Incentives for investments in innovation, reduction in interest rates to bring them at par with the international money market, tax rationalisation measures and low import duty on raw material are some of the expectations of the textile sector from the Union Budget 2017-18. Textile firms are also hopeful of special incentives schemes for new investments. “Budget should address concerns related to skilled workforce, labour law reforms, attracting investments in the textile sector and providing a future road map for the textiles and clothing industry,” Deepak Chiripal, CEO of Nandan Denim Ltd, told Fibre2Fashion. “A major challenge for textile industry is that it is highly capital and labour intensive sector and payback period is quite long, which is a big constraint for new investment in the sector. Further, the government has set a target to create another 30 million more jobs in the industry over the next three years, which is possible only if special incentive schemes for new investment in textile sector are announced,” added Chiripal. He is also of the opinion that the government should consider extending Technology Upgradation Fund Scheme (TUFS) for another five years or so to enable companies to avail maximum benefits. Export is another sector that needs to be considered. “We want finance minister to introduce measures that can boost our exports as India has the potential to become one of the biggest exporters in the world,” noted Chiripal. “Insertion of Trans Pacific Partnership (TPP) with US has further increased the challenges for Indian textiles in the long term. There are fairly good chances for protection of select countries for exports to the US. The government should accelerate arrangement with EU market economies to provide concessional imports into these territories to maintain competitiveness of the Indian exports,” said Chiripal. Woodland wants the government to consider lowering duty and emphasise on curbing inflation in this year’s Union Budget. “Textile items should be kept under GST with the minimum possible tax slab of 4-5 per cent as it is a key item for the common man. High duty [on raw material] acts as a deterrent and we get bound to import finished products. So, the government must lower the import duty,” Harkirat Singh, MD, Woodland Worldwide told F2F. “We believe that government would also lay emphasis on curbing inflation as increased inflation affects consumer’s buying power which further affects the retail market. We hope to see supportive policies for the retail sector in this year’s budget,” added Singh. “A fund should be set up for Technology Up-gradation & Innovation and support may be extended to the companies at lower rate of interest. This will help industry in improving quality of output and become more competitive,” said Chiripal. “Besides the financial implications, the Budget is expected to come out with a lot of policy and procedural changes for improving ease of doing business,” according to ASSOCHAM. (KD)
Source: Fibre2fashion
We believe that government would also lay emphasis on curbing inflation as increased inflation affects consumer’s buying power which further affects the retail market.
We are quite optimistic and have high expectations from the upcoming Union Budget. All eyes are now on the FM for clarity on the rolling out of GST and fixing indirect tax inefficiencies. We feel that textile items should be kept under GST with the minimum possible tax slab of 4-5% as it is a key item for the common man. Secondly, there are lots of raw materials like nylon and technical fibers which we wish to import from other countries and manufacture finished products here. However, high duty acts as a deterrent and we get bound to import finished products. So, the government must lower the import duty to aid companies like Woodland. This will certainly boost PM’s “Make in India” initiative. We believe that government would also lay emphasis on curbing inflation as increased inflation affects consumer’s buying power which further affects the retail market. We hope to see supportive policies for the retail sector in this year’s budget.
Source: India Infoline News Service
Apparel and leather & footwear sectors are eminently suitable for generating jobs that are formal and productive, providing bang-for-buck in terms of jobs created relative to investment and generating exports and growth. This was stated in the Economic Survey 2016-17 presented by the Finance Minister Arun Jaitley in the Parliament on Tuesday. The Survey adds that the apparel and leather & footwear sectors provide immense opportunities for creation of jobs for the weaker sections, especially for women, and can become vehicles for broader social transformation in the country. the Survey highlights the opportunity for India in this sector in global context by saying that India has an opportunity to push exports since rising wage levels in China has resulted in China stabilising or losing market share in these products. India is well positioned to take advantage of China’s deteriorating competitiveness due to lower wage costs in most Indian states, it adds. The Survey also lists a number of challenges faced by these sectors. It says that the space vacated by China is fast being taken over by Bangladesh and Vietnam in case of apparels, while Indian companies struggle in face of a set of common challenges related to logistics, labour regulations, tax & tariff policy and disadvantages emanating from the international trading environment compared to competitor countries. On logistics, the Survey says that costs and time involved in getting goods from factory to destinations are greater in India than those for other countries. On labour costs, India’s source of comparative advantage in this sector, also seem not to work in its favour due to problems like regulations on minimum overtime pay, onerous mandatory contributions that become de facto taxes for low-paid workers in small firms that result in a 45 per cent lower disposable salary, lack of flexibility in part-time work and high minimum wages in some cases. According to the Survey, in both apparel and footwear sectors, tax and tariff policies create distortions that impede India gaining export competitiveness. India imposes a 10 per cent tariff on man-made fibres vis- a-vis 6 per cent on cotton fibres. On the other hand, domestic taxes also favour cotton-based production rather than production based on man-made fibres, and leather footwear rather than non leather footwear. The global demand for apparel is moving from cotton fibre products to man-made fibre and similarly