The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 24 APRIL, 2019

NATIONAL

INTERNATIONAL

With GST impact withering away, Surat textile traders are cautiously optimistic

It is 12 noon at the Surat textile market. All roads leading to the area are packed. There is not an inch of space left in the area to walk. Just two years ago, in July 2017, when the Goods and Services Tax (GST) was launched in the country, this community was the most hit. In 2019, the business is still not back to normal, but traders are cautiously optimistic. "Business was down by almost 50 percent till last year. Earlier we used to earn about Rs 50-60 crore on a daily business. Now it has dropped to less than Rs 40 crore. But, we are hoping it is for the better," said Ramniklal Ahuja, a textile store owner in the Surat textile mill area. However, he said that since the end of 2018, business is 'almost' back to normal. An industry, that earlier did not pay any taxes, 5 percent (12 percent for certain categories) GST came in as a rude shock for textile traders. Costs automatically went up as apart from paying taxes, the traders also had to hire trained accountants to manage the revenue accounts. "We handled large cash-transactions earlier. This had to be computerised within three weeks and it was a nightmare for the first few months. But, we recovered slowly," said Ravikant Patel, a trader engaged in the textile business for 45 years. Be it the Surat textile market, Abhinandan textile market or Millenium textile market, all the shop-floor area is packed. There is not an inch of space left in the narrow alleys even as new stores are being added every few months. "Competition is aggressive as a few traders have decided to also sell their products online. This is against the spirit of the business," said a miffed Akram who has seen a 25 percent drop in business after e-transactions were mandated. He also added that cheques take days to clear and they work on pre-order on bulk basis. Hence, without sufficient cash, it is also difficult to pay the workers who are readily poached by the other mills in the region. Surat is referred to as the country's textile capital with a revenue size of Rs 50,000 crore. Both raw fabric and finished goods are manufactured in the region. But, when it comes to the Lok Sabha Elections 2019, all the traders show a guarded approach. The association has barred them from stating their political affiliations for the fear of retaliation. On the other hand, traders are also wary of new entrants and their lack of knowledge of local issues. "While we have faced pain, we hope that it will fade away in the next few months. A party change may not always mean good news for us, since we will be required to start from scratch if there is a tweak in the industrial policies," said an association member. The industry in Surat is involved in the activities of yarn, weaving, and processing of fabrics. At least 40 percent of the goods are exported to international markets.

Source: Forbes India

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Kazakhstan sets up coordinating council to attract Indian investments

The Kazakh government on Monday held a session to discuss the issues of attracting investments under the chairmanship of the Prime Minister of Kazakhstan Askar Mamin. Central Asia's biggest and resource-rich Kazakhstan has set up Coordinating Council for attracting foreign investments including from India. The Kazakh government on Monday held a session to discuss the issues of attracting investments under the chairmanship of the Prime Minister of Kazakhstan Askar Mamin. New approaches to improve investment in Kazakhstan were discussed in the course of the meeting. In order to coordinate and efficiently interact with investors, as well as provide solutions to current problems, it was decided to lay the functions of Investment Ombudsman under the Prime Minister of Kazakhstan. Also, a Coordinating Council for attracting foreign investment will be created and chaired by the head of government. “The first President of the Republic of Kazakhstan, Leader of the Nation, Nursultan Nazarbayev, has tasked us with ensuring sustainable economic growth rates, which will require us to increase the volume of investment in fixed assets in the medium term to 30% of GDP. The main driver should be foreign direct investment,” noted Mamin. The meeting identified the Astana International Financial Centre as a Unified Center for the coordination of work on investment and promotion of the investment image of Kazakhstan (Regional Investment Hub), with the provision of services for investors on the principles of a single window and the formation of a single pool investment projects. It was also decided that the government owned stake in the national company Kazakh Invest joint stock company would be passed into confidential management of the AIFC. “The AIFC platform currently consists of the necessary infrastructure, including the AIFC Court, International Arbitration Centre, the AIFC Exchange, the Expat Centre. The main goals of the AIFC are providing support in attracting investments into the economy of the country and creating an attractive environment for investment in the sphere of financial services. The AIFC has already shown itself as a useful platform in the global business community and we will continue to work in this direction,” noted AIFC Governor Kairat Kelimbetov

Source: Economic Times

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Hemp Fabric - a Fabric Generating Livelihood for Indian Farmers

The economic potential of cannabis is clearly vast and many countries including Canada and China have robust hemp cultivation industries and it's India's turn to encash it Cannabis has helped in the advancement of civilizations across the world. Hemp was used widely for different purposes including as a medicine and for making textile. Extensive research conducted recently shows that industrial hemp has the potential to change entire industries for the better. Leading nations and developed countries today are taking initiatives and implementing regulatory policies for the rapid development of the hemp industry. In India, a land where hemp was an integral part of society and played a part in ceremonies in the past, hemp is now being rediscovered and being put to use to foster new industries. Governments are reframing policies related to industrial hemp under the state legislature and are taking positive steps to promote the cultivation of hemp. The hemp industry has vast potential to help in the growth of various markets. The Uttarakhand government has taken an initiative to reframe its industrial hemp policy and has recently issued the first-ever hemp cultivation license. This means that hemp can now be used to create medicines, textiles, food items, paper, and building materials. A number of SHGs and farmer groups are supported by the Uttarakhand government and by private players under a PPP model which aims to advance the size and scope of the industry. Notably, it is estimated that annual revenues from Hemp textiles in Uttrakhand will equal 240 crore rupees while a farmer who grows hemp will earn approximately 1 lakh rupees annually from the sale of hemp. Hemp cultivation is all the more attractive because hemp can grow on barren land and requires little resources including water to flourish.

