The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 06 JULY, 2018

NATIONAL

INTERNATIONAL

 

India is set to overtake China in textile sector

Madurai: India is poised to overtake China in the textile sector by capitalizing on factors such as cheaper labour and modernisation and Tamil Nadu will have a major role to play in it, according to the Indian Textiles Accessories and Machinery Manufacturers Association (ITAMMA). J M Balaji, chairman of the events and publications subcommittee of the association, said that Tamil Nadu accounted for 39 % of the total textile production in the country. He was speaking to reporters here on Thursday on the eve of ITAMMA’s product-cum-catalogue show. Balaji said that the domestic textile industry was expected to reach a production level of US$ 350 billion from the current US$ 100 billion. India had the potential to export textiles and apparels worth US$300 billion by 2024-25 from its current US$ 40 billion, he said. There were 4.13 lakh handlooms in Tamil Nadu providing employment to 6.08 lakh weavers while the 3.66 lakh powerlooms and 1,889 spinning mills provided employment to another 2.40 lakh people. Knitwear and woven garment production units provided employment to over five lakh people. With quality and skilled labour and machinery, India could easily overcome Chinese competition in the textile industry as labour costs in China were very high compared to India. “High-tech machines which help deliver quality goods will enable us to reach the set targets at the production level, and the roadshow will have many such machines and products on display. Textile retailers and manufacturers can use the event platform for their machinery needs,” Balaji said. N D Mhatre, director general, ITAMMA, and T P Muralidharan, convener of its Coimbatore export cell were also present

Source: Times News Network

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‘WTO-compliant export subsidy proposals will be out in 3 months’

Kolkata : India may incentivise exporters of manufacturing goods for high power tariff. The initiative is part of a wider exercise, launched recently, to identify scope of incentivising exports within the WTO guidelines. The move comes at a time when the US has challenged several of India’s export subsidy schemes under the WTO’s dispute settlement mechanism. According to Alok Chaturvedi, Director-General of Foreign Trade (DGFT), a committee has been formed to come up with WTO- compliant export subsidy proposals within three months. “The committee will suggest ways for incentivising exporters in relation to unrelated or un-rebated taxes outside the purview of GST,” he said on the sidelines of a programme organised by the Indian Chamber of Commerce (ICC). Petroleum products, electricity and a host of State levies fall outside the GST purview.

High cross subsidy rates

The DGFT said there were multiple instances where industry is charged unduly higher rates for cross subsidising other activities. The high electricity tariff for industrial supplies is a case in point. The Economic Survey of 2016 claimed that on a global scale, industrial power tariff in India was too high when measured against per capita GDP and quality of supplies due to the cross subsidisation scheme. OECD countries like Australia, the US and Denmark charges a lower rate on industry. Contrary to India where industry pays for the household sector, in Europe the household is charged at a higher rate compared to industry. Closer home, Indonesia – which is experiencing robust growth – and even Bangladesh charges lower rates to industry.

Dispute with US

Chaturvedi denied any link between the current initiative and the trade disputes with the US. The US has challenged India’s export subsidy programmes in the WTO dispute settlement mechanism. The US has alleged that the export subsidies benefit Indian companies by creating an “uneven playing field” for the US-based manufacturers and exporters. “We have challenged the US contention and a dispute resolution process is on,” he said.

Source: Business Line

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Commerce Secretary Teaotia to seek inputs for e-commerce policy framework today

New Delhi : Commerce Secretary Rita Teaotia will chair a meeting of the taskforce on e-commerce on Friday to take inputs for the proposed policy framework for the sector from other Ministries and Departments, including finance, information technology & telecom and consumer affairs. The taskforce has been set up to suggest a framework for a comprehensive e-commerce policy by the end of August and submit it to the e-commerce thinktank led by Commerce and Industry Minister Suresh Prabhu. “The Commerce Ministry has had discussions with the nine sub-groups set up to examine different aspects of the proposed policy. After the other Ministries and Departments give their inputs of Friday, the policy framework would be further fine-tuned,” a government official told BusinessLine.

Sub-group tasks

The first sub-group is working on issues including cross border transfer of information by electronic means, data protection and location of computing facilities, the second on digital product, custom duties and taxation, the third on trade facilitation measures and logistics while the fourth is working on measures enhancing consumer confidence. The fifth sub-group focusses on protection of IP and contours of future technology such as AI and block chain, the sixth on payment systems and financial technologies, the seventh on interconnection issues and net neutrality while the seven and eighth are working on skills, education and training and SMEs and FDI and competition issues respectively. The taskforce would give suggestions on key issues such as the scope of taxation on electronic transmission of goods and services including 3D printing, implication of General Anti-Avoidance Rule (GAAR) on e-commerce, behaviour of current market players in e-commerce and anti-competitive practices policy and creating fair balance between online and physical marketplaces.

