In the textile sector, competition is growing tremendously, but a lot of Indian entrepreneurs are entering into the field and they are still finding success. Identifying a product is the foremost step when it comes to zeroing in on an effective export strategy. Keeping some key parameters in mind can augur well for those looking to branch out in the business and win back lucrative returns. Most entrepreneurs opt for a strategy where they focus on a country and after focusing on the country, they look at the kind of products that can be exported to that particular country. Then, there is another set of exporters who focus more on the product and thereafter look at the market. Both strategies have a chance to work but the primary point is that once in the field of exports, one has to keep in mind that they are replacing somebody who is already present in the market. Replacing someone means that positioning the USP of the product is essential. Its USP may not be confined only to the product. It may be related to the packaging, after sales service or any other area, but some kind of differentiation has to be evident enough. Next one should see what kind of market is being reached out to and who, in the market, is an established supplier. Questions like what kind of economic engagement those countries have vis-a-vis one’s own country need to be ascertained clearly. For example, if a good product has been identified which is supplied in the US market by Mexico as well, then Mexico has an FTA with the US which allows zero tariff on that, whereas the other product may attract 15% tariff. In such a situation whether one will be competitive vis-a-vis Mexico or not could be an issue. The kind of market access requirements present in that particular country also needs to be understood. They may have different requirements for the packaging, different registration processes and other formalities that have to be taken note of. All these are certain issues which one has to understand before stepping in a particular market. The primary point is in what way someone is working towards differentiating from the product which is already present in the international market. Entering a particular country means prior suppliers may already be present. It may not be an Indian supplier but someone else may be supplying. Logically then it should be differentiated from other suppliers. For example, if you are entering into the market and the target segment in women’s segment is girls in the age group of 15 to 25 years. Accordingly, one is segmenting their product as per the age and target group preferences. Some kind of new value addition has to be there - if one is joining the race, they can be successful only if they are price competitive which is difficult for new entrepreneurs as this comes from volumes. Most of the new entrepreneurs are attracted to the business of lifestyle products. But when looking at the field of exports, a look at the challenging fields such as Pharma can also be explored. In pharma, if one is not manufacturing and trading, they should look into what way they can offer some kind of addition to the product which can appear a challenging task at the outset. For instance, they can have a set of doctors at the back-end who can assist the patients abroad. Based on the symptoms that patients describe, the medicines can be recommended by the doctors. The point is that something new needs to come in. From an Indian perspective, low-end engineering sector products are seeing rapid growth because China was our competitor, but it is slowly exiting all these sectors. In the textile sector, competition is growing tremendously, but a lot of Indian entrepreneurs are entering into the field and they are still finding success. Footwear is another such sector. The trend here has been to move away from 100% leather and to mix different kinds of synthetic material which adds to the comfort level and also brings down the price. So when you are looking into the major markets - target market, niche product, differentiation aspects need to be carefully looked into. From a regulatory standpoint, the processes are very simple. The only mandatory document required is IEC code and one gets it online easily. The other document needed is PAN, and that would take care of the statutory part of compliance. However, more needs to be done in handholding of entrepreneurs. Product identification is the biggest challenge - it is the first step before any further guidance can be given to new entrepreneurs. It definitely helps if one has family tradition or history in the field in which they choose to export. But, at the end of the day, it all depends on the individual. There are individuals who don’t have any backing, they have borrowed little sums of money and now they are hugely successful in their line of business. If one is passionate about exports then a new entrepreneur can also succeed.
Source: Economic Times
The commerce ministry has asked the three agencies, which have been tasked to prepare a report on proposed mega trade agreement RCEP, to get into greater details of issues involved in the pact and hold industry specific consultations, an official said. Indian Institute of Management-Bangalore, Indian Council for Research on International Economic Relations (ICRIER) and the Centre for Regional Trade, an autonomous think-tank under the Department of Commerce have been tasked for the exercise. It was suggested during a presentation made by these agencies to Commerce and Industry Minister Suresh Prabhu yesterday. "The minister asked them to make their study more granular and also hold industry specific consultations to understand their issues and concerns. They have to see whether the industry is prepare to export to RCEP members like China or not," the official said. Regional Comprehensive Economic Partnership (RCEP) is a proposed mega free trade agreement being negotiated by 16 countries. RCEP bloc includes 10 countries of ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam) and their six free trade pact partners namely Australia, China, India, Japan, Korea and New Zealand. It aims to cover among the issues related to goods, services, investments, economic and technical cooperation, competition and intellectual property rights. These agencies are being involved as serious concerns were raised by certain section of industry and government departments on the pact. Presence of China, with which India has a huge trade deficit, in the bloc is a major concern to domestic players. Time and again, domestic industry players have said that giving duty free access to China will led to flooding of Chinese goods in Indian market. The negotiations have entered the sixth year. During the last five years, over 20 rounds of negotiations at the expert level were held. Besides, seven ministerial meetings and seven inter-sessional meetings have been held so far. RCEP members want India to eliminate or significantly reduce customs duties on maximum number of goods it traded with them. India's huge domestic market provides immense opportunity of exports for RCEP countries. But lower level of ambitions in services and investments, a key area of interest for India, does not augur well for the agreement that seeks to be comprehensive in nature.
