This makes, the output cost a bit higher for the fabrics manufactured in Surat, compared to other powerloom centres. SGCCI office-bearers stated that Panchal has been specially entrusted with the responsibility of resolving the issues faced by the powerloom sector, particularly in Surat and surrounding areas. Small powerloom unit owners, who are unable to arrange huge funds to install modern machines, are shutting down their units. Moreover, the yarn coming from other states attracts 5 per cent duty in Gujarat, whereas there is only 3 per cent duty in other states. The electricity tariff in the city is very high compared to Maharashtra, Telangana, Tamil Nadu and Andhra Pradesh.
Surat: Leaders of powerloom sector have put forth the demand with Gujarat government to provide a level-playing field to them in terms of electricity tariff, state taxes and financial aid in upgradation of conventional looms as is being done for weavers by governments in Maharashtra, Telengana, Tamil Nadu and Andhra Pradesh.Powerloom weavers representing various associations in the city held discussions with officer on special duty (OSD) in chief minister's office AB Panchal during his visit to Southern Gujarat Chamber of Commerce and Industry (SGCCI) on Tuesday. SGCCI office-bearers stated that Panchal has been specially entrusted with the responsibility of resolving the issues faced by the powerloom sector, particularly in Surat and surrounding areas. A detailed list of demands was submitted to him at the meeting.Powerloom weavers stated around 125 traditional powerlooms had shut down in the city as the fabric manufactured on these looms is no longer in demand.
Small powerloom unit owners, who are unable to arrange huge funds to install modern machines, are shutting down their units. The electricity tariff in the city is very high compared to Maharashtra, Telangana, Tamil Nadu and Andhra Pradesh. Moreover, the yarn coming from other states attracts 5 per cent duty in Gujarat, whereas there is only 3 per cent duty in other states.
SOURCE: The Times of India
H&M is looking to have about 20 stores in India by December 2017. The Swedish retailer entered India 18 months ago and as of now it has 15 stores spread across nine cities. The long-term plan for India is to grow to 50 stores. The strategy for growth will be to locate stores in malls in Tier I and II cities and to run own outlets.
H&M entered the country through a 100 per cent FDI approval for single brand trade route. It has production offices in Delhi and Bangalore. It is the world’s second largest retailer after Zara. Currently, H&M has one warehouse in Delhi-NCR which caters to its pan-India needs. It will be looking at having one more warehouse in future to meet the growing demand, improve efficiency in its supply chain and also to ensure its products reach its stores as soon as they are launched globally.
The group feels GST implementation and the saturation in Chinese textile market along with problems facing Bangladesh should hold big promise for the Indian textile sector growth. H&M is known for fashion and quality at the best price in a sustainable way and offers casual to formal wear.
SOURCE: Fashion United
Textiles firm Welspun India today reported a 22.57 per cent fall in consolidated net profit at Rs. 154.48 crore for the quarter ended March 31. Its net profit had stood at Rs. 199.53 crore in the year-ago quarter.
Total income of the company increased by 8.1 per cent to Rs. 1,772.71 crore during the quarter under review as against Rs. 1,639.38 crore during the same period in the previous fiscal, Welspun India said in a BSE filing.
During financial year 2016-17, Welspun India’s consolidated net profit grew to Rs. 362.37 crore as against Rs. 749.12 crore in the preceding fiscal, it said.
The company’s total income also rose to Rs. 6,721.09 crore in the just concluded fiscal, from Rs. 6,014.29 crore in 2015-16. Its board has also recommended a dividend of Rs. 0.65 per share. Shares of the company were trading up 0.5 per cent at Rs. 94.55 apiece on BSE.
SOURCE: The Hindu Business Line
Revenue Secretary Hasmukh Adhia on Tuesday held out the assurance that prices of goods and services will not see an increase under the Goods and Services Tax (GST) regime.
For instance, goods that currently have a tax incidence of 32 per cent will be taxed at about 28 per cent under GST, he told reporters at a GST Conclave organised by the Finance Ministry.
“Almost 60 per cent of the income of the Centre and the States comes from items that attract 14 per cent value added tax and 12.5 per cent excise duty. There will be a likely decrease on the tax on each of these items under GST,” he said, adding that GST will reduce the cascading of taxes and help ease inflation.
