Surat: The country's largest man-made fabric (MMF) hub in Surat is still awaiting central government's notification on increase in basic customs duty (BCD) on imported fabrics. After the government's announcement on increasing BCD on MMF fabrics from 10 per cent to 25 per cent in October, the industry is still awaiting the official notification in this connection. Industry leaders said import of fabrics, especially from China, has seen a sharp increase post-GST at almost 30 per cent. Confederation of Indian Textile Industry (CITI) chairman Sanjay Jain said, "MMF yarn, cotton fabric and MMF fabric are largely affected by cheaper imports from China, Indonesia, Thailand and North Korea where fabric industry is subsidized substantially to increase their share of fabric in world textile trade. Moreover, Indian fabric manufacturers have no protection from FTA countries that have been importing fabrics from China, Indonesia and Pakistan and selling garments made from such fabrics to India." Industry sources said over Rs 5,000 crore worth of undervalued fabrics are imported from China and other countries to India per annum. With fixing of floor price by the government, the importers will have to show the real value of fabrics and undervaluation is impossible. The import of cheap and undervalued fabrics in the country has resulted in the closure of 40 per cent of powerlooms in the textile hubs of Surat, Itchalkaranji, Malegaon, Bhiwandi, Burhanpur, Varanasi, Salem and Erode. The situation of Banarasi weavers is very tough as imported silk fabric is quite cheap than what is manufactured by Banarasi weavers. Surat's power loom weavers manufacture 4 crore metre of fabrics per day, which have been reduced to 1.5 crore metre per day post-GST. Around 95,000 power loom machines have been sold in scrap and more than 50,000 textile workers rendered jobless. Federation of Indian Art Silk Weaving Industry (FIASWI) chairman Bharat Gandhi said, "There was an announcement from central government on the increase of import duty from 10 per cent to 25 per cent in imported fabrics, but the same is yet to be implemented. Still, imported fabrics is being dumped into the country. Last month, the imports have seen an increase of more than 30 per cent." Gandhi added, "The situation of fabric manufacturers in the textile hubs across the country, including Surat, is very bad. Many units have shut shops. Now, the government has to act fast or else the textile sector will be on the death bed soon."
Source: The Times of India
In the first six months of this financial year, cotton yarn exports declined 10 %, mainly due to policy lapses, according to Confederation of Indian Textile Industry. Sanjay Kumar Jain, chairman of the confederation, has said in a press release that cotton yarn exports between April and September in 2016 was 517 million kg and it was 464 million kg during the same period this year. In 2013-14, spinning mills took advantage of the 2 % incremental export incentive, 2% interest subvention, and 3 % focus market incentive. In 2014, these incentives were withdrawn and cotton yarn exports in 2016-17 registered 26 % decline in value terms. Mr. Jain said that the country exports almost 20 % of its cotton produced. During the current cotton season, the prices might touch minimum support price level as the production is expected to be high. According to the Financial Stability Report of the Reserve Bank of India, textiles has one of the highest levels of non-performing assets. When exports benefits such as MEIS and IES were introduced, all segments of the textile value chain were covered except cotton yarn. Thus, cotton yarn exports to China dropped. “Withdrawal of export incentives for cotton yarn has reduced our competitive edge by increasing our prices to the tune of 5 % to 6 %.”
IES benefit
The 3 % IES benefit is essential to maintain six to nine months cotton inventory and to ensure consistency in quality of yarn supplied. He appealed to the government to restore the MEIS and IES benefits for cotton yarn.
