Commerce and Industry Minister Suresh Prabhu has sought suggestions from exporters on formulating a strategy for increasing exports by $100 billion in the next few years. The Minister, in an interaction with exporters to discuss opportunities and concern, said export performance was encouraging last year, with goods exports crossing $300 billion and registering a growth of 10 per cent, while the year before, growth was 5 per cent. Exporters body FIEO, in its strategy paper for export growth presented at the event, focussed on 685 products. FIEO projected 124 products as champion products, which could provide additional exports worth $46 billion and 54 products which could lead to an additional export of $32 billion. The strategy also covers 197 products, where India is losing its market share and thus requires a market retention strategy, which could provide additional exports of $16 billion. The interactive session raised the concerns of the exporters with regard to increasing protectionism, currency volatility, sanction on Iran & Russia, banking challenges, high cost of credit, liquidity crunch, marketing and branding support. Exporters also discussed their apprehensions related to review of GSP regime by the US, banks adopting a rigid approach in disbursement of credit and liquidity challenges that would continue to exist until GST refund process is made fully automatic with minimum human interaction. Prabhu assured exporters that the government is fully seized of their concerns and is addressing them in the best interests of the country. He said their suggestions will be incorporated in the comprehensive export strategy to be finalised soon.
Source: The Hindu Business Line
The rise in cotton MSP may be good news for farmers, but raises concerns for the consuming industry, considering that the base price of the white fibre will go up in the next cotton year. “Cotton acreage is bound to go up by 10-15 per cent in the next season,” an industry source opined.
Prices may rise
J Thulasidharan, President of the Indian Cotton Federation (ICF), said the price of kapas (raw cotton) today was equal or more than the estimated revised MSP. “During the coming season, the impact (on cotton prices) is expected to be marginal. However, due to the rise in the price of other oilseeds, a corresponding increase in cottonseed prices cannot be ruled out,” he said. An industry source sowing in Maharashtra and Gujarat was not in full swing as yet, while it was almost over in Telangana. “The industry has been expecting this announcement. In fact, we have been advising our members to import cotton at least for two months. This was not after hearing the rise in cotton MSP, well before this development,” said Prabhu Damodharan, Secretary, Indian Texpreneurs Federation. Traders are sure that the rise in cotton MSP will eventually result in a higher average price for the current 2018-19 season, which is likely to near ₹47,000 per candy ( of 356 kg). Arun Dalal, a cotton expert in Ahmedabad, noted that cotton prices have been on the rise due to multiple factors including export demand. “Last year, the average price for cotton hovered at ₹41-42,000 per candy, which was ₹39-41,000 in the previous year. This year, in 2018-19, we expect prices to make new highs and will maintain that level,” he added. A leading exporter from Ahmedabad informed that with stocks lying with the traders, prices may be jacked up. Possibly there may be a break in supply for a short duration as they wait for prices to go up. “Those having cotton stocks will wait for the good prices now as the sentiment is upbeat about cotton prices. There is no possibility of sharp downside in the prices as our prices are competitive in the international market giving us an edge over the US cotton for Chinese market,” said a senior official of a leading cotton exporting company. International cotton prices hover around 83-84 cents on the ICE futures.
Source: The Hindu BusinessLine
The Centre has loosened its purse strings to please farmers. The increase in MSP for Kharif crops is, however, largely in line with our expectations. In the BusinessLine article ‘Why MSP at cost plus 50 is no big deal’ dated April 22, 2018, it was indicated that a few crops such as jowar, ragi, sunflower seed, sesamum and nigerseed, where the MSP was just enough to cover cost, were likely to see a significant increase in the support price once the procurement price was hiked to give 50 per cent return on the cost of production. On Wednesday, the Cabinet announced an increase of 30-50 per cent in MSP for these crops. However, it was a surprise that some crops where the MSP was already 1.5 times or more relative to cost have also seen MSP go up, indicating that the cost of production has been reworked. These include bajra, arhar and urad. The MSP in bajra last year, at ₹1,425/quintal, was already 1.5 times the cost (₹949/quintal). But now the MSP is jacked up to ₹1,950. If they had assumed a 5 per cent increase in cost of cultivation of bajra, the cost would have risen to ₹997. At 1.5 times the cost, the MSP should have been ₹1,495, much lower than what was announced. It needs to be noted that the Commission for Agricultural Costs & Prices (CACP)’s recommendation on MSP as approved by the Cabinet is based on ‘A2+FL’ costs that includes expenses on farm inputs — such as seeds, fertilisers, fuel and irrigation — and imputed value of Family Labour. The ‘C2’ costs which includes imputed rent and interest on owned land and capital has not been used for arriving at the MSP this year. While higher MSPs are good news for farmers, it can add to their income only if the government is able to enforce it. Currently, though the MSP is announced for over 20 crops, procurement is effective in just two — paddy and wheat. In most crops, procurement is either absent or very minimal. In 2016-17, Kharif procurement in groundnut by the National Agricultural Cooperative Marketing Federation of India was 1.8 lakh tonnes, versus the season’s production of 60.5 lakh tonnes. Sunflower, procurement stood at 4,249 tonnes against the Kharif season production of 98,000 tonnes. In soyabean, it was practically nil. The three crops which have seen the maximum increase in MSP this year — ragi, nigerseed and jowar — don’t see any central procurement. However, two crops where the higher MSP will make a difference is paddy and cotton. In rice, about 40 per cent of the produce is procured from farmers by FCI and other central agencies, every year. In cotton too, farmers may stand to benefit given the CAI (Cotton Association of India) plays a relatively more effective role in procurement. The MSP announced is ₹5,150/quintal, up 28 per cent over last year. As of the latest sowing report, cotton sowing has been done on 32.2 lakh hectares (versus last year’s 46.1 lakh hectare). Many farmers in Maharashtra and Gujarat are still awaiting more rounds of rainfall to start sowing. These farmers may now sow more cotton. In case of other crops, however, without an effective procurement mechanism, MSP hike will only stoke retail inflation without the farmers’ actually benefiting, say farm activists.