In the case of services, which will see a higher tax of 18 per cent under GST (as against the 15 per cent service tax rate now), Adhia said the tax incidence will be the same. This is because a majority of the services will get input tax credit on purchases and the overall tax incidence will remain the same. This will be especially so in the case of banks and insurance companies.
“There could be a marginal increase of tax for some services,” he said. Adhia also stressed that the government plans to roll out GST from July 1 and urged industry and trade not to be complacent.
The government will try to finalise the rates of tax for each item at the earliest, he said. The GST Council, chaired by Union Finance Minister Arun Jaitley, is scheduled to take up fitment of commodities in the four-tier rate structure under GST at its next meeting on May 18 and 19.
Meanwhile, to reflect the integrity of businesses towards timely payment of taxes and filing of returns, each registered taxpayer under GST will be given a ‘compliance rating’. Adhia said the rating will be based on their track record.
Adhia also said that GST will give a big fillip to domestic manufacturing and the Make in India programme as it will equalise the tax treatment for both imports and domestic products. Imported goods will attract Integrated GST (IGST) for which credit can be claimed at the time of sale.
Similarly, for locally manufactured goods, a similar GST rate will be applicable and hence, there will be no advantage for the imported goods, he said. “IGST is just an interim tax or a washout tax, which is equivalent to the GST rate on a specific product,” Adhia added.
SOURCE: The Hindu Business Line
The government may be planning to have power for all by 2019, but a report released on Tuesday said densely populated and low-income countries like India may find it difficult to meet their electricity energy needs with zero-carbon power in the short term.
The government may be planning to have power for all by 2019, but a report released on Tuesday said densely populated and low-income countries like India may find it difficult to meet their electricity energy needs with zero-carbon power in the short term. On the other hand, rich and lightly populated countries such as the US or Australia face far easier challenges in this respect, it said. Additionally, the world may witness a global warming of over 4°C, at the current intensity of carbon dioxide, if the current system of energy generation is not changed, the report titled Better Energy, Greater Prosperity warned.
The report, prepared by the Energy Transitions Commission which is a diverse group of individuals from the energy and climate communities, emphasised that zero-carbon energy sources, mainly renewables, must grow by at least one percentage point per annum to contain global warming within 2°C as agreed upon by 195 nations, including India, in the COP21 summit.
The report also stressed that equitable and affordable access to electricity for all across the world will be essential to provide the same standard of living for all. At present, huge differences in prosperity are matched by huge differences in energy use per capita, ranging from over 200 GJ per capita in the US and Australia to only 20 GJ per capita in much of sub-Saharan Africa. According to the report, 80-100 GJ per person per annum is likely to be required for attaining a higher standard of living for all.
The twin goals will require a strategy for transition and steps such as decarbonisation of power combined with extended electrification and decarbonisation of activities which cannot be cost-effectively electrified. Acceleration in the pace of energy productivity improvement and optimisation of fossil fuel use within the overall carbon budget constraints would be required to speed up the required transition.India plans to have installed capacity of renewable power resources at 175 GW by 2022.
SOURCE: The Financial Express
The rupee appreciated by 19 paise to trade at nearly 21-month high of 64.07 against the dollar at the Interbank Foreign Exchange market today due to sustained selling of the American currency by exporters and banks.
Forex dealers said that apart from dollar's weakness against other currencies overseas, foreign fund inflows and a strong domestic equity market supported the rupee.
On August 11, 2015, the rupee had touched an intra-day high of 64.33. Yesterday, the rupee had gained 18 paise against the US dollar to end at a near 21-month high of 64.26 on sustained dollar unwinding from exporters and corporates amid positive global cues.
Meanwhile, the benchmark BSE Sensex rose 128.37 points or 0.42 per cent to an all-time high of 30,071.61 in early trade.
SOURCE: The Hindu Business Line
Two events that have significantly altered the discourse on world trade, especially in the Asia-Pacific region, are the Brexit and the US President Donald Trump denouncing the 12-member Trans-Pacific Partnership (TPP) early this year.
Two events that have significantly altered the discourse on world trade, especially in the Asia-Pacific region, are the Brexit and the US President Donald Trump denouncing the 12-member Trans-Pacific Partnership (TPP) early this year.
