Indian exports bounced back in 2017 after the southward trend in 2016. With global trade showing encouraging signs in 2018, we all are set to reach new milestones, provided we impart competitiveness to exports amidst increasing volatility, protectionism and liquidity constraints. The Budget should provide short- and medium-term support to exports to attain double-digit GDP growth. With the indirect taxes virtually outside the ambit of the Budget with the rolling out of GST, the expectations from the Budget are comparatively subdued.
Govt must keep its promise
However, the Budget should reiterate the government’s commitment to exports not through rhetoric, but with tangibles.
Marketing support
We are not optimistic that an Export Development Fund with sizable corpus for exports marketing will be created, but there should be support to marketing through Income Tax deductions. To give a push to SEZs, either MAT should be abolished, or the rate be brought down to 10 per cent. Corporate Tax should be reduced, as announced earlier, as many US-based companies are exploring ways to close their Indian subsidiaries. On the customs front, the instances of inverted duty structure need to be looked into. More importantly, the end use exemption for the domestic industry on inputs required for manufacturing products imported through FTAs route should be given, with a push to domestic manufacturing and imports substitution. The Budget should provide fiscal support to units that create additional employment in the export sector. Incentives may be provided based on twin criteria of growth in exports and employment – while on the one hand when exports increase, on the other, employment-intensive units also get a boost. There should be a focus on logistics, with substantial allocation for shipping and road infrastructure to build on gains to the sector from GST and e-way bill. Refunds Many exporters would like to get refunds for exports in one place. The announcement of a comprehensive Drawback Scheme, which covers the incidence of both customs duty and Input Tax Credit, would serve their interest best. This will provide a huge relief to MSMEs who take supply from unregistered suppliers and find it cumbersome to keep a detailed record required for GST refunds. The writer is the CEO and Director General of FIEO
Source: Business line
A fortnight ahead of the Union Budget, the Goods and Services Tax (GST) Council is likely to take up rationalisation of rates of about 70 items, of which at least 40 are services. Amendment in rules may also be taken up to simplify filing and plug some of the loopholes. A fitment committee of officers has made these recommendations to the Council, which will meet on Thursday. With the aim to boost struggling agriculture and rural economy, and encourage clean energy, the Council is expected to rationalise rates of agriculture implements and unconventional fuel buses. It is the last Council meeting before Finance Minister Arun Jaitley presents his last full Budget on 1 February, before general elections in 2019. “Around 40 to 50 services will be taken up for a rate revision in the Council meeting. These are services that were earlier exempt but were taxed under the GST regime. They are facing issues,” said a government official. Agriculture implements that are currently taxed up to 18 per cent may come under the 12 per cent or the 5 per cent bracket. Agriculture sector growth is projected to fall to 2.1 per cent in FY18 because of an expected drop in the rabi harvest, an almost 3 per cent fall in kharif production, according to Advance Estimates by the Central Statistics Office. In the earlier meetings, the Council had lowered the rate on tractor parts from 28 per cent to 18 per cent. In the last full Budget of the National Democratic Alliance government, measures to give a push to the rural, and small enterprise sectors are likely. Among others, bio-diesel buses, which attract 28 per cent GST, may see a downward revision. Karnataka is one of the states to have given a big push to bio-diesel buses that are environment friendly. Karnataka State Road Transport Corporation (KSRTC) has inducted a slew of buses that run on bio-diesel. In case of services, job works may be allowed as part of the composition scheme, which will imply a flat rate of tax and easier compliance. Service provider aggregators such as UrbanClap, Housejoy and Quikr that provide e-platforms to carpenters, housekeepers, and plumbers could also find relief. They had argued against the 18 per cent GST, saying it made them uncompetitive compared to neighbourhood rivals. They pointed out that the service providers using the platform were below the GST threshold of Rs 2-million annual turnover. “Currently, only a few services such as housekeeping, carpentry, etc. are subject to 18 per cent GST, if provided through an e-commerce platform, without benefit of threshold limit of Rs 2 million. We are expecting the rate to be reduced to 5 per cent in such cases. Many job work services could also come under lower rate,” said Pratik Jain, partner, PwC India. Service providers of up to Rs 500,000 a year may also be allowed to opt for composition scheme. “The government would consider the lower collections over the past two months in taking a decision on further rate cuts,’’ said M S Mani, partner, Deloitte. The rate cuts may be confined to a few items that were either taxed at a lower rate in the past or are socially necessary, such as electric cars and their parts, he added. The Council had reduced rates on 200 items in November at its meeting in Guwahati. Reflecting the rate reduction, revenue collections touched the lowest in November at Rs 808 billion. Rates for 176 items, including detergents, shampoos, and beauty products, were reduced from 28 per cent to 18 per cent, while for a few others to 12 per cent at the November 15 meeting, leaving only 50 items in the highest bracket. Meanwhile, the Council may allow a single return filing to reduce compliance burden and ease procedures for small and medium businesses. The three return forms — GSTR1 (sales supply), GSTR2 (purchase supply), and GSTR3 (the final netted out return) — may be consolidated into a single form.