Source: Business Line

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Textile mills welcome hike in MSP for cotton

Textile mills here, which are among the largest consumers of cotton, have sought introduction of Direct Benefit Transfer System for payment of Minimum Support Price (MSP) to cotton farmers. Welcoming the increase in MSP for cotton announced by the Central Government, the Southern India Mills’ Association chairman P. Nataraj, and chairman of Confederation of Indian Textile Industry, Sanjay K. Jain, said there should be a direct subsidy route so that interests of farmers and the industry are protected. According to Mr. Nataraj, the MSP for medium staple cotton is increased from Rs. 4,020 a quintal to Rs. 5,150 a quintal and that of long staple cotton from Rs. 4,320 a quintal to Rs. 5,450. The MSP increased by Rs. 1,320 a quintal between 2009-2010 and 2017-2018 and by Rs. 1,130 a quintal in 2018-2019. The impact will be huge and unprecedented, said Mr. Jain. “At one level, the move would certainly increase farmers’ income, leading to an increase in domestic consumption that would eventually support the overall Indian economy. However, we need to examine the hike from different perspectives and understand that the lakhs of farmers gain should not impact the 120 billion dollar industry which employs directly and indirectly more than 10 crore people,” he said. The real impact depends on the movement of international prices of cotton, he added. In order to help the textile mills compete with multi-national companies and cover cotton during the peak arrival season, the government should implement cotton price stabilisation fund, providing 5 % to 7 % interest subvention, 10 % margin money and nine months credit limit. It should also introduce Technology Mission on Cotton phase II that has been submitted by the Textile Ministry, said Mr. Nataraj.

Source: The Hindu

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Increase in MSP for cotton may affect exports: SIMA

Southern India Mills Association (SIMA) today said though the steep increase in MSP for cotton would benefit farmers it would have an impact on the cost of clothing and also the industry. The decision may also affect cotton exports if Indiancotton prices ruled above international prices, SIMA Chairman, P Nataraj said in a statement. He also hailed the proactive and historic initiatives taken by Prime Minister Narendra Modi to strengthen the agriculture sector that would greatly benefit cotton farmers. The SIMA chairman appealed to the Prime Minister to exercise cotton MSP operation under Direct Benefit Transfer System (DBT) and revamp the role of Cotton Corporation of India (CCI) so as to benefit the farmers and the industry equally. India has been the largest cotton producer in the world since 2015-16 surpassing China and USA and nearly 2.3 crore farmers are currently cultivating cotton, he said. Price volatility in cotton prices has also been eroding the working capital and profit margins of the industry and restricting the growth rate between 6 and 8 per cent as against the potential growth rate of 12 to 16 per cent as predicted by many studies, he added. India could become the largest producer of cotton taking advantage of Technology Mission on Cotton (TMC) that existed between 1999 and 2002 and also the introduction of Bt Cotton, he said. Nataraj also said the TMC has not been extended and the farmers were suffering due to issues like spurious seeds, lack of seed technology, agronomy research, lack of technology transfer, quality deterioration at ginning stage (admixture of waste cotton, inferior quality cotton, high trash, contamination, high moisture content. The SIMA chairman urged the Prime Minister to approve TMC-II proposal already submitted by the Ministry of Textiles and to constitute a Task Force comprising various stakeholders under Ministry of Agriculture and Textiles, prepare a detailed report based on the recommendations already made. Therefore, price stabilisation fund scheme and TMC with revised format are the need of the hour to make Indian cotton farmers to double their income and the industry to double its business size and exports by 2022 as envisaged by the Prime Minister, he said.

 

Source: Business Standard

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Garment exporters expect GST refund of ₹4,000 cr

Notwithstanding the sharp drop in exports, textile companies are expecting the government to refund ₹3,000-4,000 crore of GST levied on the shipments made since the implementation of GST. The blockage of funds with the government and rising operational cost are expected to pull down exports by 10 per cent this fiscal, said Premal Udani, Chairman, Board of Trustees of Clothing Manufacturers Association of India (CMAI). To facilitate exports, the government refunds embedded taxes through drawback rates which is currently fixed at 1.6 per cent. The industry has demanded that the rates be increased to 7 per cent given the high incidence of taxes, he added. The Government cannot expect exporters to be competitive in global market after incurring such high levies, he said. Exports fell four per cent in the financial year ended March to $16.7 billion, against $17.38 billion logged in same period last year. Going by the export trend in the first quarter of this fiscal, all indications are that it will fall by at least 10 per cent, he added. Rahul Mehta, President, CMAI, said the increase in minimum support price for cotton will hit the industry further as 70 per cent of garment exported are cotton-based. Cotton prices have gone up 20 per cent in last four months impacting the cost matrix of exporters, he said on the sidelines of an event to announce the 67th National Garment Fair in Mumbai between July 16 and 19. The strong compounded annual growth of 10 per cent to $67 billion in domestic demand since 2005 is the only solace for garment companies. In contrast, the demand in the US, EU and Japan has slowed down due to weak economic conditions. The unorganised apparel market accounts for 65 per cent of the overall domestic trade of $67 billion. Dominated by the ready-to-wear category at $56 billion, the domestic apparel market is expected to touch $160 billion by 2025, said Mehta.

