At a time when the global economy is still recovering from a slowdown, the government on Tuesday announced fresh incentives worth Rs 8,450 crore to boost exports and support the MSME and labour-intensive industries. The incentive came as a part of the mid-term review of India’s Foreign Trade Policy (FTP) 2015-2020. “The revised FTP focuses on the goal of exploring new markets and new markets and new products as well as on increasing India’s share in traditional markets and products, leveraging benefits of Goods and Services Tax (GST) by exporters; close monitoring of export performances and taking immediate corrective measures based on data analysis,” read the FTP statement, 2017. The commerce ministry had unveiled FTP 2015-20 in April 2015, with an aim to almost double India’s exports of goods and services to USD 900 billion by 2020. The mid-term review was supposed to take place around the time GST was implemented (July 1). However, the commerce ministry delayed the review in a bid to comprehend the impact of the new tax regime on the business of the exporters. The revised FTP focuses on exploring new markets and products, as well as increasing the country’s share in traditional markets, leveraging the benefits of GST, increasing ease of trading across borders and increasing farmers’ income through a focused policy for agricultural exports. The government has repositioned India’s export strategy by increasing incentives in the Merchandise Exporters from India Scheme (MEIS). The MEIS rate has been increased to 4 percent from 2 percent earlier, effective November 1. “There has been across the board increase of 2 percent in existing MEIS incentive for exports by MSMEs/labour-intensive industries involving additional incentive of Rs 4,567 crore ,” the policy statement said. Key sectors receiving the incentives are leather, agriculture, carpets, hand-tools, marine products, rubber products, ceramics, sports goods, medical and scientific products and electronic and telecom components. “Government should gradually extend the MEIS to other sectors of exports since they are also facing numerous challenges in exports. A one-time relaxation to meet Export Obligation may be provided to the industry so that they can escape the penal provisions ,which will be disruptive and will provide an opportunity to add to exports besides providing employment,” Ganesh Gupta, President of Federation of Indian Export Organisation (FIEO), said. Impetus worth Rs 1,140 crore has been given to the services trade, as well as annual incentives worth Rs 2,743 crore for sub-sectors under the textiles sector. In addition, the validity period for duty credit scrips under MEIS has also been increased to two years from 18 months earlier. Duty credit scrips are benefits given to exporters under MEIS, which can be used to pay taxes such as customs duty and some other taxes. While the implementation of GST has led to a blockage of working capital and delay in refunds, the government reiterated that the new tax system will enhance trade facilitation while benefiting exporters. “While exporters will be happy with the direction, they would look forward to some quick and long term solution to working capital blockage with respect to input GST. It requires continuous monitoring of the situation on the ground and flexibility in approach, which GST council has shown in last few months.” Pratik Jain, Leader- Indirect Tax, PwC India said.
Source: Money Control
The mid-term review of the Foreign Trade Policy (2015-20) has brought in additional relief worth ₹8,450 crore annually for the labour-intensive and micro, small and medium enterprises (MSME) sectors. Exporters of labour-intensive items, such as leather and footwear, agriculture and marine products, handmade carpets, telecom and electronics components, and medical and surgical equipment, will now be eligible for 2 per cent higher incentives across-the-board under the popular Merchandise Export from India Scheme (MEIS), under the review released by Commerce and Industry Minister, Suresh Prabhu on Tuesday. A number of services such as accountancy, architecture, legal, education and restaurant, too, will get similar relief under the Services Export from India Scheme (SEIS). The incentives come at a time when exporters are struggling under the new Goods and Services Tax (GST) regime introduced in July. Prabhu said the government was committed to redress the problems. “It is not a one-time exercise but an ongoing effort. We will continuously revisit issues, identify challenges and address them on a real-time basis,” the Minister said. Acknowledging that exporters had suffered due to problems in GST implementation, Prabhu said the government would sort it out together with exporters. “No new legislation can be made perfect in one go. I ask exporters to bear with us and be our partners in dealing with the problems,” he said, adding that a number of problems had already been sorted out. Exporters who were upset by the drop in goods exports in October 2017, and were expecting a further fall over the next few months due to lower duty drawback rates (of input tax reimbursement) and slow refunds, seem more optimistic now. “The higher incentives should start reflecting in export numbers from January. However, we are disappointed that a number of sectors were left out. Problems for exporters exist across sectors and the relief should have been for all,” said Ganesh Kumar Gupta, President, FIEO. Other initiatives like the extension of validity of MEIS scrips from 18 months to 24 months and the provision of zero GST on sale of scrips will help the industry in a big way, Apparel Export Promotion Council Chairman Ashok Rajani said. The MEIS is the most popular incentive for exporters, under which identified sectors are given duty exemption scrips that are fixed at a certain percentage of the total value of their exports. The scrips can be used to pay duties on inputs, including Customs duties. An e-wallet system to address the liquidity problem being faced by exporters is likely to be operational from April 1, 2018, PK Das, Member, CBEC, assured exporters. Finance Secretary Hasmukh Adhia pointed out that Input Tax Credit and IGST refunds for exporters were being expedited and stressed that the GST regime will be beneficial for exporters in the long run. The government has also introduced a new, trust-based self-ratification system to allow duty-free inputs for export production on the basis of self-declaration. With exports of goods lower than $300 billion in the last two years, the government is under pressure to give the sector a major boost. Exports in 2016-17 were $276.54 billion, compared with $314.14 billion in 2013-14. The review of the FTP (2015-2020) was due earlier this year, but was delayed due to the implementation of the GST in July and the problems faced by exporters under the new dispensation taking centerstage.
