The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 2 FEB, 2018

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Budget 2018: Textile sector gets a Rs 7148 crore boost

The total National Handloom Development programme was allotted Rs396.09 crore against Rs470.28 crore that was allotted for the same in 2017-2018. Stakeholders of the textile sector celebrated the Budget tabled by Arun Jaitley with an increase of close to Rs 150 crore worth allotment to textiles. "The Government had approved a comprehensive textile sector package of 6000 crore in 2016 to boost the apparel and made-up segments. I, now propose to provide an outlay of Rs 7148 crore for the textile sector in 2018-19," Jaitley said. The total National Handloom Development programme was allotted Rs396.09 crore against Rs 470.28 crore that was allotted for the same in 2017-2018. The maximum chunk of the scheme in the upcoming fiscal went  to the National handloom development programme at Rs137.37 crore and  yarn supply scheme getting Rs 150 crore. Textile infrastructure saw prominence in the scheme of things in the sector with allotment in the segment  being Rs2222.81 crore that stood Rs291.37 crore above that in fiscal 2017-2018. Research and capacity building saw allotments to the tune of  Rs 252.09 against Rs 150.20 in the current fiscal. Most of the research and capacity building fund was dedicated to areas like export promotion studies, National Institute of Fashion Technology (NIFT), Grants to AEPC (Apparel Export Promotion Council) Technology Mission on cotton and knitwear. The North East Textile Promotion Scheme was allotted Rs 7068.36 in the upcoming fiscal against Rs 6164.83 that was allotted for the current fiscal.

Source: Money Control

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Textile sector gets Rs 7,148 crore, mixed reviews from industry

The Union Minister for Finance and Corporate Affairs, Arun Jaitley, in the Union Budget, proposed an outlay of Rs 7,148 crore for the textile sector in 2018-19, as against Rs 6,000 crore in 2016. Though the numbers have improved, there were mixed reviews from the industry, post announcement.  Aditya Singhal, founder and CEO, IML Jeans, is not impressed with the budget. He says, “The budget allocation of Rs 7,100 crore in the budget would be helpful but the real issue for the textile industry is lack of skills, high cost of capital and low focus on startups in this industry,” he says. Manish Dwivedi, assistant manager, sales and marketing, Bhilosa Industries, fears the result this amount will bring in the lives of small weavers. “Textile industry is the most affected by GST. Because of increased imports from China and other competitive markets, fabric market hits at large scale. Government should apply anti-dumping duty on the same. Keeping the practical working of textile industry (specially for small weaver), they should ease the process of e-way bill. Though it’s a welcome move from finance minister, announcing Rs 7,148 crore, let’s wait if this will give the small weavers something to cheer about,” he says. Sunil Alagh, founder and chairman, SKA Advisors, feels that the move by government will increase involvement of women in the textile sector. “The textile sector comprises of about 90 to 95 per cent MSME units, which will also have greater fund flow due to the reduction in the corporate tax. This will also increase women’s employment in the textile industry. Of course, every industry like Oliver wants more. But they need to move forward and if they face further difficulties, I am sure the government will be forthcoming in this very critical industry,” he says. The finance minister has also proposed to extend the benefits under Section 80JJAA of the Income Tax Act to footwear and leather industry. However, he noted that the minimum period of employment is relaxed to 150 days in the case of apparel industry. Extending this relaxation of minimum period of 150 days to footwear and leather industry, the finance minister hoped this would encourage creation of new employment in this sector. Dr Gayathri Vasudevan, cofounder & CEO, LabourNet Services, says that this move will help in generating more jobs. “Textile industry has had the special benefit of fixed employment term. However, this budget has extended this facility over to leather and footwear industries by relaxing this from 240 day to 150 days. This is surely an innovative and economic move towards generating more jobs in these sectors. Overall, the consistent effort to increase employment opportunities is commendable,” she says.  However, Bhavin Parikh, CEO, Globe Textiles India Ltd feels that the budget lacks initiatives taken to revive of textile SEZs. “For textiles (industry), while there is an allocation of Rs 7,148 crore, not much has been said about concrete correctional measures to boost India’s export competitiveness or policies favouring a revival of textile SEZs.”

Source: The Week

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FM hikes textile outlay to Rs 7148 cr, doubles customs duty on

New Delhi :  Finance Minister Arun Jaitley today hiked the outlay for the textiles sector to Rs 7,148 crore for 2018-19 and announced doubling of customs duty on silk fabric to 20 per cent. The revised outlay for the Ministry of Textiles was Rs 6,250.8 crore in the current financial year, budget documents showed. "The government had approved a comprehensive textile sector package of Rs 6,000 crore in 2016 to boost the apparel and made-ups segments. I now propose to provide an outlay of Rs 7,148 crore for the textile sector in 2018-19," Jaitley said while presenting the Budget 2018-19 in Parliament. "Grateful to for allocating Rs 7,148 crore for Textiles that will stimulate growth of the sector (sic)," Union Textiles Minister Smriti Irani said in a tweet. The budget documents also showed that the proposed allocation for Remission of State Levies (ROSL) has been increased from Rs 1,855 crore in 2017-18 to Rs 2,163.85 crore in the coming financial year. "This will help the exporters of made-ups and apparels as backlog will be cleared and working capital released," Confederation of Indian Textile Industry Chairman Sanjay Jain said. According to the budget documents, the proposed outlay for the Amended Technology Upgradation Fund Scheme has also been raised to Rs 2,300 crore from Rs 1,956 crore. Jain said this would mean that companies will get their arrears faster. "Basic custom duty on silk fabric increased to 20 per cent from 10 per cent would save the industry from dumping from China. The industry post GST is facing higher imports across the value added segment and was seeking increase in BCD across yarn and fabric, hence disappointed with this partial measure," Jain said. However, silk exporters expressed unhappiness over the doubling of customs duty on silk fabric. "This (raising customs duty from 10 to 20 per cent) is going to hamper the silk garment exports which are already suffering," Indian Silk Export Promotion Council Chairman Satish Gupta told PTI