Source: The Hindu Business Line

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CBIC launches GST 'Verify App'

The Central Board of Indirect Taxes and Customs (CBIC) has developed a mobile app 'GST Verify' to protect interest of consumers. It is an android app to verify if the person collecting GST from the consumer is eligible to collect it or not, an official statement said today. It also provides the details of the person/ company collecting GST, it said. "Every time you shop/eat/buy check the bill if there is any GST amount mentioned, if yes verify through this app if she/he is genuinely registered person or not, thereby you save the amount shown as tax from the fraudster if he is cheating you," the statement said. It further said that a Composition Tax Payer should not collect the tax from his consumer. This app, developed by B Raghu Kiran joint commissioner GST Hyderabad, can be used all across the country, it added.

Source: Business Standard

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Non-tariff charges in electricity bill to attract GST

Electricity bills can have a goods and services tax (GST) component at times. Non-tariff charges, which include application fee for releasing connection, rentals charged against metering equipment and labour charges for shifting of meters and service lines, are liable to taxed at 18% under the GST. The AAR in Rajasthan has ruled that while distribution and transmission of electricity is outside the GST ambit, other associated services would attract the tax. Although the AAR hasn’t specified any GST rate, Rajat Mohan, partner at AMRG & Associates said, services in the GST regime usually attract 18% tax, unless specified otherwise. The application for advance ruling was filed by Tata Power Ajmer Distribution (TPADL), a subsidiary of Tata Power. “The other services such as application fee for releasing connection of electricity, rental charges against metering equipment, testing fee for meters/transformers, capacitors, etc, labour charges from customers for shifting of meters or shifting of service lines and charges for duplicate bill provided by distribution companies to consumer are taxable,” the ruling said. It added that non-tariff charges recovered from customers are not eligible for exemption and TPADL is liable to pay tax on the aforesaid recovery made from their customers. On applicability of the GST on refundable security deposit against electricity consumption and electric metre, the AAR said it would be exempt from the GST as it is treated as consideration for supply. But, if refundable deposit is used as consideration such as forfeiture and offsetting against future progress payment, the deposit becomes taxable.

Source: Financial Express

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City’sTextile sector urges Centre to study impact of GST on ground

 

Surat: The city’s textile traders and power loom weavers will be approaching the Surat and Navsari MPs to represent before the Centre their demand to appoint a fact-finding committee to study the impact of goods and service tax (GST) in textile sector. The demand has come after a statement made by finance secretary Hasmukh Adhia that traders in Surat do not want to come under the tax net since they fear direct tax implications and that none of them have quit business. Power loom industry leader Ashish Gujarati told TOI, “We will be approaching the MPs from Surat and Navsari constituencies to represent the central government to constitute a fact-finding committee to study the impact of GST on textile sector. Time and again we have submitted datas of job losses, closed units, power looms sold in scrap etc. to the government, but still the finance secretary is giving statement that no business has shut in Surat.” The power loom sector has pointed out that individual knitters and power loom weavers are unable to sustain against the integrated unit because of the non-refund of input tax credit (ITC). Due to accumulation of duty credit, most of the job workers have lost their business and about 300 looms are scraped on daily basis and 40 per cent of the knitting machines have become non-operational. Further, the power loom industry leaders stated that accumulation of ITC has resulted in fabrics being exported by merchant exporters as costlier than that of their counterparts in China, Vietnam and Bangladesh. As per the study carried out by Ernst & Young, out of the total 24 lakh power looms in the country, about 8.5 lakh are into the decentralized man-made fibre (MMF) sector. Total employment in power looms in MMF sector is 18 lakh and the average ITC refund per loom per year comes to about Rs 10,000. However, the total ITC refund amount per year in decentralized MMF weaving sector comes to about Rs 750 crore. President of Federation of Gujarat Weavers Association (FOGWA) Ashok Jirawala said, “The city’s power loom sector is on the deathbed literally. The sector is not asking for relief from GST, but want simplification in filing of returns, e-way bill and refund of ITC. The MPs of Surat and Navsari are only interested in starting flights from Surat airport, but they are no bothered about the dying textile sector.” Secretary of Federation of Surat Textile Traders Association (FOSTTA) Champalal Bothra said, “The textile traders are deeply saddened with the statement of the finance secretary. At present, many small-time traders have literally shut shops and the shop rent in textile markets have gone down by almost 30 per cent. This shows the impact of GST on the textile trade.