Source: Business Standard
Ahead of Union Budget 2018-19, the Centre and States are set to meet on January 18 to ease the compliance burden on companies, through measures such as a simpler return form and potentially lower rates on some goods. With a focus on the rural sector and small and medium enterprises, the Goods and Services Tax Council is also expected to discuss revision in rates of some goods, including handicraft items, agricultural equipment and food items. “There are unlikely to be any big-bang rate cuts at present, but some corrections will be made in cases that are considered urgent,” said a source. Additionally, the report of the Law Review Committee, which has called for further ease in compliance norms, especially in return filing, will also be taken up. “Compliance is the main focus of this meeting, as it is also impacting revenue collections. A system of invoice matching also needs to be started,” said another source. Though the GST Council has suspended the filing of GSTR-2 and GSTR-3, companies are expected to file GSTR-1. Sources said that a single return form is now likely to be introduced. Further, changes to the composition scheme, are also likely. The GST Council is also expected to begin work in earnest on inclusion of real estate under the tax net, an issue that has been on the agenda for some time. While some groundwork and initial meetings have taken place, more discussions are required for all States to come on board. The meeting, which will be chaired by Finance Minister Arun Jaitley, will also look at the rollout of the E-Way Bill, which has started on a voluntary basis at present, but will become mandatory from February 1. Additionally, the issue of revenue collections under GST also have to be discussed as the Centre and States get ready to present their annual Budgets.
Revenue dip
GST revenue fell for the second straight month in December to ₹80,808 crore from ₹83,346 crore in November. Experts also believe that compliance and revenue collection will be the main issues before the Council. “Revenue collections under GST have slowed down in the past few months and this is an area that would require extensive deliberations given that we are close to the Union Budget. Compliance processes under GST have been very cumbersome for business and methods for easing the compliance burden would also be a key discussion area,” said MS Mani, Senior Director, Deloitte India. Archit Gupta, Founder and CEO of ClearTax, said that invoice matching of some sort would help capture revenue leakage.
Source: Business line
Exporters have their expectations pinned on the Union Budget for more incentives to sustain the growth momentum, a way out of the working capital woes stemming from the new GST regime, and an improvement in infrastructure facilities. The Finance Ministry, however, will need to weigh in a lot of factors such as maintaining fiscal prudence, confirming to multilateral obligations of curbing export subsidies and nudging State governments to participate in infrastructure development for exports, while coming up with a fresh package for exporters. “Exports of leather-intensive items such as leather, foot wear, textiles, ready-made garments, carpets and sports goods are the need of the hour. The foreign exchange component of the raw material used in these products is minimum when compared to diamond, gold jewellery, electronic products or petroleum products where raw material imports comprise 80-90 per cent of the foreign exchange earnings,” said Anil Verma, President, Delhi Exporters Association. shipments India’s exports are showing signs of a rebound, with outbound shipments posting a growth of over 12 per cent in the first nine months of the fiscal, but exporters warn that without continued government support, they could slip back into losses. While the Centre has already announced a higher incentive of 2 per cent (of export value) for most of the labour-intensive sectors under the Merchandise Export from India Scheme (MEIS) as part of the Foreign Trade Policy review in December, what remains to be seen is whether the Budget would extend the measure beyond June 30 2018 when the additional sops expire. The bigger problem in extending the MEIS scheme is the fact that it is a direct export subsidy which India is no longer allowed to extend under the World Trade Organisation (WTO) rules. India’s per capita Gross National Income has exceeded $1,000 for three years in a row, and if the country does not do away with its export subsidies, other member countries of the WTO could retaliate. “It is clear that schemes such as the MEIS cannot continue for much longer. The Centre has to soon come up with alternative incentive schemes for exporters that are not directly related to exports. These incentives could be in the form of technological upgradation and modernisation schemes, funds for research & development, or sops for capital goods. One has to see if the Budget takes a step in this direction,” a government official said. Fiscal considerations would also determine whether the Finance Ministry would finally agree to do away with, or reduce the rate of Minimum Alternate Tax on Special Economic Zones, which the Commerce Ministry has been lobbying for the last few years. Exporters are also looking forward to relief from paying GST on inputs used in the manufacture of export items. Export bodies such as the Federation of Indian Export Organisations (FIEO) have argued that the IGST paid on inputs are refunded after a long time, resulting in the blockage of working capital. Therefore, the government should give an exemption from IGST on all instruments providing basic customs duty-free imports on inputs and capital goods. The Finance Ministry is seriously considering the introduction of an e-wallet system for exporters from April 1, under which the government will credit a notional amount in an exporters’ e-wallet based on preceding year’s exports and an average GST rate. It would be a running account from which money would be debited when the IGST gets paid and credited again when the proof of export is given. “We are hoping that the new e-wallet system will be operational in April 2018 and the matter would be formalised in this year’s Budget,” the official said. The Centre also hopes to convince more States to participate in the Trade Infrastructure for Export Scheme (TIES) announced last year to enhance export competitiveness by bridging gaps in export infrastructure, creating focused export infrastructure, first mile and last mile connectivity for export-oriented projects, and addressing quality and certification measures. The Central government funding is in the form of grant-in-aid, normally no more than the equity being put in by the implementing agency, or 50 per cent of the total equity in the project. So far, detailed project reports have been received from Karnataka, Tamil Nadu, Madhya Pradesh, Andhra Pradesh and Tripura. Although exports in the ongoing fiscal might touch $300 billion as per industry estimates, the government is under pressure to boost performance further. Exports in 2016-17 were $276.54 billion compared to $314.14 billion in 2013-14.
