The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 06 JUNE, 2018

NATIONAL

INTERNATIONAL

Textile industry leaders meet Finance Minister over GST issues

SURAT: Leaders from the textile sector met Union finance minister Piyush Goyal and finance secretary Hasmukh Adhia to discuss the issues related to the Goods and Service Tax (GST) on Tuesday. A delegation led by Navsari MP C R Paatil, including textile industry leaders, met Goyal and put forth various demands related to the simplification of GST, refund of the Input Tax Credit (ITC) etc. Since November-2017, more than 1 lakh power loom machines have been sold in scrap and weavers have been forced to reduce the production of man-made fabric (MMF) by operating their units in the single shift of eight hours. The textile processors, yarn spinners and the embroidery units are allowed to claim ITC refund, but when it comes to weaving industry, there is a clear discrimination by the central government. According to power loom weavers, the average ITC refund amount per loom per year comes to around Rs 7,000. The city has 6 lakh power loom machines and total annual ITC refund amount is pegged at Rs 420 crore. Leader of the textile traders Sanjay Saraogi said, “We have put forth demands including the refund of ITC, simplification of ITC 04 form, intrastate e-way bill exemption, transporters filling wrong information under part-b of the GST and traders being penalized etc. Both Goyalji and Adhiaji heard us well and they have promised to resolve the issues.” President of South Gujarat Textile Processors Association (SGTPA) Jitu Vakharia said, “We met the finance secretary and urged him for the early payment of refund of ITC. The finance secretary has promised us to bring the issue in the next GST Council meeting.”

Source: Times of India

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India to ask US for renewal of GSP scheme

India will ask the United States for a fast renewal of the generalised system of preferences (GSP) scheme, which allows market access at zero or low duties for about 3,500 Indian products, including textiles and chemicals. The US Trade Representative’s (USTR) office did not renew the scheme for India in April, saying it wanted to hold an eligibility review. India’s commerce and industry minister Suresh Prabhu will visit Washington in June and is expected to point out that GSP extension should not tied up with India’s policy on pricing of medical devices or the dairy industry as the United States had been unilaterally offering the concession to help labour intensive sectors, according to a report in a top Indian business daily. Though the US Congress had voted to extend the GSP scheme through 2020, it was not done so for India, Indonesia and Kazakhstan. Petitions were filed by the US dairy and medical device industries highlighting trade barriers in India and requesting a review of India’s GSP benefits. The United States is reportedly unhappy with recent caps imposed by India on medical products such as stents and Prabhu may discuss that issue separately during his visit.

Source: Fibre2fashion http://www.fibre2fashion.com/news/textile-news/india-to-ask-us-for-renewal-of-gsp-scheme-242605-newsdetails.htm

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Indian minister asks industry to approach DGFT over dumping

Indian textiles minister Smriti Irani, who was recently on a day’s visit to Surat in Gujarat, reportedly avoided meeting textile industry representatives, saying her visit was for a party programme. She urged traders and power loom weavers to file a complaint with the Directorate General of Foreign Trade (DGFT) against dumping of imported fabric from China. The power loom weavers have been demanding the refund of input tax credit (ITC), which the central government has not agreed upon. Irani, however, failed to give a satisfactory answer to media persons when asked about the issue, according to a top Indian newspaper report. According to president of Federation of Gujarat Weavers’ Association (FOGWA) Ashok Jirawala, the power loom weaving industry is literally on the deathbed and only the refund of ITC will be able to rescue it. (DS)

Source: Fibre2fashion

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India, Chinese officials discuss trade issues

NEW DELHI: Senior officials from China and India today held deliberations on issues hampering negotiations of the proposed mega free trade deal- Regional Comprehensive Economic Partnership (RCEP). "The two-day meet concluded today. Both the sides discussed issues pertaining to goods and services sector in the RCEP," an official said.