Source: The Hindu
Amid concerns over dip in revenue and tax evasion, the goods and services tax (GST) Council has convened its 24th meeting via videoconferencing on Saturday to discuss the early implementation of e-way bill. States are reported to have raised concerns about tax evasion under GST in absence of a proper e-way bill system, resulting in the hurriedly called meeting which was earlier supposed to be held in January, two officials said. The officials added that the work on the technology system for e-way bill has gathered momentum in last 20 days to ensure that it’s rolled out from January 1. The decision regarding the rollout date would be taken in the meeting, they said. Restoration of reverse charge mechanism and invoice matching are also expected to come up for discussion in the meeting, they said. The meeting follows after the sharp decline in GST revenue to Rs 83,346 crore for October — the lowest since the July 1 rollout of the indirect tax. Also, October’s GST revenue recorded a decline of Rs 12,000 crore from the Rs 95,131 crore collected for the preceding month. On Thursday, Bihar’s finance minister Sushil Modi had said that compliance is a big issue under GST, adding that after seeing comparative data of other states, his estimate was that Bihar may have suffered a revenue loss of Rs 10,000 crore due to absence of e-way bill in the state since the July 1 rollout of GST regime. Finance minister Arun Jaitley on Thursday had said that the Council has prepared schedule with regard to e-way bill to check evasion. “I think Council has already taken decision with regard to time schedule, with regard to e-way bill itself. That will help in enhancing collection,” he had said. The GST Council in an earlier meeting in October had decided that e-way bill would be introduced in a staggered manner from January 1 and subsequently nationwide from April 1. Tax analysts said that checking tax evasion would help the government to build a revenue buffer which would provide the adequate cushion to undertake any further rationalisation of GST rate structure. “E-way bill could act as a strong tool to check tax evasion and may result in increase in tax base. Though it would add a bit to the compliance burden of taxpayers, it would help the government to build a revenue buffer before it undertakes any further rationalisation of GST rate structure. The government, however, should consider its introduction only after the technology system for e-way bill is completely developed,” EY India Tax Partner Abhishek Jain said. The Council had last met in Guwahati in November wherein it had decided to slash GST rates on over 200 items, including a cut in GST rate from 28 per cent to 18 per cent for 178 items. The fall in GST revenue in October happened despite the rate cuts becoming effective November 15 and the revenue collections are expected to down further for November. Finance Secretary Hasmukh Adhia had already held a meeting with revenue officials from Centre and states on December 9 to discuss tax evasion and methods to boost tax collections under GST. The move to implement e-way bill, however, may see some resistance from industry which has opposed it earlier also citing the enhanced risk of harassment at the hands of tax officials at checkposts at state borders. “The need for an e-way bill requires serious reconsideration as its reintroduction would impair seamless movement of goods across state borders. The limit of Rs 50, 000 is also very low and would lead to a large requirement for e-way bill generation adding to pressures on the IT backbone,” M S Mani, Partner, Deloitte said. An e-way bill is required for movement of goods worth more than Rs 50,000. When goods are transported for less than 10 km within the state, the supplier or the transporter need not furnish details on the portal.
Source: Money Control
To promote digital transactions, the Union Cabinet on Friday cleared the way for the government to bear the transaction cost of a merchant for payments made to it on all debit cards, BHIM UPI and Aadhaar enabled Payment System (AePS) transactions, provided the transactions are up to ₹2,000. For two years starting January 1, the government will reimburse the transaction cost — also called merchant discount rate (MDR) — to banks. The Centre estimates that it will reimburse MDR of about ₹1,050 crore in 2018-19 and ₹1,462 crore in 2019-20, an official release said.
Less-cash economy
After this, the consumer and the merchant will not suffer any additional burden in the form of MDR. Such transactions account for a sizeable percentage of transaction volume, and will help to move towards a less-cash economy, the release said. When a payment is made at a merchant point of sale, MDR is payable by the merchant to the bank. Citing this, many people make cash payments in spite of having debit cards. Similarly, MDR is charged on payments made to merchants through BHIM UPI platform and AePS. By taking up the burden of MDR, the Centre hopes to see more people going for digital payments. The release also added that a committee comprising the Secretary, Department of Financial Services, Secretary, Ministry of Electronics and Information Technology, and the CEO, National Payment Corporation of India (NPCI), will look into the industry cost structure of such transactions, which will form the basis to determine the levels of reimbursement. The Cabinet also approved a special package for employment generation in the leather and footwear sector.
Package for leather
The package involves the implementation of the Central scheme, Indian Footwear, Leather & Accessories Development Programme, with an approved expenditure of ₹2,600 crore over three financial years from FY18. “The special package has the potential to generate 3.24 lakh new jobs in three years and assist in formalisation of two lakh jobs as cumulative impact in the footwear, leather and accessories sector,” an official release said.
Konkan Railway
The Cabinet Committee of Economic Affairs (CCEA) approved the second financial restructuring proposal of Konkan Railway Corporation Ltd, a Central public sector unit under the Railways. The move will increase the net worth of the company after implementation of the new accounting standard, IND AS. The CCEA also approved capital investment subsidy of about ₹265 crore, to four industrial units located in North-Eastern region, including Sikkim. The Union Cabinet on Friday also cleared the creation of a circle office of Commissioner of Metro Rail Safety CMRS, along with all supporting officers and staff, in the Commission of Railway Safety (CRS), which is under the Ministry of Civil Aviation.