Source : Business Line
NEW DELHI: Seed industry body FSII today said it was "unfortunate" that the Maharashtra government has held seed firms responsible without any proper assessment for the losses suffered due to pink bollworm attack on Bt cotton crop this kharif season. It is "unfair" and "breach of principles of natural justice" to hold seed companies responsible based on "media reports", alleged the Federation of Seed Industry of India (FSII) in a statement. The FSII, in a letter to both the Centre and the Maharashtra government, expressed concerns over the problem faced by farmers but said the industry might close if the state asks seed firms to compensate the losses. "It is very difficult to establish that yield loss, if any, is due to attack of pink bollworm. It is an established scientific fact that crop yields depend on multiple factors... You are also aware of rampant cultivation of illegal GM cotton in Maharashtra this year. All these factors might have contributed to any possible yield losses," it said. It is also a fact that adequate methods of controlling pink bollworm are available to the farmers. Our understanding is that in most of the areas pink bollworm was below economic threshold level (ETL), it added. Giving the right perspective on pink bollworm attacks on cotton fields of Maharashtra, the industry body in the letter said: "A major factor for the possible resistance development in pink bollworm is due to non-adherence to the regulatory guideline of planting non-Bt refuge by farmers. It is also dependent on the quality of non Bt refuge supplied by some seed companies." When Bt technology was introduced in 2002, the FSII said pink bollworm was not a major pest on cotton, except in some pockets of Punjab and Haryana. "It is a scientific fact that when one pest goes down due to very good control by a pesticide or a GM trait, it is natural for the other pests to increase due to lack of competition. This is true in all living beings including microbes and insects. Increase in pink bollworm is essentially due to lack of competition from other bollworms", it said. The FSII further said the Bt cotton trait is approved primarily for the control of American bollworm. "The control of spotted bollworm, army worm and pink bollworm was an additional feature of the technology. Even now the control of all the above bollworms, especially the American bollworm, has been excellent, except for the very recent phenomenon of the attack of pink bollworm in certain areas," it said. Stating that pink bollworm management continues to be implemented in an excellent manner by the Gujarat government in the last two years with extremely satisfactory results, the FSII said: "It is very important to transfer this knowledge from Gujarat to other states and prevent the attack of pink bollworm." No technology or product can be eternally effective. That is why continuous research and development of new products is important and seed companies are investing on it every year, it added. The FSII is an association of research-based seed and seed technology companies that provide high-performance and high-quality seeds. More than 10 of its member companies cater to around 40-45 per cent of the hybrid Bt cotton seeds in 2017 kharif season.
Source: The Economic Times
Digital India and technological advancements are encouraged in the country . Sadly, this impacts the handloom industry negatively and the cut-throat competition from power looms has put the very existence of the handloom sector in doubt. The handloom industry in India exudes a national identity that is revered all over the world given its unique, unparalleled, rich heritage. It exhibits the spectacular craft of our artisans and nourishes the social fabric of the country. After all, it is the sector that generates maximum employment in India (after agriculture) and also has the largest number of weavers in the world. It has been particularly favourable for women empowerment in the country too. The Banarasi sarees, the Himachali topis, handbags from Kutch, the Kolhapuri chappals, jute bags and silk sarees from Assam - they create a landscape of unity in diversity and juxtaposes aesthetic pride with cultural parity. Tragically though, this source of living for more than 6.5 million Indian families has hit a cruel patch. We are all aware of the farmer suicides, but tragically enough the death of weavers in the last 20 years has gone unnoticed. For instance, there have been 615 suicides in Andhra Pradesh from 1997-2010 and about 50 in Varanasi in the last three years.
Doom in handloom
The Budget allocation for the handloom sector was Rs 710 crore in 2016-2017, but was reduced to Rs 604 crore for the year 2017-2018. This allocation was meant for varied provisions such as welfare schemes, housing, subsidies, health insurance, and much more. This drop of more than Rs 100 crore has made it difficult for the poor weavers to keep up with limited resources. Moreover, hank yarn, the crucial raw material for the sector, has seen a spike in prices and at the same time weavers have been hit by the non-availability of many chemicals. As digital India is the call of the hour, technological advancements are increasingly encouraged in the country and rightly so. Sadly, this impacts the handloom industry negatively and the cut-throat competition from power looms has put the very existence of the handloom sector in doubt. Mohan Rao, Chairman, Rashtra Cheneta Jana Samakhya (RCJS), a confederation of handloom weavers in India says, "Many weavers are uneducated and rely solely on their skills that have been passed on to them by their previous generations. This is traditional knowledge for them and it is the government's responsibility to take their concerns and future into account." At the heart of protection for the handloom sector is the Handloom Reservation Act, which spells out the articles reserved exclusively for the production by this sector. From cotton and silk sarees to the Dhoti, there are some 11 items which find a mention under the Act. However, this has not prevented the powerloom industry from transgressing to produce the items which find mention under the Act. Rao says, the Handloom Reservation Act is dismayingly implemented. In fact, its annual report stated that there has only been 0.001% conviction of violations in the handloom sector. This results in an immediate threat to the livelihoods of the weavers.