In similar lines, officials from Australia too would be holding bilateral discussions next week here with their Indian counterparts. The pact, negotiations for which started in Cambodian capital Phnom Penh in November 2012, aims to cover goods, services, investments, economic and technical cooperation, competition and intellectual property rights. The RCEP bloc comprises 10 Asean members (Brunei, Cambodia, Indonesia, Malaysia, Myanmar, Singapore, Thailand, the Philippines, Laos and Vietnam) and their six FTA partners - India, China, Japan, South Korea, Australia and New Zealand. meeting was crucial as Indian industry and exporters are apprehensive about the presence of China in the grouping. They have stated that lowering or eliminating duties for China may flood Indian markets with Chinese goods.

Latest Comment

Indian concerns are real as dumping of Chinese goods may flood Indian markets. Indian industries will have to cut costs if they are to compete with China . Also fear of Chinese electronic especially. India's trade deficit with China stood at USD 63.12 billion in 2017-18. India wants certain deviations for such countries. Under deviations, India may propose a longer duration for either reduction or elimination of import duties for such countries.

 

Source: Business Standard

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Govt unable to crack GST e-wallet code as export refunds remain unpaid

Even as exporters and the government continue to argue over the amount of unpaid refunds under the goods and services tax (GST) regime, the much-awaited e-wallet mechanism remains a non-starter. Traders had supported the e-wallet mechanism to battle the liquidity crunch that had set in after the GST was introduced. Subsequently, a decision to adopt it was taken at the 22nd GST Council meet on October 6 last year, with an initial deadline for April 1. However, after the deadline was missed, the government extended the roll-out by six months. Earlier this year, Business Standard was the first to point out that little progress would derail the April 1 deadline. More than two months later, despite multiple meetings between top officials of the Ministries of Commerce and Finance, the progress was slow, sources said. “We still have enough time before the tentative deadline of October, but work is still pending. A workable model of an online transaction platform is yet to be created. Once that is done, the beta model of the software will have to be tasted in keeping with government regulations on a live platform and that is expected to take some time,” a senior Commerce Ministry official said. However, procedural glitches arising from converging online operations with offline realities of documentation and background checks would still be left to weed out, he added. According to sources, Commerce and Industry Minister Suresh Prabhu backs the e-wallet idea and had been instrumental in convincing the Finance Ministry on having a tax refund mechanism for exporters. But back in March, Prabhu had hinted that the proposal was stuck in North Block. “We are still assessing key aspects of the wallet, especially with regard to digital security,” a revenue department official said. He added a final nod was expected once Arun Jaitley was back at the Finance Ministry after recuperation.

Alternative measures not working

To offset pressure on exporters, the GST Council had in March also extended the tax exemptions on imported goods for six more months beyond March 31. But exporters say the move hasn’t helped much. Exporters were earlier allowed duty-free imports of goods used for making products for export. With the GST, they have to first pay the duty and later apply for a refund. As a result, their costs have risen by up to 1.25 per cent (freight on board value) since July 1 last year. While industry estimates peg the amount of unpaid refunds as of June 1 at Rs 200 billion, the government has said the figure is Rs 140 billion. “It should be noted that Rs 140 billion is what has been filed, but they are not taking into account what exporters are not being able to file unless the government modifies its software,” Federation of Indian Export Organisations (Fieo) Director General Ajay Sahai said. Fieo batted for the idea whereby, based on the preceding year’s exports and an average GST rate, the notional currency would be credited to exporters’ accounts by the Directorate General of Foreign Trade. “Like a running account, money may be debited from the e-wallet when duty-paid supplies have to be undertaken and the amount may be credited when the proof of export is made available from Indian Customs Electronic Commerce/Electronic Data interchange (EC/EDI) Gateway (ICEGATE),” Fieo had told the finance ministry.