The TPP would have covered 40% of the global GDP and nearly a third of the world trade. According to studies carried out in the US, the enforcement of the TPP could have yielded annual income gains of $295 billion, including $78 billion in the US alone. It could also unleash potential gains of as much as $1.9 trillion in the Asia-Pacific region through free trade. It was highlighted that Vietnam was expected to gain 14% under the TPP as it would become the hub of low-end manufactured goods like textiles and garments.
But the scenario has changed in the last few months. Global trade is going through turmoil, with growth declining and an increase in protectionism as countries are resorting to more and more non-tariff barriers, regulatory measures, higher standards, etc.
In the above scenario, the calling off of the TPP by the US has come as a major disappointment to other member countries who had invested years on end in negotiating a high-quality agreement to benefit the Asia-pacific region which is hungry for trade.
On the contrary, for a country like India which was not part of the TPP, the imminent demise of the TPP means the pressure on India to sign bilateral and regional FTAs to counteract other mega-regional trade pacts has eased. India is now focused on the alternative Regional Comprehensive Economic Partnership (RCEP) and hopes that its members will be more accommodative towards India’s demands in the RCEP, especially with regard to increased market access in services including Mode 4 (access to India’s skilled professionals in the RCEP region).
The RCEP is a 16-member grouping with several countries from the TPP also being a part of it. The pact, first mooted in 2011, covers a population of 3.5 billion people and a combined GDP of $22.6 trillion. However, it is being opined that the TPP is a much higher-quality agreement vis-a-vis the RCEP because of its adherence to rules on a wide range of issues—environment, labour rights, state ownership of firms and intellectual property. The RCEP mainly focuses on tariff reductions in goods and leaves out many complex areas from its purview. Moreover, it is also possible that multilateral trade negotiations led by the WTO may get a fillip with the demise of the TPP; this would go in India’s favour as the country has always been a strong campaigner of multilateral trade.
The US accounts for nearly 60% of the TPP’s GDP. With its withdrawal, the group cannot come into force. But the question is, will the other countries move forward with the TPP without the US? Since the US has made it clear that its administration would focus on negotiating “fair, bilateral trade deals that bring jobs and industry back to American shores,” what are the options with other countries? Many members in the group are hoping that once the Trump administration settles down in a few months’ time, the TPP could be revived. Meanwhile, countries like Australia, Japan and Chile have been discussing the idea of taking the TPP forward. It also remains to be seen how the bilateral trade of TPP member countries with the US will get affected without the TPP.
Talks were held during March 14-15 in the Chilean city of Viña del Mar over whether the TPP can be renegotiated and proceed without the US. South Korea and China were invited to participate and an official from the US was present—though China sent only its ‘special representative’, not a high-ranking trade official. But the talks remained inconclusive. The members agreed to meet again in May on the sidelines of the APEC forum in Vietnam and expressed concern about the growing protectionism in world trade. They were disappointed that years of negotiations on the TPP did not fructify. Australia, which has been proactive in pushing for a TPP without the US, conceded that it would focus on bilateral agreements with the Pacific Alliance states of Mexico, Chile, Columbia and Peru, and also pursue agreements with India, Indonesia and the EU. However, China promoted the RCEP in the Chile meet.
With the TPP effectively dead as of now, the future of mega FTAs looks bleak. Even the Transatlantic Trade and Investment Partnership (TTIP) negotiations have been stalled with the mess over the Brexit. The only mega FTA India can push for is the RCEP—India would need to argue that the ‘gold standard’ TPP framework has lost its appeal and popular support, and so a modest agenda based on including the diverse circumstances of negotiating countries should be the only one pursued at the RCEP. At the same time, there is still the danger that the TPP could be revived in another form, and so India must continue to reform its domestic economy and make it more competitive to survive the constantly changing global trade paradigm.
To remain relevant in the global trading system, India needs to focus on comprehensive trade pacts that not only offer a level-playing field for domestic business, but also provide a mix of bilateralism and multilateralism. If negotiated properly, each trade pact could be a progressive step towards integrating India with global markets. But the evidence on this remains open given that India’s comprehensive economic partnership agreements with Japan and South Korea didn’t bring sufficient gains for India.
