New Delhi: Commerce and industry minister Piyush Goyal on Saturday said Production-Linked Incentive (PLI) schemes across various sectors should be viewed more as an initial support given to boost manufacturing, following which companies should be prepared to face competition to grow further. The idea is to make India a manufacturing powerhouse and there is a long journey ahead, the minister said after meeting around 750 beneficiaries of the scheme. These incentives should not be seen as “crutches”. “We are not looking to make you dependent on govt subsidies This is only like a kickstart... PLI is only meant to give you that little bit of a boost to kickstart your efforts. Please look at it as a kickstart, an initial support (because) ultimately competition will prevail,” the minister said. He also nudged the industry to gradually focus on global markets and come out of the “cosy comfort” of India’s large domestic market. A more outward looking effort would help add scale, volume and enhance cost effectiveness, he said, adding, “We are looking for your and collaboration.”
The deliberations assume significance as govt has disbursed Rs 4,415 crore under the schemes for eight sectors, including electronics and pharma, till Oct 2023.
Source: Times of India
The trade in India’s textile value chain has been disrupted for the last couple of weeks as an amendment in Companies Act 2023 regarding payment clause for MSME sector has come into effect. The Finance Act 2023 was introduced in the Parliament by finance minister Nirmala Sitharaman during her budget presentation for 2023-24. The latest disruption may further dampen sentiments in the trade of yarn and other products of textile sector. However, trade experts hope that this churning in trade may give short lived pain, but it will help MSME suppliers in the long run. “The amendment came into effect from current fiscal 2023-24. It means that income tax payers (business entities registered under Companies Act 2023) will have to face its repercussions in next assessing year 2024-25,” Kunal Mishra, a Chartered Accountant at a Mumbai based consulting firm Virtual CFO, said in an article posted on LinkedIn. According to the post of Mishra, the amendment in the Finance Bill of 2023 has extended the government’s concerted efforts to enhance liquidity for MSME entities, Earlier, it had implemented various measures for the same. The amended section 43B(h) of the Income Tax Act is applicable to all types of purchases made from enterprises registered under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. However, it specifically applies to micro and small enterprises, excluding medium scale enterprises. As per Section 43B(h), any sum payable by the assessee to a micro and small enterprise beyond the time limit specified in Section 15 of the MSMED Act shall be allowed only in computing the income of the previous year in which the sum has been actually paid. This is irrespective of the previous year in which the liability to pay the sum was incurred, as per the accounting method regularly employed. The clause is applicable when an enterprise is buying goods or taking services from an enterprise registered under the MSMED Act, 2006. It is important to note that the registration of the buyer under the MSMED Act, 2006, is not mandatory. Micro enterprises, to be registered under the MSMED Act, 2006, must have an investment in plant and machinery not exceeding ₹1 crore and turnover not exceeding ₹5 crore. Small enterprises, on the other hand, should have an investment in plant and machinery not exceeding ₹10 crore and turnover not exceeding ₹50 crore. According to the latest amendment, buyers (enterprises) are obligated to pay micro and small suppliers within 45 days, depending on the presence of a written agreement. In the absence of a written agreement, payment should be made within 15 days. If payments to micro and small enterprises are not made within the specified time frame, the amount becomes taxable income for the assessee in the previous year of non-payment. The assessee can claim a deduction in the previous year when the payment is made. Mishra advised that businesses should categorise suppliers in their books and adhere to payment deadlines. As the last date of current fiscal 2023-24 is approaching fast, traders in textile and other sectors are worrying for implications of the clause. Ankur Bansal, a trader from Panipat, said that confusion regarding the payment clause is adding to the worries of the traders. They are avoiding buying any goods/service in the current fiscal as they will not be able to pay within the same fiscal year. As per clause, if a buyer places order and gets delivery of goods/service but it fails to pay within 45 days/15 days before March 31, 2024, the due payment will be added to his income for next assessing year 2024-25. In order to remain on the right side of law, buyers are taking undertaking from their suppliers and vendors that they do not fall under the category of Micro, Small and Medium Enterprises as per the MSME Act 2006. However, few traders feel that this will be a short-term pain, and trade will become normal in the next fiscal year. Traders/buyers will then be able to get delivery from their suppliers and would be able to make payment during the entire fiscal year till next March 2025.