Ayush Mission
The Cabinet gave its nod to National Ayush Mission from April 1, 2017 to March 31, 2020, with an outlay of ₹2,400 crore over the three-year period. The Mission, launched in September 2014, aims to build on India’s heritage represented by its ancient systems of medicine like Ayurveda, Sidhha, Unani and homeopathy. An agreement between India and Colombia in agriculture and fisheries was also cleared.
Source: Business Line
The GST Council's efforts to resolve exporters' woes on refunds seem to have started yielding results. Exports grew 30.55 per cent in November, a month after it contracted 1.1 per cent, also due to the low base effect and rising petroleum prices. In fact, petroleum products, along with engineering goods, gems and jewellery, and chemicals, drove nearly 80 per cent of the rise in merchandise exports. The outbound shipment stood at $26.19 billion in November against $20.06 billion a year ago. To put things in context, exports had declined by 24.43 per cent in November 2016, the steepest that year. Exports rose 12.01 per cent at $196.48 billion during the first 11 months of the current financial year. But exporters complained that their funds were still stuck and demanded government intervention to address their concerns including issues related to the goods and services tax (GST). In November, imports were also up by a three-month high of 19.6 per cent to touch $40.02 billion. This was attributed mostly to around 40 per cent surge in oil imports. As a result, the trade deficit was pegged at $13.82 billion in November, slightly lower than the 35-month high of $14 billion in the previous month. This may pressure current account deficit (CAD), which includes balance in services as well. The CAD stood at 1.2 per cent of GDP in the second quarter, lower than 2.4 per cent in Q1. Non-oil, non-gold imports, taken as an indicator of industrial health, increased by 22.6 per cent at $27.21 billion in November. Growth was significantly high compared to 4.9 per cent in October, as well as also against almost 20 per cent in August and September each. This meant industrial recovery may be round the corner. The index of industrial production (IIP) growth slowed to 2.2 per cent in October from 4.14 per cent in September. However, the recovery may not be across the board as import of project goods declined 48.5 per cent in November. Aditi Nayar of ICRA said while the high growth in exports in November came as a relief following the contraction in the previous month, it partly reflects higher commodity prices as well as a favourable base effect. Among the major contributors, export of petroleum products rose 47.6 per cent, those of chemicals by 47.9 per cent and engineering 43.7 per cent. Gems and jewellery exports rose 32.6 per cent despite gold imports declining by almost 29 per cent. However, exports of fruits and vegetables, ready-made garments of all textiles, jute manufacturing including floor covering and carpet declined. Exporters said this should be analysed to address the pain points, especially as these sectors are highly employment intrinsic.President of exporters’ body FIEO Ganesh Kumar Gupta attributed the growth in exports to a significant recovery in global demand. "The positive growth in exports in November has been witnessed by China, South Korea, Taiwan, Singapore, reflecting recovery in global demand, though India has emerged as a top performer," he said. Earlier this month, the government had announced a Rs 8,450-crore annual increase in incentives to the labour-intensive and employment-oriented exports in the mid-term review of the foreign trade policy. This financial year (FY18), it will be an additional incentive of Rs 2,816 crore. This will benefit leather, handicraft, carpets, sports goods, agriculture, marine, electronic components, and project exports in merchandise, and legal, accounting, architecture, and education in services. The government should also gradually extend these benefits to other sectors of exports since they are also facing numerous challenges in exports, the FIEO president said. Gupta exuded confidence that the problems in GST refund would also be mitigated in the days to come to ease the liquidity issues for exporters. He highlighted embedded taxes on exports, GST on sea and air freight for exports, seamless timely refund among the issues that the government should focus on, while managing high volatility in exchange rate.