footwear of non leather, it adds. India’s competitors enjoy better market access by way of zero or at least lower tariffs in the two major importing markets, namely, the US and the EU, the Survey says. The Survey suggests several measures to make these sectors globally competitive and unlock its potential for creating new jobs and generating growth. It recommends that there is a need to undertake rationalisation of domestic policies which are inconsistent with global demand patterns. Several measures have been initiated that form part of the package approved by the Government for textiles and apparels in June 2016, the Survey notes. Accordingly, textile and apparel firms will be provided a subsidy for increasing employment, but these need to be complemented by further actions. First, an FTA with EU and UK in the case of apparel will offset an existing disadvantage by India’s competitors—Bangladesh, Vietnam and Ethiopia. Second, the introduction of the GST offers an excellent opportunity to rationalise domestic indirect taxes so that they do not discriminate in the case of apparels against the production of clothing that uses man-made fibres; and in the case of footwear against the production of non-leather based footwear. Third, a number of labour law reforms would encourage employment creation in these two sectors. (RKS)
Source: Fibre2fashion
SHILLONG: Union minister for textiles Smriti Zubin Irani on Monday inaugurated the first-ever apparel and garment making centre in the state in the presence of Union MoS for home Kiren Rijiju and chief minister Mukul Sangma near Ampati in South West Garo Hills. A host of other dignitaries and officials from both the state government and the Centre were also present. The sprawling centre, covering an area of 45,000 square feet, was set up under the North East Region Textiles Promotion Scheme (NERTPS) at Hatisil near Ampati at an approximate cost of Rs 14.26 crore. "There are 105 sewing machines each in the first two units and 70 in the third unit of the centre. The foundation of this centre was laid in 2015 by the chief minister in the presence of the then Union MoS for textiles, Santosh Kumar Gangwar. Its construction was completed in less than two years," an official release read. Dedicating the centre to the people of Ampati and the state as a whole, Irani said this project is a testimony to the convergence of efforts from both the Centre and the state. She said the Union ministry of textiles was implementing projects worth Rs 70 crore in the sericulture and weaving sector for Meghalaya alone. At present, out of Rs 53 crore, close to Rs 32 crore has already been sanctioned for the state to promote handlooms. Speaking on the occasion, chief minister Mukul Sangma expressed his gratitude to the people for creating a conducive atmosphere. He said the would grow to become the most sought-after export unit in the state. He added that the Centre should take advantage of the international market in neighbouring Bangladesh and forge business partnerships with the investors in Bangladesh. He urged the Centre to provide modern technology to the weavers of the state. Union minister of state for home Kiren Rijiju said the Centre has given special focus to Meghalaya, particularly the Garo Hills, in creating job-oriented programmes. He added that there was a need to create employment opportunities for harnessing the potential of various sectors.
Source: The Times of India
PHD Chamber in association with O/o Regional Textile Commissioner, Noida, Ministry of Textiles, Government of India is organising 'Textile Exhibition cum Buyer-Seller Meet (B2B)' from 10th-12th February 2017 at Trade Facilitation Centre, Bada Lalpur, Varanasi. The Chamber expects visitors in large numbers to be present and extend their network with quality suppliers and business partners. Visitors could also avail benefits from the products on display in the Exhibition cum Buyer Seller Meet. There is no Registration Fee for Buyers. PHD is also providing 2 night accommodation along with half day city tour of Varanasi to approved and registered buyers. However, prior registration is necessary. Exhibition stalls are also being provided at the venue at special discounted rate of Rs.12000/- + Service Tax (for 3 days).
Those interested can get in touch with Subhashish.gaur@phdcci.in or Mob: 9711395603.
The Key features of Textile Exhibition cum B2B Meet are:
• Suggest interventions in the Textile sector with focus on powerloom products for increasing the domestic manufacturing thereby decreasing the import burdens while looking at the export potential.
• 3 days Exhibition cum B2B Meet
• Industry and Government delegations.
• Face to face Buyer Seller interaction and Negotiations.
• Creating a platform for exhibiting latest products, trends and technologies related to Textiles.
Exhibitor benefits:
• Focused Exhibition on Textiles
• One to one B2B interactions
• Increasing Brand Awareness
• Opportunity to increase market share
• Business networking and generation of leads
• Displaying of latest products
• Joint Venture, Collaboration and Investment Opportunities
• A gathering consisting of senior officials of Government of India, diplomats, CEOs and top officials from the technical textile companies from India and abroad.
Visitor benefits:
• Latest products and design on display.
• Opportunity with Quality Suppliers and business partners.
• Range of Varanasi Silk products on display.
• Face to Face interaction with manufacturers
• and bulk sellers.
Source: PHD Chamber
New Delhi: The Indian economy’s growth rate in the current financial year could be around 6.5% to 6.75% after accounting for an adverse impact of about 0.25 to 0.5 percentage points due to demonetisation, the official Economic Survey released on Tuesday said. This impact is likely to be temporary and the economy should rebound to grow by 6.75% to 7.5% in 2017-18, it added. This, however, will depend on expeditious remonetisation, it said, estimating this should largely be achieved by end-March. “Supply of currency should follow actual demand and not be dictated by official estimates of ‘desirable demand’,” the Survey observed. GDP growth projected to in 2016-17, lower than the previous estimate of 7.1% to 6.75% fall in farm incomes, social disruption, especially in cash-intensive sector as firms, households were unsure of impact and implications as real estate prices fell; correction will revive demand too Tax arbitrariness and harassment Adverse impact on GDP growth expected to be Cash supply to be normal slow to 6.5% GDP growth in 2017-18 to rise to 6.75-7.5%.