Source: The Hindu Business Line
HYDERABAD: While several districts in Telangana witnessed scattered rainfall, the absence of widespread rainfall has affected crop sowing operations. "Following the IMD prediction of 97% rainfall, many farmers went ahead with sowing. But now the long, dry spell has damaged cultivation on thousands of acres as the seeds did not germinate. It's a huge loss for farmers, especially those who sowed cotton by spending almost 1,000 to 2,000 per acre on seeds alone," said Kiran Vissa, founder and state committee member, Rythu Swarajya Vedika, a farmer's organization. He said many farmers are now waiting for the next round of heavy rainfall to plan sowing again. Agricultural scientists warn that if the dry spell continues, it will affect yields in a big way. "Delay in sowing will also impact the yields. If widespread rains do not occur even after July 15-20, lesser area will be sowed, leading to a drop in production. In Telangana and Andhra Pradesh, farmers sowing cotton and maize will be highly affected. Paddy production will also be reduced as delayed inflow of water from the Godavari basin will affect the paddy yield," said Aldas Janaiah, an agricultural scientist.
Source: Times of India
Expect a 30-35bps hike in FY19 inflation and a hit in rice- and cotton-based exports as Indian prices rise above global ones. In the past, hiking MSPs really helped farmers in only a few states like Punjab, Haryana, Madhya Pradesh and Chhattisgarh and, in the rest, prices of most crops remained far below the announced MSPs. (Reuters) Thanks to agri-GDP rising just 2.4% per annum in the NDA’s first four years versus 5.2% in the UPA’s last four years, and the lack of progress in reforming agriculture markets—to allow farmers to get a higher share of retail prices—the government was left with pretty much no option except to resort to a dramatic hike in minimum support prices (MSPs); more so since we’re in the run-up to the 2019 general elections. The hikes envisaged range from a high 12.9% for rice to 28.1% in the case of cotton and 52.5% in the case of ragi. The exact impact is difficult to judge as it depends upon how effective the MSPs are. In the past, hiking MSPs really helped farmers in only a few states like Punjab, Haryana, Madhya Pradesh and Chhattisgarh and, in the rest, prices of most crops remained far below the announced MSPs. This time around, the government has promised things will be different. It is true that the second part of the MSP plan, where the government has promised it will pay the difference between market prices and MSP if it cannot procure, has not yet been announced because funding it is very expensive and the system can also be gamed in a big way—FE estimates it can cost Rs 175,000 crore if market prices fall by 20% below the MSP and Rs 260,000 crore if the prices fall by 30%. But, even without this, the government has promised it will try and procure a lot more than last year. Assuming the government is able to keep its promise, economists are penciling in a 60-70 bps hike in CPI inflation, or around half that in FY19, given it will come into play after half the year is over. With other pressure points like oil and a weak rupee, that is worrying as RBI will keep hiking rates if inflation looks like it is out of control. Depending on how soon the MSP-based deficiency plan is put in place, there will also be an impact on the fiscal deficit, unless the government is able to compress other spending. More worrying, however, is the impact this will have on India’s exports and people employed in the sector. The biggest problem area is cotton where, after the MSP hike, Indian prices will be 24-25% higher than global ones. Given that two-thirds of all fibre used in India, for local use as well as exports, is cotton, this will impact not just exports of cotton fibre but also cotton-based textiles and readymade garments—how much is difficult to say, but FY18 exports of these items were over $19 billion. In the case of rice, the 12.9% hike in MSPs also makes Indian rice a bit more expensive than that from Vietnam, so some part of the $7.8 billon FY18 exports will take a hit. It is for this reason that, apart from cajoling BJP-ruled states to work on reforming agriculture markets, the government would do well to consider extending unconditional cash transfers to farmers. This will cost about the same as a deficiency-payments system but, unlike that, will not distort prices; in other words, it will be less inflationary and won’t affect exports. But, since the scheme will make payments to land-owners rather than tenant-farmers, its political impact will be less. With less than a year to go before the elections, though, political impact is probably more on the government’s mind than economic rationale.
Source: Financial Express
Surat: Textile traders and powerloom weavers in the country’s largest man-made fabric (MMF) hub are upset following the statement made by Union finance secretary Hasmukh Adhia criticizing the Surat traders for not willing to come under GST tax net to avoid reporting correct turnover. A message by the city’s textile groups countering and criticising Adhia for his statement has gone viral. The textile groups have said that the various associations have visited New Delhi on numerous occasions, not with the plea to remove GST from textile trade, but to simplify the process and allow refund of input tax credit (ITC) to the powerloom sector. The messages reads, “We would want the finance secretary to kindly tell the nation, how many times in last one year did he visit Surat and how much time did he spend with the representatives of the textile trade. Ever since the implementation of GST, every businessmen from yarn to garment chain is in suffering.” Talking to TOI, leader of powerloom sector, Ashish Gujarati said, “We want that our elected representatives in the parliament should form a fact-finding committee and study the ground realities in the textile sector. A report should be submitted to the government for corrective action. The statement made by the finance secretary is highly insensitive and objectionable for the textile industry.” The message that has gone viral on social media noted that every association has made numerous representations independently, as well as collectively, before the ministers as well as before Hasmukh Adhia, and nowhere has it been demanded that the textile traders do not want to come under the tax net. It must be noted that the report of advisory committee on GST was submitted in the first week of December 2017, but till date no action has been taken. The trade had hope that after an year though, their hardships and problem will be addressed but unfortunately they are rewarded with such an insensitive statement of the Finance secretary, said the viral message.
