The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 18 AUGUST, 2018

NATIONAL

INTERNATIONAL

FTA tweak hint to curb China goods

New Delhi: India is keen to change the rules of origin clauses in free trade pacts, including the South Asian Free Trade Agreement, to give its industry greater protection from Chinese goods routed through other countries using the trade deals. With the US-China trade war escalating, Indian policy makers fear Beijing will increasingly route its manufactures into the Asian markets. The trade deficit with China has already increased to $62.9 bn in 2017-18 from $51.1 bn in 2016-17 out of a bilateral trade worth $89.6bn in the last fiscal. Since China does not have any free trade pact (FTA) with India, policy makers feel Beijing will use other countries in South East Asia and South Asia, such as Bangladesh, with which India has FTAs. Officials point out the Confederation of Indian Textile Industry has already brought to their notice the growing use of Chinese cloth and yarn in garments from Bangladesh. India has not imposed any sourcing restrictions on less developed countries (LDCs), extending the duty-free, quota-free facility to all such 49 LDCs on a unilateral basis. Analysts believe China can well use the LDC route. Besides Bangladesh, within Asia, Nepal, Afghanistan, Myanmar, Maldives and Cambodia are LDCs.  "This in itself is a matter of some concern. What we need to guard against is any attempts to sell Chinese products by mere re-packaging or minor value addition in a third country which enjoys duty free status in India," the officials said. The Narendra Modi government has already doubled duties on some 328 textile items in a quiet move last week, making imported garments costlier. The textile sector is India's second largest job creator after agriculture, and accounts for about one sixth of its total exports. Officials said the textile industry has been crying hoarse about the worsening terms of trade and Chinese dumping post the trade war with the US. "We have more leeway in imposing tariff on textiles if we feel we are under pressure. It is a priority sector for India," said Biswajit Dhar, former director-general of RIS and currently professor, Centre for Economic Studies & Planning, JNU. India imported some $21.3 billion worth of electronics last year, and this is expected to go up despite the higher tariffs to encourage local manufactures, especially telecom instrument. The country has already increased its basic customs duty on printed circuit boards, including populated, stuffed and loaded PCBs, as well as camera modules and connectors used in mobile phones to 10 per cent from zero, seen as part of a bid to kick-start the much hyped "Make in India" campaign launched some three-and-half-year back which was supposed to entice foreign manufacturers especially electronics makers to Indian shores. Officials warned if China starts dumping the mild tariff walls created by India may not help to stem imports.

Source: The Telegraph

Back to top

MSME exports hit more by issues related to GST implementation than demonetisation? Check what report says

MSME exports were hit more by issues related to GST implementation than demonetisation, according to a report released today. MSME exports were hit more by issues related to GST implementation than demonetisation, according to a report released today. Micro, Small and Medium Enterprises (MSMEs), considered a powerful engine of the country’s economic growth, are contributing around 40 per cent of the overall shipments from India. “…MSME exports were affected more adversely by issues relating to GST implementation than demonetisation due to delay in refund of upfront GST and input tax credit affecting cash-driven working capital requirements,” said Mint Street Memo published by the RBI. The report noted that the credit growth in the MSME sector had started decelerating even before demonetisation, and declined further during the demonetisation phase. “In contrast, GST implementation does not seem to have had any significant impact on credit. Overall, MSME credit and especially micro credit to MSMEs, including loans by banks and NBFCs, shows a healthy rate of growth in recent quarters,” it said with the disclaimer that the views and opinions do not necessarily represent the views of the RBI. During the quarter April-June 2018, bank credit to MSMEs increased on average by 8.5 per cent (y-o-y), mirroring the level of growth during April-June 2015, with credit to micro and small enterprises growing at an even healthier rate. The growth in credit to MSMEs has recovered since the lows of late 2017 to reach the mid-2015 level, it said. The report said among various items of MSMEs exports, gems and jewellery, carpets, textile, leather, handlooms and handicrafts items are highly labour intensive and depend heavily on cash for working capital requirements and payment towards contractual labourers. “MSME exports showed only mild weakness post October 2016 (demonetisation period) but decelerated sharply during April and August 2017 (GST implementation period) with only a temporary recovery during the post-GST implementation period,” it said. In contrast, non-oil non MSME exports growth showed healthy growth post demonetisation but also suffered a dip during April-July 2017, it said. Given the difficulties faced by MSMEs in debt repayments after demonetisation, the Reserve Bank announced a series of measures to provide some relief, it said. “The prudential norms were relaxed (on November 21, 2016) by providing an additional 60 days for repayment of dues, beyond what is applicable for loans to be considered as sub-standard for running working capital account, for accounts with sanctioned limit of Rs 1 crore or less,” it said. The relaxation was extended (on December 28, 2016) by providing additional 30 days for repayment of dues, it said. “On December 29, 2016, the RBI advised banks to use the facility of providing additional working capital limit to their MSME borrowers to overcome the cash flow mismatches. This was a one-time measure valid up to March 31, 2017,” it said.