Source: Business Standard
According to a provisional figure of the year ended March 31, 2019, India's exports to China grew 31 percent at $17 billion in FY19. Imports dipped by 8 percent at $70 billion in the year under consideration. India's trade deficit with China fell by $10 billion to $53 billion in FY19 on the back of lower imports, officials told CNBC-TV18. The downtick in the merchandise trade gap was also aided by new market opportunities arising out of the US-China trade war in the neighbouring nation. According to a provisional figure of the year ended March 31, 2019, India's exports to China grew 31 percent at $17 billion in FY19 while imports dipped by 8 percent at $70 billion in the year under consideration. According to sources, bigger shipments of shrimps, organic chemicals, plastic raw material, cotton yarn contributed to India’s export growth to China. Officials in Udyog Bhawan attribute this to sustained parleys between India and China on market access of Indian goods, as well as greater demand for Indian goods in the neighbouring nation arising out of high duties on US products by China. In fact, the Commerce Ministry had studied the impact of the US-China trade war on India and came to the conclusion that up to 603 'Made In India' goods could find greater demand in the Chinese market. To leverage the opportunity arising out of increasing exports to China, Commerce Minister Suresh Prabhu had a meeting with government departments like textiles, steel, MSME, Ministry of IT as well as industry lobby groups like FICCI, CII and export Promotion Organisations on April 4. The minister asked the industry to identify specific goods and devise an export strategy for China in the meeting. The ultimate objective of the latest initiative will be to eliminate trade deficit with China, official sources added. China is India's biggest trading partner but a huge trade gap has been a cause of concern for New Delhi. At least four delegations of Indian trade diplomats have visited China since June 2018 to pitch for greater market access. But foreign trade is not the only economic engagement that India wants to pursue. Commerce Ministry wants to aggressively pitch for investments by Chinese companies in India, which it believes are tepid at the moment. According to sources, the ministry is willing to propose investment incentives to counter attractive sops offered by South East Asian nations for Chinese companies. An analysis by the ministry shows that Xiaomi, Shunwei Capital, Alibaba, Ant Financial, FinUp Finance Tech Group are the top 5 Chinese investors in Indian start-ups and most of the investments have gone into the ecommerce sector, followed by lending, social media and investment.
Source: CNBC TV 18
Access to cheaper funds is of crucial importance for a growth-raising investment boom led by the private sectorThe two main national parties have released their election manifestos in the days leading to the actual voting across India. The Bharatiya Janata Party (BJP) leads its manifesto with issues of national security. The Indian National Congress (INC) leads its manifesto with the challenge of job creation. The positioning tells us something about the relative importance of these issues in the campaigns led by the two political parties. There are common themes as well—especially their recognition of problems in rural areas. And inclusion in general. The parts in the two manifestos on economic policy make for interesting reading. The INC manifesto says that the party was responsible for the 1991 economic reforms. The stated commitment to liberal economics seems to be an attempt to break away from the economic philosophy of the United Progressive Alliance. The BJP manifesto puts the goal of making India a $5 trillion economy by 2025 and a $10 trillion economy by 2032. The party rightly claims credit for putting the Indian economy back on track after 2014. Demonetization is mentioned only in passing. The big takeaway is that both parties are banking on rapid economic growth to transform India, with targeted transfers to support those who are in danger of getting left behind. This is welcome, though as Rathin Roy of the National Institute of Public Finance and Policy has perceptively argued in a series of brilliant columns in recent months, there needs to be more discussion on whether inclusion should be pursued by a development state that seeks to build public goods or a compensatory state that restricts itself to giving income support to the poorest. The rest of this column will focus on one core challenge that neither party seems to have focused on, but which will be important in the next decade. It is the challenge of bringing down the cost of capital. India is currently the fastest-growing major economy in the world, which is no small matter. The question is whether the current growth rate is enough to create quality jobs for a growing population. The experience of the two previous economic booms—in the mid-1990s and in the years before the global meltdown of 2008—is that a shift in trend growth requires an investment boom led by the private sector. One of the requirements for that is competitive cost of capital. There are three ways to think about this challenge. First, the direct tax system has to be overhauled. The indirect tax system has already been transformed with the introduction of the goods and services tax (GST), albeit in a messy form. The other leg of the tax reforms agenda has not been pursued. The proposed Direct Tax Code continues to be a good model to build on. The goal is not just lower taxes but also a cleaner tax code that minimises distortions. Second, the cost of borrowing in India is too high. One important reason is that India has been an inflation outlier compared to the rest of the world. Sustained low inflation should help bring down the cost of borrowing. The fact that nearly a quarter of bank deposits are impounded by the government to fund its fiscal deficit also pushes up borrowing costs for the private sector. Many Indian companies have accessed cheaper foreign debt to fund new projects, but the depreciation of the Indian rupee over the long run—sometimes in sharp lurches— has wrecked many corporate balance sheets. Low inflation should also hopefully put the Indian currency on stable ground, and thus reduce the risks to corporate finances from sudden depreciations. Third, investment activity quickens when the relative cost of intermediate goods falls. In other words, machinery has to be competitively accessed. Chapter three of the new edition of the World Economic Outlook published by the International Monetary Fund (IMF) is aptly titled: “The Price of Capital Goods: A Driver of Investment Under Threat?" IMF economists Weicheng Lian, Natalija Novta and Petia Topalova have written in a recent blog: “Prices of machinery and equipment have been falling relative to overall prices for decades, thanks to rising trade and sweeping technological improvements that led to more efficient production of capital goods. This has helped countries around the world raise real investment and improve living standards." India has experienced a sustained investment slump over much of this decade because of reasons ranging from domestic excess capacity and the global glut in some sectors caused by Chinese over-investment, to the “twin balance sheet" problems of Indian companies and banks. Meanwhile, much of the policy focus in recent years has been on easing regulatory constraints on enterprises. Moving up the global Ease of Doing Business ladder has become almost an obsession. Far less attention has been paid in policy discussions—as well as in the recent BJP and Congress manifestos—to the high cost of capital in India. Such neglect needs to be corrected.