Source: Times News Network
New Delhi : A final view on the Reverse Charge Mechanism (RCM) and GST discount on digital payment is expected to be taken on July 8 at the meeting of the Group of States’ Finance Ministers. If finalised, these recommendations will be discussed during the 28th Meeting of the GST Council scheduled on July 21. The Group, headed by the Deputy Chief Minister and Finance Minister of Bihar, Sushil Kumar Modi, has Finance Minister of Punjab, Manpreet Singh Badal, Finance Minister of Kerala, Thomas Issac, and Finace Minister of West Bengal, Amit Mitra as members. The group met in April on RCM and May on GST discount, but could not arrive at a consensus. Now, there is an expectation that the Sunday meeting of GoM will give a concrete proposal on both the issues for the GST Council. Reverse charge is a mechanism where the buyer of the good or service will have to pay GST, which is otherwise paid by the seller. The charge is applicable on a registered dealer, if he buys goods from a dealer not registered under GST. However, the receiver of the good is eligible for input tax credit, while the unregistered dealer is not. The scheme may look simple, but generated enough debate leading to the GST Council in its 22nd meeting held on October 6 to defer it till March 31, 2018. It was also decided that the scheme would be reviewed by a committee of experts. Date for suspension has been extended twice and now the new date is September 30. “There are divergent views (on RCM). No doubt, there is need to ensure level playing field for registered players, but there is a need to see that compliance cost for small businesses does not increase,” a senior government official told BusinessLine. The important issue here is tax incidence under RCM on asseessees under composite scheme and non-composite scheme. While traders or dealer under composite scheme have to pay GST at the rate of one per cent only, it is higher for non-composite registered. There is a need to find a balance, he added. When RCM was deferred for the first time last October, it was said that this will benefit small businesses and substantially reduce compliance costs.
Sop for Digital Payment
The GoM will also discuss GST discount for digital payment. Although, there is no consensus among States and it is unlikely that this will go through, still the group has to formally submit recommendations accepting or rejecting the proposal to the GST Council. There is feeling that the proposal is expected to benefit only those who are already doing digital transaction. Also, incentive is not much to encourage people to use digital means. Another problem is that with differential rates, there will be a need to redesign the system which is again a tedious job.
Ceiling per transaction
The proposal talks about providing “a concession of 2 per cent in GST rate on Business to Consumer supplies, for which payment is made through digital mode [one per cent each from applicable CGST and SGST rates, if the applicable GST rate is 3 per cent or more] subject to a ceiling of ₹100 a transaction.” The scheme, however, would not be available to registered persons paying tax under the composition scheme.
Source: Business Line
As the global situation turns precarious with high uncertainty about world trade besides rising oil prices, tighter financial conditions and retreating portfolio capital from emerging markets, the rupee stands out as one of the most vulnerable currencies. RBI has expended close to $19 billion to stave off downward pressures in the year-to-date, but still ended up with an almost 8% fall in the rupee’s value against the dollar. Estimates of `70-71 to the dollar are doing the rounds, while analysts debate over the likely measures authorities might take to bridge the external financing shortfall for a widening current account and short-term liabilities due later in the year. However, even as policymakers may find ways to bridge the gaps, the rupee will continue to drift down the weak street. This is because of structural weakening of each component of the current account, including long-term solid supports such as software exports and foreign remittances—a development particular to the current decade. The accompanying graphic presents a long profile of net current account receipts or key exports, with the coloured rows showing the decade averages. First, consider the mainstays—software exports and remittances—that had continuously offset deficits in the merchandise trade balance in the decade to FY12. India, then, benefitted from secularly strong growth in these components, with a respective average of 24.4% and 16.3% each year. But, software export growth has dropped to just one-eighth of that figure in the current decade, or at a 3% annual average, affected by structural shifts in key export markets and the inability of domestic industry to move up the value chain. Remittances, the other current account pillar outside the goods’ trade, have fared even worse. Growth over 2012-2017 all but disappeared, with it growing at an average of 0.1% annually. There has been a shift to far lower levels here as well, and that is not hidden by the 11.3% growth in FY18 which came on top of two steep, yearly declines. A significant chunk comes from Gulf countries, so remittances do move with oil prices. However, remittances from this region had slowed even before oil prices plunged in FY15. While some cyclical recovery could be expected with recent recovery in oil prices, remittances from advanced economies could fall structurally following more visa restrictions for onshore workers and their spouses. It is clear that both these components are plateauing out. The fundamental weakening of these two columns of the current account adds to the longer deterioration of the merchandise trade balance—a story known all too well and an aggravating situation that India has been unable to address no matter where global demand may be. But, now, with eroding support of software exports and remittances, a more strained current account deficit needs to be balanced by improvements in the trade balance alone! What are the prospects for that? Merchandise export trends are discouraging: traditional exports such as textiles and gems & jewellery are slowing down despite numerous measures to address supply-side constraints, such as better infrastructure, more flexible labour regulations, GST and so on. Why is that? Can newer or dynamic sectors, such as engineering goods and chemicals offset the losses from the decline in conventional exports? What are the respective elasticities regarding foreign demand and real exchange rate changes? Consider the situation from a traditional-dynamic exports perspective. The traditional exports component aggregates all textile categories, gems and jewellery, leather and leather products, ceramic products and glassware, jute, carpets and handicrafts. Dynamic exports include manufactured product categories of drugs/pharma, organic and inorganic chemicals, engineering goods, electronic goods, plastics and linoleum. For the purpose of this discussion, natural resource exports such as iron ore, minerals, petroleum, other commodities and primary products such as agriculture /allied categories are not considered here. Six-year data to FY18 shows a sharp plunge in both. If the dynamic sector export growth dropped below one-fifth of the 21.5% annual average of the preceding decade, or 4.7% in 2012-18, traditional exports fared even worse as its annual growth collapsed to 0.4% in the past six years compared to a robust 14% averaged during 2001-02 to 2011-12. Surely, these drops are material, visibly manifested in the widening of the merchandise trade balance, especially in the last few years. The critical question is that which of these two sectors can shoulder the increased burden from the levelling off of software exports and remittances, and offset a further weakening of the current account? The faults in the current account are structural—only that these were masked by the oil price collapse in FY15. With oil prices rebounding since, the fundamental fragility of each current account component is getting exposed. With export prospects also threatened by heating trade wars, the CAD could slip out of control sooner than later. Continuously dipping into forex reserves to stabilise the rupee, therefore, could turn out to be counterproductive much sooner because external debt servicing indicators would deteriorate faster in that case. Many would look towards a capital account financing boost—stronger FDI flows would certainly help, but, we have just seen how net FDI inflows dipped in FY18 with an acceleration in outward FDI flows. Raising FPI debt-investment limits, mobilising forex through costly NRI deposits or floating a sovereign bond will not help much either—such measures post-2013’s taper tantrum proved short-lived, failing to address the basic weaknesses in the current account. Those weaknesses could resurface soon, repeatedly bearing down upon the currency. Several economists have pointed out that a weak currency will not necessarily boost exports given the negative elasticities of India’s export basket; on the contrary, it will deliver an inflation shock and damage several unhedged corporate balance sheets. But, one must note that if the current account deficit were to deteriorate to 2.5% of GDP, or more, in the forthcoming quarters, we will also see many such economists clamouring for brutally tighter monetary and fiscal policies to compress domestic demand and slow down imports. For, this is how these quick fixes work, where growth becomes the immediate casualty. It is understandable that imported inflation fears and the inability to sufficiently push corporates to hedge forex exposures has forced RBI in the past to resort to such quick fixes. However, RBI must appreciate that given the structural weaknesses in the current account flagged above, stabilising the rupee by compressing demand this time around could mean large output sacrifices. The monetary policy committee (MPC), that has patted itself for stabilising inflation, should also reflect if its decision was good policy; that of letting an overvalued rupee sustain for such a long time, and letting RBI figure out if the rupee is heavily misaligned vis-a-vis its (so-called) fundamentals and, then, aligning its monetary policy stance to carefully manage an orderly adjustment in the medium-term.
