The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 28 DEC, 2016

NATIONAL

 

INTERNATIONAL

 

Textile Raw Material Price 2016-12-27

Item

Price

Unit

Fluctuation

Date

PSF

1212.78

USD/Ton

-1%

12/27/2016

VSF

2346.39

USD/Ton

1%

12/27/2016

ASF

1842.56

USD/Ton

0%

12/27/2016

Polyester POY

1258.12

USD/Ton

0%

12/27/2016

Nylon FDY

3138.11

USD/Ton

0%

12/27/2016

40D Spandex

4361.69

USD/Ton

0%

12/27/2016

Polyester DTY

2015.30

USD/Ton

0%

12/27/2016

Nylon POY

1619.44

USD/Ton

0%

12/27/2016

Acrylic Top 3D

3325.25

USD/Ton

0%

12/27/2016

Polyester FDY

5460.02

USD/Ton

0%

12/27/2016

Nylon DTY

1504.28

USD/Ton

0%

12/27/2016

Viscose Long Filament

2950.98

USD/Ton

0%

12/27/2016

30S Spun Rayon Yarn

2979.77

USD/Ton

0%

12/27/2016

32S Polyester Yarn

1844.00

USD/Ton

0%

12/27/2016

45S T/C Yarn

2648.68

USD/Ton

1%

12/27/2016

40S Rayon Yarn

3123.72

USD/Ton

1%

12/27/2016

T/R Yarn 65/35 32S

2267.21

USD/Ton

0%

12/27/2016

45S Polyester Yarn

1972.12

USD/Ton

0%

12/27/2016

T/C Yarn 65/35 32S

2216.83

USD/Ton

0%

12/27/2016

10S Denim Fabric

1.32

USD/Meter

0%

12/27/2016

32S Twill Fabric

0.81

USD/Meter

0%

12/27/2016

40S Combed Poplin

1.15

USD/Meter

0%

12/27/2016

30S Rayon Fabric

0.65

USD/Meter

0%

12/27/2016

45S T/C Fabric

0.65

USD/Meter

0%

12/27/2016

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14395 USD dtd. 27/12/2016)

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

 

Budget 2017: As Narendra Modi govt focuses on labour intensive sectors, Textile Ministry set to see jump in allocation

In a departure from the trend of marginal annual hike in recent years, the textile ministry will likely see a substantial jump in fund allocation for it in the coming Budget as the government steps up focus on labour-intensive sectors. Already, the ministry is seeking funds to settle both old and new claims under the latest and the previous avatars of the Technology Upgradation Fund Scheme (TUFS) as well as to cater to claims of refunds under the new duty drawback scheme announced as part of a special package for the garments industry in June, sources told FE.

Sources said though the ministry has in recent months cleared some of the old claims running into hundreds of crores of rupees, a chunk of these claims were yet to be cleared. The textile ministry has also sought R1,750 crore from the finance ministry to settle claims of refunds under the new duty drawback scheme, the sources added. In the Budget for 2016-17, the textile ministry was allocated R4,595 crore, up from the revised estimate of R4,326 crore in the previous fiscal. The annual rise in budgetary allocation for the textile ministry has been marginal in recent years. In 2013-14, the ministry, in fact, witnessed a cut in allocation from a year before.

Last year, the ministry was even pulled up by a parliamentary standing committee for slow spending in recent years, though the panel noted that the ministry, of late, had improved its pace of expenditure. The textile and the garment sector assumes importance as it employs close to 32 million people, having become the largest employer after agriculture. Last year, the industry had made representations to the ministry, saying TUFS claims worth R3,000 crore were pending for more than three years against investments made during the so-called blackout period (June 20, 2010 to April 27, 2011) as well as errors in reporting of the dole-out amount by banks to the textile commissioner. Government officials this year said textile mills, which had sought subsidy against investments made under the TUFS during the blackout period, won’t be provided any such support. Such subsidy claims are to the tune of R1,000-1,200 crore, according to an industry estimate. The blackout period refers to the time when the government had stopped fresh sanctions of projects under the TUFS, seeking to change the contours of the scheme from an open-ended scheme to a closed-ended one, and launched the revised scheme only from April 2011.

The allocation of a total of R17,822 crore, approved by the Cabinet Committee on Economic Affairs (CCEA) in December last year for subsidy payments under both the old and the new schemes, also didn’t make any provision for such claims, the officials had added. The CCEA last year decided to introduce the Amended Technology Upgradation Fund Scheme (ATUFS) and approved R12,671 crore for its “committed liabilities” under the old scheme. It provided another R5,151 crore for subsidy payment under the new scheme (ATUFS) over a period of seven years, much less than the allocation seen in recent years.

SOURCE: The Financial Express

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Funds no constraint for textile schemes

The schemes implemented by the Central government must be utilised for the development of Textile and Jute industry in the district, suggested Additional Secretary Textiles Pushpa Subrahmanyam here on Tuesday. Later she interacted with representatives of the managements of the textile and handlooms units to know their problems. She inspected textile parks on the outskirts of Baddenapalli in Thangallapalli mandal, to which the Central government has issued weaving units as part of modernisation on the day.

Addressing a conference of industrialists, she felt the need to establish a yarn bank in Sircilla district along with improvising the dying process and development of sheds. ‘The Central government is implementing various schemes for the development of jute industry in the country. There is no scarcity of funds.  The funds would be allotted for giving training to workers for improving their skills. By replacing old technology with new one and modernising them, better results can be obtained,’ she stated. Pushpa directed the officials to establish new units in the place of empty blocks present in the textile park.

After observing the processing units where the modernisation scheme is implemented successfully, she said as many as 5,500 units are modernised till date and 30,000 units will be modernised in the next phase. She also said that they are designing a policy to minimise electricity charges for textile industries present in the country and are requesting the State governments to cooperate them in this regard. She also attended an awareness programme on cashless transactions for the workers of handlooms and textile units.  She handed over bank documents to those workers who have no bank accounts, after opening them. Commissioner Textiles Shailaja Rama Iyer, District Collector D Krishna Bhaskar and Assistant Director V Ashok were present along with others.

SOURCE: The Hans India

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India’s share in the global home textile market is expected to rise from 7 to 10 per cent

Sutlej Textiles and Industries is one of the largest integrated textile manufacturing companies and is strongly positioned in the production of value added synthetic, natural and blended yarns, spun yarns, processing of fabrics and home textile. SK Khandelia, president, Sutlej Textiles and Industries, exchanges his views on the growing opportunities for the Indian textile industry.

As a private enterprise, what is the kind of governmental help that will advance growth in your field?

The ministry of textiles is helping the Indian textile industry meet the emerging global challenges and opportunities and commit itself to meeting and exceeding the expectations of all its stakeholders by building on its previous efforts and by implementing this forward- leaning strategic plan. Recently, the union cabinet approved a set of reforms, including simplified labour laws and technology up gradation for the made-ups sector. "The interventions are expected to boost employment in the textiles sector and create jobs for up to 11 lakh persons, lead to increase in exports and enhance benefits to the workers in the textiles and apparel sector," said an official release. These incentives are part of the Rs. 6,006 crore packages announced for the apparel sector in June.

How big is the market for home textiles internationally? What percentage does India claim in it?

Home textiles segment has become one of the most attractive segments in the textiles industry in the recent past and has emerged as one of the most fashion sensitive segment in the textiles industry. After witnessing sluggish growth phase during financial crisis of 2008, home textiles segment has shown signs of recovery and registered considerable growth in past few years. Retail value of home textiles segment is estimated to be around $107,236.7 million in 2014 and is expected to reach $131,499.9 million by 2020 growing at a CAGR of 3.5 per cent. US and EU, which are the main consumption centres, are gradually but steadily coming out of a recessionary phase. Buyers are back in stores. Apparel and home textile consumption is picking up. Going forward India's share is expected to rise from 7 to 10 per cent and is expected to be biggest beneficiary as Chinese industry reaching its peak.

What percentage of yarn and home textiles manufactured at Sutlej are sold domestically and exported abroad?

The company has identified exports as its preferred area. It has been exporting to over 60 countries and has established relationship with overseas buyers. The company is having three star "Trading House" status granted by Directorate General of Foreign Trade. In order to remain competitive in the international market, management has taken special care to maintain quality of its products which has been well acknowledged by its customers. This is also evident from the substantial export performance of company. For fiscal 2016 and the half year ended September 30, 2016, our total export revenue as a percentage of total revenue was at about 26 per cent. In home textile segment, the contribution of exports in total revenues is exceeding 35 per cent.

Which are the major markets for Sutlej for the product categories - yarns and home textiles? Where is the market growing?