 

Source: Times new Network

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Reliance Brands picks 12.5% stake in luxury apparel firm Future101

Reliance Brands has acquired 12.5 per cent stake in luxury apparel firm Future101 Design for Rs 9.50 crore. In a BSE filing, Reliance Industries said, “Reliance Brands, a subsidiary of the company, has purchased 12.5 per cent equity stake in Future101 Design Pvt Ltd (Future101) for Rs 9.50 crore”. The acquisition of minority stake is in the nature of strategic investment, it added. Future101 is engaged in manufacturing, distribution and sale of luxury apparels in India. “Future101 belongs to a similar industry as Reliance Brands. We expect growth in this sector and value creation from this investment,” the company said. Future101 reported an annual turnover of Rs 22.18 crore in 2017-18.

Source: The Hindu Business Line

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US sanctions effect: Indian banks’ reluctance to process payments worries Russia

Mumbai : Russia has expressed concern over Indian banks’ reluctance to process payments worth billions of dollars, citing US sanctions against Russia. The Trump administration imposed in April the latest round of sanctions against Russia. According to sources close to the development, Russian diplomats and bank representatives met top officials at the State Bank of India on Thursday to discuss a way out. The impasse, if it continues, could impact annual transactions between the countries amounting to around $10 billion. The sources, who spoke on conditions of anonymity, said SBI has historically been the lead bank for India-Russia transactions. “Over the past few months, SBI and other PSBs have refused to process or have delayed processing payments to Russian companies and are refusing to honour bank guarantees and LCs from Russian banks towards Russian companies participating in government tenders,” the sources said. While Russia’s Vneshexonombank is the lead bank for bilateral payments, some deals have been processed by other banks such as Sberbank, VTB bank and Gazprombank. Queries sent by BusinessLine to the Russian banks and SBI did not elicit any response.

Defence contracts

The sources, however, said that receiving money relating to defence contracts and other payments, including for Russian diplomatic missions, have been difficult.“Leave aside large defence contracts, even for small payments of a few thousand US dollars, the banks have started asking for supporting documents, including the full ownership structure of the company and its affiliates and sub-contractors,” the official noted. As all these transactions are nominated in US dollars, Indian banks are reluctant to process them fearing loss of American and European businesses. One of the options being discussed is to carry out settlements in rupee or rouble or a third currency such as the Hong Kong or Singapore dollar. In that case, the transactions would be carried out by a bank that has no exposure to the US market, just as UCO Bank was used to handle oil payments to Iran after the US imposed sanctions. “Banks’ compliance departments are trying to play safe and are hence blocking all Russia-related transactions, even though the parties to the deals are not under US sanctions,” another person familiar with the matter said. According to several sources, payments for defence contracts worth over $1 billion are stuck. “Considering the volume of the trade with Russia vis-a-vis that with the US, it is easier for some banks to give up the Russian business rather than invest time and resources in understanding these sanctions,” a banker, who did not wish to be identified, told BusinessLine. However, he said that the trade between the countries will continue. The issue was taken up by the leaders of the two nations in Sochi earlier this year and is likely to be discussed at upcoming meetings.

Source: Business Line

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Apparel exports to decline by 10 per cent in FY19 due to GST

India's apparel exports downturn may continue and is expected to decline by overall 10 per cent in FY19, a senior industry official said her In 2017-18 exports declined by 4 per cent to USD 16.7 billion. "Country's apparel exports have taken a beating from October 2017 onwards. The introduction of GST has resulted in non-refund of several embedded taxes. Consequently exports for the financial year 2017-18 declined by 4 per cent to USD 16.7 billion from 17.38 billion in the previous year," the Clothing Manufacturers Association of India (CMAI) president Rahul Mehta told reporters here. The downturn continued in FY 2018-19 with a month on month decline of 8-10 per cent and it is expected to witness overall decline by 10 per cent in FY19, Mehta said. The country exports nearly 70 per cent of cotton garments and 20 per cent jump in cotton prices in last few months has also hit exports severly, he said. The industry is having talks with the textile ministry and the government has assured that embedded taxes will be refunded through the drawback route. Commenting on domestic apparel market, Mehta said, country's domestic apparel market is estimated at USD 67 billion, which has grown at a CAGR of 10 per cent since 2005. Indian domestic market has performed better than the largest consumption regions like US, EU and Japan, where depressed economic conditions led to lower demand and growth. Due to presence of strong fundamentals, the domestic apparel market size of India is expected to grow at 11-12 per cent CAGR and reach about USD 160 billion by 2025. The domestic market size is dominated by ready-to-wear category, market size USD 56 billion, with 84 per cent share which is further growing at a CAGR of 10-11 per cent. The ready-to-stitch market currently at USD 11 billion is expected to grow at a CAGR of 7 per cent and reach about USD 20 billion in 2025. In order to boost domestic trade, CMAI is organising a 67th national garment fair between July 16-19 this year in Mumbai. Nearly 916 exhibitors in 986 stalls are displaying 1,087 brands. The apparel trade show is expected to transact business worth Rs 700-800 crore, Mehta added.