Uses of Hemp

Hemp has a number of uses and it can be used to manufacture goods of exceptional quality cheaply and more efficiently than they are manufactured today. Consider for instance that hemp grown on 1 acre of land can produce as much paper as can be produced from 4 acres of trees. Such efficiency in producing paper is the need of the hour because trees on thousands of acres are felled each year to produce paper. Hence instead of felling millions of trees, hemp can be cultivated and used to produce paper instead. Another reason to cultivate hemp, particularly to manufacture paper is that the paper made from hemp fibre can be recycled up to 8 times while paper manufactured from wooded trees can only be recycled 3 times. Hence not only can a single acre of hemp produce 4 times as much paper as an acre of trees, but such paper can also be recycled many more times. Clearly cultivating hemp leads to better utilization of natural resources and as a result, to more prosperity in society. Most farmers in India are not wealthy which is why they will benefit immensely by cultivating hemp as hemp can grow on barren land and requires very little resources to flourish. So hemp can be grown cheaply which makes it ideal for cultivation by Indian farmers. Today across Uttarakhand there are ghost villages, such villages are so called because they’ve been abandoned and their earlier inhabitants have moved to parts of the country that provide greater economic opportunity. However, allowing hemp to be cultivated has led many from such villagers to migrate back to their villages solely because cultivating hemp has presented them with a means to earn a livelihood. Not only has such in-migration presented villagers with the means to earn a livelihood, but it has also lowered some burden on larger cities to which the villagers, sensing better opportunity, had migrated. Cultivating hemp will also benefit farmers because they can live in their village and enjoy a far higher standard of living, and a higher savings rate, than they could while living and working in a city.

A Tough Fibre

Another reason to cultivate hemp is that the stem of the industrial hemp plant can be used to create tough fibre while rural women living in the villages of the Himalayan region have been doing so for decades. Today science has shown hemp to be a superior fibre and the hemp industry is playing a key part in popularizing the revolutionary potential of hemp fibre. Hemp fibre has anti-microbial, anti-fungal, anti-inflammatory potential (to a certain extent), and the fabric produced from hemp is soothing, soft, and comforting to the touch. Cannabis sativa has low THC content (under 0.3per cent) and completely satisfies the norms of the NDPS act and also holds the potential to create significant economic growth in countries across the globe.

Has the Potential to Change the village Economy

Farmers will prosper by growing hemp because hemp can be used to manufacture goods such as canvas. In fact, hemp fibre is so synonymous with a canvas that the word canvas is derived from the word “cannabis”. Once manufactured, hemp canvas and fibre will have many uses, particularly with the armed forces. A reason for this is that canvas made from hemp is resistant to ultraviolet light, heat, mildew, and repels insects making it the perfect material for canvas used by the armed forces. In effect, the manufacture of canvas from hemp will help give an impetus to the domestic defence industry, something which is high on the government’s list of priorities. Farmers who cultivate hemp will play a small part in nurturing this industry. Notably, the defence sector is one the largest in India and among the largest industries in the world. When farmers manufacture for this industry, they stand to be a small part of one of the largest industries in the world. The process used to refine hemp fibre to make it ideal to produce fabric does require an investment in advanced technology. Hence research institutions and organizations across the world are investing huge capital in R&D programs to invent refining processes and technologies in order to create the finest hemp fabric for use in industries. Such processes, once they are successful, will benefit farmers who grow hemp. Using hemp, a fine and thin fibre of great durability and of high quality can be created which has multiple uses in the textile industry and as mentioned above even has used with the military. The true scope of hemp remains to be fully explored despite extensive ongoing research to fully understand its uses. In brief, Cannabis considered a harmful drug for decades is now reclaiming some of its lost glory and is even shining brightly in the eyes of many as it did in centuries past. The economic potential of cannabis is clearly vast and many countries including Canada and China have robust hemp cultivation industries. In Canada well over 100,000 acres of land is being used to grow hemp. In addition to providing a source of valuable material, hemp production creates thousands of jobs that sustain thousands of families. So the twin benefits of hemp fibre and other hemp extracts are supplemented by job creation and fuller utilization of natural resources. Furthermore, by growing hemp, an economy grows also.

In Other Countries

Considering the example of Canada and its successful cultivation of hemp, there is little or no reason to believe that similar or greater success cannot be replicated in India. Like Canada, India also has abundant land that is suitable for growing hemp. Yet the cultivation of hemp in India can have a greater impact economically on the nation that such cultivation has had in Canada. For instance, India is a developing country where the successful emergence of an entirely new industry will permeate much of the economy with greater vigour. Additionally, Indian culture has an intimate relationship with cannabis and cannabis-based products could easily generate revenue for Indian companies in India and through exports. One of the beneficiaries of greater exporters will be the farmers who cultivate hemp. Because India is a developing country, it will take time for Indian industry to adapt and create white goods that meet global standards, yet Indians have an intimate knowledge of the Earth, nature, soil, and crops and cultivating hemp is a natural outgrowth of such intimacy. Farmers in India have a precious relationship with the soil that is almost absent among farmers from other countries. By cultivating hemp farmers in India will be able to foster this relationship and reap the benefits of a higher personal income while also simultaneously benefiting the Indian industry and the whole economy.