Sutlej has a strong global clientele and exports to more than 60 countries. It has presence across major developed and emerging economies like Australia, Argentina, Bangladesh, Bahrain, Belgium, Brazil, Canada, China, Chile, Cuba, Egypt, France, Germany, Hong Kong, Italy, Morocco, New Zealand, Peru, Philippines, Poland, Portugal, Russia, Saudi Arabia, Sri Lanka, Turkey, United States of America, the United Arab Emirates (UAE) and The United Kingdom, among others.

Sutlej has also been recipient of numerous prestigious awards like Niryat Shree - Gold trophy award for its export performance in spun yarn; Gold trophy by SRTEPC for best performance for export of fabrics to focused Latin American countries and Silver trophy by SRTEPC for Second best export performance in spun yarn category.

Indian yarn is widely accepted in International markets as the exporters here regularly meet the needs of importers with unmatched efficiency and economy in countries like USA, Italy, Spain, Japan, China, South Korea, Taiwan, Bangladesh, Vietnam etc.

Please give details of your last two fiscals and your expectations for the coming two fiscals.

Continuing the upward trend, last two fiscals have also shown improved performance wherein the company's revenues increased and profit after tax strengthened. Given the diverse challenges that the sectoral and the company encountered, this profitable growth represents a validation of our strategic direction. The management is committed for future growth of the company and evaluating various alternate projects focusing more on our core competencies and adjutancy for further growth.

Which three major aspects will influence the export of yarn and fabrics in times to come?

The Indian government has come up with a number of export promotion policies for the textiles sector. It has also allowed 100 per cent FDI in the Indian textiles sector under the automatic route. Government has extended the export entitlement quota for readymade garments and knitwear, yarn and fabrics and made-ups to the US, Canada and EU for one year with effect from 1 January, 2017.

What are the future investment plans at Sutlej Textiles?

We are pleased to state that during the recent past, the company has grown tremendously both organically and inorganically, providing us with the incentive to substantially scale up its capacity across the foreseeable future. As our investments translate into timely project commissioning across the foreseeable future, we expect to report higher revenues, superior margins and increased surpluses that graduate us into the next growth orbit. The company will continue to upgrade existing facilities by additions to modernise existing machineries and install additional latest technology machines across the segments. As stated earlier, the management is committed for future growth of the company and evaluating various alternate projects focusing more on our core competencies and adjutancy for further growth.

What are the issues plaguing this industry? What are your five-fold measures to resolve these issues?

Our capacity in spinning, looms and processing is mainly in unorganized sector in India. Absence of large scale garment units, poor infrastructure, high cost of finance and power in India are the major bottlenecks. Proactive steps from the government and industry will be needed to overcome these bottlenecks.

SOURCE: Fibre2fashion

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Textiles sector looks to 2017 for policy boost

2016 turned out to be a mixed bag for textiles, as the government unveiled reforms to impart a thrust to the sector, rolled out innovative campaigns like 'I Wear Handloom', a new Minister at the helm, and a controversy over the appointment of former cricketer Chetan Chauhan as the NIFT chief. However, as the year draws to a close, the much-awaited new National Textiles Policy is yet to see the light of day, with the Textiles Ministry still engaged in consultations with stakeholders chalking out nitty-gritty of its roadmap.

The policy aims to achieve USD 300 billion (over Rs 20 lakh crore) worth of textile exports by 2024-25 and create an additional 35 million jobs. The textiles industry is eagerly awaiting the roll out of the policy in 2017, as it could make Indian garments more competitive in international markets by reducing the cost of production, and all eyes are on Irani, hoping she will infuse fresh momentum into the sector. The year began with the government notifying the Amended Technology Upgradation Fund Scheme (A-TUFS) to provide a one- time capital subsidy for investments in employment-and technology-intensive segments of the textile sector, a move aimed at promoting exports and import substitution.

A Rs 6,006-crore special package for textiles and apparel sector was rolled out in June, expected to create one crore new jobs in three years, attract investments of USD 11 billion and generate USD 30 billion in exports. The government brought in major labour law reforms in the garb of the package to increase productivity, and offered additional incentives for duty drawback scheme for garments. Around the same time, Textiles Ministry found itself at the heart of a controversy, with the appointment of Chauhan as the Chairman of NIFT, and many questioning the government's decision, raising doubts over his credentials to lead India's premier fashion technology institute. A few days later, Smriti Irani, shunted out of HRD, assumed the mantle of the Textiles Minister. On taking charge, Irani retorted to critics quoting from a popular Hindi song of the 1970s, "Kuchh toh log kahenge, logon ka kaam hai kehna" (people are bound to say things because they have to say something). Soon after, there were media reports of a tussle between Irani and Textiles Secretary Rashmi Verma, an IAS officer of 1982 Bihar cadre and sister of Cabinet Secretary P K Sinha.

Apparently, differences cropped up between the two ladies on a range of issues from procedural and the administrative to those related to policy. However, no one came on record to talk about the issue. Irani tried to steer clear of the controversy by coming up with innovative ideas like the 'I Wear Handloom' campaign to show support for Indian weavers. The campaign became a hit as many prominent faces posted selfies sporting handspun clothing on social networking site Twitter.

The Textiles Minister is faced with an uphill task, as overall exports of textiles and garments from India during 2015-16 were USD 40 billion, falling way short of the USD 47.5 billion target. In fact, the Government recently admitted that the USD 48 billion target for textiles and garment exports for 2016-17 may be "hard to achieve", mainly because of less demand in major markets such as the US, EU and China. Irani, who had a successful stint as a TV actress before taking plunge into politics and fought unsuccessfully against Rahul Gandhi from Amethi in the 2014 Lok Sabha elections, also launched Pehchan, a move to register and provide ID cards to handicraft artisans. The new upgraded ID card for artisans is linked with their Aadhar numbers & bank accounts so that they can receive direct cash transfer benefit. The year also witnessed Textiles Ministry aggressively inking MoUs with reputed apparel brands to sell handloom products in retail stores, attempting to draw people towards the fabric and increase its sales.

Recently, the government approved reforms in the apparel Made-ups sector, aimed at creating large scale direct and indirect employment of up to 11 lakh persons over the next three years and boosting exports. The reforms were approved within the Rs 6,006 crore budget for the apparel package announced earlier.

SOURCE: The Deccan Chronicle

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Child slavery shocking in India’s textile mills

Various forms of slavery, including child labour, are present in more than 90 per cent of south India's spinning mills which produce yarn for Western brands, researchers said, calling for mapping of supply chains and tougher audits. The India Committee of the Netherlands (ICN), a human rights  organisation, spoke to workers from almost half the mills in Tamil Nadu, the largest producer of cotton yarn in the country. Most female workers employed in the 734 mills involved in the research were aged between 14 and 18, it said, and up to 20 percent of the workers were younger than 14. It said employees were forced to work long hours by employers who often withheld their pay or locked them up in company-controlled hostels. Many also faced sexual harassment. "We have raised the issue for five years now, but even to us the scale of this problem came as a shock," ICN Director Gerard Oonk said in a statement. K. Venkatachalam, chief advisor of the Tamil Nadu Spinning Mills Association, said he was not aware of the research. He said the state government had recently filed a report to the Madras High Court "clearly stating that these issues are no longer prevalent in the industry". "The matter has been closed," Venkatachalam told the Thomson Reuters Foundation. India is one of the world's largest textile and garment manufacturers. The southern state of Tamil Nadu is home to some 1,600 mills, employing between 200,000 and 400,000 workers.

Traditionally the dyeing units, spinning mills and apparel factories have drawn on cheap labour from villages across Tamil Nadu to turn cotton into yarn, fabric and clothes, most of it for Western high street shops. Most workers are young women from poor, illiterate and low-caste or "Dalit" communities, who often face intimidation, sexually offensive remarks and harassment. ICN said in more than half of the mills it researched, workers were not allowed to leave company-controlled hostels after working hours. Only 39 mills paid the minimum wage and in half the mills, a standard working week involved 60 hours or more of work. "Supervisors torture girls to extract work beyond their capacity," ICN quoted an 18-year-old former worker as saying.