Source: India Today

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Customs duty on silk fabrics doubled to 20% in Budget 2018

NEW DELHI: Finance Minister Arun Jaitley today proposed doubling of customs duty on silk fabrics to 20 per cent to provide "adequate protection to domestic industry".According to the Budget 2018-19, customs duty on silk fabrics has been raised from 10 per cent to 20 per cent. Silk exporters, however, said the move would hit shipments of silk garments from India. This (hike) is going to hamper silk garment exports, which are already suffering," Indian Silk Export Promotion Council Chairman Satish Gupta said. "The majority of silk fabrics are imported from China. We are uncompetitive already and this will make things worse. We have been pleading with the government to lower the duty to 5 per cent," Gupta said. "In 2016-17, the export of silk garments from India was to the tune of USD 160 million against approximately USD 200 million in 2015-16. The duty impact is making our garments expensive in the international market," T S Chadha Executive Director, the Indian Silk Export Promotion Council said. Meanwhile, the Confederation of Indian Textile Industry welcomed it by saying the imports after GST rollout were negatively impacting the industry. The hike in customs duty will encourage the domestic industry and push the Make in India programme further, it added.

Source:  The Economic Times

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Long-pending demands of knitwear sector still unmet

Tirupur: Knitwear industrialists here were more or less a disappointed lot on Thursday as the Union budget failed to address many of their long-pending demands. They, however, welcomed the allocation of Rs 7,148 crore for textile sector, of which Rs 2,300 crore was earmarked for Amended Technology Upgradation Fund Scheme (ATUFS). But they said allocation of Rs 2,255 crore for Rebate of State Levies (RoSL), one of the four incentives given to exporters, was inadequate. They were also disappointed that their demands for knitwear development board and ESI multispecialty hospital didn't find a mention in the budget. The RoSL scheme came into effect on September 20, 2016 and the actual requirement for our apparel sector till March 31, 2018 is Rs 5,000 crore (average 3.5% of FOB value of garments).The concern is that the made-up sector has also be given RoSL benefit out of the allotted amount," Tirupur Exporters' Association president Raja M Shanmugham said. "Tirupur, the knitwear hub of the country, should be given importance when it comes to developing infrastructure facilities. We have been demanding for a Knitwear Development Board for long as there isn't an industrial body to connect with policy makers. But the budget has no mention of it," he added. Shanmugham, however, welcomed the relaxation in corporate tax for MSMEs and also hailed the proposed amendment to the Employee Provident Fund (EPF) to reduce women employees' contribution to 8% from 12% for the first three years of their employment. "Since it was the last budget for the Narendra Modi-led government, it has made many positive announcements, including Rs 3 lakh crore for Mudra scheme, of which 76% will go to women," said KS Babuji, general secretary, Collar Work and Hosiery Small Industries Association. The budget also did not go down well with the industrial trade unions. "The Tirupur Trade Unions Federation had unanimously made an appeal to exempt job work sector of the industry from GST since it attracts a cumulative tax rate of 40%. But the Union finance minister didn't do anything about it" said N Sekar, general secretary, Banian Factories Labour Union, Tirupur AITUC.

Source : Time of India

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Textile sector gives thumbs down to Budget

Still grappling with the after-effects of the GST and demonetisation, the state’s textile industry has demanded an early payment of GST refunds and a reduction in tax rates. Grappling with capital crunch and dwindling export orders, the state’s textile industry is dissatisfied with the allocation of Rs 7,148 crore for the sector in the Union Budget. In Punjab, there are over 12,000 units in the textile sector — ginning, spinning, knitting, apparel, garmenting etc. and major source of employment. HKL Magu, chairman, Apparel Export Promotion Council, said: “Finance Minister Arun Jaitley has merely made a budgetary allocation for the special package of Rs 6,000 crore announced by the government in 2016, so there is nothing new about it. The manufacturers are struggling with a fund crunch as the industry is yet to receive Rs 4,000 crore in the form of Goods and Services Tax (GST) refund. We were expecting incentives for research & development (R&D) in the apparel sector. Every year, an industry spends 2-3 per cent of its turnover on R&D.” “We have been asking the government to help apparel exporters survive. Very few people have got GST refund between July and December,” he added. Manufacturers said they had become uncompetitive, even as Bangladesh was offering its products 10-15 per cent cheaper in the global market. “We have sought reduction in GST on man-made fibres from 18 per cent to 12 per cent. However, the issue was not addressed in the Budget. The social welfare surcharge of 10 per cent on imports will make imported raw material costlier, which will hit exports,” said Rashim Jindal, Head, Marketing & Raw Material, Sportking India Ltd. Ajit Lakra, president, Ludhiana Knitters’ Association, said, “The increase in the outlay, prima facie, looks good, but it will depend on the implementation. We are disappointed with the Budget as the industry’s concerns have not been addressed. The implementation of GST is still hounding the industry.” Ludhiana is the hub of the knitwear industry in Punjab with around 5,000 units, mostly in the MSME (Micro, Small and Medium Enterprises) sector. The domestic market growth rate of the apparel industry was flat during 2017-18 due to demonetisation and GST. On the export front, if the government does not increase duty drawback rates, there could be a possibility of negative growth in the export sector. The Indian apparel industry saw declining numbers for overall exports in October, November and December 2017 – a fall of 39 per cent, 11 per cent and 8 per cent year-on-year, respectively, mainly due to the impact of GST and the discontinuation of certain export incentives.