Source: Financial Express
A final view on the Reverse Charge Mechanism (RCM) and GST discount on digital payments is expected to be taken on July 8 at a meeting of the Group of States’ Finance Ministers. If finalised, these recommendations will be discussed at the 28th Meeting of the GST Council on July 21. The Group, headed by Bihar’s Deputy CM and Finance Minister Sushil Kumar Modi, met in April on the RCM and May on the GST discount, but could not arrive at a consensus. Now, there is an expectation that the Sunday meeting of the GoM will give a concrete proposal on both the issues for the GST Council. Reverse charge is applicable on a registered dealer, if he buys goods from a dealer not registered under GST.
Source: Business Line
New project announcements in India fell 22 percent in the quarter ended June indicating no pick-up in investment activity, data by the Centre for Monitoring Indian Economy suggests. Indian companies announced fresh projects worth Rs 2.1 lakh crore in the three months ended June, according to the CMIE data cited in a report by Motilal Oswal Securities. The decline was mainly led by a fall in new public-sector projects. The share of new government projects, the report said, fell to its lowest in 14 years. Government spending pulled along the Indian economy in the absence of capital expenditure by the private sector amid excess capacity and mounting bad loans in the last two years. That’s slowly changing though. Capacity utilisation rose to 74.1 percent in the quarter ended December compared with 71 percent a year ago, according to the Reserve Bank of India’s survey. That, according to a Yes Bank Ltd. report, suggests that the private sector would make a comeback as rural and urban demand improves. CMIE, however, doesn’t see the expected recovery yet. While the share of private sector projects in the June quarter increased 24 percent over the year-ago period, it was led by a single order. The Rs 1.3-lakh-crore purchase order for Boeing aircraft accounted for three-fourths of the value of the new projects, the Motilal Oswal report said. Excluding this, new project announcements fell 72 percent. Fresh investments in sectors such as manufacturing, metals and transport equipment declined during the period, the report said.
Project Completion
The number of projects completed in the year ended March 2018 was the lowest in three years on temporary disruptions due to the note ban and the rollout of goods and services tax, the report said. Project completion in 2017-18 declined 42 percent over the previous year.
Stalled Projects
The number of stalled projects in the June quarter was down from its March peak of 12.2 percent. The stalling rate now is at 10.8 percent, the CMIE data show. Lack of environmental clearances, low fuel availability, insufficient funds and land acquisition-related problems are mainly responsible. Power, manufacturing and metal sectors were worst affected.
Capital Expenditure
Despite the fall in fresh investments, public sector contributes around 62 percent of the projects under implementation, according to the CMIE data. Sectors showing strong growth are textiles, consumer goods and transport equipment.
Source: Bloomberg
Even as Washington was quoted as saying that there could be a “case by case” decision on sanctions waiver after the November 4 deadline, India is expecting to discuss the details of the roll-out of the new sanctions regime against Iran and carve-outs if any, with US state department and treasury officials when they arrive in India later this month. The Trump administration has demanded countries must halt all imports of Iranian oil from November 4 or face US financial measures. The US’ director policy planning in the state department, Brian Hook, told journalists on July 2, “We are prepared to work with countries that are reducing their imports on a case-by-case basis. But as with our other sanctions, we are not looking to grant waivers or licences.” Hook said the US government teams have done 13 roadshows in Europe and Asia. India is not yet on their radar as no such teams have arrived here to engage the Indian government, which is the second largest buyer of Iranian oil. Sources said however, a team would be in India in a couple of weeks. Sources here also believe there is a degree of understanding in the US about the necessity of protecting the Chahbahar port from US sanctions, as had been done the last time around. Nikki Haley, US’ UN envoy, during her visit last week indicated that the US would be willing to discuss a carve-out for Afghanistan. But interestingly, India and US have not had any official conversations on the sanctions, especially since shipping and ports are part of the sanctions. Hook was quoted as saying, “We are not looking to grant licenses or waivers, because doing so would substantially reduce pressure on Iran. And this is a campaign of imposing pressure. We are not looking to grant licences or waivers broadly on the re-imposition of sanctions, because we believe pressure is critical to achieve our national security objectives.” While the sanctions law is the same as last time, the Trump administration is believed to be implementing it much more tightly. This would reduce the leeway countries like India and China enjoyed the last time round. India is not a party to the JCPOA but China is. The US has announced its decision to withdraw from the nuclear deal with Iran, known as the Joint Comprehensive Plan of Action (JCPOA), and reimpose sanctions against the country. Sources here said the rupee-rial arrangement that had been done the last time round to enable India to continue buying Iranian oil, was still in place. The essential point of that arrangement was India paid for Iranian oil in rupees which were kept in an escrow account in UCO Bank. Iran used funds from there to pay for imports from India, like rice, textiles and pharmaceuticals. After the sanctions were lifted, this arrangement was tweaked to allow Indians to invest in the Iranian economy and for Iran to pay them in rupees. However, that has not progressed far.