Source: Live Mint
Tata Trusts and Microsoft India Wednesday inked a pact to to jointly rejuvenate handloom clusters in the eastern and north-eastern parts of the country. Both the entities have signed a Memorandum of Understanding (MoU) in this regard, Tata Trusts and Microsoft India said in a joint statement. As part of the collaboration, Tata Trusts and Microsoft will leverage each other's strengths to provide business and communication skills, design education and digital literacy to handloom weavers so that they may build a sustainable future. "Through this initiative, we want to empower artisans and bring them up to par making them competitive in the industry," Tata Trusts Chief Program Director R Pavithra Kumar said. Microsoft India CVP Cloud & Enterprise and Managing Director Anil Bhansali said the company is focused on reviving some of the forgotten and fading handloom forms in India's textile heritage as part of its philanthropy programs in India. "Our partnership with Tata Trusts will help reach down to the grass-root level of the weaver clusters and train them, hence building a digitally inclusive society. We aim to use our Project Sangam to empower the weavers across India so that they can adopt and deploy digital tools to improve their craft," he added.
Source: Times of India
They are yet to recover from impact of recent natural calamities, GST and demonetization. It’s been over three years now, but the Micro, Small and Medium Enterprises (MSME) sector has not yet been able to heal itself of the wounds caused by the Chennai floods, Cyclone Vardah, demonetisation and the GST. Those owning or working in businesses in this sector feel orphaned by both the State and Central governments. Tamil Nadu has over 17.20 lakh registered MSME units, producing various products for sectors including automobiles, electronics, engineering, textiles and chemicals. They are united as a composite voting group, MSME representatives in the State claim.
Documents lost
The proprietor of an MSME unit said he lost all his documents during the floods in 2015 and, since then, has been running from pillar to post for a solution. “Several Union Ministers came and visited the industrial estates, assured us that everything would be fine, collected all the details that we gave them and posed for photographers. But after that, there was no news from them,” he lamented. “No one came forward to even give me a loan. I had to borrow from financiers at a very high interest to revive my business,” he added. C.K. Mohan, former general secretary, Tamil Nadu Small and Tiny Industries Association (Tanstia), said: “No government came to the rescue of the MSMEs during the floods and during the implementation of the GST. A lot of us could not claim insurance since we lost all our documents in the floods.” Small unit holders in the industrial estates in Guindy and Ambattur had similar stories to tell. They said this time, they will vote for a party that will help resolve their issues permanently. Since December 2015, the sector has been facing several issues – more than 14,000 units suffered losses during the floods that year. On an average, each MSME in industrial estates across the State, including those in Guindy, Ekkattuthangal, Ambattur, Padi, Thirumudivakkam, Tiruvallur, Kancheepuram and Cuddalore, suffered losses in excess of ₹10 lakh. The following year, Cyclone Vardah destroyed many units which were already reeling from the impact of the flood. More recently, demonetisation and the GST have hampered business. A unit owner in Ambattur said: “Even now, during the campaign, candidates don’t even get off their vehicles to ask the industries here what our needs are.”
GST plea
“Both the State and Central governments have neither given any assurances to MSMEs, nor have they come out with a clear roadmap,” said K.C. Durairaj, president, Chennai Metro Small and Micro Industries Association. He added that many units had been wound up as they could not repay loans, among other issues. In June 2018, a policy note tabled by the MSME Department showed that over 50,000 units were wound up in Tamil Nadu in one year. Tanstia president S. Anburajan suggested that the government should look at a separate GST rate for the sector. “What MSMEs produce cannot be compared to what corporates make. So why should this sector pay the same GST that a big corporate firm pays?” he asked.
