The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 01 JULY, 2017

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Textile India 2017 Emphasises On 'Skill, Scale And Speed'

With an aim to promote textile industry in India, the Prime Minister Narendra Modi inaugurated Textiles India 2017 at Gandhinagar, Gujarat on Friday (30 June). Calling it India’s first ever mega textiles trade fair, the PM said, “The textile industry is being infused with the mantras of 'skill,scale,speed' & 'zero-defect, zero-effect'.” He said that textile bridges the gap between agriculture and industry. While addressing the gathering at Mahatma Mandir, Modi said, “It being the second largest employer after agriculture, the textile sector offers significant employment opportunities.” The Prime Minister expressed the hope that Textiles India 2017 will help familiarise global and Indian leaders with India’s enabling policy environment, strengths and vast opportunities. He said, “The domestic market for apparel and lifestyle products, currently estimated at US Dollars 85 billion, is expected to reach US Dollars 160 billion by 2025. This growth will be driven by the rising middle class. There is also a high global demand for textiles and apparel manufactured in our country. India is the world’s second largest exporter of textiles, commanding a global share of around five percent. Indian textiles, including traditional handloom and handicraft products, are exported to more than a hundred countries.” Describing India a bright spot in the global economy, Modi said that India has emerged as one of the most attractive global investment destinations. This has been made possible by a series of sustained policy initiatives. He said that more than seven thousand reforms have been implemented to improve the ease of doing business. Processes have been simplified and made transparent. Government has repealed over twelve hundred outdated laws. Modi added, “India has moved up by 32 places in the last two years in the Global Competitiveness Index of the World Economic Forum. This is the highest for any country. India moved up 19 places on the World Bank Logistics Performance Index of 2016. We have also moved up sixteen places on the Global Innovation Index of the World Intellectual Property Organisation in 2016. We are third among the top ten FDI destinations listed by the United Nations Conference on Trade and Development.” The three-day event is expected to be attended by participants from 106 countries. Around 15000 Indian buyers and sellers, 2500 international buyers, international delegates and representatives, artisans and weavers have come together for the event. Union Minister of Textile, Smriti Irani, said, “Textiles India 2017 gives a platform for global partnerships in order to benefit local businesses.” Calling it an attempt to bring textiles, traditions and technology together, she added, “A special package announced under the aegis of the Prime Minister for apparel and made-ups seeks to boost exports by Rs 1 lakh 94 crore and attract investment upto Rs 74,000 crore. The government’s commitment to ensure that technology enhances productivity has resulted into approval of Rs. 17,822 crore for technology upgradation in textiles for the period of 2015-2022.” Chief Minister of Gujarat, Vijay Rupani said that Gujarat is fortunate to have gotten the opportunity to host Textiles India 2017. Chief Minister of Andhra Pradesh, Chandrababu Naidu complimented the Ministry of Textiles for organising the event, saying that the textiles sector will continue to survive for times to come. Governor of Gujarat, OP Kohli; Chief Minister of Gujarat, Vijay Rupani, Chief Minister of Andhra Pradesh, N. Chandrababu Naidu and MoS, Textiles, Ajay Tamta addressed the audience. Minister for Irrigation, Handloom and Textile and Sericulture, Government of Assam, Ranjit Dutta; Minister for Textiles, Government of Karnataka, Rudrappa Manappa Lamani and Minister for Cooperation, Textiles and Marketing, Government of Maharashtra, Shri Subash Deshmukh and Chairman, Jharkhand State Gramodyog Board, Shri Sanjay Sheth were also present. Minister of State for Textiles, Ajay Tamta, ministers representing Gujarat, Telangana, Maharashtra, Jharkhand, Assam and Karnataka were among several dignitaries who participated in the inaugural session. Top industrilsts, including, president, US Polo association, David Cummings; CEO, UK India Business Council; Richard Heald; MD; Arvind Mills; Sanjay Lalbhai; Chairman and MD, Raymond, Gautam Hari Singhania; Chairman, Aditya Birla Group, Shri Kumar Mangalam Birla, and Chairman of Korea Federation of Textile Industries (KOFOTI), Kihak Sung were also present on the occasion.

Source:  Business World

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GST launch: Implementation splits Gujarat textile farmers, traders

While textile traders of Gujarat are protesting against goods and service tax (GST), corporate of the textile industry have favoured GST. At the inauguration of ‘Textile India 2017’ in Gandhinagar, textile industry leaders have said that it is a bold steps of government and will help the informal sector of the industry. Textile traders in Gujarat were on a three-day strike to protest against the proposed rate of GST on the industry and have given an ultimatum to the government that if it will not remove GST, traders will go for an indefinite strike from July 1. On the other hand, big companies like Raymond Limited, Aditya Birla Group and Arvind Limited have expressed their views in favour of GST. “Implementation of GST is a historical and bold decision of the present government. It will bring transparency in the industry. GST will help informal sector of the textile industry,” said Sanjay Lalbhai, chairman and managing director of Arvind Limited. Adding to it, Lalbhai said, “This move will push Indian textile Industry to be more competitive and this will help the industry to compete with China in global front.” The corporates also believe that GST is the biggest transformation of tax in India and it will take the industry to the new high. Gautam Singhania, chairman and managing director of Raymond Group, said, “The move will create seamless and inclusive business environment which will enable exponential growth in the economy. It is expected that in next three to four years, size of Indian textile Industry will be double to about $200 billion.” Top international brands like US Polo Assn also shared Top international brands like US Polo Assn also shared similar view. The company’s president and chief executive officer David Cumings said, “GST is not only good for Indian companies but also for the international companies like us. India has potential to be the largest or one of the largest textile centers in the world.” Chairman of Aditya Birla Group, Kumar Mangalam Birla, called for a research and development in textiles. “We must step up rigor in skill development to deliver world class productivity. We must also boost our investment in high-tech research and development,” he said. Inaugurating the Textile India 2017 exhibition, Prime Minister Narendra Modi described India as a bright spot in the global economy. It has emerged as one of the most attractive global investment destinations. Modi said, “We have one of the most liberal investment policies for foreign investment in the textile and apparel sector. We allow 100% FDI through automatic route in textile and apparel sector.” Addressing to the textiles industry, Prime Minister also said that the industry has a pivotal position in the Indian economy. It is strong and competitive across the value chain. India has an abundant supply of raw material like cotton, wool, silk, jute, and man-made fibre. “Now, it is time to concentrate on Modi said, “We have one of the most liberal investment policies for foreign investment in the textile and apparel sector. We allow 100% FDI through automatic route in textile and apparel sector.” Addressing to the textiles industry, Prime Minister also said that the industry has a pivotal position in the Indian economy. It is strong and competitive across the value chain. India has an abundant supply of raw material like cotton, wool, silk, jute, and man-made fibre. “Now, it is time to concentrate on textile industry in a big way. India is the world’s largest producer of cotton and jute, and second largest producer of silk and man-made fibre. This provides us the distinct advantage of backward integration, which many other countries may not have.” He also claimed that the sector is second largest employer after agriculture in the country. Over 45 million people are employed directly in the sector, and more than 60 million people are employed in allied activities. The exhibition is a part of the first of its kind Textile India Summit 2017. This maiden initiative is a collaborative effort of 24 export promotion councils under the ministry of textiles and the Confederation of Indian Industry (CII). This mega exhibition will showcase India’s strength in the entire gamut of textile and apparel value chain from fibre to fashion. The exhibition is a platform to strengthen the textile value chain in India and offers a perfect environment for B2B engagements to explore new partnerships, business relationships, investment opportunities and technological tie-ups across various segments. More than 1,500 national and international exhibitors from the textile sector are exhibiting their products and services. Over 2,500 international buyers and 15,000 domestic visitors are expected to attend the exhibition.