Source: Business Line
The much-awaited Foreign Trade Policy mid-term review was on Tuesday released to highlight the steps taken by the Narendra Modi government to ensure ease of trading for exporters in the country and to highlight the impact of the Goods and Services Tax (GST). Aiming to nearly double India’s exports of goods and services to $900 billion by 2020, the government had announced several incentives in the five-year Foreign Trade Policy for exporters and units in the Special Economic Zones in April 2015. The mid-term review was supposed to be released in July with the implementation of the GST on July 1, but it was postponed to also study the impact of the new indirect tax on exporters. Here is a summary of the incentives announced for exporters in the Foreign Trade Policy review today:
Overview
·FTP will continue to have dynamic character
·Import export code simplified
·Government could assess the impact of GST and could take remedial action
·GST to help spur exports growth
·Rationalisation of export promotion schemes to continue
·Focussing on new markets for Indian exporters
·India’s exports to focus on new markets in Africa, Latin America
·Taking care of MSME, agricultural products, labour intensive sectors focus of FTP review
·Incentives worth Rs 8,450 crore in this policy review
·Current export incentives Rs 25,000 crore
Procedures and processes
·Self certification scheme for duty free imports for export inputs
·Validity for duty credit scrips raised to 24 months from 18 months
·Single point contact for trade queries launched on DGFT portal
·Launched state of the art trade analytics for evidence based policy interventions
·Will set up a team to assist exporters
·Cutting down delay in filing of Export General Manifest for duty drawback
·Single window system to facilitate export of perishable agriculture produce
·Number of mandatory documents needed for exports, imports reduced to 3 each
·Consignment of export items not to be withheld for any reason by Govt
·24/7 customs clearance facility extended to all bills of entry
·To support enhanced insurance cover for exporters
Merchandise exports
·MEIS incentives raised by 2% to 4% (merchandise export from India scheme)
·Increase in MEIS for all labour intensive sector exports
·Benefits to Leather, Handicrafts, Carpets, Sports goods, Agriculture, Marine, Electronic Components, Project Exports
·MEIS incentives for two sub-sectors of textiles, ie, ready-made garments and made ups already been increased from 2% to 4%, involving an additional annual incentive of Rs 2,743 crore
·Additional annual incentive of Rs 749 crore for leather sector; Rs 921 crore for handmade carpets of silk, handloom, coir, jute products; Rs 1354 crore for agricultural products; Rs 759 crore for marine products; Rs 369 crore for telecom, electronic components; Rs 193 crore for medical equipment
Services exports
·SEIS incentives increased by 2% (Services Exports from India Scheme)
·Labour incentives for small businesses raised by 2%
·SEIS incentives for all notified sectors such as educational, hospital, hotels & restaurants, biz, legal, accounting, architectural, etc increased by 2%
·Additional annual incentives of Rs 1140 crore, which will provide impetus to services trade
Source: Financial Express
Trade Policy, Trade Policy Review, incentives to push exports, Suresh Prabhu, Foreign Trade Policy, midterm review, Merchandise Exports from India Scheme, annual incentive Commerce and Industry Minister Suresh Prabhu today let out more incentives while unveiling the mid-term review of the Foreign Trade Policy 2015-20 with a view to boosting exports. Commerce and Industry Minister Suresh Prabhu today let out more incentives while unveiling the mid-term review of the Foreign Trade Policy 2015-20 with a view to boosting exports. The minister said the Merchandise Exports from India Scheme (MEIS) incentive rate will be raised by 2 per cent across the board for labour intensive/MSME sectors. The increase in annual incentive by 34 per cent to Rs 8,450 crore will benefit leather, handicraft, carpets, sports goods, agriculture, marine, electronic components and project exports, the minister said in a tweet. The mid-term review, Prabhu said, “aims to promote exports by simplification of processes, enhancing support to high employment sectors, leveraging benefits of GST, promoting services exports, monitoring exports performance through state-of-the-art analytics”. The focus of the FTP, he said, will be on exploring new markets and products as well as increasing India’s share in traditional markets and products. Emphasis will be on enhancing participation of Indian industry in global and regional value chains, the minister added. The FTP will provide “additional annual incentive of Rs 749 crore for the leather sector, Rs 921 crore for hand-made carpets of silk, handloom, coir, jute products, Rs 1,354 crore for agri products, Rs 759 crore for marine products, Rs 369 crore for telecom, electronic components, Rs 193 crore for medical equipment,” the ministry said in a tweet. It further said MEIS incentives for two sub-sectors of textiles — ready-made garments and made-ups — have already been increased to 4 per cent from 2 per cent, with an additional annual incentive of Rs 2,743 crore. The FTP, Prabhu said, also aims at facilitating increase in farmers’ income through a focussed policy for agricultural export. Referring to implementation of the Goods and Services Tax (GST), Prabhu said introduction of the new tax regime “would be the catalyst for spurring growth in the export sector. The lower duty on most of items and reduction of cascading effect of various duties would lower the cost and make exports competitive”. He added that green shoots in export growth are distinctly visible now with positive export growth in 13 of the past 14 months. The five-year FTP was announced on April 1, 2015, and set an ambitious target of India’s goods and services exports at $900 billion by 2020. It also has a goal of increasing India’s share of world exports to 3.5 per cent, from 2 per cent.
Source: Financial Express
The move by election watchdog to cap the cash to be carried by anyone at Rs 50,000 at the time of elections has hurt the textile business in Surat as the traders coming from other states has drastically decreased, say local traders. Business bodies in Gujarat have already urged the Election Commission that traders with requisite proof that money is not be misused during the elections should be allowed to carry out business as usual. "Traders from across the country come here to buy textile products. As the business is in cash, the restriction by the Election Commission has prevented traders from other states to come to Surat. The business has already halved and this latest move has aggravated the problem," said Kamlesh Chopra, a trader in Tirupati Textile Market of Surat, one of India's major hub for wholesale business in textiles. Ramratan Bohra, President of Tirupati Textile Market Maintenance Association said that in Surat the business in Surat is predominantly in cash and so it is affected. Gujarat's apex body for trade and industry, Gujarat Chamber of Commerce and Industry (GCCI) had earlier written to the Election Commission that while the democratic process of election is critical for the country and there is a consensus that no one should be able to gain unfair advantage using money power, those traders carrying cash should not be harassed. "Normal business activity should not be disrupted because of elections. If one has sufficient proof that the cash is for business purpose only, there should be no punitive action," GCCI President Shailesh Patwari had then told media persons. However, the situation in Ahmedabad market is different as now transactions have gone digital, said Arpan Shah, Vice President of Gujarat Garment Manufacturers Association (GGMA). "Now most of the payment is through RTGS. So there is not much impact in Ahmedabad because of the cap," said Shah.
POLLS AND BIZ
However, the situation in Ahmedabad market is different as now transactions have gone digital, said Arpan Shah, Vice President of Gujarat Garment Manufacturers Association (GGMA). Business bodies have already urged the EC that traders with requisite proof that money is not be misused during the elections.
Source: DNA
COIMBATORE: With textile imports seeing a sharp increase in the past few months, the industry is blaming GST for the rise stating that lower import duties are leading to overseas fabric and garments flooding the Indian market. Cotton fabric imports surged 45% in July, was up 29% and 12% for August and September respectively. Import of textile yarn, fabric and made-ups increased 12% year-on-year in October to $153.9 million, according to estimates. Pre-GST, import of textile products attracted basic customs duty (BCD) plus countervailing duty (CVD) and special additional duty (SAD). Post-GST, CVD and SAD have been withdrawn and IGST (Integrated GST) was introduced. “Unlike CVD and SAD, IGST is fully adjustable against GST liability on sale of the imported product. Recognising the problem and threat of imports flooding the market, the government recently increased import duty on MMF(man-made fibre) fabric from 10% to 20%. However, the import duty on MMF yarn and cotton fabric have been kept at old rates," said Sanjay Kumar Jain, chairman, Confederation of Indian Textile Industry (CITI). “In the pre-GST scenario, import of garments from Bangladesh was attracting Rs 77 a piece (where MRP is Rs 999 a piece) and Rs 116 a piece (where MRP is Rs 1,500 a piece in the shape of CVD plus education cess and thereon," CITI said. “However, in the post-GST scenario, there will be no cost for import of garments from Bangladesh. Similarly, in the case of import of garment from other countries, the cost has been substantially reduced by Rs 77 a piece and Rs 116 a piece where MRP is Rs 999 a piece and Rs 1,500 a piece respectively," it said. “Hence, the Indian garment industry will face stiff competition from imported garments, especially from Bangladesh where production cost is already lower than India," CITI said. The textile body has urged the government to increase import duty on MMF yarn, cotton fabric and MMF fabric by 15% to protect the local yarn, fabric and garment producers from cheap import threat, especially from FTA (free trade agreement) nations like Bangladesh and Sri Lanka. “There is a greater needto impose safeguard measures such as 'Rules of Origin', 'Yarn Forward and Fabric Forward Rules' on countries like Bangladesh and Sri Lanka that have FTAs with India to prevent cheaper fabrics produced from countries like China routed through these countries," Jain said.