Another teenage girl, Kalaichelvi, who earned around 8,000 rupees ($118) a month, told researchers she was forced to work for 12 hours straight with no breaks for lunch or to use the bathroom. She said she suffered from burning eyes, rashes, fever, aching legs and stomach problems due to the working conditions. About a third of the yarn produced by workers like Kalaichelvi is used in export factories in Tamil Nadu that produce garments for many global brands. Citing poor enforcement of labour laws and "superficial audits" by buying brands, the ICN called on the industry and government to map supply chains and publish sourcing details. It also called for factories that upheld standards to be rewarded. ($1=67.8650 Indian rupees) (Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking and climate change)

SOURCE: The Hans India

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Minister for Textile and Handlooms K.T. Rama Rao encourages handloom textile sector in Telangana

Minister for Textile and Handlooms K.T. Rama Rao on Tuesday requested all legislative leaders to encourage promoting and boosting of handloom and handicrafts sectors across Telangana. KTR met the speaker and all ministries personally in this regard and gifted them hand woven clothes while asking them to ensure that all employees working under them use handloom textiles and thereby promote it. Rao had earlier assured that the Telangana Government would announce a ‘Handloom Policy’ soon to take more measures for development of handloom products and the weaver community. The policy will include establishment of 12 handloom clusters in the state.

SOURCE: The Siasat Daily

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Karnataka govt urged to allow run powerlooms in residential buildings

The Akhila Karnataka Kaimagga Nekarara Sangha (All Karnataka Handloom Weavers Association), MLC and president, M.D. Lakshminarayana has urged the State government to allow functioning of powerlooms in residential buildings. As from the past, weavers have been running handlooms and powerlooms fixed with shuttle in their dwelling place. As per the Cluster Development Plan (CDP) for textile industry formed by the State government in 2013, powerlooms are barred from functioning in residential areas. Based on this, the trade licences are not issued and environment clearance is not provided by the authorities concerned to run powerlooms in residential buildings in a few urban centres.

The State government should bring necessary amendment to the CDP and allow the functioning of powerlooms in residential buildings. The government should not consider weaving as an industry or a commercial activity, but a part of the culture and lifestyle of Nekara communities. Mr. Lakshminarayan said that the cloth for uniforms distributed among the students of government schools should also be purchased from local weavers. He further also urged the government to establish marketing committees for weavers also at the district level on a a similar model of Agriculture Produces Marketing Committees formed by the government have ensured a suitable platform to market the agriculture produces.

SOURCE: Yarns&Fibers

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Cotton Corporation goes in for purchase of the commodity at market rates

State-run Cotton Corporation of India (CCI) has resorted to commercial purchase of cotton at market rates from various parts of the country to ensure supplies for its customers in the textiles industry. The corporation has issued notices reaching out to buyers informing them that the Corporation will shortly commence e-auction of FP bales for the cotton season 2016-17. Those buyers who are not yet registered may register themselves with the Corporation for participating in e-auction of FP bales. M M Chockalingam, CMD (in-charge) said that after a gap of almost four years, they have made a small beginning and have purchased about 1,000 bales (of 170 kg each) so far, at commercial rates, from various centres even as cotton trades firm on lower arrivals due to the impact of the currency crunch.

The Corporation expects to purchase around 15 lakh bales for the season of 2016-17. “Cotton prices are ruling between R5,000 and R5,200 per quintal in various markets while Minimum Support Price (MSP) is at R4,160 per quintal and therefore procurement at MSP seems unlikely,” he said. However, apart from MSP operations, CCI also has to perform commercial operations at times in the interests of the farmers and to keep the market stable. “If CCI does not have stocks then traders can control markets and bring out cotton during lean season,”he explained. “The intent of the CCI is to ensure that this does not happen and keep prices uniform. Instead, CCI will purchase some 15-20 lakh bales of kapas and make it available to the industry in times of need,” he said.

CCI has been purchasing kapas or raw cotton from markets wherever the prices are lower, Chockalingam said, adding that the commercial purchase of up to 15 lakh bales would be mainly from the West, Central and Southern parts of the country as prices in the Northern markets are ruling much higher. Kapas prices are ruling between R5,000 to R5,200 per quintal in various markets. While prices are expected to soften a bit from next month, most experts have ruled out a drastic fall.

Further, they see a very slim possibility of the CCI taking up procurement operations at the MSP this year as prices were unlikely to drop below the support price levels on account of the tight demand-supply scenario. The Centre had declared an MSP of R4,160 per quintal for the current season for the long staple fibre and R3,860 for the medium staple length. Besides protecting cotton growers’ interests, CCI caters to the needs of its customers, such as the National Textiles Corporation and several co-operative mills. It also meets the demand of private sector mills, mainly during the lean season, by releasing the fibre from its stocks. Over the last three-four years, CCI has stepped into the markets to protect farmers when prices fell below the minimum support price (MSP) levels. But this year, cotton prices have been firm at the start of the season on account of lower arrivals. In fact, in the immediate aftermath of demonetisation, cotton prices spiked, even surpassing the global prices, as farmers temporarily held back their produce. Although Indian cotton acreage had dropped by close to a tenth this year to around 110 lakh hectares higher yields, on account of widespread rains in key producing states, it is expected to help maintain output.

SOURCE: The Financial Express

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Slow down in cotton trading as holiday mood prevails

As the holiday mood prevailed in world cotton markets, the local market have also come under the grip of general lethargy, slowing down business deals to a very low level, brokers added. Due to Christmas and New Year holidays trading activity has slowed down in world leading cotton markets, this has also reflected on domestic market. Ahead of bank closing, ginners were reluctant to enter into big deals fearing long delay in payments against their deals Keeping trading activity considerable slow on Monday at cotton market in Pakistan.

Reports coming from cotton fields indicate that very little cotton has been left for picking and around 90 to 95 percent has already reached ginning factories. This strongly indicated that current cotton season would end much earlier. Moreover, leading spinning groups have now diverted their buying towards Indian cotton and currently booking was going on at full swing, brokers maintained. As per dealers, the official spot rate remain unchanged at Rs 6250. In Sindh, seed cotton prices were at Rs 2600-3250 while that in Punjab, phutti rates were at Rs 2800 and Rs 3500, as per 40 kg. In the ready session, around 3,000 bales of cotton changed hands between Rs 6250-6500. According to the market sources, one of the leading factors behind the lacklustre business is cotton imports from Indian, slow down in arrivals of quality cotton, holidays in the globe and local bank closing. The following major deals reported on the ready counter were : 600 bales of cotton from Rohri at Rs 6250, 1200 bales from Dharanwala at Rs 6300 and 1000 bales from Sadiqabad at Rs 6450-6500.

SOURCE: Yarns&Fibers

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Reviving exports

The finance minister ought to pay heed to his commerce ministry colleague’s appeal for more funds in order to enable the latter to offer more incentives to exporters in labour-intensive sectors. Additional incentives are needed to make India’s exports competitive. The commerce ministry, in its petition to the finance ministry, has proposed enhancing the incentives it offers under the merchandise export incentive scheme (MEIS), announced in the April 2015 Foreign Trade Policy. These incentives are meant to compensate exporters for infrastructural inefficiencies and associated costs, particularly with respect to India-made goods with high employment potential and export intensity. Currently, MEIS is allocated Rs. 23,000 crore and covers 7,103 items.

India’s exports have been struggling for years now — first due to slow growth in many destination nations and also due to contraction of demand from oil exporting nations in West Asia. The demonetisation of Rs. 500 and Rs. 1,000 banknotes has also adversely affected many exporters. Faced with a cash crunch, they have been unable to adequately source material and labour to fulfil orders. India’s export sector also needs to be strengthened to withstand changes that could take place in world trade, led by disruptions by the Trump administration in the US. Trade is expected to get more protectionist with the US president-elect threatening to review multilateral trade deals as well as import of goods into the US in a bid to boost domestic industry, made-in-America products and balance the country’s trade. India’s worries on that count may be limited as gems and jewellery, and apparels and textiles are among the top items exported to the US. But the disruption caused by the US could result in slowing global trade again. That could also mean global value chains would be disrupted. This could hurt India, but its impact is difficult to assess as the country is part of such chains only for a limited number of items.

Apart from giving incentives to exports, and preparing for a possibly altered trade environment, India needs to make products that find greater global acceptance. That requires getting more sophisticated with designs and giving superior finishes — two qualities a lot of Indian exports lack. Indian exporters also need to spend more on understanding the tastes of global consumers. Greater acceptance of Indian products will help the country secure better prices. Increasing the demand for Indian goods, particularly those produced in the small-scale sector, is important to create more jobs, particularly for youth. With nearly half of India’s exports comprising items manufactured in labour-intensive sectors such as gems and jewellery, textiles and apparels, agriculture and allied products, marine products, and leather goods, the Foreign Trade Policy 2015 had rightly emphasised support for such sectors. The Centre needs to walk that talk.