Source: Business Standard

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Why States are reluctant to cut VAT on auto fuels

New Delhi : Petrol price was cut by 13 paise a litre and diesel by 9 paise a litre on Tuesday in line with the softening of international crude oil and product prices. Over the last week, public sector oil retailers reduced fuel prices by almost 60 paise a litre on petrol and 43 paise a litre on diesel. The prices varied from State-to-State depending on local taxes and levies. Petrol is being sold at ₹77.83 a litre, while diesel retails at ₹68.88 a litre in the Capital. Consumers, however, have not got any relief largely because of the high tax rates levied on auto fuel by both the Centre and State governments that account for almost half the sale price. The Centre rakes in ₹19.48 for every litre of petrol sold and ₹15.33 for every litre of diesel sold in the country. On May 30, consumers in Kerala got a partial respite with the State government implementing a Value Added Tax waiver of ₹1 a litre on both petrol and diesel. The Centre would want other States to follow suit and ease the pressure on prices and in the long run bring it under the Goods and Services Tax regime. However, this is not likely to happen, according to former Petroleum Secretary, SC Tripathi. “Who would like to let go of free revenues. Even if I was there I would have done the same — not let go. The States or the Centre would not like to let go of the easy revenues accrued through the taxes on auto fuels.” States such as Maharashtra have the highest prices for auto fuel with diesel sold at ₹73.33 a litre and petrol at ₹85.65 a litre in Mumbai, primarily driven by high State levies in the form of VAT.

Source: Business Line

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India services PMI contracts in May; falls to 3-month low

India’s services sector activity contracted for the first time in three months in May as new business orders stagnated and cost pressures intensified amid higher fuel prices, said a monthly survey. The seasonally adjusted Nikkei India Services Business Activity Index fell to 49.6 in May from 51.4 in April, indicating a marginal contraction in business activity, following a two-month period of growth. The index had last slipped below the 50-point mark, that separates expansion from contraction, in February. “The performance of the service sector was disappointing in May, as output dipped into contraction for the first time in three months,” said Aashna Dodhia, Economist at IHS Markit, and author of the report. As per the survey, competitive demand conditions and a broad stagnation in new orders were the key factors behind a decline in output across the service sector in May. “India saw the slowest improvement in the health of the overall economy since February in May, whilst the latest survey showed the effects of higher global oil prices as the private sector recorded the most marked input cost inflation for three months,” Dodhia added. On the employment front, the slowdown in service activity fed into the labour market, as jobs growth moderated from April’s seven-year high. The headline seasonally adjusted Nikkei India Composite PMI Output Index -- that maps both the manufacturing and the services sector -- fell from 51.9 in April to 50.4 in May. Meanwhile, speculation is rife that the RBI’s Monetary Policy Committee (MPC) may hike the key interest rate for the first time in over four years. The policy review meeting of the six-member MPC, headed by Reserve Bank of India (RBI) Governor Urjit Patel, is currently underway with the decision to be announced on Wednesday. In its first bi-monthly monetary policy for 2018-19 in April, the RBI had left the repo rate unchanged at 6 per cent. The MPC maintained status quo for the fourth consecutive time since August last year.

Source: Business Line

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Big boost to PM Modi: Indian economy to advance 7.3% in 2018-19, fastest-growing in globe, says World Bank