Source: The Times of India
With "jobless growth" being a persistent feature of official statistics over the past decade, the Union Budget is being keenly watched for measures to spur employment and skilling, particularly in the context of increasing urbanisation. The Budget+ is expected to tackle this area of concern that the Modi government has inherited from the UPA and which was highlighted by Congress in its critique of the economy released by former PM Manmohan Singh and former finance minister P Chidambaram. The government has been engaged with the issue of creating more quality jobs and this has been an important part of Niti Aayog's task and the Budget is expected to reflect initiatives to improve opportunities for the youth. BJP sources said the absorption of graduates and school finishers in the workforce was a major political concern as a large section of those in the employable age did not have adequate skills. Going by the Modi government's stated reluctance to hand out doles, the focus could be on creating facilities for training and encouraging growth in sectors that are expected to boost employment. The President's address to Parliament+ on Tuesday noted that the government had been working to create new avenues and make technical education more accessible to students, particularly those from economically weaker sections. ITI trainees have been provided academic equivalence of matriculation and higher secondary level through bridge courses, and initiatives like online learning offering a path to a degree are steps in the same direction. The government is looking to address a scenario where increasing urbanisation is forcing rural workforce to look for employment outside the agriculture sector. Also, there was a long felt need to reduce the percentage of the workforce dependent on a sector that contributed between 15-17% of the GDP. The increasing 'rurban' areas represent a challenge as they are regions in transition where the traditional economy is changing. The aspirations of the younger segment of the population, whether rural or urban, are also geared to the modern economy. The skilling objective was mentioned by the President in his references to the "har haath ko hunar" motto as he noted that an umbrella ministry was not coordinating these efforts. The PM Kaushal Vikas Yojana aims to train over one crore youth in the next four years.
Source: The Times of India
Over the medium run, the implementation of GST and enactment of other structural reforms should help the economy realise its real potential GDP growth of 8-10%, chief economic advisor (CEA) Arvind Subramanian has said in the Economic Survey However GST, which will be implemented from July 2017 if the finance ministry sticks to the new deadline, is likely to affect revenue collections adversely, particularly that of the Centre as the states’ revenues are guaranteed. The survey pointed out that the transition to the GST is so complicated from an administrative and technology perspective that “revenue collection will take some time to reach full potential”. Combined with the Centre’s commitment to compensating the states for any shortfall in their own GST collections relative to a baseline of 14% increase, the outlook must be cautious with respect to revenue collec- tions, the survey said. The report suggested that the government should use the windfall gain from demonetisation to fund the deficit in tax collections under GST. It said the implementation of GST will lead to better tax compliance not only in indirect taxes (GST relates to indirect taxes) but in direct taxes also. Implementation of GST will provide huge data on individual transactions. Greater information-sharing between the direct and indirect tax departments at the Centre, along with coordination with the states, could lead to greater compliance through non-punitive means. The implementation of GST will also remove the distortion in taxation which promoted inter-state as against intra-state trades.
Source: The Times of India
Economic Survey for 2016-17 stands out not just because of the breadth of the research it contains but also because it provides a sobering, realistic and credible view of the Indian economy. It praises the government’s “bold new experiments” in economic policy and points out that, even after demonetisation, India will likely remain the world’s fastest-growing large economy next year. But it also provides a clear-eyed view of India’s long-term prospects. While it is not too late for India to become a high-growth economy, time is short. According to its estimates, India’s demographic dividend will peak in 2020. Unless deep structural reforms are rapidly introduced – reforms that enhance investment, productivity and growth – India will not take full advantage of the second half of its demographic dividend, just as it has already failed to do with the first half. However, if the reforms that it outlines are carried out, then a shift to a high-growth trajectory is not just possible but probable. Some diagnoses and recommendations in the Survey stand out because they depart from current orthodoxy. For example, the costs of demonetisation for growth are notable, in this telling, bringing growth down to below 7 per cent. In addition, while pointing out the many benefits of digitalisation of the economy, the Survey pointedly argues against a shock therapy-style transition to a more digitalised India. In addition, it says that cash continues to have its benefits and that a rigorous cost-benefit analysis of the degree of digitalisation is necessary. It is to be hoped that, as the government plans the policies that are to follow up on demonetisation, the Survey’s recommendations are taken on board. The Survey argues that the true extent of the cash reduction after demonetisation was much smaller than previously thought, and is being rapidly remedied. This is a valuable, data-assisted contribution to the debate. It is to be noted, however, that much of the other economic data that has traditionally been a large part of the Economic Survey’s review and outlook sections in years past has not been produced for this year’s Survey. This is a disappointment, given that conditions at the moment are particularly uncertain and questions about data quality and availability are spreading. Had the otherwise credible Survey taken on the challenge to provide data backing discussions that are currently taking place, it would have helped. Some other recommendations are equally out of the norm. While stopping short of recommending privatisation, the Survey does highlight the continuing inability of public sector banks to sort out their governance issues. It argues that a decentralised approach to loan resolution has failed, and inches closer to a “bad bank”style solution. But it fails to provide a solution to the existing problem of stressed assets. Transferring those assets at book prices to a bad bank will lead to zero private sector participation, and the socialisation of losses; but determining a marketbased price for such assets will be difficult and time-consuming. In other words, the Survey cannot at the moment envisage the end to India’s ongoing investment crisis — another reason why India appears stuck in a low-growth equilibrium. Overall, while praising actions so far, the Survey is also a call to action: Time is running out, and India deserves swifter movement on economic reform, if future generations are not to be disappointed.
