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MARKET WATCH 05 FEB, 2019

NATIONAL

INTERNATIONAL

Budget: Textiles Min FY'20 allocation pruned to Rs 5,831.48 cr.

The original budget proposal was Rs 7,147.73 crore to fund various programmes and schemes for the textile sector. Finance Minister Piyush Goyal has proposed Rs 5,831.48 crore budgetary allocation for the textile ministry for 2019-20, which is 16.01 per cent lower than the current fiscal. As per the budget document tabled in Parliament on Friday, the revised expenditure (RE) for the textile ministry has been pegged at Rs 6,943.26 crore during 2018-19. The original budget proposal was Rs 7,147.73 crore to fund various programmes and schemes for the textile sector. "The low allocation for ATUF & ROSL schemes for textiles is worrisome as it is clearly not sufficient to meet obligations under the schemes, both backlog and expected fund requirements in 2019-20."However, since this is an interim budget, we hope more funds will be allocated for these schemes," Confederation of Indian Textile Industry Chairman Sanjay Jain told. According to the budget document, Rs 700 crore has been allocated towards the Amended Technology Upgradation Fund Scheme (ATUFS) for the next fiscal, as against Rs 622.63 crore for 2018-19. Besides, a provision of Rs 1,000 crore has been made towards the Remission of State Levies (ROSL) as compared to Rs 3,663.85 crore in the revised estimate of 2018-19. The government had earmarked Rs 2,163.85 crore for ROSL in the previous year's Budget.

Source: Economic Times

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Interim Budget 2019: A booster dose for consumption, investment

The Interim Budget should spur consumption that, in turn, would impel the private investment cycle. After three years of prudence, the NDA government slipped on the fiscal deficit target in fiscal 2018, and then again in 2019. For fiscal 2020, in the Interim Budget, it has pencilled in fiscal deficit at 3.4% of GDP, or 30 basis points (bps) more than envisaged under the Fiscal Responsibility and Budget Management (FRBM) Act. No surprise there, because persuasions of a battle of hustings typically preclude fiscal rectitude. In the milieu, the Interim Budget’s focus on rural India and agriculture was expected. The pension and personal tax proposals come as the icing. This should push up consumption, especially in the social strata that has a higher propensity to consume, and in the process, animate a slothful private-sector investment cycle. That is important because the government, which gamely drove investments in the past couple of years, will have to take a back seat with the fiscal slippage showing. What will be helpful here is that capacity utilisation has ticked up and the corporate deleveraging cycle is progressing well. The Interim Budget also promises to leave more money in hinterland hands. The PM Kisan scheme alone could inject ₹95,000 crore into the farm economy in the current and next fiscals. CRISIL estimates this would boost profit from farming by 22%. Add the impact of proposed interventions on insurance, credit and calamity relief, interest subvention on animal husbandry and fisheries, and agriculture, the economy already looks reassuring.

Tax rebate

Then, there is something for the middle class, too. The tax rebates for those earning up to ₹5 lakh, the ₹10,000 increase in standard deduction, and the hike in the TDS threshold on interest earned on deposits up to ₹40,000 are also consumption triggers. The focus should now be on relentless implementation of announced reforms by getting the State machinery moving at full tilt.

Sectorally, the consumption boosting measures augur well for low-value consumer durables, fast-moving consumer goods and select automobile segments. Sales of mobile phones, smaller-sized television sets and entry-level two-wheelers should be positively impacted. Higher rural income will also spur demand for packaged food items such as biscuits and bakery products. Focus on road building under National Highway Authority of India and Pradhan Mantri Gram Sadak Yojana will spur demand for commercial vehicles and tractors, respectively. Construction of roads has payoffs as it is highly labour-intensive and in addition to job creation, is productivity-enhancing. Without doubt, consumption would be on a firm stead if these measures are pursued in the post-election budget as well. As the Finance Minister indicated, the Budget is best read in the context of India’s development journey. So what does all this mean for India’s growth next fiscal? Coming after two years of slowing private consumption, continuing sluggish rural demand and wage growth — both on and off the farm — the measures in the Interim Budget can help re-invoke demand from middle and lower strata. That would be opportune because the global economy is witnessing weak and asynchronous growth, with risks tilted to the downside. Export growth, which had made a comeback in 2018, faces risks of weakening global trade growth owing to escalating trade wars, this year. Next fiscal, therefore, India’s growth will have to be driven largely domestically. At this juncture, India needs good luck on crude oil and monsoons as well as relentless execution of budgetary proposals to fire growth. Private consumption, which accounts for over 55% of GDP, can be that domestic driver. If the monsoon turns out to be adequate for the fourth straight season, and crude oil prices remain leashed as now, India’s GDP could grow at 7.3% in fiscal 2020. With higher growth comes higher inflation. Higher demand will maintain the pressure on core inflation which continues to hover around 5.5%. Food inflation too is expected to move up from a very weak base of fiscal 2019 as global food prices move up and efforts to improve the realisations of farmers bear fruit. CRISIL estimates indicate inflation could move up from 3.7% in fiscal 2019 to 4.5% in fiscal 2020. The focus of the full Budget in June-July next, irrespective of political outcome, needs to be generously on the lower- and lower-middle income strata. The next leg of growth can then be materially inclusive and therefore more sustainable.