Source: The Tribune

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Union Budget 2018: Demands not met, textile and diamond industries in Gujarat sulk

Expressing shock, the industry experts claimed that the Budget had been made keeping in mind the 2019 General elections and major beneficiaries were farmers and rural people,” said SGCCI president P M Shah.  The textile industry had been badly affected by demonetisation, GST and e-way bill in the state. The diamond and textile industries in Gujarat were unhappy, with many of their demands not met in the Union Budget announced by Finance Minister Arun Jaitley on Thursday. Representatives of both industries had made pre-Budget suggestions to the Central government on the steps to be taken for the benefit of both industries as over 20 lakh people are associated with them. The textile industry had been badly affected by demonetisation, Goods and Services Tax (GST) and e-way bill. The industry experts had claimed that due to the hard steps taken by the government, the downfall of the industry had started as large numbers of shuttle machines had been scrapped in Surat and even the production of textile fabrics had gone down by up to 40 percent. Many weavers and traders switched over to other businesses. At Southern Gujarat Chamber of Commerce and Industry (SGCCI), experts from different sectors were called and discussions on the Union Budget were carried out. “Expressing shock, the industry experts claimed that the Budget had been made keeping in mind the 2019 General elections and major beneficiaries were farmers and rural people,” said SGCCI president P M Shah. Gems and Jewellery Export Promotion Council Chairman Dinesh Navadia said, “We had given suggestions and had pinned hope on the Centre for the betterment of the industry, but our hope has remained hope.” The Budget has belied the expectations of the the textile industry as well. Federation of Indian Art Silk Weavers Industry (FIASWI) Chairman Bharat Gandhi said, “The import duty on the pure silk had been increased from 10 per cent to 20 per cent which will benefit the local pure silk industry people. This will give major boost to the local pure silk industry. The pure silk manufacturers are found in Surat, Bhagalpur, Varanasi, Bengaluru, etc.” The Federation of Surat Textile Traders Association president Manoj Agrawal said, “The local textile industry has been facing great problems due to input tax credit in GST, e-way bill and the recommendations were not looked at. Some relaxations were expected from the Finance Minister, but nothing has come out. The daily production in the industry has gone down by 40 per cent after GST and e-way bill.” Girdhargopal Mundra, chairman of Madhusudan Group, a major textile group of Surat, said, “The Budget was unsatisfactory for the textile industry. The Government should have thought about taking steps to increase the GDP, and for that some promotions should be given to textile exports.”

Source: The Indian Express

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The agony and ecstasy of MSP: What's good for farmers may hurt your pocket

The foreign trade data released by the Ministry of Commerce and Industry revealed a 3% decline in CAGR in textiles and apparel exports compared to the corresponding period December 2016. Textile industry, which has been consistently seeking help from government for its MSMEs, has conveyed mixed feelings on the announcements made by the finance minister Arun Jaitley in his budget speech in Lok Sabha. "Overall it is a balanced budget. Several measures have been announced which will benefit the MSME sector and since 99% of the textile industry fall under the MSME sector this is good news," said Confederation of Indian Textile Industry, Chairman, Sanjay Jain. The good newsThe FM announced a comprehensive package of Rs. 7148 crore for the textile industry in his budget presentation. This has cheered the industry which has been struggling with a backlog of ROSL (rebate on state levies) on exports. "The increase in allocation from Rs 6000 crore to Rs 7148 crore is a big plus. We will have to see the break-up of this allocation, but presuming it is in line with last year's percentage break-up, it will make more money available for ROSL which has a big backlog. This will consequently help export of madeups and apparels," said Jain. The two big announcements made by the government pertaining to the MSME sector: extension of reduced corporate rate tax of 25% for companies with a turnover of up to Rs 250 crore and the promise to "soon announce measures to effectively address NPAs and stressed accounts for MSMEs," will have a far reaching impact on the textile industry. The government has also included the textile sector in its fixed term employment system which was earlier made available only for the madeups and apparel segments. To comply with the government's vision to double farmers' income by 2022, the finance minister announced the formula for minimum support price will now be applicable to all crops. "In our party's manifesto it has been stated that the farmers should realize at least 50% more than the cost of their produce. In other words, one and half times of the cost of their production. We have decided to implement this resolution as a principle for all the crops. I am pleased to announce that as per pre-determined principle, government has decided to keep MSP for the all unannounced crops of kharif at least at one and half times of their production cost. I am confident that this historic decision will prove an important step towards doubling the income of our farmers," said Jaitley in his speech. While the move is a welcome initiative for the cotton farmers, it may end up increasing the burden of the MSMEs dealing with cotton fabric. "The biggest highlight of budget is the announcement of MSP for cotton. We are still working out the figures, but this move will definitely result in a high inflation in cotton and though the farmers will gain but the rest of India will have to pay a higher price for clothing," said Jain. The move will also end up making the domestic cotton uncompetitive vis-a-vis international prices, added Jain. He said that the textile industry, comprised mainly of MSMEs should not be made to carry the burden of increased cotton rates. "Our contention has been that the MSP burden should not be transferred to the rest of the chain but that the farmers should be given a direct subsidy. The government could get into a similar trap which had Chinese government in a tangle five years back when they tried to sell their cotton for much above the natural prices and though they moved to direct subsidy two years back, the industry is still saddled with unsold stock," warned Jain. The industry has been asking the government for increase in import duty and export incentives to correct the imbalance caused by the introduction of GST. The foreign trade data released by the Ministry of Commerce and Industry for the month of December 2017 revealed a 3% decline in CAGR in textiles and apparel exports compared to the corresponding period December 2016. The exports of Textiles and Apparel stood at $ 2996 million during December 2017 as against $ 3075 million in December 2016. However, the cumulative export has slightly improved by 2% CAGR as the exports stood at $ 26,136 million in April-Dec 2017 in comparison to $ 25,721 million in April-Dec 2016. The imports, on the other hand, saw an increase during the same period: Imports of textiles during December 2017 stood at US$ 165.34 in comparison to US$ 137.24 in December 2016, registering a rise of 20.48 per cent. The FM did announce an increase of 10% in import duty, but only on silk fibre. "The industry is getting dumped with imports from China. We have been demanding increase in the basic custom duty across the chain - yarn and fabric - and it is a big disappointment for the industry. The whole industry is being hit by imports post GST, but now we will have to live with it," said Jain signing off.