Source: Times News Network
Exports from the Uttar Pradesh Micro, Small and Medium Enterprises (MSME) sector have clocked almost 6% growth to touch Rs 890 billion during 2017-18. MSME exports stood at about Rs 840 billion during 2016-17, UP Khadi, MSME and export promotion minister Satyadev Pachauri said here. To further boost MSME sector, the Yogi Adityanath government is planning to organise a mega Summit later this month focussed on the One District, One Product (ODOP) scheme, which is aimed at promoting the state’s traditional industries. In fact, Adityanath is likely to meet MSME entrepreneurs on July 10 ahead of the ODOP Summit, which follows UP Investors Summit 2018 held on 21-22 February, wherein the state government had netted investment proposals worth Rs 4.68 trillion. Pachauri said unlike previous regimes, the current dispensation had accorded priority to the MSME sector, which contributes 60% of its industrial output, employs 40 million people and generates direct economic activity worth Rs 1.2 trillion annually. The Adityanath government had launched ODOP scheme to prop up 'Make in UP' on the lines of 'Make in India'. UP is home to nearly 5 million MSMEs and the sector forms a vital cog in the state's economic development roadmap, including job creation. He said the ODOP Summit would promote the state MSMEs through high pitch branding and marketing. The minister opined that the state’s MSME future depended heavily upon the success of ODOP and warned officials against laxity in pushing the agenda forward. UP's textile manufacturers would also organise an expo in Mumbai in near future to showcase their products. Recently, a Memorandum of Understanding (MoU) was signed with Bangladeshi entrepreneurs, which, Pachauri claimed, would pave the way for exporting industrial and other products to the neighbouring country, while similar tie-ups would be sewed up with industrial chambers of other countries too. Meanwhile, the government plans to establish ODOP clusters at 10 districts viz. Ambedkar Nagar, Etawah, Gautam Budh Nagar, Hapur, Barabanki, Agra, Kanpur City, Kanpur Dehat, Hamirpur and Fatehpur, state MSME secretary Bhuvnesh Kumar informed. Earlier, the state had also launched a dedicated ODOP website www.odop.in to promote the concept, which is expected to nurture traditional industries and create jobs, besides arresting migration of youth to bigger urban centres and metros. UP is uniquely famous for product specific traditional industrial hubs across 75 districts viz. Varanasi (Banarasisilk sari), Bhadohi (carpet), Lucknow (chikan), Kanpur (leather goods), Agra (leather footwear), Aligarh (lock), Moradabad (brassware), Meerut (sports goods), Saharanpur (wooden products) etc. The website also showcases such authentic merchandises. At UP Investors Summit, the MSME sector had netted 348 MoUs and investment proposals worth over Rs 60 billion, although aggregate commitments to the sector was much higher, considering a number of MSME proposals were clubbed under different heads, such as food processing, services etc.
Source: Business Standard
The government is considering introduction of a rights-based legislation for skill training in India, in line with those in Germany and South Korea, a move that will give legal heft to Prime Minister Narendra Modi’s flagship programme, the Skill India mission. The next step in skill development would be to back it with an act that entitles millions of youth entering the workforce a right to be skilled, a senior government official told ET. “This will make skill training enforceable, which in turn will significantly improve the employability of the Indian workforce,” the official added. According to the official, every country with a fully developed vocational education training system has a law guiding it. “We definitely need a law to regulate such a diversified skilling ecosystem in the country. However, we waited all this while because we wanted the system of skilling to mature a bit before it gets covered under a law,” the official said, requesting anonymity because the skill development ministry is still studying the idea. About 12 million youth enter India’s workforce every year, although a large chunk of them is unemployable because of poor proficiency, which is why skill enhancement is a key thrust area for the government.After coming to power in 2014, the NDA government formed a dedicated ministry of skill development and entrepreneurship. This was followed by the launch of the Skill India mission in 2015 targeting the training of more than 400 million people in different skills by 2022.However, barely 40 million people have been trained by various stakeholders since then, including 25 million by the ministry of skill development. However, barely 40 million people have been trained by various stakeholders since then, including 25 million by the ministry of skill development. The idea of a rights-based legislation for skill development was first mooted by a high-level sub-group of chief ministers, headed by then Punjab Chief Minister Prakash Singh Badal, under Niti Aayog. The sub-group was of the view that a rights-based legislation backed by robust implementation would generate greater demand, remove the low esteem attached to vocational education and encourage more young people to seek skill training.
Source: Economic Times
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1308.70 |
USD/Ton |
0% |
7/4/2018 |
|
VSF |
2225.69 |
USD/Ton |
0% |
7/4/2018 |
|
ASF |
3076.64 |
USD/Ton |
0% |
7/4/2018 |
|
Polyester POY |
1374.73 |
USD/Ton |
0% |
7/4/2018 |
|
Nylon FDY |
3496.86 |
USD/Ton |
0% |
7/4/2018 |
|
40D Spandex |
5252.80 |
USD/Ton |
0% |
7/4/2018 |
|
Nylon POY |
1605.86 |
USD/Ton |
0% |
7/4/2018 |
|
Acrylic Top 3D |
3579.41 |
USD/Ton |
0% |
7/4/2018 |
|
Polyester FDY |
5665.52 |
USD/Ton |
0% |
7/4/2018 |
|
Nylon DTY |
1624.62 |
USD/Ton |
0% |
7/4/2018 |
|
Viscose Long Filament |
3144.18 |
USD/Ton |
0.24% |
7/4/2018 |
|
Polyester DTY |
3181.70 |
USD/Ton |
0% |
7/4/2018 |
|
30S Spun Rayon Yarn |
2956.58 |
USD/Ton |
-0.25% |
7/4/2018 |
|
32S Polyester Yarn |
2113.13 |
USD/Ton |
0% |
7/4/2018 |
|
45S T/C Yarn |
2941.57 |
USD/Ton |
0% |
7/4/2018 |
|
40S Rayon Yarn |
2251.20 |
USD/Ton |
0% |
7/4/2018 |
|
T/R Yarn 65/35 32S |
2506.34 |
USD/Ton |
0% |
7/4/2018 |
|
45S Polyester Yarn |
3121.66 |
USD/Ton |
-0.24% |
7/4/2018 |
|
T/C Yarn 65/35 32S |
2641.41 |
USD/Ton |
0% |
7/4/2018 |
|
10S Denim Fabric |
1.41 |
USD/Meter |
0% |
7/4/2018 |
|
32S Twill Fabric |
0.87 |
USD/Meter |
0% |
7/4/2018 |
|
40S Combed Poplin |
1.21 |
USD/Meter |
0% |
7/4/2018 |
|
30S Rayon Fabric |
0.68 |
USD/Meter |
0% |
7/4/2018 |
|
45S T/C Fabric |
0.71 |
USD/Meter |
0% |
