The government plans to set up ‘Bharat Park’, an India-specific trade zone with a showroom and warehouse in the UAE. Goods Made in India will be displayed and stored for the global audience in the Park. Piyush Goyal, Union Minister of Textiles and Commerce said the Bharat Park will facilitate other countries to buy Indian goods and the payment will be secured in UAE. Urging the industry to maintain the quality of goods exported from India, he said the Bureau of Indian Standard will spend ₹40 crore to set up 21 testing laboratories at various places in India.
Future of textiles
The future of the textile industry belonged to Man Made Fibre Textiles as there are limitations in ensuring enough supply of cotton to meet the growing demand, he said at the recent Export Awards function of The Synthetic and Rayon Textiles Export Promotion Council. He urged the industry to use the free trade agreements with Japan, Australia, UAE and South Korea. The current poor utilisation of this opportunity is a matter of great concern for India, he added. Bhadresh Dodhia, Chairman, SRTEPC said export of man-made fibre textiles was down 9 per cent at $3.1 billion in the first seven months of this fiscal against $3.4 billion in the same period last year, though technical textile exports improved marginally to $1.51 ($1.5 billion). Dodhia said the industry is confident that textile exports will cross $6 billion in this fiscal and technical textile shipments will cross $3 billion. SRTEPC will achieve the Government’s export target of $11 billion of man-made fibre and $10 billion of technical textiles by 2030.
Road blocks
SRTEPC has urged the government to cover the entire value chain of MMF textiles under same GST rate and correct the current inverted duty. Dodhia requested the government to cover the entire value chain of textiles and clothing under the Interest Equalization Scheme. The GST on fibre is levied at 18 per cent while that on yarn and fabrics is 12 per cent and 5 per cent. This has led to accumulation of huge input tax credits with the manufacturers and adding up to cost of production besides hampering competitiveness in the international market.
Source: Business Line
The Red Sea crisis has started taking a toll on India’s exports as shipping and insurance costs for shipments to the EU, east coast of the US, parts of Africa and the Middle East have escalated, a senior official has said. But the government is yet to take a call on providing support to exporters in the form of subsidies, rebates or higher incentives under existing schemes, the official added. “At the Commerce Secretary’s stock taking meeting on the Red Sea situation with traders, shippers and other stakeholders on Thursday, it was clear that exports from the country had started getting affected by the crisis as both shipping and insurance costs had escalated,” the official tracking the matter said. The Iran-backed rebel group Houthi started attacking cargo in the Red Sea after the start of the Israel-Hamas war in October to declare their support for Hamas. Risk of attacks While the Defence Ministry was providing security and escorts to some shipments, the number of exporters using the Red Sea route had decreased because of the risk of attacks and the high insurance costs, the official added. “Most exporters are using the alternative route through the Cape of Good Hope but that is a much longer route. There is no container shortage yet, but turnaround time has increased by about 14 days because of the long route,” the official said. Both shipping costs and insurance costs have increased sharply and the government would make an estimate once the numbers were provided by the industry, he added. According to industry estimates, about $225-230 billion of India’s exports to the EU, the east coast of US, African countries such as Egypt, Eritrea and Djibouti, and some Middle East countries could be at risk if the situation in the Red Sea does not get contained.