Source: Entrepreneur

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Future of Creative India lies in its past

Reviving Indian cultural goods and making them commercially viable will boost jobs and entrepreneurship. India has thrived on its creative economy since time immemorial, only to lose it all, in a space of the last 150 years. If we take an example of just the textile industry, we had a share of about 30 per cent in the global trade until late 19th century. This is now down to less than 5 per cent. The place of pride we once held is now just visible in museums, whether it is the 3,500 years old terracotta handspine at Lothal in Gujarat or the legendary transparency of the Indian muslin housed at London’s V&A museum. The question facing us as Indians today is will we continue to play the cost game with generic products? Will we remain a factory to the world? Or can we hope to make a significant difference in the lives of our citizens, especially the most creative at the bottom of the pyramid. If that hope is real, we would need to restore and leverage our unique creative advantages and build value added business propositions. In order to do that, we need to look into and learn from our past, trace back the journey and take the faster, more sustainable route to the future. Let us take examples of two plants that Indian textile trade rested on, Cotton and Indigo.

The cotton example

At the time of independence, 98 per cent of the cotton grown in India was the desi variety. Today, it is less than 2 per cent. As the industrial spinning mills in India emerged to help meet the needs of a large population, they needed more production-friendly cotton with longer staple lengths that desi varieties could not provide. However, this transition happened without paying attention to our unique local semi-industrial ecosystem and we lost our ability to produce yarns and fabrics that nobody else in the world could or can. Up until the late 19th century, we were producing very fine hand spun and hand woven fabrics from the same short staple desicotton varieties. But instead of simultaneously developing technology to support desi cotton, our industry and research institutes (even post-independence) chose to abandon that direction to focus entirely on hybrid and BT cotton.

The indigo story

The second example is of the Indigo dye. Such was our claim to its provenance, that even the term ‘Indigo’ itself is derived from its Indian roots that meant “Indian” or “Indian Ink”. No surprise then that we had near monopoly in the world. We, however, lost our place to the German chemical version, which was much cheaper and the natural medicinal properties of Indigo that permitted miners to live in their jeans for days, was lost to the world. While these are references from the past, clues on how we could turn these two crops back into a strong and scalable competitive advantage, also reside in our economic history. History has a habit of repeating itself. But only the bad things repeat themselves on their own. Good things, if relevant to current times, need to be cajoled back. It is in our interest to think of ways how we can revive and accelerate the creative economy, more for commercial reasons than patriotic ones. A strong creative economy will not only provide a strong sense of identity to the future generations, but also generate employment at the grassroots level. But such a revival requires young entrepreneurs to come forward and reclaim the lost traditions and re-establish some of these missing links. There are multiple ways this can be achieved. For example, we need to invest in finding innovative ways to mechanise post-harvest processes to enable spinning of the very short staple desi cotton. Once the link between the farmer growing desi cotton and the handloom weaver is re-established, the economic value chain will be active again. The small and marginal farmers have natural proclivity towards desi cotton due to their hardiness and low cost. An assured market would be the only incentive they would need. Such incentives will lead to production of desi cotton on large scale, resulting in yarns that are uniquely Indian and can only be woven on the gentleness of a handloom. This would also render redundant, the questions around the relevance of handlooms in current times. Likewise, natural indigo is like wine. Production of indigo relies on the characteristics of the soil, micro-climate in the region, skills of the farmer to extract dye, the local water quality and the dyeing techniques. No two lots dye the same, no two regions or tracts of land produce same quality, depth or shades of the colour. Just how wines from different regions have different “tastes”. So while dyers using synthetic indigo will produce a standard product, natural indigo users could produce fine wine like Chateau Margaux! A combination of fabric made from desi cotton and dyed with natural indigo can recreate the magic of Indianness that is lost in time. Imagine a beautifully textured canvas in the hands of skillful and creative indigo artists. Where else in the world could this happen? It is time that the current generation of creative entrepreneurs, many with the finest of design education in the world, exposure to global markets and a strong desire to work with Indian artisanal heritage find their own expressions with these two magic crops, to drive not just ‘Make in India’ but also ‘Create in India’. Some brands like ‘Pero’, ‘11.11’ and ‘Maku’ have made exciting beginnings. Likes of Probiotics in Auroville, who have even created a unique anti-septic, anti-oxidant bath bar from the indigo plant provide an inspiration for many others to follow in their steps. We also have numerous organisations spearheading efforts in support. Malkha, Selco Foundation, Asal and Khamir are coming forward to finding real solutions to building the broken desi cotton value chain. A beginning has been made, but there are miles to go. This requires a collective effort not only from the ecosystem partners and government, but also from customers. A first step could be recognising the beauty and relevance of Indian cultural goods in contemporary times. Ask not just what the world has to bring to us but what we have to bring to the world. Anchal is an advisor, teacher and mentor specialising in creative and cultural industries, and an alumnus of IIM Ahmedabad. Amit Karna is Associate Professor of Strategy and Innovation at IIM Ahmedabad. They together offer the creative and cultural businesses programme for entrepreneurs and industry at IIM-A.

Source: The Hindu Business Line

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Rupee rises 9 paise against US dollar in early trade

The rupee appreciated by 9 paise to 69.58 against the US dollar on Tuesday ahead of the RBI's second round of dollar-rupee swap auction. The currency was also buoyed on reports that India has lined up alternate sources to make up for likely shortfall in crude supplies, forex dealers said. Besides, a positive start of the equity markets influenced the recovery of the rupee, they added. However, a strong US dollar against major global currencies capped gains of the domestic unit. The Reserve Bank of India (RBI) is set to inject long-term liquidity worth USD 5 billion into the banking system through dollar-rupee buy-sell swap for a tenure of three years, the second such auction within a month. At the Interbank Foreign Exchange market, the domestic unit opened higher at 69.63 against the dollar then rose further to quote at 69.58, up 9 paise over its previous close. The rupee had declined by 32 paise to a two-week low of 69.67 against the US dollar Monday. According to the dealers, the RBI's dollar-rupee swap auction would help absorb dollar inflows that could make the rupee stronger. India, the second biggest buyer of Iranian oil, has lined up alternate sources to make up for the likely shortfall in supplies after the US decided not to give waiver from its sanctions for buying oil from the Persian Gulf nation, as per the sources. Meanwhile, the BSE Sensex was trading 152.78 points or 0.40 per cent higher at 38,797.96. The NSE Nifty too rose 40.35 points, or 0.35 per cent, to 11,634.80. The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.03 per cent to 97.31. Brent crude futures, the global oil benchmark, was trading higher by 0.39 per cent at USD 74.33 per barrel. Foreign institutional investors (FIIs) remained net buyers in the capital markets, putting in Rs 73.08 crore on Monday, provisional exchange data showed.