7/4/2018 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.15008 USD dtd. 4/7/2018). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Swiss Ambassador to Bangladesh discusses the growth of bilateral trade and speaks on the urgency of diversifying exports to keep the economy growing. Switzerland Ambassador to Bangladesh Rene Holenstein has said Bangladesh should diversify its trade basket and place focus on new sectors - leather, ceramic, IT - to boost exports to Switzerland and beyond, which is currently limited to apparel products mainly. “The trade figure may look small compared to Bangladesh’s trade with other countries but what impresses me is that the bilateral trade has almost tripled since 2010 and is expected to cross $1billion mark in the coming years,” he told UNB in an interview at his office. Ambassador Holenstein said he has regular exchanges with the Swiss companies operating in Bangladesh as well as their representatives of the Bangladeshi business community who tell him about the business opportunities and challenges in Bangladesh. “The main challenges identified by the investors I talk to are namely, infrastructural limitations, bureaucratic red-tape, weak policy implementation and insufficient legal security,” he said while responding to a question. The diplomat said Bangladesh should address these issues “in a more emphatic manner” to boost potential and existing investors’ confidence to attract more FDI. “I am confident that with further improved infrastructure and energy supply, regulatory predictability and legal security, Bangladesh will become a more preferred destination for the Swiss businesses in the future,” he said. Ambassador Holenstein said the year 2018 is “very important” for the people of Bangladesh as the national election will take place at the end of this year. “As a friend of Bangladesh, it is our sincere hope that the next election, held in a free, fair and inclusive manner, will further bolster the democratic strides made by the country,” the envoy said. Ambassador Holenstein said like Switzerland or any other nation, the topic of human rights is very important for Bangladesh. “Human rights are enshrined as fundamental rights in the constitution of Bangladesh.”Responding to a question, he said drug trafficking is a global problem, which has to be responded by maintaining a moral high ground and upholding the rule of law and access to justice. The boom in the textiles and pharmaceutical sector is making Bangladesh an attractive place for Swiss investment, said the ambassador. In 2017 bilateral trade volume between Switzerland and Bangladesh recorded an impressive growth of more than 14% totaling 676.8 million Swiss Francs. “Investments and reinvestments from the Swiss companies in Bangladesh are also increasing steadily,” he said. Mentioning that Switzerland has a strong focus on innovation and technology, the envoy said, “I see potentials for Swiss companies providing technological solutions to Bangladesh in the coming days.” He said they have to also identify new areas of economic cooperation - hi-tech, clean-tech,renewable energy - where the two countries can mutually benefit from the collaboration. During the Presidential visit in February 2018, the Swiss president and prime minister of Bangladesh welcomed the positive developments of bilateral trade and investment and stressed the need to further strengthen the bilateral relations including in the area of trade and investment. “Bangladesh’s aspirations for 2021 and its remarkable socio-economic achievements in the last decades are impressive. To accelerate this growth in an inclusive and sustainable manner, it is important to continue to respect the fundamental human rights principles in the country,” he said. The diplomat said at present, development and economic cooperation are the two main pillars of bilateral relations between the two countries. “Cultural ties are also expanding rapidly.” The two countries regularly have high level exchanges. Bilateral relations “received renewed momentum” during the visit of the President of the Swiss Confederation Alain Berset, in February 2018. “During this important visit, which is indeed a milestone in the bilateral relations, our two countries placed strong emphasis on forging closer economic and technological cooperation,”Ambassador Holenstein said. Since his arrival in Bangladesh, almost a year ago, Ambassador Holenstein has visited most of the divisions in Bangladesh. “Wherever I went, I felt genuine warmth and curiosity of the people towards Switzerland as well as its people.” He said, “I can confidently say that the relations between our two friendly countries are stronger now than ever before.” The Ambassador said Switzerland has remained a steady and committed development partner of Bangladesh. The Swiss Agency for Development and Cooperation SDC is present in Bangladesh for a longtime. The current Swiss development cooperation strategy for Bangladesh has a duration of four-year covering 2018-2021. The Swiss cooperation strategy is aligned with the Agenda 2030 and Bangladesh’s national goals and focuses on three areas namely, Democratic Governance, Income and Economic Development, and Safer Migration. Switzerland’s annual contribution stands at around US$22million excluding humanitarian assistance. Responding to a question he said Switzerland has been able to play an important role in specific domains particularly in the areas of poverty reduction,social inclusion as well as disaster risk reduction over the last four and a half decade. “Switzerland will continue to support Bangladesh’s development with targeted interventions to support the poor, marginalized and vulnerable population,” he said. The diplomat said Switzerland will also continue to cooperate closely with the government of Bangladesh.
Source: Dhaka Tribune
More than 1,000 textile workers from a footwear factory in Daun Keo City yesterday rallied at the Takeo Provincial Hall to demand officials intervene on their behalf to get their unpaid severance packages. The workers said that the factory was supposed to pay them a severance package upon the conclusion of their six-year contracts. Protests began on Monday when the workers first descended upon their former place of employment, a factory operated by Takeo Shoes Cambodia. On Tuesday, the workers protested in front of the provincial labour department and yesterday they hit the provincial hall. Worker Meas Srey Oun said yesterday at the provincial hall that Takeo Shoes Cambodia was not upholding its obligations. Ms Srey Oun said that workers initially filed a complaint at the provincial labour department ten days ago. “We worked there for many years, we need our severance pay and we will return and return again,” she said. “We are afraid that our former employer will not pay our severance.” Takeo provincial Governor Ocuh Phea said that he met with the workers to find a solution for them and noted that the complaint has been received and that provincial officials are handling the case. “First, we want them to go back home without any protest and we will meet with their employer for a solution,” Mr Phea said. Yi Sokhorn, another worker, said that they were not coerced to rally. Instead, Mr Sokhorn said that they took it upon themselves to fight for their missing pay. “Unions didn’t help us to rally, we all came together to demand our severance pay,” he said. In March, the government said it was prepared to pay out $4.6 million to about 4,100 workers whose bosses fled without paying their wages. Since then, thousands of workers who were abandoned by their employers have received compensation from the government. The government also moved to amend article 89 of the labour law regulating severance pay for workers. Following the amendment, the Garment Manufacturers Association in Cambodia said the move could financially burden employers by forcing them to pay out severance all at once rather than in instalments. In a statement after the amendment, GMAC said amending article 89 protects workers, but “will create a new degree of financial burden for the employer and possibly other human resource management challenges”. “We would like to express our concern and ask the government to please carefully consider the issue,” the statement added. “We strongly suggest that employers pay the compensation in phases.”