Source: Business Line
Synopsis Citing a 50-70% drop in capacity utilization 50% to 70%, the Confederation of Indian Textile Industry (CITI) sought extension of the one-year moratorium for repayment of the principal amount, and conversion of three-year loans under Emergency Credit Line Guarantee Scheme (ECLGS) into six-year term loans. The textile mill associations on Friday sought financial support measures for India’s spinning segment which is hit by the prolonged Ukraine-Russia conflict, the recent Israel-Hamas war, an 11% import duty on cotton and issues related to Quality Control Orders on man made fibre l. Citing a 50-70% drop in capacity utilization 50% to 70%, the Confederation of Indian Textile Industry (CITI) sought extension of the one-year moratorium for repayment of the principal amount, and conversion of three-year loans under Emergency Credit Line Guarantee Scheme (ECLGS) into six-year term loans. Rakesh Mehra, CITI chairman also pushed for an extension of “necessary financial assistance to mitigate the stress on working capital, on a case-to-case basis” to mitigate the unforeseen crisis plaguing the spinning sector, prevent job losses to several lakh people, sustain the market share, and achieve the envisaged export targets the ECLGS, constituting approximately 6% of the total disbursement of Rs 2.82 lakh crore as of September 30, 2022. However, the spinning segment now faces a severe crisis with a 50% decline in cotton yarn exports, a 23% drop in overall exports of cotton textiles, and an 18% reduction in total textiles and clothing products during the financial year 2022-23 compared to the previous year, CITI said
Source: Economic Times
Synopsis Piyush Goyal has claimed that the country will meet its ambitious $2 trillion export target by 2030, notwithstanding geopolitical headwinds and inflationary concerns. India currently exports around Rs 1,500 crore worth of jute. Goyal, who also holds the portfolios of textiles and consumer affairs, food and public distribution, urged industry players to increase the figure. Kolkata, Union Commerce and Industry Minister Piyush Goyal on Saturday expressed optimism that the country will meet its ambitious USD 2 trillion export target by 2030, notwithstanding geopolitical headwinds and inflationary concerns. Speaking at the inauguration of the Patsan Bhavan, which houses the Jute Commissioner's office and headquarters of Jute Corporation of India and National Jute Board, in New Town, Kolkata, Goyal acknowledged the challenging global situation. He cited the Ukraine war, the Israel conflict and issues related to the Red Sea as factors impacting trade. "To address low food grain production and curb domestic inflation, we have implemented restrictions. However, despite all these challenges, India's exports will continue to grow, aiming at reaching USD 2 trillion by 2030 from the current USD 770-775 billion," Goyal said He highlighted the potential of the jute industry, stating that with "contribution from the jute sector and concerted efforts from the Centre and state governments, we can achieve new heights". India currently exports around Rs 1,500 crore worth of jute. Goyal, who also holds the portfolios of textiles and consumer affairs, food and public distribution, urged industry players to increase the figure. He also asked the jute sector to showcase products at the upcoming Bharat Tex 2024, the world's biggest-ever textiles event, to be organised from February 26-29 in New Delhi. Goyal also highlighted the achievements of the central government and appealed to the people of West Bengal for their support in the upcoming general elections.
Source: Economic Times
New Delhi: Consumer Affairs Minister Piyush Goyal on Saturday said the government will bring more products under the mandatory quality norm as India moves towards becoming a developed nation by 2047. Addressing virtually the 77th foundation day of the Bureau of Indian Standards (BIS), Goyal said complying with high quality standards in products and services will help India achieve high goals and become a developed nation. Towards this direction, the BIS should become an ambassador of quality standards. "It should not just become an adopter of standards, but should be a pioneer of standards," he said. That apart, the BIS should frame quality standards comparable to international standards wherever possible. "For example in products like lift air filters and medical devices, I think India can be a front-runner and set international standard He also urged for much greater stakeholder engagement for making quality standards and asked the industry to be more demanding to set labs for testing the quality. Hailing the BIS efforts in creating a quality conscious nation, the minister said bringing more products under the mandatory compliance of quality norms issued through the Quality Control Order (QCO) has ensured availability of quality products/services to the consumers. So far, 156 QCOs have been issued, covering 672 products. Before 2014, only 106 products were covered under 14 QCOs, he said. "In future, more products will be brought under the QCO. I believe we will be covering 2,000-2,500 products," he said, and added, "Our commitment to the quality will be so strong that every product/service available in India will be of higher quality." The minister further said that over decades, India was dependent on foreign standards for quality. "Now, India's pace and progress will be decided and dependent on our own standards. We will rely on our standards, not foreign standards, thus become self-reliant," he added. Among