Source: Financial Express

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Exempt textile sector from GST: Uttam

The TPCC has demanded that the Central government take steps to exempt the textile industry from the purview of the Goods and Services Tax regime. TPCC president N. Uttam Kumar Reddy said that the textile industry was considered a business that was helping the common man. More than 20 lakh small and medium textile traders were connected with the trade in Telangana while an equal number of people were indirectly dependent on the industry. The TPCC chief was interacting with the media after a delegation of representatives of the textile trade, including Hyderabad Cut Piece Cloth Merchants’ Association, Hyderabad Cloth Merchants’ Association and others, called on him at Gandhi Bhavan and explained the hardships they would face after the new GST comes into effect. He said textiles was the second largest business and employment generator in the State with weavers, machine automated process house, hand processes, distributors, agents, wholesale dealers and others connected with it. A majority of the people connected with the trade were illiterate and work for meagre profit. The sector was already facing crisis due to competition, fund shortage and high cost of inputs. Bringing textiles under the GST regime would adversely impact the livelihood of scores of people dependent on it. He announced the Congress’ support to the ongoing agitation by the textile industry and said he would request AICC vice-president Rahul Gandhi to raise the issue in the Parliament. Meira Kumar’s visit Mr. Uttam Kumar Reddy said the UPA’s presidential candidate Meira Kumar would visit Hyderabad on July 3 to interact with the leaders of the Congress and other parties. The party has decided to seek the support of Majlis-e-Ittehadul Muslimeen for her candidature.

Source: The Hindu

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5% GST on job work to hit textile sector

Imposition of 5% GST on job work in the textile sector is expected to badly hit the industry across India, especially States like Karnataka that has a large number of garment and textile units. Though some garment units work out of a single factory floor in places like Bengaluru, job work or outsourcing of services constitute a significant part of the industry. Karnataka contributes 20% to the country’s apparel production. Several textile shops in Bengaluru remained shut in protest against the new tax regime on Friday. Cloth markets in major cities in Gujarat too were shut. Earlier, the GST council had clamped 18% tax on job work but reduced it to 5% following protests. Textile job works such as cutting, embroidery, finishing, washing or pressing, packing, bleaching, dyeing, printing, knitting, and colouring has been brought under the 5% GST slab. Earlier, there was no tax for these works. Hanumanthe Gowda, KASSIA vice-president, who also runs a silk textile unit in Bengaluru, said the council has imposed 5% tax irrespective of the quantum of work. Powerloom and handloom units across the State and in particular in Ballari, Doddaballapur, Kanakapura, Ramanagaram, Chennapatna, Hubballi-Dharwad, Belagavi, and Vijayapura will face severe difficulties. “About 90% job work people are uneducated and will unable to file tax online,” Mr. Gowda said. Manufacturers who do not have integrated units to complete embroidery, printing and finishing would suffer great loss, KASSIA secretary B. Praveen said. Industry representatives have decided to meet Textile Minister Smriti Irani seeking tax exemption for the sector, Mr. Gowda said.

Source:  The Hindu

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GST rollout: Textile traders protest against tax reform, govt refuses to relent

From Delhi to West Bengal, textile traders have claimed loss of jobs and revenue under the new taxation law.

HIGHLIGHTS

Textile traders across the country protest against GST reform.

1 Hansmukh Adhia dismissed any rethink over tax slab for textile industry.

2Protests are because they want to be out of tax chain: Adhia.

3 As the nation comes under uniform tax ambit, no relief for the textile traders. Speaking to India Today, revenue secretary Hansmukh Adhia dismissed any rethink over the 5 percent tax slab for textile industry which has been raising the red flag against GST. "Textile protests are because they want to be out of tax chain, which is not possible," said Hansmukh Adhia, Revenue secretary. From Delhi to West Bengal, textile traders have claimed loss of jobs and revenue under the new taxation law. In a show of unity, Mumbai's kalbadevi textile traders held a rally against GST. Even in PM's home state, textile lobby boycotted him in Surat. But inspite the pressure, government stands firm. "Discontent that is coming is not from the rate hike but to keep them out of the tax chain. In the Goods & Service tax entire chain has to be covered by putting tax on it," said Hansmukh Adhia to India Today. Interestingly just ahead of the GST midnight session, the finance minister gave relief to farmers by reducing tax slab of fertilizers from 12 per cent to 5 per cent and exclusive parts of tractors from 28 per cent to 18 per cent. But top sources in North Bloc have told India Today that for any further revision of tax slabs including textile government will wait to see if they are able to garner enough revenue first to cede their ground.