Source: Business Standard
Yarn is basic raw material for power loom sector and the increasing nylon and polyester yarn prices has destabilized the sector further which is reeling under the after-effects of implementation of Goods and Services Tax (GST), despite the fact that GST Council had reduced GST on yarn from 18 percent to 12 percent. The rally of yarn prices is going on since September, said Pandesara Weavers Cooperative Society president Ashish Gujarati. Gujarati added that the production of grey fabrics has decreased from 4 crore metre per day to less than 1.5 crore metre per day. With yarn price hike, weavers are incurring loss of Rs 2 per metre. The loss in nylon fabric is very huge. According to the Industry sources, front and second-line spinners had increased nylon yarn prices by almost Rs 50 per kilogram since September, while polyester yarn prices increased up to Rs 8 per kilogram. This has dealt a major blow to the production of grey fabrics and weavers incurring loss of Rs 2 per metre. Sources said that demand for polyester fabric, including saris and dress material, is at an all-time low. Business turnover in the textile markets has reduced by almost 60 percent in the last few months. Despite this, yarn spinners have been increasing yarn prices. Sachin Weavers Association president Mahendra Ramoliya said that a majority of power loom weavers are operating their units only thrice a day in Pandesara GIDC. The production of grey fabrics has gone down by almost 80 percent. The GST has broken the spine of power loom sector. The vibrant business environment in the Diamond city Surat has gone for a toss. In the last couple of months, many powerloom weavers have shut their units, rendering thousands of textile workers jobless. Also around more than 95,000 power loom machines have been sold in scrap. Still on an average around 150 power loom machines are being sold in scrap everyday.
Source: YarnsandFibers
Textiles is among the sectors identified by Technology Information Forecasting and Assessment Council (TIFAC) to bring down emission levels by using better technology. Gautam Goswami, who heads the TIFAC Technology Vision 2035, told The Hindu that a meeting was held in Coimbatore recently in this regard. “We met about 50 people and 40 % of them were from the industry. SITRA is an active participant in this project. Tirupur cluster is another important area. We are looking at how to go for textile processing with lesser water and more automation,” he said. Mr. Goswami explained that as part of the Paris agreement on climate change, India has to reduce emissions by 30 % to 35 %. TIFAC is preparing a report on the technologies required, indigenous technologies available, what needs to be borrowed, and ways to use the green climate fund. The report is expected to be finalised in a year. Sectors identified “We have identified 10 sectors, including industrial processing, transport, agriculture, water, waste, and renewable energy. In industrial processing, major manufacturing industries such as steel, cement, textiles, leather and fabrication are covered,” he said. In textiles, we have identified about 30 areas and have asked the industry to prioritise (technology prioritisation techniques) these. The meeting held here was part of this effort. G. Thilagavathi, professor and head of textile technology at PSG College of Technology, said the Centres of Excellence of the department will organise more meetings with textile industry here to get their views on the technologies available and needed in different segments of the textile value chain and submit a report to TIFAC.
Source: The Hindu
Ahmedabad, December 15: Raising their demand for early resolution of the 5 per cent GST under the Reverse Charge Mechanism (RCM), ginners across the country observed a day’s strike on Friday. As many as 4,300 ginning units from Maharashtra, Gujarat, Odisha, Telangana, Karnataka and Andhra Pradesh stalled their cotton processing activities opposing the Centre’s move of introducing RCM for the fibre under GST. Earlier, the Cotton Association of India (CAI), following its meeting on November 27, had decided to support the strike. More action later “If the RCM issue is not resolved by the GST Council in its upcoming meeting on December 21, the ginners may go on an indefinite strike from the next day,” said Atul Ganatra, CAI’s President. Under the Reverse Charge Mechanism, a recipient of goods and/or services is liable to pay GST, instead of the supplier. In this case, ginners — the buyers of raw cotton — are required to pay the tax instead of the cotton farmers. Mixed response in GujaratOut of over 4,300 ginning units in the country, about 1,300 are spread in Gujarat, with major concentration in Saurashtra and North Gujarat. Even as most ginning units in most other States observed complete closure, the units in Gujarat gave a mixed response to the strike. Ginners stated that even as the RCM on GST is refundable, “our experience is that it is not refunded timely. Our working capital gets stuck up due to the delay in refund. If ginners are not lifting cotton from the yards, farmers will suffer, which is not good,” said Rajnibhai Gandhi, a ginner from Bodeli in Chhota Udepur district, Gujarat.