Source: The Hindu

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Budget 2019 – A budget for the Aam Aadmi.

How Budget 2019 has brought mega cheer for the common man:

The budget has consciously tried to put more money in the hands of the rural and urban population. Let us look at some key measures:

• The budget has proposed income up to Rs5 lakh per annum tax free in the hands of the tax payer from the next year. Add to that the 80C/D benefit of 1.5lakh, and it will effectively imply no tax up to income of Rs6.5lakh

• The standard deduction limit has been raised from Rs.40,000 to Rs.50,000 per annum. Last year, tax payers had complained that this standard deduction was in lieu of transport allowance and medical reimbursement, and hence, the incremental benefit was limited. This move will mean incremental benefits for tax payers.

• This budget could be an incentive for tax payers to save under Section 80C and Section 80D more seriously. Taxpayers now know that if they save in Section 80C instruments and also avail the exemption of interest on home loan, they can take their tax free income closer to Rs9 lakh. In addition, by opting for an NPS and medical cover, you are free of tax till a total income level of Rs10 lakh. This is an additional incentive for taxpayers to seriously save for ELSS/PPF investments and also think about buying a residential property.

• The budget has also exempted the notional rent on second property from income tax. This becomes an incentive for people to buy a second property and can be a huge incentive for the housing sector as such.

• In addition to the benefit on notional rent, there is an additional benefit on the capital gains front. Currently, if a person sells a house and then reinvests in another house, it was exempt from capital gains tax under Section 54. To give an incentive for many people who want to relocate to peaceful semi-urban locales, the government has announced that the proceeds can be reinvested in 2 properties instead of just 1. Of course, this special benefit will only be available once in a citizen’s lifetime.

• The budget has tried to implement a very simple form of “Universal Basic Income” (UBI) for small and marginal farmers owning less than 2 hectares of land. Such farmers will get Rs6,000 as basic minimum income each year via direct transfers into their bank account. The UBI plan will cover 12crfarmers and entail an annual outlay of Rs75,000cr. What matters is that this plan will be effective from December 2018, so farmers will start to see the benefits immediately.

The budget may be a class act in a number of ways. No political party from the left or the centre can really object to these giveaways. That should make the implementation a lot easier for the government.

Source: The Hindu

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Odisha Govt signed MoU with KEC, Iran for mutual cooperation