Source: PTI

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15% subsidy demanded on handloom yarn to face GST

Srikakulam: Hand loom cloth industry and weavers are about to face tough times with imposition of 5 percent GST. At present plight of hand looms is not satisfactory as they have no sufficient market and demand but needs hard work and more labour. In addition to this, power looms are dominating the market as handloom cloth is costlier than powerloom.

Highlights:

•In Srikakulam district a total of 36 handlooms and weavers associations are producing handloom cloth

• Actually handloom cotton cloth (khadi) has good quality and has better durability than powerloom but customers are attracted towards powerloom than hand loom as power loom available at cheaper price than handloom. A total of 5,000 weavers are depending directly on the industry and another 2,000 workers are depending on it indirectly At present government is providing 10percent subsidy to hand looms on yarn purchase. With imposition of GST hand looms would bear five percent cost on yarn and cost of the cloth will also be enhanced which would dampen even the existing demand. In Srikakulam district a total of 36 handlooms and weavers associations are producing handloom cloth. A total of 5,000 weavers are depending directly on the industry and another 2,000 workers are depending on it indirectly. When state government is trying to protect handloom industry by providing facilities GST will cause damage to the industry, it is felt. ‘Handloom industry and cloth will slowly disappear as present generation is not interested to produce the cloth due to hard labour and least earning. With the five percent GST cost of the cloth will be increased and demand for it will fall down automatically’ said Ponduru Khadi Sangham (PKS) President, Guntuku Kameswara Prasad expressing serious concern. ‘Imposition of five percent GST on yarn is not good and it will be another burden on handlooms’ said PKS secretary, Danda Venkata Ramana echoing the same feeling. ‘Government is providing 10 percent subsidy on yarn purchase to handlooms and it needs to be enhanced to 15 percent to avoid GST burden then only handlooms will be in existence by competing with powerlooms’ Assistant Director (AD) for handlooms and textiles, Gutti Raja Rao opined.

Source: The Hans India

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Beyond Surat's GST strike: Technology is causing a churn in textile sector

Small and medium enterprises in Gujarat are suffering, reflecting the situation across India. At one time, the neighbourhood around Surat’s textile markets was noisy. The street resounded with the clacketing of powerlooms – five or six machines in dark, poorly ventilated rooms with split levels. Most of these were family-run businesses. The looms were on the groundfloor with families working by day and sleeping upstairs at night. Now, the inner city is more quiet. There are still powerlooms aplenty in the industrial clusters around the town. But within the town, they increasingly show up in junkyards and the shops of scrap merchants. The premises that used to house them now lie empty or have been repurposed. Some are used by people in the embroidery trade. Others serve as parking spaces for two wheelers. The castes that traditionally operated these looms – Khatris and Ghanchis – have left the trade as well. Some have entered new businesses. This reporter met some driving rickshaws. Others have given out their premises on rent and live off that income. This silence – and the departure of weavers from their traditional trade – reflects something important. Surat’s small and medium businesses were struggling even before the government announced that it would implement the Goods and Services Tax from July 1, subsuming all indirect taxes, from octroi to service tax, into one rate that would be consistent nation-wide. This reflects the situation Scroll’s Ear To The Ground project found in the other states we reported from as well. There too, small and medium enterprises were in trouble. It’s a worrying trend. small and medium enterprises are the biggest employers in India’s manufacturing sector. We know what went wrong in Ludhiana, Tirupur, Coimbatore and Rourkela. What is happening in Surat? Three horsemen of the apocalypse This goes beyond usual suspects like demonetisation and the rising cost of doing business. About ten years ago, businessmen from Gujarat’s Saurashtra region began setting up textile businesses in Surat in southern Gujarat. Their entry, triggered by ebbing prospects in their traditional businesses like diamonds and farming, changed production economics in the cluster. At that time, most weaving units in Surat were small – the smallest ones had no more than five or six powerlooms. By contrast, said Mahendra Kajiwala, a manufacturer and trader of polyester, viscose and embroidery fabrics, “the newcomers from Saurashtra, who had a lot of money, set up 100 looms or more at a time.” They did not enter just weaving. Take Dinesh Jogadiya. Hailing from Kathiawad, he used to work as a diamond polisher. Ten years ago, after diamond polishing machines entered the industry – and the demand for polishers like him decreased – he moved to Surat where he started a business that sticks small diamonds to garments. Around the same time, customers’ tastes began changing more quickly. Till the 1980s, said Sanjay Saraogi, the managing director of Laxmipati Sarees, “saris were mostly ang dakhne ke liye [to cover the body]. Women did not see them as fashion and, in any case, had a limited budget.” Sales of a new design, he said, would grow for the first four years and then slowly start to drop. Things began to change after liberalisation. On the morning this reporter met him, Saraogi spoke about this shift at length. Around 1995, he was just a trader – not a manufacturer. He sold the products made by looms and mills. At this time, he began seeing something odd. Even as Surat’s output stayed the same, customer preferences seemed to be changing. New products – like saris that were half a metre longer than the standard 5 metre one – were selling surprising well.  “The longer the sari, the more the pleats,” he explained. In addition, more expensive saris were selling better than before. It was partly due to a jump in purchasing power, the spread of mass-media-driven aspirations and, he said, a large shift in who was buying the saris. “Before the 1990s, aadmi sari khareedkey le jaatey they. Original customer jisko pehanna tha jab woh nikalne lagi tab market mein choice bhi aaya.” Before the 1990s, men used to buy saris for women. It is when the women started stepping out to buy them that the demand for choice grew as well. In more recent years, technology has played a role too. As shuttle-less looms became more common, they changed customers’ expectations on quality and design. Said Saraogi, “New technology like digital printers are replacing the existing flatbed printers. Customer expectations will only rise. Change in the next ten years will be even faster than what we see now.” Surat's landscape is shaped by the textile industry. Photo credit: M Rajshekhar Third, Chinese fabric began to be imported. Said Sri Narain Aggarwal, who heads Prafful Sarees and is a member of the Synthetic & Rayon Textiles Export Promotion Council, “Last year, India got about Rs 5,000 crore worth of Chinese manmade fabric.” This fabric is far cheaper than what India makes. “What they sell here is at the cost of the yarn. What we sell for Rs 100 a metre, they sell for Rs 50 a metre.” Even though India’s synthetic fabric market is far bigger – valued at about Rs 100,000 crore – the entry of the Chinese has added pressure on margins, he said. What complicated matters here is that India has an anti-dumping duty for polyester chips and yarn – but not for finished polyester fabric. For this reason, companies operating in segments where Chinese fabrics are being used are caught in a vise. Even as domestic raw material costs rise, Chinese imports are pushing the sale price lower. Market segments – like saris, where the Chinese do not operate – are aware of their good fortune. India exports garments like lehngas to countries like Pakistan and Bangladesh. Given the high domestic cost of raw material (and not being able to buy cheaper chips or yarn from international markets), “We are lucky we operate in market segments where there is very little competition,” said Sanjay Saraogi, the managing director of Laxmipati Sarees. “If it was any other market, the business would have collapsed by now.”