Source: Fibre2fashion
In a recent development concerning India’s textile and apparel industry, the South India Garment Association (SIGA) has penned a letter to Prime Minister Narendra Modi, expressing concerns over the impact of Rule 43B(H) on micro, small, and medium enterprises (MSMEs). India’s textile and garment industry is a key contributor to employment, providing livelihoods to over fifteen crore individuals directly and indirectly. However, the industry is facing unprecedented challenges, compounded by factors such as the rise of online retail giants and the entry of large corporations into garment retailing. SIGA highlights the adverse effects of Rule 43B(H) on the industry, including a decline in bookings for the upcoming summer season and increased order cancellations by retailers. The association underscores the importance of flexibility in payment processes, especially considering the intricate dynamics of the fashion-based industry. In conclusion, SIGA urges the government to reconsider and repeal Rule 43B(H) in the textile and apparel sector. The implications of this regulation could have far-reaching consequences for MSME entrepreneurs, while larger corporations stand to benefit. It is crucial to initiate dialogue and collaborative efforts to address these challenges and ensure the sustainable growth of India’s textile and apparel industry
Source: Indian Apparel
The textile sector has expressed concern over the impact of a new clause in the Income Tax Act, 1961, through the Finance Act 2023 on payment for goods provided by Micro and Small Enterprises (MSME). In the Finance Act 2023, the Finance Ministry has introduced Section 43B(H), which would ensure payment towards the goods supplied by MSMEs within 45 days. This is as per provisions provided under Section 15 of the MSMED Act, 2006, to ensure prompt payments so that MSMEs will not be affected by delays in any fund flow issues. Flagging the industry’s concern, the Tamilnadu Spinning Mills Association (TASMA) has written to the Finance and MSME ministries saying the clause has triggered a panic among suppliers and buyers in the textile value chain. “Even though, the decision to introduce Section 43B(H), to the Income Tax Act 1961, … many buyers, who have been receiving the goods / supplies hitherto with a flexibility of payment period as agreed upon between both the parties, are now hesitant to accept the goods, when the payment terms are limited to 45 days only,” the association said.
Smooth trade so far
In certain trades in the textile industry, the payment period has been accepted by the supplier as well as the buyer as 90 days and transactions have been going on smoothly without any issue. Suppliers and buyers feel that a period of 90 days will be necessary to get the payment considering the nature of the goods which undergo further value-addition through other processes, TASMA said. Hence, it has urged the MSME Ministry to amend the clause allowing 90 days for the settlement of payment with micro, small and medium enterprises. “If this cannot be introduced as a General Amendment to the Act, it can be considered restrictively for the textile industry alone suitably, considering the ongoing business practices,” the association said.
Source: The Hindu
The UP Government has allocated a substantial sum of Rs. 400 crore for the Atal Bihari Vajpayee Powerloom Vidyut Flat Rate Yojana, to revitalise the looms sector. Additionally, a mega textile park has been approved under the PM Mega Integrated Textiles Region and Apparel Scheme, with a generous provision of Rs. 400 crore. This park is anticipated to attract investments ranging from Rs. 10,000 crore to Rs. 15,000 crore and create approximately one lakh direct and two lakh indirect employment opportunities. This Park will sprawl across 1,000 acres in Malihabad tehsil in Lucknow. According to the State Government spokesman, the project will come up in Attari village, in Malihabad tehsil, on the outskirts of the state capital. Attari village has been selected keeping in view the connectivity of the park with the rest of the city. The park will have industrial plots and industrial sheds.The project site is located 20 km away from NH-20 and SH-20, both of which are four-lane roads connecting Lucknow to Sitapur and Hardoi, respectively. Furthermore, the National Institute of Fashion Technology (NIFT) in Varanasi has received a significant boost of Rs. 150 crore in the budget, reflecting the Government’s focus on promoting educational and professional development in the fashion and textile sectors. Various other provisions have been made for key sectors such as Khadi and village industries, clay art, IT and electronics, and MSME sectors. Under the Pandit Deendayal Gramodyog Rojgar Yojana, a provision has been made for an interest subvention facility for beneficiaries for three years, amounting to Rs. 14 crore. Additionally, Rs. 15.75 crore has been allocated for the Khadi and Village Industries Development and Continuous Employment Promotion Policy, while an amount of Rs. 11.25 crore has been proposed for the Integrated Development Program of Clay Art to provide employment opportunities to traditional artisans.