Source: The Hindu
Some reforms in India have shown the benefits of digitalisation which has also reduced the opportunities for discretion and fraud, the IMF said in its latest report on Wednesday. The introduction of e-procurement in India and Indonesia has also increased competition and led to better quality of construction, the International Monetary Fund (IMF) said in its latest edition of the fiscal monitor report released ahead of the its annual spring meeting with the World Bank. "Some reforms in India show the benefits of digitalisation and reducing opportunities for discretion and fraud," the International Monetary Fund (IMF) said in its latest edition of the fiscal monitor report released ahead of the its annual spring meeting with the World Bank. "For example, the adoption of an electronic platform for managing a social assistance programme in India resulted in a 17 per cent decline in spending with no corresponding decline in benefits," it said. Similarly in Andhra Pradesh, the use of smart ID cards that are used to identify beneficiaries of specific programmes and improve beneficiaries' access to information helped reduce leakage by 41 per cent relative to the control group, it said. According to the Fiscal Monitor report, studies on public procurement show that the design of procedures can have a significant impact on the prices and quality of products. The introduction of e-procurement in India and Indonesia also increased competition and led to better quality of construction, it said. External scrutiny by Supreme Audit Institutions (SAIs), parliaments and civil society helps safeguard the integrity of public finances and hold civil servants and elected officials accountable, the IMF said, adding that focused audits can help fight corruption by identifying waste and miss-management. "For example, social audits have been in place in India since 2005 to oversee the implementation of a large job guarantee programme and to fight corruption in the programme," it said. These audits were endorsed and supported by the Indian SAI and relied on the strong and direct participation of citizens, the IMF said, adding that SAIs also help promote integrity by reviewing the reliability of the internal control and audit framework. In its fiscal report, the IMF said the interim federal government budget of February 2019 envisages a slower pace of adjustment than previously planned, primarily due to the newly announced rural farm income-support scheme. "IMF staff projections are that the achievement of the federal government deficit target of three per cent of GDP will likely be delayed and that the debt target of 40 per cent of GDP will be achieved after 2024," it said. On the other hand in China, the government plans a more proactive fiscal stance for 2019 that would include reductions in the value-added, personal income and corporate income tax rates. General government debt is projected to rise over the medium term to over 72 per cent of the GDP by 2024, the IMF added.
Source: Economic Times
The show to be held from July 2 to 4 in Mumbai is expecting 17% rise in the number of exhibitors at 700 from 32 countries and 14% increase in the number of visitors at 40,000 from last year. HGH India, the annual B2B trade show of home textiles, home décor, gifts and housewares, is looking to capitalise on the growing home décor market in the country. The home décor market is growing nationally at 20%. South India is growing at faster clip of 25 to 30%. Retailers, institutional buyers and interior designers from cities like Kochi, Thiruvananthapuram, Madurai, Bengaluru and Hyderabad have increased their presence at the tradeshow,’’ said Arun Roongta, MD of HGH India. He added that it is much higher than the growth in many foreign countries compelling many foreign brands to come to India. The show to be held from July 2 to 4 in Mumbai is expecting 17% rise in the number of exhibitors at 700 from 32 countries and 14% increase in the number of visitors at 40,000 from last year.`` We expect 90% rise in the foreign exhibitors at 190 with around 110 of them from China alone,’’ Roongta said. According to him, the show has been able to bring export-oriented manufacturers to Indian market. `` Makers of handicrafts in Jodhpur and Moradabad, carpets in Bhadohi, kitchen linen in Karur, handlooms in Kannur etc who were focusing totally on export market have now good presence in the domestic market after participating in the show,’’ he said. Roongta said HGH India is planning to showcase the locally made handicrafts, handlooms, coir and jute products, hand-made carpets and khadi products under Indian Heritage brand. The show connects the Indian market for home products and gifts with retailers, artisans and micro-enterprises.
Source: Economic Times
RBI has reduced the repo rate by a total of 50 bps in 2019 to push economic growth. The half a dozen banks which had lowered marginal cost based lending rate (MCLR) in March are likely to abstain from further rate action despite Reserve Bank of India’s signal for easier financing cost. The rest including the bigger ones State Bank of India and HDFC Bank NSE 0.28 % have taken the plunge with 5-10 basis points reduction in benchmark rate following RBI's second successive repo rate cut on April 4 but these are way below what was signaled by the central bank. RBI has reduced the repo rate by a total of 50 bps in 2019 to push economic growth while banks are facing difficulty in passing on the benefit as deposit rates remain sticky. “Banks are not lowering their rates as deposit rates need to be lowered first. This cannot be done given the slow growth in deposits as households have shifted to equities and mutual funds. Currently, to meet their credit requirements they have been sourcing corporate deposits at a higher rate,” said Madan Sabnavis, chief economist with CARE Ratings. RBI Governor Shaktikanta Das said he would hold “further consultations with stakeholders and work out an effective mechanism for transmission of rates.” Lenders such as ICICI Bank NSE -0.33 % , Bank of Baroda, Punjab National Bank NSE 0.05 % and Union Bank of India reduced their respective MCLR by 5-10 bps in the next 40 days after RBI’s February policy action. “These may not go for further rate cuts,” a chief executive of a public sector bank said. Axis Bank, HDFC Bank, ICICI Bank and YES Bank NSE -0.11 % did not respond to mails seeking comments on their interest rate strategy. “The present scene only shows that monetary transmission cannot be enforced but has to happen through the market forces. What SBI is doing is a positive step as the cost of funds comes down when rates on high level savings account is lowered. Further, it should be remembered that when lending rates are lowered all loans get repriced while deposits get repriced only on renewal or on fresh deposits. Therefore, average cost will not go down for some time,” Sabnavis explained.