No country for small companies

Each of these changes tilted the competitive advantage towards larger companies. As customer tastes changed, in part due to exposure to the fabrics made by shuttleless looms, powerlooms used by the smaller players turned obsolete. Both Chinese imports and the new factories set up by newcomers from Saurashtra and elsewhere pushed down market prices. It was a world where the old technology of powerlooms was redundant. As Dhirubhai Shah, the managing director of Shahlon Group, a company in real estate and yarn manufacture, said: “Powerlooms, despite being fully depreciated, are unable to compete. They are more labour intensive. Each worker can only work on six-12 looms at a time. In contrast, shuttleless looms need lesser labour, yield better quality and higher production.” Take waterjet looms. They offer four or five times the production of powerlooms, need less space, and a single worker can supervise eight-12 looms. At the same time, as Gautam Shah, a salesman at VK Tex, a small weaving firm in Pandesara, said: “Weaving ke andar design element daalna asan hain.” It is easier to bring design elements into these. Gautam Shah of VK Tex. Creativity and innovation is one way smaller units like his can survive. Which is why Shah doesn't sit with others. Photo credit: M Rajshekhar. To respond, companies in Surat had two options. They could scale up to drive down their manufacturing costs lower and compete better. Another option is to try to protect margins by creating more innovative products. Neither of these is easy for a small company. Take capacity addition. Right now, Surat is seeing a spike in companies investing in newer technology – water jets, air jets and rapiers. The rapidity with which projections on minimum viable scale are changing is astounding. As Dhirubhai Shah wryly noted, “At one time, 12 powerlooms made for a viable business. Then, a business with five-six waterjets was considered viable. Right now, units with eight-12 waterjets are viable. The new scale of viability will be minimum 12-36 looms.” This might move higher yet. China has just banned the use of waterjets. Extremely water-intensive, a waterjet uses as much as 10,000 litres of water a day. There is a real risk, said Sanjay Saraogi, the managing director of Laxmipati Sarees, that these factories might relocate to India. In which case, the industry will see both a level of scale – and water consumption – it has not seen till now. As the minimum scale needed for viability rises, more and more businesses will drop out. As Gautam Shah of VK Tex said, “While a powerloom costs anywhere between Rs 70,000 to Rs 100,000, a waterjet comes for Rs 5 lakh-Rs 20 lakh.” That is not the only cost. Units also need to invest in ancillary equipment – like the ones which feed yarn into the modern looms. Those cost another Rs 50 lakh, said Shah. Another way smaller companies can protect their margins is tapping into rising customer demand for innovation. As Gautam Shah said, “Companies are now trying to protect margins by coming out with novel designs.” These, he said, boost margins by as much as 25 paise or 50 paise, which is considerable, given that the weaving industry makes a net margin of no more than Re 1-Rs 2 per metre. But these are shortlived gains. Rivals copy these designs quickly. But, even here, the dice are loaded in favour of scale. Larger companies can create mechanisms for spotting market trends faster – and more consistently. Take Saraogi. As the previous article in this series said, he moved his trading company into production when he found his suppliers were not spotting market trends fast enough. Since then, he has placed no less than 450 salesmen in the stores of his biggest wholesalers across India. These salesmen sell only Laxmipati’s saris to the retailers who come to the wholesaler’s shop – and Whatsapp realtime information on market preferences back to the head office. “I get updates from them saying this design is working well,” Saraogi said. We have used that information to slow production of some designs and accelerate elsewhere.” He gestures at a brochure of bridal gowns in front of him. “Red chod di aur black ka supply bada diya.” We stopped producing the red and began producing more of the black. This is the sort of thing smaller players cannot do. It will be a mistake to dismiss this – as some businessmen in Surat did – as creative destruction or market forces at play. That is too simplistic an analysis.