Source: Business Standard
Underlining the uncertainty in the economy, the Economic Survey 2016-17 on Tuesday projected gross domestic product (GDP) to grow at 6.75-7.5 per cent in FY18. The Central Statistics Office (CSO) had earlier projected 7.1 per cent in FY17. With private investments unlikely to recover significantly from the current levels, the Survey expects exports to provide the much-needed fillip to the growth. The outlook for consumption, which accounts for a lion’s share of GDP, is uncertain, it noted. Of the four principal drivers of growth, exports could well turn out to be the driver of growth in FY18. After months of muted performance, India’s exports seemed to be recovering off late largely due to an uptick in global economic activity. This, the survey believes, could continue with the growth in the US likely to pick up on account of a fiscal stimulus. If global growth edges up to 3.4 per cent in 2017, as forecast by the International Monetary Fund, the Survey expects exports to contribute to higher growth by one percentage point. This recovery could also have broader spillover effects on investment. On consumption, though, the outlook is less certain. Higher oil prices could drag down discretionary spending by households. But consumption could get a fillip on account of cheaper borrowing costs — borrowing costs are expected to be 75 to 100 basis points lower in 2017, as compared to 2016. Add to that the catch-up in demand after the demonetisation-induced reduction in the last two quarters of FY17 and spending on housing and consumer durables and semi-durables could rise, the Survey notes. Private investment continues to remain a source of concern. There has been no clear progress on tackling the twin balance sheet problem, the Survey pointed . With bank and corporate balance sheets continuing to be under stress, private investment is unlikely to recover significantly from the levels of FY17. Higher public investments could offset sluggish private investments. But the extent to which this happens depends on the fiscal stance of the government. The government was expected to bring the fiscal deficit down to 3 per cent of GDP in FY18. But after demonetisation, some economists have suggested the government postpone fiscal consolidation and provide a fiscal stimulus to the economy. This dilemma reflects in the Economic Survey. “The stance of fiscal policy next year has to balance the short-term requirements of an economy recovering from demonetisation against the medium-term necessity of adhering to fiscal discipline—and the need to be seen as doing so,” it said. The government’s fiscal picture gets complicated with the lack of clarity on its revenues. First, the windfall on account of lower oil prices is likely to disappear the coming year, which will impact tax collections. The Survey estimates excise-related taxes will decline by about 0.1 percentage point of GDP. Second, roll-out of the goods and services tax will complicate revenue projections of the Centre. But on the other hand, the government is expected to receive a fiscal windfall from the high-denomination notes that are not returned to the Reserve Bank of India (RBI), as well as from higher tax collections as a result of increased disclosure under the Pradhan Mantra Garib Kalyan Yojana. This could create fiscal space for a stimulus. While the Survey has forecast growth at 6.757.5 per cent, it highlights the downside risks the forecast has from three sources. First, it is likely the effects of demonetisation could linger into the next year. This, according to the Survey, could affect supplies of certain agricultural products, especially milk (where procurement has been low), sugar (where cane availability and drought in some southern states will restrict production), and potatoes and onions (where sowings have been low). This will have an impact on inflation, reducing space for RBI to lower rates. Second, higher oil prices could also reduce consumption, lower corporate margins and leave less room for investment. It will also reduce space for monetary easing. Third, trade tensions could emerge, which could negatively impact global growth and trigger capital flight from emerging markets. The outlook for consumption, which accounts for a lion’s share of GDP, is uncertain
Source: Business Standard
Finance minister Arun Jaitley is expected to announce more incentives for promoting digital transactions in Union Budget 2017-18 to be presented on Wednesday, a majority of participating economists said in the latest round of FICCI’s Economic Outlook Survey. The Survey puts forth an annual median GDP growth forecast of 6.8 per cent for 2016-17. The survey was conducted in the months of December 2016 and January 2017 and drew responses from leading economists representing industry, banking and financial services sector. The participating economists were asked to share their top expectations from the Union Budget 2017-18. A majority of respondents also suggested that additional benefits should be bestowed upon Fintech companies in a bid to move towards a cashless economy. Respondents also hoped that the budget would look at addressing the impact of demonetisation on the informal sector which is largely cash dependent. “It is important to ensure that there are enough incentives for the informal setups to move into the formal system.” Some of the other expectations indicated by the participating economists were greater infusion of capital in public sector banks and announcement of further measures to strengthen asset quality of the public sector banks. The economists opined that the forthcoming budget would focus on giving an impetus to growth (which is inclusive) and provide fillip to gross fixed capital formation by enhancing complementarities between public and private investment. “Steps would also be taken towards reviving and deepening of the corporate bond market,” some respondents felt. Also, they expect the government to further boost its efforts to increase employment through its flagship programmes such as ‘Make in India’ and ‘Skill India’. Economists also expect the government to unveil incentives to promote exports. Majority of the economists also believed that the budget will lay down guidelines for the roll out of the Goods and Services Tax (GST).