Impact of deposit rate cuts work with around six months’ lag.
“We are conscious of the fact that there has to be effective and appropriate transmission of the rates. After the last meeting, I had held meetings with public sector and private sector banks. The banks have cut MCLR by up to 10 basis points. But more needs to be done,” Governor Das had said on Aril 4 after announcing the second 25 bps rate cut in quick succession.
Source: Economic Times
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1326.25 |
USD/Ton |
0.27% |
4/10/2019 |
|
VSF |
1861.88 |
USD/Ton |
0.81% |
4/10/2019 |
|
ASF |
2497.89 |
USD/Ton |
0% |
4/10/2019 |
|
Polyester POY |
1355.45 |
USD/Ton |
0% |
4/10/2019 |
|
Nylon FDY |
2889.63 |
USD/Ton |
0% |
4/10/2019 |
|
40D Spandex |
4751.51 |
USD/Ton |
0% |
4/10/2019 |
|
Nylon POY |
1534.19 |
USD/Ton |
0% |
4/10/2019 |
|
Acrylic Top 3D |
3157.74 |
USD/Ton |
0% |
4/10/2019 |
|
Polyester FDY |
5630.31 |
USD/Ton |
0% |
4/10/2019 |
|
Nylon DTY |
1581.85 |
USD/Ton |
0% |
4/10/2019 |
|
Viscose Long Filament |
2725.79 |
USD/Ton |
0% |
4/10/2019 |
|
Polyester DTY |
2681.10 |
USD/Ton |
0% |
4/10/2019 |
|
30S Spun Rayon Yarn |
2539.60 |
USD/Ton |
0% |
4/10/2019 |
|
32S Polyester Yarn |
2033.17 |
USD/Ton |
0% |
4/10/2019 |
|
45S T/C Yarn |
2889.63 |
USD/Ton |
0% |
4/10/2019 |
|
40S Rayon Yarn |
2174.67 |
USD/Ton |
0% |
4/10/2019 |
|
T/R Yarn 65/35 32S |
2547.05 |
USD/Ton |
0% |
4/10/2019 |
|
45S Polyester Yarn |
2830.05 |
USD/Ton |
-2.06% |
4/10/2019 |
|
T/C Yarn 65/35 32S |
2442.78 |
USD/Ton |
0% |
4/10/2019 |
|
10S Denim Fabric |
1.37 |
USD/Meter |
0% |
4/10/2019 |
|
32S Twill Fabric |
0.83 |
USD/Meter |
0% |
4/10/2019 |
|
40S Combed Poplin |
1.11 |
USD/Meter |
0% |
4/10/2019 |
|
30S Rayon Fabric |
0.63 |
USD/Meter |
0% |
4/10/2019 |
|
45S T/C Fabric |
0.71 |
USD/Meter |
0% |
4/10/2019 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14895 USD dtd. 10/04/2019). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
BTMA urges govt to reduce tax rate to 12.5pc. Bangladesh Textile Mills Association (BTMA) leaders have urged the government to reduce the income tax rate from 15 per cent to 12.5 per cent till 2028. They also urged the government to include yarn and fabric as VAT exempted items as the sale of local yarn and fabric has declined drastically. BTMA leaders said the business of local millers have been damaged due to misuse of bonded warehouse facilities. They said yarn, fabric and other dress-making materials are being imported under mis-declaration and duty-free facilities. The sale of fabric and local yarn has reduced drastically and 50-60 per cent of the looms have been remained closed for a long period of time. Around 50-60 thousand power looms have been shut down so far out of 1 lakh, said BTMA chief. It is apprehended that more local mills likely to be shut down due to lack of new work orders, BTMA leaders said this to the reporters at a hotel in the capital yesterday. Mohammad Ali Khokon, president of Bangladesh Textile Mills Association (BTMA), said that local weaving and spinning mills are shutting as they are not getting proper prices of yarn and fabric and counting losses. The imported items are coming under mis-declaration and duty-free facilities which have already flooded in the market, causing threat to the local mills, he added. In our spinning mills, only 80 lakh spindles are running out of 1 crore 10 lakh, said BTMA chief. Woven dying mills have reduced their capacity below 40 per cent while export-oriented spinning mills are forced to sell their products at a lower rate compared to their production cost resulting in huge stockpiling of yarn and fabric, he noted. “If the situation prolongs, factories may be unable to pay wages and forced to close down due to liquidity crisis,” he said. The BTMA leader said that over 8 to 10 lakh pieces of dresses, including sari, three pieces and other shirting clothes, were entering into Bangladesh illegally through 17 border markets and the items were being taken to Dhaka city through railway. BTMA leaders also demanded the cash incentives to 15 per cent from existing 4.0 per cent, strong monitoring to stop import under mis-declaration and misuse of the bonded warehouse facilities. “We are not against ‘import’ but we want level playing field so that products can not enter illegally inside the country,” said BTMA chief. The BTMA urged the government to launch a drive in the textile producing areas to prevent sales of illegally imported yearns and fabrics and to ensure proper management of bonded warehouses. BTMA President Mohammad Ali Khokon, vice-presidents Alamgir Shamsul Alamin, Abdullah Al Mamun, were present at the meeting.