Source: Economic Times
India can take over the baton of higher growth from China for the next three decades if ties between the two Asian giants remain buoyant and the Indian economic trajectory follows the Chinese one, NITI Aayog Vice Chairman Rajiv Kumar has said. For the first time since the global economic crisis in 2008, “there are signs of synchronised economic recovery in major economies” like the US, Europe and Japan, he said at the third annual dialogue between the top planning bodies of the two countries. This is good for the recovery of the global economy, he said, adding, in this scenario, India and China should place themselves to take advantage of the synchronised global recovery. “It is imperative that the two countries work together and help each other to grow further,” he said while addressing the dialogue between the NITI Aayog and Development Research Centre (DRC) of China here. “I think now perhaps hope all of us agree that given the circumstances globally and in Asia, may be India can take over the baton of higher growth from China for the next 30 years,” he said. He said Prime Minister Narendra Modi was “very emphatic” about India’s growth rates moving to double digits as higher growth alone can remove poverty in India as in China. He said China’s achievement of lifting over 600 million people out of poverty is “remarkable in human history”. Kumar’s emphasis on India taking over the baton of higher growth from China whose economy is on a slowdown after posting double digit growth rates for over three decades, comes in the backdrop of the global economy staging a recovery. “Now India must follow suit. For that we need to focus on and achieve higher rate of growth of employment,” he said. The increase of over 14 per cent in wages per year for the past few years in China is a sign that India can benefit by Chinese investments moving to India which will generate employment, he said. He also highlighted Modi’s plan to achieve double digit growth by 2022. “India should be achieving double digit growth. So that we can achieve six freedoms – freedom from poverty, squalor, corruption, terrorism, casteism and communalism,” he said. The Indian government is trying to make the public sector more accountable, trying to ensure that states compete with each other, he said. “We want to replace competitive populism with competitive good governance so that we can derive the democracy dividend for which we have had to pay a cost so far. If we succeed, we will ensure that India will achieve double digit growth rates in a sustainable and inclusive manner,” he said. “We in India are at the cusp of many new changes. We have to adopt completely different growth. Maybe we may not generate as many jobs as China did but India wants to work with China to fill the spaces it is vacating in industry,” he said. As China moves ahead in technology and knowledge, it is opening up space for others in fields like light engineering and light manufacturing, he said. “While you are vacating those spaces, India would do well to invite Chinese investment so that those spaces we can fill and generate employment, while at the same time taking all the innovative steps in India to ensure that it is not left behind in the fourth industrial revolution which is currently underway,” Kumar said.
Source: Financial Express
Time and again India has flagged its concerns on the slow pace of services trade RCEP, Regional Comprehensive Economic Partnership, india market access, asean Time and again India has flagged its concerns on the slow pace of services trade. The Regional Comprehensive Economic Partnership (RCEP) leaders who met on the sidelines of the 31st ASEAN Summit in Manila recently have expressed their commitment to resolve differences and conclude the ASEAN+6 country free trade agreement (FTA) by 2018. Indian Prime Minister Narendra Modi, during his three-day visit to the Philippines, has also extended his support for a “balanced outcome” of the RCEP negotiations. RCEP is a proposed FTA between 10 ASEAN countries and their six FTA partners, namely Australia, China, India, Japan, South Korea and New Zealand. It accounts for 25% of global GDP, 30% of global trade, 26% of FDI flows and 45% of the total population. From India’s point of view, RCEP is critical. In fact, RCEP countries account for almost 27% of India’s total trade. Exports to RCEP countries account for about 15% of India’s total exports and imports from RCEP comprise 35% of India’s total imports. India runs a trade deficit with ASEAN as well as partner countries of RCEP. India’s trade deficit with the bloc has risen from $9 billion in FY05 to $83 billion in FY17, of which China alone accounts for over 60% of the deficit. After over 19 rounds of negotiation since 2012, RCEP countries have failed to conclude the mega trade deal. India’s commerce ministry has received a lot of backlash over its “protectionist attitude” in the ministerial negotiation rounds. India’s earlier offer of differential tariffs under the three-tier approach for different countries (especially China) was rejected by member nations. According to media reports, India had offered complete liberalisation on almost 75% of the tariff lines earlier. However, it was later pressurised to liberalise 90-92% of total tariff lines. On tariff liberalisation, India has been worried about dumping of cheap Chinese goods into the domestic market, which could hurt its manufacturing industry, given China’s scale, cost-optimisation and subsidy regime. Thus, India Inc has urged the ministry to refrain itself from giving larger tariff cuts to China to ensure a level-playing field for the domestic industry. India, however, continues to maintain its tough stance on tariff elimination, intellectual property rights and services trade, cognisant of its experience from previous FTAs. India’s trade balance with previous FTA partner countries has deteriorated post signing of FTAs. For instance, the combined trade deficit with ASEAN, Japan and South Korea has increased from $16 billion in 2010 to $23 billion in FY17. Exports, too, haven’t seen any exponential growth to FTA partner countries despite tariff cuts. Exports to FTA and non-FTA partner countries have, in fact, grown at a similar pace over the past decade (13% year-on-year). This points to the fact that India has not gained much from its previous FTAs. One of the most comprehensive trade deals signed by India till date has been with ASEAN 10 countries, where 74% of the tariff lines were liberalised (tariffs reduced to zero) for two-way trade. India’s average import tariffs under the ASEAN-India Free Trade Area (AIFTA) decreased from 11.3% to 4.7%. Of the over 12,000 tariff lines, India offered complete elimination of tariffs on 74% of the lines, 15% were in sensitive track (phased elimination over an extended period of time) and 11% under complete exclusion (no tariff cuts). Apart from the surge in total trade deficit due to tariff cuts, a closer look at the sector-wise trade flows also paints a grim picture. According to the UN’s Harmonised system of product classification, products can be grouped into 99 chapters and further into 21 sections like textiles, chemicals, vegetable products, base metals, gems and jewellery, etc (similar to sector classification). The analysis shows that trade balance has worsened (deficit increased or surplus reduced) for 13 out of 21 sectors. This also includes value-added sectors like chemicals and allied products, plastics and rubber, minerals, leather, textiles, gems and jewellery, metals, vehicles, medical instruments, and miscellaneous manufactured items. The sectors where trade balance has improved include animal products, animal and vegetable fat, wood and articles, paper and paperboard, cement and ceramic, and arms and ammunitions. The sectors where trade deficit has worsened account for approximately 75% of India’s exports to ASEAN. Trade-surplus sectors have also shown only marginal improvement. Overall, it can be concluded that India’s quality of trade has not improved under AIFTA. India has also resisted pressure from the trade bloc on intellectual property rights. Japan and South Korea have been advocating for TRIPS Plus provisions (similar to TPP, or Trans-Pacific Partnership), which are stricter than the level of protection India provides under the TRIPS (Trade-Related Aspects of Intellectual Property Rights) agreement of the World Trade Organisation (WTO). India feels that these provisions can lead to extension of monopoly on drugs and may keep drug prices high. This may be detrimental for the country’s generic pharmaceutical industry. Time and again India has flagged its concerns on the slow pace of services trade negotiations in RCEP. India’s strength lies in services trade, and negotiation on this is critical. India has been pushing for greater market access in services, which has irked ASEAN members. India did not get a fair deal under the AIFTA services pact, after the goods agreement was signed. It expects greater liberalisation in Mode 4 services that facilitate movement of professionals from one country to the other. Apart from pushing for liberal visa regimes, India has backed greater liberalisation in Mode 3 (commercial presence) and Mode 2 (consumption abroad) services. In fact, India’s proposal for “RCEP business travel card” to make business travel hassle free avoiding visa documentation and long queues at passport control has also failed to find any support from the partner countries. At this stage, India’s best bet would be to offset its loss on account of goods trade by getting greater benefits from market access in services and investment. If that’s not what can be possibly negotiated, India might end up signing yet another bad deal, regretting it years later.
