotion organization which challenged the Swiss textile chemical business to develop a dye that may represent the very first dye derived from cotton plant-residues.
Cotton Incorporated said that the new patented technology addresses two key concerns of the textile industry: sustainability and traceability. These sulphur-based dyes are designed for use on cellulosic fibres, such as cotton, but while most dyes in the textile industry are synthetic, using petrochemicals (oil) as a base, EarthColors is a biosynthetic alternative that utilises natural waste from the agricultural or herbal industry. Mary Ankeny, Senior Director Textile Chemistry Research at Cotton Incorporated, who led the project from the Cotton Incorporated side said that as soon as they heard about the EarthColors technology, they wanted to explore the possibilities of cotton as a natural dye source. Byproducts of cotton harvesting and ginning have been utilized within the food and construction industries for decades, but they were intrigued by the idea of using cotton biomass to dye cotton fibre. There is an ample supply of cotton biomass. The global volume of cotton harvesting and ginning byproducts – which includes burs, stems, immature bolls, lint, sticks, and leaves – can be as much as three million tons per year. One 480 lbs bale of cotton, for example, can produce 150-200 lbs of usable byproducts. Archroma’s EarthColors application on cotton byproducts marks the first time the cotton plant has been used to actually dye cotton fabrics. Dyeing a natural fibre with dye processed with natural ingredients has appeal for many environmentally-conscious brands, a niche Archroma aimed to fill with the launch of the line in 2014.
Nuria Estape, Head of Textile Specialties Global Marketing & Promotion, at Archroma said that they are grateful to Cotton Incorporated to have brought them this challenge. Archroma strives to challenge the status quo, and their EarthColors technology demonstrates their dedication to support and inspire sustainable fashion with warm colors that can be traced from the field to the shop. Each batch of EarthColors dye offers a high level of traceability in the form of a hangtag with a Near Field Communication chip. Data on the chip, which can be accessed by Archroma customers and even consumers through a smart phone, explains the manufacturing process of the dye and where the natural materials were sourced. Similarly, every bale of cotton grown in the United States receives a bale identification tag. The tag allows cotton businesses to trace the journey of the bale as far back as the facility where the cotton was ginned. The tag also includes information on the fibre characteristics for the cotton contained in the bale, which allows for efficient inventory management by merchants and mills. The knit and woven constructions, produced at Cotton Incorporated’s laboratories and at the Cone White Oak facility, demonstrate the range of brown hues that is achieved by using 100 per cent cotton biomass as the source.
SOURCE: The Global Textiles
Victory for Donald Trump in the US presidential election could be a game changer for China's economy. The candidate's promise to slap punitive tariffs on Chinese imports would be highly contractionary, deflationary and wipe hundreds of billions off the value of the world's second-biggest economy, according to new research by Kevin Lai, the Hong Kong-based chief economist for Asia (excluding Japan) at Daiwa Capital Markets. Lai estimates that Trump's suggestion for a 45 per cent tariff on Chinese goods to narrow the trade deficit with America would spark an 87 per cent decline in China's exports to the US - a decline of $420 billion. Here is a chart that demonstrates what could be the impact of this decision:
SOURCE: The Business Standard
Serious buyers from all over the country and abroad, especially from garment specialty hubs like Delhi NCR, Surat, Jaipur, Mumbai and Ludhiana, came to realize their needs at the promising trade fair Gartex 2016 which was held from 27-29 August at Delhi's renowned exhibition centre- Pragati Maidan and left satisfied at the end of the event. The three day event witnessed product demonstrations, information exchange, networking and deal closings. Collectively, the trade fari brought into the forefront new innovation, better version upgrades, and new product entrants in the Indian garment manufacturing market. Gartex hosted more than 75 exhibitors representing more than 150 brands related to digital textile printing technology, garment manufacturing machines, embroidery machines, sewing machines, quilting machines, fabrics, and apparel accessories. Several embroidery machines were spotted on the show floor. Baba Textile Machinery (India) Pvt. Ltd. demonstrated the strengths of its computerized embroidery machine which also made a sale; Aura Technologies displayed its Aura-perfect series multi-head embroidery machines; while Stitch Technologies India Pvt. Ltd. showcased the 'Tajima' brand computerized embroidery machine. A number of quilting machines were also seen at the show with representation from Twin Star Machines, sole agent for Dongguan Chishing Machinery Company Ltd. in India, which demonstrated Chishing quilting & embroidery machines. STI Apparel Automation Pvt. Ltd., Indian business partners for Hong Kong-based manufacturing company Fucen Sewing Machine Co. Ltd., displayed several industrial sewing machines. In the fabrics segment, Gloster Limited, Pashupati Overseas, and Shree Mahadeo Cotton Mills Ltd., among others provided opportunities for visitors to get a first-hand experience of their offerings.