Source: The Independent
Pakistan is passing through toughest economic conditions of its history. Yet these conditions are not irreparable or irreversible. There is a light of hope on the other side of this darkest long tunnel. What we need is to be focused and to let the storm of repayments due this year be settled. These repayments are against aggressive loans taken by previous regimes to check inflation, avoiding devaluation, controlling interest rates and to fuel non-developmental expenditures rather increasing Exportable Business Activities instead of import based economic growth. Present Government is under severe criticism on bringing inflation to double digit, devaluation of Pak-Rupee and increasing discount rates which according to some experts is result of avoiding IMF to defend PTI’s pre-election claim that going IMF is a suicidal. Is it fair to verdict against a newly established government on its Economic policies where evidently, the biggest indicator of control over Economy i.e. Current Account Deficit decreased significantly along with Trade Deficit? Then why PTI is being blamed for the financial crisis they inherited? Boasting of not going to IMF, overestimation of foreign remittance, no massive recovery from accountability, inability to increase direct taxation and finally non fulfilment of 100 days planned targets, formulated this public opinion. According to available statistics, inflation has recorded highest of last 5 years. It reaches to almost 9.4% in the month of March 2019. GDP growth rate slowed down and according to Asian Development Bank (ADB) Forecast it will end up to around 3.9% in Financial Year 2019. GDP was around 5.7% when PMLN completed its 5 years. Massive devaluation took place in Current Financial Year where Rupee lost its value against dollar by almost 26 Rupees. Another factor that has jolt down the business activates; the interest rate phenomenon. State Bank of Pakistan has increased Discount Rate almost a double of last regime due to increase in inflation. This has increased financial cost of industries having credit lines with Banks to meet their working capital exigencies. But this is not end of the story. Inflation has recorded highest in the last 5 years. It reaches to almost 9.4% in the month of March 2019. GDP growth rate slowed down and according to Asian Development Bank (ADB) forecast, it will end up to around 3.9% in Financial Year 2019. GDP was around 5.7% when PML-N completed its 5 years. Massive devaluation took place in Current Financial Year where the Rupee lost its value against dollar by almost 26 Rupees. In PMLN era almost $35 Billion Dollars were taken as external loans from different ways. Why PMLN needed for such huge loans? They tried to control Dollar vs PKR parity artificially which actually was the outcome of their inability to bring down Trade Deficit that translated into huge Current Account Deficit, accelerated more than GDP growth. Imports were increased multiple times to that of Exports and Pakistan had become a country lucrative for imports due to artificially controlled Pak Rupee. On the contrary Exportable item could not get their customers being expensive owing to same reason. Another blunder of the regime was to encourage import of those consumable items which otherwise are also manufactured in Pakistan. Therefore local industries that can be checked through quality control and could have resulted in producing quality products which in return could have saved foreign exchange, lost their business grounds gradually. Cheaper and superior quality consumable items and lower Dollar rate translated into decrease in inflation numbers resulted in lower discount rates contrary to present situation. Non Developmental Expenditures, just for cosmetic surgery of Economy to get votes in shorter run, like Metro Train etc, had consumed billions of Dollar which otherwise could have spent over projects from where revenues may be generated for repayment against these loans in longer run. Current Account Deficit (CAD) and Trade Deficit figures under present regime show that government has controlled these two fundamentals of Economic System. The current account deficit plunges by 59% in February 2019 compared to January in this financial year. PTI inherited a massive CAD which stood at $18.9 billion in FY18 which has been the cause of dwindling reserves. However, since the beginning of this year, there has been persistent decrease in CAD as it fell by 47pc month-on-month in January 2019.During 8 months of Financial Year 2019, CAD fell to $8.844 billion, down 22.5pc, from $11.421bn in same period last year. Asian Development Bank also predicted that CAD is expected to ease in FY2019 equivalent of 5.0% of GDP which will narrow further to 3.0% in FY2020 with easing macroeconomic pressures on the external accounts. According to this theory when CAD will narrow to some particular level it will bring economic activities of Pakistan near to real values according to the law of demand and supply. Moreover bringing down imports will control foreign exchange loss. However behind getting these results PTI Finance Ministry is ruining lives of general public and small medium enterprises by injecting inflation that resulted in increasing Discount Rates and massive devaluation of Pak Rupee which actually needs to be fixed through other measures. Increase in Direct taxation is a key to control fiscal deficit rather increasing General sales Tax rate and spreading it out to more products whether it is consumable items, medicine or Utility Bills. This will control inflatory pressure on general public without effecting Tax Collection. Government should focus on improving quality control units so that people may buy local products instead of those manufactured by Multi-National Companies (MNCs) in Pakistan to avoid any Foreign Exchange Leakage and to promote