Source: Business Standard

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Debt recovery: Back to square one for RBI

The SC annulled RBI’s February 12 order for its oversimplified view on stressed assets. This is a chance to improve IBC systems. The Supreme Court on April 2, struck down the Reserve Bank of India’s revised framework on Resolution of Stressed Assets, popularly known as the ‘Feb 12 Circular’. The circular had revamped much of the framework that was in place for identification and resolution of stressed assets and directed banks having exposure to entities with large stressed assets to take certain mandatory steps to resolve these exposures within 180 days, failing which they would have to initiate insolvency proceedings against the defaulting entities in terms of the Insolvency and Bankruptcy Code (IBC). In doing so, the circular also removed recourse to out-of-court restructuring schemes such as CDR, SDR, S4A and the JLF. In the absence of the Feb 12 Circular, there is, at present, no framework for resolution of stressed assets. This is antithetical to the RBI’s aim to facilitate quick and efficient identification and resolution of such stressed assets. In response, the RBI will have to move fast, and come up with a framework that avoids the pitfalls that have become evident from the failure of the February 12 Circular. One of the main pitfalls of the circular was that the RBI required the institution of IBC proceedings for all companies whose NPAs (non-performing assets) were not resolved within a fixed timeline. Companies in sectors such as power, sugar, textiles and shipping challenged the circular as being arbitrary, as it prescribed a one-size-fits-all approach and refused to recognise that the circular would not resolve distress when applied to sectors that were suffering due to extraneous factors linked to governmental policy. The companies argued that they would be unable to come up with a resolution plan to standardise their bad debts within the 180 days provided by the circular, and so they would have to undergo the IBC process. While the IBC has brought in a paradigm shift in the recovery and resolution of bad debt, anecdotal evidence indicates that due to the inherent problems faced by these sectors, very few buyers would be interested in these assets. This raised questions about the suitability of IBC proceedings for resolving them.

Legal framework

Apart from such concerns that are more rooted in policy, the RBI’s use of the legal framework to issue the Feb 12 Circular was also found to be flawed. The Supreme Court pointed out that the RBI’s powers to regulate stressed assets can only operate independent of the IBC, and that any separate direction to initiate the IBC process could be brought only against single, specific entities, that too, only with prior government authorisation. A more objective, and in retrospect — legally valid approach — would therefore be for the RBI to allow for a separate identification of companies (like in the case of the so-called ‘dirty dozen’) that should go through the IBC process, after balancing the interests of banks, debtors and the public at large. This also indicates that there is a need to have a well-considered, out-of-court resolution framework, that is an alternative to the IBC process. The Feb 12 circular provided for a restructuring framework that had extremely strict timelines, and required approval of all the creditors. This made it practically impossible for a resolution plan to be approved within the strict time period of 180 days provided by the circular as it created opportunities for hold-outs by creditors. The mechanism also did not provide a framework for lenders and borrowers to coordinate with governmental authorities and sectoral regulators. This, therefore, offered no alternative mechanism for resolution of distress for entities that require a more nuanced approach that even the IBC is not entirely well suited for. Had the RBI circular done so, perhaps the court would not have seen such an immediate challenge from entities from the power, sugar and other such sectors.

Competing concerns

This ruling presents the RBI with an opportunity to go back to the drawing board and redesign its framework for resolution of stressed assets. In designing this new framework, the RBI must balance two competing concerns — the need to create the right incentives for banks to resolve their bad loans promptly (in a cost-effective manner), and the need to maintain sufficient flexibility to enable the framework to effectively resolve stress caused by different factors. If the RBI is able to design a such a framework it would afford better prospects of resolution to struggling sectors and entities than a one-size-fits-all approach.

Source: The Hindu

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The problem with cherry-picking data

If it’s the government’s case that NSSO figures are suspect, what has it based policy decisions on? Minister of State for Housing and Urban Affairs Hardeep Singh Puri said last week, “we definitely have a data crisis,” and blamed academics for creating a “false narrative”. Yet, at the heart of the data crisis in India is the Central government, which has been holding back important data. Most recently, it did not announce the data on employment created by the ‘Mudra’ scheme. Earlier, the National Sample Survey Office (NSSO) data on employment were withheld. Data on farm suicides have not been available since 2016. Data are being withheld precisely where experts have flagged problems, such as on employment, farmers’ crisis and economic growth.