Hurdles in GST
Rao adds, "Repeated GST on yarn, dyes, chemical, as well as the product again ends in a compromised selling price for the product which leaves the weavers with extremely low benefits." Rao says that most of these weavers are not registered with GSTN and GST itself is too complicated a tax structure for them. "Neither are they familiar with input credit. For a layman like a poor weaver, it is not possible to maintain strategic records or claim returns," says Rao. For example the cotton sector was earlier exempted from central taxes and leviable to VAT at the fibre and yarn stage only, but now has been brought into the GST net at a rate of 5% and provisions for Input Credit to all. However, most weavers do not understand the process of input credit and various provisions like the composition scheme. There is another issue where high skilled weavers, for example, from Kota, Varanasi, Venkatgiri, Kuthampully etc, churn our sarees that can cost over Rs 10,000 each. Garments and apparels over sale value of Rs.1000 attract a GST of 12% . Rao says that there are no subsidies for the weavers and although there is a yarn subsidy, it is going away in GST. He says, "From one side the government is offering something and from the other, it is taking the same thing back." MS Mani, Senior Director, Deloitte India, simplifies the problem and explains, "There are three different stages in the textile sector - yarn (thread), fabric (cloth), apparel (the shirt, for example). The GST impact will be different for a yarn processor, a fabric processor and an apparel maker and these cannot be combined. So there is no one GST impact for the entire textile sector." Mani says that apparel businesses - mostly run by big businesses - have been paying VAT and excise duty, and now they are paying GST too. The problem is with the yarn and fabric businesses that mostly work for some of the apparel maker. Trouble is also for the small apparel business at the same time. Mani adds, "In terms of excise duty, any apparel maker was not required to pay excise at all up to Rs 1.5 crore of his turnover. Now in GST, the threshold is Rs 20 lakh. This is a significant change for smaller apparel makers etc. They asked for the withdrawal of GST on handloom products because a large part of the textile sector does not pay any taxes. If they start paying GST, they will have to start paying income tax as well, since through GST their purchases and sales will be known." Mani adds that even the reverse charge mechanism is not the solution for any SME business. "If the government decides to go ahead with the currently postponed reverse charge on purchases of some unregistered dealers, the SME sector as a whole is going to be adversely impacted as big businessmen would refuse to indulge with them," says Mani. There is, however, a ray of hope as parliamentarians are seized of the matter. "I am from Himachal Pradesh and the state has always taken immense pride in the Kullu caps or the mufflers that most people there are known for. Women who choose to work at and from home have upheld the glories of the handloom sector for long. Unfortunately, with rising prices, handmade products have become expensive and they are not being able to keep up without support. We need to do something before weaving becomes a dead occupation," says Virender Kashyap, a MP from the ruling BJP government.
Prospects in Parliament
Recalling his own years in college, CPI's D Raja says he has fond memories of seeing thousands of weavers at work in his native state of Tamil Nadu that is known for its textile, power loom and handloom sectors, but is unsure if it is the same today. "I was a member of the committee that scrutinised GST before it was passed to Parliament. I knew we were not prepared for it and the then President Pranab Mukherjee admitted that there will be temporary problems with GST. The question is, how long will this continue? I will encourage the government to look at this issue and bring some sensitivity towards the weavers," says Raja. Representatives of the handloom sector have urged the government to set up a parliamentary standing committee to review the rights and welfare schemes for weavers and have also requested the 15th Finance Commission and NITI AAYOG to address the financial crisis in the sector. Representatives state that the provision of GST need to be looked at and the Ministry of Textiles work together with related agencies for remedial actions. They have also demanded that the government should issue white paper on the budgetary allocation and while executing programmes for handloom weavers. Mani cites the example of textile traders' strike in Surat for 30 days last year, but the government did not relent to their demands. He says, "I don't think the government is in a hurry to withdraw GST. Granting a GST exemption to the whole sector defeats the very purpose of why GST was introduced in the first place. Nor is it going to prevent other sectors from making the same demand. There is no alternative right now apart from the fact that people gradually need to start getting to pay their taxes." For a sector deep in the woods, all eyes would be on Finance Minister Arun Jaitley when he delivers his Budget speech on February 1, to provide some succour.
Source: The Economic Times
MUMBAI: The rupee was one the worst performing emerging market currencies in the world on Tuesday as rising oil prices and worsening trade deficit, which hit a three-and-a-half year high in December, spooked investors. The local unit lost nearly 1% to the US dollar and yields on old benchmark bonds surged to about 22-month high to 7.56% after RBI deputy governor Viral Acharya warned banks to manage interest rate risk on their own. In terms of spot returns, the rupee ranked 23, yielding -0.65% this calendar year, just ahead of Turkish Lira among emerging market, Bloomberg data show."Poor deficit number, coupled with rising oil prices, is leading to a short-term panic in the markets," said Ashish Vaidya, head of markets for India at Singapore's DBS Bank. "If this trend sustains for a few days, we need to be on a high alert as markets are expected to turn volatile." The rupee closed at 64.04 to a dollar, down from 63.49 on Monday. During the day's trading it fell to a low of 64.11, a level not seen since December 28. "More permanent flows across current account deficit, foreign direct investment and foreign portfolio inflows in equity have turned negative this fiscal year, with rise in commodity prices," said Ananth Narayan, a professor of finance at SP Jain Institute of Management and Research in Mumbai. "Given this background, the rupee will likely underperform other currencies as the macro environment turns, and some of these carry flows stop or even reverse."