SOURCE: The Hindu Business Line

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War on Cash Distresses MSMEs' Treasury

While their payments are getting delayed due to lack of cash, banks are cautious about lending to cash-based MSMEs. As the government announces a war on cash and pushes people to go digital, the micro, small and medium enterprise (MSME) segment is facing problems from both ends. While on one end payments are getting delayed after demonetisation for businesses in a segment where cash is the main medium for transaction, on the other they are seeing lenders becoming increasingly cautious about giving loans to them. Banks are taking a relook at their MSME lending strategies as questions arise over their repayment capacities with payments from customers getting held up, said Manavjeet Singh, founder of Rubique, an online aggregator of financial products.

Meanwhile, banks have gone on an overdrive to acquire point of sales terminals for merchants to be able to accept digital payments.For instance, Dena Bank, one of the biggest lenders in the MSME space, has ordered 10,000 PoS terminals. For these businesses, going digital will also help make the loan process easier, said bankers.“If an enterprise has a habit of accepting payments digitally, it becomes easier for us to process loans for them as we get a better understanding of their cash flow and repayment capacities,“ said one of them.

Lenders are likely to take a lenient approach towards MSME businesses in rural areas, where the move to digital is likely to take more time than in big cities. “If we see an enterprise in an urban metropolitan area not having digital payment channels, then it will affect their credit worthiness.But in small towns and cities, we are not yet taking that as a principal criteria,“ said Sanjay Aggarwal, MD of AU Financier. While being careful about lending to these companies, bankers are also worried about the possibility of them not repaying on time, citing lack of cash following demonetisation as the reason. “Lack of cash cannot be considered as an excuse for enterprises to not repay their loans to banks.There are numerous digital channels available for payments and we are pushing them towards those means,“ said a senior Dena Bank official, who did not wish to be named.

SOURCE: The Economic Times

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Union Budget 2017 likely to be taxpayer-friendly

The post-demonetisation Budget is likely to be citizen- and taxpayer-friendly and will aim to push growth. This was the central message that emanated from an interaction between Prime Minister Narendra Modi and a group of economists organised by the NITI Aayog on Tuesday. The consultations saw the PM remark that while people in general were not tax evaders, they did want taxes better utilised and accounted for. "Tax simplification figured quite a lot... on direct taxation, corporate and personal income tax, reducing exemptions, bringing down the tax rate and aligning tax system to make India competitive with international destinations," NITI Aayog vice-chairman Arvind Panagariya said.

A source said the Modi government's third Budget may offer incentives and packages to boost consumption and accelerate economic growth, a concern after reports that demonetisation had suppressed demand and reduced discretionary spending. After the meeting, Panagariya said all attendees stressed on the need to bring firms and businesses into the formal economy - a goal of demonetisation - as this would lead to growth of more secure and productive jobs. Panagariya said the meeting between PM and economists focussed on three key points — agriculture, jobs and budget-related issues.

In the meeting, there was a discussion on strategies to work on Modi's goal to double farmers' income by 2022 and expand the digital payment revolution to include the agriculture sector, he said, adding there were suggestions on moving to high-value agriculture products. A source said Modi sought suggestions on setting up or developing world-class agriculture universities on the lines of IITs and IIMs. Experts favoured simplification and reduction in personal income tax rates and harmonisation of customs duties to global levels in a bid to boost economic activities. On the inverted duty structure, it was suggested that harmonisation of tariffs could resolve the issue.

SOURCE: The Economic Times

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Economists Suggest Lower Taxes, Uniform Import Duty

Ahead of the budget, economists have suggested lower corporate and personal taxes, fewer tax exemptions, a uniform import duty to address the inverted duty structure to encourage manufacturing and more steps to create a bigger formal economy by building on demonetisation. The suggestions followed a meeting organised by the Niti Aayog on the theme 'Economic Policy ­ The Road Ahead' attended by Prime Minister Narendra Modi and Finance Minister Arun Jaitley .

In his intervention, Modi called for innovative approaches in areas such as skill development and tourism, a statement released by the government said. He also explained the thought behind advancing the budget that would be presented almost a month earlier than usual, saying under the current system the authorisation of expenditure comes with the onset of the monsoon. This results in government programmes being relatively inactive in the productive pre-monsoon months, he told economists. The budget is likely to be presented on February 1 this year rather than end February . The railway budget has been absorbed into the main budget. The Central Board of Direct Taxes (CBDT) and the Central Board of Excise and Customs (CBEC) should not work in silos and share data, Niti Aayog Vice Chairman Arvind Panagariya cited Modi as saying while briefing reporters about the meeting. If someone sees that his or her tax revenue is used to build, say a hospital, nobody will hesitate to pay tax, but when expenditure is not properly done, then people want to evade, Panagariya said, mentioning the PM's intervention. “Experts suggested reducing corporate and personal income tax, and removing exemptions to simplify the tax regime,“ Panagariya said. Before the meeting with Modi and Jaitley , three separate groups of economists deliberated on agriculture, skills, jobs, education and the budget with a mandate to make specific suggestions to the prime minister.

The economists and experts who attended the meeting included Pravin Krishna, Sukhpal Singh, Vijay Paul Sharma, Neelkanth Mishra, Surjit Bhalla, Pulak Ghosh, Govinda Rao, Madhav Chavan, NK Singh, Vivek Dehejia, Pramath Sinha, Sumit Bose and TN Ninan. The economists recommended simplification of taxes and better coordination between the data bases of the tax department's two arms-CBDT and CBEC. On indirect taxes, the suggestion was to unify customs duties across the manufacturing sector to about 7% to prevent inverted duty structures. This would also ensure no loss of revenue. “The tariffs on components and inputs can be higher than the tariff on the final products. So that undercuts the incentive to produce the final product,“ Panagariya said. The suggestions came in the wake of a pre-budget meeting earlier this month in which industry bodies had sought rationalisation of income tax slabs and reduction in corporate tax to about 18%.

SOURCE: The Economic Times

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Budget 2017: Peak custom duty may be cut to 7%

A suggestion to harmonise the peak customs duty on industrial goods at 7%, concrete steps aimed at doubling farm income by 2022 and shifting labour-intensive economic activity to the formal sector figured prominently as Prime Minister Narendra Modi met economists and sector-experts, ahead of the Budget 2017-18, reports fe Bureau in New Delhi. In day-long deliberations anchored by the NITI Aayog, reforms steps that have long remained as unfinished agenda like agricultural marketing reforms, imparting skills compatible with industry’s needs to the employment seekers and improving the quality of school and higher education also came up. India’s peak customs duty (the highest of the normal rates) on non-agriculture products had come down steeply from a prohibitive 150% in 1991-92 to 40% in 1997-98 and further, to 20% in 2004-05 and 10% in 2007-08. Broadly, the basic customs duty corresponds to the tariff on imports as other duties on imports like CVD are in lieu of taxes that domestic goods suffer.

The proposal to bring down the peak customs duty further to 7% is in line with streamlining the same with the corresponding duties in Asean countries. NITI Aayog vice chairman Arvind Panagariya said experts have suggested that harmonising the duty at 7% will address the issue of “duty inversion” that hurts domestic manufacturing. Duty inversion or inverted duty structure occurs when the tariffs on finished goods are lower than that on components, intermediate goods/raw materials. The duty harmonisation, however, needs to be revenue-neutral.

The meeting also stressed the needs for creating clusters of economic activity for achieving efficiency and economies of scale. With wages in China rising fast and Indian pays increasing relatively slowly, the country should try and gain strength in employment-intensive export sectors like textiles and footwear, Panagariya noted. While it is a fact that 90% of India’s labour force is in the low-paying unorganised sector, many experts have pointed out that pushing them to the formal sector artificially could create distress. On comments by some experts that the country’s tax mop-up is only a fraction of what is owed to people, the Prime Minister said people might not avoid paying taxes if they are satisfied that the revenue earned through taxation is well spent, according to Panagariya.

SOURCE: The Financial Express

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Budget may have more measures to boost cashless transactions

In expert panel to promote digital transactions said that the government should announce measures in the Union Budget 2017-18 to mandate digital payments of utility bills above a certain threshold and allow consumers to pay taxes and other government payments using debit cards and digital wallets, in addition to net banking. “Low value routine transactions need special attention...all government agencies should consider the feasibility of contracts requiring the vendors to provide a convenient digital payment option to consumers. This would encourage people to transact digitally,” said the Committee on Digital Payments, which was chaired by Ratan Watal, Special Adviser NITI Aayog and former Finance Secretary. These low value transactions could include parking charges, toll charges across the country or health services at government hospitals and health centres, it said.

In its report submitted to the Finance Ministry earlier this month, it also said the Budget should announce a permanent withdrawal of all convenience fees, service charges and surcharges levied by government agencies such as utility service providers, petrol pumps and for contributions to relief funds, on customers for making electronic payments (C2G payments). The government should also bear the cost of electronic transactions, it said. In an indication that some of these suggestions would find a place in the Union Budget, the Finance Ministry on Tuesday has sought public comments on the report of Committee on Digital Payments. The committee was set up to “review medium-term measures necessary to promote digital payment system in the country”, it said.