Clashing with reality

The NSSO data (which have not been released officially) undermine the National Democratic Alliance government’s claims on job creation. In fact, they showed massive unemployment. Demonetisation and the implementation of the goods and services tax, both of which undermined the unorganised sector which employs 94% of the workforce, have impacted employment. Data from the Centre for Monitoring Indian Economy (CMIE) and others have confirmed the loss of jobs. The NSSO and CMIE data are based on household surveys which capture any additional employment created by Mudra loans, tax aggregators, e-commerce, etc. Basically, jobs are being lost so that the net effect is a decline in employment. The government had promised doubling of farm incomes by 2022. But, farmers’ incomes have come under pressure due to falling farm produce prices and rising input costs. This got aggravated by demonetisation, with cash shortages in rural areas compelling farmers to sell at lower prices to the traders to get cash. Data on farmer suicides have not been released on schedule even though the National Crime Records Bureau (NCRB) collects them annually. The government has implicitly admitted that there is a crisis in the farming and unorganised sectors, and due to that in employment generation. That is why it announced an annual ₹6,000 support to farmers owning up to five acres of land and promised insurance to workers in the unorganised sector. It has also increased allocations for the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) from ₹55,000 crore to ₹60,000 crore. This allocation is inadequate, but it does indicate that the government is forced to acknowledge the crisis facing the poor. To counter the argument of a crisis facing large segments of the population, the government first tried to discredit alternative arguments and then changed its stance to say that data on the unorganised sector employment were bad. In the process, it discredited its own agency’s data. But the data on employment put out by NSSO have been used for long. Was that all incorrect also? If so, policy formulation based on that faulty (or non-existent) data was also incorrect. It would render suspect not only the policies of past governments, but even this government’s. Most critically, if data on unorganised sector employment are not reliable or are non-existent, then GDP data are also not credible. After all, such data must factor in the contribution of the unorganised sector. The implication is that the government is only estimating growth on the basis of the organised sector of the economy, a point repeatedly made by this writer in the last two years. In brief, the government has tied itself up in knots by saying that no one has credible employment data. So, GDP data also become suspect and so does the claim of 7% rate of growth. If the GDP calculation is inaccurate, can the budget figures based on this data be relied upon? Using the organised sector growth to represent the unorganised sector growth is somewhat acceptable only if the two components are moving in the same direction. But that has not been true post-demonetisation, which decimated the unorganised sector. So, the official figures represent only the organised sector. If the alternative data on unorganised sector growth are included, then the rate of growth would turn out to be less than 1%. This would be consistent with the crisis of the unorganised sector, agriculture and employment. A 7% growth rate of the economy is not consistent with this crisis. The situation becomes even worse when quarterly GDP growth figures are relied on. They are based only on the corporate sector data and not even the organised sector. Thus, they are even less representative of growth of the economy. The government cites World Bank and International Monetary Fund figures in support of its contention of 7% growth. But these agencies do not collect independent data and only reiterate the official data. So, their figures are not independent endorsements of government data. To be fair, all governments in the past have manipulated data. The budgetary figures — fiscal deficit, expenditures and revenues — are fudged. Critics point to creative accounting in the budget every year. Data on education and health are also manipulated to show better performance. Whenever the GDP base change has been announced, experts have pointed to flaws. Inflation measured by the wholesale price index has been criticised as not representing the services sector, hence understating inflation.

Risk of arbitrariness

What is new is the complete denial of data collected by official agencies. If the government wishes to revamp data collection, it cannot be done arbitrarily. Expert committees must be appointed to work on the modification of methodology and the database. Even this would not account for the substantial black economy. In brief, the present government is denying the data of its own agencies or modifying data arbitrarily. This is opening the doors for future governments to do the same. Tomorrow when the inflation rate rises, a government can claim that data on prices are faulty. If so, the bottom falls out of the calculation of dearness allowance to the organised sector and the budget formulation gets impacted. Further, the calculations of the Reserve Bank of India (RBI) also go wrong since it is supposed to target inflation. If both the data on growth and prices are denied, what would the RBI target? No one says that data cannot be improved but denying the existing official data only creates problems for policy and its credibility. Arun Kumar is at the Institute of Social Sciences, New Delhi and author of ‘Ground Scorching Tax’, 2019

Source: The Hindu

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Maharashtra gears up for new kharif season with 2.25-crore BT cotton seed packs

Though fears are being expressed about farmers possibly shifting to soyabean and maize as options, the state government has planned for a possible kharif crop of 40-41 lakh hectares. As the BT variety continues to account for over 96% of cotton crop in the country, the Maharashtra government has managed to supply at least 2.25 crore packs of BT cotton seeds to farmers this kharif. Though fears are being expressed about farmers possibly shifting to soyabean and maize as options, the state government has planned for a possible kharif crop of 40-41 lakh hectares. Experts said farmers had been getting good prices and therefore crop estimates for the new season may be retained. The Cotton Association of India (CAI ) had trimmed the crop estimate for the fibre crop to 321 lakh bales (170 kg each), which is about 7 lakh bales lower than its previous month’s estimate last month. The crop is likely to be the lowest since the 305 lakh bales recorded in 2009-10 (as per Cotton Advisory Board estimates). The main reason for reduction in cotton crop during this year is the scarcity of water in some states and the fact that farmers uprooted their cotton plants in about 70-80% area without waiting for the third and fourth pickings. According to MG Shembekar, member, National Seeds Association of India, cotton prices have been high this season and the Pink Bollworm situation had been also contained to a great extent in Maharashtra and therefore the crop position is expected to be good this kharif as well. According to officials in the agriculture department, seed companies are in a position to supply around 2.25-crore packs of BT cotton seeds to farmers this kharif. Normally, cotton is cultivated on 41 lakh hectares every season. Last year, the appearance of the Pink Bollworm led to a scare but awareness increased among farmers who took measures to curb the menace, officials said. Normally around 1.80-crore packs of seed are required by farmers every year but the department has improved the seed supply position and has ensured that 40-50 lakh additional packs are available to farmers. With cotton prices rising sharply in March and April 2019, the Indian Cotton Federation (ICF) has submitted a memo to textile commissioner Sanjay Sharan, seeking a stop to the panic in the market that has led to the rise in prices. The industry has urged the government to come out with its own official production estimate to clear the ambiguity caused by differences in estimates from the CAI, which represents traders, and the ICF, which represents consumers. ICF said the cotton supply was comfortable and therefore measures should be taken avoid panic.