Bhubaneswar: On the 4th day of MSME International Trade Fair-2019, the session on “Promoting Women Entrepreneurship” received an overwhelming participation from more than 300 women entrepreneurs, exporters and startups. On this occasion, an MoU between Odisha Assembly of Small & Medium Enterprises (OASME) and Khazar Electric Company (KEC) from Iran was also signed for mutual cooperation for transfer of technology and production of equipments for agriculture, food processing, agriculture and waste management in presence of ACS, MSME. Delivering a special address on this occasion, Shri L.N. Gupta, ACS, MSME informed that there are 40,892 MSMEs led by women entrepreneurs in the state providing employment to 1.58 lakh persons. He added that 6032 micro enterprises led by women entrepreneurs have been assisted with margin money of Rs.142 crore under PMEGP since 2008-09. Also, 38 MSMEs led by women have been extended capital investment subsidy of Rs.4.5 crore under Odisha MSME and Odisha Food Processing Policy by the state government. He encouraged women entrepreneurs to come forward and take help of the entire ecosystem to further growth of their business. He also announced a system of resolution of credit related grievances at the level of General Managers of RICs/DICs on every Monday. Mrs. Subha Sarma, IAS, Commissioner cum Secretary, Handloom, Textiles & Handicraft Department, highlighted the potential for women enterprise in Textile & Handicraft Sectors. She stated that the gap in supply of Institutional uniforms/apparel and training opportunities in Incubation Centre starting from sewing to marketing may be leveraged by prospective women entrepreneurs. She emphasized on fusion of innovative ideas in traditional Handicrafts and invited the Women Designers to come forward for partnership with Boyanika. She also highlighted opportunity for aggregators to act as marketer for Handicraft products and adoption of value based packaging practices for Handicrafts. Mrs. Sujata Kartikeyan, IAS, Commissioner-cum- Director, Mission Shakti, Odisha shared success stories of Women SHGs. She informed that Mission Shakti is associated with 70 lakh women in 6 lakh SHG Groups. The cumulative savings of Odisha SHGs is Rs. 5000 Crore. She cited the unique integration of SHGs under Mission Shakti with Government programmes, namely, Mid-day Meal, Take Home Ration, Electrical Meter Reading, and driving training to women. She pointed out the challenges for women entrepreneurs in terms of Standardisation of Product, branding, delivery of bulk order, arrangement of aggregators, & marketing Tie up and invited women MSMEs to be aggregators & mentors of SHGs. Shi Sujay Kar, Dy. Director, ORMAS informed that 812 Producer Groups are operating with ORMAS. He added that right marketing tie-up, value addition, packaging, backward and forward linkages are essential factors for Marketing & sustenance of a women enterprise. He suggested availing the benefit of District Level Training Programme for Primary & secondary collectors conducted in sectors like Agri- Horticulture, Handloom & Handicraft Sector. Miss Reemly Mohanty, Founder of Reemly’s Design Studio, while sharing experience of bringing up her own enterprise, made a vivid elaboration on Brand Building & Marketing, understanding the customer & their perception, putting thrust on customer services like delivery timely, product protection from competitors & Marketing relations. Miss Jayshree Mohanty, MD, The Luminous Info Ways Pvt. Ltd suggested women entrepreneurs to brand their product and graduate from Startup to MSME and beyond with self involvement. Smt. J. M. Mohanty, Chairperson, OASME Women Wing highlighted the problems faced by women entrepreneurs due to lack of collateral, lack of knowledge in marketing, finance, quality & standard and requested for Govt. support.

Source: Odisha Diary

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Skill training for 1.23 lakh unemployed youths

The Wayanad district administration is gearing up to organise a skill-development programme for as many as 1,23,741 unemployed youths in the district under the Transformation of Aspirational District project of the Central government. The project envisages to ensure job opportunities for unemployed educated youths by imparting employability skills in various sectors, including agriculture, construction, soft skills, and service sectors in a phased manner, District collector A.R. Ajayakumar told The Hindu. It was planning to train as many as 20,000 youths in farming-related sectors; 40,000 in the service sector; 23,000 in soft skills; and 40,000 in construction sectors in four years, Mr. Ajayakumar said. “We give preference to short-term training programmes to ensure job opportunities for the youth,” he said.

Training partners

Institutions such as Kerala Academy for Skills Excellence (KASE); Uralungal Labour Contract Cooperative Society(ULCCS); Nettur Technical Training Foundation, Thalassery; and Bharat Petroleum Corporation had offered their willingness, apart from the technical institutes in the district, to train the youth, he said. The training programme will begin by the middle of February. Union Minister of State for Skill Development and Entrepreneurship Anantkumar Hegde will hold a videoconferencing on the project on Wednesday. Those technical institutes wishing to participate in the programme should submit a proposal to the District Planning Office before Monday, he added. The Niti Aayog has selected as many as 117 backward districts in the country for executing the project and Wayanad is the lone district from the State.

Source: The Hindu

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Worried over drop in shipments, govt to hold discussions with exporters

Concerned about the drop in exports of labour-intensive items such as gems & jewellery, engineering, leather products, man-made textiles and handloom, senior officials from the Commerce and Industry Ministry will meet exporters on Tuesday to discuss the situation and find a way out. “Exports have not been increasing consistently this year as was expected. The matter is of greater concern as exports are falling in sectors that engage a large number of workers, including gems & jewellery, textiles and engineering goods. The government wants to find out how it can work with exporters to address the situation,” a government official told BusinessLine. Export growth in December 2018 was almost flat at $27.93 billion due to a fall in shipments of labour-intensive goods. In the April-December 2018 period, there was a 10.18 per cent growth in exports at $245.44 billion. While the export growth in the initial months of the current fiscal was encouraging, in the third quarter it slackened. “The idea behind the meeting is to find out from exporters if there were some particular problems that they were facing that could be addressed through government intervention. The government also wants to know if the incentives given to exporters are working,” the official added. All export promotion councils as well as representatives from export organisations will participate in the meeting.