While Prime Minister Narendra Modi had sought a 50-day window till December 30 to control the impact of demonetisation of Rs. 500 and Rs. 1,000 rupee notes, the government is keen to promote cashless transactions through digital or banking channels as it would cut down on tax evasion. The Watal committee also said that the Budget should propose that government agencies and organisations should not insist upon cheques including post-dated cheques and instead allow for at least one alternative digital payment mode, including for advance payment. Further, a new Digital Payments Incentive Fund should be created in the upcoming Budget that would be resourced from the savings generated by the Centre from the movement towards less cash. “This may be called DIPAYAN or Digital Payments Action Network,” said the report, adding that it will link financial inclusion with social protection.

SOURCE: The Hindu Business Line

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Modi surveys economic landscape ahead of Budget

Ahead of the NDA government’s third Union Budget, Prime Minister Narendra Modi on Tuesday met with 13 economists and experts at NITI Aayog to review the economic situation and recommend measures for the year ahead. Although demonetisation was not on the agenda, its effect was discussed. “There was no discussion on demonetisation separately. But its impact on various sectors and consequently on growth did come up,” said a source.

Terming the meeting an experiment, NITI Aayog Vice-Chairman Arvind Panagariya said the farm sector, jobs and skill education and other issues related to Union Budget 2017-18 were discussed. “Today’s meeting was held at the suggestion of the Prime Minister. The economists and experts, who met the Prime Minister, were divided into three groups and later briefed him on their deliberations,” he told reporters, adding that the government received a number of suggestions. The Prime Minister, who is Chairman of NITI Aayog, said the advancement of the Budget to early February would ensure that expenditure is authorised by the time the new financial year begins. “In our current budget calendar, the authorisation of expenditure coincides with the onset of the monsoon,” Modi noted. The meeting on ‘Economic Policy: The Road Ahead’ was also attended by Finance Minister Arun Jaitley and Secretary-level officials. “Participants shared their views on various economic themes such as agriculture, skill development and job creation, taxation and tariff related matters, education, digital technology, housing, tourism, banking, governance reform, data-driven policy, and future steps for growth,” said an official release. Sources said each participant was given four minutes to speak.

Other proposals

Panagariya said suggestions included proposals on how to make digital payments to farmers and double farm income by 2022. “Greater market support and price support mechanisms in agriculture were also discussed,” he said. On job creation and skill development, experts recommended apprenticeship development and discussions with industry. The need to move workers from the informal to the formal sector also came up. Economists raised the issue of inverted duty structure for manufacturing, and sought harmonisation of customs tariff at 7 per cent.

Calling for a number of reforms in the budgetary process, economists sought simplification in corporate and personal income tax. They also called for strategic disinvestment, and listing of state-owned firms as well as the increased use of direct benefit transfers to rationalise subsidy expenditure. They also recommended time-cycle smoothening of revenues as is being for expenditure.

Economists and experts including India Equity Strategist for Credit Suisse Neelkanth Mishra, former director of NIPFP M Govinda Rao, Professor of Economics, John Hopkins Pravin Krishna, Chairman Oxus Investments Surjit Bhalla, former Finance Secretary Sumit Bose and CEO Pratham Education Foundation Madhav Chavan attended the meeting.

SOURCE: The Hindu Business Line

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Demonetisation was a move towards formal economy: Arvind Panagariya

Expressing their support for the November 8 demonetisation of high-value currency that has resulted in a major cash crunch, a group of experts on Tuesday told Prime Minister Narendra Modi that the move help to strengthen the process of formalising the Indian economy, the major part of which is organised informally. "Demonetisation was discussed as a move towards formal economy," NITI Aayog Vice Chairman Arvind Panagariya said, briefing reporters following Modi's interaction here with a set of noted economists at a session on "Economic Policy - The Road Ahead" organised by the think-tank. "All the speakers stressed the need to bring workers and activity into the formal sector," Panagariya said in reference to the stated aims of the November 8 demonetisation announcement for curbing corruption, black money, counterfeit currency and terror financing.

Complementing the demonetisation process is the government's drive to promote digital transactions and a less cash economy so as to move from the informal to greater formalisation of the economic system. "The speakers pointed out that 90 per cent of the labour force in the country is still in the informal sector," Panagariya added. Besides Niti Aayog and Finance Ministry officials, the session was attended by economists and experts, including Pravin Krishna, Sukhpal Singh, Vijay Paul Sharma, Neelkanth Mishra, Surjit Bhalla, Pulak Ghosh, Govinda Rao, Madhav Chavan, N.K. Singh, Vivek Dehejia, Pramath Sinha, Sumit Bose and T.N. Ninan. The meeting with experts to take stock of the economy assumes significance against the backdrop of the cash crunch after the government last month scrapped the Rs 1000 and Rs 500 notes. Economists and various state governments have voiced concerns that demonetisation will disrupt the economy and drag down the GDP growth rate for this fiscal by up to two percentage points.

SOURCE: The Business Standard

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High power cost drives SEZs to replace state as power supply

With industrial consumers bearing the burnt of high power costs in the form of cross-subsidy imposed by the state-run power discoms even in the special economic zones (SEZs), Power Trading Corporation (PTC) India has joined hands with a multi-product SEZ in Indore for distribution of 80 MW power in a first-of-its-kind arrangement. The company has availed the ‘deemed licensee’ status of the SEZ, which allows it to replace state with any other agency as the designated discom.

 

As FE reported earlier, the discoms in nearly all states charge the industrial consumers over twice as much per unit of electricity as the domestic ones to finance subsidies to the agriculture sector and the less privileged domestic consumers. This, however, reduces the competitive ability of the manufacturing unit with tariff as high as R10/unit in some of the industrialised states. “The manufacturers and other businesses set up shop in an SEZ to reduce their overall input cost. However, high power cost can dent some of the savings, especially for those involved in metal works as power cost could constitute as much as 40% of their expenditure,” Rajib K Mishra, director, marketing and business development, PTC India, told FE. Assuming R8/unit as the power cost for such an industry, even a reduction of R1/unit in the energy bill could bring down the input cost by over 10%.

 

PTC India, which has a base of nearly 500 bulk consumers, will execute the distribution business through its subsidiary PTC Retail. While the firm would look for similar opportunities in over 200 SEZs across the country, Mishra said it wasn’t easy to convince the SEZ management which is manned by a state government official, to give up their high-end consumers. Going ahead, the company could also look at roping in the defence establishment. “With our foray into the distribution business, we are also preparing for the eventual separation of carriage and content in the distribution business as proposed in the amendments to Electricity Act, 2003. This will allow several licensees to compete for the same area of operation,” Mishra added.

 

Though the Union government introduced the amendments in Parliament in 2014 to introduce competition in the crucial segment of power business, it is not being pursued with much intent even after the standing committee report because of opposition from several states. The high power cost for bulk consumers has already driven away railways from the state-owned discoms’ fold. The national transporter has secured several commitments for half the cost levied by discoms earlier. Railways’ dependency on states will further reduce as its Nabinagar thermal power plant in association with NTPC comes on stream early next year.

 

SOURCE: The Financial Express

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Dollar flight brought rupee within striking distance of 69 in 2016

The rupee struggled to maintain its earlier red-hot form as it came strikingly close to the 69 mark against the dollar towards the end of 2016, from the year's high of 66.25 in September, with over USD 2 billion pullout by FIIs taking a big toll. The local unit touched a low of 68.90 (intra-day) in November before recovering to end at 67.74 on December 26, 2016, as against its close of 66.15 last year-end, a net loss of 2.40 per cent.

Redemption of foreign currency non-resident (FCNR) deposits in November made mood all the more cloudy even as the central bank went for the status quo following foreign capital outflows, largely due to narrowing of interest rate differential between the US and India. Foreign investors withdrew USD 6.47 billion from the debt segment while there was a fairly good inflow of USD 4.01 billion in equities, taking net outflow to over USD 2 billion. There is already a talk of the rupee going below the 70 mark in coming days as the impact of demonetisation plays out in GDP and industrial production numbers in the next couple of quarters, Abhishek Goenka, CEO and founder of IFA Global, a leading forex and treasury solutions firm, told PTI. He said any hiccups in Chinese economy and the overall strength of the dollar will continue to be a drag on the rupee in the coming year.