local industry. MNCs are a good source of Foreign Investments but in longer run if they don’t shift technology to that country it results in local industry to fail and through heavy payment of dividends, foreign exchange outflow becomes a regular feature through these MNCs. Promoting agriculture is another way to increase exports rather than heavily depending on Textile sector only. It will also reduce input cost and import of cotton for Textile sector resulting a very positive impact on Balance of Payments. For increasing agriculture Pakistan needs uninterrupted water flow which can be possible by introducing smaller dams to save Rain flows in monsoon season which can also helpful for producing cheaper electricity. Apart from Dams, Iran Pakistan Gas pipeline can also bring down the utility bills crisis of industries and General Public at large. These measures can control inflation which will ultimately result in lowering discount rates. By promoting Made in Pakistan Products Foreign Exchange will be saved which will also lower the pressure on imports which other way round results in getting more loans to bridge trade deficit.
Source: The Daily Times
Recommendations were given to Vietnamese textile-garment businesses at a workshop in Ho Chi Minh City on April 10 to help them develop strategies for sustainable development. Secretary General of the Vietnam Textile and Apparel Association (VITAS) Truong Van Cam said the country is now one of the biggest textile-garment exporters in the world. The sector gained nearly 37 billion USD from exports in 2018, up 16 percent year-on-year, with the figure expected to hit some 40 billion USD in 2019. Additionally, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) is forecast to create a driving force for Vietnam’s textile-garment industry in 2019 and the following years, he said. Despite its relatively fast growth, the industry still has certain weaknesses, especially in compliance with rules of origin, Cam said, noting that this is considered one of the sector’s major challenges as it strives to capitalise on new-generation free trade agreements (FTAs), including the CPTPP. He said that aside from the CPTPP’s difficulties, there are also opportunities that will arise as strict regulations will prompt Vietnamese firms to make changes to develop more sustainably and win the trust of global consumers. It will also put pressure on companies to cooperate with one another to form supply chains and actively attract investment to improve their production and business performance. The textile-garment industry is viewed as a sector with high pollution risks. Therefore, amid international economic integration, businesses need to adhere to environmental protection regulations, he said, recommending that they pay attention to circular economy in which they should save water and energy during the manufacturing process. Meanwhile, Vo Tan Thanh, Director of the HCM City Branch of the Vietnam Chamber of Commerce and Industry (VCCI), said the industry is highly valued, especially as one of the biggest foreign currency earners of Vietnam. As such, reforming technology, improving product quality, and reducing production costs are necessary to promote its product competition on domestic and foreign markets. Thanh also asked businesses to actively seek cooperation chances in terms of equipment and material supply so as to meet rules of origin in FTAs and enhance their competiveness on the global market. In particular, they should switch from a made-to-order model to the production of goods created by themselves to help the sector gain strides in sustainability. Statistics show that more than 6,000 businesses are operating in the textile-garment industry of Vietnam, which is believed to still have much room to expand exports, especially to the 10 other CPTPP members. The country has exported just 5.3 billion USD worth of textile-garment products to CPTPP countries each year, accounting for 6.3 percent of the grouping’s market.
Source: Vietnam Plus
At its sustainability summit here this morning, Walmart announced new goals for apparel and soft home sourcing. The textile goals have two key components: sourcing more sustainable fibers and reducing the manufacturing impact on the environment. Walmart plans to increase the use of recycled polyester fiber and has established a goal of using 50% recycled content by 2025 and to source 100% more sustainable cotton. On the manufacturing side, the retailer said by 2022 Walmart US stores will source apparel and home textiles only from mills that use the Sustainable Apparel Coalition’s Higg Index Facility Environmental Module (FEM) to measure and help improve environmental performance. Walmart will also prioritize sustainable chemistry, setting a goal to reduce the discharge of priority chemicals from the textile manufacturing process. Walmart said as part of its responsible sourcing initiative, it is working alongside NGOs, industry groups, governments and suppliers to improve the lives of workers in the global apparel supply chain – with a particular focus on women. In addition, Walmart announced that for the first time, checkout carousels at its US stores will include reusable bags that will be available to customers for purchase. The new campaign is intended to help reduce plastic waste. The reusable bags will be placed in easy to find and highly frequented sections of the stores. As part of the launch, Walmart is rolling out a new assortment of reusable bags that are made with post-consumer recycled content. The new reusable bag initiative will begin rolling out to stores next month and follows a recent announcement by Walmart on a series of plastic waste reduction goals that seek to advance the sustainability of the retailer’s private brand packaging by making it 100% recyclable, reusable or industrially compostable by 2025.
