In India after Agriculture industry, Textile industry is one emerging sector that has generated huge employment for the skilled and unskilled labours. North Eastern Region is one area where it has huge potential for investments particulary in the field of textiles and handicrafts. Due to its inherent strength for skilled work force and locally available raw materials this sector is developing a lot in this region.The Ministry of Textiles is implementing projects worth Rs 1050 cr for Handlooms,Handicrafts,Sericulture,Apparel and Garmenting etc which falls under the textile sector in all the eight states of Northeast Region in line with the “Act East” policy of the government. Here is how NorthEast India fares in terms of Textiles Industries:
Meghalaya:
• Traditional Mulberry silk producing areas. highest producer of silk among NE states.
• High potential for expansion of Mulberry, Eri and Muga silk production.
• One of the leading producers of bamboo in the country.
• Established tradition of high-quality weaving.
• Rich Labour Pool.
• Apparel and Garment making centre at Ampati.
• Almost 100% of country’s Oak Tasar silk production.
Manipur:
• Highest producer of Mulberry silk in NE states.
• All 4 varieties of Silk-Mulberry, Eri, Muga and Oak Tasar are produced.
• Position among NE States in silk production.
• Highest number of handicrafts units as well as the highest number of Artisans in comparison to the other NE states.
• One of India’s largest bamboo producing states and a major contributor to the country’s bamboo industry.
• Among the top 5 in terms of the number of handlooms in the country.
• 3rd largest producer of Silk in the Country.
Assam:
• Around 85% of global Muga silk production.
• Around 62% of Country’s Eri silk production.
• More than 40% concentration of Handlooms out of the total Handlooms in NER.
• 3rd position in NE for silk production after Assam and Meghalaya.
Nagaland:
• High potential for production of Eri silk in all districts.
• Abundant availability of Skilled Manpower and Raw Materials.
• Handloom products are famous for their beauty and intricate design.
• Apparel and Garment makin g Crntre at Dimapur.
• 2nd position among NE states in Mulberry silk production after Manipur
Mizoram:
• Conducive climate for commercial exploitation of all varieties of Silk.
• One of the leading producers of bamboo in India, contributing 14% to the country’s bamboo stock.
• Presence of highly literate and skilled workforce.
• Ideal for production of all varieties of Silk.
Arunachal Pradesh:
• Fertile land and areas adjoining Assam highly suitable for large scale farming and mechanization.
• Boasts of an enriching array of unique and appealing handloom designs from each of its tribes.
• Producer of Carpets of varied designs and high quality.
• Rich tradition of Cane and Bamboo Handicrafts.
• Apparel and Garment making centre at Pasighat.
• 3rd position among NE states in Mulberry Silk production after Manipur and Mizoram.
Tripura:
• Focusses on production of only Mulberry Silk with end to end solutions.
• Strong co-operative system and and Women group activity in all areas of silk production from plantation to fabric
• Immense potential for International Trade.
• Endowed with rich and diverse Bamboo Resources.
• Large base of Skilled Labour.
• Famous for unique cane and Bamboo Handicrafts.
• Bamboo and Cane Craft are deep rooted in traditional culture of the state.
Sikkim:
• Producer of Carpets of varied designs and high quality.
• Handloom Products are famous for their beauty and intricate design.
• Apparel and Garment making Unit at Barfok.
• Carpet weaving at Makha.
• Candle making at Namchi.
The above mentioned points proves that Northeast India has the potential to produce the country’s finest silk products, the same of which can be exported outside the country, elevating the economic standard and status of the Northeastern states besides putting Northeast in the cultural map of the world
Source: North East Today
As the government increases focus on labour-intensive sectors, the textile ministry will likely see a 35-40% jump in fund allocation in the coming Budget from the budgeted level of 2016-17, bucking the trend of modest hikes in recent years. The ministry may be allocated Rs 6,200-6,500 crore in the coming Budget, compared with the Rs 4,595 crore budgeted for 2016-17. (Reuters) As the government increases focus on labour-intensive sectors, the textile ministry will likely see a 35-40% jump in fund allocation in the coming Budget from the budgeted level of 2016-17, bucking the trend of modest hikes in recent years. The ministry may be allocated Rs 6,200-6,500 crore in the coming Budget, compared with the Rs 4,595 crore budgeted for 2016-17, sources told FE. It could get more funds to settle both old and new claims under the latest and previous versions of the Technology Upgradation Fund Scheme (TUFS) and to cater for refund claims under the new duty drawback scheme announced as part of a special package for the garments industry in June last year, the sources added. In fact, these two crucial schemes could account for more than a half of the ministry’s likely budgetary allocation in 2017-18. The budgetary allocation for the amended TUFS (ATUFS) could be raised to at least Rs 2,000 crore in 2017-18, as the Rs 1,480 crore earmarked for the scheme in the 2016-17 Budget proved to be grossly inadequate. Similarly, if the textile ministry’s estimate of annual outgo on account of refunds of various state levies to garment exporters under the duty drawback scheme is any indication, the budget for 2017-18 could provide over Rs 1,500 crore for it. The ministry has been provided Rs 500 crore for 2016-17 to settle duty drawback claims since the scheme was notified in September last year. The annual rise in budgetary allocation for the ministry has been marginal in recent years, and in 2013-14, it even witnessed a cut in outlay from a year before. The ministry was even pulled up by a parliamentary standing committee in 2015 for slow spending in previous years. However, the panel observed 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. Noted textiles expert DK Nair said, “A significant increase in allocation for the textile ministry will improve the implementation of some of the schemes that are not yielding the desired results at the moment due to inadequate funds.” In 2015-16, 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. 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. Government officials have said textile mills, which 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. However, those who have lost out due to mis-reporting by banks may get the subsidy benefits. The TUFS was introduced in 1999 to make available funds to the textile industry for upgrading technology at existing units as well as to set up new units with state-of-the-art facilities so that its viability and competitiveness in the domestic and international markets soar. Last year, the cabinet committee on economic affairs decided to refund the state levies under the duty drawback scheme. The government expected the move to raise exports by $9.5 billion, employment by close to a million and investment by $2.7 billion over a three-year period.
Source: Financial Express
Nashik: The Maharashtra Industrial Development Corporation's (MIDC) regional office has acquired 113 hectare land parcel meant for the proposed textile park. A proposal for infrastructural development has been sent to the head office for approval. Once the approval comes in, the MIDC will float tenders for developing infrastructure. The proposed park is expected to attract investment and provide job opportunities to the youths. Speaking to TOI, a senior official from the MIDC said, "We have already acquired 113 hectare at Sayane near Malegaon that will house only textile units. We are in the process of developing infrastructure. We have already prepared a proposal worth Rs 15 crore to develop infrastructure like roads, water supply, streetlights, among others. The proposal has been sent to our head office in Mumbai for approval." He added, "We will float a tender for infrastructural works once we get a nod from our head office. There may be delay of a month due to code of conduct due to civic and ZP elections. It will take around a year for developing the infrastructure following which plots at the park will be allotted to textile units." Apart from this, the MIDC is also mulling over to build Common Effluent Treatment Plant (CETP) project for the textile units. "The CETP project is estimated to cost Rs 10 crore. We are preparing the proposal that will be sent to our head office for approval," said the official. Manish Rawal, chairman of NIMA infrastructure committee, said, "This is a positive development for Nashik. Textile sector is still new for Nashik and this proposed Textile Park will attract new investments. This will not only fetch investment, but will also provide job opportunities to thousands of youths. It will also create a vendor base in Nashik." He added, "We are already making efforts to bring in new investment, but we need adequate land. At this juncture, 113 hectare (282 acres) will be available for textile units. At the same time, the MIDC needs to develop infrastructure at the earliest and start allotment of plots for those who wanting to set up textile units."