Source: Apparel Resources
Nirmala Sitharaman has been spearheading the economic management of the Modi government during its second term. Following the presentation of her consecutive 6th budget, she mentioned that the government deliberately refrained from addressing issues in fragments during the vote on account and chose to wait until the full budget in July for a comprehensive approach. The FM expresses confidence that the Indian economy is set to maintain its growth trajectory, and the govt is poised to effectively control inflation. Finance minister Nirmala Sitharaman has been leading the Modi government’s economic management in the second term. In a detailed interview after presenting her sixth straight budget, she spoke to TOI on a wide range of issues, and said that govt held its hand while presenting the vote on account as it did not want to address issues in patches and, hence, opted to wait for the full budget in July. The FM is confident that the Indian economy is on course to retain the growth momentum and govt will be able to keep inflation under check. Excerpts: You have faced turbulent years as FM due to the pandemic and other issues. How do you look back at the last few years? Do you see this as the best year during your term? After Covid, the economy has been showing its inherent strength, resulting in investment, mergers and acquisitions, and recovery of small businesses. I must appreciate that MSMEs have used the liquidity facility given to them quite wisely and sparingly. The economy has shown the thirst to come out of the problem completely and show its true potential. I completely credit the people and the drive they have shown. Otherwise, it was not possible to grow faster and faster and remain in the top slot in the world
Source: Times of India
Prime Minister Narendra Modi will inaugurate a four-day textiles exhibition, which will commence from February 26, Commerce and industry Minister Piyush Goyal said recently. He said that for the first time the entire textile sector is coming together on one platform.
Source: Apparel Resource
The Southern India Mills’ Association (SIMA), welcoming the interim Union Budget, hoped that the demands of the textile industry relating to the raw material issues and few other industry demands might be considered in the full-fledged budget. SK Sundararaman, Chairman, SIMA, in a release said the overall increased allocation of around 27.60 per cent for the Ministry of Textiles for the year 2024-25 when compared to the previous year. This is towards various schemes being operated by them including PM MITRA Park, NITTM, A-TUFS, ISDS, RoTDEP and RoSCTL., apart from making allocation for Cotton Corporation of India to exercise MSP operation for cotton. The Association had sought for removal of 11 per cent import duty on ELS cotton, exempting the same for other cotton varieties exclusively during off season (April to October) to protect the interests of farmers. It also sought announcement of Technology Mission on Cotton- II to increase the cotton production, productivity and doubling the farmers’ income.. Exempting the manmade fibre imported under the Advance Authorization Scheme from the respective Quality Control Orders and exempting manmade fibres that are not produced indigenously from the Quality Control orders were some of the other requests from the association. They hoped that the government would consider these measures in the fullfledged budget, the release said.