Source: The Economic Times

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Silk farmers to enter global market

Moving away from making just silk yarns for fabric, Kumaraswamy has proposed to tap the global market for the byproducts to ensure considerable income to silk farmers. Realising the global demand, especially in the production of women’s consumables like nail polish, lipstick and silk colours, the chief minister has proposed to formulate a strategy to exploit the market potential. “There is worldwide demand for silk byproducts such as nail polish, lipstick and silk colours. An amount of Rs 2 crore will be provided to formulate a strategy to exploit this market,” Kumaraswamy said. The announcement. has brought cheers to the sericulture farming community of Ramanagara, Channapattana, Kolar and Chikkaballapur districts, who have been hit by falling prices of silk cocoons. This apart, the chief minister has proposed to revive theKarnataka State Silk Research and Development Institute that was set up in the 1970s at Talaghattapura on the outskirts of Bengaluru.

Source: Decan Herald

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Global textile tech expo on Jan 18

The second edition of GTTES 2019 (Global Textile Technology and Engineering Show) is slated between January 18 and 20, 2019 at Bombay Exhibition Centre, Mumbai.  A roadshow to sensitise about this upcoming event was held in the textile hubs of Tirupur and Coimbatore on Thursday by India International Textile Machinery Exhibition Society. India ITME Society plans to organise similar shows across the textile hubs in the country. Inviting the textile industry in this region to capitalise on the opportunity that GTTES 2019 platform offers, Hari Shankar, Chairman, India ITME Society said all the export promotion councils have endorsed this event as a platform for meeting up with domestic requirement with the Make in India initiative for facilitating and encouraging the textile and textile engineering sector. Around 450 exhibitiors have registered for the event so far, he added.

Participants

Besides India, participants from countries such as Australia, Austria, Argentina, Bangladesh, Belgium, Canada, China, Czech Republic, France, Germany, Iran, Italy, Indonesia, Japan, Korea, Malaysia, Pakistan, Sri Lanka, Sweden and Turkey are to take part in this expo. Hari Shankar said that B2B meetings with African delegation has been scheduled for January 18, technical textiles seminar on January 19 and Colours and Dyes seminar by the Society of Dyers and Colourists on January 20. Seema Srivatsava, Executive Director, India ITME Society highlighted the opportunities that expos such as this would offer to the textile industry stakeholders. “India is the world’s second largest textile market and the biggest market for textile machinery as well. GTTES 2019 would therefore help translate the demand to supply,” she said, urging the units here to explore and exploit the market potential. The organisers are planning to organise the sensitisation campaign in Erode, Salem and Karur — the other textile hubs in this part of the country.

Source: The Hindu Business Line

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Global Textile Raw Material Price 05-07-2018

Item

Price

Unit

Fluctuation

Date

PSF

1316.22

USD/Ton

0.11%

7/5/2018

VSF

2235.92

USD/Ton

0%

7/5/2018

ASF

3090.79

USD/Ton

0%

7/5/2018

Polyester POY

1394.62

USD/Ton

0.98%

7/5/2018

Nylon FDY

3512.94

USD/Ton

0%

7/5/2018

40D Spandex

5276.95

USD/Ton

0%

7/5/2018

Nylon POY

1613.24

USD/Ton

0%

7/5/2018

Acrylic Top 3D

3595.86

USD/Ton

0%

7/5/2018

Polyester FDY

5691.57

USD/Ton

0%

7/5/2018

Nylon DTY

1635.85

USD/Ton

0.23%

7/5/2018

Viscose Long Filament

3158.63

USD/Ton

0%

7/5/2018

Polyester DTY

3196.32

USD/Ton

0%

7/5/2018

30S Spun Rayon Yarn

2970.17

USD/Ton

0%

7/5/2018

32S Polyester Yarn

2122.84

USD/Ton

0%

7/5/2018

45S T/C Yarn

2955.09

USD/Ton

0%

7/5/2018

40S Rayon Yarn

2261.55

USD/Ton

0%

7/5/2018

T/R Yarn 65/35 32S

2517.86

USD/Ton

0%

7/5/2018

45S Polyester Yarn

3136.02

USD/Ton

0%

7/5/2018

T/C Yarn 65/35 32S

2653.55

USD/Ton

0%

7/5/2018

10S Denim Fabric

1.41

USD/Meter

-0.11%

7/5/2018

32S Twill Fabric

0.87

USD/Meter

-0.17%

7/5/2018

40S Combed Poplin

1.21

USD/Meter

-0.12%

7/5/2018

30S Rayon Fabric

0.69

USD/Meter

0%

7/5/2018

45S T/C Fabric

0.72

USD/Meter

0%

7/5/2018

 

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.15077 USD dtd. 5/7/2018). 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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Pakistan :Textile exporters urge government to allow GDs for duty drawback