Mumbai: Indian banks have approached the government to amend the draft Goods and Services Tax (GST) law under which transactions between two branches of a bank will trigger a tax. This tax could be cumbersome because of the enormous number of financial transactions being carried out and because it will be impossible for banks and finance institutions to value services provided by one branch to another and then pay GST on that. Banks have written to the government to amend the GST law involving such ‘self-supply’ of services. According to people in the know, the government may be looking to make this change within a month. The problem is this: if a bank branch located currently in Mumbai provides a service, or is perceived to provide a service to another branch in New Delhi, GST will be applicable on such a service. So, if a Mumbai resident withdraws money from a New Delhi ATM, the bank would first be required to value this service and then pay GST on that. This, will be impossible to comply with. “The valuation of supply of services can trigger dispute, prone to misinterpretation and promote corruption. If the provision remains, branch to branch transactions in banks or similar transactions in other sectors need to be valued and should be taxed,” says Sachin Menon, national head, indirect tax, KPMG India. Experts point out that the support provided by the head office to a regional office or a branch and vice versa or sales and after sales support will have to be valued first. GST will be have to paid on this value. It is impossible to identify intra company transactions and value them and then carry out compliances, say experts. “There are thousands of branches and sales offices in case of some of these service providers and the interaction between establishments is numerous,” said Uday Pimprikar, partner, tax & regulatory services, EY India. GST Roadblock. Industry experts point out that the current GST law suggests that supplies between two registrations of the same entity should be liable to GST. “There is no need to levy GST on inter-branch supply of services. To distribute credit, there is already a simpler concept of input service distributor,” says Dharmesh Panchal, India West Indirect Tax leader, PwC. Banks including, SBI, ICICI and HDFC, have approached the government to modify the GST framework involving self-supply of services, say people in the know. In a written communication to the GST committee, banks have claimed that they would not be able to comply with such a regulation as it’s impossible to value such services.
Source: Economic Times
India may propose to give China lower market opening concessions in the Regional Comprehensive Economic Partnership pact being negotiated between the16 countries compared to what it offers to all others when Trade Ministers meet in Cebu this week. New Delhi will also insist that other members improve their offers in services and bring in more clarity before it lays down clearly its offers in goods, a senior Commerce Ministry official said. “We think it would be naïve of any country to expect that we could offer the same levels of concessions to China as we do to countries such as Laos or Vietnam. It is not possible. Although we are still discussing our strategy, we may go for a different set of concessions for China,” the official said. Trade Ministers from the 16-member RCEP — which includes the 10-member ASEAN, India, China, Japan, South Korea, Australia and New Zealand — will meet in Cebu, Philippines, on November 3-4 to try and see if final commitments in the area of goods, services and investments could be reached. New Delhi, however, has to first decide on how it would treat China — the country which accounts for almost half of India’s trade deficit — before it firms up market opening offers for others, the official said.
Three-tiered tariff
In the last RCEP Trade Ministers meeting in Laos, New Delhi gave in to pressure from other members and agreed to give up the three-tiered structure of tariff cuts being initially pursued. Under the three-tiered approach, India offered the maximum concessions to the ASEAN (tariff elimination on 80 per cent items), followed by Japan and South Korea (tariff elimination on 62.5 per cent items) with which it has bilateral free trade pacts and the least to China, Australia and New Zealand (tariff elimination on 42.5 per cent items) where no such pacts exist. “We believe that by proposing to give China lower market access than the other RCEP countries we are not moving back to the three-tiered structure. It is a meaningful deviation that we would seek to take care of our genuine concerns,” the official said. The official added that since there was not much progress in services negotiations, India would demand more clarity on offers in services before it clarifies its position in goods further. “There has been almost no offer in Mode 4 services which involves movement of workers. In the other areas too, there is no clarity on what members are offering. We are going to reiterate that an agreement of services has to be signed as part of a single undertaking simultaneously with goods,” the official said.
Source: Business Line
Kumara Mangalam Birla led Aditya Birla Group is merging Aditya Birla Nuvo Ltd into Grasim Industries Ltd, in a bid to unlock shareholder value. This merger will create an entity with Rs 60,000 crore in annual revenue. The merger was approved by the board of both, Aditya Birla Nuvo and Grasim Industries, at their respective board meetings. Aditya Birla Nuvo has in its portfolio, financial services, textiles, telecom and insulators. Among textiles, Nuvo has in its fold Jaya Shree Textiles, the biggest linen producer in India and Indian Rayon, the biggest manufacturer of exporter of viscose filament yarn. While Grasim apart from the cement division, also has in its fold the viscose staple fibre division in Birla Cellulose, a manufacturer and exporter of value added fibres like viscose, modal, etc. "The new entity will have a mixture of mature and new-age businesses with steady cash flows, which is one of the primary objectives of the merger,” Kumar Mangalam Birla said while announcing the merger.
Source: Fibre2fashion
COIMBATORE : Textile machinery manufacturing major Lakshmi Machine Works has showcased 10 machines at IMTEX 2017, now underway in Bengaluru. Company President K Soundhar Rajhan said the products on display were designed in line with LMW's policy of delivering innovation and value creation, backed by a well-trained service team. The products at IMTEX 2017 include an integrated solution for the metal cutting industry, a vertical machining centre, a new twin spindle vertical machining centre, the ‘JV Series’ with a high speed drill tap centre, a mini milling machine exclusive for the die and mould sector and aerospace sector and a compact horizontal machining centre. The Coimbatore-based company, a global player and one of three manufacturers of the entire range of textile spinning machinery has, since its inception in 1962, introduced over 12,000 machines for the textile spinning industry. Referring to the integrated solution for the metal cutting industry, Soundhar Rajhan said the industry's expectation is much more than machining. “Our solution will address needs such as high productivity, accuracy, low downtime, minimal rejection and above all an automated solution.” He further said in the vertical machining centre category, the company's new simultaneous machining capability machine would be ideal for aerospace components, oil and gas and medical industries.
Source: Business Line
The legal routes by which resident Indians and companies send money abroad are being examined by the Union finance ministry’s Enforcement Directorate (ED). It suspects some outward remittance routes, such as the Liberalised Remittance Scheme and advance import remittances, could have been misused during the demonetisation drive. All categories of outward remittances are being looked into, to check whether the disclosure requirements and purpose of sending money was genuine, said a senior ED official. SHRIMI CHOUDHARY writes. The legal routes by which resident Indians and companies send money abroad are being examined by the Union finance ministry's Enforcement Directorate (ED). It suspects some outward remittance routes, such as the Liberalised Remittance Scheme (LRS) and advance import remittances, could have been misused during the demonetisation drive. All categories of outward remittances are being looked into, to check whether the disclosure requirements and purpose of sending money was genuine, said a senior ED official. The ED prepared a plan in a three-day meeting here on January 17-19, chaired by its head, Karnal Singh. Personnel were directed to check details of all categories of remittances in the past two months, said an official who was there. An individual is permitted to remit up to $250,000 under LRS. This may be used to buy immovable property, invest in equity or debt, for education or medical reasons. By RBI data, outward remittance under LRS for November 2016 was $620.8 million (~4,200 crore), as compared to $333.4 mn in the same month a year before. Outflow of funds for travel and for maintenance of close relatives abroad has been showing a jump for some months. Also, the ED is believed to be examining some private and public sector banks for possible breach of the the anti-money laundering and know-your client norms. "There are instances where lenders were allowing dubious transactions and lowering their guard against tax dodgers,” the official said. ED officials estimate ~2,5003,000 crore was taken out of the country under the guise of remittances, of which ~700 crore has been established. “In some of the cases, the advance remittances shown in the books of exporters went to shell companies abroad,” the official added. He said the money taken out of the country was shown as payment towards import, with an inflated value of goods. Most of the money sent abroad was first deposited in the accounts of shell companies. With several layers of transactions, the difference between remittance and actual cost of goods would then be transferred into the exporter’s account in India. In some cases, the company in question showed it had exported finished metal but no remittance was received, disclosed the official. An example cited was of Rajeshwari Exports, where the ED has registered a case for allegedly misusing the advance remittance route and gained ~ 1,500 crore in a year. The officer said similar methods had been adopted by other companies while placing orders for import of precious metals through advance remittance. Ashvin Parekh, managing partner of Ashvin Parekh Advisory Services, said: “Any kind of funds transfer attempted by individuals to come out of the tax net need to be scrutinised, as the 50 days of demonetisation drive was not only for depositing or exchanging old notes but to catch tax evaders.” In that period, if a person had transferred a significant amount of money abroad or someone received a large amount, an explanation would have to be given to the tax authorities, he added.