Source: Financial Express
Cotton ginners in Maharashtra are finding it difficult to source cotton this season as more than 50% of the crop in the state has been affected by pink bollworm. Out of about 150 ginning units in the state, only 100 are active but even these are working at 50% capacity, top officials of the Khandesh Gin/Press Factory Owners Association indicated. The state is staring at a loss in production of cotton crop this year due to the pink bollworm pest which is reported to have affected more than 50% of the crop. The bleak crop would in turn hit the availability of good quality cotton to the ginners. Pradeep Jain, president of the ginners association said the season could be short this year and good quality cotton may only be available only until December. Thereafter, farmers may be required to uproot their crops and burn it to ensure that the worms do not proliferate, he added. Jain said that it take a couple of years to overcome the issue. A team from the Nashik Agricultural Directorate visited Jalgaon this week to identify the seriousness of the issue. The start was good in June-August when the crop was sown. The first attack in August was not that serious. Thereafter, the pink bollworms matured and affected the crop. The ginners association, which has been attempting to export cotton, found their samples rejected by parties. ” The quality has been badly affected. Reddish and yellow lines in the cotton has affected both productivity and quality,” Jain said. The state agriculture department has already written to the Centre to denotify BG II as it has lost its efficacy to fight the pest. Dr CD Mayee , president of the board of directors of the South Asia Biotechnology Centre (SABC), said that the attack of pink bollworm is in the range of 10% to 40% in some pockets of Maharashtra, Madhya Pradesh, Gujarat and Karnataka. “The crop has already been harvested in the north and therefore this region does not have any problem. It is more prominent in central India, including Vidarbha region of Maharashtra, which is a dry land and where there was a drought in the initial stages of the crop. This was followed by unseasonal rainfall, thus affecting flowering which in turn lead to higher chances of infestation,” Mayee explained. “During the last three-four years, there has been an erosion of resistance to BG II, which is obvious because the same product cannot have resistance for 16 years to the pink bollworm,” Mayee had said earlier. Pink bollworm is a small, thin, gray moth with fringed wings — the most damaging of all pests that attack cotton crop in the country. The female moth lays eggs on cotton balls and larvae emerge only to destroy entire fields by chewing through the cotton lint to feed on seeds. A research report by Dr K R Kranthi, former director of Central Institute of Cotton Research (CICR), shows that pink bollworm has developed resistance to Bollgard-II Bt cotton not only in Maharashtra but other cotton-growing states as well. Bollgard-II is the Bt hybrid variety that was introduced in 2010. “There are only two benefits of Bt cotton. One, it controls bollworm, due to which the yield is protected. Two, it reduces use of insecticides meant for bollworm control. Currently, cotton growers do not get either benefit,” Kranthi had said earlier.
Source: Financial Express
Modelled on the lines of makerspaces in other countries and customised to Indian needs, this will probably be the world's second largest facility of its kind, KT Rama Rao said. India's largest makerspace, a prototyping and design centre, will come up here next year and will have equipment worth over $20 million, Telangana's Industry Minister K.T. Rama Rao announced here on Tuesday. To be known as T-Works, the facility will come up over 250,00 square feet with many partners offering their software tools and equipment. Modelled on the lines of makerspaces in other countries and customised to Indian needs, this will probably be the world's second largest facility of its kind, he said. Anybody with an idea can collaborate with other people at T-Works and convert his or her designs into working prototype. "T-Works will be up and running around this time next year," the Minister said, while addressing India Design Summit organised by the Confederation of Indian Industry, adding anybody could use freely available tools -- software, test and measurement equipment -- to build any product. "T-Works will allow anyone young or old school student, graduate or retired professor, man or woman to collaborate with other intelligent individuals and converge their designs on paper or PC and convert it into working prototype," said Rama Rao, son of Chief Minister K. Chandrasekhar Rao. Open to all Indians, the facility will have CNC machines, cutting machines of all kinds, welding and carpentry tools, PCB assembly machines, and 3D printers of all ranges. "This I believe is going to change the way we do business especially with respect to design and hardware space in India," he said. The Minister said T-Works will help in making products in domains like mechanical, electro mechanic, electronics and semiconductor spaces. It will also help in making products in automobiles, IoT, avionics, drones, med devices, medical instruments, defence equipment, consumer electronics, telecom products, mobile devices, gadgets and sensors. "T-Works will become one of cornerstones and essential hub in the wheel in heralding a new wave of entrepreneurs, makers, tinkerers and designers of all kinds, aesthetic, textile, fashion, lifestyle, mechanical and technological," he added.
Source: Economic Times
Eyeing at boosting sales of the handicrafts and handloom products in the region by giving the craftsmen access to a larger consumer base, the Northeast handicraft-cum-handloom exhibition cum sale bonanza is being organized in the state of Manipur. The exhibition kicked off this week and extends for the next two weeks. The Union Minister of State (Independent Charge) for Development of North Eastern Region, Dr. Jitendra Singh inaugurated the event. Also the Minister announced package of Rs. 90 crore for "Northeast Hill Area Development” in Manipur during the inaugural event. During a press interaction at the event, Singh highlighted the efforts undertaken by the Finance Minister Arun Jaitley towards the region. He said that the government both atthe centre and the state will work together to ensure equitable development of all the districts of the state irrespective of topography and geographical conditions. He added that the Ministry of Development of North-eastern Region (DoNER) held many deliberations with the Department of Expenditure and realized that a separate sub – scheme must be created under the existing schemes for public welfare in North-eastern region. The central govt under the leadership of Prime Minister Modi has always encouraged handloom and textile products from Northeast, Singh added.
Source: KNNindia.co.in
Mahbubnagar: The district administration has chalked out plans to extend insurance cover to all handloom workers in the district. The Department of handlooms and Textiles is making efforts to ensure that all the handloom workers come under the insurance cover. As part of the plan, the officials have invited applications from the members of Handloom Association in the district to bring the workers under the ambit of insurance, launched by the Central governments for the benefit of the handloom community. According to Tirumala Rao, Assistant Director of the Department of Handloom and Textiles, the handloom workers both from the organised and unorganised sectors can avail themselves of various insurance schemes like Pradhanmantri Jeevan Jyothi Bheema Scheme, Mahatma Gandhi Bunakar Bheema Scheme and Pradhan Mantri Suraksha Bheema scheme. Each scheme has its own specifications basing on the age group. For instance, handloom workers, who wish to get enrolled under Pradhanmantri Jeevan Jyothi Bheema scheme should be in the age group of 18-50 years and they need to earn their livelihood by earning 50 per cent from handloom work. All candidates must submit their applications along with the Aadhaar cards and the age in the aadhaar card must match with their actual date of birth. Another important condition is that only such workers whose handlooms are geotagged will be eligible for applying for these schemes. Except variations in the age group, all other conditions for all the three insurance policies are similar. The age group for availing Pradhanmantri Jeevan Jyothi scheme is between 18 and 50 years, the age group for availing the Mahatma Gandhi Bunakar Bheema scheme is between 51 and 59 and for availing the Pradhanmantri Suraksha Bheema Scheme any handloom worker between 18 and 70 years is eligible. For availing the insurance facilities all the handloom workers in the district are directed to approach the office of Handlooms and Textile. “Interested handloom workers in the organized and non-organised sectors should fill their details in separate pro forma and submit their applications at the office. For any further details they can approach the officials during the office hours,” said Tirumala Rao.