Going forward, the global trade environment could transform with the focus of countries being on bilateral trade deals and what suits them the best. The US is negotiating bilateral deals with Japan, China and the EU, apart from renegotiating the NAFTA. However, a majority of WTO members are hoping that the collapse of mega FTAs could lead to the resurgence of the WTO with most countries preparing for the 11th WTO Ministerial in Buenos Aires, Argentina, at the end of the year. The situation at the moment is fluid but it is hoped that a clear picture of global trade will soon emerge.
SOURCE: The Financial Express
Assurances of timely payments from power distribution companies will push wind power tariffs down further, according to industry watchers.
Chairman at the Indian Wind Turbine Manufacturers Association, Sarvesh Kumar, said, “A better payment guarantee mechanism will push tariffs down further.” He was speaking at a press conference on the sidelines of Windergy India 2017.
Power prices crashed to ₹3.46 a unit in the country’s first ever auction of wind energy projects this year. The association released its report on the wind energy scenario of India. In the report it noted that power distribution companies have been defaulting on Renewable Purchase Obligations. This is hampering the prospects of the sector’s growth in India. Kumar noted that payment assurances give more clarity to the developer he said, “In the Rewa bid, there is clarity on off-take assurance and that’s why the tariffs are so low.” A similar payment security mechanism will allow wind energy project developers to bid aggressively.
SOURCE: The Hindu Business Line
Increased connectivity among Bangladesh, China, India and Myanmar (BCIM countries) will lead to expanded trade volumes. But such trade should be a sustainable one, A Gitesh Sarma, Additional Secretary (Administration), Ministry of External Affairs, said here on Tuesday.
According to him, greater access to each other’s market is desirable and this will help create “solid regional integration” and “promote greater connectivity”.
“While we focus on expanding trade volumes, equal attention should also be paid to its sustainability. Greater access to each other’s market is desirable to achieve more viable and sustainable trade cooperation in our region,” Sarma said during his inaugural speech at the 3rd Bangladesh-China-India-Myanmar Economic Corridor Joint Study Group meeting.
The bureaucrat also pointed out that greater BCIM connectivity does not, however, mean that these nations will ignore domestic circumstances and developmental aspirations in their respective counties.
“ Even as we explore greater connectivity between BCIM countries, we should be mindful of different domestic circumstances and developmental aspirations in our respective countries,” Sarma added.
The sub-regional cooperation through formats like BCIM complements the Centre’s “Act East” policy and should help in giving greater impetus to “economic growth and development” in Eastern and North Eastern parts of the country.
“We hope that greater linkage of the Eastern India with Bangladesh, China and Myanmar will bring mutually beneficial results for all of us in the region,” he added.
Chinese suggestions
Wiang Xiaotao, Vice-Chairman of the National Development and Reform Commission of China, called for inter-government cooperation and the need to have a discussion on having the right mechanism towards it.
“We have drafted an inter-government cooperation mechanism and hope that it is taken up for discussion,” he said. According to Xiaotao, growing economic cooperation will benefit people and also help achieve sustainable development.
SOURCE: The Hindu Business Line
With the goods and services tax (GST) being destination-based, states might be unable to provide incentives to encourage local industry.
At the GST Conclave in New Delhi, Revenue Secretary Hasmukh Adhia on Tuesday said, “States are wondering how to continue with promised benefits. Any incentive has to be by way of the Budgets.”
States offering the incentives might not even be able to collect taxes, he added. In inter-state sale of goods, the destination states would collect the tax.
Some states currently offer incentives through refunds. As the value-added tax is origin-based, some states pay back the producers, irrespective of whether or not goods move out of the state.
Once the new indirect tax regime is rolled out, states may only be able to offer business-to-consumer (B2C) incentives, but not business-to-business (B2B) ones.
Adhia gave the example of goods produced in Gujarat but consumed in Bihar. “What right will Gujarat have to forgo the tax of Bihar?” he said.
The Centre would continue with area-based exemptions to hilly and Northeastern states by way of refunds, the revenue secretary said.
Pratik Jain, leader, indirect tax, PwC-India, said incentives offered by states would likely get limited to goods consumed within the states.
“Besides, the effective rate of VAT may also go down from 13-14 per cent to 9 per cent on most products under the GST, narrowing the relative advantage industry enjoys,” said Jain.
Service tax rate to remain unchanged
Although the service tax rate will go up from 15 per cent to 18 per cent, Adhia said the effective rate would remain the same, as service providers would be allowed input tax credit for goods used by them to providing services. “Currently, a bank does not get an input tax credit for the stationary or office supply it uses. Under the GST, it will get that, so the effective tax rate will remain the same,” he said.