The US economy appears to be on the mend and the Federal Reserve in December raised rates for the first time in a year. The economic revival and expectations of more aggressive US rate hikes, as borne out by hawkish comments from the policymakers, will continue to support the greenback. All eyes were on the US election this year. The Donald Trump win provided the dollar much support because of a likely higher fiscal spending by his incoming administration. Post presidential election, the dollar rallied to the highest level since January 2003 against major currencies, together with a rally in US equities, on anticipation that the newly-elected US President will bump up infrastructure expenditure and go in for tax cuts.

On the other hand, Brexit put the world economy in a bind, with the pound taking a hit by over 15 per cent, while continued easing by ECB has weighed on the euro that fell below the 1.04 level after opening the year at 1.09. The year also saw a sharp fall in the yuan, leading to fears of market turmoil in the Chinese economy. The latest data released by Chinese Academy of Social Science (CASS) suggest that the economy could grow at the slowest pace in 25 years.

SOURCE: The Economic Times

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Rupee slips over 15 paise in early trade on month-end dollar demand

The rupee traded nearly 16 paise down at 68.22 against dollar early Wednesday on account of buying of the American currency by companies and importers amid mixed global cues. Domestic equity indices, BSE Sensex and NSE Nifty, were trading higher with marginal gains in early trade. The 30-share Sensex was up 37 points, or 0.14 per cent, at 26,251 around 9.30 am (IST), while NSE’s Nifty50 index gained 10 points, or 0.12 per cent, to 8,042. The local currency snapped its two-day winning streak on Tuesday and closed 32 paise down at 68.05 against the US currency amid month-end dollar demand from importers amid foreign institutional investors.

Angel Broking in a research note said, “The rupee is expected to depreciate in Wednesday’s session, tracking losses in Asian equity markets as investors hunt for bargains in the last trading week of the year. Moreover, month-end dollar demand from importers and banks will further act as a negative factor.” ICICI Securities said rising yield spread between the US and India and reduced hope of a rate cut by the Reserve Bank of India in the near term are weighing on the rupee. Foreign institutional investors stood net sellers in the domestic equity market on December 27, as they sold shares worth Rs 1,099 crore with gross purchases and gross sales of Rs 1,000 crore and Rs 2,099 crore, respectively, data available with depository NSDL showed. Amit Gupta, Co-Founder and CEO TradingBells, said, “The USDINR pair may trade in the 67.70-68.30 range with a slight upside bias in the coming sessions, as dollar demand from oil importers continues.”

 

SOURCE: The Economic Times

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India likely to host key RCEP meeting in July

India is expected to host in July next year the negotiations for mega trade deal RCEP which aims at liberalising norms for trade in goods and services and boost investment among 16-member countries. "This will be a crucial meeting of the Regional Comprehensive Economic Partnership (RCEP)," an official said. Currently the member countries are deliberating upon the single-tier system of duty relaxation under the proposed pact.

Under this system, the members have to finalise the maximum number of goods on which duties will either be eliminated or reduced significantly. The agreement aims to cover goods, services, investments, economic and technical cooperation, competition and intellectual property rights. As the domestic industry has apprehensions over a deluge in imports from countries such as China after the duty cut under the agreement, India wants certain deviations for such countries. Under deviations, India may propose a longer duration for either reduction or elimination of import duties for such countries. The talks for the pact started in Phnom Penh in November 2012. The 16 countries account for over a quarter of the world's economy, estimated to be more than $ 75 trillion.

The 16-member bloc RCEP comprises 10 ASEAN members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six FTA partners -- India, China, Japan, South Korea, Australia and New Zealand.

SOURCE: The Economic Times

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Global Crude oil price of Indian Basket was US$ 52.83* per bbl on 27.12.2016

 The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 52.83* per barrel (bbl) on 27.12.2016.

In rupee terms, the price of Indian Basket increased to Rs. 3592.28 per bbl on 27.12.2016 as compared to Rs. 3583.64 per bbl on 26.12.2016. Rupee closed weaker at Rs 68.00 per US$ on 27.12.2016 as against Rs 67.83 per US$ on 26.12.2016. The table below gives details in this regard: 

Particulars

Unit

Price on December 27, 2016 (Previous trading day i.e. 26.12.2016)

Pricing Fortnight for 16.12.2016

(Nov 29, 2016 to Dec 13, 2016)

Crude Oil (Indian Basket)

($/bbl)

52.83*

50.85

(Rs/bbl

3592.28       (3583.64)

3460.34

Exchange Rate

(Rs/$)

68.00              (67.83)

68.05

* Brent/ Oman & Dubai prices are not available due to holiday on 26.12.2016 & 27.12.2016, hence the price of Indian Basket Crude oil cannot be derived. Therefore, price of Indian basket as of 23.12.2016 has been considered.

 SOURCE: PIB

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Employers, labour in textile industry agree on N32,000 minimum wage

Employers in the textile industry and Organized Labour in the sector have reached an agreement to raise the salary of the least paid workers to N32,000 per month to help workers cope with the economic recession. National Union of Textile, Garment and Tailoring Workers of Nigeria, NUTGTWN, which gave this hint in a document obtained by Vanguard, said the increment is about 75 per cent higher than national minimum wage. In the document endorsed by the President and General Secretary of the union, Mr. John Adaji and Issa Aremu respectively, the union said the new wage was agreed upon at the 46th National Collective Agreement, NCA. According to the union: “Notwithstanding the current economic challenges and the peculiar operating challenges of the textile sub-sector, it is remarkable that the union sustained the struggle for a living wage for members.

We just signed the 46th national collective agreement with the Nigeria Textile Garment and Tailoring Employers Association, NTGTEA. The agreement significantly raised wage rate in the industry by 13 percent. 18 percent and 15 percent wage increases were achieved in 2012 and 2014 respectively bringing total cumulative wage increase to 46 per cent through the process of collective bargaining. “Agreements through bargaining process have therefore brought the minimum wage in the industry to N32, 000, about 75 per cent higher than national minimum wage. This outcome is the result of focused leadership, support from our members and the cooperation of the employers. However, given the massive devaluation of the Naira and attendant inflation, the industry minimum pay is yet to take our hard working members out of poverty. This is why we support the demand of Nigeria Labour Congress, NLC, for a new national minimum wage.”

The workers’ body also sympathised with employers for harsh operating environment, lamenting that “due to the depressed state of the economy, the challenge has been to defend the existing jobs. Some of the key manufacturing textile industries like Nichemtex Ikorodu temporary closed down due to lack of raw materials and high electricity tariff that is not industry friendly.” The union, however, decried the worsening unfair labour practices such as casualization and outsourcing, saying “Precarious or casual work is the work done by workers under terrible conditions of low pay, delayed payment and general insecurity. Precarious work is becoming the norm in most workplaces in Nigeria with most employers taking advantage of mass unemployment to violate workers’ rights. More and more precarious workers are unable to realise their fundamental rights at work and enjoy essential social rights.” The union joined the global campaign against precarious work on Friday October 7, 2016 with rallies in the cities of Kaduna, Lagos and Abuja respectively.

SOURCE: The Vanguard Nigeria

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Vietnam textile industry proposes to review development plan

In the five years from 2010 to 2015, the Vietnam textile industry held a growth rate of export value at 15 percent per year. This year export value is expected to reach $29 billion. The target in export value was much lower than the figures in reality and the development plan was not suitable with the real development of the industry. The textile and garment industry was slated to reach US$20 billion in export value in 2015, but the industry hit an export value of $27.5 billion.

The Vietnam Textile and Apparel Association has proposed the Government and related ministries and sectors to review the development plan for the garment industry by 2020 to support local textile and garment enterprises in taking opportunities as well as overcoming challenges from free trade agreements. Renovation of the development plan for the textile and garment industry by 2020 and towards 2030 is necessary because the industry expects to enjoy many advantages in development over the next 10 years. The adjustment of the plan should be effective until 2025, and towards 2040. The association has also suggested the Government, the Ministry of Industry and Trade and the Ministry of Planning and Investment to build development plans for the industry, including a development plan on industrial zones. As many small textile and garment firms have not been concentrated in specialized zones for the textile and garment sector, which led to difficulties in the management and treatment of waste water. This factor is related to the industry’s sustainable development and protection of the environment.

SOURCE: Yarns&Fibers

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E-service introduced for boosting textile sector: Bangladesh

The government has introduced an electronic service to exhilarate the country’s textile sector by making the business process hassle-free. Textile sector is one of the highest foreign income earning windows of Bangladesh, which currently bears around 83% of total export earnings. The government wants to ensure the foreign income from the textile sector of worth US$50 billion by 2021, from the current figure of $28 billion. “We are launching the E-service for the entrepreneurs so they can do their business by spending less time and money”, said Textile and Jute Minister Muhammad Imaj Uddin Pramanik while launching the service at a seminar held at Jute diversification and Promotion Centre in the city yesterday.