Source: The Hans India
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1355.58 |
USD/Ton |
0.84% |
12/5/2017 |
|
VSF |
2152.32 |
USD/Ton |
-1.72% |
12/5/2017 |
|
ASF |
2658.30 |
USD/Ton |
0% |
12/5/2017 |
|
Polyester POY |
1336.70 |
USD/Ton |
0% |
12/5/2017 |
|
Nylon FDY |
3398.40 |
USD/Ton |
-0.44% |
12/5/2017 |
|
40D Spandex |
5890.56 |
USD/Ton |
0% |
12/5/2017 |
|
Polyester DTY |
3624.96 |
USD/Ton |
0% |
12/5/2017 |
|
Nylon POY |
5709.31 |
USD/Ton |
0% |
12/5/2017 |
|
Acrylic Top 3D |
1574.59 |
USD/Ton |
-0.24% |
12/5/2017 |
|
Polyester FDY |
3186.94 |
USD/Ton |
0% |
12/5/2017 |
|
Nylon DTY |
2794.24 |
USD/Ton |
0% |
12/5/2017 |
|
Viscose Long Filament |
1661.44 |
USD/Ton |
0% |
12/5/2017 |
|
30S Spun Rayon Yarn |
2854.66 |
USD/Ton |
0% |
12/5/2017 |
|
32S Polyester Yarn |
2042.06 |
USD/Ton |
-0.07% |
12/5/2017 |
|
45S T/C Yarn |
2884.86 |
USD/Ton |
0% |
12/5/2017 |
|
40S Rayon Yarn |
2190.08 |
USD/Ton |
0% |
12/5/2017 |
|
T/R Yarn 65/35 32S |
2431.74 |
USD/Ton |
0% |
12/5/2017 |
|
45S Polyester Yarn |
3020.80 |
USD/Ton |
0% |
12/5/2017 |
|
T/C Yarn 65/35 32S |
2492.16 |
USD/Ton |
0% |
12/5/2017 |
|
10S Denim Fabric |
1.41 |
USD/Meter |
0% |
12/5/2017 |
|
32S Twill Fabric |
0.87 |
USD/Meter |
-0.17% |
12/5/2017 |
|
40S Combed Poplin |
1.21 |
USD/Meter |
-0.62% |
12/5/2017 |
|
30S Rayon Fabric |
0.67 |
USD/Meter |
-0.23% |
12/5/2017 |
|
45S T/C Fabric |
0.72 |
USD/Meter |
0% |
12/5/2017 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.15104 USD dtd. 5/12/2017). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The Italy-Vietnam Textile Technology Center established at the HCMC University of Technology, on November 29 aimed at supporting the training and research in the textile technology aspect. This project will contribute to the development of Vietnam’s textile-garment industry, helping Vietnamese textile-garment enterprises approach technology transfer through technical training and assistance from the HCMC University of Technology and Italian experts. This is an Italian Government-funded project between the Italian Trade Agency (ITA) and the HCMC University of Technology, with technical support from the Association of Italian Textile Machinery Manufacturers (ACIMIT) and the International Polytechnic for the Industrial and Economic Development (PISIE). According to Prof. Dr. Vu Dinh Thanh, rector of the HCMC University of Technology, for the research and training purposes, the Italy-Vietnam Textile Technology Center has been equipped with made-in-Italy machinery and equipment, and Vietnamese lecturers and engineers in the sector have been trained by Italian experts. The center will be a reliable destination for training and supplying manpower for Vietnamese and Italian textile-garment businesses. With the Italy-Vietnam Textile Technology Center, Vietnamese textile-garment enterprises will be able to have access to advanced technology and chances to exchange experience with professors and researchers from Italian universities. However, the center requires Vietnamese universities to renovate their training programs so as to be able to train professional textile-garment experts, researchers and lecturers, who meet the actual demand of businesses. Mr. Paolo Lemma, chief representative of the ITA in Vietnam, said that Vietnam is a potential market, with multiple business cooperation opportunities for Italian enterprises specializing in textile and apparel, leather and footwear, tanning, agriculture and infrastructure. Vietnam has advantages in terms of human resources, economic conditions and an open market, which are favorable for the development of Italy’s strong sectors, and the two sides can help each other. Italy is now the 18th biggest export market and the 15th biggest import market of Vietnam. According to the Ministry of Industry and Trade of Vietnam, the two-way trade between Vietnam and Italy was over US$2.88 billion in the first seven months of 2017, a year-on-year increase of 5.9%. Italy is also Vietnam’s third largest trade partner in the EU, with two-way trade amounting to US$4.6 billion in 2016. The “Italy-Vietnam Textile Technology Center” project was initiated in 2015 as a result of an array of initiatives implemented by the Italian Government after the issuance of an ordinance to launch a campaign to promote the “Made in Italy” brand for the country in 2014. This project will contribute partly to promoting trade and developing cooperation between Italy and Vietnam and if the two countries’ enterprises strengthen their information exchange and cooperation, two-way trade will increase steadily.
Source: YNFX.
The Japanese Agency for International Cooperation (JICA) plans to send technicians to Angola for experimental cotton cultivation in the Capanda Agricultural Hub in Malanje province. Field trials with cotton varieties using a drip irrigation system, in collaboration with the Angolan Institute of Agrarian Development, will assess their adaptability and yield. JICA support will bring in irrigation equipment, seeds, fertilizers and cotton pressing machinery, a Portuguese news agency report cited the Japanese Embassy in Luanda as saying. Angola first witnessed cotton cropping in the mid 16th century during the Portuguese colonial period. The country’s cotton production reached a record of 86,000 tons in 1973, making it one of the world’s largest producers. But the civil war after the proclamation of independence in 1975 virtually ended cotton production.
Source: Fibre2fashion.
The U.S. trade deficit increased more than expected in October, hitting a nine-month high as rising oil prices helped to boost the import bill, suggesting that trade could be a drag on growth in the fourth quarter. The Commerce Department said on Tuesday the trade gap widened 8.6 percent to $48.7 billion. That was the highest level since January and followed an upwardly revised $44.9 billion shortfall in September. Economists polled by Reuters had forecast the trade deficit widening to $47.5 billion in October after a previously reported $43.5 billion deficit the prior month. When adjusted for inflation, the trade deficit increased to $65.3 billion, also the largest since January, from $62.2 billion in September. The so-called real trade deficit in October was above the third-quarter average of $62.0 billion. That suggests trade could subtract from gross domestic product in the October-December quarter, if the deficit does not shrink in the last two months of the year. U.S. financial markets were little moved by the wider trade gap, which was flagged in an advance report last month. The chronic trade deficit has garnered the attention of Republican President Donald Trump, who has blamed it for the massive loss of U.S. manufacturing jobs as well as moderate economic growth. Trump argues the United States has been disadvantaged in its dealings with trade partners and has ordered the renegotiation of the North American Free Trade Agreement (NAFTA), which was signed in 1994 by the United States, Canada and Mexico. NAFTA talks have stalled, with Mexico and Canada rejecting a U.S. proposal to raise the minimum threshold for autos to 85 percent North American content from 62.5 percent as well as to require half of vehicle content to be from the United States. The government reported last month that trade contributed 0.43 percentage point to the economy's 3.3 percent annualized growth pace in the third quarter. The Trump administration believes a smaller trade deficit, together with deeper tax cuts could boost annual GDP growth to 3 percent on a sustained basis.
Record high imports
Republicans in the U.S. Congress have approved a broad package of tax cuts, including slashing the corporate income tax rate to 20 percent from 35 percent. But the planned fiscal stimulus will come at a time when the economy is at full employment, which will boost imports and widen the trade gap. Imports of goods and services increased 1.6 percent to a record $244.6 billion in October. Goods imports were the highest since May 2014 amid a $1.5 billion increase in crude oil imports. Imported oil prices averaged $47.26 per barrel in October, the highest since August 2015. The country's import bill was also pushed up by food imports, which were the highest on record. There were also increases in imports of cellphones and other goods. Imports from China and Mexico were the highest on record in October. Exports of goods and services were unchanged at $195.9 billion in October as shipments of soybeans fell $1.4 billion and civilian aircraft dropped by $1.1 billion. Exports of industrial supplies, however, increased by $2.6 billion to their highest level since November 2014 and petroleum exports were the strongest in three years. Exports to China hit their highest level since December 2013, while those to Mexico were the highest in three years. The politically sensitive U.S.-China trade deficit increased 1.7 percent to $35.2 billion. The trade deficit with Mexico surged 15.9 percent to $6.6 billion.
Source: Financial Express
Egyptian Minister of Industry and Foreign Trade Tarek Kabil recently said the country will offer incentives to investors for new textile projects. In a meeting with the supreme council for textile industries, Kabil said three cities and other industrial complexes for the textile industry have been set up in Kafr El-Dawar city and El-Mahalla city.
His ministry is cooperating with the ministries of industry, agriculture and the public business sector to develop the textile sector, Kabil said in a statement.