Endgame

Something else is at work. Consider the decision of Surat textile units to go on strike this week. GST was half the reason. The other half is this: in India’s political economy, clusters of small industry, even those as large as Surat’s, have far less clout than larger businesses. “We do not have a way to reach the policy-makers in Delhi,” admitted a senior official in the Surat Chambers of Commerce. This lack of clout shows in several ways. Representations by the Surat industry association to the central government pointing out the cost disadvantage the current GST leaves smaller units with have gone nowhere. Or take the industry’s letters to the government asking it to impose anti-dumping duties on chinese fabric imports. “We have asked thrice in the last two years but the applications have been rejected,” said Shah. In marked contrast, however, India has imposed anti-dumping duties on the import of polyester chips and yarn. As journalist Paranjoy Guha Thakurta wrote in an article titled: “Polyester Prince Revisited,” in the Economic and Political Weekly, “In the teeth of opposition from the polyester using industry in India, the central government on 25 July (2014) imposed an anti-dumping duty on imports of purified terephthalic acid (PTA), a critical intermediate that is used in the production of various polyester products. This decision will almost entirely benefit only one corporate entity, that is, RIL [Reliance India Ltd].” An email sent to the company seeking its comments did not get a response. An anti-dumping duty is hardly unique to the textile industry. India had similarly imposed an anti-dumping duty on Chinese steel, which helped steel producers but hit all the downstream engineering companies exporting finished products. Agreed Abhijit Sen, a former member of the erstwhile Planning Commission, “What you are talking about is a national problem. India is protecting input suppliers but not anyone else.” Each of these decisions undermines India’s manufacturing competitiveness. This sits oddly with the government’s Make In India and StartUp India missions. And they show that, no matter which government comes to power, talk about making the country’s small and medium enteprises competitive is just a hologram. GST too, as the previous article in this series showed, tilts this landscape in favour of a few larger companies. Given that backdrop, the strike was a last-ditch effort to be taken seriously. This is a problem. After agriculture, India’s textile industry is the biggest employer. Within it, the largest chunk of employment is provided by the small and medium enterprises. Surat itself is one of the biggest employers for migrant labour. This is true for all of India. Most employment, outside agriculture and construction, is generated by India’s small and medium enterprises. A small shopkeeper prepares to scooter back home with the stock he has just bought. This apathy towards the small and medium enterprises, as the formal sector tries to grow by cannibalising the informal sector, needs a policy response. As Abhijit Sen, a former member of the erstwhile Planning Commission, said, “If an industry becomes efficient – but at the cost of smaller enterprises and labour – can the rest of the economy absorb these people?” It’s hard to see that happening in Surat. Some of the weavers, as Saraogi said, will get hired by units like his that need trained hands to manage the new equipment he is buying. But it is not clear if everyone laid off will find a new job. And if they do, it isn’t certain whether that job will pay them as much as before. This is one reason why Rajesh Mehra, the blouse trader from Amritsar, was in despair. He used to make around Rs 32,000 a month – if he traded 100,000 metres of fabric. “Rs 10,000 of that went for my expenses in Surat,” he said. “Rs 10,000 went to my family in Amritsar. And Rs 10,000 back to my village.” On the day this reporter met him, he was sitting in his shop, surrounded by unsold stock worth Rs 3 lakh-Rs 4 lakh, wondering what to do. “I cannot go back. I have a family to maintain. I will have to look for a job here.” At one point in the chat, he looked distracted for a moment. He asked if it is easy to learn English. Then a gallows humour asserted itself. He said ruefully, “Or I can go back home and we can all eat [a free meal] at the gurudwara’s langar.”

Source: Business Standard

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Readymade garments prices may go up 2-3% under GST

The goods and services tax (GST) regime will push up the prices of your readymade garments. All apparel priced over Rs 1,000 will see a 2-3% increase in prices while branded garments below Rs 1,000 may a dip in prices up to 2% or flat price. The GST rate for garments of less than Rs 1,000 is fixed at 5% while all that are exceeding Rs 1,000, 12%. Rohan Shah, a Mumbai-based tax counsel, said, "The effective tax rate will be on the realisable value of the manufacturer. If a manufacturer is realising above Rs 1,000 from the sale of the product, then the effective tax rate is 12%, else it is 5%". "Under the present tax structure, manufacturers had to pay the excise duty, service tax, the value-added tax and central sales tax (CST). Imports and exports had customs duty, and when the goods are transported from one place to the other it had octroi. Under GST, the supply of goods and services is the only thing that will be taxable," said Gajanan Khanande, deputy commissioner, sales tax, in a presentation to the Clothing Manufacturers Association of India (CMAI). The apparel manufacturers are unlikely to increase prices. "Looking at the current competitive scenario I do not manufacturers to increase prices in the near future," Rahul Mehta, president of CMAI. "India reported a 15% growth in garment exports at $17 billion in 2016-17 and we expect this to rise to 18% with exports hitting $20 billion from the sector as China slows down production and demand for garment manufacture shifts to Vietnam, Thailand and also to India. The US market which accounts of 30% of this demand is also doing well. The potential for exports to Europe and Japanese markets also seems bright," Mehta told DNA Money. But the traders who have a turnover of over Rs 20 lakh to Rs 75 lakh will come under the ambit of the GST. "It's this segment which will find it hardest to comply with the discipline that the GST demands of meticulously filing returns every month," said a textile manufacturer. He cannot under-report either because his supplies to a manufacturer will be tracked by tax authorities, said the manufacturer. Job work for embroidery work undertaken by the manufacturer on garments will attract 18% GST -- that is for the service rendered he has to pay 18% for embroidery -- but if the same embroidery is done on cloth it will have a 5% GST. "This will have an impact on the small manufacturers, most of whom follow the job work basis of manufacturing. CMAI has requested the government to reconsider this obvious anomaly and reduce GST on job work at garment stage to 5%," Mehta said.

Source: DNA

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KTR invites textile industry to Telangana

Telangana Handlooms and Textiles Minister K. T. Rama Rao has enunciated the need for a national policy for promoting textiles, which he said, was the second biggest employment generating sector after agriculture. Addressing the ‘Textile India Summit’ inaugurated by Prime Minister Narendra Modi at Gandhi Nagar, in Gujarat, on Friday, Mr. Rama Rao said the Telangana government recognised the importance of textiles sector and resolved to establish a ‘Mega Textile Park’ in Warangal. He explained the Telangana government’s industrial policy at the CEO round-table meeting and said that the State had become a suitable destination for investments, a press release said. He assured that the government’s textile policy would be as revolutionary as the industrial policy, and extended invitation for investment. Talking of the textile park proposed at Warangal, he said the production motto of the park would be ‘Fibre to Fashion’, and it would include even international fashion products. Housing would be provided for the workers inside the park, and skill development training offered through an institute that would be set up in association with PSG institute, Coimbatore. The cotton produced by Telangana is of good quality, he said , urging the investors to avail the advantage of better quality of cotton. In line with its ‘Meet or Beat’ policy, the Telangana government is ready to offer opportunities that will either match or supersede any package offered anywhere in the world for industries, Mr.Rama Rao said. Union Minister for Textiles Smriti Irani, and Chief Minister of Andhra Pradesh N.Chandrababu Naidu, were also present at the round-table.