No Budget measures

The Interim-Budget announced by stand-in Finance Minister Piyush Goyal did not have any incentives for the export sector. “There was not much expectations of any major announcements for exporters in the Budget as incentives have been extended to exporters in the past through notifications. If the government deems fit, it could do so now as well,” the official said.

Source: The Business Line

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Rising oil prices leave rupee under pressure for a fall to 72.5

Three weeks of narrow sideways range movement between 70.45 and 71.50 in the Indian rupee has come to an end. The rupee declined, breaking the range below 71.50, and fell to a low of 71.82 on Monday. The currency closed at 71.80, down about a per cent for the week.

Dollar recovers

The US dollar index fell sharply last Wednesday following the Federal Reserve meet. The Fed surprised the markets by indicating that it would remain “patient” in determining the interest rate moves in the future. The dollar index fell from around 96 to a low of 95.15 after the Fed outcome. Though the rupee opened with a gap-up on Thursday, it failed to sustain higher and retain the strength as a result of the weakness in the dollar. The dollar index has recovered from its low of 95.15 and is currently trading at 95.70. A test of 96 looks likely in the near term. A break above 96 can take it further higher towards 96.5. Such an upmove in the dollar index can continue to keep the rupee under pressure.

Oil gains

The strong rise in oil prices continues to exert more pressure on the rupee compared to the dollar index. WTI-crude oil prices have surged over 5 per cent in the past week from around $52 per barrel to currently trade at $55.2 per barrel. The level of $53.5 will now be a good support. As long as oil trades above this support, there is a strong likelihood of it moving higher towards $58 and $59 in the coming days. This in turn will increase the likelihood of the rupee declining below 72 against the US dollar.

Rupee outlook

The wide gap-down open on Monday is a negative for the rupee and has also increased the pressure on it. The level of 71.4 is an immediate resistance. Next significant hurdle is in the 71.00-70.90 region. Supports are at 71.80 and 72. If the rupee manages to reverse higher from either of these supports, an interim recovery towards 71.5 or 71.4 is possible. However, a bullish outlook on oil prices leaves the rupee vulnerable to break below 72 in the coming days. Such a break will increase the likelihood of the rupee weakening towards 72.4 and 72.5.

Source: The Business Line

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Relief for exporters as Gujarat HC strikes down notification on pre-import riders

What could be seen as major relief for the exporters, the Gujarat High Court has struck down the October 2017 notifications of the Central Board of Indirect Taxes & Custom (CBIC) and correspondingly by the Directorate-General of Foreign Trade (DGFT) prescribing pre-import conditions to avail I-GST (Integrated Goods and Services Tax) exemption. The ruling will bring clarity on liquidity issue being faced by the exporters. “The Gujarat High Court, through a landmark decision pronounced in various cases, put a permanent end to this misery by striking down the pre-import condition as arbitrary, ultra-vires and violative of the Constitution,” Abhishek A Rastogi, Partner at Khaitan & Company, who argued in this matter, said. Commenting on the decision, Ajay Sahay, Director-General at FIEO, said, “This will end all doubts on the liquidity issue during the intervening period between October 2017 and January 2019).” The CBIC notification dated October 13, 2017, prescribed certain conditions, which in practical term denied benefits to exporters who import input goods after their finished products are exported. This notification was challenged in the High Court. Though, the Finance Ministry did issue another notification in January this year to remove pre-import condition and include specified deemed export supplies for exemption from integrated tax and compensation cess for materials imported against Advance Authorisations and Advance Authorisations for Annual Requirement. However, this relief was given prospectively while demand was to allow relief from October 2017 itself. Accordingly, the petitioners continued challenging the issue in the High Court. It was said that exporters importing duty-free items under Advance Authorisation licences have been going through unfair and undue hardships ever since the GST introduced from July 1, 2017.

Advance Authorisation

While BCD (Basic Customs Duty) exemptions continued under GST, the Government did not extend the exemption to IGST on imports under Advance Authorisation. Though, the Government extended exemption to IGST as well, when imported against valid Advance Authorisation licences but with ‘pre-import’ condition. The petitioners argued that the ‘conditions were arbitrary and violative of Article 14 of the Constitution.’ Rastogi said the imposition of ‘pre-import’ condition on imports made under Advance Authorisation licences by the Government on October 13, 2017 was causing enormous hardships to exporters. Advance authorisation licences are issued to allow duty-free import of inputs, which are used to make finished products for export. There was no such condition imposed on the scheme in the pre-GST period. Change in the condition meant that imports done after exports cannot avail exemptions from IGST and compensation cess. The Directorate of Revenue Intelligence (DRI), the anti-smuggling agency, started issuing show-cause notices to exporters for wrongfully availing of exemptions in cases where their exports preceded imports. They were asked to pay IGST in cases where raw material was imported only after goods were partially or fully exported. Now, after the ruling, exporters will not face such problems.