Impact of RBI Statement
Trade deficit, or the excess of imports over exports, hit three-year high of $14.88 billion in December while crude oil prices touched a three-year peak of $70 a barrel. Bonds also suffered a rout after the Reserve Bank of India deputy governor Viral Acharya signalled that the regulator wouldn't bail out banks from market losses. The new benchmark bond yield spurted about 20 basis points to 7.38% since its introduction earlier on January 5. "Even the RBI statement on interest rate risk management weighed on the market heavily," said Anindya Banerjee, deputy vice-president at Kotak Securities. "Some have rushed to sell securities as they expected a selling spree by foreign portfolio investors." Acharya on Monday said banks have to take care of the risks and not depend on regulatory easing of measures. "Interest rate risk of banks cannot be managed over and over again by their regulator," Acharya told the audience at the annual Fixed Income and Money Market Dealers Association meet. "Market liberalisation does not just involve the regulator easing business processes, introducing new products and creating new markets it also requires participants to take initiative to reskill themselves for constantly evolving market conditions and products.'' Overseas flow has also slowed amid hardenin of rates in developed world. "A combination of rising twin deficits and possible inflationary impact of rising oil and commodity prices may prompt the MPC to increase rates in coming months," said Narayan. MPC refers to the RBI's rate-setting monetary policy committee which is slated to meet on February 7.
Source : Economic Times
The European Textile and Apparel Confederation (EURATEX) the International Association for Soaps Detergents and Maintenance Products (A.I.S.E.) the European Outdoor Group (EOG) the European Man Made Fibres Association (CIRFS) and the Federation of European Sporting Goods Industry (FESI) struck an agreement to address the release of microplastic in the aquatic environment. The group of European industry associations representing the global value chain of garments and their associated maintenance agreed that viable solutions need to be found to the release of micro plastic into global marine and freshwater during the entire lifecycle of textiles which is highlighted as one of the sources of microplastic. In the agreement the associations commit to a cross industry coordination and stakeholder support through a set of effective and economically feasible measures: 1) Define common measurement methods Agree on reliable and harmonised test methods to identify and quantify the type of microplastic present in water and in the environment 2) Share Knowledge Call for collaboration across all relevant industry sectors and other organisations including research to share information define common priorities to fill knowledge gaps and advise on mid and longterm measures 3) Industrial research Support and participate in industrial research activities to investigate feasible options to tackle the release of micro plastic and to contribute towards addressing a global problem. The industry associations believe that through mutual work and better understanding of the issue feasible solutions can be found that can be effectively applied by industry consumers and authorities. Through the agreement the industries would like to tackle this issue that is potentially affecting billions of people worldwide. The first half of 2018 foresees the mapping of actions on test methods and on-going research discussions on potential harmonisation methodologies and conceivable cross-industry collaborations. The goal for the end of 2018 will be to draft a proposal for the European Commission. This proposal aims to fill knowledge gaps to identify and quantify sources of micro plastic pollutions in order to work on possible solutions.
Source: Tecoya Trends
TT Ltd will set up a mega garment plant in place of spinning machinery at Gajroula, in Uttar Pradesh. The move is aimed at diversifying from textiles to manufacturing garments. The company says, “TT is exiting from spinning and entering the garmenting and fabric business on a massive scale.” Garment and fabric turnover is targeted to be doubled in 2018-19 and target speedy growth in years thereafter. TT said it will continue to open branded stores through franchisees to push garments sale. The company is also emphasising on expanding its retail stores under brand T T Bazaar, it has already opened 50 such showrooms and another 50 stores are in the pipeline. The company is targeting opening 250 stores by 2019. All such stores will be in the franchisee mode. The company is appointing distributors in states where it has lower coverage, such as Chhattisgarh, Assam, Andhra Pradesh, Tamil Nadu, Telangana, Maharashtra and Karnataka. The new factory will enjoy benefits of central subsidies and incentives as well as special subsidies and incentives declared by the new Textile Policy of Uttar Pradesh.
Source: FashionUnited
The Tiruchirapalli District Tiny and Small Scale Industries Association (TIDITSSIA) who had pitched for the mini textile park, a hub for minor readymade manufacturing units has been shown a few locations in Manapparai area for establishment of a mini textile park (MTP) with substantial government subsidy. N. Kanagasabapathy, TIDITSSIA president, said that the location of the MTP with common facility centres for design ideation, training, and sales in Manapparai area will be ideal for the development of the readymade garments business in Puthanatham town. The MTP scheme envisaging establishment of at least 10 production units on a minimum area of 10 acres has to be developed through formation of a Special Purpose Vehicle. The government, through the Handlooms and Textiles department, will make available subsidy to the extent of 50% with a maximum ceiling of ₹ 2.5 crore under the project. The Revenue authorities have identified a little over 24 acres within the jurisdiction of the proposed area identified for establishment of the SIPCOT Industrial Park, Mr. Kanagasabapathy said. The industry sources said that such a facility would be ideal for promoting export. Most of the more than 50 readymade garment manufacturers in Puthanatham, located about 17 km away from the Manapparai town, have specialised in making churidars and children's apparel of export quality by virtue of frequent study visits to Mumbai. Establishment of the MTP will be a motivating factor for scaling up production through cluster approach. Moreover, as Manaparai has both road and rail connectivity, by setting up a mini textile park would not only give a potential platform for small powerloom manufacturers to promote their products in both domestic and international markets but also help in generating employment.