Source: The Hindu Business
The finance minister of Bangladesh, Abul Hassan Mahmood Ali, has underlined his government’s willingness to reconsider its decision to reduce the export incentives. He revealed this during a meeting with the garment manufacturers recently, who expressed their concerns about the potential negative impact of the incentive cuts on the apparel sector. Previously, the government had been offering cash subsidies ranging from 1 to 20 per cent to exporters, particularly in the garment sector, to enhance their global competitiveness. However, as of the end of January this year, authorities implemented a reduction in incentives, adjusting the rates to range from 0.5 per cent to 15 per cent. The revised rates are applicable to shipments made between January 1 and June 30 of the current year. Notably, incentives for the top five garment items, which contribute to 56 per cent of the country's annual apparel shipments, were also withdrawn. It may be mentioned here that prior to the January 31 notification, apparel exporters enjoyed 4 per cent incentive for using local fabrics, coupled with added 2 per cent for shipments within the eurozone. They also received 4 per cent incentive for shipments to emerging markets, excluding the EU, US, Canada, and the UK even as the average incentive across all markets stood at 1 per cent. Meanwhile, apparel exporters have voiced concerns, alleging an approximate 80 per cent reduction in export subsidies because adding this has created significant challenges towards maintaining competitiveness in the global market.
Source: Fibre2fashion
For the first time since April 2023, the US manufacturing sector showed signs of improvement in January 2024, according to the latest purchasing managers’ index (PMI) survey data from S&P Global. The seasonally adjusted US manufacturing PMI climbed to 50.7 in January from 47.9 in December, surpassing the initial 'flash' estimate of 50.3. This upswing, which halted a two-month declining streak, indicated the most significant enhancement in operating conditions witnessed since September 2022. Driving the uptick in the headline figure was a renewed expansion in new orders at manufacturing firms at the start of the year. The pace of growth was moderate overall and the quickest since May 2022. Where an increase was noted, companies linked this to successful marketing initiatives and stronger customer demand. That said, improved demand conditions were domestically focused, as new export orders fell for the nineteenth time in the last 20 months. Europe and Canada were identified by panellists as key export markets with a weakened sales environment, as per S&P Global. Despite greater new order inflows, goods producers recorded a drop in output during January. Supply disruption stemming from severe storms and transportation delays reportedly hampered firms' ability to expand production. The pace of output decline eased to only a marginal pace, however. Supplier delivery performance deteriorated for the first time in just over a year. Although only marginal, the extent to which lead times for inputs lengthened was the greatest since October 2022. Concurrently, higher transportation, supplier and fuel costs pushed up the pace of input price inflation in January. The rate of increase accelerated for the second month running to the sharpest since April 2023, despite being softer than the series average. Meanwhile, manufacturers stated that output prices continued to rise as firms sought to pass on higher costs to customers. The pace of charge inflation was broadly in line with the series trend and the quickest in nine months. Employment at manufacturers rose fractionally in January, thereby ending a three-month period of job shedding. Firms hired in anticipation of greater new orders despite a further strong drop in backlogs of work. A rise in new orders led firms to cut their input buying at a much slower pace compared to that seen in December. Although stocks of inputs also continued to fall, the pace of depletion eased to a marginal pace, with stocks of finished goods also declining only slightly. Finally, business confidence at goods producers jumped to a 21-month high in January. Optimism was reportedly underpinned by planned investment in marketing spending and building capacity, alongside hopes of stronger demand conditions.