Banks are supposed to identify unusual activity in remitting money aboard; this might get missed on occasion. However, irrespective of demonetisation, there is a mechanism for compliance with the rules for fund transfers abroad, added Parekh.
Source: Business Standard
In a major push to the maritime sector, the Centre has planned port-modernisation projects worth ~91,000 crore, leading to the creation of a 3-billion-tonne port handling capacity by 2025. To part-fund its various schemes, the shipping ministry is likely to get ~2,500-crore allocation in the Budget, slated to be presented on February 1. India’s port handling capacity in 2015-16 stood at 1,673 million tonnes per annum (MTPA). Official estimates expect the traffic at the major ports to touch 2,500 MTPA by 2025. Keeping in line with the need for a higher capacity to handle growing traffic at the 12 major ports, the government has planned massive capacity augmentation exercise, which it aims to achieve through modernisation and development. According to global norms, the difference between porthandling capacity and traffic should be 25-30 per cent, an official in the shipping ministry told Business Standard. Various port traffic studies conducted by the Centre have pointed towards one holistic approach in terms of development of India’s 12 major ports — Kandla, Mumbai, JNPT, Marmugao, New Mangalore, Cochin, Chennai, Ennore, V O Chidambarnar, Visakhapatnam, Paradip and Kolkata (including Haldia). Each port would be developed under a master plan on PPP (public-private partnership) basis, the official said. According to the plan, 142 port modernisation projects would be executed in a phased manner at an investment of ~91,000 crore. The projects would be implemented in 20 years and would contribute an additional capacity creation of 884 MTPA. According to the official, 72 projects, costing about ~35,000 crore, are under implementation. Port development through master planning was envisaged by the central government after a series of deliberations with consultants. Also, during the study, it was found that import and export of certain commodities was more than others. The first six months (AprilSeptember) of FY17 witnessed growth of 142.4 per cent in cargo traffic of iron ore, as compared to the year-ago period, official data released by the ministry of shipping showed. Cargo traffic of petroleum, oil, lubricants (POL) increased 5.8 per cent, followed by other cargo (4.6 per cent) and container (0.7 per cent), against the yearago period. In terms of composition of the cargo handled at major ports, the largest commodity handled in the period of AprilSeptember 2016 was POL (37.1 per cent), followed by coal (23.4 per cent), container traffic (19.6 per cent), other cargo (11.9 per cent), iron ore (5.66 per cent) and fertilisers (2.5 per cent). The ministry has envisaged a spurt in cargo movement in the coming years as an outcome of growth in the manufacturing sector. The port modernisation plan is part of the broader Sagarmala programme, under which the government announced building 14 coastal economic zones (CEZs) aligned to the relevant ports in the maritime states, including West Bengal, Andhra Pradesh, Odisha, Karnataka, Tamil Nadu, Kerala, Goa, Maharashtra and Gujarat. The ambitious Sagarmala programme has four essential features — port modernisation, port connectivity, port-led industrialisation and coastal community development. Besides Sagarmala, the central government also intends to build a robust network of inland waterways and has entrusted Inland Waterways Authority of India (IWAI) with the job.
Source: Business Standard
In yet another significant change to its annual accounting system, the government seems to have approved in principle to syncing the financial year with the calendar year. It is, however, not clear whether the switch will take place from 2017-18 or from the next financial year. The financial year currently begins April 1.
Time factor
“The government can prepare accounts for a period of nine months for 2017, but there is a paucity of time. At the very least, the Budget could include a statement of intent that the Centre would move to a new financial year cycle,” said a person in know of the development. Finance Ministry officials remained tight-lipped about the development but sources said an announcement is likely in the Union Budget on February 1. “Such a move has its benefits as it would help in better Budgeting and also maintain the flow of expenditure through the year,” said the source. The Finance Ministry had in July last year set up an expert panel, led by former Chief Economic Adviser Shankar Acharya, to examine the “desirability and feasibility” of having a new financial year. The committee, which submitted its report last month, is understood to have favoured the move to a new fiscal year cycle of January to December.
Expenditure flow
Such a fiscal year would be in line with the practice of international agencies and some other countries, and more importantly, it would ensure the flow of expenditure starts before the monsoon sets in. This would also boost the government’s efforts to improve the quality of spending, especially on capital assets, for which it has also advanced the Budget timeline and scrapped the distinction of Plan and Non-Plan expenditure. Under the current fiscal year cycle of April to March, most spending flows out from Ministries by June after the passage of the Budget and Finance Bill by Parliament. However, by then the monsoons also kick in and expenditure on development and construction activities has to be postponed till later in the year.
Source: Business Line
Manufacturers in this region have appealed to the Union Government for data on overseas markets and other measures that will give a boost to exports. The Federation of Indian Export Organisations (FIEO) organised an interactive meeting here on Saturday with the Commerce Secretary S. R. Rao on enhancing exports.
Priority sector
Rafeeque Ahmed, president of FIEO, said exports should be treated as priority sector for credit and credit flow to exporters should improve. The target for exports from the country this year is 325 billion dollars. Exporters should look at achieving 350 billion to 360 billion dollars worth exports. They should increase the market share by offering attractive prices. He appealed to the Union Government to create a marketing and development fund that will support exporters who want to travel abroad to meet buyers. Walter D’Souza, regional chairman of FIEO, said the organisation was opening an office here. Exports from Tamil Nadu crossed 34.50 billion dollars in 2012-2013 with three per cent growth. The State’s share in the national exports was 11.5 per cent. The ease of doing business is one of the important parameters on which the status of trade facilitation in a country can be benchmarked. Costs have an adverse impact on competitiveness of exports and hence it should be brought down. A. Sakthivel, chairman of Apparel Export Promotion Council, said that with support from the Government exporters in this region will be able to double exports in three years. He sought Exim scrip for garment exporters who imported fabric. Some of the fabric varieties are not available in the country and hence exporters have to source them from other countries, he said. Further, with frequent increase in diesel price, exporters should get it at international prices. Small and medium-scale enterprises should be able to import generators used for captive purpose at zero per cent duty, he said.
Positive indications
Ajay Sahai, Director General of FIEO, said that India can look at double digit growth in exports as global trade is improving and there were positive indications of the U.S. and the European Union economies. India’s current account deficit is 4.8 per cent of the GDP and though exports have grown, increase in imports is higher. In a memorandum to the Commerce Secretary, Southern India Mills’ Association said second hand shuttleless looms should be allowed for imports under the Export Promotion Capital Goods Scheme. Further, the import duty on synthetic fibres should be removed and the excise duty should be reduced to eight per cent from the existing 12 per cent.
Source: Business Line
A Budget that spurs demand is the need of the hour. The view that fiscal stimulus crowds out private spending is questionable Whatever may be the actual recommendations of the NK Singh panel tasked to review the fiscal consolidation roadmap, it has been widely agreed, by now, that the upcoming Budget should focus on stimulus measures in order to boost domestic demand, improve investments and pave the way for job-filled growth. Demonetisation is behind us and the withdrawal of cash has led to temporary problems of demand compression with consequential impact on growth. But, if there is something akin to the balance sheet of the economy, it can be seen that this is indeed the moment for a path-breaking Budget that can induce a sharp recovery.