Source: Khmer Times
The country’s earnings from export exceeded the target by nearly 6 percent to reach $36.66 billion during the July-Jun period of the outgoing 2017-2018 fiscal, according to an Export Promotion Bureau data released on Wednesday. Bangladesh maintains the growth momentum largely on the back of garments, jute, jute goods, agricultural products, furniture, home textile and building materials. In June alone, export receipts stood at $3.03 billion, 3.08 percent less than the corresponding period in the last fiscal. The monthly target, however, decreased by 18.87 percent. Garments, which account for more than 83 percent of the total exports, logged in $30.61 billion in the last fiscal year, 8.76 percent more than the 2016-2017 fiscal. Knitwear exports went up 10.40 percent year-on-year to $15.19 billion in July-Jun while shipment of woven garments raised 7.18 percent to $15.42 billion. Home textiles brought in $878.68 million, growing 9.95 percent year-on-year. Exports of leather and leather goods, the second largest export earning sector after garments, dropped 12.03 percent year-on-year to $1.08 billion in the period. The segment dealt with a blow by a decline in leather shipment which shed 21.28 percent. Within the same category, exports of leather footwear grew 5.33 percent and leather products fell 27.48 percent. Export of cotton & cotton increased 14.03 percent year-on-year to $124.85 million from the same period a year ago. Export of jute and jute goods, another top earner, jumped 6.56 percent to $1.03 billion. In the category, jute yarn and twine saw their earnings rise 6.55 percent while shipment of raw jute decreased 7.24 percent and those of jute sacks and bags declined 3.69 percent. Export of frozen fish, live fish and shrimp decreased 3.42 percent to $508.43 million in the July-Jun of 2017-18. Export of building materials increased 233.90 percent to $1.97 million in the July-June period. Pharmaceuticals raked in $103.46 million in the July-June period, up 16.03 percent from the last fiscal.
Furniture shipment grew 20.27 percent to $63.18 million.
Agricultural products fetched $673.70 million, up 21.79 percent over the last fiscal, according to EPB data.
Spices export increased 22.80 percent to $42.92 million.
Vegetable exports decreased 3.76 percent to $77.98 million while tobacco exports increased 20.96 percent to $56.39 million in the July-Jun period. The government expects to bring in more than $60 billion from exports by 2021. Garment manufacturers say apparel shipments should grow 12-15 percent a year to hit the $50 billion export target by 2021.
Source: Bangladesh Post
Hanoi (VNA) – The garment-textile sector expects to gross 35 billion USD in export turnover in 2018, higher than the target set at the beginning of the year, thanks to a large number of orders from foreign partners and bright prospects of the world and domestic economies. Vice President of the Vietnam Textile and Apparel Association (VITAS) Truong Van Cam said domestic businesses have received full orders for the third quarter of this year and are negotiating to secure long-term contracts through 2019. Many garment-textile firms in the southern economic hub of Ho Chi Minh City revealed that they have received orders until the end of this year, even for the first months of 2019. “Though the prices are likely to decline, the number of orders has been surging this year, especially with large-scale enterprises”, Cam said. According to Chairman of the HCM City Association of Garment, Textile, Embroidery and Knitting Pham Xuan Hong, there are numerous prospects for the garment-textile sector this year thanks to a certain number of orders. However, there remain challenges facing local businesses ahead, including fiercer competition from regional countries such as China, Myanmar and Cambodia, he noted. To realise the export goal, General Director of the Vietnam National Textile and Garment Group (Vinatex) Le Tien Truong said creating high-quality products with reasonable prices and ensuring on time delivery are the most fundamental solutions of the sector. Vietnam’s garment-textile sector should not receive cheap orders instead of reasonable prices that require high skills and techniques, he said. The solution to this matter is making appropriate investment in technologies to increase labour productivity not only through the skills of workers but also the production system, management and computerization in administration and automation in each stage, he recommended. Truong unveiled that most of importers make big orders in Vietnam, and they have only shifted small orders to other countries like Myanmar and Cambodia, as Vietnamese firms are spending big on new technologies to increase productivity and competitiveness. Furthermore, free trade agreements have helped Vietnam diversify its export markets and address the shortage of materials, he said. From importing most of raw materials for production, the garment-textile industry now exports more than 3 billion USD worth of yarn, nearly 1 billion USD worth of fabric, and 400 million USD worth of garment accessories each year, Truong said. Particularly, the fourth industrial revolution (Industry 4.0) has changed the mindset of businesses in regards to technology investment, the general director added. Garment-textile companies have paid more attention to developing human resources and using technology to create quality products by selecting high value production segments such as Original Design Manufacturing (ODM) and Own Brand Manufacturing (OBM). In 2017, the garment-textile sector raked in 31.2 billion USD from exports, a year-on-year rise of 10.23 percent. In the year, Vietnam’s garment-textile exports to major markets like the US, the EU, Japan, the Republic of Korea and Russia increased by 7.2 percent, 9.23 percent, 6.1 percent, 11.8 percent and 56 percent, respectively.