From now on, the entrepreneurs will get 18 kinds of service through the E-service, which has been launched under the project of “Online one click registration & service delivery by directorate of textiles by developing an E-centre network using ICT.” The program is being financed by the Access to Information project of the Prime Ministers’ Office. Among others, A2I Project Director Kabir Bin Anwar, Director General of the Department of Textile Ismail Hossin, BGMEA Vice-President Md NAsir and BKMEA Director Kamal Pasha were also present on the occasion. Under this, the entrepreneurs can easily send their applications as well as fees through this online service, sitting at their own offices.

SOURCE: The Dhaka Tribune

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Vietnamese Textile Firms Need To Up Ties

Domestic textile enterprises and logistics service providers should work together to reduce costs and improve their competitiveness, according to experts. Vietnam News Agency (VNA) reported Nguyen Tuong, Vice Chairman of the Vietnam Logistics Association, as saying the textile industry needs to import raw materials from abroad and export products to foreign markets. Working together, many enterprises could purchase raw materials by combining their orders to create a large shipment, which will help significantly reduce transportation costs, he said. The costs of logistics currently account for nearly one-third of the costs of each textile product exported, so the Vietnamese garment sector could save more than US$1 billion per year by reducing this cost.

Additionally, Truong Van Cam, Vice Chairman of the Vietnam Textile and Apparel Association, said most textile companies currently perform outsourcing jobs, causing them to depend on the supply of raw materials and transportation services of providers assigned by their partners. Most of these providers are foreign companies, thus the market share for local logistics companies has been narrowed, Cam said. Further, high transportation costs are undermining the competitiveness of Vietnamese goods in international markets, he added.

Director of the Nam Viet Co Ltd, Nguyen Duc Chuong, said that during peak seasons, textile firms have to pay the container imbalance charge (CIC) - a kind of sea freight charge which a carrier requires to offset costs arising from the transfer of a large amount of empty containers from one place to another. This charge is only affordable to enterprises with large-scale import-export orders, such as Nha Be Corporation or Viet Tien Garment Joint Stock Corporation, but is a heavy burden on small and medium-sized textile firms. Meanwhile, there is a lack of confidence between the owners of goods and Vietnamese logistics service providers due to low-quality and high prices, said representative of the Dam San joint stock company, which specialises in producing fibers. Located in the northern province of Thai Binh, the firm has to spend US$3 billion to US$4 billion every year on logistics costs. To improve the quality of the supply chain and reduce logistics costs, many textile enterprises have turned towards "self-service".

A representative of the Nha Be Corporation said the corporation has established the NBC logistics company to carry and load goods, and to export and import procedures for its shipments. To facilitate the transaction, NBC logistics firms also opened a representative office in China's Shanghai, and many textile enterprises are seeking to hire it to perform export and import services. So far, conducting self-logistics services for approximately 70 per cent of their goods has helped the corporation save US$2 billion per year. Previously, it had to pay US$6 billion for import-export of goods annually. However, self-service is still not a solution for small and medium-sized firms. Therefore, business leaders in the two sectors agreed that it was necessary for the Ministry of Industry and Trade and the Ministry of Transport to assist the coordination and connection between shippers and the owners of goods.

SOURCE: The Bernama

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New textile mill established in Afghanistan

A new textile mill has been set up in northern Balkh province in Afghanistan, which will produce 1.5 tons of yarn and 10,000 metres of fabrics per day and employs around 150 persons, which also includes 60 women. The textile facility has been set up at an investment of 60 million Afghanis, with plans to also export its products to various countries. Haji Baryali Nabizada, the owner of the textile mill told the Pajhwok Afghan News that he however was looking at government support to further expand production capacity. He cited land and electricity issues as road blocks in expanding capacity and sought government help in sorting out these challenges.

SOURCE: Fibre2fashion

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Govt urged for holistic approach to promote exports: Pakistan

Federation of Pakistan Chambers of Commerce and Industry (FPCCI) horticulture exports head Ahmad Jawad said decreasing exports result in unfavourable balance of payments, pressure on the exchange rate, and rupee depreciation, which again increases the imports bill, creating a vicious cycle.

Talking to media, Jawad said the exports of almost all the countries in South Asia were on the rise. “Unfortunately, with Pakistan, it is the opposite case.” In the fiscal year 2015-16, Pakistan’s exports witnessed a 12 percent decrease from $23.6 billion to $20.8 billion. This is an awkward and embarrassing situation for Pakistan, given the fact that we had been awarded the GSP Plus status by the European Union to help boost our exports.

According to the economic survey of Pakistan 2014–15, the country’s exports remained stagnant at $24–25 billion (and it actually decreased in the year 2016), while Bangladesh’s exports surpassed the $30 billion mark last year, and are set to hit the $34 billion mark this year. The reason for decreasing Pakistani exports is the sluggish growth in the Islamabad’s major trading partners - UK, US, and China, high cost of production due to electricity shortfall, and delays in order deliveries because of non-availability of energy inputs. Among Pakistan’s major exports, rice, cotton, leather, jewelry and the chemical sector have been hit hard by the slump in exports. Given the current scenario of Pakistan’s dwindling exports, a strategy for bolstering them becomes imperative, Jawad said.

One of the primary ways of enhancing exports is to support entrepreneurship and to create new avenues for growth by guiding the youth. "We should identify other export opportunities from Pakistan and inform the investors and the public about them so that more people can take part in the value creation process. Similarly, there are many other opportunities available in the supply chain of many finished products like in the untapped horticulture sector, which is constantly ignored."

Jawad mentioned the example of Bangladesh, which imports cotton from other countries, but was now the fifth largest textile exporter in the world owing to its value-added textile exports. In Pakistan, data shows that the export of cotton yarn has been down by 32 percent, but the export of readymade garments has improved by around 4.2 percent in the current fiscal year. This speaks volumnes about the importance of value-addition. “Similarly, in the meat and dairy sector, we can export frozen meat products, powdered milk, cheese and other value-added creative products instead of exporting raw products,” he said.

FPCCI panel chief also said Philippines, which has half the population of Pakistan, has roughly $25 billion of exports in the global outsourcing industry (part of the service sector), even Dubai earned $36.4 via tourism in 2015. “Pakistan’s workforce is also skilled and it can become a major player in the global outsourcing industry if given proper attention by the government,” he added. The tourism potential is also great here for both adventure seekers and history enthusiasts. “We have got some breath taking scenery, palatable food, and a wonderful cultural history for the global tourists,” the FPCCI chief added. Jawad urged the government to take a more liberal view of the situation, and develop a multipronged strategy towards the promotion of exports.

SOURCE: The News

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Hong Kong company to build apparel facility in Vietnam

Hop Lun Vietnam Company, a Vietnamese subsidiary of a Hong Kong based apparel manufacturer has laid the foundation stone of an apparel manufacturing facility in Vinh Phuc, a northern province of Vietnam. The plant once operational is expected to employ 2,500 workers and earn around $38.2 million from exports and contribute $6.5 million in taxes. According to Vietnamese media, the parent company set up in 1992, has plants in China, Bangladesh and Indonesia, and employs around 28,000 workers, while producing 15 million units of apparel products per month.

SOURCE: Fibre2fashion

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Moroccan-Kuwaiti Economic Forum Opens in Casablanca

The third Moroccan-Kuwaiti Economic Forum opened on Tuesday in Casablanca with the attendance of representatives of several public and private institutions in Morocco and Kuwait. The event was marked by the inauguration of an exhibition on Kuwaiti cultural products and items by Moroccan cooperatives representing the sectors of textile, cosmetics and food processing. The forum is an occasion to examine issues of shared interest at the commercial, social, cultural and media levels that would contribute to the development of cooperation and partnership ties between the two parties. The agenda of the forum, which will run until Dec. 29, includes working meetings between Moroccan businessmen and their Kuwaiti counterparts to contribute to efforts aimed at strengthening relations between the two sister nations. The event is initiated by the Kuwaiti Ministry of Information, in collaboration with the Embassy of Kuwait in Morocco. In addition to Moroccan exhibitors, several Kuwaiti bodies are taking part in the forum as the National Council for Culture, Arts and Letters, and the Committee for Industry and Investment Companies.

SOURCE: The Morocco World News

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Russia, Pakistan, China warn of increased Islamic State threat in Afghanistan

Russia, China and Pakistan warned on Tuesday that the influence of Islamic State (IS) was growing in Afghanistan and that the security situation there was deteriorating. Representatives from the three countries, meeting in Moscow, also agreed to invite the Afghan government to such talks in the future, the Russian Foreign Ministry said. "(The three countries) expressed particular concern about the rising activity in the country of extremist groups including the Afghan branch of IS," ministry spokeswoman Maria Zakharova told reporters after the meeting.