Source: Business Line
SILIGURI: Bangladesh has called for investments from Indian entrepreneurs to give a boost to its growing readymade garment manufacturing sector. "It is an opportunity waiting to be tapped. While Indian entrepreneurs can gain out of their investment in the sector in Bangladesh, more number of our workers can have employment there. It's a win-win situation for both," President, Rangpur Chamber of Commerce and Industry (RCCI) Mostofa Sohrab Chowdhury told ET at Siliguri. RCCI is one of the largest Business and trade community platforms of Bangladesh. According to World Trade Statistical Review 2017 of WTO, while global clothing products market has gone down to $444 billion in 2016 from $450 billion in 2015, Bangladesh could have increased its share in global apparel export up to 6.4% from 5.9% during the period to maintain its second position in the sector. But share of China, the undisputed first, had gone down from 39.3% to 36.4% while the other close competitors Vietnam, India, Turkey and Combodia recorded share of 5.5%, 4%, 3.4% and 1.4% respectively. As Director of RCCI, Debabrata Sarkar explained, China's market share loss is a major vacuum that could not be taken up by any other major player and remained untapped. With its huge expertise in the sector and available efficient manpower, Bangladesh can utilize this with proper investment inflow. "There lies the opportunity for Indian investors," said Sarkar. Indian entrepreneurs also found the prospect as bright. "With friendly political and commercial environment, over 4000 km common boundary and well set immigration as well as communication facility, Bangladesh is definitely a favourrable land for Indian entrepreneurs. Quite similar social environment between the two countries is another positive factor. Garment sector there is definitely a worth exploring arena for us. We have definite plan to verify the opportunities," said Rajiv Lochan, Chairman, Confederation of Indian Industries, North Bengal Chapter.
Source: The Economic Times
Heimtextil Frankfurt, the four day international trade fair holding a leading position in the textile industry beginning from January 9, 2018 will see Reliance Industries Ltd (RIL) launching an extended range of Recron FS, a fire-retardant textile solution with diverse features and applications. In Recron RS, RIL has used a new technology that enables flame retardancy from the levels of 7000 ppm to 25000 ppm depending on the end use. RIL’s technology also allows the use of recycled polyester as a feedstockto produce permanently flame-retardant polyester. The technology also does not allow depletion of tenacity. The polyester not only brings the highest standard of safety in the fabric by making it fire-retardant, but also enhances the aesthetical aspects. Recron FS is manufactured under the most environment-friendly conditions and is a part of the responsible care product offering from RIL. Life span, cost effectiveness, excellent and permanent fire retardant performance, permanency of colour, and the ability to use recycled polyester makes it a sustainable technology. The physical and chemical bonding of phosphorous with polyester matrix makes fire retardancy permanent. This helps in the creation of a textile raw material that doesn’t allow fire to spread easily. And thus, fabrics made from Recron FS possess the unique ability to provide everlasting fire safety in any application and every instance, according to RIL. Recron FS gives the desired fire protection for the entire fabric requirement across industries and households. Moreover, the lifelong fire retardant nature of the fabric assures higher safety and reduces life cycle cost. It helps protect colour of interiors and furnishings from fading and deteriorating from sunlight exposure. It also protects the room from sun glare and help reduces the load on air conditioners. In addition to strong technical support and promotional services, Recron FS will ensure that all fabrics undergo rigorous fire retardant tests. Upon successful passing of the requisite tests, the fabric maker can manufacture and use the unique Recron FS trademark on the fabrics. This trademark is an assurance to the entire value chain and to the end customers about the quality, adherence of standards, and high performance of the fabrics. RIL will be extending its support to the fabric makers to install a sustainable process to make permanently flame-retardant fabrics. In case any fabric does not pass the tests, the Recron FS team will work with the fabric maker to identify the problems and find solution for it.
Source: YarnsandFibers
Kochi : The All India Port & Dock Workers Federation has protested against the alleged anti-labour and anti-port policies of the Centre as well as the unilateral approach of Indian Ports Management in side-lining trade unions while taking decisions on labour related matters. The Kochi convention of the federation, held here last week, decided to support the call given by all the five recognised federations to organise a protest day on December 20.
Source: Business line
Ludhiana: An awareness programme on 'Adoption of Solar Energy for Apparel Industry' was organized at a city hotel by Apex Cluster Development Services under MSME (Micro, Small, and Medium Enterprises) Cluster Intervention programme (MCIP) of Small Industries Development Bank of India (SIDBI). Cluster development manager SS Bedi, while welcoming all the dignitaries, shared details of the cluster intervention programme for the apparel industry, and said government schemes were always for the benefit of the industry, but it depended on businessmen how they availed the schemes after understanding and fulfilling the formalities. The programme began with a presentation on financial literacy and 4E scheme with case studies and solar rooftop systems by KV Kiran Kumar, senior technical expert, who explained the procedures, benefits, and feasibility of solar energy. Manoj Kumar, expert (Operations), SIDBI, shared information about the various schemes being run by the bank, and gave a presentation as well. He also explained the procedure and regulations on the same to motivate the gathering.