Source: Financial Express

Back to top

Ahmedabad: GST relief likely for textile players

Players in the textile sector are likely to soon get relief. Well placed sources said that soon a new order, a draft copy of which is doing rounds in social media, will be passed that will allow a refund of pending tax credit of Goods and Services Tax (GST). The pending refunds are worth thousand or crore of Rupees. An earlier order by the government provided that the pending tax credit will lapse on July 31. The order disallowed refund of accumulated input tax credit on account of inverted duty structure (when the tax on raw material is higher than that of the final product) on about ten categories of fabrics. It had created a hue and cry in textile sector. It was also not clear which credit will lapse? Players and tax experts made a series of representations to allow refund of tax credit and clear the air on other matters. Sources in the know of things said that most of the questions raised by the industry are likely to be addressed in the revised notification. A well-placed source told DNA that almost all legitimate concerns related to input services, tax on capital goods, exports and even stocks are likely to be refunded, which will be a major relief for the sector. Naresh Sharma, president of Ahmedabad Textile Processors Association hopes that soon a notification should be out. "We are happy that our pending tax credit will not get lapsed. This will ease the liquidity situation in the market. Textile players will benefit from it," said Sharma.

Source: Daily News & Analysis

Back to top

GST officers to ensure companies pass on benefits to the consumers

 

Weeks after goods and services tax (GST) rate reduction on over 100 items including consumer durables, the anti-profiteering watchdog has asked GST officers to keep a close tab on businesses to ensure benefits are passed on to end consumers. However, tax experts cautioned that it could lead to harassment of taxpayers at the ground level if not done in a judicious manner. The national anti-profiteering authority has asked the central board of indirect taxes and customs (CBIC), the nodal department for GST, to instruct commissioners to proactively carry out checks on companies and businesses for profiteering. “The GST law authorises commissioners to file profiteering complaints if they find that rate cuts or availability of input tax have not resulted in commensurate reduction in prices. They must be proactive, especially after the July rate cuts, considering that consumer awareness in the country remains low,” said an NAA official. Of the over 100 profiteering complaints being examined at different levels, only 7-10 have been filed by commissioners of various states. Rates were cut on more than 100 items in July, including refrigerators, washing machines, small-screen television sets, perfumes, cosmetics, vacuum cleaners, and shavers. According to rule 128 of the Central GST Act, the standing committee under the anti-profiteering mechanism will examine complaints and evidence provided by an interested party or a commissioner.“Even commissioners are authorised by law to file complaints. But only a handful of complaints have been filed by them,” pointed out an official. Also, if an enquiry is with respect to a particular product, details about other products should ideally not be sought,” he said. He added that for the industry, it means that necessary documentation and explanations should be kept ready, which demonstrates that GST benefits have been passed on to the consumers. According to the anti-profiteering rules under GST, “Benefits of input tax credit should have been passed on to the recipient by way of commensurate reduction in prices.” The anti-profiteering mechanism is a three-stage process. There is a state-level screening committee for local complaints and a standing committee for national-level complaints. Then, there is investigation by the directorate general of Anti-Profiteering and finally a probe by NAA, the decision-making body. “The lower number of complaints filed by Commissioners could be due to their preoccupation with the GST implementation. Since the majority of businesses should have complied with the requirements of Section 171, it is expected that they will be able to provide documentation demonstrating the same” M S Mani, Partner at Deloitte India.

 

Source: Business Standard

Back to top

India's Andhra state announces sops for handloom weavers

Chief Minister of India’s Andhra Pradesh state N Chandrababu Naidu recently announced sops for weavers, including ₹8,000 aid to their families for two months during the rainy season, enhanced input subsidy and market rebate, an Odisha Cooperative Tassar and Silk Federation Ltd (SERIFED) centre at Chirala and a weavers park in Amaravati with housing facilities. He was speaking at Tallareddypalem in Vetapalem in Prakasam district on the occasion of National Handloom Day on August 7. Despite the central government’s objection, the Andhra state government waived off ₹114 crore worth weavers’ loans and is now thinking of waiving off individual loans of weavers instead of the societies, media reports from the state quoted him as saying. He promised 100 units of free power to weavers for the work sheds in the park that will put an additional burden of ₹29 crore on the state exchequer. He also agreed to clear ₹49 crore dues to the Andhra Pradesh State Handloom Weavers Cooperative Society (APCO) from the state government at the earliest.