Source: Fibre2fashion
Bangladesh produces about five million tons of cloth annually. About 1,500 billion liters of water is used to make these clothes. All of which is dependent on ground water. As a result, the level of underground water in Bangladesh is decreasing at an alarming rate. Bangladesh will face water shortage soon if no alternative arrangements are made. These comments were made by Hosne Ara Begum, Dean of Textile Engineering Faculty of Bangladesh University of Textiles yesterday (February 2) in a seminar titled ‘Impact Analysis of Textile, Apparel and Jute Industries in Bangladesh’. The seminar was held on the second day of the four-day 18th Dhaka International Textile and Garment Machinery Exhibition organized at International Convention City, Bashundhara. President of BGMEA Faruque Hassan was the chief guest while the guest of honor was Hasin Jahan, Country Director of WaterAid. WaterAid's Policy and Advocacy Director Partha Hefaz Sheikh presided and gave the welcome address. Bangladesh Apparel Youth Leaders Association (BAILA) president Abrar Hossain Sayem was also present. Professor Dr. Hosne Ara Begum said that in 1996 underground water was available in Dhaka city under 25 meters. It decreased to 45 meters in 2005 and 60 meters in 2010 and reached 75 meters in 2023. Many civilizations of the world have perished because of water. If we are not aware about the underground water now, the buildings of Dhaka city will collapse soon. Speakers in the meeting said that due to dependence on underground water, high consumption of water in the industrial sector is a matter of great concern for the environment and necessary steps should be taken now to ensure long-term sustainability of water supply for business growth. In recent times, the country's garment factories and textile industries are leading the implementation of green policies by introducing rainwater harvesting and conservation management. Their sustainable approach to water management in business is having a positive impact on the environment. Faruque Hassan said, as a progressive organization, BGMEA is actively encouraging factories to collect and conserve rainwater for sustainable water management. Businesses need to emphasize rainwater for industrial sectors and provide necessary support to reduce dependence on groundwater abstraction and groundwater. Hasin Jahan said that everyone should work on rainwater collection and conservation to solve the impending water crisis in case of groundwater depletion. In the case of the industrial sector, factories have ample rooftop space, which can easily be used for rainwater harvesting and conservation, and through this, the sector can come up with sustainable solutions to meet the growing water needs of businesses. WaterAid is committed to working with businesses and the private sector to strengthen efforts to protect water and the environment.
Source: Textile India
The textile and readymade garments (RMG) industry in Bangladesh is now facing a number of challenges due to increased labor costs, heightened competition from low-cost nations, higher production cost, gas and power crisis, global inflation and worldwide geopolitical conflicts etc. The demand for garments has been declined in Europe and America, this downward trend in the global market is another major challenge. In this critical juncture, implementing innovation throughout the industry can help the industry to overcome the situation. In this regard, Textile Today Innovation Hub (TTIH) has been working for a long time to implement innovativeness in the textile and apparel industry of Bangladesh. TTIH has revealed ‘Manual for Implementation of Innovation Projects’ (MIIP) on 1 February in the Innovation Conference 2024 jointly organized by Bangladesh Textile Mills Association (BTMA), Yorkers Trade and Marketing Service Co. and Textile Today Innovation Hub and at International Convention City Bashundhara (ICCB) concurrently with the 18th Dhaka International Textile and Garment Machinery Exhibition (DTG). MIIP or ‘Manual for Implementation of Innovation Projects’ is a complete guide to implementing an innovation project in a factory/organization/institution from scratch. It guides step by step to build a team, make the team capable of finding innovation scopes, conduct innovation projects, troubleshoot the problems, make the innovation project successful and replicate or scale up the innovation, and finally create an innovative culture in the factory. In the opening session of the Innovation Conference 2024 Mohammad Ali Khokon, President, BTMA was present as Chief Guest, where Mohammad Hatem, Executive President, BKMEA; Engr. Md. Shafiqur Rahman, President, ITET; Shahidullah Azim, Vice President, BGMEA; Prof.Dr. Engr. Ayub Nabi Khan, Pro Vice Chancellor, BGMEA University of Fashion & Technology were present as special guests. Tareq Amin, Founder & CEO, Textile Today Innovation Hub shared the keynote speech. Mohammad Ali Khokon said that without uninterrupted gas, textile sector cannot progress. The sector is supporting one-fourth of the population and it is the economic backbone of the country. The sector is facing different problems, and to sustain, we need policy support from the government as well as we must have to adopt industry 4.0 machinery and innovation. Engr. Md. Shafiqur Rahman said that without continuous gas supply, textile and apparel industry cannot sustain. Most of the