Source: Fibre2fashion
Gandhigram Rural Institute has developed a special textile material for soldiers with all features required by them. This material can be used for making dresses for soldiers on the war front. Describing the nature of the new material here on Tuesday, Chemistry Professor M.G. Sethuraman said the specially modified cotton fabric that had self-cleaning, super-hydrophobic and anti-bacterial properties would increase the usage of textiles for military personnel. It had other properties such as softness, breathability and biodegradability. It also had properties of blood repellency and UV protection. It could also be used for medical professionals and nurses, he added. Cotton was chosen as the base material and was modified by fabricating a copper coating through reduction of copper acetate by employing ascorbic acid at room temperature. With a coating of Stearic acid over the copper-coated fabric, the surface of the fabric became water-repellent, he said. Mr. Sethuraman said the fabric had mechanical stability and washing durability showing super- hydrophobic property with a water contact angle of 159 degrees. It would also separate oil-water mixture owing to its super-oleophilic nature of functionalised cotton. Tests against gram-positive and gram-negative bacteria too showed very good anti-bacterial activity as well as blood-repelling property. The material had been characterised by modern methods such as x-ray diffraction, scanning electron microscopy and x-ray photo electron microscopy, he noted. “We had already submitted a detailed research proposal to Defence Research and Development Organisation in this connection. Its cost of production will not be much. Moreover, the quality of cotton will be retained,” he said. “We have also been widening the research to manufacture electronic textiles that will become the choice of the youth in the future. The DRDO was approached for funds to widen our research,” he said. A research article on the modified cotton fabric by Mr. Sethuraman and research scholar T. Suryaprabha was published in Cellulose journal.
Source: The Hindu
The Economic Survey makes a case for replacing India’s many direct and indirect subsidies for the poor with one Universal Basic Income (UBI) scheme. This idea, being tossed about by academics and policymakers recently, proposes a lumpsum income transfer, calculated according to poverty lines or any other criterion, to be handed over unconditionally, to anyone who qualifies for these grants. It is an appealing thought, but alas, inapplicable in India. The virtues and vices of UBI schemes have been debated for decades. Its detractors argue that a scheme that guarantees a basic income could reduce work effort: by as much as 5% per person per year. Supporters argue this cost will be more than offset by lower administrative costs of running large welfare programmes. In India, with its abysmal public healthcare system and extremely inefficient subsidy programmes, these arguments are irrelevant. A basic income scheme for the poor already exits, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), which guarantees 100 workdays per year at minimum wage, to whoever wants it. It is a dole, the work part is meant to be a self-selection method: the undeserving rich are unlikely to turn up for manual labour. MGNREGA costs just 0.3% of GDP, far lower than any UBI scheme; it benefits about 50 million people, mostly women, and has had an enduring knock-on effect in boosting rural incomes and wage rates. When India can raise tax revenues adding up to a mere 16.5% of GDP, and manages a general government expenditure of about 27% of GDP — 57% for France and 38% for the US — only by running up a fiscal deficit of close to 7% of GDP, talk of UBI is meaningless. Exclusion errors would afflict UBI as well, given India’s political economy.
Source: Economics Times
The global textile market is expected to reach approximately USD 1,237.1 billion by 2025, according to a new report conducted by Grand View Research, Inc. Rising disposable income, urbanization and population growth in emerging economies including China, India and Mexico is expected to play an importance role in improving the lifestyle of consumers which is expected to drive the demand for textile products. Product innovation is expected to have a positive impact on the industry; for instance, the Runway of Dreams brand launched by apparel manufacturer Tommy Hilfiger in February 2016. Furthermore, a growing number of fashion retail outlets and supermarkets in developing economies, including China and India, owing to government support to promote investments is expected to increase the textiles demand in the near future.