India is projected to regain its position as the world’s fastest-growing major economy advancing 7.3 per cent this fiscal year and 7.5 per cent in the next two “as factors holding back growth in India fade”, according to the World Bank forecasts. The growth projections reflect “robust private consumption and strengthening investment,” the bank’s Global Economics Prospects report released on Tuesday said. “India’s GDP growth bottomed out in the middle of 2017 after slowing for five consecutive quarters, and has since improved significantly, with momentum carrying over into 2018 on the back of a recovery in investment,” the report said. India has overcome the temporary disruptions caused by the implementation of the Goods and Services Tax (GST) by mid-2017, and manufacturing output and industrial production have continued to firm, it added. Per capita growth rates “are strong” and are expected to help bring down poverty in coming years, it said. The World Bank forecasts are slightly lower than two other projections by international bodies published in April and May. In May the UN projected a growth rate of 7.5 per cent for 2018 and 7.6 per cent for 2019, while in April the International Monetary Fund forecast 7.4 per cent for 2018 and 7.8 per cent for 2019. The bank said that in India there has been a further deterioration in trade and current account balances because of accelerating import grown amid strengthening domestic demand and higher energy prices. The global economic picture painted by the bank is not as rosy as it is for India. “After reaching 3.1 per cent in both 2017 and 2018, global growth is expected to moderate over the next two years as global slack dissipates, major central banks gradually remove policy accommodation, and the recovery in commodity exporters matures,” the report said. It expected the global growth rate to go down to three per cent in 2019 and 2.9 in 2020.

Source: Financial Express

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Global Textile Raw Material Price 2018-06-05

Item

Price

Unit

Fluctuation

Date

PSF

1384.66

USD/Ton

0.34%

6/5/2018

VSF

2276.58

USD/Ton

0.34%

6/5/2018

ASF

3071.82

USD/Ton

0%

6/5/2018

Polyester POY

1387.78

USD/Ton

0.28%

6/5/2018

Nylon FDY

3555.20

USD/Ton

0.88%

6/5/2018

40D Spandex

5535.52

USD/Ton

0%

6/5/2018

Nylon POY

5894.15

USD/Ton

0%

6/5/2018

Acrylic Top 3D

1668.45

USD/Ton

0%

6/5/2018

Polyester FDY

3212.16

USD/Ton

0%

6/5/2018

Nylon DTY

3196.57

USD/Ton

0%

6/5/2018

Viscose Long Filament

1645.06

USD/Ton

0%

6/5/2018

Polyester DTY

3679.95

USD/Ton

0%

6/5/2018

30S Spun Rayon Yarn

3025.04

USD/Ton

0.26%

6/5/2018

32S Polyester Yarn

2245.39

USD/Ton

0%

6/5/2018

45S T/C Yarn

3071.82

USD/Ton

0%

6/5/2018

40S Rayon Yarn

3180.97

USD/Ton

0%

6/5/2018

T/R Yarn 65/35 32S

2666.40

USD/Ton

0%

6/5/2018

45S Polyester Yarn

2338.95

USD/Ton

0%

6/5/2018

T/C Yarn 65/35 32S

2604.03

USD/Ton

0%

6/5/2018

10S Denim Fabric

1.46

USD/Meter

0%

6/5/2018

32S Twill Fabric

0.90

USD/Meter

0%

6/5/2018

40S Combed Poplin

1.25

USD/Meter

0%

6/5/2018

30S Rayon Fabric

0.71

USD/Meter

0%

6/5/2018

45S T/C Fabric

0.74

USD/Meter

0.21%

6/5/2018

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.15593 USD dtd. 5/6/2018). 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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US emerges as top export destination for India

The US has emerged as the top export destination for India, with USD 47.9 billion worth of shipments last fiscal, followed by UAE and Hong Kong, as per the commerce ministry data. “USA was India’s top export market during April-March 2018 with exports reaching USD 47.9 billion, followed by UAE (USD 28.1 billion) and Hong Kong (USD 14.7 billion),” the department of commerce said in a series of tweets. In 2016-17, the country’s shipments to America stood at USD 42.2 billion. The other key destinations include China, Singapore, UK, Germany, Bangladesh, Vietnam and Nepal. The top ten exporting products last fiscal included petroleum; pearls, precious, semiprecious stones; pharmaceuticals; engineering goods; chemicals; textiles and rice. According to trade experts, the US would always be the main export destination for domestic exporters as it accounts for about 16 per cent of India’s total merchandise shipments. “It is a very big market for us as the US is largest economy in the world. We need to give special focus on this market as it is going to be an important destination for our exports,” Professor at Indian Institute of Foreign Trade (IIFT) Rakesh Mohan Joshi said. Federation of Indian Export Organisations (FIEO) Direct General Ajay Sahai said that the US, being the biggest consumer, is extremely important for sectors such as apparels and made ups, leather footwear, pharma and engineering.