Textile exporters have urged the federal government to allow Goods Declaration (GDs) generated till 30th June 2018 for applying for the duty drawback Scheme. Muhammad Jawed Bilwani, Chairman, Pakistan Apparel Forum in a letter to Mian Misbah-ur-Rehman Federal Minister Commerce and Textile Industry raised the issue of claims under Duty Drawback of Taxes. He said as per Ministry of Textile Industry's notification dated 12th December 2017 on Duty Drawback of Taxes 2017-18, exporters are required to submit claims on shipment date basis and drawback will be allowed for the shipments made from 1st July 2017 to 30th June 2018. He said that export consignment reaches at the port or terminal in time for shipment abroad but does not board the ship as consignment is marked for examination by ANF/Customs or non-availability of space in vessel. A number of exports were not dispatched due to Shut Out Container - a container that enters the terminal as export for a vessel as indicated by VCN/VIAN and is not connected to the vessel for whatsoever reason and is lying in the container yard. He proposed that the shipment date of exports, GDs of which generated till 30th June 2018, should be extended till 10th July 2018 to enable exporters to applying the drawback under FY18 and to avail incremental drawback. He said if the shipment date will not extend for 10 days, a number of exporters will remain unable to avail of the duty drawback scheme. Chairman Pakistan Apparel Forum said the same request was sent to secretaries of Ministry Commerce and Textile for extension in date of shipment by 10 days. However, these ministries have replied that the extension can only be allowed by the Economic Coordination of Cabinet (EEC). "However, we understand that extension may be allowed by the Ministry as per procedural requirement to facilitate exporters and genuine submission in the interest of Textile Industry," he added.

Source: Business Recorder

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It’s Not Just Trump, China’s Also Making The WTO Irrelevant

China’s pioneering initiative to institutionalize trade rules and dispute mechanisms for its New Silk Road is especially impactful in making the World Trade Organization irrelevant in and of itself, but when combined with Trump’s recent moves away from this globalist body, it has the effect of dealing what might be a deathblow to the group and leading to its ultimate replacement with a Beijing-led model. Sputnik republished a piece from China’s official Communist Party media outlet the Global Times reporting the Chinese Ministry of Foreign Affairs and law society’s joint efforts in streamlining trade rules and dispute mechanisms for the New Silk Road. The article goes on to describe the various functions that Beijing is trying to incorporate into the as-yet-unnamed body that it’s presumably trying to form, which includes:

* “cooperation related to financing, taxation, transportation, intellectual property rights, labor and counter-terrorism;

* treaty-based mechanisms or institutions to prevent and resolve disputes and to strengthen mutual recognition and enforcement of judgments in civil and commercial matters;

* and establishing an online platform that provides information on foreign laws and judicial cases.”

All of the above competencies are pretty much already carried out by the World Trade Organization (WTO), of which China and the vast majority of its partners are members, drawing into question what it is that Beijing wants to achieve by constructing a different institution that redundantly repeats the same tasks as the existing one. Before addressing China’s motives, it’s worthwhile to put everything into its proper international context. Trump’s recent spree of threats to either ignore the rules of the same WTO that the US itself helped found or pull out of the body completely because of its perceived bias against America’s national interests threatens to create an irreplaceable leadership void in the organization. Instead of continuing to invest in its efforts to gradually co-opt various members and reform this US-created body from within, China apparently made the decision that it’s easier to build its own institutional trade structure. Up until recently, China had been simultaneously pursuing the two contradictory tasks of trying to reform the WTO and building a replacement to it, which provided the country with as many choices as possible for flexibly reacting to fast-changing scenarios in international affairs, but the latter goal is now taking precedence following Trump’s signals that he’ll be downgrading the globalist body’s importance in influencing America’s new semi-protectionist economic policies that largely run counter to the same rules the US itself originally promulgated. The unravelling of the WTO could lead to widespread economic uncertainty across the world that would endanger China’s interests, which is why its leadership was prudent enough to implement the back-up plan of building a possible Silk Road replacement to it in case this scenario ever came to fruition. It could also be argued that China might have also had very long-term plans of replacing it all along, preferring to operate within its own international body as opposed to one created by the US. Whatever its motivations may have been, the objective reality is that China’s preexisting efforts to build an international body whose competencies are largely redundant with the WTO’s contributed to Trump’s plans to render this globalist entity largely irrelevant, with both Great Power rivals uncoordinatedly pursuing the same ends of dismantling Western Globalization for drastically different reasons altogether. Trump wants to replace this system with what could be described the “Washington Consensus 2.0” whereas China wants to advance its vision of Silk Road Globalization. About the first replacement model, Trump wants to reassert the US as the world’s most dominant economy by removing all the trade loopholes that his predecessors wrote into law for reasons of self-enrichment & Liberal-Globalist ideology and therefore return to an era of largely bilateral economic agreements that put “America First” in all respects. China, meanwhile, wants to solidify its role as the engine of South-South economic integration and a viable alternative to the US, whose previous Washington Consensus model of leadership is now largely distrusted by most of the world. To paraphrase the famous line from American cowboy movies, the WTO isn’t big enough for the US’ Washington Consensus 2.0 and China’s Silk Road Globalization, which is why both Great Powers are seeking to replace it in the New Cold War. The US doesn’t really see much of a need for the WTO when its preexisting multilateral trade arrangements can devise custom-tailored solutions for resolving disputes between members and Washington wants to focus more on bilateral partnerships going forward anyhow, while China is eager to replace this Western-built institution originally designed to advance American interests with its own Silk Road construction better suited for its own. The end result is that China, just like Trump, is working to make the WTO irrelevant, though in the grand scheme of things, that might not actually be a bad thing for anyone apart from the elite stakeholders invested in indefinitely perpetuating this seemingly outdated system.