The United States, which still has nearly 10,000 troops in Afghanistan more than 15 years after the Islamist Taliban were toppled by U.S.-backed Afghan forces, was not invited to the Moscow talks. The gathering, the third in a series of consultations between Russia, China and Pakistan that has so far excluded Kabul, is likely to deepen worries in Washington that it is being sidelined in negotiations over Afghanistan's future.

Officials in Kabul and Washington have said that Russia is deepening its ties with Taliban militants fighting the government, though Moscow has denied providing aid to the insurgents. Zakharova said Russia, China and Pakistan had "noted the deterioration of the security situation (in Afghanistan)". The three countries agreed a "flexible approach to remove certain figures from sanctions lists as part of efforts to foster a peaceful dialogue between Kabul and the Taliban movement," she added.

Afghan President Ashraf Ghani last month asked the United Nations to add the Taliban's new leader to its sanctions list, further undermining a stalled peace process. Earlier on Tuesday, Afghan Foreign Ministry Spokesman Ahmad Shekib Mostaghni said Kabul had not been properly briefed about the Moscow meeting. "Discussion about the situation in Afghanistan, even if well-intentioned, in the absence of Afghans cannot help the real situation and also raises serious questions about the purpose of such meetings," he said. A number of Afghan provincial capitals have come under pressure from the Taliban this year while Afghan forces have been suffering high casualty rates, with more than 5,500 killed in the first eight months of 2016. An offshoot of Islamic State has claimed responsibility for several attacks in the last year.

SOURCE: The Economic Times

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CPEC made remarkable progress after full implementation: China

China's official media today played down the growing criticism within Pakistan over the $46 billion CPECBSE -4.45 %, saying the project has made "remarkable progress" though India has opted for "disrupting" the initiative. "Three years on, the China-Pakistan Economic Corridor (CPEC), described by Pakistani Prime Minister Nawaz Sharif as a "game changer" for the entire region, has entered into full implementation in 2016 and remarkable progresses have been achieved," a commentary in the state-run Xinhua news agency said.

Referring to Chinese ambassador to Pakistan Sun Weidong's comments, it said 16 early harvest projects, including several power stations, highways and projects related to Gwadar Port, were under construction and tens of thousands of new jobs have been created for local people. Last month, China started operating the Gwadar Port which is being connected with Xinjiang through the Pakistan occupied Kashmir (PoK) by dispatching ships loaded with goods brought by trucks from China to Middle East. "There are at least 39 projects, (in CPEC) the majority of them related to energy, where obvious progress has been seen during 2016," Saeed Chaudhry, director of the Islamabad Council for International Affairs, told Xinhua in a recently. Chaudhry's remarks include the second phase of upgrading the Karakorum Highway from Havelian to Thakot and the highway linking Pakistan's largest cities of Karachi and Lahore. Both of the two highways have been smoothly implemented and for the former, the Abbottabad Tunnel construction project has begun and seen substantive progress, it said. While Xinhua report lauded the progress of the CPEC, an article in the state-run 'Global Times' criticised sections of Pakistani media for taking a critical view of the project.

Written by a research fellow in the Institute of Strategic Studies Islamabad (ISSI), the article criticised Pakistani journalist Cyril Almeida for putting out "irresponsible tweets" against the project. "There is no denying the fact that there has been criticism of CPEC in Pakistan. There has been criticism of the government of Pakistan, mainly of the ruling party, over the percentage of shared routes of CPEC in Pakistan," it said. "Every province wants to get the most out of it. It is like fighting over a cake before eating it. But even then, no political party ever raised objections against China. Rather, if there is one country over which Pakistan's political parties are united, it is China. The fight among the political parties is 'over CPEC' and 'not against CPEC'," it said. The report also said it was "undeniable" that there have been controversies over CPEC and particularly, on the 'Belt and Road Initiative' of China. "Those controversies, which are created at the international level, are an effort to raise doubts about China's intensions. India and the US do not seem to be happy with Beijing's growing regional and global economic clout. India openly opposed the Belt and Road Initiative and CPEC. It opted for both overt and covert means to disrupt the smooth advancement on these two projects, which are complimentary to each other," it said. "There is a whole range of challenges in implementing CPEC that if not smartly dealt with, the road to CPEC success would become bumpy. All these challenges come with external strings attached," it said.

The story of Almeida's twitter spat with Zhao Lijian, charge d'affaires at the Chinese embassy in Islamabad provided fodder to "malign" Pakistan-China relations, it said. "Pakistan and China have to build a united front through institutional framework to counter this negative campaign. Both countries also need to focus on formulating public opinion, which implies cooperation with news agencies and networks," it said.

SOURCE: The Economic Times

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China: growth engine, stabilizer of world economy

Although China cannot solely lift the world economy out its current malaise, the nation's current stable growth offers more than just confidence to the world. Despite a troublesome start and headwinds from home and abroad, the Chinese economy ends 2016 on a firm footing, and it looks like growth targets for this year will be met. "Seeking progress while maintaining stability" is the main theme of next year's economic work, as China pledges to ensure its economy operates within a reasonable range while pushing structural reform.  As the world's second-largest economy and the main source of export demand for over 100 economies, which account for about 80 percent of global GDP according to the IMF, China's commitment to ensuring stable growth is reassuring.

China has long been seen as an engine to shore up global economic growth, a role it played during the global financial crisis, when strong growth here -- backed by a 4 trillion yuan ($575.9 billion) stimulus package -- helped avert the worst of a global recession. It is not crisis time yet, but alarm bells are ringing. IMF Managing Director Christine Lagarde said that not since the early nineties has the world economy been so weak for so long.

Growing uncertainty for the world economy, and geopolitical instability have made China's economic stability particularly significant. It is true that China has slowed significantly from its double-digit growth rates, but after the transition to what some Chinese leaders have dubbed the "new normal," China still remains the world's major growth engine. If China's GDP growth reaches 6.7 percent in 2016, in line with the government's official target for the year, China would account for 1.2 percentage points of world GDP growth, according to economist Stephen Roach. With the IMF currently expecting only 3.1 percent global growth this year, China would contribute to over one-third of the world's growth.

Given persistently weak external demand, ongoing deleveraging and capacity-reduction pressure, and a slowing property sector, maintaining stable growth will not be easy for China in 2017. Unlike some major economies, where policy space is constrained, China policy makers have ample room to boost activity and avoid drastic decline. And unlike other major economies, China's slowdown is to some extent a desired outcome of reforms designed to transform the economy. China is moving from an export-and-investment-driven economy to one that is more sustainable and draws strength from consumption, services and innovation. Through structural reform, China's transition is capable of addressing both short-term cyclical pressures and longer-term issues. Its successful rebalancing will greatly benefit the world.

Expanding domestic demand from China will become an increasingly important source of export-led growth for China's major trade partners, provided that those countries grant open access to growing Chinese markets. China has worked hard to assume responsibility as a regional and global economic power, putting forward a series of initiatives to encourage regional economic integration and cooperation. High on the list are the Asian Infrastructure Investment Bank and the Belt and Road Initiative. The Regional Comprehensive Economic Partnership is also gaining momentum. Under such circumstances, a weak and vulnerable world economy needs China more than ever.

SOURCE: The Global Textiles

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Oil prices edge down ahead of OPEC, non-OPEC production cuts

US benchmark West Texas Intermediate (WTI) crude futures were down 13 cents at $53.77 at 0021 GMT after settling up 88 cents at $53.9 a barrel in the previous session. WTI prices have risen 25% since mid-November.Oil prices edged down on Wednesday in quiet early Asian trading as the market waits to see how OPEC and non-OPEC members carry through on planned supply cuts in the new year. International Brent crude oil futures were yet to trade after closing 93 cents higher at $56.09. Trading is expected to remain thin this week ahead of the New Year holiday season. The market is taking a wait-and-see approach on the official start of the landmark deal reached by the Organization of Petroleum Exporting Countries and several non-OPEC members. The deal is set to kick in from January 1.

OPEC and non-OPEC producers are expected to lower production by almost 1.8 million barrels per day (bpd), with Saudi Arabia, OPEC's largest producer, agreeing to bear the lion's share of the cuts. In a sign that the world's oil major producers may abide by their agreement, Venezuela, one of the members of the oil cartel group, said it will cut 95,000 barrels per day of oil production in the New Year. Russian oil producer Gazprom Neft said it planned to boost oil output by 4.5-5% next year, less than it had intended before Russia, one of the non-OPEC member countries, joined a deal to erode a global supply overhang.

SOURCE: The Business Standard

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