Source: Yahoo Finance
The United States withdrawal from the Trans-Pacific Partnership (TPP) to spur momentum for the successful conclusion of the Regional Comprehensive Economic Partnership (RCEP), a proposed free trade agreement between the ten member states of the Association of Southeast Asian Nations (ASEAN) (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam) and the six states with which ASEAN has existing free trade agreements (Australia, China, India, Japan, South Korea and New Zealand). Asia Pacific Chief Economist, Rajiv Biswas, said that US President Donald Trump’s signing of an executive order, confirming the country’s exit from the TPP, would accelerate a significant shift in the trade policy landscape in the Asia Pacific region. The US withdrawal would also help strengthen China’s economic leadership position in the Asia Pacific, in respect of the RCEP and Free Trade Area of the Asia-Pacific (FTAAP). China is also undertaking its own regional economic initiatives, such as the One Belt One Road regional strategy as well as playing a major role in creating new development finance institutions such as the Asian Infrastructure Investment Bank (AIIB). China is likely to play a much stronger lead role in the future Asia Pacific trade architecture through a number of multilateral trade liberalisation initiatives, notably the RCEP and FTAAP. At the Asia-Pacific Economic Cooperation (Apec) Summit held last November in Lima, Peru, two Latin American TPP member countries, Chile and Peru, also expressed interest in joining the RCEP negotiations. This was on expectations that the TPP would stall. The RCEP is an Asia-Pacific trade liberalisation initiative led by China that includes the ten Asean members as well as Australia, New Zealand, Japan, South Korea and India. The FTAAP encompasses all 21 Apec economies through trade liberalisation and once established, would become the world’s largest free trade zone, covering 57 percent of the global economy and nearly half of world trade. Biswas said that Apec leaders had also reaffirmed their commitment to move forward with a longer term vision of creating the FTAAP, with next steps set out in the Lima Declaration. As the FTAAP would be realized outside of Apec, but in parallel with the organisations’s process, this creates greater flexibility in case some members do not wish to pursue the vision. Meanwhile, on the impact of US withdrawal from the TPP on Malaysia, the country’s export growth outlook had been significantly impacted by the US decision. The Vietnamese and Malaysian manufacturing export sectors were expected to be among the largest beneficiaries of the TPP due to the much improved market access to North America. It would have provided a large boost to Vietnam’s textile exports. Biswas said that US withdrawal from TPP is also a blow to Japanese Prime Minister Shinzo Abe and his economic reform plans for the country as the trade pact was a key pillar of the Third Arrow structural reforms under Abenomics. While the other 11 TPP members could create a parallel agreement without the US and move forward, the economic benefits would be significantly reduced. However, President Donald Trump has expressed his intention to pursue bilateral trade negotiations with other TPP member countries, this approach may provide opportunities for further trade liberalization between them. The gross domestic product (GDP) of the US accounted for around 68 percent of the combined GDP of the 12 TPP negotiating partner countries. There is a silver lining in the US aborting the trade deal.
Source: Yarns and fibres
Germany will help Bangladesh for their social and economic development in the field of textiles and garments through its Non-Governmental Organization for International Cooperation, GIZ. The agency’s major concern will educate manpower of the industry, for the betterment of textile industry. They are also keen on training the textile body members to boost the research at the ordinal level and ameliorate the teaching quality. Also Read – GIZ sponsors social standards program for Pakistan textile industry A German delegation headed by Christian von Mitzlaff, Programme Coordinator, German-Bangladesh Higher Education Network on Sustainable Textiles conveyed German Government’s interest at a meeting with Professor Abdull Mannan, Chairman of University Grants Commission (UGC) of Bangladesh, as per the UGC press release. The possibility of collaboration between the higher educational institutions of the two countries was also discussed at the meeting. Mannan highlighted that UGC welcomes the co-operation and assistance from donor countries for the enhancement and internationalization of country’s higher education. The Chairman of the Commission also underlined the need of the hour and commented that there is an urgent requirement and change in the practice of the teaching and learning process of textile education to meet the country’s demand for proficient workforce.
Source: Apparel Resources
ISLAMABAD: Prime Minister's package for exporters notified by the Ministry of Textile Industry and Federal Board of Revenue (FBR) does not cover non-textile sectors -- surgical, sports, leather and carpets -- creating ambiguities among exporters. Sources told Business Recorder here on Monday that Ministry of Textile Industry has allowed duty drawback from garments, home textiles, processed fabric, greige fabric and yarn manufacturers cum-exporters units under the Prime Ministers Package of incentives for exporters. According to the notification, the duty drawbacks under this order shall be allowed for exports on or after 16th January, 2017. However, for other sectors including surgical, sports, leather and carpets, Ministry of Commerce has yet to issue a notification on duty drawback of local taxes in this regard. In line with the decision of the Economic Coordination Committee (ECC) of the Cabinet, the Federal Board of Revenue (FBR) has issued three notifications which make the package effective from January 16, 2017. FBR sources added that it has notified exemptions as per decisions communicated by the ECC which include exemption from customs duty and additional customs duty on import of 13 items from January 16, 2017 till June 30, 2018. Sources said the FBR has also issued instructions to the Collectors of Customs of Model Customs Collectorates (MCCs) to grant exemption of sales tax on the import of textile machinery and duty exemption on the import of 13 items including cotton, artificial staple fibre and other items from January 16, 2017. Textile units can claim exemption of customs duty on the import of (PCT Code 52.01) cotton, not carded or combed; (PCT Code 52.03) cotton, carded or combed; (PCT Code 5503.1100) of aramids; (PCT Code 5503.1900) other; (PCT Code 5503.3000) Acrylic or modacrylic; (PCT Code 5503.4000) Of polypropylene; (PCT Code 5503.9000) Other; (PCT Code 5504.1000) Of viscose rayon; (PCT Code 5504.9000) Other; (PCT Code 5506.1000) Of nylon or other polyamides; (PCT Code 5506.3000) Acrylic or mod acrylic and (PCT Code 5506.9000) other and (PCT Code 5507.0000) Artificial staple fibres, carded, combed or otherwise processed for spinning. Through SRO 36(1)/2017, the Board has exempted sales tax on the import of machinery (not manufactured locally) by textile industrial units registered with Ministry of Textile Industry from January 16, 2017 till June 30, 2018. Zero per cent sales tax would be applicable on machinery, not manufactured locally, and if imported by textile industrial units registered with Ministry of Textile Industry, as specified in Part IV of the Fifth Schedule to the Customs Act, 1969, subject to same conditions as specified therein. Chairman Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) Ijaz Khokhar told Business Recorder that there are ambiguities with respect to Prime Minister Package for exporters. He said that a letter has been sent to Secretary Textile for convening a meeting of Federal Textile Board to discuss the issues and remove ambiguities. According to the Textile Ministry notification, drawback shall be available only to manufacturing cum exporters. The units availing the drawback shall be registered with the Ministry of Textile Industry. However, Khokhar said that the package should not be restricted to manufacturing cum-exporters and should be applicable to all categories of exports. It is difficult to show growth in exports during the next six months period as it would take time to avail the actual incentives announced by the government. However, the delay in release of sales tax refunds is already creating a liquidity crunch for the exporters, sources added.