Source: Financial Express

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Global Textile Raw Material Price 23-04-2019

Item

Price

Unit

Fluctuation

Date

PSF

1311.11

USD/Ton

-0.16%

4/23/2019

VSF

1869.82

USD/Ton

-0.79%

4/23/2019

ASF

2511.97

USD/Ton

0%

4/23/2019

Polyester    POY

1320.80

USD/Ton

-1.88%

4/23/2019

Nylon    FDY

2860.61

USD/Ton

-0.52%

4/23/2019

40D    Spandex

4737.88

USD/Ton

0%

4/23/2019

Nylon    POY

5631.82

USD/Ton

0%

4/23/2019

Acrylic    Top 3D

1542.05

USD/Ton

-2.08%

4/23/2019

Polyester    FDY

2711.62

USD/Ton

0%

4/23/2019

Nylon    DTY

2681.82

USD/Ton

0%

4/23/2019

Viscose    Long Filament

1489.90

USD/Ton

-1.96%

4/23/2019

Polyester    DTY

3128.79

USD/Ton

0%

4/23/2019

30S    Spun Rayon Yarn

2577.53

USD/Ton

0%

4/23/2019

32S    Polyester Yarn

2026.26

USD/Ton

0%

4/23/2019

45S    T/C Yarn

2890.41

USD/Ton

0%

4/23/2019

40S    Rayon Yarn

2845.71

USD/Ton

0.53%

4/23/2019

T/R    Yarn 65/35 32S

2413.64

USD/Ton

-0.61%

4/23/2019

45S    Polyester Yarn

2175.25

USD/Ton

0%

4/23/2019

T/C    Yarn 65/35 32S

2547.73

USD/Ton

0%

4/23/2019

10S    Denim Fabric

1.37

USD/Meter

0%

4/23/2019

32S    Twill Fabric

0.83

USD/Meter

0%

4/23/2019

40S    Combed Poplin

1.10

USD/Meter

0%

4/23/2019

30S    Rayon Fabric

0.64

USD/Meter

0%

4/23/2019

45S    T/C Fabric

0.71

USD/Meter

0%

4/23/2019

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14899 USD dtd. 23/04/2019). 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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ITMF publishes global textile production cost comparison

The International Textile Manufacturers Federation (ITMF) has published International Production Cost Comparison (IPCC) for 2018. The IPCC is designed to trace the implications of the growing capital intensity in the primary textile industry. The 2018 edition adds ‘finishing’ to the historical cost analysis in spinning, draw texturing, weaving, and knitting. The IPCC describes manufacturing and total costs of yarn/fabric broken down into various cost elements at different stages of the textile value chain. For the first time also, the geographic coverage in the latest edition counts Pakistan and Bangladesh, besides Brazil, China, Egypt, India, Indonesia, Italy, Korea, Turkey, the US, and Vietnam.The goal of the report is to allow for a better appreciation of the relative importance of the cost elements and their respective influence on the total costs. In the category Spinning Ring/NE30, for example, the report shows that countries with high manufacturing cost (i.e., in USD/kg of yarn, Italy = 2.35, Korea = 1.60, US = 1.54) also have the higher share of labour cost (respectively 33 per cent, 27 per cent, and 31 per cent). The share of power in two of these countries, however, equals the sample average. It reaches 21 per cent in Italy and Korea and 10 per cent in the US, a level comparable to that measured in Egypt. Transforming this NE30 yarn in a woven ring yarn fabric shows a similar pattern in labour costs in Italy, Korea, and the US, but a different picture for power costs, where each country’s relative share to total manufacturing costs is now below sample average. The share of power drops to 17 per cent in Italy and Korea and 9 per cent in the US, while the sample average rises at 26 per cent. This average is driven up by Indonesia, India, Brazil, Pakistan, and China where the share of power cost to total manufacturing cost is between 30 per cent and 40 per cent. The data on the transformation of the same NE30 yarn in a knitted ring yarn fabric shows that the labour shares are equal to the power shares in China, Brazil, and Egypt (i.e. 20 per cent, 14 per cent, 6 per cent, respectively) and that labour is relatively more expensive than power in the US, Italy, and Korea (about 14, 8, and 4 times higher, respectively) or relatively cheaper in India, Bangladesh, and Pakistan (3, 3.5, and 4 times lower, respectively). The report further presents the cost of transforming the former woven fabric into a finished woven fabric (continuous open width). On average, the share of labour and power to total manufacturing costs in this category are very similar (13 per cent and 14 per cent, respectively). Strong geographical discrepancies nevertheless exist, especially with respect to labour costs with a spread of 14 cent/m. This reflects the difference in labour costs between Bangladesh (1 cent/m) and Italy (15 cents/m). The spread in power cost is measured at 4 cents/m, which corresponds to the difference between the cost of power in Egypt or Vietnam (i.e. 3 cents/m (USD)) and in Brazil or Italy (i.e. 7 cents/m (USD)). The IPCC 2018 further covers the categories of spinning rotor/ne20, texturing (75DEN/72F), weaving rotor yarn fabric, weaving textured yarn fabric, knitting rotor yarn fabric, knitting textured yarn fabric, finishing - knit - continuous open width (COW), and finishing - knit - discontinuous (JET). (RKS)

Source : Fibre2fashion

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Polartec, Kraig to launch fabrics made of spider silk