Source: The Business Line

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'Indian textile exports facing duty disadvantage against LDCs'

As per World Trade Organization’s (WTO) systems, the Least Developed Countries (LDCs) enjoy Generalized System of Preferences (GSP) because of which they enjoy duty advantage, said Minister of State of Commerce and Industry, C. R. Chaudhary. In a written reply to the Lok Sabha,Chaudhary said India faces duty disadvantage up to 9.6% against other neighbouring LDCs. The global demand of textiles has also declined significantly in 2014-17, contributing to reduction of textiles exports from India, he added. The minister informed that the Duty Drawback scheme rebates the incidence of Customs and Central Excise duties suffered on inputs used in manufacture of export goods. Duty Drawback scheme is not related to lack of innovations in the textile industry or its losing out to neighbouring countries, he added. He said that to increase exports of textile industry, Government announced a Special Package for garments and made-ups sectors. The package offers Rebate of State Levies (RoSL), labour law reforms, additional incentives under ATUFS and relaxation of Section 80JJAA of Income Tax Act. Further, the rates under Merchandise Exports from India Scheme (MEIS) have been enhanced from 2% to 4% for apparel, 5% to 7% for made-ups, handloom and handicrafts w.e.f. 1st November 2017. Products such as fibre, yarn and fabric in the textile value chain are being strengthened and made competitive through various schemes, inter alia, Powertex for fabric segment, Amended Technology Upgradation Fund Scheme (ATUFS) for all segments except spinning, Scheme for Integrated Textile Parks (SITP) for all segments, etc. Assistance is also provided to exporters under Market Access Initiative (MAI) Scheme. Further, Government has enhanced interest equalization rate for pre and post shipment credit for the textile sector from 3% to 5% w.e.f. 02.11.2018.

Source: SME

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Global Textile Raw Material Price 31-01-2019

Item

Price

Unit

Fluctuation

Date

PSF

1333.52

USD/Ton

0%

1/31/2019

VSF

1977.21

USD/Ton

0%

1/31/2019

ASF

2397.65

USD/Ton

0%

1/31/2019

Polyester POY

1270.26

USD/Ton

0%

1/31/2019

Nylon FDY

2753.36

USD/Ton

0%

1/31/2019

40D Spandex

4762.56

USD/Ton

0%

1/31/2019

Nylon POY

3006.37

USD/Ton

0%

1/31/2019

Acrylic Top 3D

5610.89

USD/Ton

0%

1/31/2019

Polyester FDY

1547.83

USD/Ton

0%

1/31/2019

Nylon DTY

2574.76

USD/Ton

0%

1/31/2019

Viscose Long Filament

2544.99

USD/Ton

0%

1/31/2019

Polyester DTY

1473.42

USD/Ton

0%

1/31/2019

10S OE Cotton Yarn

2103.71

USD/Ton

0%

1/31/2019

32S Cotton Carded Yarn

3407.46

USD/Ton

0%

1/31/2019

40S Cotton Combed Yarn

3918.69

USD/Ton

0%

1/31/2019

30S Spun Rayon Yarn

2738.47

USD/Ton

0%

1/31/2019

32S Polyester Yarn

2001.76

USD/Ton

0%

1/31/2019

45S T/C Yarn

2872.42

USD/Ton

-0.52%

1/31/2019

40S Rayon Yarn

2158.04

USD/Ton

0%

1/31/2019

T/R Yarn 65/35 32S

2544.99

USD/Ton

0%

1/31/2019

45S Polyester Yarn

3036.13

USD/Ton

0%

1/31/2019

T/C Yarn 65/35 32S

2530.11

USD/Ton

0%

1/31/2019

10S Denim Fabric

1.37

USD/Meter

0%

1/31/2019

32S Twill Fabric

0.83

USD/Meter

0%

1/31/2019

40S Combed Poplin

1.11

USD/Meter

0%

1/31/2019

30S Rayon Fabric

0.65

USD/Meter

0%

1/31/2019

45S T/C Fabric

0.71

USD/Meter

0%

1/31/2019

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14883 USD dtd. 31/1/2019). 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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Third of UK firms mulling relocation with Brexit: Survey