Source: Eurasia Future

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Pakistan : Duty exemption on cotton import withdrawn

ISLAMABAD: The Federal Board of Revenue has withdrawn duty exemption on import of cotton. A notification SRO847 issued on Thursday stated the exemption facility will be ineffective from July 15, 2018. Since Jan 8, the government has exempted 5pc sales tax and 4pc customs duty on import of cotton through a notification SRO48 of 2018. The exemption was withdrawn to give benefit to local growers.

Source: The Dawn

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Trade benefits for Bangladesh to stay post Brexit: UK

British minister of state for Asia and the Pacific Mark Field has said the United Kingdom will continue to offer the trade facilities Bangladesh is enjoying now there even after Brexit. The level of negotiation will be broadened with Bangladesh after Brexit, he said at a press briefing after a meeting with Bangladesh commerce minister Tofail Ahmed in Dhaka. Mark visited a number of readymade garment factories in the country and expressed satisfaction over the environment-friendly initiatives there, according to Bangladesh media reports. Tofail said both discussed bilateral trade relations, duty-free market access, coming national elections and the Myanmarese Rohingya migrants issue.

Source: Fibe2Fashion

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New hemp and cotton Clean Fibre Initiative

Earth Alive Clean Technologies (EAC), a leading Canadian clean-tech company, developer and manufacturer of state-of-the-art microbial technology-based products for sustainable agriculture and mining, has announced the launch of the Clean Fibre Initiative, a collaborative research project to improve the production of natural fibre crops in Canada and around the world. Hemp is a fibre crop that is experiencing rapid expansion in North America and around the world. Legislative changes are making it easier for farmers to produce hemp, and it is an excellent option for crop rotation. Hemp has lower water requirements than other fibre crops; it is also highly regenerative for farm soils. Scaling up hemp production will require not only increasing the number of acres, but also maximising crop yield and quality. Sustainable crop nutrition will be key, the company explains. Cotton is one of the most widespread natural fibre crops, but its environmental impact is under growing scrutiny. With 30 million acres of cotton grown around the world and the serious challenges it poses such as soil degradation, water depletion, and pesticide contamination, cotton growers are in need of new tools and approaches that protect soil quality, while maintaining crop productivity. “We put soil health at the centre of our work and we are confident that our Soil First platform will allow producers to improve the productivity of their fibre cultures, while reducing the net impact on the environment,” said Michael Warren, CEO, Earth Alive. “By involving existing growers in the development of application protocols and in the evaluation of our products, we can monitor crop performance across a range of factors that are important to them. We are also looking at hemp seed and oil production. Additionally, one of our sites will monitor the changes in cannabidiol (“CBD”) levels in the plants; with legislative changes underway CBD extraction derived from hemp is expected to increase significantly in the future.” Earth Alive currently has hemp trials underway with conventional and organic growers in Canada, as well as the US. Cotton trials are underway in Peru and Burkina Faso. Earth Alive is calling for more producers to join the initiative. Participants will establish Clean Fibre Initiative trial sites on their commercial plantations and Earth Alive technical staff will monitor and evaluate the plots throughout the initiative. “Sustainable agriculture isn’t just about producing nutritious food to eat, it’s also about producing safe and environmentally responsible clothes to wear,” said Simon Neufeld, Chief Agronomist, Earth Alive. “Fibre crops are an important revenue generator for farmers all over the world and we are focused on developing new technologies that will build and protect the soil to allow farmers to continue growing these crops for generations to come.”