Source: Home Textiles Today
Ecofast Pure Sustainable Textile Treatment is one of the five breakthrough technologies for which Dow has been honoured with Edison Awards. Ecofast Pure is a breakthrough technology that enables unique, brighter colours on cotton textiles while helping address sustainability challenges in the industry, including quality and consumption of water. Dow has bagged silver for the patented technology that reduces water, dye, energy and chemical use in the dyeing process and meets the ZDHC Roadmap to Zero Programme standards. Ecofast Pure is compatible with reactive, direct and acid dyes and can be applied to knit and woven fabric, denim and garments. Dow received two gold, two silver and one bronze award in categories ranging from clean manufacturing to coating and packaging materials. The Edison Awards honour excellence in new product and service development, marketing, human-centered design, and innovation. “These five Edison Awards, recognizing innovations from the new Dow, demonstrate the vibrancy of our markets and strength of our R&D efforts. The awards cover a diverse group of technologies from across our portfolio of businesses,” said AN Sreeram, senior vice president, Research & Development, and chief technology officer for Dow. “We have the people and the tools to continue the proud history of innovation at Dow. Winning a record five awards demonstrates the power of our innovation engine as Dow accelerates into the future. Like Edison in his time, our research is customer focused – solving customer and societal needs and creating value for our shareholders.
Source: Fibre2Fashion
A new global rule mandated by the International Maritime Organisation (IMO) for national governments to introduce electronic information exchange between ships and ports took effect from Monday. The rule seeks to make cross-border trade simpler and the logistics chain more efficient, for the more than 10 billion tonnes of goods which are traded by sea annually across the globe. The requirement, mandatory under IMO’s Convention on Facilitation of International Maritime Traffic (FAL Convention), is part of a package of amendments under the revised Annex to the FAL Convention, adopted in 2016. “The new FAL Convention requirement for all public authorities to establish systems for the electronic exchange of information related to maritime transport marks a significant move in the maritime industry and ports towards a digital maritime world, reducing the administrative burden and increasing the efficiency of maritime trade and transport,” IMO Secretary-General Kitack Lim, said in a statement. The Facilitation Convention encourages use of a “single window” for data, to enable all the information required by public authorities in connection with the arrival, stay and departure of ships, persons and cargo, to be submitted via a single portal, without duplication. The FAL Convention, which has 121 contracting governments, contains standards and recommended practices and rules for simplifying formalities, documentary requirements and procedures on ships’ arrival, stay and departure. The Facilitation Convention (Standard 2.1) lists the documents which public authorities can demand of a ship and recommends the maximum information and number of copies which should be required. IMO has developed standardised forms for documents such as the IMO General Declaration, Cargo Declaration, Ship’s Stores Declaration, Crew’s Effects Declaration, Crew List, Passenger List and Dangerous Goods. Five other documents are required, on security, on wastes from ships, on advance electronic cargo information for customs risk assessment purposes, and two additional ones under the Universal Postal Convention and the International Health Regulations. Under the requirement for electronic data exchange, all national authorities should now have provision for electronic exchange of this information. India launched a Port Community System — ‘PCS1x’— at ports in December 2018. ‘PCS 1x’ is a cloud-based technology developed by Mumbai-based logistics conglomerate JM Baxi Group. PCS1x offers value-added services such as notification engine, workflow, mobile application, track and trace, better user interface, better security features, improved inclusion by offering dashboard for those with no IT capability. A unique feature of ‘PCS1x’ is that it can latch on to third party software which provides services to the maritime industry thereby enabling the stakeholders to access wide network of services. The system enables single sign on facility to provide one stop interface to all the functionalities across all stakeholders. It also deploys a payment aggregator solution which removes dependency on bank specific payment eco system. The system will enable trade to have an improved communication with the customs as they have also embarked on an Application Programming Interface (API) based architecture, thereby enabling real time interaction. PCS1x offers a database that acts as a single data point to all transactions. It captures and stores data on its first occurrence thereby reducing manual intervention, the need to enter transaction data at various points and thereby reducing errors in the process. “It is estimated that this feature alone will reduce transaction time by as much as two days. The application will have a cascading effect in reducing dwell time and overall cost of transaction. The platform has the potential to revolutionise maritime trade in India and bring it on par with global best practices and pave the way to improve the Ease of Doing Business world ranking and Logistics Performance Index (LPI) rank,” a Shipping Ministry official said.
Source: The Hindu Business Line