Services enjoying abatement to be taxed less than 18%
Services enjoying abatement for valid reasons will be taxed lower than 18 per cent, Adhia said. Restaurants, tour operator, construction and transportation currently enjoys abatements under service tax. Abatement is essentially a reduction in the level of taxation faced by the service provider. Transportation will be taxed at a lower rate under the GST, as its major input item petrol is out of the GST net, not allowing an input tax refund. “It is a possibility that there is more than one rate for service tax in GST. Where there is abatement for service for valid reasons, the GST rate will be lower than 18 per cent,” said Adhia. He pointed out that transportation services will be put in a lower tax bracket since petrol is out of the GST net.
GST roll-out on July 1
The revenue secretary said that all efforts are being made to roll out GST from July 1 and the industry, too, should brace for it. While Telangana and Bihar have already passed the State GST (SGST) Bill in their respective state legislatures, Rajasthan is scheduled to pass it soon. “As many as 14 states have said they will pass the SGST Bills by the middle of May and by end-May, all state legislatures will pass the SGST Bill,” Adhia said. We are making all efforts to implement the GST from July 1,” he added. Adhia said trade and industry should not be complacent and must make efforts to prepare for the GST. “The big industry will have to change the ERP software system, the small traders need no preparation as they can file return using the offline tool on the GSTN portal,” he said.
GST to lower inflation
The GST will not lead to inflation; rather it will make domestic goods competitive compared to imported items. Adhia said prices will come down, as cascading effect of taxes will ease. He pointed out that the current tax incidence of around 32 per cent will come down to 28 per cent under the GST. “The incidence of tax on imported goods will be equivalent to the tax paid by the local industry. This will strengthen domestic manufacturing and Make in India,” Adhia said.The imported goods will be subject to Integrated GST (IGST) for which credit can be claimed at the time of sale. The IGST is just an interim tax or a washout tax, which is equivalent to the GST rate on a specific product.In case of locally manufactured goods, a similar GST rate will be applicable. Hence, there will be no advantage for the imported goods. The government levies countervailing duty and special additional duty on imported goods to protect domestic manufacturers.
Compliance ratings under GST
Adhia said that a system of GST compliance rating will be put in place so that every trader or businessman will be rated based on their track record.Once the rating is made public on the GSTN portal, an entity could decide on whether to deal with another trader that does not deposit tax with the government and therefore, has a low compliance score.
Source: Business Standard
In its news release on the three-year action agenda, Niti Aayog called for tackling tax evasion, expanding the tax base and simplifying the tax system through reforms. Citing an example, it backed the idea of consolidating existing custom duty rates to a unified rate.
On the threshold of imposing income tax on the rural sector, Debroy said it could be decided after taking into account the average income of either three years or five years. “I don’t believe in artificial distinction of rural and urban, so whatever is the threshold on personal income on urban side, should be exactly the same on the rural side,” he said. “At best, what I could do is... instead of using agriculture income for one particular year, I average it over a three-year period or maybe over a five-year period as agriculture income is subject to annual fluctuations, barring that threshold should be the same,” Debroy said. His comments created a flutter at the news conference and vice-chairman Niti Aayog Arvind Panagariya was seen making efforts to move on to other topics in the three-year action plan to avoid any controversy.
Taxing agriculture has been a controversial issue in the country and the recom- mendations by the Economic Survey last year met with stiff opposition, with political parties slamming the recommendation. Finance minister Arun Jaitley recently clarified in Parliament that there was no proposal to tax agricultural income. Experts say that not taxing farm incomes provides loopholes which are exploited by evaders.
“Inability to levy a comprehensive income tax in India, in part, lies in the constitutional assignment itself. The assignment of tax on incomes from agriculture to the states has resulted in the Union government levying tax only on non-agricultural incomes. States do not levy agricultural income tax except the income from plantation crops. Even corporates making investments in agricultural sector do not have to pay the tax,” M Govinda Rao and Sudhanshu Kumar wrote in their 2017 working paper for the National Institute of Public Finance and Policy.“There have been several studies estimating the potential from taxing agriculture and the more recent study by Rao and Sengupta (2011) for 2008-09 estimates the potential at 0.6% of GDP. Exemption to the agricultural sector prevents the levy of comprehensive income taxation and provides an easy avenue for evasion and avoidance,” the study said.