Source: The Times of India
The rupee (INR) surged to three-month high of 64.01 against the US dollar (USD) today after exit polls predicted BJP win in Gujarat and Himachal Pradesh assembly elections. The votes will be counted on Monday. According to an aggregate of exit polls, the BJP will win Gujarat with 116 of 182 seats and also wrest Himachal Pradesh from the Congress. This led to a ripple effect on the stock market, with Sensex zooming 350 points. Yesterday, the rupee bounced 10 paise to end at 64.34 a dollar. The rupee closed at 64.04/dollar today.
5 things to know about rupee's surge today:
The final election results on 18 December will be closely watched as an indicator of Prime Minister Narendra Modi's popularity in the run-up to the next general election in 2019, global financial services major Nomura said in a note. Bonds and the rupee also gained after the exit polls predicted BJP win. The benchmark 10-year bond yield was down 1 basis point at 7.12 per cent. Globally, the US dollar sagged today on concerns about the progress of US tax reform. This also lifted the rupee. The dollar was down 0.1 per cent at 112.26 yen. President Donald Trump's efforts to win passage of a sweeping tax bill in the US Congress hit potential obstacles on Thursday when two more Republican senators insisted on changes. On Wednesday, the US Federal Reserve raised interest rates but left its rate outlook for the coming years unchanged even as policymakers projected a short-term jump in US economic growth from the Trump administration's proposed tax cuts. "The Fed's move this week was largely perceived as a dovish hike," said Bill Northey, chief investment officer at the private client group of US Bank in Helena, Montana. "It was ultimately well within expectations."
Source: Financial Express
Vietnam’s textile and garment sector may have a trade surplus of US$15.5 billion on total export revenue of US$31 billion this year, said Vu Duc Giang, chairman of the Vietnam Textile and Apparel Association (VITAS). Textile-garment trade surplus may hit US$15.5 billion this year, vietnam economy, business news, vn news, vietnamnet bridge, english news, Vietnam news, news Vietnam, vietnamnet news, vn news, Vietnam net news, Vietnam latest news, Vietnam breaking newsThe Vietnam Textile and Apparel Association forecasts that Vietnam’s textile and garment export revenue might reach US$31 billion this year and the number is expected to increase to US$33.5-34 billion next year At a press conference in HCMC on December 11, Giang said the sector has gained strong export growth this year, at 10.23% versus 2016, and the momentum is to continue into next year with export earnings expected at US$33.5-34 billion. The sector has faced multiple challenges early this year, but the situation has changed for the better since the second quarter of this year, Giang said. Of the total export revenue of this year estimated at US$31 billion, textiles and garments contribute an estimated US$25.91 billion, fabrics US$1.07 billion and cotton US$3.51 billion. Local enterprises have tapped new markets including China, Russia and Cambodia while maintaining traditional markets such as the U.S., the EU, Japan and South Korea. It is noteworthy that local firms have managed to switch production, from processing exports for foreign firms to FOB (free on board) and ODM (original design manufacturing), Giang added. Commenting on next year’s business, Giang said many textile and garment firms have signed big export contracts enough for production in the first haft of next year and buyers of these products have shown their confidence in product quality and delivery time of Vietnamese firms. To achieve the target for next year, VISTA advised textile and garment enterprises to change their production methods meeting requirements of import markets, enhance competitiveness, invest in new techniques and technologies, diversify products and build links among enterprises. However, Giang said the price competition will be tough as many other countries have also sought to undercut Vietnam, especially apparel manufacturers from China, Bangladesh, Sri Lanka, Myanmar and Cambodia. Therefore, local enterprises have to ensure the supply and have high-skilled workers, invest in modern equipment and step up automation. According to VISTA, domestic firms have to import 86% of fabrics for garment production as locally-produced fabrics have not met standards of major import markets, while locally-produced fabrics are subject to taxes while imported fabrics used for export processing are tax-free. The textile and garment sector is also experiencing difficulties due to rising production and labor costs. For example, expenditures on social and health insurance in Vietnam are 2.5 times higher than in other regional countries. VITAS has proposed the Government adjust policies on salary, insurance, administrative procedures and inspections to help textile and garment enterprises overcome difficulties. Vietnam currently has nearly 6,000 textile and garment enterprises with 2.5 million employees.