Source: Vietnam News Association
Exports of long-staple cotton seen at 52,000 T in 2017/2018
Traders see exports rising 45 pct in 2018/2019 season
Authorities strictly enforce quality rules to help demand
CAIRO, July 4 (Reuters) - Egyptian cotton production is on course to rebound with help from a devalued currency and bigger cultivation area, recovering from a slide in exports of the world-famous crop since 2011 that was caused by a drop in quality. Cotton exports are expected to reach about 52,000 tonnes in the 2017/2018 season that ends in August, up nearly 37 percent from the previous year, Nabil al-Santaricy, head of the Alexandria Cotton Exporters Association, told Reuters. “Next year we expect to yield approximately 120,000 tonnes overall, so we expect exports to rise by approximately 40-45 percent if we export around 75,000 tonnes,” he said. Output fell drastically in 2011, when political upheaval meant regulations to maintain quality were not enforced. But demand for the Egyptian product, known locally as “white gold”, has picked up as rules to ensure quality have been strictly imposed again since 2016. Egypt is the world’s second largest exporter of long-staple cotton, used mainly to make luxury linens, behind the United States, said Ahmed Elbosaty, chairman of Modern Nile Cotton, Egypt’s largest cotton trading company. “This time we are coming back with a volume the market is used to and was in desperate need for ... Now the quality is back and the quantity is going up,” he said. The Agriculture Ministry has boosted the cultivation area in 2018/2019 to lift exports from Egypt, where sunny skies and superior seed produce a cotton with unusually long fibres used to make light and durable fabrics with a sheen and soft touch. Egypt planted 336,000 feddans (141,120 hectares) of long-staple cotton in 2018, up from 220,000 feddans (92,400 hectares) in 2017, the ministry spokesman said this week. Cotton cultivation could expand further as the authorities push farmers to avoid water intensive crops, such as rice, to prevent shortages as Ethiopia prepares to start filling a huge dam on the Nile, considered Egypt’s lifeline. Egyptian cotton has received a further boost with the 2016 devaluation of the pound, which lost roughly half its value against the dollar, making exports more competitive globally. There has also been renewed interest in pure Egyptian cotton following a 2016 scandal in which Indian textile manufacturer Welspun India falsely passed off some of its cheap sheets as premium Egyptian cotton products, driving off some U.S. buyers. The company said at the time it was addressing the issue and blamed it on a “complex supply chain”.
Source: Reuters
Moving towards sustainability, Thermore has introduced a revolutionary and blowable product - Ecodown Fibres. These fibres ensure the same loft as high quality 90/10 feathers and can likewise be blown into a garment. Tests performed on Ecodown Fibres have shown an outstanding fill power of over 600, which is how the product guarantees that “puffy” look. The loft of down products is calculated with the “fill power test”: fibres are blown through a cylinder and their volume is measured. The higher the “fill power”, the puffier the jacket. Moreover, this insulation is highly durable. Its one-of-a-kind multi-shape structure allows high resistance and prevents it from clumping when washed. Not only are Ecodown fibres animal-free, but they are also made from 100 PET bottles. Every jacket insulated with Thermore’s fibres allows recycling up to 10 post consumer bottles. Along with a warm feel, the insulation achieves a soft touch without the use of microfibres, which would contaminate oceans and, ultimately, food. Designers can finally let their creativity flow with no limitations, knowing Ecodown Fibres will allow them not only to recreate that puffy down look, but also to support environmental sustainability. Despite the efforts of the apparel industry to move towards a more sustainable and cruelty-free approach, recent surveys report that 80 per cent of cold weather clothing is still insulated with duck feathers. This is mainly due to the lack of a synthetic solution that provides the same look and loft as down. (SV)
Source:Fibre2Fashion
Two more member states of the Common Market for Eastern and Southern Africa — Kingdom of Eswatini, formerly called Swaziland, and Ethiopia — have received green signal from their governments to start cultivation of insect-resistant transgenic Bt cotton. They will join Sudan, a COMESA member state, that initiated commercialization of Bt cotton in 2012. Four African countries — Burkina Faso, Egypt, Sudan and South Africa — had to date commercialized Bt cotton, according to information on COMESA secretariat website. The Swaziland Environment Authority (SEA) and the Ethiopian ministry of environment, forest and climate change granted the approvals in May and June respectively. Ethiopia has also granted a five-year special permit for confined field trials of drought-tolerant and insect-resistant maize varieties. COMESA, through its specialized agency, the Alliance for Commodity Trade in Eastern and Southern Africa (ACTESA) supported both Eswatini and Ethiopia in biotechnology and biosafety policy formulations. Research trials on transgenic maize, banana, cassava, cowpea, enset and potato are under way in other COMESA member states like Malawi, Kenya, Egypt and Uganda. (DS)
Source: Fibre2Fashion
The inaugural US Functional Fabric Fair by Performance Days, which will be held on July 23 and 24, 2018, in New York, has attracted global exhibitors and visitors. Top textile manufacturers and service providers, along with sports fashion designers, product managers, purchasing agents, representing functional wear manufacturers, will be seen at the expo. One month prior to the event, some 70 companies are exhibiting and more than 400 attendees from 12 countries have registered to attend the Functional Fabric Fair powered by Performance Days. The event will showcase the latest trends in fabric development for the functional textile industry and offer a sourcing marketplace for high performance functional fabrics and accessories. Functional Fabric Fair powered by Performance Days staged during New York Market Week and co-located with multiple fashion market events at the Javits Centre. Exhibiting companies will present functional fabrics, branded technologies, treatments, laminates, paddings, finishes, and accessories such as yarns, tapes, prints, buttons, and zippers. The inaugural event also includes complimentary workshops, industry presentations and professional networking and matchmaking programmes. Additional event details and event registration are available at FunctionalFabricFair.com. Registered attendees represent influential industry functions such as brand manager, buyer, CEO, creative director, designer, fabric manager, materials sourcing, merchandiser, owner, president, product development, production executive, research & design, sales, stylist, sustainability, textiles designer, and more. Steve McCullough of Reed Exhibitions said, “We are especially pleased with the strong representation of the textile industry’s top brands to build a wide-ranging marketplace at the first US Functional Fabric Fair powered by Performance Days. A wide scope of textile providers, a comprehensive education programme, and strong networking opportunities have combined with ideal timing and location during fashion market events to attract a powerhouse of influential attendees.” (GK)
Source: Fibre2Fashion