Source: Business Starndard

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US unemployment rate is now lowest since April 2000

The unemployment rate in the US has reached its lowest since April 2000, as many industries including retail continue to hire. According to the National Retail Federation, the retail industry employment was up by 28,800 jobs seasonally adjusted in May over April and 100,200 jobs unadjusted year-over-year. Overall, US businesses added 223,000 jobs in May. “May’s rebound in jobs together with the report of solid income growth and the rise in consumer confidence points to the economy functioning very well,” NRF chief economist Jack Kleinhenz said. “Solid fundamentals in the job market are encouraging for retail spending, as employment gains generate additional income for consumers and consequently increase spending.” “With the unemployment rate of 3.8 percent at its lowest since April 2000, shows that many industries including retail are hiring and creating jobs at a steady pace. We expect this rate to continue to decline as the fiscal stimulus and tax cuts are further absorbed in the economy,” Kleinhenz said. May’s numbers followed an upwardly revised combined increase of 19,300 jobs for March and April. The three-month moving average in May showed an increase of 19,000 jobs, NRF said in a press release. Retail registered monthly gains nearly in all segments with the most robust increases concentrated in three sectors: general merchandise stores, which were up 13,400; clothing and clothing accessory stores, up 6,500; and building and garden supplies, up 6,000. Losses were concentrated in two sectors: health and personal care stores, down 800 jobs; and non-store which includes online, down 1,100 jobs. Economy-wide, average hourly earnings in May increased by 8 cents – 2.7 per cent – year-over-year. Kleinhenz noted that retail job numbers reported by the department of labour do not provide an accurate picture of the industry because they count only employees who work in stores while excluding retail workers in other parts of the business such as corporate headquarters, distribution centres, call centres and innovation labs. The labour department numbers also exclude automobile dealers, gasoline stations and restaurants.  The study cautioned that imposing tariffs on an additional $100 billion of Chinese imports would come at a significant cost to the US economy, destroying 455,000 jobs each year and reducing GDP by $49 billion. (DS)

Source: Fibre2Fashion

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NRF upset as US plans to apply tariffs on Chinese imports

The National Retail Federation (NRF) has expressed disappointment over US plans to move ahead with tariffs on $50 billion worth Chinese imports that will lead to higher costs for US consumers, fewer jobs and retaliation. Job-killing tariffs aren’t the answer to China’s worrisome trade practices, NRF president and CEO Matthew Shay said in a statement. “As the US and China prepare for another round of negotiations, we hope the administration has clearly defined objectives and concrete solutions to resolve this trade dispute without tariffs. The lack of clarity surrounding the administration’s plans is creating significant uncertainty for American businesses, disrupting supply chains and threatening to undermine the economic gains we’ve seen over the past year,” said Shay. On March 22, US President Donald Trump signed a memorandum announcing that the United States would take multiple steps to protect domestic technology and intellectual property from certain discriminatory and burdensome trade practices by China. These actions were announced following a report of the Office of the US Trade Representative (USTR) regarding China’s practices with respect to technology transfer, intellectual property, and innovation. A recent study by NRF and the Consumer Technology Association found tariffs on $50 billion of Chinese imports, coupled with retaliation promised by China, would reduce US gross domestic product (GDP) by nearly $3 billion and destroy 134,000 American jobs.