Source : Vietnam Net
China’s reign as the apparel powerhouse to the United States continues as sourcing agents find this go-to region a reliable manufacturer of anything related to clothing. But, for several years, U.S. imports from China have been slipping. It was no different in 2017. For the year ending through October 2017, apparel companies imported $27 billion worth of clothing from China, which is a 4.6 percent decline from the previous year, according to the U.S. Commerce Department. Still, China accounted for 33.7 percent of all the apparel brought into the United States. That was before India and Vietnam began to ramp up their clothing factories to compete with lower wages and costs. The No. 2 favorite for apparel importers was Vietnam, a country that has been increasing its apparel industry as fast as it can train workers. Vietnam was poised to become a big apparel provider to the United States through a free-trade pact called the Trans-Pacific Partnership that would have given Vietnamese-made clothes duty-free status. But after President Trump decided to bow out of the TPP, Vietnam lost that opportunity. Nevertheless, the United States upped its apparel imports from Vietnam by 6.2 percent for the year ending through October, for a total of $11.4 billion worth of goods. Vietnam now commands 14.3 percent of the U.S. apparel import market. In the search for low wages, Bangladesh has turned up as the third-largest apparel supplier to U.S. companies.
Source: Apparel News
A new scheme for selling cotton to textile enterprises will appear in Uzbekistan starting from next year. The corresponding decree was signed by Uzbek President Shavkat Mirziyoyev, podrobno.uz reported. Starting with the harvest of raw cotton in 2018, as an experiment, the system of ordering and advancing the production of raw cotton directly from farms and other agricultural producers by domestic textile enterprises will be introduced,” the presidential decree said. Over the years, enterprises purchased raw materials from the monopoly supplier Uzpahtasanoatexport. According to the new order, textile enterprises will finance the basic costs of farming to grow raw cotton by advancing at least 60 percent of the contract’s value. All delivered raw cotton should be used only for further deep processing and production of finished competitive products, the document noted. The price for raw cotton purchased by enterprises will be established on a contractual basis based on an analysis of actual costs and profitability of farms. At the same time, it should not be lower than the cost of cotton purchased for state needs. Therefore, the president instructed the government to establish government procurement prices for the “white gold” harvest of 2018 until January 15, 2018. Enterprises of the textile industry sell cotton seeds to fat-and-oil enterprises, additional products -- to other consumers through exchange trades. This year Uzbekistan collected more than 2.9 million tons of raw cotton. President of Uzbekistan Shavkat Mirziyoyev also signed a decree on liquidation of the Uzbekengilsanoat joint-stock company. Thus, the head of state supported the proposal of the textile industry enterprises, the shareholders of the Uzbekengilsanoat JSC and a number of other departments on the establishment of the Uztekstilprom Association. At the same time Uzbekengilsanoat JSC, which combined state regulatory and economic functions, is liquidated. As indicated in the document, the current system of management of the industry does not meet the current trends in the development of the textile industry and is not capable of supporting producers. Uzbekengilsanoat includes 436 enterprises, which makes up only 6 percent of their total number. The activities of this society basically comes down to collecting statistics, holding various meetings, organizing exhibitions. Its organizational form also does not correspond to the legal status of the joint-stock company. The experience of foreign countries has shown that one of the most effective forms of development of the textile industry is the creation of clusters. This model implies the organization of a single production cycle, which includes the cultivation of raw cotton, primary processing, further processing at cotton ginning enterprises and the production of final textile products with high added value. Proceeding from this, the special Working Commission was entrusted to develop a draft Concept of development of cotton-textile clusters for the medium-term perspective, taking into account the results of the organization of similar clusters in the Bukhara and Navoi regions. Along with this decree, measures to support textile industry enterprises, including the provision of privileges for customs payments are envisaged. For the first time, an advisory body, the Council of the enterprises of the textile and apparel and knitted industries, will appear in the structure of organization. It is interesting that all enterprises included in the association will be obliged to export products with the unified marking Uztextile. The president also provided members of the Uztekstilprom Association with a number of privileges and preferences. Among them are exemption from payment of customs fees for imported cotton, artificial and