Polartec, provider of innovative, sustainable textile solutions, and Kraig Biocraft Laboratories, the biotechnology company working to develop and commercialise spider silk, have teamed up to launch the first fabrics made from spider silk in the market. The material from recombinant spider silk was initially developed for specialised military applications. These first-of-their-kind materials will eventually service the global market for high performance textiles and apparel. Among the strongest fibres produced in nature, scalable and cost-effective production of spider silk represents a ‘holy grail’ of material science. Kraig possesses the exclusive right to use patented spider silk gene sequences in silkworms, which is the first way to mass produce these fibres cost effectively and responsibly. (Spiders cannot be raised in colonies and competitors rely on genetically engineered E coli bacteria to make silk, which produces high levels of carbon dioxide in addition to being cost prohibitive.) “Teaming with an industry leader such as Polartec is a real endorsement of our proprietary approach to unlocking the potential of commercially-produced spider silk,” says Kim Thompson, Kraig Laboratories founder and CEO. “Kraig believes that spider silk, with its superior mechanical characteristics, has the potential to surpass the current generation of high performance fibres.” These fully renewable, biodegradable and biocompatible ‘super fibres’ are thin, lightweight, flexible, resilient, extraordinarily strong, and display strength-to-weight ratios more comparable to aramid fibres than other current performance fibres. In apparel applications, the possibilities of recombinant spider silks are particularly exciting, realising unprecedented combinations of physical properties such as luxurious feel and breathable comfort with top durability. In joint development since 2016, Polartec and Kraig are applying the performance characteristics of spider silk into yarns for military-grade textiles. “This project combines two of our most important innovation missions: providing best-in-class textiles to our nation’s military personnel, and our investment in a fully biodegradable product line,” says Gary Smith, Polartec CEO. “Our partnership with Kraig has the potential to be as revolutionary as when we created the first performance fabrics made from post-consumer recycled plastics in 1993.” Polartec recently announced its Polartec Eco-Engineering commitment to using 100 per cent biodegradable and recycled materials across its entire product line through another partnership with Unifi and CiCLO. For example, this new standard for sustainable textiles will include the creation of the world’s first fully recycled and biodegradable fleece, other knits, insulation fills and breathable waterproof fabrics.

Source: Fibre2Fashion

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Egypt invites India Inc to invest in Suez Canal Economic Zone

Companies from agricultural and agri-processing, IT, telecom, power, renewables are also welcome to explore investment opportunities in the economic zone. Egypt is rolling out the red carpet for India Inc to invest in the Suez Canal Economic Zone, as it expects the bilateral trade to nearly double to USD 8 billion by 2022. The Arab nation is also in talks with New Delhi to establish an India Economic Zone at the Suez Canal Economic Zone, on the models of the ones established by Russia and China and is looking at asset-light industries like food processing, packaging and IT, Egyptian ambassador Heba Salaheldin Elmarassi said here Tuesday. India Inc led by over 50 companies have already invested over USD 3 billion across Egypt, she said, adding while companies from there have invested around USD 150 million here. "Indian companies are welcome to explore emerging investment opportunities in the economic zone, especially in sectors like chemicals, petrochemicals, pharma, textiles, and auto & auto components among others," Elmarassi said at an event organized by the industry lobby CII. Companies from agricultural and agri-processing, IT, telecom, power, renewables are also welcome to explore investment opportunities in the economic zone, she added. India is the sixth largest export market for Egypt and the 10th largest source of imports and the bilateral trade stood in favour of the Northeastern African nation at USD 4.4 billion in 2018, up from USD 3.5 billion in the previous fiscal year. "There is a vast potential and we are targeting to boost the trade volumes between the two countries to reach USD 8 billion by 2022," Elmarassi told PTI. India's export to Egypt stood at USD 1.6 billion in FY8, up from USD 1.2 billion in 2017, while imports stood at USD 2.7 billion and USD 2.3 billion respectively, leading to a trade deficit. Egypt is trying to diversify its trade beyond the traditional items of dates, grapes, strawberry and green beans. She said already over 5o Indian companies are operating in here country, including the Tatas, Ashok Leyland, M&M, Dabur, Marico, Forbes Marshall, Kirloskar, Asian Paints, Gail India, Sun Pharma, Pidilite, Sanmar, and Essel Propack among others, with total investments of around USD 3 billion. The Suez Canal Economic Zone, one of the main projects where Egypt is trying to attract foreign investments, is a free zone and trade hub along the banks of the newly-expanded Suez Canal. Strategically located on the main trade route between Europe and Asia, over 8 per cent of global trade passes through the canal annually. Spanning 461 km, which is almost two- thirds of Singapore, the zone consists of two integrated areas, two development areas and four large ports.

Source: Business Today

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HP makes first moves into textiles with dye-sub launch

HP will make its first-ever moves into the textiles printing market by launching two machines in its new Stitch S series of dye-sublimation printers, with a third on the way for Fespa. The 1.6m-wide Stitch S300 and S500 printers will be available from June after being debuted at the ISA 2019 convention in Las Vegas, US, from tomorrow (24 April). HP said the Stitch S300 had been designed for ease-of-use and is intended for entry-level or minimal-use markets. It comes with HP’s Ergosoft RIP, HP transfer paper and the manufacturer’s full profile library. It is capable of both transfer and direct-to-fabric printing. Its sibling, the S500, was described by HP global business director for textiles Ester Sala as a “workhorse” for high-production operations, designed to keep up with demanding workloads in markets such as sportswear, interior decor and soft signage. Both machines will be followed in July by the 3.2m Stitch S1000, which will be presented under exclusive invitation at ISA and will receive its public unveiling at Fespa 2019 in Munich next month. Details on the S1000 are scant as yet and will be revealed closer to the show. “The digital printing market is worth $3.6bn [£2.77bn] and polyester makes up 60% of the square-meterage that is printed,” said Sala. “It is expected to continue growing to a point where its demand is doubled by 2030 and the more it grows, the more dye-sublimation will grow, too. “It is because of this that we have decided to move into the four key markets of soft signage, interior decor, sportswear and apparel. Across these markets, it is the same pain points that they have in common: colour management, waste and inefficiencies, and delivery times. “We have been working closely with customers during the development stages of the Stitch family to make sure we come up with the best solution possible.” A pioneering feature of the Stitch family will be its user-replaceable printheads which Sala said “will bring a lot of peace of mind to users in a very manual industry” by saving on downtimes. Features including automated maintenance, the ability to take papers as light as 25gsm and a variety of hardware built in for image, colour and banding control have been touted by HP as reasons the Stitch is a unique proposition in the textiles market. The S500 runs a symmetrical eight-head dual-CMYK configuration and is designed to maintain colour and quality consistency at speeds up to 110sqm/hr, billed by Sala as “twice as fast as the fastest machine currently on the market”. Alongside the printers, HP has also launched its own branded dye-sublimation papers and a specialised dye-sub thermal inkjet ink billed as the first of its kind by HP. Going forward, the Stitch branding will be an umbrella term for all HP machinery in the textiles sector. The family of machines, including the full show debut of the S1000, will appear on HP’s stand at Fespa 2019, set to take place at Messe Munich on 14-17 May. Macclesfield-based wide-format kit vendor RA Smart has been named as HP’s chosen reseller for the Stitch family in the UK and Ireland.