Introducing something new in the apparel accessories segment was Delhi-based manufacturer Label Solutions with its introduction of high-density and 3D silicon heat transfer and super emboss on cotton & polyester. Other companies included Arrow Textiles Limited, YKK India Pvt. Ltd., Dona Doni Fashion Pvt. Ltd., Redwood Narrow Fabric, and Wenzhou Muse International Trade Co,. Ltd. Several digital textile printing manufacturers and dealers participated in the show, showcasing the best machines in the industry. Negi Sign Systems & Supplies displayed the Negijet TX R-1900 digital textile printer; Arrow Digital showcased MTEX- the only integrated solution for stretchable fabrics compatible with pigment, acid, reactive and disperse inks; Orange O Tec Pvt. Ltd. exhibited MS JP3, Apsom Technologies displayed Konica Minolta's Nassenger Pro 120 inkjet textile printer and Colorjet's Vastrajet- direct to fabric digital textile printer; and Green Tech and Epson demonstrated T-shirt printing machines to name a few. Additionally, Mimaki India Pvt. Ltd. launched its high speed 1.8m wide-format direct textile printer- Tiger-1800B which received a good response from visitors.
Speaking of his experience at the show, Vikram Bhatia, MD, Apsom Technologies (India) Pvt. Ltd., said that they got good customers and relevant people visited their booth. They are happy to have been part of this show and they did like to take part in it next year as well. Prakash Chopra, business manager, Arrow Digital Pvt. Ltd., said that the quality of visitors to the show was very good. They received a good response for the new MTEX machine displayed at their booth. They got serious prospects and are hopeful to close a few deals. Similarly, Amit Narang, director, STI Apparel Automation Pvt. Ltd. said that they were satisfied with the footfall and the quality of visitors. They got a lot of leads. The management especially was up to the mark and they hope to be participating next year as well. Gartex 2016 concluded with a grand success as exhibitors and visitors successfully achieved their business goals. The next edition of Gartex is declared to take place from 29th to 31st July 2017 and is designed to be the trendsetter for the industry player to showcase new technology, state-of-the-art equipment, materials and services.
SOURCE: Yarns&Fibers
Ethiopia manufacturing industry has blossomed in recent years due to better industrialization policies from the government and has attracted investors from United Kingdom, Turkey and India who have invested billions of dollars in foreign direct investment (FDI) in the textile and other sectors of the economy while the Kenyan government has not laid out policies to boost its industrialization, leading to a near-stagnation. As a result, Ethiopia is set to become the largest manufacturing nation in East Africa, beating the regional leader Kenya, as government incentives, such as cheap electricity, tax holidays and cheap land, attract investors in the industry. Saitoti Torome, Kenya’s Planning Permanent Secretary, during the launch of the Kenya Economic Report in Nairobi last week said that Kenya must improve the industrial sector. If not careful their market will be flooded with goods from Ethiopia.
The Kenyan manufacturing industry employed 287,400 people in formal jobs in the 2014-15 period, an increase from 279,400 jobs in 2013-14. However its contributions to the Gross Domestic Product (GDP) are declining, according to the Kenya Economic Report 2016 that was released by Kenya Institute for Public Policy Research and Analysis (KIPPRI), this month. The main cause for the decline in Kenya’s manufacturing sector is high production costs and competition from cheap imports from China and India. However, despite the stagnation in the manufacturing sector, World Bank Group estimated that Kenya’s economy will grow at a rate of 5.9 percent this year, rising to 6 percent next year. Ethiopia’s economy is predicted to grow by about 8.1 percent. Growth in the two east African nations is mainly due to the boom in the infrastructure sector, with both of them undertaking big projects to upgrade roads, air and rail transport besides increasing their energy capacity. But Kenya, the biggest economy in the East African region, risks being flooded by cheaply manufactured goods from neighboring Ethiopia, which has had a booming manufacturing industry in recent years.
SOURCE: Yarns&Fibers
European businesses are planning to expand their investment and operations in the Asean region but want to see more trade deals between the two regions according to a recent survey that polled 200 executives from European countries in the region. The latest annual EU-Asean Business Sentiment Survey, finds that 74% of European businesses project a rise in Asean profits for 2016 and expect the region’s importance to global revenues to increase over the next five years. As a result, two thirds plan to expand operations and employment in the region while 85% are planning to increase their regional trade and investment. Businesses in the region say they are keen to see strengthened ties between the EU and Asean with 66% of them expressing interest in a free trade agreement (FTA) between the two regions. Over half the respondents say they feel they are at a competitive disadvantage without an FTA. The survey also highlights that small businesses are still struggling with policy challenges as 52% of respondents say that trade barriers are hampering supply chain efficiency, while 44% report facing unfair competition from local and regional incumbents, including state-owned and government-linked enterprises. Based on survey findings, the EU-Asean Business Council (EU-ABC) says it is calling for the acceleration of the process for an EU-Asean FTA and for speedier conclusions to existing bilateral FTA negotiations.
Commenting on the results, EU-ABC chairman Donald Kanak says: “The survey shows strong support for a substantive and meaningful EU Asean FTA to support sustained European investment in the region, and the EU-Asean Business. “Council urges leaders from the EU and Asean to work together toward that end, and in the meantime the rapid conclusion of bilateral FTA negotiations between the EU and Asean member states.”
SOURCE: The Global Trade Review