Source: The Hans India

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SWOT analysis of Indian textiles and apparel industry

The current National Textiles Policy (NTP), framed in 2000, is hopelessly outdated, given three major international developments: the phaseout of the Multi Fibre Agreement (MFA), the emergence of China in global trade particularly in the field of textiles and apparel, and the 2008 global financial crisis. The industry now awaits the new NTP. The world has changed considerably since 2000.  Automation is in, printing has gone digital and e-commerce has changed the way money is made in the 21st century. Any NTP that replaces the hopelessly-outdated one of 2000 will not just have to maintain a balancing act among planet, people and profit, it will have to be a jigsaw puzzle that has been solved for good and is future-proof. A policy after all cannot be a mere status report about a sector of the economy; it needs to ascertain the future and chart out a path towards it. It was for this reason, among many others, that the 2000 policy looks not just jaded, but embarrassingly anachronistic. As the ministry of textiles works overtime to draft the NTP, Subir Ghosh does a SWOT (strengths, weaknesses, opportunities, threats) analysis of a few select sectors and aspects of the Indian textiles and apparel industry.

Source: Fibre2fashion

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Pakistan: Textile sector holds govt responsible for export woes

LAHORE: Pakistan Hosiery Manufacturers and Exporters Association (PHMA) Chairman Adil Butt has expressed concern over the decline in textile exports, which have dropped 1.98% in the first 11 months of the current fiscal year. Along with the fall in textile exports, Pakistan’s trade deficit has swelled 42.12% to about $30 billion compared to $21.1 billion in the same period of previous fiscal year. Butt held the government responsible for the constant decline in textile exports because of delay in release of tax refunds of exporters and asked it to immediately release all the pending sales tax refund and Customs rebate claims as well as withholding tax claims.“The drop in textile exports comes during a turbulent period for textile manufacturers as they await the promised government incentives for the export sector including disbursement of an export promotion package worth Rs180 billion and smooth receipt of sales tax refunds.” The year-on-year growth in exports of most of the textile products was negative including towels, cotton clothing and bed wear, which showed double-digit declines, he said while quoting the Pakistan Bureau of Statistics (PBS). Butt hit out at the government for running a headless textile ministry and for increasing the turnover and sales tax to 1.25% and 6% respectively, adding none of the textile industry’s major proposals had been incorporated into the budget. Out of the Rs180 billion promised in the incentive package for the export sector, just Rs4 billion has been released, despite chest thumping about the release of Rs24 billion. The package is aimed at making the industry cost-effective by removing duties on raw material (cotton and man-made fibres) among other measures. Textile exports from July-May (2016-17) were recorded at $11.234 billion compared to $11.461 billion in the corresponding period of 2015-16. Exports of cotton yarn and cotton cloth fell 3.64% and 5.81% respectively. Similarly, raw cotton and yarn (other than cotton yarn) exports showed massive drops of 47.14% and 27.32% respectively. Other items were not too far behind with knitwear, towels, art, silk and synthetic textile losing a combined $51.798 million in export value over the course of the year.

Source: Tribune

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Chinese regulator approves launch of cotton yarn futures

BEIJING - The China Securities Regulatory Commission (CSRC) has recently approved the launch of cotton yarn futures on the Zhengzhou Commodity Exchange, it said on its website on Friday.

* China is adding new contracts on its commodity exchanges to meet strong investor appetite in the world's No 2 economy

* Fluctuation in cotton yarn prices has had substantial impact on an industry that employs 2.5 million people, and involves 9,000 companies, said the CSRC.

* Yarn futures will help the industry hedge against risk, and promote stable operations, building on the cotton futures already traded for several years, it added.

* A start date for trading of yarn futures will be announced separately.

* China launched soymeal and sugar options earlier this year, and is expected to soon launch a new hog futures contract.

Source: Reuters

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Drop in certified stocks offer support as cotton bounces

A big decertification of stocks in deliverable position and movement of July delivery notices into strong commercial hands offered support as cotton futures scored marketing week gains. Maturing July led the advance, closing up 286 points to 74 cents for the week ended Thursday and widening its settlement premium over December to 6.76 cents. Benchmark December edged up 50 points to 67.24 cents. December bounced from 66.15 cents on Monday, lowest since Aug. 31 when it printed 65.50 cents, to a high of 68.13 cents on Tuesday. It hit the low following beneficial weekend rains on the Texas High Plains, touched the high on the decertification news and settled around the middle of the 198-point range. Certified stocks declined from 490,897 bales posted on June 23, largest since July 2013, to 312,472 bales on Thursday. There were 181,628 bales decertified and 3,203 bales newly certified for a net drawdown of 178,425 bales. Fresh talk arose of scarce supplies and a need for cotton from the cert stocks to meet demand ahead of volume movement of the new crop. July delivery notices through Thursday had totaled 1,138 lots, including 19 lots that appeared to have been retenders. SG Americas Securities issued 1,119 notices and Term Commodities stopped 1,039. Volumes declined to among the lowest daily turnovers of the year and price ranges narrowed as traders jockeyed for position just ahead of USDA’s report on planted acres, which was set for release on Friday. U.S. weekly export sales remained robust at a combined all-cotton total of 584,200 running bales for this season and next. Combined sales the last two reporting weeks have totaled a whopping 1.235 million RB. Topping expectations, sales for 2016-17 rose to an 11-week high to 262,300 RB during the week ended June 22 to boost commitments to 14.992 million RB for the marketing year ending July 31. Commitments widened the lead over year-ago cumulative sales by 191,000 RB to 5.784 million RB or 63 percent. Total sales were nearly 107 percent of the USDA export estimate, compared with 104 percent of final 2015-16 shipments a year ago. Exports of 261,100 RB lifted the season’s total to 12.899 million RB. Shipments were up 5.152 million RB from a year ago and were 92 percent of the forecast. A year ago, shipments were 87 percent of final exports. To achieve the USDA estimate, shipments need to average roughly 233,200 RB for the five weeks left in the marketing year. New-crop sales of 321,900 RB brought commitments for 2017-18 to 4.269 million RB, now 33 percent of USDA’s projection. Forward sales a year ago were 13 percent of the current 2016-17 export estimate. On the crop scene, U.S. cotton conditions declined during the week ended last Sunday, with good to excellent dropping four percentage points to 57 percent, according to USDA’s progress report. Fair was unchanged at 33 percent and poor to very poor increased four points to 10 percent. A year ago, conditions were 56 percent good to excellent, 36 percent fair and 8 percent poor to very poor. Based on the USDA report, the DTN cotton condition index slipped to 147 from 158 a week earlier and 167 two weeks ago. The index a year ago was 149. Conditions in Texas showed good to excellent down four points on the week to 46 percent and poor to very poor up five points to 13 percent, compared with 52 percent and 10 percent, respectively, last year. The good-excellent Texas cotton two weeks earlier was 62 percent. The U.S. crop was 98 percent planted, near the five-year average of 99 percent. Squaring at 34 percent and boll setting at 7 percent were up from the five-year averages of 30 percent and 5 percent, respectively. On the international scene, a Bloomberg report quoted Nayan Mirani, president of the Cotton Association of India, as saying the country’s production could climb to 37.5 million bales of 170 kilograms, largest since 2014-15, if the monsoon is normal in the main growing areas. That would convert to 29.3 million 480-pound bales and compare with USDA’s latest crop forecast for India of 28 million bales, up 1.5 million bales from last season.