initiatives taken in the recent years, Goyal said hallmarking of gold jewellery and mandatory quality compliance in toys stand out and which brought transformation in the country. Hallmarking is a purity certification of the precious metal Currently, hallmarking facilities are available in more than 340 districts. Over 4.15 lakh articles are hallmarked on a daily basis and 90-95 per cent consumers buy hallmarked jewellery, he said. Similarly in toys too, the mandatory quality compliance has helped reduce the cheap imports by 52 per cent and now safe and quality toys are available in the Indian market, he added. Asserting that good quality is non-negotiable and complying with quality does not make the product costlier, the minister urged the industry to actively engage in setting quality standards and stressed on maintaining transparency in quality testing. Minister of State for Consumer Affairs Ashwini Choubey, Consumer Affairs Secretary Rohit Kumar Singh, Department of Promotion and Internal Trade Secretary Rajesh Kumar Singh, and BIS Director General Pramod Kumar Tiwari were present at the event
Source: Economic Times
Synopsis The proposed free-trade agreement (FTA), Comprehensive Economic Partnership Agreement (CEPA), between India and Oman faces potential challenges due to demands for customs duty concessions on petrochemical products like polypropylene and polyethylene. Certain domestic players oppose these duty concessions, citing Oman's significant subsidies on raw materials for petrochemical production. Customs duty concession demand on petrochemical products such as polypropylene and polyethylene, used primarily in the plastics industry, may act as a sticking point in the early conclusion of talks for the proposed free-trade agreement (FTA) between India and Oman, according to an official. Negotiations for the pact, officially dubbed the Comprehensive Economic Partnership Agreement (CEPA), are in the last phase. Certain domestic players from both public and private sectors are opposing duty concessions on these products under the agreement. They are claiming that Oman provides huge subsidies to its industry on raw materials for the production of these petrochemical products According to them, if India would give duty concessions on these already subsidised products, it would be a double advantage for Omani firms. The government official said that they are holding talks with domestic players on the issue. Officials of the two countries concluded the second round of talks for the agreement in December last year. At present the customs duties on these products are around 7.5 per cent. Domestic plastic makers, however, are of the view that duty cuts will give a boost to the labour-intensive sector as raw material cost accounts for about 60 per cent of the final goods. The negotiations on the text of most of the chapters have been concluded by both sides. Oman is the third largest export destination among the Gulf Cooperation Council (GCC) countries. The bilateral trade was USD 12.39 billion in 2022-23 as against USD 5 billion in 2018-19. India's exports have increased from USD 2.25 billion in 2018-19 to USD 4.48 billion in 2022-23. According to think tank GTRI (Global Trade Research Institute), Indian goods worth USD 3.7 billion such as gasoline, iron and steel, electronics, and machinery will get a significant boost in Oman, once both sides reach a comprehensive free trade agreement. India's imports from Oman stood at about USD 8 billion in 2022-23. Key products included petroleum products (USD 4.6 billion), urea (USD 1.2 billion); Currently, over 80 per cent of India's goods enter Oman at an average of 5 per cent import duties, the GTRI report has said adding Oman's import duty ranges from 0 to 100 per cent along with the existence of specific duties.
Source: Economic Times
Synopsis The CM also released the USD 1 trillion report and the first copy was received by Goyal on the occasion. Later in a social media post, Stalin said, "Honoured to share the dais with Union Minister of Commerce and Industry Thiru Piyush Goyal and esteemed industry leaders. TVS Chairman Venu Srinivasan, JSW MD Sajjan Jindal, Ashok Leyland MD Shenu Agarwal at TNGIM2024 inauguration. Union Minister Piyush Goyal on Sunday said the world today wants to engage with India for free trade agreements (FTA), and to expand trade and diplomatic relations with India. Speaking at the inaugural of the maiden Global Investors Meet of the DMK government, the Commerce and Textiles Minister said India's young population has given demographic dividend which has become the envy of the world. Batting for women joining the formal workforce in the country, he said, "when women go to work, it will not only add to the GDP but will also add twice to the country's GDP as the work they are now doing will be replaced by technology." Elaborating, he said, "... as more and more women come into formal workforce, the work what they are now doing, which is unfortunately not reflecting in our Underscoring that women led development will take India to newer heights, Union Minister said, "While India is outperforming all our peer economies, the world today wants to come and engage with India, to do free trade agreements with India, to expand trade and diplomatic relations with India." He noted that the development taking place across sectors, was based on the strength of the young population as the average age stood at 28.4 years. "This young population's basic needs have been met with several welfare initiatives like food, clothing, shelter, healthcare, education, water, digital