The balance sheet
Budgets refer to income and expenditure statements. But there is very little discussion around the major elements of what could be construed to constitute the country’s balance sheet. The UN has been bringing out the Inclusive Wealth Report (an exercise which broadly looks at “manufactured capital, human capital, natural capital and social capital” as a country’s assets and internal and external debt of the government and private entities as liabilities) which had attempted to marry essentially an accountant’s perspective with that of an economist. If one were to take just the liabilities from this ‘balance sheet’, it would emerge that the country is perhaps at an economic sweet-spot from where a jumpstart is possible. Let us take external debt first. According to the latest report of the Ministry of Finance, India’s external debt stock stood at $485.6 billion at end-March 2016 as against $475.0 billion at end-March 2015. While external debt has increased over 2015-16 by a small 2.2 per cent, important debt indicators such as external debt-GDP ratio and debt service ratio remain comfortable. Our external debt continues to be dominated by long-term borrowings. The external debt policy pursued by the Government has kept external debt within manageable limits. India continues to be among the less vulnerable countries with its external debt indicators comparing well with other indebted developing countries, as the survey states. Of this debt, what is significant is that government debt is only $93 billion in India’s case. Further, the ratio of short-term debt on the external front is a modest 18.5 per cent which means that there is no reason for any anxiety on the debt-servicing front, at least for the next year. Just for comparison purposes, it may be noted that China’s share of short-term debt is 71.2 per cent though that is mitigated by its very high reserves position.
Government debt
As for short-term government debt, it stands at a measly $108 million, indicating that concern on the external debt front, as of now at least, is unwarranted. Our foreign exchange reserves are at $359 billion. When it comes to total government debt, the figure is ₹60, 33,464 crore including external debt. To give an idea of the indebtedness of the country, it would be useful to compare this with the total credit/ loans taken by all domestic entities inside India from the banking system — it stands at about ₹76,00,000 crore. And one major difference has been that whereas the Government has been borrowing at fixed rates, all others are borrowing at floating rates. So, in a falling interest rate regime, the Government has been effectively paying higher interest! Our share of government debt to GDP is at about 70 per cent and there are countries in the Euro Zone which have these ratios closer to about 90 per cent. Of course, the percentages in the case of Japan, the UK and the US are much higher. The obsession with fiscal deficit is premised on two grounds, mainly. One, that budget surpluses are a form of national saving, and two, that higher fiscal deficits would crowd out private investments because of the pressure it would put on interest rates. There have been studies and reports which have negated both theses empirically. One of them, based on RBI data, conclusively stated that there is no significant relationship between high fiscal deficits and high interest rates. Anecdotal evidence is also now on hand; banks have invested more in government debt than the SLR requirement and still have liquid surplus to lend, which has forced them to drop rates. At present, a 10-year government security has a yield of 6.7 per cent, much lower than a one-year bank deposit rate. Much of what can be called “fiscal deficit fundamentalism” can be attributed to neo-classical views which would fit western liberal economies. Thanks to our inclination to save (net savings rate is about 31 per cent of GDP), government borrowing, per se, need not be seen as a matter of concern.
Fiscal fundamentalism
Of course, like any other economic entity, our government also cannot perennially borrow and live beyond its means. But to cling to numeric targets even when the crying need of the hour is to boost demand and public investments (so that it will crowd in private sector investments) would be detrimental to the growth trajectory that we need to have to generate enough jobs. Also, when monetary policy is seemingly constrained by exchange rate considerations, fiscal fundamentalism may have to be abandoned. Putting money in the hands of the poor and the middle classes, making life easier for the distressed farm sector and making for vibrancy in the small and medium businesses is vital. The country’s economic balance sheet seems strong and resilient enough to afford the Government ‘space’ to be accommodative enough to spur growth impulses, without going overboard on fiscal loosening.
Source: Business Line
The environment for SMEs, especially those in manufacturing, is far from conducive. There is a cyclical downturn in global growth, hurting external demand and dragging down commodity prices. Domestic demand is sluggish due to slowdown in the investment cycle. India’s industrial output has fallen in five of the ten months of this fiscal. Manufacturing GDP grew at the slowest rate since last June, in the recent September quarter. These numbers capture both the large as well as the small businesses. So, it is quite possible that the contraction in output in smaller businesses could be sharper. There are a couple of ways in which the Centre could help this sector.
One way is to help refurbish the brand of manufacturing SMEs to help them attract investors.
Firing the imagination
Over the years, the manufacturing sector in India has lost its dominant position to services. In 1950, agriculture contributed around 50 per cent to the GDP, services 30 per cent and industry around 18 per cent. While the share of industry has increased to around 30 per cent, the growth rate is far lower than services that now account for over 50 per cent of the GDP. The growth rate of services also outpaces other sectors in the economy. This fast rate of growth is taking the much-needed attention away from manufacturing. Then, we have the new age start-ups in the tech space that are attracting the attention of the public, investors and policy makers. No one will dispute that there is a lot of money in the hands of investors – HNIs, PE funds, venture capitalists – who are ready to give money to a good idea. Most of this money is pouring in to technology companies, healthcare or other services. Why is the money not coming to manufacturing SMEs? It has to do with the prospects of the sector as well as perception. Prospects of many businesses will improve with the economy. What the Centre can do is help improve the brand of manufacturing to catch the attention of these investors. The ‘Make in India’ movement is a good start, but needs to gain greater traction. If the potential in the sector is highlighted so that investors are convinced, then it will not be difficult for the sector to find funding that can act as a catalyst for growth.
Lack of data
The lack of legible publicly available data to track the SME segment is also a major difficulty for policy makers looking to find solutions to the issues facing this segment. If you tried answering a question, ‘what are the profit margins of companies in the SME segment in FY 16?’, it would be quite difficult. There just isn’t any database that captures the latest operational performance of these businesses. The Inter-Ministerial committee set up to look at the issues of manufacturing MSMEs suggested building an IIP index for MSME segment alone. That is a good idea but that will give a broad picture alone. In these days of big data and data analytics, having a publicly available data-base on all SMEs could help attract investments as well provide guidance to policy makers regarding the efficacy of their policies.
Perhaps block-chain technology can be used to make a public ledger updated by the SMEs themselves that is open to the public. According to the MSME annual report 2015-16, there are 76,000 small and 3,000 medium enterprises. The number isn’t large especially when compared to 14,85,000 micro enterprises. So the task will not be too difficult. Its time policy makers gave more time to this segment that can make a large difference to our economic growth.