India, expected to be the world’s largest cotton producer for the third consecutive season in 2017-18, is projected by USDA to account for nearly a quarter of the global crop. A rebound in cotton area with a yield near the five-year average is driving the projected crop increase. India’s cotton consumption is projected by USDA to rise about 2 percent to 24.2 million bales in 2017-18. However, owing to China’s expected reduction in yarn imports, India’s mill use is forecast below the record of 24.5 million set in 2014-15. The higher production is expected to limit India’s need for imported cotton to 1.75 million bales, down from 2.5 million, while exports are forecast to remain at a relatively low 4.2 million bales. Meanwhile, mills priced a net 3,795 on-call lots across the futures board during the week ended June 23 to reduce their unpriced position to 84,898 lots, Commodity Futures Trading Commission data showed. Producers priced 623 lots, dropping their unfixed position to 34,427 lots. The net call difference declined to 50,471 lots, 24.9 percent of the declining open interest.Earlier, trend-following funds slashed their net longs 25,202 lots to 45,183 in cotton futures-options combined during the week ended June 20, according to CFTC traders-commitments data. That was the smallest since May 31, 2016, when their net longs totaled 38,571 lots. Index funds raised their net longs 2,465 lots to 73,589, while traders with non-reportable positions sold 1,749 lots to reverse to net short 1,592 lots from net long 157 lots. Commercials bought a net 24,587 lots, covering 35,269 shorts and liquidating 10,682 longs to cut their net shorts to 117,179 lots. Combined open interest fell 49,624 lots to 247,217, smallest since July 5.

Source: Lubbock online

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U.S. 2017 cotton acreage highest since 2012

Cool, wet weather may have kept growers from planting as much cotton as they could have, soybeans much higher. Dozens of round modules grace the edge of a cotton field near Portland, Ark., in 2016. U.S. cotton farmers appear to have planted 12.1 million acres of cotton in 2017, 20 percent more than in 2016 and the highest acreage since 2012, according to USDA’s National Agricultural Statistics Service. The increase is not quite as high as USDA-NASS was forecasting in its March Planting Intentions Report when it placed 2017 U.S. cotton plantings at 12.2 million acres. A cool, wet spring in the Mid-South may have limited the increase. In other highlights of the June Acreage Report, USDA-NASS estimated a record high 89.5 million acres of soybeans planted in the U.S. for 2017, based on its surveys of growers across the soybean-planting regions. More attractive soybean prices at harvest apparently led growers to switch out of corn and into soybeans. USDA-NASS said producers planted 94 percent of the soybean acreage to herbicide-resistant seed varieties, meaning the GMO-planted soybean acreage was basically unchanged from 2016. Much of the increase in soybeans came from corn acres, which USDA estimates are down 3 percent from 2016 to 90.9 million acres. Compared with last year, planted acres are down or unchanged in 38 of the 48 estimating states. Some analysts had been speculating that soybean acres might exceed those of corn in the U.S. for the first time. Growers surveyed by USDA-NASS said they had either planted or intended to seed 2.56 million acres of rice, an 18.6-percent decline from 2016. Low rice prices in relation to other crops and flooding in north Central Arkansas each contributed to the decline.

Source: Delta Farm Press,

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Tanzania: Gloom Grows As Drought, Pests Ravage Cotton Farms