Egypt will launch the 2018-2020 national strategy for developing handicrafts and cultural industry by 2017 end, Kabil had announced in October, according to an Egyptian daily report. According to official statistics, exports by the country’s Textile Export Council increased by 3 per cent between January and October this year, standing at $673 million compared to $651 million during the same period a year before. (DS)
Source: Fibre2Fashion
Egypt’s cotton exports reduced by 38.4 per cent between June and August, the fourth quarter of the agricultural season 2016-17, standing at 3,276 tonnes compared with around 5,733 tonnes in the same period last year. India was the top country importing Egyptian cotton during that period, with almost 1,474 tonnes, representing 41.5 per cent of exports.The drop was attributed to a decline in the area of cultivated cotton, according to the quarterly report of Egypt’s government statistics agency CAMPAS.
The total consumption of domestic cotton was 1,761 tonnes during that period, compared to some 4,832 tonnes in the same period last year, representing a 62.8 per cent decrease, an Egyptian daily reported. In July, Egyptian President Abdel Fattah Al-Sisi held a meeting with the prime minister as well as the ministers of agriculture and trade and the public enterprise sector to discuss ways of boosting the cotton industry.
The textile and spinning industry contributes with up to 26.4 per cent to industrial production, trade ministry data show.
Source : Fibre2Fashion
Worried by the lack of competitiveness of local manufacturing companies as a result of low patronage among other challenges, the Minister of State for Industry, Trade and Investment, Hajiya A’isha Abubakar, has intensified calls for support of local industries as part of efforts to aid job creation and economic growth. Abubakar called on states and local governments as well as Ministries, Departments and Agencies (MDAs) including organised private sector to comply with government’s procurement law giving priority to Nigerian products in all procurement activities. Abubakar disclosed this on Monday at a stakeholder’s forum and national flag-off of the campaign for patronage of Made-in Nigeria products and services in Lagos. She said the campaign was aimed at changing the psyche of Nigerians from penchant for foreign goods and services; re-orientate the public to value locally made products to develop a strong and virile industrial base. She added that the initiative would encourage Nigerians to wear traditional attires to project culture, revive the textile industries and promote fashion industries among others without compromising quality and standards. According to her, government is not unaware of the numerous challenges faced by entrepreneurs in the area of infrastructure; this has led to the signing if three executive orders by the present administration which provides specific instructions on a number of policy issues affecting the Ease of Doing Business (EDB) in the country and support for local content in public procurement by the Federal Government. “We anticipate this would encourage the industries to produce more quality products for the Nigerian market since increase in demand would no doubt, trigger increase in supply,” she stated.
Source: Guardian News
I recently read an article about the futility of subsidising certain sectors of the economy, especially the textile sector which immediately reminded me of the sack race which we used to play in primary and high school. What does the sack race have to do with the subsidy and what is the analogy between the two? For those who have never had the pleasure of playing a sack race (also known as gunny race) it is a competitive game in which the participants place both their legs inside a sack that reaches their waist and then are told to hop forward from the start to the finish line. A subsidy can be classified as Production Subsidy, Consumption Subsidy, Export Subsidy, Employment Subsidy, Tax subsidy, Transport Subsidy. The reader will agree, after finishing the whole article, that the Government is not paying any form of subsidy to the exporters. Competitive equilibrium is a state of balance between buyers and sellers where the quantity of goods demanded is the quantity of goods supplied at a specific price. When the supply of goods exceeds the demand, the price falls. Conversely when the supply decreases but demand remains the same, the price increases. And when the cost of production increases, so does the sale price which reduces demand and the buyers go elsewhere. This basic cannon of economics is applicable domestically and internationally as well, especially during the last couple of decades with the implementation of WTO rules and information technology. A buyer or a trader sitting in a remote village of Lalamusa, Pakistan, can compare the price of a shirt being made in Longyan, China with the price made in Hyderabad, Pakistan, by the click of a mouse. So, it is the endeavour of every manufacturer not only to buy, at the most competitive prices, the input raw materials, energy, labour and other services but also run their factory most efficiently 24/7. Moreover they want to apportion its fixed cost over maximised production, to reduce the overall cost of production of its products, and to remain competitive. But where do the subsidies come in and why there is a misperception that the Government is giving subsidies to the export sector. The main stay of Pakistan’s export economy is textile, which is under threat for the last five years during which the cost of doing business has increased. During the last seven years, Pakistan could add only two mill spindles and 6,000 rotors compared to 3.2 mill spindles and 36,000 rotors added by Bangladesh, and 19 mill spindles and 69,000 rotors added by IndiaAs per a World Bank report on Ease of Doing Business, Pakistan’s ranking declined by 40 points in five years, from 107 in 2012 to 147 in 2017 against India which improved by 32 points, from 132 in 2012 to 100 in 2017. All the constituents of the survey relate to the Government’s policies or their implementation; the majority among them being Starting a Business, Dealing with Construction Permits, Getting Electricity, Registering Property, Getting Credit, Paying Taxes, Trading Across Borders, Enforcing Contracts, Resolving Insolvency, Transparency in Business Regulations and Good Practices. Our ranking has decreased by 40 points in the past 5 years; as a result, our ranking is now at 174 in 189 economies in ‘Trading Across Border’ indicators. This has explicit and implicit consequences in increasing the cost of doing business. The textile sector is suffering due to inordinate delays by the Government in reacting to the changes in global policies, especially the pro-textile policies of our competitive countries. For example, a package of Rs 180 billion was announced by the Prime Minister for the export sector. However, the deal has come to a halt after the distribution of Rs 32 billion for exports up to 30 June 2017 which resulted in over 10% increase in garment exports. The rules for the Technical Upgrade Fund — a part of the package — have still not been made even after expiry of 11 months. Neither the rules have been made till today nor the money has been allocated to repay the Duty Drawback of 3.5 percent to the garment sector which was due for exports on 1st July, 2017. Moreover, the admitted sales tax refunds of exporters, the figure is guesstimated to be Rs 250 bill, are pending. There are more dozens of applications pending for months to get approval of Zero rating of sales tax (which was announced in June, 2016) on purchase of coal, diesel and furnace oil. Then there is another misperception of various writers about the efficiency or lack of latest technology in production processes. The textile industry has been continuously modernising their machinery. However, when an industry is continuously in the red, it first seeks to survive and then plans for modernisation. The prolonged load-shedding of 12/14 hours a day in the last 8 years, forced the textile industry to make their arrangements to produce electricity by spending millions of rupees on purchase of two generators, one to run on diesel (generation electricity at Rs 32/kw) and another one on gas; they had to invest on systems to produce steam from three sources ie coal, gas and rice husk or wood. These huge investments could have enhanced the production capacity and modernised the machinery, but the industry’s foremost priority was to survive. Resultantly, during the last seven years, Pakistan could add only 2 mill spindles and 6,000 rotors compared to 3.2 mill spindles and 36,000 rotors by Bangladesh, while India added 19 mill spindles and 69,000 rotors. With the above impediments, the industry could not keep pace with the BMR. The readers may now have guessed the analogy between the sack race and export sector. The restrictive nature of various factors is inflicting a heavy toll on the export sector which is carrying the burden of inefficiency of the energy sector by paying 20 percent of DISCO losses including theft and non-payment of bills (the textile sector has ZERO theft and pay 100 percent bills) whereas our competitors are not paying for the delinquent consumers’ bills. We are paying USD 0.12 /kw including taxes of Rs 4.54 /kw (TR Surcharge, FC Surcharges, NJS, Excise Duty) on electricity bills whereas our competitors are paying US$ 0.05 without any other surcharge; export sector is incurring an expense of Rs 25 bill per annum on interest on the borrowed money to cover the shortfall in working capital created by sales tax refunds blocked by FBR which is not being incurred by our competitors; we get gas at Rs 1000/mmbtu against Rs 600 equivalent by our competitors; and a sword of Damocles is hanging over industries’ head in the shape of GIDC of Rs 100-Rs 200 per mill BTU for the previous four years which has been thankfully stayed by the High Courts. For the information of readers, the Gas Infrastructure Development Cess — GIDC is meant to be spent to lay pipelines for Sui Southern and Sui Northern gas companies which is being taken from the industrial sector although the intended asset will be owned by the gas companies). The overall burden of the above factors renders the industrial sector generally and textile sector particularly uncompetitive on an international level. Hence the readers can very easily discern whether refund of a fraction of the above-stated taxes and levies, which should not have been there in the first place, can be called subsidy or the industry is just getting back what is due to them. All the above factors are tantamount to a sack being put on the exports’ waist and then told to compete in the race. Unless the sack is removed there is no way that exporters can even remain in the race, let alone have a chance to win it.