Source: Business Line
Union textiles minister Smriti Irani delivering the inaugural address at the first ever North East Investors Union textiles minister Smriti Irani delivering the inaugural address at the first ever North East Investors' Summit, at Shillong on January 29, 2017. Courtesy: PIB
The Central government is in a position to infuse Rs 820 crore for supporting sericulture in the North Eastern Region (NER). This is estimated to impact around 3.95 lakh families, with 70 per cent of the resultant employment opportunities accruing to women. The textiles ministry alone has sanctioned projects worth more than Rs 1,040 for the NER. Textile promotion schemes of handloom, handicrafts, sericulture and garmenting are being implemented, so that the Central government can add to the efforts of the state governments in creating more employment opportunities, Union textiles minister Smriti Irani said while inaugurating the first North East Investors’ Summit, organised jointly by the ministry of textiles and the ministry of DoNER, in Shillong. In her inaugural address, Irani said that the huge participation in the summit showed not only the trust and belief in the investment opportunities in the NER, but also the investors’ belief that the cooperation among the Government of India and governments of North Eastern states will result in exponential multi-sectoral growth in the region. On the occasion, Irani launched ‘India Handmade Bazaar’, an online portal, which will provide direct market access facility to handloom weavers and handicraft artisans. The portal will facilitate weavers and artisans to enter information about their products for easy understanding of customers/exporters. Weavers and artisans will be able to access the portal through their mobile number registered with Office of Development Commissioner. The mobile number can be registered by visiting nearest Weavers’ Service Centre or Marketing Centre. Buyers can view the products online and directly contact weaver/artisan to enquire or place an order.The minister informed the gathering that master craftsmen from the handloom sector will impart training to students across the various NIFT centres in the country, beginning from the coming academic session. She said this will enable the students to learn the legacy craft and imbibe this into contemporary fashion. During the summit, nearly 20 MoUs were signed to develop and promote NER handicrafts, handlooms, agro-textiles and geo-textiles. Various MoUs were signed to promote collaboration in the textiles sector, in each of the various states in the region. (RKS)
Source: Fibre2fashion
At the first North East Investors' Summit dedicated to textile industry jointly organized jointly by the Ministry of Textiles and the Ministry of DoNER, in Shillong which started on Sunday. On the occasion, the Union Textiles Minister Smriti Irani launched 'India Handmade Bazaar', an online portal, that will provide direct market access facility to handloom weavers and handicraft artisans. The portal will facilitate weavers and artisans to enter information about their products for easy understanding of customers/exporters. Weavers and artisans will be able to access the portal through their mobile number registered with Office of Development Commissioner. The mobile number can be registered by visiting nearest Weavers' Service Centre & Marketing Centre as well. Buyers can view the products online and directly contact weaver/artisan to enquire or place an order. Nearly 20 MoUs were also signed on the occasion, to develop & promote NER handicrafts, handlooms, agro-textiles & geo-textiles. Various MoUs were signed to promote collaboration in the textiles sector, in each of the various states in the region. Vice Chairman of NITI Aayog, Dr Arvind Panagariya said that the North East has the potential to become a power-house for textile exports, thereby becoming the gateway to reach Southeast Asian countries. A lot is being done by the Government of India for the North East and that 10 percent of the textile budget is allocated to the North Eastern states.
Source: Yarns and fibres
The Trans Pacific Partnership Agreement was also expected to hit export of yarn and textiles in India. (A. Pasricha/VOA) When President Donald Trump abandoned the Trans Pacific Partnership (TPP) Deal, there was a sense of relief in India, where sectors such as apparel and pharmaceuticals were bracing for a hit. The ambitious pact between 12 countries bordering the Asia Pacific to boost trade had been a “serious worry” for Sudhir Dhingra, Managing Director of New Delhi-based Orient Craft, one of India’s biggest apparel exporters. India's apparel industry had feared losing business due to the Trans Pacific Partnership agreement that involved 12 countries. (A. Pasricha/VOA) India is happy to see TPP go away The reason: it would have made India’s exports less competitive as it slashed tariffs and gave countries like Vietnam and Malaysia preferential access to markets in the United States and Japan. Dhingra calls its scrapping very good news. “I personally was very concerned for the trade,” he explains. “As it is, parts of those region are more productive, more efficient. And on top of that if you get duty free advantages, so obviously the entire business runs to these markets.” India's garment industry employs millions of people. (A. Pasricha/VOA) Huge apparels industry in Indi India’s garment and textiles sector employs millions of people and about 20 percent of apparel exports are headed to the United States. The apparel industry was not the only one threatened by TPP. India’s Commerce Minister, Nirmala Sitharaman had said that the pact would impact a range of sectors like leather goods, plastics, chemicals and textiles. Effectively, the TPP meant that India would have been sidelined from a mega trade agreement which covered about 40 percent of global trade. Estimates for export losses that India would have eventually suffered have varied widely. The Peterson Institute for International Economics said India’s losses would approach $50 billion per annum if China and other countries joined the pact at a later stage. Others said it would be far less. But with losses being a near certainty, the scrapping of the TPP gives India respite, said Biswajit Dhar, trade expert and professor at New Delhi’s Jawaharlal Nehru University. “There might be a sense of relief because TPP was threatening to introduce standards for trade liberalization and introduction of new rules which were far more stringent than those that India is comfortable with,” he said. The TPP involved setting strict labor and environment regulations and higher intellectual property rights protection. Regional deals The end of TPP is now likely to turn the focus to regional agreements – one of them could be the Regional Comprehensive Economic Partnership (RCEP) – a bloc which includes India and China and accounts for nearly half the world’s population. Many expect that China will step in to fill the gap left by the United States as new trade deals are hammered out. Some say that will be a relief for India as China is unlikely to set the same kind of standards as the one that were envisaged for the TPP. However, many others feel that may not be any more comforting for India because it would also mean that India would have to open its markets to China. China's influence “Even without preferential access, China has managed to put its footprint in the Indian economy quite substantially,” pointed out trade expert Dhar. “So the worry among Indian business people is that if China is given preferential market access, then there would be a real problem that they will have on their hands.” India, long known for its tough business climate, complicated rules that deter investment, high taxes and stringent labor laws, has not benefited from the manufacturing boom that transformed many Asian economies in recent decades. Efforts to give a lift to manufacturing under a flagship program of Prime Minister Narendra Modi called “Make in India” has yet to have a significant impact. Trade experts warn with the scrapping of the TPP and more talk of protectionism by the Uncertain economic future
United States, the future of global trade has become uncertain. “I don’t think we should cheer”, said Arpita Mukherjee, a Professor at the Indian Council for Research on International Economic Relations. “He (Trump) is also saying Make in America. It is an unknown scenario, so you should be worried.” Experts are calling on India to implement reforms to make its industries globally competitive. “You have to offer ease of doing business, and once you do that, you will benefit by any trade agreement,” she said.
About 20 percent of India's apparel exports are headed to the United States. (A. Pasricha/VOA) Dhingra said different states in the country have been wooing businesses like his in the past year offering subsidies and other incentives that could help him become more competitive. “There is not a week that I don’t get a call from some state government or the other where they want Orient Craft to set up factories there. They are willing to give support, they are willing to give subsidies. This is something I have not seen in the past 40 years,” he said.
Source: Voice of America
India is trying to fast-track negotiations on the proposed Economic Technology Cooperation Agreement (ECTA) with Sri Lanka, which would result in an expansion of the existing free trade pact in goods and also include services and investments, by striking a balance between services and goods. With China, too, seeking to conclude a similar economic pact with Sri Lanka this year, New Delhi is eager to ensure that it doesn’t fall behind, a government official told BusinessLine. “India and Sri Lanka had initially resolved to conclude the pact by the end of the last calendar year but couldn’t do so due to some niggling issues in services and rules of origin. The third negotiating round in Colombo earlier this month was encouraging and we hope to take it forward in March in New Delhi and conclude the talks soon,” the official said. New Delhi is keen to enter the services sector in Sri Lanka, but there are apprehensions in the country that the strong Indian companies could uproot local businesses. “We understand Sri Lanka’s concerns, but services remain our strong area. That is why we are trying to reach an agreement on areas within services, like IT or ship building, where Sri Lanka needs service professionals and India would not be disrupting anything,” the official said.
Flexi rules
Sri Lanka also wants more flexible rules of origin — the rules which determine to what extent a partner country needs to add value to imported inputs for it to qualify as originating from that country. While China’s efforts to conclude a free trade pact with Sri Lanka has put India on its toes, New Delhi has been assured that it would not be discriminated against. “Sri Lanka has assured that its pact with China will in no way affect the country’s strategic and economic ties with India,” the official said.