buyers are reluctant to increase product price, which is another big issue for the T&A industry. To sustain in this situation, innovation is a must. Textile Today Innovation Hub (TTIH) is working adamantly to spread innovation culture throughout the industry – which is highly effective for the industry in terms of cost reduction, resources utilizations. Prof. Dr. Engr. Ayub Nabi Khan said, “For the sustainable development of the industry there's no alternative to innovation. We must bring innovation culture and research culture. This will ensure capable people and we will be able to develop value added products.” Tareq Amin said in his keynote speech, “The journey of a single innovation starts with the principle – ‘Work on Small; Make on Spot’. Sticking to the principle, a small area gets selected passing with certain parameters first, then the issue practically gets addressed. TTIH strategizes the whole process of the innovation from locating an innovating spot to replicating the solution to a similar circumstance. TTIH has developed a unique modeling system to dig into a matter and guide solutions for any practical problem.” “Within this system, TTIH has taken 120 (around) projects so far. 100 projects have already been completed and 70% of them were communicated with the industry where several projects are ongoing. More than 150 Experts (mostly from the industry and several from university), 50 plus factories, 15 coordinators, and 100 plus inputs suppliers are directly connected with TTIH,” he added. Every innovation must have a business case; it should either reduce the cost, help increase the revenue, or, simplify any process of the business operations. For the application, the whole innovation journey should be ‘systematically helpful and commercially useful’. A small innovation of a product or process in a company can have a significant impact on its business. Innovation conference 2024 discussed the challenges and benefits of implementing Innovation Projects. Textile Today has been functioning as an Innovation Hub since 2018. It empowers factories through its "Practically Tested Innovation Model." This systematic approach guides factories to ideate, plan, and execute innovative projects that is called ‘Innovation Circle,’ to find out high-impact areas with the support, training, workshop, and expert guidance. This fosters a culture of continuous innovation. A strategic panel discussion was held on ‘Implementing Innovations & Its method where panel speakers were Engr. Razeeb Haider, Director, BTM and MD, Outpace Spinning Mills Ltd.; Dr. Hasib Uddin, Chairman, APS Group; Taufique Anowar, Director (Marchandising), Centro Tex Ltd.; Syed Mohammad Ismail, Country Director, Archroma Bangladesh Lt.; Md. Amanur Rahman, Managing Director, Dysin Group; Engr. Shamim Rahman, Director, South West Composite ltd.
Source: Textile Today
Bangladesh witnessed a robust resurgence in exports, with manufacturers shipping a remarkable $5.72 billion worth of goods this January, marking the highest monthly export figure to date. The earlier record, set in December of the previous year, stood at $5.30 billion. This is as per the Export Promotion Bureau (EPB) of Bangladesh. An increase in apparel shipments — apparels make up 85 per cent of the nation’s total exports — is seen responsible for the substantial increase in export receipts, which went up by 11.45 per cent year-on-year. Thanks to interventions by the European and US governments, there has been a reduction in the inflationary pressures in Europe and the US, which helped push Bangladesh’s apparel exports up, claimed industry insiders. Meanwhile, speaking to media, Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Faruque Hassan said the garment makers have ramped up production in January following the restoration of normalcy, particularly after the announcement of a new wage structure for apparel workers, which also contributed towards improving the country’s overall export performance.
Source: Fibre2fshion
Garment and textile trade bodies recently requested the Bangladesh government to continue policy support to maintain the competitiveness of the sector by reconsidering the decision to cut cash incentives on the shipment of garments and other export-oriented products. A delegation led by Bangladesh Garment Manufacturers and Exporters Association (BGMEA) president Faruque Hassan met finance minister Abul Hassan Mahmood Ali in Dhaka to convey the request. The delegation comprised senior representatives from the Bangladesh Textile Mills Association, the Bangladesh Knitwear Manufacturers and Exporters Association and the Federation of Bangladesh Chambers of Commerce and Industries. The meeting attended by senior secretary in the commerce ministry Tapan Kanti Ghosh and finance division secretary Mohammad Khairuzzaman Mozumder, discussed the key issues being faced by the country’s RMG industry, according to domestic media reports. BGMEA president Faruque Hassan said severe inflation in the United States and the European Union has led to a decline in apparel exports to major markets of Bangladesh. A decrease in garment exports affects the country’s foreign reserves as the RMG sector accounts for 84 per cent of export earnings, he said. A new minimum wage for garment workers has been implemented by businesses amid rising prices of energy and raw materials, which is adding to the pressure, he added.
Source: India Today