Source: YarnsandFibers
More than 2,000 international buyers and buying houses are expected at the 60th edition of India International Garment Fair (IIGF) beginning January 17. IIGF is one of the largest and most popular platforms in Asia where overseas garment buyers source and forge their business relationship with the finest apparel and fashion associates in India. Ajay Tamta, the minister of state for textiles will inaugurate the fair at New Delhi. The four-day fair will primarily cover the Autumn/Winter season of European Union, US and other western markets. A total of 294 exporters from 11 states namely Gujarat, Haryana, Maharashtra, Madhya Pradesh, New Delhi, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh and West Bengal will participate in the fair. They will showcase women’s wear, accessories, kid’s wear and menswear. "IIGF is India’s largest garment exhibition which has been successfully in providing a marketing platform to small and medium exporters to showcase their latest garment and fashion accessories trends to the international buyers and helping them to leverage brand India across the globe," said HKL Magu, chairman, Apparel Export Promotion Council, organiser of the fair. "The fair is happening at a time when the industry is facing lot of challenges both domestically and globally but I am sure that with a large buyer base IIGF will be able to turn things around for Indian apparel exporters. In the last fair held at Ahmedabad, the response was quite encouraging and this year we are looking forward towards capitalising on the momentum built during the Ahmedabad fair," added Magu. "The 60th IIGF assumes greater importance as more than 2000 international buyers and buying houses will participate in the fair, this year. IIGF is known for generating high value business and I am quite sure that IIGF will help the industry in influencing the buyer sentiments and demonstrating our product strengths," said Lalit Thukral, chairman, exhibition advisory committee, IIGF said. Hosting fashion shows, the fair will exhibit collections for business developments. The B2B fair will be held in association with International Garment Fair Association and four major garment exporters' associations namely Apparel Exporters & Manufacturers Association, Garment Exporters Association, The Clothing Manufacturers Association of India and Garment Exporters of Rajasthan. (RR)
Source: Fibre2Fashion
A cornerstone laying ceremony was held on Tuesday in Ethiopia's eastern city, Dire Dawa for a textile plant that will be built with an investment of 220 million U.S. dollars. Dire Dawa mayor's office said Chinese firm Wuxi No. 1 Cotton Mill will build the textile plant which will lie on 40 hectares of land. The construction of the textile plant will take 30 months and is expected to employ 3,000 Ethiopians once commissioned. The plant will be located inside Dire Dawa Industrial Park (DDIP) that is currently being constructed by China Civil Engineering Construction Corporation (CCECC). DDIP, currently being built at a cost of 159 million U.S. dollars on 159 hectares of land, is expected to attract industries specialized in textile, apparel, and agro-processing. Ethiopian government is financing the construction of the industrial park which is expected to be commissioned later this year. The textile plant's cornerstone laying ceremony was held in the presence of Liu Yu, economic and commercial counselor at the Chinese embassy in Ethiopia and Ibrahim Usman, mayor of Dire Dawa city administration.
Source: Source: Xinhua
More than 200 Pakistani companies took part in the four-day Heimtextil fair, the world’s biggest exhibition of home textile that ended on Friday. They had put up stall in the pavilion set up by the state owned Trade Development Authority of Pakistan. The Pakistan exhibitors received encouraging response from European consumers, but still regional rivals edge out Pakistani companies in many cases due to cost advantage. Apart from home textiles such as bed linen and towels, the European buyers have also expressed great interest in the textile products used in health facilities. However, an increase in prices of yarn and cotton, which are vital inputs in textile production, has pushed up production cost by 15 to 20%, making it tough for the exporters to finalise orders at competitive prices. Shahab Textile Mills Chief Executive Officer Sheikh Ali Ahmed Sadiq said that they had found great demand for health-care textile products from across the world. Sadiq has been participating in Heimtextil since 2013 and considers it a great platform for interacting and forging linkages with big textile buyers. He chastised the government for its “lack of attention” and high production cost of businesses, saying exporters had got bogged down because of these factors. With the business cost staying high, the exporters also could not reap the rewards of the rupee’s sharp depreciation against the dollar in December 2017. A weaker currency gives price advantage to exporters in the international market, but at the same time it makes imports expensive for businesses. Europe, the US, Middle East and Africa were big markets for such textile goods, he revealed, adding Canada too was a major consumer of health-care textile products, but it had levied 18% duty on exports from Pakistan. On the other hand, Bangladeshi exporters are enjoying duty-free status there. Pakistan produces scores of health-care textile products of excellent quality which include clothes for patients, bed sheets, specialised bed sheets and towels for operation theatres, gowns for doctors and paramedical staff. Though Pakistani products have drawn a great response, their high production cost has left the country uncompetitive in relation to regional rivals. They are losing orders to companies from China, Bangladesh, Turkey, Vietnam, India and Egypt. The Indian government has given concessions to its industries in a bid to help them compete well in the global market. Speaking on the occasion, Multimet International Executive Director Zafar Saeed revealed that an old customer of the company had come up with a huge order for the Spanish market. Spanish buyers were willing to offer a 3 to 4% higher price compared to the previous order, but over the past year production cost in Pakistan had gone up in the range of 15 to 20%, he said. Even if they minimise their margins, the goods will still be expensive by around 10%, making it difficult for them to win orders, he said while pointing out that new buyers from Spain, Poland and Albania had also expressed interest in Pakistan’s home textiles. Gul Ahmed Textile Mills Chairman Mohomed Bashir pointed to the latest technological advances including digital printing and online export orders being embraced by the home textile industry worldwide. He suggested that Pakistani companies should adapt themselves to the changing trends in order to secure their place in the international market.