India and Sri Lanka signed their free trade agreement in goods way back in 1998, which resulted in higher imports from Sri Lanka in the initial years, with India catching up later and the country also benefiting on the investments front. “Although there was no provision of investments in the FTA, India became largest sources of FDI into Sri Lanka because of the linkage between goods and investments. Indian companies, taking advantage of the free trade regime and the literate work force started investing in the country,” pointed out Ram Upendra Das from Delhi-based think-tank RIS, which played an instrumental role in signing of the initial FTA. Das said that even services, for instance tourism in both countries, has flourished in the absence of an agreement in the area. “A wider pact encompassing both services and investments will give a further boost to bilateral economic relations,” Das said. India’s exports to Sri Lanka amounted to $5.3 billion in 2015-17 whereas its imports from the country were at $743 million.
Source: Business Line
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 54.63* per barrel (bbl) on 30.01.2017.
In rupee terms, the price of Indian Basket decreased to Rs. 3717.14 per bbl on 30.01.2017 as compared to Rs. 3725.97 per bbl on 27.01.2017. Rupee closed stronger at Rs. 68.04 per US$ on 30.01.2017 as compared to Rs. 68.20 per US$ on 27.01.2017. The table below gives details in this regard:
|
Particulars |
Unit |
Price on January 30, 2017 (Previous trading day i.e. 27.01.2017) |
Pricing Fortnight for 16.01.2017 (Dec 29, 2016 to Jan 11, 2017) |
|
Crude Oil (Indian Basket) |
($/bbl) |
54.63* |
54.24 |
|
(Rs/bbl |
3717.14 (3725.97) |
3691.57 |
|
|
Exchange Rate |
(Rs/$) |
68.04 (68.20) |
68.06 |
* Since Oman & Dubai prices are not available due to holiday in Singapore on 30.01.2017, the price of Indian Basket Crude oil cannot be derived. Therefore price of Indian Basket as of 27.01.2017 has been considered.
Source: PIB
Ankara, we came full cycle and have unbanned textiles imports again. reported that “in 1980s, the Nigerian textile market had become the third largest in Africa, with over 180 textile mills and over 500,000 direct and indirect jobs.” At this time textile imports were banned. However, in 1997, the ban on importation of textiles was lifted and cheap imports from China and India flooded into Nigeria and killed off the textile industry. Over 50 companies had closed down, while about 80,000 employees had lost their jobs. To save the situation, textile imports were again banned in 2004. This new ban came with a bailout fund of N100b for the textile manufacturers plus reduced duties for the importation of raw materials for textile manufacturing. The Bank of Industry has said about N60bn has been disbursed to various beneficiaries under the intervention scheme, which led to the re-opening of the United Nigeria Textile Limited in Kaduna. Capacity utilization had increased from 40% to 61%. However even with the ban in place Nigeria still imported about N300bn worth of textiles annually, per the National Union of Textile Garment and Tailoring Workers of Nigeria. In fact, Suresh Bakhijani, Indian deputy high commissioner to Nigeria, revealed that Nigeria had imported textile products worth $138 million within one year from India. The arguments for this new policy is simple, we banned, but imported textiles are still in Nigerian markets, true. So the ban was not working. The other argument is that Nigeria signed up to the Common External Tariff (CET) and thus, we cannot close our borders to trade, we can at best impose an Import Adjustment Tariff. Both arguments show a failure of strategic policy, and decision making Let’s take the Common External Tariff (CET)….it is important to understand that there is nothing like free trade, no nation opens up her borders to imports…none. I give a few examples. China Imposed Anti-Dumping Measures on Korean Polyester China has initiated temporary anti-dumping measures against South Korean imports of polyester staple fiber, state media reported on November 2002. The decision followed a probe into claims, last year the imports were hitting domestic polyester staple fiber producers hard. So no one opens her borders because they signed a piece of paper..… So what can Nigeria do? 1. Subsidize local textile production: Give the local textile companies a 90% rebate on cost of generated Power. According to the textile union “Between 30% and 35% of textile and garment manufacturing costs are energy related expenses. thus give textile plants zero percent CBN interest loan to build embedded power plants or pipelines to get gas to their factories. 2. Strategic imposition of tariffs: Allow me give an illustration how a import tariff should work, let us review the British Calico Acts (1690-1721). In the late 17th century, The UK Parliament began to see a decline in domestic textile sales, and an increase in imported textiles from places like China and India. Seeing the textile importation as a threat to domestic textile businesses, the UK Parliament passed the Calico Acts and by 1813 the import duty on Indian cotton goods stood at 85%. By 1830 British cotton textiles dominated the world market and the Indian cotton textile industry was in ruins. The Calico Acts acted as effective trade barriers, which allowed Britain to build up its cotton industry with technology, specifically the steam engine. The trade barriers allowed for British textile industry to grow and learn to make cotton textiles as efficiently as the Indians did without the threat of foreign competition. Once the local British textile firms could produce cotton as cheaply as the Chinese and the Indians, the UK lifted the ban on cotton and began to export. “The goal of protectionism is to allow an industry to develop until it is able to compete in international trade. Once the industry is competitive on global markets, you no longer need domestic tariffs and they can be removed” This is effective where the local market already has latent capacity that can be deployed. So in Summary, Give the local textile companies local support, for instance, subsidized loans, subsidized diesel, subsidized gas to power gas plants, this will drop their prices and kill off imports. Consider a temporary tariff hike to give the local mills time to adjust their operations. The goal should not be protectionism, as a destination but as a pathway to ensuring local textile market survives and creates jobs. It’s our problem, we can fix it.
Source: Business Day
ISLAMABAD: Federal Minister of Commerce Khurram Dastgir Khan said that to achieve a constant growth in the textile sector, Pakistan was investing in energy sector. In an interview with an European Newspaper (New Europe), Minister said that Pakistan's exports has been making their way through international markets including USA and EU since many decades. To a question, Minister said that USA has traditionally been Pakistan's single largest export market and there will be no extraordinary changes now. "At the moment, we are analysing the situation we would like to be engaged in. Particularly, Pakistan is exporting many goods that are no longer produced in the US, particularly textiles", he said. However he said that since 2014 the EU became a major partner and gave Pakistan the GSP+ status. "We wanted the Americans to give us the same status, but apparently both Bush and Obama's administrations thought that Congress and the Senate would not agree to such concessions," he explained. To another question, minister said that Chinese investment has been coming to us in different areas, including in solar and green energy. "Although, it is not just the Chinese who invest in our country. Pakistan is also financing from its own resources three major natural gas fields", he added. Dastagir said Pakistan has the whole chain of production, including cultivating cotton and sending it up to the cloth factories. "We produce clothes and textiles without relying on outside aid. We export across the whole region", he added. To a question regarding Kashmir issue, Dastagir said that people are suffering there (Indian occupied Kashmir) , they are being blinded and they are being killed. He emphasized Europe is a standard bearer of human rights, of the rights of minorities. "Dastagir urged Europe that it must see the Indian occupied Kashmir situation also as an issue of human suffering and try to do whatever it can to protect people of Indian occupied Kashmir.
Source: Business Recorder
Bangladesh, which grows about 180,000 bales (1 bale=218 kgs) of cotton in a year or 1 per cent of the annual demand, now aims to grow I million cotton bales by 2025. The country is now the biggest importer of cotton in the world and spends more than $3 billion on cotton imports annually, of which, India meets 50 per cent of the current cotton demand. Speaking at a press conference, Mehdi Ali, general secretary of Bangladesh Cotton Association (BCA) said, “We have targeted to meet 10 per cent of our yearly demand from domestic cotton production by the end of 2025, by growing 180,000 bales.” According to Ali, most farmers in various districts of Bangladesh have deserted tobacco cultivation in lieu of cotton, as cotton offers them better returns. He shared the opinion that the Bangladesh cotton industry must stop relying on just one or two countries for cotton imports, as sometimes, there are challenges which importers have to face. In response, Mohammad Ali Khokon, vice-president of Bangladesh Textile Mills Association (BTMA) informed that cotton imports from African countries have risen significantly in recent times, to reduce dependence on India. “Bangladeshi spinners and cotton traders are now importing more than two million bales of cotton from various African countries like Burkina Faso, Benin, Chad, Lesotho and Sudan, with USA and Australia also becoming major sourcing destinations” he added.