Source: The Times of India (Mumbai edition)
The introduction of Goods and Services Tax (GST) will not be inflationary, though there might be a marginal rise in service tax for few services, revenue secretary Hasmukh Adhia said. Also, the government proposes to introduce compliance ratings for GST taxpayers based on their track record of payment of taxes and defaults under GST, which will be beneficial for taxpayers to choose whom to transact with based on their ratings, he said.
Addressing the GST Conclave organised by the Ministry of Finance, Adhia reiterated the July 1 deadline for GST rollout, asking industry to not remain complacent and complete their preparatory work in time. “We are making all efforts to implement GST from July 1. We request the trade and industry that they should not be complacent and should make efforts to prepare for GST. The big industries will have to change the ERP software system, the small traders need no preparation as they can file return using the offline tool on the GSTN portal,” Adhia said.
The revenue secretary and a team of officials addressed queries regarding the proposed indirect tax regime in GST Conclave, wherein they elaborated on the following:
Impact on prices
Adhia said GST will end cascading effect or “tax on tax” and is likely to reduce overall prices. Citing example of other countries, where introduction of GST led to increase in prices, he reasoned that there was inflation risk in those countries as they moved from a single point taxation system to multiple taxes, unlike India, where a multiple taxation system already exists.
Some services, however, may see a marginal increase in taxation as service tax is likely to go up to 18 per cent under GST from 15 per cent at present. Tax incidence is likely to remain similar to the existing level as service providers will be able to avail input tax credit on purchase of goods needed for providing their services, especially in the case of banks and insurance companies, Adhia said.
Abatement will be provided for some services, especially those where input tax credit is not allowed on inputs. “Not necessary that all services will be taxed at 18 per cent. Wherever abatement is required for valid reasons, that service will be taxed at a rate below 18 per cent as well. For example, for transport services, a major component is petrol and diesel and since there is no GST on them, therefore, service tax rate will be lower than 18 per cent (for transport services),” Adhia said.
Compliance rating
A system of ratings will be enforced based on record of timely payment of taxes made by taxpayers under GST. The contours of the compliance rating will be approved by the GST Council in due course, GSTN CEO Prakash Kumar said. “We will start with putting everyone at an equal level, but if a taxpayer is non-compliant, then the rating will go down,” Kumar explained. The rating will provide the name of the taxpayer as well as the GST Identification Number.
Area-based exemptions, tax on imported goods
Area-based exemptions will be absolved and states can give incentives, if needed, in the form of reimbursements, Adhia said. He, however, said that states are in a dilemma to provide exemptions because if the consumption of the exempted item takes place in another state, then it will be a “double loss” for them as they will also lose out on the share of taxes on the item as GST is a destination-based tax.
“States are in a dilemma for reimbursements also…for example, there’s exemption on production of an item in Assam, but the goods produced will attract SGST, CGST and if it will go to another state, then IGST will be required to be paid. For IGST, it will take credit of SGST. So, states won’t get anything but they would have reimbursed that manufacturer. States would lose doubly. States are wondering how to now accommodate this,” Adhia said.
All imported goods will attract IGST equivalent to levy of CGST and SGST to maintain parity with taxation on local products. The imported goods, he said, will attract IGST for which credit can be claimed at the time of sale. There will be no advantage for the imported goods and hence, it will boost the government’s Make in India initiative, he said. To protect domestic manufacturers, government levies countervailing duty (CVD) and special additional duty (SAD) on imported goods, which will get subsumed under GST.
Refund to tourists
The legal provision to provide refund on IGST to a tourist while exiting India will not be immediately enforced after July 1 rollout. “Immediately, it won’t be available to foreign tourists, but after some time… We will have to develop a mechanism,” Adhia said.
Source: Indian Express
INTERNATIONAL
The fourth industrial revolution (Industry 4.0) will present a challenge for Vietnam’s textiles and garment sector within the next five years, according to Mr. Le Tien Truong, CEO of the Vietnam National Textile and Garment Group (Vinatex).
Automated production systems in the sector are yet to meet the requirements of Industry 4.0, he said, in particular the application of big data, the Internet of Things (IoT), and artificial intelligence (AI).