Source: The Print Week

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Croatia may get 10 mn investment

Croatian Ambassador to India Dino Debeljuh received a €10 million investment proposal from a Punjab industrial delegation today in Chandigarh. Investment will be in the hotel industry, information technology, education, the pharmaceutical sector, and agriculture in Croatia. "Our embassy is providing assistance to the business community," Debeljuh said. Bilateral trade between the two countries is $ 40-50 million, as per the data of the Croatian government. India's main exports to Croatia are textile yarn, leather, crude minerals, tractors, antibiotics, spices, etc. Croatian Ambassador to India Dino Debeljuh received a €10 million investment proposal from a Punjab industrial delegation today in Chandigarh. Investment will be in the hotel industry, information technology, education, the pharmaceutical sector, and agriculture in Croatia. Imports from Croatia are turbines, antibiotics, cement, motor vehicle components, medical equipment, and sports goods. Debeljuh said Croatia was expected to get membership in the European Union. "Developing property, establishing manufacturing units and importing goods from China and India for the European markets will be attractive business propositions," he said. Commenting on various government incentives and schemes for entrepreneurs, he said, "There are tax-free zones near the sea side and inland." The ambassador highlighted the vast business potential of the road transport of goods coming by sea to Europe, if routed through Rijeka port in Croatia rather than conventional port routes like Hamburg.

Source: Business Standard

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With energy exports depressed, Turkmens turn to towel smuggling

Beset by economic hardship, enterprising Turkmens have found a way to supplement their incomes - smuggling towels and bed linen into neighboring Kazakhstan. Moving hundreds of items every trip in trademark Chinese plaid bags which at times have clogged airport luggage belts, informal traders - mostly women in their late forties and fifties - hand them over to relatives or local partners to be resold for up to five times the purchase price. Dressed in traditional Central Asian garb such as headscarves and long skirts, these women arrive on almost every flight from Ashgabat to Almaty, Kazakhstan’s biggest city. Textiles are among the few items manufactured domestically from local feedstock and prices for items produced by state-owned companies have remained stable for years even as the Turkmen manat lost four-fifths of its value on the black market due to Turkmenistan’s falling gas export revenue. A deal to resume gas exports to Russia this month brought hope, but turned out to be small and short-term. Turkmenistan, where president Kurbanguly Berdimukhamedov rules with an elaborate personality cult, is one of the world’s most closed countries. There are no opposition parties or media critical of the government and Berdymukhamedov, often referred to as Arkadag (Protector), wields sweeping powers. Turkmenistan rarely allows visits by foreign journalists and the textile trade offers a glimpse into the depth of its economic problems.

INDUSTRIAL SCALE

The trade attracted the attention of Almaty airport officials this year when luggage from Turkmenistan started clogging its belts. The planes, it turned out, were stuffed with textiles. “My daughter trades at a bazaar (in Kazakhstan) and I bring her goods little by little... which I buy from our (Turkmen) stores,” said a Turkmen woman picking up bags from the luggage belt in Almaty, Kazakhstan’s commercial hub. Like all other people involved in this informal textiles trading, the woman spoke on the condition of anonymity because traders like her dodge customs duties by claiming their goods are personal belongings not meant for resale. These de facto smuggling operations reached industrial scale in early 2019, prompting the Almaty airport to lodge an official complaint with the Turkmen flag carrier. “There were parcels weighing over 50-60 kilograms (110-130 pounds) each,” said Marina Zabara, a complaints inspector at the airport. Oversized parcels have since disappeared but the flow of textiles continues. A Reuters reporter saw Turkmen travelers pick up parcels of textiles upon arrival in Almaty this month. “A woman from Turkmenistan moved to our village last year and offered us to sell their textiles,” said a Kazakh trader working at a market on the outskirts of Almaty. “Her mother brings the goods as luggage, as many items as she can.” At Almaty’s biggest market, traders display Turkmen bedding - often with traditional patterns based on deer and sheep horns or abstract human figures - from fully-packed cargo containers. “The demand is good, with the most expensive bedding set priced at 10,000 tenge ($26),” said one trader. Some hotels have also become wholesale buyers, Turkmens say. The official exchange rate of the manat is 3.5 per dollar, but on the black market a dollar fetches 18.6 manat. A Kazakh citizen who used to live in Turkmenistan told Reuters that by buying out luggage allowances from other travelers and bribing airline officials, a “shuttle trader” can move up to 200 kilograms (441 pounds) in one trip.

Source: Reuters

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