Source: Innovation in Textiles

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FEATURED: Financing available, BDF tells local textile industry

Rwanda’s Business Development Fund (BDF) has urged tailors, fashion designers and traders in locally made clothes to make use of the existing opportunities in working with financial institutions and benefit from the BDF guarantee fund. The call was made by Carine Sandrine Mugwaneza, the Marketing and Relationship Manager at BDF, during the ongoing one-month countrywide campaign targeting busy trading centers. She was speaking last week while addressing stakeholders in the Made-in-Rwanda apparel industry who were exhibiting their products in the Car Free Zone in downtown Kigali City. “We have been approaching business people in the local apparel sector to enlighten them on how they can access to financing through financial institutions and that we are ready to provide a guarantee fund for those who do not have collateral,” she said. BDF works with the financial institutions namely banks, Microfinance Institutions and Savings and Credit Cooperatives to cover a between 50 per cent and 75 per cent of collateral required by the lending institution. The maximum guaranteed amount is Rwf500 million for Agriculture project and Rwf300 million for other sectors within a maturity period of 10 years. Those who are eligible for the support are Micro, Small & Medium Enterprises (MSMEs), individuals, associations, cooperatives. So far 26,000 projects have been supported to the amount of Rwf150.4 billion. “For youth and women projects, we cover 75 percent of collateral required by the banks. We are explaining to people about BDF services, the process that they can go through to be able to work with financial institutions and we cover their required collateral. We launched the campaign about guarantee because we realized that many people are still unaware of such opportunities,” Mugwaneza explained. She added that their interest in business people dealing in the clothing industry was because they make a major contribution to the implementation of Made-In-Rwanda initiative as the government seeks to reduce the import bill and in the process of phasing out second-hand apparel. “We have to promote local manufacturing by easing access to finance for the entrepreneurs. That is why we targeted the exhibitors of locally made clothes,” she added. The government is in the process of drawing up a strategy to develop the textiles, apparel and leather industrial sectors. It is estimated that, if everything goes as planned, it could create 25,655 jobs, increase exports to $ 43 million and decrease imports to $ 33 million by 2019 (from $124 million in 2015). The impact on trade balance will result in savings of $ 76 million over a three-year period. In 2016, Rwanda increased taxes on used clothes from $0.2 to $2.5 per kilogram, while taxes on used shoes increased from $0.2 to $3 per kilogram

Source: The New Times

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Want to Win the Trade War? Long the Dollar

Trade wars are good, and easy to win -- that’s a Donald Trump assertion which is giving succor to dollar bulls. They see the greenback as a better haven than gold should the tariff tit-for-tat intensify. Four months after the U.S. president shocked equity markets with his vision of higher duties on imports to America, investors are discovering catalysts that should help the nation’s currency withstand trade turbulence better than gold. “The dollar has become the main destination for safe-haven investors,” Ole Hansen, head of commodity strategy at Saxo Bank A/S, said by email from Copenhagen. “Geopolitical risk is on the rise, bonds and stocks have sold off and yet gold continues to drift lower.” The prospect that import tariffs will reduce the biggest economy’s current-account deficit at a time when the Federal Reserve raises interest rates has created a rare opportunity. The dollar can be used both as a haven and in carry trades, according to Andreas Steno Larsen, a global currency strategist at Nordea Bank AB in Copenhagen. The currency’s hold over gold is strengthened by the fact the metal is usually priced in dollars -- they’re inversely correlated.

Bad Half

With bullion last week posting its worst first-half performance in five years, investors are recalculating how they weight traditional assets. The push is coming from a confluence of events, from Trump’s antagonistic stance toward America’s trading partners, to the fact that the Fed is winding down quantitative easing earlier than its counterparts in Japan or Europe. The global stocks benchmark MSCI All Country World Index just notched its first back-to-back quarterly decline since 2015, and emerging-market equities posted the first drop in six quarters. Meanwhile the dollar is outperforming most major currencies. As the world’s most liquid bond market offers higher yields, the appeal dwindles for holding an asset bereft of an income stream such as gold. Meanwhile, the currency strengthened its grip over gold prices, overshadowing other drivers including falling physical demand in India, industrial-demand expectations and dwindling investment flows in exchange-traded funds. About half of gold’s fluctuation since January could be explained by movements in the greenback, regression analysis shows. That’s a stronger bond than in any year in the past decade. “We’ve seen a very tight relationship between gold and the dollar recently,” Carsten Menke, a commodities strategist at Bank Julius Baer & Co. Ltd., said by phone from Zurich. “It’s very difficult to make money trading gold when the dollar is rising.” At the same time, the 120-day correlation between the Bloomberg Dollar Spot Index, which was up 1.7 percent this year through July 3, and the S&P 500 turned negative in February. A stronger-than-noise reading of negative 0.3 meant the benchmark indexes moved in opposite directions more than not. A rallying dollar may itself be a headwind to stocks. A “significant” driver of the dollar’s gains this year has been reduced risk appetite, spurring a tide of capital to dollar assets as emerging markets seize up, according to Jane Foley, head of currency strategy at Rabobank. That said, “the sheer liquidity associated with the dollar means that for some investors it will always be a safe haven,” she wrote in a recent note. The U.S. is expected to start enforcing fresh tariffs on a range of Chinese goods on Friday, with the Asian nation poised to retaliate immediately. China exported more than $500 billion to America last year.

Source: Bloomberg

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