Source: Fibre2fashion

Back to top

‘Knowledge acquisition and setting standards must for technical textiles’

Centres of Excellence for technical textiles in Coimbatore should look at knowledge acquisition and developing standards for products, said Ashwin Chandran, vice-chairman of Southern India Mills’ Association and chairman and managing director of Precot Meridian, here on Friday. Inaugurating a two-day conference on “Industrial Textiles - Products, Applications and Prospects”, organised by the Department of Textile Technology and Automobile Engineering of PSG College of Technology, he said Coimbatore has two Centres of Excellence - one for medical textiles and another for industrial textiles - set up with support from the Central Government. This is the right time to tap opportunities in technical textiles as the Union Government is promoting Make in India and indigenisation. Coimbatore region has several textile clusters and hence, the Centres of Excellence can easily work with the industry. The centres should look at knowledge acquisition and become experts in their respective fields. The centres should also involve marketing experts, identify the demand, and work with the textile clusters. Further, at present, there is no centralised information on standards for industrial textiles. The centres should work on testing and standards, he said. Prasad Potluri, director of Research, Northwest Composites Centre, School of Materials, University of Manchester, spoke about the need for such events. Roy Conway, Industrial Chemist, Northwest Composites Centre, School of Materials, University of Manchester, said that globally, the Indian sub-continent is important for textiles. The quality of textiles in India is better, he pointed out. L. Gopalakrishnan, Managing Trustee of PSG Institutions, said India’s technical textiles market size accounts for 4 % of the global market. The market is expected to grow 20 % year-on-year. Of this, industrial and home textiles will be substantial. G. Thilagavathi, professor and head of department of textile technology, PSG College of Technology, said the Industrial Centre of Excellence has an incubator and it has developed several products.

Source: The Hindu

Back to top

Malegaon textile park likely to be ready by March 2019

Nashik: The textile park coming up on 113 hectare land at Sayane in Malegaon taluka of the district will be ready by March next year. The work to create the basic infrastructure like road and water supply lines in the proposed park has been undertaken by the Maharashtra Industrial Development Corporation (MIDC). At present, the MIDC is developing the second phase of the park at Sayane and local industries have urged them to start land allotment at the earliest. Moreover, local industries have also demanded to set up a Common Effluent Treatment Plant (CETP) at the industrial estate.  In first phase, the MIDC has already developed 15 hectare of land that will house 72 industries. “All these plots have been allotted. Around 15 units have already started operations while other units are under constructions there,” an MIDC official said. “We have already started developing infrastructure. Around 60% of the infrastructural work is over and this textile park will be ready for industries by March end next year,” a senior MIDC official said. “Water supply, approach roads, internal roads and other infrastructural facilities that are to be developed,” he added. Director of Malegaon textile cluster project Prakash Kankaria said there is a need for MIDC to speed up the work. “Once ready, the second phase of the park will definitely boost the industrial growth. But authorities are developing infrastructure at snail’s pace. It is already delayed by a year. We want the MIDC to at least start allotment of plots in the proposed textile park simultaneously while developing the infrastructure,” he said. Kankaria added that the rate of land is another issue. “In the first phase, the MIDC had fixed a rate at Rs 400 per sqmt. But in the second phase, the rates are expected to be higher. There have been reports that it may be around Rs 1,000 per sqmt or more. We want the rates to be minimum and below Rs 500 per sqmt,” he added. An MIDC official said they have already proposed CETP project with capacity of 1 million litre per day (MLD) and are awaiting nod from the head office before taking up this scheme