Geita — Drought, pests and marketing woes have so affected cotton production that farmers are now discouraged to continue growing the cash crop. Major cotton-growing regions -- Mwanza, Shinyanga, Mara, Tabora, Simiyu, Singida and Kigoma - have been hit hard. Cotton is one of the country's traditional exports that generated $43.1 million in the year ended April 2017, according to the Bank of Tanzania. Some 500,000 smallholder farmers cultivate 400,000 acres of cotton and an average of 300 kilos is harvested annually. A Lubeho villager in Mbogwe District, Geita, Mr Mpendawali Makonope, is sad that his farm has been scorched by drought. "I have a five-acre farm of cotton and I expect to harvest about 1,000 kilos. That's an average of 200 kilos per acre. When weather was favourable I used to harvest up to 3,500 kilos per acre." Mr Makonope, with a family of 22, has been hit hard. He has been growing cotton for decades, but the situation became bad in the past three years. He no longer depends on farming for a living. "I've bought milling machines and operate them commercially to meet my family's needs." Mr Mashaka Francis has a cotton farm of 5.5 acres. Pests that are resistant to pesticides have wreaked havoc on it. "Pests will reduce the harvest to 1,500 kilos, down from 3,000 kilos I normally get. I sprayed pesticides six times on the plants to no avail," he laments. Another farmer, Mr Maguha Mayala, of Kahumbi Village, raises a similar concern. He expects to harvest 1,000 kilos of cotton from 3.5 acres. "This is a terrible year for cotton farmers. Pests and drought have ruined our farms. However, I have grown cassava to get food." Mr Juma Kusekwa, of Isaka Village in Buchosa District, Geita, invested significantly in cotton, but a pest has devastated his farm. "I've been encouraged by President John Magufuli's speeches to industrialise Tanzania. I cleared land and grew cotton, hoping to get a bumper crop for sale, but pests have shattered my dream. I expected to get 1.5 tonnes of cotton from five acres, but I'll just get 500 kilos. Pesticides no longer kill pests; they are resistant." Tanzania Cotton Board official Atupele Mwakijolo accuses the Tropical Pesticides Research Institute (TPRI) of misleading farmers on the types of pesticides to be used. According to Mr Mwakijolo, whenever farmers raise matters, they are dealt with accordingly. "If they are about pesticides, TPRI is duly informed. If they are about weighing there is the Weight and Measurement Agency and if it's a problem about seeds, the Tanzania Official Seed Certification Institute is made aware of it." However, he said the cotton price had improved to Sh1,100 a kilo. Ukiriguru Agricultural Research Institute field officer Stella Chirimi urges farmers to adopt good methods to increase yields. "A farmer is supposed to get approved seeds so as to avoid diseases in earlier stage. The best seed is UKM 08 which can produce up to 800 kilos per acre. It thrives in wild, sandy, silty and clay soils. "The soil should be dug 100cm to enable roots to penetrate and the farm should be prepared as early as October and November. It should be planted onto terraces of 150 or 90cm, 2.5m apart." Seeds should be planted in rows of between 90 to 40cm and 150 x 45cm between lines. According to her, a hectare will have 28,000 holes and an acre 12,000 holes. Each hole will have two seeds and the hectare will have 56,000 plants or 24,000 plants for an acre. "A farmer can use 7.5 tonnes of composite manure in one hectare or three tonnes per acre after each three years. Fifty kilos of TSP can be used for 1.5ha or 0.5 acre. Urea, DAP, CAN or Nitrogen fertiliser can be used for growth." She names Fusarium wilt caused by Fusarium oxysporum fs vesinfectum - as fungus -- for killing cotton plants. "The fungus can live in the soil for years even if cotton was not grown. It can cut production by 20 per cent. When the plant is infected its leaves become grey and shrink while the stem becomes black before the plant rot." Since no chemical can kill the fungus, she has advised farmers to uproot the plants, burn them and put the farm under quarantine or grow other crops such as maize or cassava, which are not affected by it, for about five years before replanting cotton. Alternaria macrospora and Alternaria altenata, also fungi, can stay cotton plants after harvesting for some years. She also mentioned Xanthomonas malvacearum--a bacterial species -- that attacks plants in all stages by drilling, sucking fruit and stems. Caterpillars also attack cotton fruit. Cotton aphids, spider mites, thrips, stink bugs and whiteflies also affect plants. She called on farmers to sow seeds and harvest crops on time and burn the remaining plants. Planting varieties that are resistant to pests and using control are important. The latter involves using insects which eat pests and their eggs. Another technique is spraying plants and seeking advice of extension officers. Cotton organic farming is practised in Tanzania while in some African countries such as Sudan and Burkina Faso biotechnology is used to produce seeds which are resistant to drought and pests.

Source:  allAfrica.com

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Speakers announced for Textile Sustainability Conference

Textile Exchange prepares to welcome over 400 leaders from the textile and apparel industry for its annual Textile Sustainability Conference. The 2017 conference is a global event taking place in Washington, DC, from 9-13 October, with a theme of United by Action: Catalyzing the Sustainable Development Goals in Textiles. Textile Exchange announced an initial list of speakers participating in this event to discuss current sustainability issues, including how to engage with the United Nations #SDGs and the #GlobalGoals. On the brand and retail side, the conference will feature Ariane Grazian, Sr. Manager of General Merchandise Sustainability, Walmart; Helena Helmersson, Global Head of Production for H&M; Jeffrey Hogue, Chief Sustainability Officer, C&A; and Caroline Reid, Project Manager Sustainable Development, IKEA. Justin Mundy, Director of HRH The Prince of Wales International Sustainability Unit, will also join the event for a special presentation on 11 October 2017 on Scaling the Use of Sustainable Cotton. He will be joined by representatives from the Sustainable Cotton Initiatives. Leading suppliers such as Shreyaskar Chaudhary, Managing Director, Pratibha Syntex Limited and Jose Fernandez, Global Merino will also be presenting.

Innovative ideas

Visitors can learn about innovative ideas delivering on the #SDGs from:

• Dr Maurizio Crippa, CEO, gr3n

• Karin Ekberg, CEO, Leadership & Sustainability

• Tim Greiner, Co-founder and Managing Director, Pure Strategies, Inc.

• Dr Jung Ha-Brookshire, Assoc. Dean for Research & Graduate Studies of College of Human

• Environmental Sciences & Assoc. Prof of Textile & Apparel Mgt, Univ. of Missouri

• Karla Magruder, Founder & Textile Consultant, Fabrikology International

• MeiLin Wan, Vice President Textiles, Applied DNA Sciences

• Sophie Mather, Material Futurist, BIOV8TION

• Maggie Kervick, Director of Communications & Outreach, GCNYC Fair Fashion Center

Conference

The conference agenda structure offers two full conference days, and additional pre- and post-conference days dedicated to in-depth workshops. The series of workshops take the audience through multiple sessions of insight and information. A special Textile Exchange member-only breakfast will feature Andrew Winston, globally recognised expert on green business and author of Green Recovery and Green to Gold. After attending Textile Exchange’s 2016 conference, Nicole Bassett, Co-Founder, The Renewal Workshop said: “I always walk away from the Textile Exchange global conference with a deep understanding of the newest ideas, innovations and companies in sustainability in the textile industry. The conference gives the opportunity for great networking and developing business relationships.”

Source: Innovations in Textiles

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