Source: The Economic Times

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Allocation for remission of State Levies for export of garments inadequate: SIMA

PUNE: Textile industry has said that the budget allocation for Remission of State Levies (RoSL) for the exports of garments and made-ups is inadequate. However, it is upbeat that it will create more jobs. The Southern India Mills' Association (SIMA) has welcomed the increased allocation of Rs.7,148 crores that includes Rs.2,300 crores for Amended Technology Upgradation Fund Scheme and the balance for other schemes as against Rs.6,251 crores allocated during last year. "Extending 12% EPF employer's contribution for the first three years of employment and also the fixed term employment for all the sectors of the industry would encourage job creation in the textile industry," said P.Nataraj, chairman, SIMA. He has also welcomed the scheme for MSMEs to address the issues relating to NPA norms and stressed assets, a long pending demand from the industry. He has also welcomed the reduction of corporate tax rate from 30% to 25% for the units having upto Rs.250 crores annual turnover. He has stated that more than 80% of the textile units would be benefited out of the reduced corporate tax rate that would help them to plough back the amount for creating additional jobs and value addition. Nataraj has said that the Union Budget has allocated Rs.2,164 crores for Remission of State Levies (RoSL) as against Rs.1,855 crores allotted last year for the exports of garments and made-ups. "This amount is inadequate as there is huge backlog even for the year 2017," he said pointing out that timely disbursement of government dues is very much essential to ensure adequacy in working capital and achieve a sustained growth rate in exports and job creations. He has appealed to the Government to clear the long pending RoSL benefits, IGST refund and other dues at the earliest to ease the financial position of the exporters. Atul Ganatra, president, Cotton association of India said that the budget will be good for cotton industry. "Increase in MSP will encourage the farmers to grow cotton without as cotton MSP may go up next season. The government has stationed more than Rs 7000 crore for textile sector, which will boost the textile industry and the effect of this will be seen on cotton trade since it is related to textile sector."

Source: The Economic Times

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Mega gains for micro biz; leg up for leather, textiles

Chennai: The announcements in the Union Budget for micro, small and medium enterprises (MSMEs) and employment-heavy industries like leather and textiles would benefit the state which leads in textile, SME and leather sectors. The host of sops announced for new employees in export-oriented sectors in the budget would make them competitive, industry representatives say. The leather industry is the biggest beneficiary in recent times, with not only the budgetary benefits but also the Rs 2,600 crore special package announced in December. The state contributes more than 35% of the total exports and has leather clusters in Ambur and Vaniyambadi in Vellore. Reduction in the minimum employment period from 240 days to 150 days and the additional 30% income tax deduction for leather and footwear sector for new employees would encourage more employment, industry sources say. "The extension of 25% reduced corporate tax to MSME units having turnover of up to Rs 250 crore will benefit the leather and footwear industry as 90% of the industry is concentrated in the MSME segment," said Aqeel Panaruna, vice-chairman, Council for Leather Exports. "Enhancement of customs duty on footwear from 10% to 20% will enhance competitiveness of domestic footwear industry and will promote Make in India programme," he said. The budget has also made provisions for modernisation of 200 units, upgrade of existing campuses and placement-linked skill development training to 1.44 lakh unemployed people. For small and medium-sized businesses with Rs 50 crore to Rs 250 crore turnover, the finance minister announced a reduction in income tax from 30% to 25% . "The 5% saving that I make can be used for innovation. Having our own reserve is now an advantage for funding R&D," said S Sampath, CEO, Velmurugan Heavy Engineering Industries, Trichy. Tamil Nadu has 6.89 lakh registered SMEs contributing to over 15% of the total units in the country. For the textile industry, the benefits would help battle competition with sops narrowing the difference in wages with competing nations, officials said. Wages, which account for about 12% to 15% of the production costs in garment making, are about 25% cheaper in Bangladesh, a key competitor for the country in textile exports. "These initiatives will help the sector to become competitive and face challenges from Bangladesh, Sri Lanka, and Vietnam," said A Sakthivel, regional chairman, Federation of Indian Export Organisations, southern region. "Extending 12% EPF employer's contribution for the first three years and also fixed term employment would encourage job creation in the textile industry," said P Nataraj, chairman, Southern India Mills' Association. "About 80% of textile units would benefit from the new corporate tax rate," he said. Garment units in Tirupur were given incentives that included the Centre bearing employer's contribution to the employee provident fund for new workers who are earning less than Rs 15,000 per month during the first three years and an increase in overtime from three hours to eight hours per week in June 2016.

Source: The Times of India

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Reduction in tax for MSMEs to benefit TN textile firms

The reduction of corporate tax to 25 per cent for companies with turnover upto Rs 250 crore will benefit textileand garment firms in Tamil Nadu, according to the Coimbatore based Indian Texpreneurs Federation (ITF). The textile body also welcomed the increase in budgetary support to the textile sector in the Union Budget 2018-19 laid in Parliament today. “This Budget will infuse confidence among the medium-sized companies in India,” commented ITF convenor Prabhu Dhamodharan soon after finance minister Arun Jaitley finished his Budget speech. Explaining the benefit of reduction in corporate tax, Dhamodharan said, “Majority of Spinning and apparel companies in Tamil Nadu are within the Rs 250 crore turnover bracket. So, the tax reduction to 25 per cent will give a direct benefit to us and it will help us to speed up our plans in solar investments to achieve self-sustaining status in our energy requirements.” He also welcomed the 20 per cent increase in budgetary support to the textile sector, which has now increased to Rs 7,148 crore for 2018-19. He said that this will help the textile sector, as it will result in clearance of pending ROSL dues. He hailed the proposed schemes to encourage bond markets in India, as it will help the Indian corporate sector to explore alternative financial options like bonds. However, the major focus of the budget was development of the agricultural and rural economy. “Focus on agro sector is the need of the hour and this budget rightly focused on the same. The (new) budgetary supports may help in achieving more yield per hectare in cotton and more crop output will help Indian textile sector in the long run,” Dhamodharan said. (RKS)

Source: Fibre2Fashion

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Textile industry welcomes fund allocation for textile sector