connectivity, air, road, ports, rail which will take the country grow on a fast track. We have prepared the nation to aspire big, to think big and to work collectively as a nation with a sense of duty and to make the nation a developed nation by 2047." Referring to Prime Minister Narendra Modi's comment that India would aspire to become a developed nation by 2047 and to shed the colonial mindset, Goyal said, "these things rest on two important fundamental needs -- women led development. Strengthening the Nari Shakti and second is to make India corruption free." Goyal said India was looked as 5th weakest economy before 2014 and in the last 10 years, it has grown to become the world's fifth largest economy. "India was looked as one of the weakest five economies in the world. The journey in the last 10 years has been from fragile economy to the world's fifth economic fundamentals. The journey has given us a GDP growth of 7.7 per cent in the last two quarters." he said. Complimenting the Tamil Nadu government for setting a target to raise the state's economy by USD 1 trillion by 2030, Goyal said this aspiration would drive for industrialisation, creation of new jobs in the state. "this (vision to reach USD 1 trillion economy) will help the young girls and boys to aspire for big goals in life and it is only when we have big goals, this country will move forward." Stalin, who released semiconductor and advanced electronics policy on the occasion, said the Global Investors Meet would act as a catalyst for economic and industrial growth. "With the aim that Tamil Nadu should play an important role in shaping India's economic growth, I have set an ambitious target of transforming Tamil Nadu's economy into a USD 1 trillion economy by 2030. To achieve this, we are pursuing a twin-pronged approach of attracting both capital and employment intensive investments," Stalin, who was clad in a black colour suit said. "We have been inviting investors with a red-carpet. We want to be the trendsetter amid other states. TNGIM has witnessed encouraging response and is expected to bring pride and investment to Tamil Nadu. Multiple policies have been announced by the state. Our focus is to ensure development for all," he added. The CM also released the USD 1 trillion report and the first copy was received by Goyal on the occasion. Later in a social media post, Stalin said, "Honoured to share the dais with Union Minister of Commerce and Industry Thiru Piyush Goyal and esteemed industry leaders. TVS Chairman Venu Srinivasan, JSW MD Sajjan Jindal, Ashok Leyland MD Shenu Agarwal at TNGIM2024 inauguration. "Positive vibes and global acclaim for Tamil Nadu's one trillion dollar dreams are fuelling our journey to success. Let's aim high, attract game-changing investments, and position Tamil Nadu as the economic powerhouse of India," he said. Anticipating a tremendously successful event and eagerly awaiting the investment numbers that will shape the state's thriving future, he added is a pedestal for the state to showcase the sectoral expertise, enhance and strengthen skilling diversity and expand the investment opportunities both nationally and internationally." "Tamil Nadu's skilling prowess exceeds the national benchmark by contributing 43 per cent of the total women workforce in India," he noted.
Source: Economic Times
Ludhiana: Although winter is the peak time for the textile industry to make sales, the traders have reported that all their hopes have been dashed to the ground due to late arrival of the winter season. The industry which has already been facing stagnation for the last few years failed to get relief this winter as well. As per textile associations, the fear of retaining stock has led them to sell winter clothes at discounted prices. However, the industrialists have some reason to cheer as this winter witnessed a sharp rise in the sale of winter accessories including gloves, scarves, boots and winter socks. Garment manufacturers said people had not even started visiting stores for winter shopping halfway through December. They said the manufacturing of winter clothes usually comes to an end in September or October and the manufacturers start preparing for the production of summer season. Vinod Thapar, president of Knitwear and Textile Club, said, “the industry was first hit by demonetisation, then Covid-19 and now late arrival of winter. Only the incentives and facilities from the government can help us.” Charanjit Singh, an industrialist, said, “There is only 5% increase in the sale compared to routine days. Apart from late arrival of winter, low demand is also a major reason.” Rajesh Gupta, vice president of Knitwear and Textile Club, “Late winter only benefitted the retailers. We cleared out stocks in November. If winter came earlier, we would have got more orders.”
Source: Times of India
The rupee appreciated 9 paise to 83.06 against the US dollar in early trade on Monday on the back of positive domestic equity markets and inflow of foreign fund. However, forex traders said a strong American currency and volatile crude oil prices weighed on the domestic currency. At the interbank foreign exchange, the domestic currency opened at 83.09, touched the level of 83.04 before trading at 83.06 against the greenback in initial deals, registering a rise of 9 paise from its previous close.On Friday, the domestic currency settled at 83.15 against the dollar. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.09 per cent higher at 102.22 on Monday.
Brent crude futures, the global oil benchmark, declined 1.12 per cent to $ 77.88 per barrel.