Source: Business Recorder
KARACHI: Cotton prices touched a seasonal high on Monday on the back of rising demand. However, activity could not expand as ginners preferred to hold their stocks. There was strong demand for quality cotton but short supply disappointed many spinners who were desperate to get hold of any quantity they could lay hand on. Improved off-take of cotton yarn induced sentiment, brokers said. Higher cotton prices in world markets, particularly India and the United States, made spinners look to the domestic market to meet their seasonal demand, brokers said. Meanwhile, reports coming from India indicated that phutti (seed cotton) flow has increased and on an average around 182,000 bales started reaching ginneries per day. The Karachi Cotton Association’s spot rates were steady at weekend level. The following major deals were reported on the ready counter: 4,000 bales from Dharki Rs7,000), 1,200 bales Shahdadpur (Rs5,700 to Rs5,900), 900 bales Sanghar (Rs5,600), 400 bales Dahranwala (Rs6,700), 600 bales Mian Channu (Rs7,000), 800 bales Marrot (Rs6,775) and 400 bales Fort Abbas (Rs6,700).
Source: Dawn
LAHORE: The export package would enable exporters to improve cash flows in the next six months, as the eligible sectors get the promised refunds on all exports made between January and June, but thereafter, incentives would be subjected to 10 percent export increase. It seems that the exporters just wanted some free money from the government and applauded the package as the best ever they got. If the cost of doing business was the reason then the incentives after June 2017 should have continued without any conditions. The incentives would be provided only to exporters who increased their exports by 10 percent over the previous year. Some experts pointed out that the package was announced under pressure and at a time when export performance was gradually improving, particularly in textiles. They said that textile exports were rising steadily in readymade garments, knitwear, bed wear, and other value-added sectors, but the exports of yarn and fabric were still under pressure. The textile exports in fact were bound to increase because of increase in global cotton rates, which was also reflected through the textile chain. In yarn and fabric as well the decline in exports was sharper in quantity than in value. The permanent features of the export package were the concessions granted in import of machinery and subsidy on long term loans taken to upgrade the technology. This concession was for the entire duration of the package that is till June 30, 2018. Another positive for the textile sector was that the government has imposed additional duties on import of Indian yarn. This should be considered a prudent measure, as the Indian government was providing similar concessions on exports of its yarn. However, the value-added apparel sector resents this measure due to the fear that domestic yarn producers would jack up their prices in line with the increased price of Indian yarn on the back of higher duties. Some experts opine that it would have been better had the government announced a discount on local use of yarn as was practiced in Bangladesh. At the same time, the price of each type of yarn should have been fixed at its export price to check undue profiting by the local yarn producers in the domestic markets. The good thing about the package is that the incentives of seven, six, five, and four percent announced on different categories of textile exports would be made promptly after realisation of export proceeds. This would resolve the issue of stuck up promised refunds as was the case in refund of sales tax, and other rebates according to the announcements and promises made by the government. One hopes that the bureaucracy would not invent a way to deny this lucrative incentive to the exporters on some pretexts. If no hurdles came up, this package would work smoothly for six months. Even the exporters from Punjab would go along with the package for the time being. However, as soon as the condition of 10 percent increase in exports over previous year came into effect, the exporters from Punjab would bring up the case of high power and energy cost in the province. While those exporters, who failed to increase their exports, would again complain of the high cost of doing business. The package would certainly provide temporary relief, but exports would be back to square one if the government and the private sector do not take any measures to reduce cost. The government would have to improve governance to reduce the burden of corruption on exporters and develop logistic efficiencies. The private sector would have to upgrade its technology to reduce cost on energy and manpower.