Source: Fibre2fashion
Workers at the United Aryan EPZ Ltd on Ring road off Thika Super Highway on January 27, 2017. SALATON NJAU| NATION IN SUMMARY Trade ministry welcomes move by President Donald Trump to drop the Trans-Pacific Partnership Agreement (TPP), would have hit hard the Africa Growth Opportunity Act (Agoa) through which Kenya sells to America duty-free. Last year, Kenya joined other African nations to lobby for the delay in the implementation of TPP, which would have resulted in stiff rivalry to the country’s textile industry. Kenya is a beneficiary of the preferential trade pact Agoa, which allows sub-Saharan African countries to export goods to the US tax-free. Textiles and apparel account for about 80 per cent of Kenya’s total exports under the agreement. Kenya can breathe a sigh of relief after the US dropped plans to endorse a trans-pacific trade pact that would have exposed the country’s exports to America to stiff competition. The Ministry of Trade has welcomed the move by President Donald Trump saying the Trans-Pacific Partnership Agreement (TPP), would have hit hard the Africa Growth Opportunity Act (Agoa) through which Kenya sells to America duty-free. Last year, Kenya joined other African nations to lobby for the delay in the implementation of TPP, which would have resulted in stiff rivalry to the country’s textile industry as it would allow 12 pacific nations to export their goods to America duty free. Trade Principal Secretary Chris Kiptoo says the withdrawal of this trade deal by Trump is good news for Kenya, especially for the country’s textile sector. Kenya is a beneficiary of the preferential trade pact Agoa, which allows sub-Saharan African countries to export goods to the US tax-free. Textiles and apparel account for about 80 per cent of Kenya’s total exports under the agreement. “If the Trump administration would have moved on with implementation of TPP, then goods from Kenya heading to US under the Agoa treaty would have been affected significantly as a result of competition from other nations. Its withdrawal gives us a sigh of relief,” Dr Kiptoo said. Big players Dr Kiptoo said it would be difficult for Kenya to compete with countries such as Vietnam and other Asian States, which are not only part of the TPP deal but are big players in the textile field. “Vietnam is a big producer of textile and this would have made it difficult for us to compete with them if they get duty and quota free access to the US market. Our cost of production is high compared to Vietnam and this would have made our goods uncompetitive in the market,” he said. On Monday last week, Mr Trump fulfilled one of his campaign pledges and signed a statement formally abandoning the Pacific trade deal. TPP eliminates or reduces all tariffs on goods traded between partner countries. The TPP agreement would have abolished many of these charges. The United States remains Kenya’s major trading partner and was position three in the first 10 months of last year as the country’s export destination.
Source: Business Daily
NAIROBI (Xinhua) -- Kenya is putting in place policy reforms to boost local textile production, including by encouraging domestic sales, a senior official said Friday.www.citiindia.com 32 CITI-NEWS LETTER
Minister of Industry, Trade and Cooperatives Adan Mohamed told a media briefing that the measures include allowing textile firms in the Export Promotion Zones to sell up to 20 percent of their produce locally without paying duties. “This will allow textile firms to take advantage of growing demand for apparel products by the growing middle class and hence boost the sector,” Mohamed said. “We want to make sure our citizens have access to the high quality export products that are sold to overseas market,” he said during the launch of the Progress Report on Textile and Apparel Industry. According to the report, Kenya’s textile and apparel exports had grown to 415 million U.S. dollars by the end of 2016, accounting for 30 percent of industrial exports over the past five years. The East African nation however is major importer of second-hand clothes despite its vibrant textile sector. The minister noted that increased local production will make consumers switch from purchasing second-hand clothes. Mohamed said the government is targeting labor-intensive low-tech industries such as textile as part of the realization of the industrialization agenda that will transform Kenya into a newly-industrializing, middle-income country.
Source: Coast week
COTTON USA provides proactive support through its Sourcing Program with respect to procurement issues, which includes organized sourcing trips to important regions. Visitors also are invited to visit the exhibit to discover the COTTON USA Marketing and
Licensing Program and learn about COTTON USA’s collaboration with leading brands and retailers around the world. Cotton is a natural and renewable fiber, and U.S. cotton producers are leading the way in responsible cotton production practices. U.S. cotton has a track record of continuous improvement with respect to water and crop protection product use, and habitat and soil preservation. The U.S. system’s transparency allows for constant monitoring and improvement. The roughly 18,000 U.S. cotton growers comply with stringent U.S. government regulatory requirements and are committed to the principle of continuous improvement. At the COTTON USA exhibit, the textile trade also will be able to gather information on how the Cotton LEADS™ program, initiated by Australia and the United States, offers manufacturers, brands and retailers a reliable cotton supply chain solution and confidence that the raw material used from these countries is responsibly produced and identified. COTTON USA is a premium trademark ingredient brand that identifies products made from U.S. cotton through all stages of processing and marketing. COTTON USA has strong consumer awareness and preference for COTTON USA, with more than 51,000 product lines and 3.8 billion products having proudly carried the name COTTON USA since 1989.
Source: Fibre2fashion
The Asia Apparel Expo is a professional sourcing marketplace for European companies to meet with apparel manufacturers and suppliers from eight Asian countries that will take place in Berlin from February 14-16. Over 300 companies from Hong Kong, China, India, Bangladesh, Pakistan, Sri Lanka, Taiwan and Vietnam are expected to exhibit at the show. The trade fair is organised by Hong Kong based Kenfair Exhibition Limited and managed by Comasia Limited. It is the largest tradeshow in Europe where clothing professionals can meet with Asian factories that offer production of apparel products for men, women and children as well as fabrics and textiles, and trimmings and accessories, and that are ready to meet European customers’ demands for finished garments, contract manufacturing and private label development. Asia is the world’s number one destination for apparel manufacturing and Asia Apparel Expo connects world-class Asian clothing manufacturers and fabric suppliers, providing low cost, high quality and stable product supply, to European brands, said the organiser in a press release. The sixth edition of the three-day expo is supported by Export Promotion Bureau of Bangladesh, China Council for the Promotional of International Trade (CCPIT) Shanghai Pudong Sub-Council, CCPIT Jiangsu, CCPIT Zhejiang and Bureau of Commerce of Qingdao of China, and The Indian Silk Export Promotion Council and Federation of Indian Export Organisations of India. Europe imports about half of the world’s total clothing production and Asia is the major apparel supplier, producing more than 32 per cent of the world’s clothing exports. China is the leading world producer and supplier of clothing and has thrived under a government policy geared towards developing a clothing and textiles industry open to the world. Asian countries have developed highly competent, competitive and skilled manufacturing bases with continuous improvements in quality, on-time delivery, customer service, ethical and environmentally-friendly employment practices and working conditions. Six Asian countries (China, Indonesia, Vietnam, Bangladesh, Sri Lanka and India) account for 80 per cent of Asia’s apparel exports to Europe, Americas and Japan. Asia Apparel Expo is open to sourcing professionals and brand manufacturers, trading companies, wholesalers, multiple retailers, chain stores, department stores, agents, designers, private label and buying offices.