Source: Daily Times
The Egyptian government recently hosted Destination Africa to promote the continent as a new frontier for textile manufacturing, with Egypt as a regional focal point. Paul Cochrane was at the event in Cairo. Egypt is trying to develop its upstream textile capabilities to bolster exports and be part of an integrated African continent-wide supply chain, linking its cut-and-sew and quality cotton fibre base. While Egypt exported US$764m worth of fabric and yarn in 2016 according to the country’s Textile Export Council (TEC), challenges abound regarding Egypt’s efforts to generate more value-added textiles. For the second year running, the Egyptian government and its national export councils (such as the TEC) hosted a trade event, Destination Africa, in Cairo on 11-12 November, to promote Africa as a ‘new frontier’ for garment and textile manufacturing. The potential for Africa, with Egypt as a regional focal point, to be the world’s next dynamic destination for outsourced clothing and textile manufacturing as costs rise in Asia was emphasised at the event. But to do so, the continent needs to develop its capabilities, industry insiders warned. “The idea behind creating a continental supply chain is to have everything on our continent, including yarns, fabrics and accessories,” said Mohamed Kassem, commissioner of Destination Africa. “This will take some time as we need to invest in spinning, weaving, dyeing and finishing in a big way. If we want to achieve speed to market, we can’t depend on fabrics spending 30 days on the water, but to be off the cutting table after a week, and two weeks off the production line, to reach retailers in a further two weeks. That is the type of fast turnaround we need to create, so we need a fully-fledged supply chain.” This will involve significant investment as Egypt lacks mills that provide small quantities for quick delivery, while more specialised areas, such as fabrics and dyeing, are not well developed.“We need infrastructure to be ready [to become an outsourcing centre], say US$5bn for the entire continent,” said Waleed el Zorba, managing director of Egyptian clothing exporter Nile Holding Company, and an organiser of Destination Africa. We can’t stay as cut and sew. The supply chain needs to be centralised to grow.”
Creating added value
Currently, as far as Egypt is concerned, the majority of its fabric and yarn is sourced from Asia, with Egypt’s clothing production being, to a significant degree, export-focused and not meeting domestic requirements. To bolster its backward linkages and, hence, its flexibility regarding production and markets, the Egyptian government is establishing a textile park of industrial units in southern Egypt and near the Suez Canal for foreign investors wanting to build weaving, spinning and mixing factories, offering them financial incentives as well as direct construction assistance. “Added value can come through completing the internal supply chain,” says Rasha Fahim, acting TEC executive director. “The apparel factories will have added value through using high-quality fabric made in Egypt or completing the supply chain within the Middle East and North Africa region using the Agadir agreement,” she says, stressing how Egypt could leverage its position within this free trade agreement, which also includes Morocco, Tunisia and Jordan. Such proactivity is clearly needed. Egypt’s textile exports dropped in the wake of the 2011 uprising, picking up again in 2014, to US$968m, but have since dropped. Exports were US$764m in 2016, although have grown in 2017, to reach US$608m by the end of October, growing by 29% in the third quarter, according to the TEC. Egypt manufactures cotton yarns, sewing threads, cotton fabrics, acrylic fibres and fabrics, and acrylic yarns and sewing threads. Italy and Turkey currently account for 60% of sales, according to the TEC. However, Egypt is not keeping pace with global investment in textiles, especially compared to China. “The biggest investors in the sector in recent years have been China, India, Bangladesh and Vietnam,” said Olivier Zieschank, an economist at the International Textile Manufacturers Federation (ITMF), at Destination Africa. “Africa and North Africa are only slightly represented.” While global purchases of short-staple spindles dropped by 12% in 2016, Chinese investment in short-staple spindles increased by 27%. Egypt’s capacity on the other hand dropped in 2016 from 42,432 short-staple spindles in 2015, to 13,440, reflecting the overall global drop, from 9,042,968 in 2015, to 7,882,352 in 2016, according to the ITMF. Shipments of texturing spindles to Egypt also declined, from 6,960 in 2015, to 4,560 in 2016. In shuttle-less looms, investment also dropped, with deliveries falling from 220 in 2015, to 118 last year. Shipments of electric flat knitting machines to Egypt significantly declined in 2016, from 83 to 10, according to the ITMF. The decline was due to a drop in textile and garment exports as buyers shied away from Egypt due to the country’s post-revolution instability – a political problem that persists, given the recent Sinai mosque attack. The decline in the garment sector overseas – which had a knock-on effect for textile manufacturers – has been significant, with garment exports dropping in 2015 by 3%, to US$1.38bn, and again in 2016, by 8%, to US$1.27bn. Further impacting investment is the devaluation of the Egyptian pound in November 2016 from EGP8 to the US dollar to EGP17.60 on average during 2017. “Egypt needs foreign investment to upgrade but we have devaluation to contend with and high interest rates,” said Samer Riad, general director of Riad Group, which includes the Egyptian Textiles Company. “The companies that have invested have done so already.” A further challenge is that Egypt is viewed as a source of cheap labour rather than for investment in higher financial yield technical textiles and value-added fabrics. Competitor Turkey is a case in point. According to Mustafa Denizer, vice president of Turkish company Diktas, which has factories in Egypt, Turkish firms account for 20-30% of Egypt’s garment exports. Turkish companies are utilising Egypt due to its low costs and its duty-free access to the US, so are less keen on investing in technical textiles in Egypt than in their home market base. “Egypt and Turkey can compete, but Turkey is 20 years ahead as it has more technical textiles,” said Denizer. An issue for Egypt is that, while it wants to modernise the overall sector, it also wants to generate one million jobs in the garment and textile sectors. It cannot afford to move towards less labour-intensive manufacturing. “We had a Chinese visitor that was looking to invest,” said Riad. “He asked why we have automated machines when we have cheap labour? For a cheap labour company, we have technology that is above average compared to others. But we all use the cheap labour and cut out on the technical side. I can’t see many bursts of technological evolution in the industry in general.” Companies that are investing in the latest technologies are invariably foreign investors, a fact recognised by the Egyptian government which wants to attract this finance by easing its investment restrictions and scrapping trade red tape under a broad range of economic reforms. These liberalisation measures are designed to unlock US$12bn in potential loans from the International Monetary Fund (IMF). “The trade ministry has made it easier for the textile sector,” said Ehab El Zaher, managing director of Sweet Girl, in Alexandria, which manufactures knitwear under licence. One reason for this, he says, is that the government recognises the sector’s labour intensity and that it employs many feeder industries.” What else can the government do? Hany Salam, CEO of Salamtex, which produces lace and warp-knitted fabrics in Egypt for export to some 20 countries, with a capacity of 120 tonnes per month and an annual turnover of US$10m, says there is a way ahead.