synthetic fiber, wool, raw materials and other materials necessary for the production of textile products until January 1, 2021. Currently, Uzbekistan is the world’s sixth-largest cotton producer among 90 cotton-growing countries. The country exports cotton mainly to China, Bangladesh, Korea and Russia. Uzbekistan is expected to achieve full processing of cotton fiber in 2021. By 2020, the capacity of local enterprises will ensure the full processing of cotton produced in Uzbekistan, which can lead to a significant decrease in the export supplies of this crop. Only in 2017, the country intends to bring internal processing of cotton fiber to 70 percent. At the same time, by 2021 the production of textile and clothing and knitted products will increase by 2.2 times compared to 2016, including ready-made fabrics - 2.7 times, knitted fabrics - 3 times, knitted goods – 3.4 times, hosiery – 3.7 times. It is planned to increase the export of products by 2 times. One of the policy priorities of Uzbekistan, the world’s fifth-largest cotton exporter, is further development of its textile industry. Annually, the country grows about 3.5 million tons of raw cotton, produces 1.1 million tons of cotton fiber. Uzbekistan takes consistent steps to increase the volume of cotton fiber processing. In particular, it is planned to create 112 modern, high-tech industrial factories, expand, modernize and technologically upgrade 20 operating capacities. All this will increase the export potential of the industry up to $2.5 billion a year and create more than 25,000 jobs. In the period 2010-2014, the textile industry of Uzbekistan received and spent foreign investments worth $785 million while 147 new textile enterprises with participation of investors from Germany, Switzerland, Japan, South Korea, the U.S., Turkey and other countries were commissioned. Export potential of these enterprises amounted to $670 millions. Currently, Uzbekistan continues to attract foreign investments for construction of textile enterprises in the country.
Source: AzerNews
Cotton is said to be still a major contributor to Mozambique’s agricultural exports and is a main source of income for many rural communities in the African country. The Mozambique government has partnered with the Better Cotton Initiative to revitalize its cotton industry to achieve its ambitious goal to become the first country in the world to produce 100 percent ‘Better Cotton’. The partnership between the BCI and the Mozambique government highlights how policy-makers can use credible, mission-driven standard systems to meet development goals, while revitalizing nationally important industries. According to a statement from ISEAL, the global membership organization for sustainability standards, Mozambique aims to embrace the Better Cotton Initiative as it looks to breathe new life back into its growing cotton agricultural sector. ISEAL said that in central and northern Mozambique, production of the fibre is still one of the main sources of income for rural families and in the 2016-17 season, 170,000 smallholders, who typically farm less than a hectare each, accounted for 90 percent of the country’s total production. Furthermore, there is considerable scope to expand the country’s cotton industry as the country’s agricultural sector has recovered strongly over the last 20 years. In 2011 – 12, cotton production reached an all-time peak of 182,000 tonnes, in response to a record high farm-gate price the previous season (US$0.50 per kilo, compared to US$0.20 per kilo over the previous 10 years). Average cotton production remains considerably lower than at its pre-independence peak (civil war in the country officially ended in September 1974), but in recent years, yields are said to have fluctuated considerably, leaving many processing plants operating below capacity and unable to adequately plan for the future. While average yields are claimed to have progressed from 400 to 600 tonnes per hectare. According to ISEAL, the country is still held back by issues such as poor-quality seed and pest infestations, adding to economic challenges related to production, cotton also poses a number of sustainability challenges. Cotton agriculture in Mozambique is rain-fed leaving farmers vulnerable to drought, so efficient water management is essential. Loss of soil fertility and erosion pose a significant threat to cotton yields, as do pests, though most farmers can only afford limited use of pesticides. Poor labour conditions are also endemic in the cotton sector, while many children work on their family farms. Mozambique cotton production uses a concession model. The government grants a company, usually a ginner (processor), the right to be the sole operator in a particular area. In return, the company must provide inputs to farmers – including seeds and pesticides, but also extension services to educate farmers on better agricultural practices. A minimum price is agreed annually between the government, ginners and farmers. The country has 12 concessions, including national companies and a few multinationals. According to the current BCI annual report, the BCI farmers produced Better Cotton in 23 countries, across 5 continents, amounting to 12 percent of global cotton production.
Source: YarnsandFibers