Source: Fibre2fashion

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Trump slams China Canada and Mexico for unfair trade practices

WASHINGTON : US President Donald Trump has slammed China and America’s two neighbours - Canada and Mexico - for unfair trade practices which he said is unacceptable. “Farmers have not been doing well for 15 years. Mexico Canada China and others have treated them unfairly” Trump tweeted as he assured his country to change this dynamic through his ongoing trade deals. “By the time I finish trade talks that will change. Big trade barriers against US farmers and other businesses will finally be broken. Massive trade deficits no longer!” he said. The US and China have held trade talks to deescalate tensions between the two sides. The world’s two largest economies have been at loggerheads over trade and industrial practices for months with the talks under way in the Chinese capital - the third formal round of negotiations. The discussions are intended to ease tensions after Washington said it would follow through with tariffs on Chinese imports despite a truce reached between the two sides in the US last month. “The US has made such bad trade deals over so many years that we can only WIN!” Trump said.

Source: Tecoya Trend

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Karl Mayer supports Indian textiles industry

In 2015, India ordered more machines than ever before from Karl Mayer, which made it one of the company’s three most important sales regions. Business is taking off again after rather muted demand over the last two years. “India has a population of about 1.3 billion, who all need clothes,” said Mark Smith, Karl Mayer’s Sales Manager. According to Mr Smith, Karl Mayer is in an ideal position to support growth in the country. In addition to offering high-speed machines, Karl Mayer also offers its Indian customers expertise in warp knitting. Last month, the company participated as a speaker in the symposia entitled German Technology meets Indian Textiles and Nonwovens, held by the German Engineering Federation (VDMA) in Mumbai. Karl Mayer also regularly organises its own Tricot Circle events there. Indian textile specialists were once again invited to gather inspiration for new ideas from the latest developments in warp knitting on 17 May in Daman and on 18 May in Amritsar.

Innovations from Germany

The VDMA Symposium in India included 36 application-oriented papers presented by more than 30 well-known companies. Karl Mayer was showing its Terry.Eco concept for warp knitting. This system for the ecological and economical production of terry goods went down well with the visitors. There were about 100 delegates in the auditorium, including many representatives from weaving companies. “The feedback was much better than we expected. Many questions were asked, which showed that weavers have understood the advantages of warp knitting for producing terry goods and are now getting to grips with the possibilities,” said Mark Smith, a speaker from Karl Mayer.

Know-how for tricot customers

The third Tricot Circle held by Karl Mayer was well attended by just under 135 delegates. The focal topics of the event were the possibilities offered by high-speed tricot machines for designing a wide variety of apparel fabrics and for producing terry goods. Many warp knitting companies in India are concentrating on producing embroidery grounds and simple fabrics for saris. However, the HKS 4-M EL can do so much more than that, as Klaus Schulze showed in his lecture. This specialist in textile product development at Karl Mayer demonstrated various transparent fabrics featuring different mesh patterns in the ground and superimposed geometric designs produced by the versatile HKS model. Possible ground constructions include classic tricot types, such as honeycomb, diamond and atlas mesh construction. Atlas and filet tulle grounds featuring integrated diamond patterns with the look of raschel-knitted fabrics can also be worked. The delegates listened very intently to what was being said and asked many technical questions. “The patterning possibilities of the four-bar HKS machine will make it popular in India,” said Mark Smith. A new collection of designs produced on the HKS 3-M also attracted a great deal of attention. The lightweight, voile-like fabrics are particularly eye-catching, thanks to their fine, transparent ground and dense, striped pattern blocks, and gave the visitors ideas on how to use the potential of their machines even more effectively.

Other highlights

As another highlight, Klaus Schulze demonstrated the possibilities of producing warp-knitted terry fabrics. The TM 4-TS EL is particularly interesting for India. The delegates were also interested in a paper describing a beach towel made from a double-face fabric with a cotton side for drying and a side made from polyester microfibres with cut-open loops and a colour-printed design for lying on. Other topics also generated great deal of interest and raised many questions, including innovative textile products manufactured on the HKS machine range for the athleisure sector, intelligently designed, stylish RSJ fabrics for sportswear and leisurewear, and Karl Mayer’s Virtual Showroom.

Source: Knitting Industry

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