Source: YarnsandFibers
Ethiopia has granted 200 cotton farmers organic certification for the first time. The farmers are part of a project training small-scale cotton growers to reduce and stop using dangerous pesticides. The project began in 2013 with 90 farmers, and today is flourishing with over 2,000 farmers taking part. The project is funded by TRAID, supported by the Pesticide Action Network UK, and delivered in-country by PAN Ethiopia. Maria Chenoweth, chief executive officer of TRAID, a U.K.-based charity working to stop clothes from being thrown away, said, “Since 2009, TRAID has committed nearly 1 million pounds to support cotton farmers to stop using hazardous pesticides and use safer more sustainable alternatives. In Ethiopia, the farmers involved in this project will now get the organic premium for their cotton, and are the first in the country to do so. It’s a hugely significant moment and the project is well on its way to more farmers becoming accredited.” Tadesse Amera, Director of PAN Ethiopia said, “The project has helped farmers to achieve yields higher than those in conventional farming and has reduced agro-chemical dependency and its related negative human health and environmental impacts.” Farmers have been trained on Integrated Pest Management techniques in Farmer Field Schools and are now achieving cotton yields over 100 percent higher than untrained farmers in the same area. They have also seen increases of 77 percent in the price per kilogram of cotton since the start of the project, without drenching their crops with harmful pesticides. Farmers are trained in soil and water health, ecological pest management principles and learning to grow other crops alongside cotton. Typically, this knowledge has disappeared as reliance on pesticides has taken hold. Farmers in the project also use natural pesticides–a homemade food spray–that is made from local ingredients like ground neem seeds. It is used to attract “good” insects to their fields, which then eat the pests that threaten their crops. A version of this spray has already been used successfully in Benin, West Africa in another TRAID funded project supporting organic farmers, and some of these Beninese farmers went to Ethiopia to share learning at the start of the project. TRAID noted that nearly 1,000 people are estimated to die every day from acute pesticide poisoning. Many hundreds of thousands more suffer from chronic ill health, including cancers, neurological diseases and infertility. According to the United Nations report “Global Chemicals Outlook,” pesticides are also poisoning Africa’s health services by $6.2 billion per year. Farmers become trapped in a spiral of crop mismanagement and debt, spending up to 60 percent of their income on pesticides while they struggle to grow on poor soil depleted by pesticide overuse. With farmers, their families and surrounding communities so negatively impacted by pesticide use, the continued development of organic cotton production is essential, and this work shows that an agro-ecological approach is working for farmers and helping to removing hazardous pesticides from the environment.
Source: Sourcing Journal Online
The share of natural fabrics and materials in the Russian textiles industry is steadily declining in favour of their synthetics, according to recent statements by the Russian Ministry of Industry and Trade. However, plans are afoot to expand the raw materials base for technical textiles, including the reintroduction of hemp fibre for technical applications. In the last five years, the annual growth of natural fibre and yarn consumption in Russia was equivalent to 5-6% per year, compared to 13-15% in the case of synthetics, and the difference continues to grow in favour of synthetics. The same trend is observed worldwide, where, according to analysts’ predictions, the share of synthetic and man-made fibres in global consumption will increase from 45% to 65-70% by 2025. Last year, in Russia, the local synthetic and man-made fibres market exceeded 650,000 tonnes in volume and RUB 55 billion (US$ 950 million) in value. Analysts expect further market growth this year. Currently, most of the Russian demand for synthetic fibres was met through imports, mostly from China. However, the situation may change in the coming years, with the Russian government announcing plans to increase domestic production. “The countries of East Asia have long placed a stake on the production and export of their synthetic fibres and yarns to abroad. This is reflected by statistics, which shows that today this region provides about half of the world production of these materials. Obviously, high competitiveness of Asian producers in the international arena is mainly related to the ability of their producers to save on costs. Due to this, Russian manufacturers may find it difficult to compete with Asian rivals in the coming years, even in the domestic market,” commented Andrei Razbrodin, president of Russian Association of Textile and Light Industry Producers (RATLIP). Despite this, the production of synthetic fibres and yarns in Russia has significantly increased in recent years. Currently, domestic producers cover around 35% of the country’s demand and there is a possibility that these figures will continue to grow in years to come. According to analysts at RATLIP, this dynamic is understandable, considering that non-natural fibres have better characteristics and more stable prices than their natural equivalents. It is predicted that polyester and viscose fibres (the share of which already makes up 85% of global synthetic and man-made fibres consumption) will remain the most popular types of non-natural fibres.
Innovative materials
At the same time, the Russian government plans to further increase the production of innovative textile materials in the coming years by expanding the raw materials base needed for their production. For example, as part of these plans, the government plans to make hemp one of the major raw materials for the production of technical textiles and other innovative textile materials, according to recent statements by sources close to the Russian Minister of Industry and Trade. Hemp, or industrial hemp typically found in the northern hemisphere, is a variety of the Cannabis sativa plant species that is grown specifically for the industrial uses of its derived products. It is one of the fastest growing plants and was one of the first plants to be spun into usable fibre 10,000 years ago. It can be refined into a variety of commercial items including paper, textiles, clothing, biodegradable plastics, paint, insulation, biofuel, food, and animal feed. In textiles hemp can be used as a substitute for linen and even cotton and is used in upholstery and even as a reinforcing fibre in composite applications. The Russian government and some local private businesses plan to create conditions for a significant increase of area used for cannabis cultivation in the country. The USSR accounted for 70% of the world's total area under cannabis, which was equivalent to almost 1 million hectares. However, the production of cannabis was almost fully suspended in the USSR in 1987 as a result of a decree signed by the President of the USSR Mikhail Gorbachev, which banned cultivation of cannabis in personal plots of land by making it a criminal activity. By 2011 cannabis cultivation in Russia almost disappeared. At present, the total area under cannabis in Russia is estimated at only 1,500 hectares, which are mostly located in the Adygea, Mordovia, Penza, Novosibirsk, and Orel regions. However, there is a possibility for the situation to change in the coming years, due to the plans of the Russian government to start building hemp processing factories in different parts of the country. The plans include the production of cannabis varieties that do not possess narcotic characteristics. These will be special varieties developed by some leading Soviet agricultural research institutes during the 1980s, the leaves of which are said to contain no more than 0.1% of tetrahydrocannabinol (TGC). “In the US and Canada, the permissible level of TGC for technical hemp is 0.5%, which is several times higher than in the case of Russia. Currently, China remains probably the world leader, in terms of cannabis processing and the production of fabrics and clothing made of hemp. In fact, all the Chinese enterprises, which have the right to deal with cannabis, are operated in accordance with the orders of the country’s Ministry of Defence, supplying the majority of products for the needs of the army,” said Julia Belopukhova, project manager of RosLenKonoplya, a public association, which unites some leading Russian producers of flax and cannabis. According to predictions of analysts in the Russian Ministry of Industry and Trade, by the end of 2018, the area under hemp in Russia will reach 6,000 hectares in 25 Russian regions, from Vladivostok to Kaliningrad.