Coimbatore:  The textile industry in the region today hailed the budget presented by Finance Minister Arun Jaitley. Tirupur Exporters Association president Raja M Shanmugham welcomed the announcement of allocation of Rs 7,148 crore for Textile Sector of which Rs 2,300 crore has been allotted to Amended Technology Upgradation Fund Scheme and Rs 2,164 Crore for Remission of State Levies. In a statement, he also welcomed the extension of corporate tax at 25 per cent to the companies turnover up to Rs 250 crore in the financial year 2016-17 which is beneficial particularly to the medium enterprises. He lauded the announcement on launching of flagship National Health Protection Scheme to cover over 10 crore poor and vulnerable families providing coverage up to 5 lakh rupees per family per year for secondary and tertiary care hospitalisation and added this will be beneficial to the employees in Tirupur cluster also. In a separate statement, Southern India Mills Association chairman P Nataraj also welcomed the increased allocation of Rs 7,148 crores. Extending 12 per cent EPF employer?s contribution for the first three years of employment and also the fixed term employment for all the sectors of the industry would encourage job creation in the textile industry, he pointed out.

Source:  India Today

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Indian textile industry hails budget with some scepticism

Textile associations in India have welcomed the raised allocation for the sector in this year’s budget, saying it will help firms in many ways, including clearing pending rebate of state levies (RoSL) dues. The drop in corporate tax rate for units with an annual turnover of up to Rs 250 crore will benefit most textile units, they feel, with some scepticism. The associations, which include the Southern India Mills’ Association (SIMA), Coimbatore-based Indian Texpreneurs Federation (ITF), the Confederation of Indian Textile Industry (CITI), the Tiruppur Exporters Association (TEA), the Cotton Textiles Export Promotion Council (TEXPROCIL) and the Clothing Manufacturers Association of India (CMAI), also welcomed the increased allocation for infrastructure development and the focus on agriculture, and saw a lot of incentives for micro, small and medium enterprises (MSMEs). The National Livelihood Scheme of Rs 5750 crore will benefit the textile sector in rural areas, according to CITI chairman Sanjay Jain. The budgetary allocation for the textile sector has been increased to Rs 7,148 crore, which includes Rs 2,300 crore for the Amended Technology Upgradation Fund Scheme (ATUFS) of the textiles ministry, over Rs 6,251 crore last year. ATUFS was introduced in 2015 specifically targeting employment generation and export, promotion of technical textiles, technologically upgrading existing looms and encouraging quality in the processing industry. Jain feels a large part of the increase in allocation has gone to the state-owned Cotton Corporation of India (CCI) for performing minimum support price (MSP) operations and hence, won’t help the industry. Not much has been said in the budget about concrete correctional measures to boost India’s export competitiveness in textiles or policies favouring a revival of textile special economic zones, said Bhavin Parikh, CEO of Ahmedabad-based Globe Textiles (India) Ltd. Welcoming the scheme in the budget for MSMEs to address issues relating to non-performing asset (NPA) norms and stressed assets, a long pending demand of the industry, SIMA chairman P Nataraj said the reduction of corporate tax rate from 30 per cent to 25 per cent for units with an annual turnover of up to Rs 250 crore will benefit more than 80 per cent of the textile units and help them plough back the amount for creating more jobs and value addition. Nataraj and TEA president Raja M Shanmugham, however, feel the allocation of Rs 2,164 crore for RoSL compared Rs 1,855 crore last year for the export of garments and made-ups is still inadequate as there is a huge backlog for 2017. The RoSL scheme for apparel exporters came into effect from September 20, 2016, and the actual requirement for the apparel sector alone till March 31 this year is in the range of Rs 5,000 crore, said Shanmugham. TEXPROCIL chairman Ujwal Lahoti hoped the increased funds will cover fabrics as well under the RoSL scheme. The 20 per cent higher allocation for infrastructure development shows the government’s thrust on renewing spurt in economic activity, according to GHCL Ltd managing director RS Jalan. CMAI president Rahul Mehta said infrastructural bottlenecks have been hindering apparel manufacturing, which involves significant domestic transportation of raw materials and finished goods. Referring to the reduction of women employees' contribution towards the Employees Provident Fund (EPF) to 8 per cent for the first three years, many industry associations said apparel sector workers will be among the primary beneficiaries of this provision as the sector extensively employs women. Although the rise in basic customs duty (BCD) on silk fabric to 20 per cent from 10 per cent would save the industry from dumping from China, the industry aspired for an increase in BCD across both yarn and fabric and therefore, is disappointed with this partial measure, CITI chairman Jain said. The step to make the MSP of all crops 1.5 times that of the production cost will benefit cotton farmers, but will result in high inflation for consumers and the downstream segments and make the industry uncompetitive internationally, Jain added. CITI urged the government to change from MSP to the direct subsidy system, so that the profit protection measure of farmers doesn’t impact the textile consumer and the value added industry. (DS)

Source: Fibre2Fashion

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Strands of discontent in the textile industry

NEW DELHI : The Budget allocation for the labour-intensive textiles sector — which provides jobs to about 45 million people — increased 14.7 per cent over the previous year to Rs. 7,148 crore. The rate of growth in allocation for the new fiscal, however, is less than half the increased allocation of over 30 per cent to Rs. 6,226.5 crore in 2017-18. The textile sector, which is facing double trouble in the form of lower exports, especially of garments, and higher imports from countries such as Bangladesh, had sought higher rates of reimbursement under the duty drawback and refund of State levies (ROSL) following the implementation of the new GST regime. It also demanded higher disbursement under the Amended Technology Upgradation Fund Scheme (ATUFS). “Adequate budgetary allocation for schemes such as refund of State levies and interest subvention benefits can help improve competitiveness of textile exporters and boost export growth,” industry analyst ICRA had said in a pre-Budget note. While allocation for the ATUFS has been raised to Rs. 2,300 crore in 2018-19 from Rs. 1,956 crore in 2017-18, it is still lower than the allocation of Rs. 2,622 crore in 2016-17. Provision for ROSL for 2018-19 is higher at Rs. 2,222 crore compared to Rs. 1,939 crore last year, but the ROSL rates remain unchanged. “The industry was hoping for some support to mitigate the financial crunch, especially because it faced a severe reduction in the drawback and RoSL benefits. The industry is looking forward to increased interest subvention from the existing 3 per cent to 6 per cent, to help stay competitive, as several other countries have much lower interest rates,” pointed out HKL Magu from the Apparel Export Promotion Council. As per industry calculations, under the new GST and drawback rules, reimbursements of taxes for the sector has dropped to the extent of 7 per cent (of the value of exports), whereas an additional incentive of 2 per cent was given to the sector in the foreign trade policy review in December. This resulted in a shortfall of 5 per cent, leading to a fall in exports, according to AEPC.