Source: Time of India

Back to top

Pakistan: Increase in polyester prices irks textile exporters

LAHORE - A meeting of textile mills that use polyester fiber as basic raw material was held in All Pakistan Textile Mills Association (APTMA) on Friday to consider the market situation. Great dismay was shown over the unsustainable hike in prices of polyester staple fibre. The participants of the meeting expressed concerns over a crisis like situation under which a sizeable exporting capacity has already closed down. They further apprehended that an unprecedented increase in PSF prices would not only lead to further closing of the capacities of yarn manufacturers but is likely to adversely affect the entire textile export value chain. They pointed out that Pakistan is already lagging behind the global market players in the area of man-made textile products. Pakistan has never been able to make inroads into synthetic market globally, they added. They said fact of the matter is that basic textile raw materials cotton and PSF are both short for industry consumption because of the protection and incidentals on the import of PSF (20 percent) and cotton (11 percent). Textile exporters are being forced to cross subsidise PTA and PSF plants in Pakistan whereas exporters are given rebates and draw backs in other countries. Recently the domestic polyester manufacturers have increased prices by over 20 percent, which has played havoc with the situation. Many of t1he exporters being non-viable due to the prevailing circumstances have decided to close down their operations for upto 10 days from next week. The meeting was also of the view that one of the main causes of the non viability of domestic polyester fiber chain is the protection extended to the obsolete PTA plant over the last 25 years. The import duties on its raw materials are zero yet the finished product PTA is being given protection of 6 percent despite making huge profits which is a big reason for the predicament and non viability in the export market of Pakistani produced manmade textiles. The yarn producers have urged the government to reduce import duties on the import of PSF from existing 7 percent to 2 percent as polyester prices have almost doubled in the last year.

Source: The Nation news

Back to top

Kazakh-China cooperation in textiles explored in Astana

China and Kazakhstan have immense potential to cooperate in textiles as only a third of the 250,000 tonnes of cotton produced annually by the latter is processed and the rest exported as raw material, according to Kazakh Invest National Company chairman Saparbek Tuyakbaev, who recently addressed leaders of around 30 Chinese textile companies visiting Astana. The companies are members of the Chinese Union of Textile Industry and visited Astana to study investment opportunities. The meeting was organized with the support of Kazakh Invest, according to a press release on the official website of the prime minister of the country, www.primeminister.kz. Moreover, special economic zone Ontustik is located in the border region with Uzbekistan, the largest cotton producer, which is an added benefit for Chinese companies, noted Tuyakbaev. The meeting discussed cooperation in cotton production, raw material processing, apparel manufacturing and logistics. (DS)

Source: Fibre2fashion

Back to top

KFC apparel hits the market – and all for a good cause

KFC has just launched a brand new line, although these are made to make you look delicious. Calling it “the world’s most Aussie KFC merch”, the global chain has released a line of threads that, credit to them, are pretty bloody Aussie. Along with your standard t-shirts, there are budgie smugglers (featuring the Colonel’s trademark bow tie), tracky dacks, surf wax and a surfboard. However, the best pieces of clothing on sale are definitely the crocheted bits and bobs, which have been by Melbourne’s Phil Ferguson (AKA Chili Philly). Now, generally Chili Philly is known for his headwear, so it’ll be no surprise to find there is both an Original Recipe drumstick and KFC bucket to keep your noggin warm on offer, but there is also a chance to up your neck game, with a Colonel Sanders’ tie. If you’re keen on rockin’ these Chili Philly items, you’d better start saving, with the tie going for $211, the drumstick for $611 and the bucket for $811. But rather than this being a shameless grab to cash-in on bogans and hipsters who want to show how proud or ironically clever they are with regards to Dirty Bird, the full line of clothes is actually in aid of a good cause. Specifically, all proceeds from the sales will go to the KFC Youth Foundation, “which helps young Aussies build confidence through our partnerships with Australia’s top youth-focused charities including Reach, Youngcare, Whitelion, StreetWork and ReachOut”. If you’re looking to express your fashion the KFC way at a slightly more affordable rate, the tees are $30 each, while the budgie smugglers and tracky dacks are going for $40. As for the surfboard, that was a one-off piece that sold for $3000 as this story was being written!