Source: Innovation in Textiles
A joint venture between the state-owned Algerian companies Groupe C&H, TEXALG, SNTA and the Turkish Group TAY, with more than forty years of experience in textiles, has been founded to build one of the biggest textile mills in the world. German textile machinery producer Brückner Textile Technologies has been awarded the contract for the supply, installation and commissioning of machines for dry finishing. “The coordination team for the project was selected very carefully. The result was a highly experienced and competent crew, compiled with the aim to select the suppliers according to many different criteria and always striving for the highest standards,” Brückner reports.
Future plans
The project comprises several stages, which will be realised within the next years and has far-reaching and multi-purpose aims: Algeria will become as independent as possible of textiles imports in the medium term and the project will create a large number of jobs. On a site of around 2,500.000 sqm and with an investment of US$ 800 million, several vertically structured textile plants will be built in the next few years, specialising in various categories of textile end products. The new company will also have an internal service and training centre for new workers.
Selecting suppliers
Many meetings and a comprehensive exchange of opinions took place in order to outline and optimise the individual specifications of the required machines. On the one hand, the machines should allow an easy operation, and on the other hand, they have to be able to offer many possibilities for automation, quality control and remote maintenance. The family-run company Brückner was selected based on its ability to meet the three main criteria, which included productivity, quality of the products and highest possible energy efficiency. In addition, the team focused on the available local service, as well as on fast and flexible after sales services.
First step
The first step of the project has been divided into a denim, a non-denim and a knits section. The machinery in question are complete, fully integrated production lines for the production of 12 million pairs of trousers, six million shirts and 12 million T-shirts each year. The scope of supply comprises several stenters, sanforising ranges, thermosol dyeing and highly flexible denim finishing lines. All these machines are custom-made and are provided with various options. The preparations to realise the next stage, which comprises the production of home textiles, are also already under way.
Source: Innovation in Textiles
Algeria’s Industry and Mines Minister Youcef Yousfi inaugurated Africa’s largest textile production facility, named “TAYAL SPA”, in the northwestern Algerian province of Relizance. The textile facility is the result of Turkish-Algerian joint venture which will eventually come at a total cost of $1.5 billion. In his speech at the opening ceremony, Yousfi said that 40 percent of the production would meet the needs of the domestic market and 60 percent would be exported. He noted that the facility, when finished, would be the largest textile facility in Africa constructed by a Turkish-Algerian partnership. The full facility will be built in three phases on a plot of land with a total surface area of 2.5 million square-meters in the Sidi Khettap industrial zone of Algeria's Relizane. Province through the partnership of the Algerian government and the Taypa textile company of the Turkish Tay Group. The first stage of the project consists of eight textile production units, a textile school that will train 400 people, and 567 dwellings for the workers and officials. The second stage includes 10 factories that will be producing ready-made garments, industrial fibers, denim, and knitted and woven fabrics. The facility will employ 10,000 people at the first stage. Once the entire facility has seen completion, it is expected to employ 25,000 people and produce 60 million meters of denim fabric and 30 million pieces of garments annually. The partnership agreement was signed in 2015. As per the agreement, Taypa has 49-percent share of the facility while the Algerian government owns 51 percent of the shares.
Source: YarnsandFibers
Egypt plans to set up the biggest city for textiles and clothing on a land space of 3.1 million cubic meters in Al-Sadat city. Egypt’s Minister of Industry and Foreign Trade Tarek Kabil in the presence of President AbdelFatah al-Sisi during his visit to Al-Sadat city announced the start of the building procedures of the city. President Sisi announced that the government is ready to execute 50 percent of this project to speed up its implementation in a period of 18 months instead of seven years. The city will contain 568 factories with $2 billion as a paid capital to be invested during seven years with 87 percent of foreign investment and 13 percent of national investment. The project will have five phases, the first phase is set to be finished in 2020 with 57 factories and investments worth $230 million, while the last phase is scheduled to be completed in 2024, Kabil stated. This project will be implemented by the Chinese company Man Kay for investment that has been working in the textile manufacturing field for more than 10 decades the company owns 25 affiliated Chinese companies. Kabil further clarified that the textile and clothing city will offer 160,000job opportunities, with an annual production estimated at $9 billion.
Source: YarnsandFibers