 Exports down

Export of garments and textiles fell 3 per cent in December 2017 to $2.99 billion, although in the April-December 2017 period it grew 2 per cent at $26.13 billion.

According to figures compiled by textile body CITI, India’s imports of garments from Bangladesh increased 66 per cent to $111.3 million during July-December 2017 compared to $66.9 million in the same period last year.

Source: Business Line

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Budget 2018: Lukewarm response to textile package

CHENNAI: The Tamil Nadu textile industry has reacted positively to the increase in budgetary allocation to the sector at Rs 7,140 crore but insists that concerns over pending funds under various schemes and erosion of pre-GST incentives still hurt the industry. Finance Minister Arun Jaitley in his Budget speech today allocated the sum for the industry comprising yarn spinners, fabric and garment manufacturers and exporters. Raja Shanmugam, President of Tirupur Exporters Association, the Western Tamil Nadu based cluster turning over tens of thousands of rupees in exports and domestic sales, said the Budget announcement was "not so pleasing" as it was a just bump up in allocations compared to the previous one. The expectation from the industry was that the Government will spell out reforms to compensate for duty drawback and sops under the Rebate on State Levies scheme (ROSL).

"Since the GST regime does not have these invisible sops, our competitiveness was hit. We hoped the finance Minister would touch upon the subject," he told ET from Tirupur. Entrepreneurs had got about 2.5% of duty refunds after a small change was effected to the MEIS and ROSL schemes recently, but the advantage was 5-6% of refunds under the VAT system. Prabhu Damodharan, Secretary for Indian Texpreneurs Federation, said there are still funds pending to roll into the industry under the technology upgradation and other schemes. "I welcome the announcement but I will wait for the blueprint of implementation to see if it something to celebrate."

Source: Economic Times

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Seeing export traction, Budget hikes provision for some schemes

Estimating a robust rise of 15 per cent in goods exports in 2017-18 — which could increase outbound shipments to an all time high of $316 billion — Finance Minister Arun Jaitley has increased allocations under the interest equalisation scheme (IES) and remission of state levies (ROSL) for exporters. While there are no announcements directly benefiting a specific sector, exporters are positive about the higher allocations for IES and ROSL in Budget 2018-19 and are hopeful that more members of the community would benefit from the schemes as the rate of compensation remains unchanged. “The increased allocation from Rs. 1,100 crore to Rs. 2,000 crore for the IES for the current year and Rs. 2,500 crore for 2018-19 would help the export sector as it gives cushion to include merchant exporters and services exporters,” said Ganesh Kumar Gupta, President, FIEO. Under the IES, exporters are provided bank loans at lower interest rates with the Centre compensating the banks for the difference in rates.

More allocation

Similarly, enhanced allocation for ROSL, which compensates exporters for State levies, from Rs. 1,555 crore to Rs. 1,855 crore for the current fiscal and Rs. 2,164 crore for the subsequent fiscal will not only help in clearing the backlog but could also be used to extend the benefit to carpets, handicrafts and fabrics and yarn exports, Gupta added. The imposition of 20 per cent export duty on graphite electrode has made engineering goods exporters unhappy. “It is not clear why 20 per cent export duty has been levied on graphite electrode. This is contrary to the policy of the government to give an impetus to exports. The emphasis should be on removal of inverted duty structure on the import side wherein the priority should be to have more duty on finished products while raw material should be subjected to the lowest duty structure,” said Ravi Sehgal, Chairman, EEPC. The extension of fixed term employment facility for all sectors is also expected to benefit exporters. “It will allow exporters to provide additional jobs as and when they get export orders particularly in sectors where the demand is seasonal in nature,” Gupta said. At the projected growth rate of 15 per cent, exports in 2017-18 would increase to $316.85 billion which is higher than the previous high of $314 billion in 2013-14. Last year, exports had increased by 5.17 per cent to $275.85 billion after two successive years of fall in outbound shipments.

Source: Business Line

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Global Textile Raw Material Price 2018-02-02

Item

Price

Unit

Fluctuation

Date

PSF

1452.65

USD/Ton

-0.27%

2/1/2018

VSF

2317.90

USD/Ton

0%

2/1/2018

ASF

2571.91

USD/Ton

0%

2/1/2018

Polyester POY

1381.21

USD/Ton

-0.23%

2/1/2018

Nylon FDY

3540.35

USD/Ton

0%

2/1/2018

40D Spandex

5794.74

USD/Ton

-1.35%

2/1/2018

Polyester DTY

3310.15

USD/Ton

0%

2/1/2018

Nylon POY

2810.05

USD/Ton

0%

2/1/2018

Acrylic Top 3D

1651.10

USD/Ton

0%

2/1/2018

Polyester FDY

3762.61

USD/Ton

0%

2/1/2018

Nylon DTY

6001.13

USD/Ton

0%

2/1/2018

Viscose Long Filament

1627.29

USD/Ton

0%

2/1/2018

30S Spun Rayon Yarn

3032.32

USD/Ton

0%

2/1/2018

32S Polyester Yarn

2213.11

USD/Ton

-0.07%

2/1/2018

45S T/C Yarn

3032.32

USD/Ton

0%

2/1/2018

40S Rayon Yarn

3159.32

USD/Ton

0%

2/1/2018

T/R Yarn 65/35 32S

2635.42

USD/Ton

0%

2/1/2018

45S Polyester Yarn

2365.52

USD/Ton

0%

2/1/2018

T/C Yarn 65/35 32S

2556.04

USD/Ton

0%

2/1/2018

10S Denim Fabric

1.48

USD/Meter

0%

2/1/2018

32S Twill Fabric

0.91

USD/Meter

0%

2/1/2018

40S Combed Poplin

1.27

USD/Meter

0%

2/1/2018

30S Rayon Fabric

0.71

USD/Meter

0.45%

2/1/2018

45S T/C Fabric

0.75

USD/Meter

0%

2/1/2018

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.15876 USD dtd. 2/1/2018). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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Lanka's apparel exports tops $ 4.81 bn in 2017