Nearly one-third of the British businesses are considering moving or setting up operations to other countries. A survey of more than 1,200 company directors found that 16 per cent had already pressed the button on relocation plans or were planning to in connection with Brexit, while a further 13 per cent are actively considering doing so. The trend was not restricted to big businesses. While more large companies had already moved operations, small firms were almost twice as likely to be now actively considering the prospect, said the report by the Institute of Directors (IoD). "It brings no pleasure to reveal these worrying signs, but we can no more ignore the real consequences of delay and confusion than business leaders can ignore the hard choices that they face in protecting their companies. Change is a necessary and often positive part of doing business, but the unavoidable disruption and increased trade barriers that no-deal would bring are entirely unproductive," Edwin Morgan, interim director general of IoD, said. The survey revealed that two-thirds of exporters to the EU were looking to relocate overseas, and 4 in 10 IoD members who are engaged with contingency planning have explored moving operations. The EU was by far the most commonly-identified destination for firms looking to move or set up operations abroad to deal with Brexit. "While the actions of big companies have been making headlines, these figures suggest that smaller enterprises are increasingly considering taking the serious step of moving some operations abroad. For these firms, typically with tighter resources, to be thinking about such a costly course of action makes clear the precarious position they are in," explained Morgan. "We still have a chance to stem the flow, and provide enough certainty to the firms that are considering moving but haven’t yet done so. The UK’s hard-won reputation as a stable, predictable environment for enterprise is being chipped away. Our political leaders must keep this in the front of their minds as we enter this critical phase of negotiations," he concluded. (RR)

Source: Fibre2Fashion

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76 nations, regions agree to start talks on e-com rules

With the 164 World Trade Organisation (WTO) members unable to arrive at a consensus over some 25 separate e-commerce proposals at the body’s biennial conference at Buenos Aires in December, 76 countries and regions recently agreed at the World Economic Forum (WEF) in Davos to start negotiating this year on a set of open and predictable e-commerce regulations. The participating countries include the United States, Japan and those from the European Union (EU). China, which had resisted joining the talks, reportedly agreed to come on board at the WEF at the last moment, according to global news wires. China’s ambassador to WTO Zhang Xiangchen said his country decided to join the negotiations out of concern over a broader crisis surrounding the WTO, which has been coming under attack from the US Administration.  “The multilateral trading system is in a deep crisis,” he said. “Against this backdrop, the launching of e-commerce negotiation will in a significant way help reinvigorate the negotiating function of the WTO and shore up confidence in the multilateral trading system and economic globalisation,” Zhang was quoted as saying. The WTO stalemate in December disappointed those who hoped for new agreements on regulating e-commerce. “We will seek to achieve a high-standard outcome that builds on existing WTO agreements and frameworks with the participation of as many WTO members as possible,” members of the coalition said in a joint statement. “We continue to encourage all WTO members to participate in order to further enhance the benefits of electronic commerce for businesses, consumers and the global economy,” they said. (DS)

Source: Fibre2Fashion

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Morocco lost 46,000 jobs due to Turkish textile imports

The continuous rise in Turkish textile imports to Morocco has reduced the sales volume of textiles of several manufacturers in the domestic market and caused loss of nearly 46,000 jobs between 2013 and 2016, according to the country’s secretary of state for foreign trade Rakiya Eddarhem. Production meant for the domestic market fell by MAD 11-13 billion. A 200 per cent increase in imports of Turkish products between 2013 and 2017 disrupted Morocco’s textile industry destined for the domestic market, a newspaper in the country quoted the government official as saying. Turkey has reportedly taken advantage of the free trade agreement (FTA) signed with Morocco in April 2004. Her department had taken some measures to minimise the disruption, she added. (DS)

Source:Fibre2Fashion

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Vietnam targets $40 billion in exports from textile and garment industry |

Hanoi (Viet Nam News) — Vietnam Textile and Apparel Association (VITAS) set the industry development target this year for export turnover at US$40 billion, which would mark a 10.8 per cent year-on-year increase. The industry’s trade surplus is expected to reach $20 billion this year. Employment will be ensured and income for 2.85 million workers would be increased, said VITAS. These targets were based on a successful year in 2018, when export turnover of garments and textiles products reached more than $36 billion, marking a year-on-year increase of 16 per cent. This level of growth would make the nation one of the top three largest exporters of textiles and garments in the world. In addition, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which came into effect last month, was expected to help the economy grow by 1.3 per cent. It should boost export turnover by 4 per cent. The textile and garment industry is seen a key sector with many opportunities to expand the market. Chairman of VITAS Vũ Đức Giang said the signs for order statuses for 2019 were also very positive. Many businesses already had orders for the first six months of this year and even the whole year. “The sector has gradually completed the supply chain thanks to increasing flow of capital invested in the textile and dyeing industry, making its products more competitive,” said Giang.