Source: Techly

Back to top

Foreign cotton ban as elixir for boosting local content

As part of efforts to revive Nigeria’s ailing cotton manufacturing sector, the Cotton Ginners Association of Nigeria urged the Federal Government to ban importation of foreign cotton into the country to boost local textiles. Taiwo Hassan writes. Era of Boom The textile industry was one of the booming sub-sectors of the Nigerian economy in the post independence years. Driven by locally grown cotton and with huge demand for clothing by a fast growing population, it provided direct and indirect employment to hundreds of thousands of Nigerians for several decades. In the golden era of Nigeria’s textile industry between 1985 and 1991, the sector recorded an annual growth of 67 per cent and as at 1991, it employed about 25 per cent workers in the country’s manufacturing sector. Some of the textile companies that enjoyed the boom then include Kaduna Textile Ltd (KTL), Arewa Textile Plc, United Nigerian Textile Plc, Supertex, Nortex Nigerian Ltd and Finetex Nigeria Ltd. Others were Gaskiya Textiles Mill, Kano Textile Ltd, Aba Textile, Zamfara Textile Ltd, Asaba Textile Ltd, African Textile Mill Plc, Tofa Textile and several others. In that period the functional textile companies were around 180, employing about a million people. It accounted for over 60 per cent of the textile industry capacity in West Africa, empowering millions of households across all the geopolitical zones of Nigeria. Set backs The story, however, changed in the early nineties when the sector took a massive dive into an industrial abyss. At a point during the crisis in the sector, from about 180 thriving textile companies, the number came down to almost zero, with textile giants such as United Nigerian Textile Company bowing to the pressure imposed by a hostile operating environment. According to the President of the National Union of Textile, Garments and Tailoring Workers of Nigeria (NUTGTWN), Comrade Oladele Hunsu, the textile industry in the 1980s was the second largest employer of labour after the Federal Government. “However, over the years, there was a steady decline in operations of the textiles firms and then an eventual collapse of the industry, which has led to loss of jobs, dearth of skilled manpower, low capacity utilization and drop in government revenue due to lack of excise duties, “he said. The dip in the fortunes of the industry, he said, was due to the influx of cheap textiles and fabrics into the country from all over the world and mainly from China and India. He added that the downturn in the sector was a result of the government’s lack of political will to ban imported textiles and poor monitoring of the country’s porous borders. “This will continue to impact negatively on the textile industry if not checked,” he said. Effort to Revive the sector There is no doubt that Nigera’s comatose textile sector has been a great concern for this present government under President Muhammadu Buhari. Indeed, the desire to turnaround the fortunes of the country’s textile industry has been a huge task for the administration, as it had engaged on new technique, especially leveraging on the biotechnology (BT) cotton as solution to revive the nation’s comatose textile industry and stop foreign imports. BT cotton However, as the fortunes of the country’s textile and garment sector continued to decline due neglect by past administrations, the Federal Government recently approved and released high yielding variety of genetically modified (GM) cotton through the National Committee on Naming, Registration and Release of crop Materials. For the government, the introduction of the GM cotton in Nigeria was a good development for the comatose textile industry, which was once described as the engine room of the Nigerian economy in the early 80s. About 1000 mega farmers had been assembled to ensure commercialization of the GM cotton and quick distribution among farmers nationwide. Speaking during the inspection tour of the BT cotton on station trial at the National Biotechnology Development Agency (NABDA), Abuja, the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, commended all the stakeholders who had made commitments to the development of the technology. “Introduction of BT cotton can result to the revival of the textile industry, it would be a great achievement for the country. The textile industry, which was one of the country’s most important sectors of the economy is dead, he said. “I am happy with what I have seen today, BT cotton stakeholders can talk about BT cotton in the country now. You can yell loud about BT cotton.” Ban Despite the efforts being made locally to improve the country’s comatose textile and garment industry, there were reports that some international organizations were lobbying the Federal Government to get permission for importation of cotton into Nigeria, with juicy offers to help in reviving the ailing textile sector. Hence, this new development on foreign importation of cotton has sparked controversy in the textile industry. Particularly, the Cotton Ginners Association of Nigeria had insisted that the government should not accept the offer and rather totally ban the importation of foreign cotton into Nigeria. President of the association, Salman Abdullahi, stated this in a press release recently. Implications He said that Nigeria’s native trade would suffer if international traders were permitted to import cotton into the country. “It has come to our information that there are some international organisations with the proposal to put money into Nigeria within the textile and garment trade with a provision that they must be allowed to carry into the nation cotton from their home nations to feed the proposed industries,” he said. “We hereby reject this proposal in its entirety due to the hazard it poses to cotton manufacturing in Nigeria and the devastating impression it will have on over two million Nigerian cotton farmers and their dependants.” Abdullahi stated that the acceptance of the proposal would lead to the downfall of over 52 existing cotton ginneries, loss of many textile companies, and more importantly, the total eradication of Cotton manufacturing in Nigeria. Funding The president however, noted that the association was in support of real funding within the sector, as it would create employment opportunities for youths and help foster peace within the nation. He urged the Federal Government to work with stakeholders and potential investors to revive cotton manufacturing within the country. Last line Amid the brewing controversy facing the textile industry over the looming importation of foreign cotton, it is therefore necessary for the government to listen to the Ginners’ clarion call so as to boost local capacity in the sector.

Source: The New Telegraph

Back to top