Minister of Industry and Commerce Rishad Bathiudeen visits a mini apparel factory supported by his Ministry in the Northern Province.  Sri Lanka’s 2017 apparel performance has matched the recent forecast made by the Minister of industry and Commerce-even exceeding the target. Apparel export revenue data issue by both Joint Apparel Association Forum (JAAF) and Sri Lanka Apparel Exporters Association (SLAEA) confirmed Minister Bathiudeen’s forecast. According to these latest data, the total Sri Lankan apparel exports for 2017 were US $ 4.818 billion (an increase of 3.06% from 2016’s $4.67 billionn). This is the highest annual export revenue to be recorded for Lankan apparels. Only for the month of December 2017, the exports were at $ 452 million –a 21% increase in comparison to 2016 December’s $374 million. Interestingly, December 2017 monthly exports too were the highest ever exports for any December. 45% of apparel exports in 2017 (at $ 2.163 billion) went to US while 42% (at $ 2.025 billion) headed to the EU. Year on Year exports to US showed a 2% increase in 2017 from 2016’s $2.121 billion. Still, YoY exports to EU surged by a larger 4.13% to $ 2.02 billlion in 2017, from 2016’s $1.944 billion.

Source: Daily News

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USA : Manufacturing grows again, but pace slows

WASHINGTON – American manufacturers expanded again last month, though more slowly than in December. The Institute for Supply Management, a trade group of purchasing managers, reported Thursday that its manufacturing index dipped to 59.1 in January from a revised 59.3 in December. But any reading above 50 signals growth, and U.S. factories have been expanding for 17 straight months. Among 18 manufacturing industries, 14 grew in January, led by textile mills and makers of fabricated metal products. Export orders grew faster, while manufacturers' new orders, production and hiring increased more slowly. Overall, American industry remains strong, thanks in large part to a pickup in global economic growth and a weakening dollar, which makes U.S. products less costly in foreign markets. The manufacturing report was one of several released Thursday reflecting the nation's economic state.

Construction

U.S. builders pushed construction spending up 0.7 percent in December to a record high, though it was the weakest performance since they began to emerge from the financial crisis, the Commerce Department reported. The upward spending marks the fifth consecutive monthly gain, with all major sectors showing modest increases. The December increase followed a 0.6 percent rise in November. It closed out a year in which construction spending rose 3.8 percent. While it was the sixth consecutive annual increase, it was the most meager since a decline in 2011, when companies were breaking free from recession. For December, spending on housing projects rose 0.5 percent while nonresidential construction was up a stronger 1.1 percent. Spending on government projects rose 0.3 percent as strength at the federal level offset a drop in state and local construction.

Worker output

U.S. productivity edged down at a 0.1 percent rate in the fourth quarter. It was the weakest showing in nearly two years and further evidence of the struggles the country is having boosting worker efficiency. The fourth quarter decline followed a much stronger 2.7 percent gain in the third quarter, the Labor Department reported. Labor costs increased at a 2 percent rate in the fourth quarter after two quarters of declines. For the year, productivity rose 1.2 percent, a rebound from a decline of 0.1 percent in 2016, which had been the first annual decline in 34 years. But the rebound still left the average productivity gain over the last decade at 1.2 percent, less than half the 2.6 percent average annual increases seen from 2000 to 2006.

Source : Journal Gazette

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Vietnamese garment companies increase competitiveness

Vietnamese garment companies increase competitiveness, Forestry, wood exports to top $9b, Steel sector set for 20% growth, Blockchain technology may open new era, Jewellers seek better loans for 2018. Vietnam earns billions of dollars from garment and textile exports every year. But in the domestic market, local enterprises are facing fierce competition from foreign rivals. In late 2017 many foreign clothing companies made inroads into the Vietnamese market heating up the competition with local fashion brands and garment manufacturers. After Zara, H&M opened stores in Hanoi and Ho Chi Minh City last September. With Mango and Topshop, they are the favorite brands in Vietnam. Nguyen Thi Tuyet who lives in Binh Thanh district, Ho Chi Minh city says “I like foreign brands with affordable prices. They aren’t more expensive than local ones but have good materials and good designs and are fashionable.” Vietnam’s famous clothing brands like An Phuoc, Viet Tien, and Garment 10 focus on trousers, T-shirts, and vests. Other product lines like dresses, sweaters, and pullovers are facing tough competition from foreign brands. Some Vietnamese companies have begun investing in this market segment. Than Duc Viet, Deputy General Director of Garment 10 Corporation said, "We focus 80% of our investment in main product line and 20% in fast fashion to increase our competitiveness and maintain our market share amidst young people’s preference for foreign clothing brands.” Vietnamese enterprises are urged to improve their capacity, focus on long-term investment, recruit competent fashion designers, and promote their products. Pham Xuan Hong, Chairman of the Ho Chi Minh City Association of Garment Textile Embroidery Knitting (AGTEK) says, "The Association plans to establish a Fashion Design Center in the hope of creating a breakthrough in fashion design in Vietnam.” Vietnam is becoming a promising market for foreign clothing makers. Vietnamese enterprises are advised to change their business strategies and adopt new trends in order not to be left behind in the fierce competition.

Source: VietNamNet.