Import of raw materials should be reduced

According to Chairman of the HCM City Textile and Garment – Embroidery Association Phạm Xuân Hồng, CPTPP will have an impact on the sector. It will cut import tariffs and diversify products available in CPTPP member countries. Hồng said that although the sector had prepared for the implementation of the trade deal, many businesses had not yet met the demands. “Enterprises have tried to limit imports of raw materials but still have to import over 60 per cent of foreign raw materials, of which 50 per cent comes from China,” Hồng said. “Therefore, enterprises need to understand the regulations, customs procedures and logistics laid out in CPTPP.” The State should support businesses by creating a fair playing field and minimising administrative procedures to raise competitiveness in domestic market,” he said. Cao Hữu Hiếu, Managing Director of Vietnam National Garment and Textile Group (Vinatex), said the sector would have many opportunities to grow and challenges as the country started to implement the agreement this year. Hiếu said with the strength of the country’s capital, experience, technology and labour force, many foreign-invested enterprises would establish production chains from yarn, fabric and garments in Vietnam. “If businesses do not invest and improve capacity, it will be difficult for them to compete in the domestic market, especially with products coming in from CPTPP member countries,” Hiếu said. “They need to take initiative in producing raw materials and minimising dependence on imported materials to help the industry enjoy the benefits of CPTPP.” Hồng said that technical standards were not a big problem for Vietnamese garment enterprises. However, requirements for the origin of yarn, weaving and dyeing – which must be met under CPTPP – were a big challenge because Vietnam imports more than 60 per cent of raw materials from outside CPTPP member nations. He said solving raw material sourcing issues was not a simple task. "CPTPP is considered one of the factors attracting foreign investment in the raw materials manufacturing industry. However, this industry carries risks of environmental pollution if outdated technology is used." “Management agencies will have to carefully consider the benefits of raw materials for production and environmental impacts before granting investment licences,” Hồng said.

Source: Vietnam News

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'Massive' US tariffs hit Chinese economy 'very badly', says Trump

The US and China have been locked in an escalating trade spat since early 2018, raising import tariffs on each other's goods. The massive tariffs imposed by America on import of products from China has badly hit the economy of the Asian nation, President Donald Trump said Sunday, with the clock ticking on a March 1 US-set deadline for Beijing to address trade concerns and avert an escalation in the tariff war between the world's two largest economies. The US and China have been locked in an escalating trade spat since early 2018, raising import tariffs on each other's goods. Last year, Trump imposed tariff hikes of up to 25 per cent on $ 250 billion of Chinese goods. The move prompted China to increase tariffs on $ 110 billion of American goods. During a meeting in Argentina on the sidelines of the G-20 Summit, Trump and Xi agreed to halt any further tariff increases for 90 days beginning January 1. "We have put massive tariffs on China...it is hurting China's economy very badly. I want them to make a fair deal," Trump told CBS News. If no resolution is reached by the March 1 deadline, tariffs on $ 200 billion of Chinese goods are set to increase from 10 per cent to 25 per cent, a prospect that has rattled the global market because of the inevitable economic damage. China has offered to hike its US goods purchases to reduce the bilateral trade deficit and also offered to discuss regulatory changes to improve market access for international investors. However, it has been reluctant to reduce its chances of competing with America on innovation and advanced technologies and doubts remain about its willingness to cede much ground. Trump said he is hopeful of making a deal with China. "It looks like we are doing very well with making a deal with China...no two leaders of this country and China have ever been closer than I am with (Chinese) President Xi (Jinping). We have a good chance to make a deal...it's going to be a real deal...not going to be a stopgap (arrangement)," he said.

Source: Business Standard

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Textile exports can double in five years: APTMA head