Source : Fibre2fashion
Exports from Pakistan to the European Union (EU) have surged 37 per cent in the past three years, driven by the generalised scheme of preferences (GSP) plus status offered to Pakistan in December 2013. The GSP plus status makes it possible for Pakistan to export 20 per cent of all exports at zero rate and preferential rates for 70 per cent of overall exports. The biggest beneficiary of GSP Plus have been Pakistan textile and apparel exports, which make up for around 60 per cent of overall exports from the country to the EU. “The GSP status offers huge potential for enhancing mutual trade between Pakistan and the EU,” Pakistan federal commerce minister Khurram Dastgir Khan said in a statement. Khan also revealed that exports of machinery, chemicals and dyes from Europe to Pakistan also grew 14 per cent in the same period, which were mainly used in production of exports of textiles and garments to the European markets.”
The yearly trade between EU and Pakistan is around $7 billion, with the balance of trade being nearly equal. The main products exported from Pakistan to the EU mainly included textiles, apparels, and leather products.
Source: Fibre2fashion
The withdrawal of the US from the Trans Pacific Partnership (TPP) trade agreement has delighted the Indonesian textile and apparel exporters, as they will now have a level playing vis-à-vis those countries in the TPP pact. US President had earlier last week decided to withdraw from the TPP agreement, which offered preferential duty rates to member states. Indonesia’s neighbours like Malaysia and Malaysia used to enjoy a preferential import duty in shipments to the US, on account of being TPP member countries, while Indonesian textiles were subjected to 10 per cent import duty. A leading Indonesian daily quoted the chairman of Indonesian Textile Association (API) Ade Sudrajat as saying that the decision of the US to withdraw from TPP will benefit the country’s textile exports, as the country will now be able to compete at the same price points, as export from other countries to the US. As against, exporting around 36 per cent of overall Indonesian textile and apparel exports to the US last year, API now expects that figure to rise to 39 per cent or $4.8 billion this year.
Source: Fibre2fashion
China’s voracious demand for cotton is sparking the fibre’s best rally in six months. Chinese buyers have committed to purchasing almost five times more American cotton than at this time last year, the US government said in a report this month. The price of the commodity is heading for its biggest monthly advance since July. Hedge funds are positioned for more gains, holding the secondmost bullish wager ever. American growers, the world’s top exporters, are this season expected to ship the most cotton since 2013, data from the US Department of Agriculture show. Sales growth is also being driven by purchases in Indonesia and Vietnam. “While rising demand has sparked two straight years of rallies, futures in New York are still trading about 65 per cent below a record set in 2011, leaving the fibre at affordable levels for consumers.
Close to new high
The net-long position in cotton rose 3.2 per cent to 87,341 futures and options in the week ended January 24, data published by the US Commodity Futures Trading Commission three days later show. That was just shy of an all-time high of 90,215 contracts set on January 10, according to the figures, which go back to 2006. Cotton traded on ICE Futures US in New York climbed 2.5 per cent last week.
Prices were little changed at 74.86 cents a pound on Monday and are up 6 per cent this month. Futures touched 75.37 cents on January 5, the highest since August. Consumption will probably outstrip production by 1.24 million tonnes this year, Cotlook Ltd, an Englandbased research company, said last week. That can help to erode global stockpiles, which the USDA estimates at 90.6 million bales (of 218 kg).
Spur for US farmers
The price gains will likely spur US farmers to increase plantings, especially with futures for competing crops relatively weak. American sowing may rise 7.6 per cent this year to about 10.84 million acres, a Bloomberg survey showed. Global producers are also increasing their harvests, with output expected to rise in Australia, China and India, the top grower. Cotton has rallied in recent weeks even as commercial traders, including mills and producers, have held a large net-short position, or bets that prices will fall. As investors added to the bullish holdings, it created a kind of tug-of-war between the two sides.
ISLAMABAD: The Ministry of Textile Industry has predicted decline in cotton production to accelerate, which could compel farmers to shift to other crops if no corrective measures are taken by the provincial governments, officials told Dawn. The warning has come at a time when the federal government is considering allowing the import of cotton to bridge the shortfall in local production. Cotton acreage has already shrunk by 22 per cent over the last 10 years because of low yields, according to the ministry. Another major reason behind the downtrend is better returns in growing sugarcane because of policy incentives offered by the government for that crop. Climate change also has indirectly affected the cotton crop since 2010. Devastating pest attacks have been another factor in declining cotton productivity over the years. All that resulted in price crash for cotton farmers as they got Rs2,200-2,500 per 40 kilograms against their production cost of Rs3,000. As the dilemma persisted for many years, the farmers felt compelled to shift to other cash crops, such as sugarcane, rice and maize, which offered better returns. Official data compiled by the textile industry shows the acreage of maize increased 24pc, rice 7pc and sugarcane 14pc from 2005-06 to 2016-17, mainly because of reduction in cotton area. A senior official of the textile ministry said low cotton yield had a direct impact on textile and garment exports, 75pc of which are based on cotton. “Any variation cotton yield has a direct impact on exports of textile and clothing,” the official said. Pakistan aims to cultivate cotton on 3.2 million hectares annually, including 72pc (2.6m) hectares in Punjab, 27pc (600,000) in Sindh and less than 1pc in Khyber Pakhtunkhwa and Balochistan. Another official of the Ministry of National Food Security and Research said the per-acre yield of cotton has stagnated since 1991, which has left the country with no choice but to import cotton to meet the domestic demand. The only reason for this was non-introduction of new varieties and new technology. The issue will mostly be now resolved after the promulgation of the much-awaited Plant Breeder’s Rights Act 2016 in December. The law will now encourage the development of new plant varieties and to protect the rights of breeders of new varieties as well. The act will help in establishing a viable seed industry in the country. Unlike cotton, government’s support to the sugarcane crop has helped increased its cultivation by 14pc. The price of sugar also more than doubled to Rs68 per kg in 2016 from Rs31 in 2005-06. The price of sugar in the domestic market is almost 80pc higher than the international market. Moreover, the number of sugar mills went up from 56 in 1995-96 to 84 in 2015-16. Of them, 45 mills were in Punjab, 32 in Sindh and eight in KP. Almost 70pc of the country’s sugar mills are located in core cotton zone of the country, especially in Punjab. Analysts say that this unexplained protection to sugar and unprecedented expansion of sugar industry were posing threat to cotton and other crops. To look into all these issues, the government has tasked Pakistan Central Cotton Committee to study the sector and come up with some concrete recommendations. The committee has evolved a report and submitted to the textile industry in November 2016. The report also mentioned the impact of climate change on cotton production. Heavy floods and rain caused a loss of around Rs14.409bn to cotton crop in 2015, according to the report. A similar trend of loss was also seen in the previous years with the worst impact of Rs98.091bn in 2010 due to floods. In Punjab, the number of sugar mills in cotton-growing areas is rising, posing a threat to cotton output. There are now five sugar mills in Rahim Yar Khan, two in Muzaffargarh, and one each in Bahawalnagar, Khanewal, Rajanpur and Layyah. As per the law, the provincial government is empowered to issue a no-objection certificate (NOC) for the installation of new sugar mill or enhancing the crushing capacity of the existing mills. The installation of new sugar mills in Mianwali is expected to affect the growing of cotton in the area. The report recommended that provinces should stop the practice of issuing new NOCs or allowing the expansion in the capacity of the existing sugar mills to save previous resources of irrigation water and cultivating cotton, which is a highly valued-added crop. The KP government should be persuaded to give due emphasis to the development of cotton in the district of Dera Ismail Khan and not issue NOC for new sugar mills or for expansion in crushing capacity of the existing mills, the report said. It was suggested that efforts should be made for reduction of input cost of cotton production. Campaigns may be initiated for the development of cotton with some targeted and result-oriented schemes in KP and Balochistan. Besides, introducing new technology in seed will also help increase production per unit area and increase profitability. A support price system for cotton crop has also been recommended, as in the case of wheat and sugarcane, to maintain the acreage
Source: The Dawn