“Industry 4.0 will create very rapid changes and unpredictable factors in the economy,” he went on.
“If there are no careful preparations, production systems in the sector will not be sufficiently competitive to adapt to the changes. This will be a major challenge within the next five years.”
In the 2017-2020 period, he believes, Vinatex must pay more attention to research and apply the technological achievements of Industry 4.0, improving workplace productivity.
“The most important thing is ensuring the group is not excluded from global chains,” he said. “It will be difficult to achieve this goal as it requires the group focus on the development of resources.”
2017 will be a year with many challenges for Vietnam’s textiles and garments. The only positive signs in the first quarter were the recovery of main markets such as the US, the EU and Japan and growth of 12 per cent year-on-year.
If there are few fluctuations in the economic and political situation, Vietnam’s textiles and garment sector may see growth of more than 10 per cent this year. Favorable circumstances are the key factor for enterprises under Vinatex to have an effective year, Mr. Truong said. Vietnam’s textile and garment exports failed to reach the targeted $29 billion in export turnover in 2016.
Export turnover was estimated at $28.5 billion, up 5.4 per cent year-on-year but short of the $29 billion target, which was previously $30-$31 billion. “Growth is at its lowest since 2010,” Mr. Truong told VET.
“But growth in absolute value was higher than in previous years.” Vinatex’s business performance was disappointing in 2016. Industrial production value increased just 3 per cent, to VND37.7 trillion ($1.65 billion), while export turnover of VND2.47 trillion ($108.6 million) was up 4 per cent.
Total revenue reached VND40.5 billion ($1.78 million), up 3 per cent, and pre-tax profit stood at VND1.43 trillion ($62.9 million), up 9 per cent. Main markets such as the US, Japan, and South Korea saw single-digit growth. Vinatex aims to maintain growth of 13 to 15 per cent this year, with exports totaling $4 billion.
SOURCE: VietnamNetBridge.com
Greater Manchester is witnessing a boom in textiles industry with 77 manufacturing businesses investing £32 million in the Textiles Growth Programme over four years. This has unlocked more than £6.4 million in grants through the Government’s Regional Growth Fund, created nearly 1,000 new jobs, safeguarded over 150 jobs and created 79 apprenticeships.
According to a report in the Manchester Evening News, the programme focused on five local enterprise partnerships (LEP) areas, which had previously had a history of textiles manufacturing, and where there were no growth opportunities. These included Greater Manchester, Lancashire, West Yorkshire, Leicestershire, Nottingham and Derbyshire.
Through renewed confidence, the industry now has the potential to add 10,000 new jobs and £500 million more to the UK’s economy each year by 2020. It is the most significant initiative ever to be undertaken in the UK to support its textiles industry, the report said.
Andy Ogden from English Fine Cottons, based in Dukinfield said: “The Textile Growth Programme has brought confidence back to the industry. The textile industry needs to support itself and bring quality back to the market.”
“We’ve invested £6 million in bringing cotton spinning back to support weavers, knitters and dyers. We want to ensure high quality cottons produced here in Manchester are back on the high street, giving British consumers the products they deserve,” Ogden said.
A total Regional Growth Fund of £27 million, awarded to the programme in 2012 has leveraged a further £123 million nationally from the private sector through the support of 340 British manufacturers.
Carol Kane, CEO at Manchester-based Boohoo.com said: “At Boohoo we are proud to source over 50 per cent of our products from the UK. Not only are we delighted to support the British textile manufacturing industry and the creation of employment opportunities for workers in the UK, having our suppliers nearby is also a crucial part of our business model. We are a fast-fashion business with a focus on speed to market, so being able to manufacture our products in the UK allows us to lead the way in offering the very latest trends and styles.”
The UK has now got a textiles workforce of 127,000 people across all skill levels from packing and warehouse staff through to board directors.
Lorna Fitzsimons, founder and director of the Textiles Growth Programme, based in Manchester, added: “Five years ago, Lord Alliance challenged Sir Vince Cable, the then Secretary of State for Business, Innovation and Skills, to recognise the opportunity for increasing UK fashion and textiles manufacturing. This started us on a journey which led to the most extensive study on supply and demand for UK fashion and textiles manufacturing in decades. There is still more to do but this is a success story no one saw coming.”
SOURCE: Fibre2Fashion