Pakistan’s currency has cumulatively lost about 25 per cent of its value against the dollar since the beginning of 2018. Gas and electricity prices for the five export industries have been brought down to the level of average regional prices and textile exporters are now able to import duty-free cotton. The government is also working on ensuring the early payment of refunds of more than Rs200 billion to improve the exporters’ liquidity position. It also announced some incentives to boost investment in greenfield projects. All these measures have been instituted to boost the country’s collapsing exports, especially textiles and clothing, a phenomenon that has significantly contributed to the widening current account deficit and forced the government to accumulate a massive pile of expensive foreign debt over the last five years. And yet textile and clothing exports, which fetched $13.5bn or almost 60pc of total export earnings last fiscal year, continue to struggle. The industry’s total shipments remain flat at $6.64bn during the first half of 2018-19 on an annual basis. This raises questions about the rationale for the subsidy worth billions of rupees given to the country’s largest manufacturing industry that contributes 8.5pc to GDP and employs 46pc of non-farm labour. “Do not be impatient,” says Ali Ahsan, chairman the All Pakistan Textile Mills Association (Aptma), during an interview with this correspondent. “Most pro-industry initiatives announced months ago are being implemented just now. Others will be executed in the next few months. Positive results will start appearing in the next few months. You’ll see growth in our shipments when the government releases trade numbers for January. I won’t say it will be massive. But it will be enough to show that we are back on the growth trajectory. Most exporters are fully booked for the next six months. Even yarn shipments, which went down 17pc in the first half of 2018-19, have gone up in January,” says Mr Ahsan. He says it is not possible to turn around exports overnight. In textile trade, he explains, it takes at least six months before the results start coming. “Our exporters have received massive orders at Heimtextil 2019.” Mr Ahsan has a lot of good words for the PTI government for its support for the industry and clean-up of the mess created by the preceding government. “This government is listening to businesspeople and trying to tackle their problems. But it should also give a long-term export and growth policy to help boost investment in new projects in the downstream industry,” he says. He believes textile and clothing exports can easily double to $26bn in the next five years if the government continues to support the industry through a long-term policy. “Those who are expecting instantaneous, massive growth in textile exports will continue to be disappointed. The government has done a lot in the last few months. But a lot more also needs to be done for sustainable, high growth in exports. The steps taken thus far can increase shipments only to an extent. We need to increase our capacity to create an export surplus and invest heavily in value-added sectors.” In the short term, he elaborates, it is crucial to remove upfront incidentals on the import of manmade fibres, which is short for industry consumption. This will enable the industry to diversify into products that are in high demand in foreign markets. Further, the government must liquidate all outstanding refunds of the industry on account of sales tax, duty drawbacks and previous textile policies, withdraw gas infrastructure development cess (GIDC) arrears of pre-GIDC Act 2015, allow the payment of the post-GIDC Act arrears in instalments, and expedite new gas and electricity connections and tagging for the zero-rating of the industries by departments concerned, he says. “The long-term export and growth policy should extend the long-term financing facility to indirect exports as well to boost investment in the value-added sectors, reintroduce industrial credit policy, invest in the garment industry infrastructure, enhance credit limits for new factories, discourage textile and clothing imports and stop smuggling to open up the domestic market to the local industry,” says the Aptma chairman. He is hopeful that at least half of the textile capacity closed in the last five years will return to production, thanks to the recent supportive measures by the government. The rest of the factories have already been sold out and machinery junked, he adds. “Now we need new projects for export growth. We cannot do it without creating integrated textile and apparel parks to provide plug-and-play facilities for local and foreign investors. We export 30pc of yarn produced in the country. We need to establish new weaving, processing and garment units to convert that yarn into value-added products to boost exports. We can generate additional exports of $20bn and create 1.5 million jobs by investing $7bn,” he says.

Source: The Dawn

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Ministry launches handicraft, homestay entrepreneur loan scheme

KOTA BARU: The Tourism, Arts and Culture Ministry has set aside RM500 million for a Handicraft and Homestay Loan Scheme to support the handicraft and homestay industries this year. Its Minister Datuk Mohamaddin Ketapi said the allocation is an initiative of the government towards empowering the existing industries to propel the income of craft entrepreneurs. “This scheme has commenced early this year and is open to all craft entrepreneurs including batik and songket producers apart from assisting homestay entrepreneurs nationwide. “The government will also be lightening the burden of entrepreneurs by giving a subsidy of 2% to reduce the interest of the loan,” he told reporters after opening the East Coast Textile Craft Festival, here today.  Also present were the ministry’s deputy secretary-general (Culture) Saraya Arbi and deputy secretary-general (Tourism) Datuk Haslina Abdul Hamid. The festival is being held at Dataran Rehal from Jan 31 to Feb 9 to empower and promote textile craft products including batik, songket, Royal Pahang weaving products from the craft community in Kelantan, Terengganu and Pahang. A total of 56 craft entrepreneurs are participating in the festival which focuses on various activities including sales of craft products, demonstrations and interactive craft as well as an exhibition on the evolution of batik. Mohamaddin said apart from creating awareness and providing the latest information to the people, the festival is also the best platform to enhance cooperation and the marketing chain of East Coast textile craft entrepreneurs at domestic and international levels. Meanwhile, he said 97 entrepreneurs had received the Standard Compliance Certificate issued by Kraftangan Malaysia which enabled them to be given priority in promotional programmes organised by the department. — Bernama

Source: The Sun Daily

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