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Crisis looms for Pakistan’s textile industry with cotton trucks stranded in Afghanistan

ISLAMABAD: Supply crisis looms large over Pakistan’s textile industry as over 150 trucks laden with cotton are collecting dust on Pak-Afghan border as they are not allowed to enter the country. The Ministry of National Food Security has refused to issue permission to the trucks containing cotton from Central Asian states to enter Pakistan, and instead instructed them to seek clearance from the Karachi port. Prime Minister Shahid Khaqan Abbasi had instructed the Economic Coordination Committee on January 5 to wave off duty on the import of cotton. However, a notification in this regard was withheld for several days reportedly on the behest of influential cotton growers, and now the trucks are being allowed permission inside Pakistan. Sources revealed that influential cotton hoarders have created an artificial shortage to raise the price of cotton. This can further aggravate the situation and create a crisis if the issue is not resolved within a few days. The textile industry is responsible for seventy percent of Pakistan’s exports, and provides employment to thousands of workers. The industry had witnessed increase in operational cost in 2017 due to the rising prices of gas and electricity. In recent days over thirty textile mills have stopped production, while more than hundred mills have been forced to close in recent years.  Experts say that the local textile industry, which is already facing immense difficulty competing in the region can be hit hard by cotton supply crisis if the issue is not resolved.

Source:  ARY News

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Better manmade fibers a growing challenge for cotton

Cotton faces increasing competition from manmade fibers that are better than they used to be Cotton Board . While global demand for cotton continues to pick up, the natural fiber still faces challenges from manmade fibers that are better than they used to be. Speaking to the annual meeting of the Southern Cotton Growers and Southeastern Cotton Ginners Association in Myrtle Beach, S.C. in January, Berrye Worsham, president and chief executive officer of Cotton Incorporated, said global use of cotton is expected to climb to more than 120 million bales this year, about the same level seen prior to the global recession a decade ago. Despite the gains, cotton still faces challenges in gaining market share versus manmade fibers. Worsham highlighted five shifts impacting cotton:

• Competitive fibers are better than they used to be. Polyester today isn’t what polyester was 20 years ago.

• Brands, retailers and consumers are more accepting of other fibers than in the past. This is particularly so for the millennial generation.

• Lighter weight fabrics are now required in multiple product categories.

• Performance features are required in a growing number of products, not just for active wear.

• Sustainability is increasing in importance.

“We all talk about polyester as being public enemy number one, but we have lost as much share to rayon as we have to polyester,” Worsham said. “Another issue that has hurt us is lighter weight fabrics in most product categories. As products are getting lighter, from jeansto tops, it means you need less fiber to make a particular product.” However, Worsham said Cotton Incorporated continues to work to rebuild demand and make cotton more competitive with synthetic fibers. Providing technical support to mills and manufacturers around the world and presenting new product ideas that use cotton are important. Cotton faces challenges from the growth of performance-related fabrics in a number of product categories, whether that is stretch characteristics or moisture management. Worsham said the performance trend is impacting all product categories, not just the active wear market.  Moreover, stronger consumer interest in lighter-weight fabrics is a problem for cotton. “We have to figure out how to make things today that perform but also are lighter weight, and that sometimes can be difficult for cotton versus synthetic fiber,” Worsham said. “In order for us to compete, we have to do one of three things: We have to engineer the fabrics in a way that has performance without any chemistry. We may have to integrate technologies or chemistry in some cases to get performance characteristics. We have to consider that we might have to blend cotton with other fibers, still keeping the product mostly cotton, but in some cases you need other fibers to have the performance that we need.”

Source:  Southeast Farm Press

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Why Apparel's Biggest Battle Pits Amazon Against Target, Not Walmart

Barely a week goes by without another analyst pinning a wild estimate on Amazon’s clothing and footwear sales. The truth is that no research firm knows how much apparel Amazon sells — but it’s certainly measured in the billions of dollars, and the figures are likely growing fast, making the company a significant threat to the largest incumbent apparel retailers. Our team's comprehensive new survey on Amazon fashion has uncovered an abundance of detail on who is buying fashion on Amazon and why, as well as which retailers those shoppers are switching their spending from. One major takeaway from our research is that, in apparel at least, the biggest battle does not appear to be Amazon versusWalmart, or Amazon versus department stores, but Amazon versus Target. A number of our survey findings point to Target being challenged by Amazon’s growth in fashion:  Confirming Amazon’s scale in apparel, our survey found that Amazon is neck and neck with Target as the second-most-popular clothing and footwear retailer in the US, as measured by number of shoppers. Only Walmart has more shoppers. When we asked Amazon clothing and footwear shoppers which retailers they had switched their apparel spending from, the number one answer was Target. That’s despite Walmart having a sizable lead over Target in terms of total apparel sales and shopper numbers. And it’s despite the fact that several major department store retailers have suffered from falling sales in recent years — a trend that many commentators have pinned on the rise of Amazon.  Moreover, when we asked Amazon apparel shoppers where else they buy clothing and footwear, more of them named Target than named major department stores and off-price retailers and a significantly larger number named Target than named Walmart. So, the data suggest a sizable shopper overlap between Target and Amazon, implying that Target could lose out as Amazon grabs further apparel sales.  Finally, Target apparel shoppers are more likely than apparel shoppers at most other major retailers to have an Amazon Prime membership — and our survey confirms that Prime membership drives shopping, including apparel shopping, at Amazon. Target’s financial reports suggest that its apparel sales have held up: In recent years, Target has consistently reported that clothing, accessories and footwear make up about 19% of its total sales. The retailer has also been strengthening its fashion offering; last fall, it unveiled four new apparel labels as part of a raft of 12 new private labels. It launched its limited-time Victoria Beckham For Target range last year, too. As Amazon continues to launch new private labels and grow sales in apparel, major established retailers will have to fight harder for consumers’ apparel dollars by offering greater newness, exclusivity and innovation. In addition, as these competitors seek to Amazon-proof their offerings, we may see more of them follow the path that Walmart took in 2017, when it acquired a suite of digital-first brands, including ShoeBuy, Moosejaw and ModCloth.

Source: Forbes

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