Source: The News International
Inspired by encouraging domestic garment sales, Kenya is putting in place policy reforms to boost local textile production and reduce the use of second-hand clothes in the country. It may be noted here that Kenya alone imports around 1,00,000 tonnes of second-hand clothes, shoes and accessories a year – many of which were originally donated to charity shops in the west countries. Kenya’s Minister of Industry, Trade and Cooperatives Adan Mohamed commented that the measures include allowing textile firms in the Export Promotion Zones to sell up to 20 per cent of their garments 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 added 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 US $ 415 million by the end of 2016, accounting for 30 per cent of industrial exports over the past five years. Kenya, 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 labour-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: Apparel Resources
The bluesign label developed by the Switzerland-based Bluesign technologies AG founded in 2000, which is adopted by worldwide leading textile and accessory manufacturers, is one of the most well-known and stringent sustainability seals within the textile industry. The aim is to reduce the environmental footprint along the entire supply chain of the industry. Companies are subjected to strict testing to certify the quality of the chemical products and textile components they produce, as well as any accessories. If a product is manufactured using bluesign approved components, it is eligible to bear the bluesign product label. The bluesign system is not limited to specific type of raw materials and fibres, nor is it limited to individual stages of production or specific consumer textile products. The bluesign system considers the impact of individual consumer products on people, environment and the consumption of resources. At least 90 per cent of the textile fabric must be bluesign certified. This particularly includes the inner and outer layers of a piece of clothing, including all prints. Beyond that, at least 30 per cent of all components, including zippers, buttons and embroidery, must be bluesign certified. The bluesign seal excludes the use of polluting substances from the production process from the beginning to ensure that the finished product matches the strictest of consumer protection requirements worldwide. (RR)
Source: Fibre2fashion
The call is unlikely to sit well with local textile manufacturers, spinners and cotton growers in a bid to revive the ailing industry. A traders lobby group has urged the government to waive duty on all textile material imports to spur growth of the local fashion and tailoring industry. Kenya Traders and Importers Association chairman Benson Mutahi said local players in the sector were disadvantaged because they buy textiles with a 16 per cent value added tax as well as a 25 per cent import duty, making up 41 per cent in taxes. “Our tailors and dressmakers in the new clothes business must add their costs to the retail price, which makes new clothes expensive,” he said. Mr Mutahi said Chinese clothes dealers were selling ready-made clothes from Chinese factories cheaply and directly to Kenyans, thereby short-changing the taxman. “Chinese dealers buy clothes from their factories where they enjoy 40 per cent tax rebates but when we buy clothes in China, we buy through agents at a higher cost including taxes,” he observed. This, he said, has made it difficult for local tailors and dressmakers to compete effectively against cheap imports. However, the call is unlikely to sit well with local textile manufacturers, spinners and cotton growers in a bid to revive the ailing industry. A recent move by Treasury secretary Henry Rotich to encourage textile factories in the export processing zones (EPZs) to use 20 per cent window to sell their products in Kenya has also hit local clothes-making business. “EPZ factories enjoy the 41 per cent tax rebate and now you have allowed them to sell 20 per cent of their products locally. But we cannot access EPZ factories and have left dressmakers and tailors at the mercy of imports,” he said.
Source: Business Daily
PULLMAN, Wash. – Washington State University has won a $365,000 grant for research on recycling cotton waste products into high quality regenerated fibers for consumer goods. “This project is at the heart of WSU’s commitment, as a land-grant university, to expand sustainable systems,” said James Moyer, associate dean for research in WSU’s College of Agricultural, Human and Natural Resource Sciences. “The development of more sustainable, recycling protocols for cotton will not only reduce waste but also result in more environmentally friendly systems for recycling the fiber.” The Walmart Foundation and U.S. Conference of Mayors recently announced winners of the U.S. Manufacturing Innovation Fund grants, which this year focused on innovations in textile manufacturing processes. “Numerous trees are being cut to process into wood pulp for making regenerated cellulose fibers, such as rayon and lyocell,” said Hang Liu (pictured above), assistant professor in WSU’s Department of Apparel, Merchandising, Design and Textiles. “But we are throwing away used cotton products, which are a better cellulose resource.” WSU will develop an environmentally friendly and economically viable solvent system for cotton waste dissolution and fiber spinning. Working on the grant with Liu are Ting Chi, AMDT professor, and Jinwen Zhang, professor in WSU’s School of Mechanical and Materials Engineering.
Fund created to increase U.S. jobs
WSU is one of six universities receiving nearly $3 million in grants to create new manufacturing technologies and reduce the cost of producing goods in the U.S. The goal is to create jobs that support America’s growing manufacturing base. The fund was formed in 2014 to provide $10 million in grants to advance the production or assembly of consumer products in the U.S. This is the final round of grants awarded by Walmart and the Walmart Foundation for the fund. “Advancing the production or assembly of consumer products in the U.S. is the number one goal of the innovation fund,” said Kathleen McLaughlin, president of the Walmart Foundation and chief sustainability officer for Walmart. “As these projects come to fruition over the next few years, we hope the research not only enables cost-effective solutions for manufacturers, but also improves the sustainability of the U.S. textile industry.”
Source: WSU News