Solutions for growth
Firstly, the country needs to build on its technical knowhow and experienced labour base to work on standards, as well as undertaking research and development.This includes some serious capacity growth if the country wants to develop technical textiles production. Salam said: “The problem is that technical textiles and functional products require many different parts to play a role in it. For instance, I can’t order a medicinal product without a medically qualified person for tests and feedback. I can send two technicians to Germany for a few months, but it is more complex than that. We need laboratories for the testing.” Salamtex currently carries out work developing technical and military fabrics in South Africa due to the shortcomings in Egypt.“We worked with the University of Cairo on textiles that retain water for agricultural uses but they are not serious,” said Salam. “Should it be thicker, or smaller or have bigger holes? We had no replies. We’re not ready yet, and I think all of Africa is not ready yet [for more technical textiles.”Until it is, he suggested that Egypt might be better served by targeting lower tech markets. “I am not saying we shouldn’t invest in this, but it would work better to, say, manufacture the best jeans in the world for a big brand,” said Salam. Despite this, demand within Egypt’s core export markets of Europe and the US, is, however, expected to ultimately grow Egyptian technical textile production. “We need to start looking into technical fabrics as a high duty component – this will lead to filling factories that do cut and sew with more advanced products,” said Hala Hisham, CEO of the Arafa Group, which is a vertically integrated company with 1,200 textile workers, and 5,000 garment workers. When will this happen? The answer is unclear – although it will take a lot of work. “There are a lot of finishers in Egypt that could use functional fabrics for wicking, odour repellent, and stain repellents, but this is basic,” said Destination Africa’s Kassem. “More advanced technical textiles should be among our future plans. Honestly, we are still struggling with the classic supply chain, and we have not really looked into technical textiles.”
Source: Wtin.
The US opposition to recognizing China as a market economy within the framework of the World Trade Organization (WTO) is in reckless disregard of the relevant WTO rules, and is intended to make an excuse for its trade protectionism by misleading the public. By submitting a statement of opposition to the WTO as a third-party brief in support of the European Union in a case brought by China, the United States tried to mix the concepts of the surrogate country approach and market economy status to mislead the public for its selfish interests. Last year, China filed a WTO dispute case over surrogate country approach, arguing the approach should be dropped after the expiration date on Dec 11, 2016 in accordance with Article 15 of the accession protocol. In fact, the case has nothing to do with whether China has been granted market economy status or not, as there are no standards in the WTO rules for the status. As Liang Guoyong, economic affairs officer at the Investment and Enterprise Division of United Nations Conference on Trade and Development, said, the case is about "surrogate country approach," not "market economy status," which means the former is within multilateral trade rules, while the latter is regarded as a domestic law issue. The practice to mix the two things together, he said, apparently contradicts multilateral trade rules and also breaks some countries' international commitments and promises. Furthermore, it is clear that such behavior is a US planned attempt to protect its trade with China and a part of its efforts to contain China's rise. According to the General Administration of Customs, China's exports to the United States in the first three quarters increased 18.7 percent over the same period of 2016, and China's trade surplus with the United States in the first 10 month expanded 7.3 percent to reach $225 billion. The robust growth in China's exports to the United States and the appreciable trade surplus could be a catalyst for the US administration to maintain a tough stance on China. Such behavior is just reminiscent of the domestic laws of certain WTO members in the Cold War era, and the refusal would put trade ties with China at risk. On the other hand, China has established and continuously improved its market economy system, which has earned worldwide recognition. So far, more than 80 economies have recognized China as a market economy.
Source: China Daily
The dollar advanced against major rivals Monday after US senators squeezed through a tax-cut bill at the weekend. Elsewhere, European stock markets rallied and Asian indices diverged as traders awaited a key Brussels summit on Brexit and digested news that a former aide to Donald Trump had agreed to co-operate with a probe into Russian election interference. Around 1030 GMT, Europe's leading stock markets had managed gains of around one percent from Friday's closing levels. Earlier in Asia, Hong Kong ended higher but there were falls for Tokyo and Shanghai. Oil prices were down after Friday's rally in reaction to a decision by crude producers to extend a period of production limits. Bitcoin meanwhile reached a fresh all-time high Monday, at $11,845.33, after a US regulator cleared the way for futures in the unit to trade on major exchanges. The Chicago Mercantile Exchange -- the world's biggest futures exchange -- has said it will launch futures contracts on December 17. "The fact that CME -- the biggest kid on the block -- is moving early into cryptocurrency will force other major exchanges to follow suit in the fear of not missing out," said Shane Chanel at ASR Wealth Advisers. The unit has risen 15-fold since the start of the year. In foreign exchange trading meanwhile, "the US dollar began the week on the front foot after the... tax plans were approved, opening the door to a vast fiscal stimulus for the US economy", noted Neil Wilson, senior market analyst at ETX Capital. After marathon talks in Washington lawmakers finally passed controversial reforms to the tax system, which the president says will fire up the world's number one economy. The greenback strengthened against the yen, euro and pound, though dealers remain reticent as both houses of Congress must reconcile their differing bills before sending a final draft to the White House, while analysts also warned of political risk."If the legislation gets ratified quickly, there would likely be another dollar bounce, but the longer this drags out, the dollar will probably sell off as political uncertainty has been the greenback's undoing over and over again in 2017," said Stephen Innes, head of Asia-Pacific trading at OANDA. The dollar's advance helped to boost the share prices of European exporters, while the pound was downbeat also on Brexit uncertainty. British Prime Minister Theresa May was hoping to seal a deal Monday on divorce terms with EU chiefs, with the Irish border still the key stumbling block as months of tense talks reach a decisive moment.
Source: The Daily Star.
The Abbasi-led administration's focus on supporting exporters was recently reflected by the directives issued by the Prime Minister to the Ministry of Commerce and Textiles to formulate a set of recommendations in consultation with the stakeholders designed to facilitate our largest export sector, notably the textile sector. This directive comes in the wake of the Prime Minister's earlier decision that exporters are no longer required to show a 10 percent increase in exports to be eligible for fiscal and monetary incentives - a requirement that was envisaged to be applicable in the current year as part of the January 2017 export promotion package announced by the then prime minister Nawaz Sharif. These measures reflect the serious challenges facing the current account that include a widening trade deficit and declining foreign exchange reserves - reserves that were debt-enhancing supported by loans from multilateral development finance institutions which shrank dramatically after the end of the International Monetary Fund's Extended Fund Facility in September 2016 due to a trust deficit that the government would continue on the path to economic reforms that were agreed with the Fund. Additionally, remittances, though registering a modest increase in recent months, are unlikely to reach the levels of past years due to the continued recession in the Middle East. These are some rather disturbing factors that finally compelled the government to focus on generating foreign exchange revenue from desired sources defined as earnings rather than from borrowing. Reports suggest that the list of suggestions by the textile associations are exhaustive and maybe a challenge for the government to implement given that any fiscal and/or monetary incentive given to the textile sector would have negative implications on the government's revenue collection capacity which, in turn, would compromise the budget deficit target. In this context, one must view the demand of the textile association to allow zero rating on packing material and withdrawal of customs duty and sales tax on cotton that was a component of the January package but was later withdrawn. The long standing demand of all exporters with respect to the inordinate delays in the payment of sales tax refunds and rebates by the Federal Board of Revenue has been an unwritten policy that all administrations have tacitly supported with the objective of showing revenue collections that are much higher than is in fact the case. Repeated demands and repeated directives by the country's chief executives, including Nawaz Sharif and now Shahid Khaqan Abbasi, have not produced the desired results. While one can fully support this recommendation made yet again by a section of exporters yet given that the country is likely to experience a budget deficit close to what it inherited in 2013, around 8 percent, due to this being an election year it is doubtful if this proposal would be implemented. However, the textile association's recommendation to implement a uniform price for natural gas and LNG would imply either: (i) a constitutional amendment that would no longer allow first priority to the province where the gas wellhead is located which, in effect, has implied that the domestic gas available to Sindh and Khyber Pakhtunkhwa is much cheaper than the LNG available to the industrialists of Punjab - a proposal that is unlikely to generate a two-third parliamentary support; or (ii) give a heavy subsidy on LNG to industrialists in Punjab which again may not be economically or indeed politically viable. Thus with respect to this recommendation, it is clear that the government may find that its hands are tied though one would hope that it learns a valuable lesson from this notably that the availability of a new fuel source is not enough to appease the consumers, the price at which it is available is also a critical element.
Source: Business Recorder