In the domestic equity market, the 30-share BSE Sensex was trading 73.62 points or 0.10 per cent higher at 72,099.77. The broader NSE Nifty advanced 25.85 points or 0.12 per cent to 21,736.65. Foreign Institutional Investors (FIIs) were net buyers in the capital markets on Friday as they bought shares worth Rs 1,696.86 crore, according to exchange data. The seasonally adjusted HSBC India Services PMI Business Activity Index rose from 56.9 in November to 59 in December, highlighting a sharp increase in output. The country's forex reserves jumped by $ 2.759 billion to $ 623.2 billion in the week ended December 29, the Reserve Bank said on Friday.
Source: Business Standard
Finally, Chittagong Port Authority has withdrawn the value added tax (VAT) on port services for export-oriented industries to help businesses facing downturn amid the global economic crisis. For the past few months, the Chittagong Port Authority has been collecting VAT at the rate of 15 percent against various charges on the import and export of garment industry's raw materials. Because the National Board of Revenue (NBR) had granted the provision of 15% VAT on port services for both imported and locally manufactured goods for fully export-oriented industries and factories. They granted it by issuing two separate statutory regulatory orders (SROs) back in 2019 and 2021. Last year’s Finance Act ended the “zero rate of VAT” on services relating to the ‘transportation of international transport services and supplies relating to loading on and unloading from ships’, from 1 July 2022, after which the chairman of the Chittagong Port Authority had to start collecting 15% VAT on port services – which hit garment exporters hard, they claimed. Some 45% of containerised goods, mainly raw materials, imported through Chittagong port came under the purview of VAT, raising the cost of exports, mainly garments. An emergency meeting of senior leaders of BGMEA was held with NBR on October 1 to stop VAT collection. In addition, on October 4, Syed Nazrul Islam, the First Vice President of BGMEA, wrote a letter to Chittagong Customs, Excise and VAT Commissioner Syed Mushfiqur Rahman requesting to stop VAT collection. The VAT Commissioner wrote a letter to the member of the National Board of Revenue (musak policy) on October 30 seeking guidance in this regard. Data shows that Chittagong port handled a total of 3.05m teu in 2023, compared with 3.143m in 2022. Some 4,103 ships came to the port last year, around 6% fewer than in 2022. Inland container depots handled 877,689 teu of containers in 2023, against 983,452 teu in 2022, around 11% less.
Source: Textile Today
Europe, in particular, will feel the brunt of monetary tightening. The impact of previous rate hikes and reduced liquidity is now becoming evident in the real economy. Consumer and business confidence across Europe remains subdued, despite a slight easing of the energy crisis. The European Union (EU) expects an average economic growth of 1.2 per cent in 2024, a slight increase from 0.5 per cent in 2023 but still lagging behind the pre-pandemic average of about 2 per cent. This mild recovery is likely to be supported by an increase in consumer spending, driven by slowing inflation, rising real wages, and strong labour markets, as per the report. Additionally, demand for EU exports, which saw a significant decline last year, is anticipated to recover as global trade gradually improves. However, fiscal policies are expected to tighten, with governments scaling back on energy subsidies and inflation support measures, while starting a gradual fiscal consolidation. Among the larger European economies, Germany faces notable challenges. The country saw a 0.1 per cent contraction in its GDP in 2023 and anticipates a modest recovery to 0.7 per cent in 2024. Structural challenges, such as labour shortages, reliance on energy-intensive industries, and inadequate investment in areas like digital infrastructure, continue to impede growth. In the UK, high interest rates and fiscal tightening are significant obstacles to growth, with projections suggesting a slowdown from 0.5 per cent in 2023 to 0.4 per cent in 2024. The labour market across Europe, though showing signs of cooling, remains robust. Inflation is expected to decline further, with the European Union forecasted to see a decrease from 5.9 per cent in 2023 to 3.1 per cent in 2024, and the UK from 7.4 per cent to 3.6 per cent. Major central banks in Europe have indicated that policy rates are nearing their peak. However, they are likely to maintain a restrictive monetary policy until inflation consistently approaches the target. Despite the economic challenges, the European labour market has shown resilience. Signs of a slowdown are emerging, with employment growth decelerating, job vacancies declining, and firms' employment expectations deteriorating. Unemployment rates might increase slightly in 2024, but labour markets are expected to stay relatively tight, given the ongoing labour shortages in both high-skilled and low-skilled occupations.
Source: Fibre2fashion
