The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 03 MAY, 2019

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INTERNATIONAL

Economy appears to have slowed down in FY19, says Finance Ministry report

A declining growth of private consumption, weak increase in fixed investment and muted exports are some reasons for the slowdown, said the report, titled ‘Monthly Economic Report' for March 2019. It was released by the Department of Economic Affairs on Wednesday. “The Indian economy is the fastest-growing major economy and is projected to grow faster in the coming years. However, India's economy appears to have slowed down slightly in 2018-19,” the report stated. “On the supply side, the challenge is to reverse the slowdown in growth of the agriculture sector and sustain the growth in industry,” it said, clearly admitting the extent of the farm sector slowdown. This comes at a time when the Opposition is constantly attacking Prime Minister Narendra Modi on rural distress while campaigning for the ongoing Lok Sabha elections. The report also stated that retail inflation was showing signs of peaking. “The room for monetary easing has been created by low inflation in 2018-19, although it has started to inch up in last few months of the year,” it said. The report added that the real effective exchange rate has appreciated in Q4 of FY19 and could pose challenges to the revival of exports in the near future. On a positive note, current account deficit as ratio to gross domestic product is likely to have fallen in the January-March quarter of FY19, which would limit the leakage of growth impulse from the economy, while fiscal deficit has been gliding down to the targeted 3 per cent, the report stated. Also, an increase in foreign exchange reserves in Q4 of FY19 on account of an improvement in trade balance has increased the import cover for the economy. The country's GDP grew at a six-quarter low of 6.6 per cent in Q3FY19 because of subdued expansion in agriculture, manufacturing and government expenditure, according to official data.  However, investment activity continued to grow at a healthy pace. The government has also lowered its estimate of economic growth for Q1 and Q2 of FY19 to 8 per cent and 7 per cent, respectively, from its earlier estimate of 8.2 per cent and 7.1 per cent, respectively. As a result, the forecast for the full year's growth has been revised downwards to the lowest in the Modi government - at 7 per cent in FY19 because of lacklustre growth in farm, mining and some services such trade, hotels and transport. Because of high growth in Q1, manufacturing is projected to show higher growth this year compared to the previous year. These numbers suggest that the central statistics office expects the economy to grow marginally lower at 6.5 per cent in Q4FY19.

Source: Business Standard

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Manufacturing PMI dips to 51.8 in April

Manufacturing activity expanded at a slower rate in April compared to its levels in March, according to a private sector survey. The Nikkei India Manufacturing Purchasing Managers’ Index registered a reading of 51.8 in April, lower than the 52.6 in March. A reading over 50 indicates an expansion while one below 50 denotes a contraction. “A softer increase in new orders created a domino effect in the Indian manufacturing industry, restricting growth of output, employment, input buying and business sentiment,” the report said. “The one bright spot in April was exports, which expanded solidly and at a slightly quicker pace than in March.” “Broken down by sector, capital goods was the key source of weakness, recording contractions in new business and output,” the report added. “Growth was meanwhile sustained at both consumer and intermediate goods makers.” The report went on to say that new business growth moderated in April reportedly due to the ongoing General Elections and also in response to a challenging economic environment. The increase in order book volumes was the slowest in eight months, it said. “The slowdown in growth of total sales, coupled with cashflow difficulties and competitive pressures, hampered output expansion in April,” the report said. “Although production rose, the increase was the slowest since last September.”

RBI rate cut likely

“Although remaining inside expansion territory, growth continued to soften and the fact that employment increased at the weakest pace for over a year suggests that producers are hardly gearing up for a rebound,” Pollyanna De Lima, principal economist at IHS Markit and author of the report, said. Ms. De Lima added that the fact that price pressures were cooling in the manufacturing economy and growth was losing momentum makes it increasingly likely that the Reserve Bank of India may cut interest rates for the third consecutive time in June.

Source: The Hindu

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Finance ministry confirms slowdown fears; growth may ease to 6.5% in January-April

The report said the expected firming up of government consumption expenditure in Q4 of FY19 is on course as growth in cumulative revenue expenditure of the central government has been higher in recent months. The second advance estimate of the Central Statistics Organisation has pegged FY19 GDP growth at 7%, down from 7.2% in FY18 and 8.2% in the year before. The GDP growth may have touched 6.5% in the March quarter, against 6.6% in the previous quarter, and the slowdown in the economy in FY19 has been caused by declining growth of private consumption, tepid increase in fixed investment and muted exports, according to the latest monthly report of the finance ministry. Current account deficit (CAD) situation may have improved in the last quarter of FY19 from 2.5% in the December quarter, as dip in imports has improved the merchandise trade deficit. The second advance estimate of the Central Statistics Organisation has pegged FY19 GDP growth at 7%, down from 7.2% in FY18 and 8.2% in the year before. “On the supply side, the challenge is to reverse the slowdown in growth of the agriculture sector and sustain the growth in industry. On the external front, current account deficit as ratio to GDP is set to fall in Q4 of 2018-19, which will limit the leakage of growth impulse from the economy,” the report by the department of economic affairs said. Though the easing of the monetary policy (the repo rate has been cut by 25 basis points each in February and April) has the potential to support growth, the recent cuts are yet to transmit to weighted average lending rate of banks. Thus the “effects of the easing on investment activity are yet to manifest”, said the report. “Credit growth could have been challenged by continuous tightening of bank liquidity, causing the call money market rates to trend up since Q1 (FY19); however, some respite is evident in Q4,” said the report for March. The real effective exchange rate has appreciated in the March quarter and could “pose challenges to the revival of exports in the near future”. However, increase in foreign exchange reserves in the last quarter of FY19 on account of improvement in trade balance has increased the import cover for the economy, it added. The report said the expected firming up of government consumption expenditure in Q4 of FY19 is on course as growth in cumulative revenue expenditure of the central government has been higher in recent months. “Though fixed investment as percentage of GDP has been trending up since 2017-18, this trend may pause for a while, also evident in slowing down of growth in non-food bank credit in Q4 of 2018-19,” it said.

Source: Financial Express

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India-Pakistan trade halves in February, plunges headlong since

While imports were expected to drop, given that India had slapped a 200% duty on purchases from Pakistan after the withdrawal of the MFN status, the massive fall in exports suggests Islamabad has quietly raised its non-tariff barriers for Indian products in response to New Delhi’s tariff war. India had last reviewed the MFN status after the 2016 Uri attacks — which were traced to militant outfits based in Pakistan·but refrained from revoking it. India’s imports from Pakistan crashed 44.6% and its exports to the hostile neighbour plunged 43.7% in February when New Delhi revoked its most favoured nation (MFN) status to Islamabad in the wake of the Pulwama terror attack on the 14th of the month, perpetrated by Pakistan-based militant outfit Jaish e-Mohammed (JeM). Analysts said trade with Pakistan might have collapsed even further in March, which witnessed the full-month impact of the measures taken after February 15. The country-wise official trade data for March are yet to be compiled. While imports were expected to drop, given that India had slapped a 200% duty on purchases from Pakistan after the withdrawal of the MFN status, the massive fall in exports suggests Islamabad has quietly raised its non-tariff barriers for Indian products in response to New Delhi’s tariff war. India had granted the MFN status, a jargon for giving equal treatment to all trade partners under the WTO framework, to Pakistan unilaterally in 1996. JeM chief Masood Azhar was designated as a global terrorist by the United Nations on Wednesday. While India’s exports to Pakistan dropped to $126.5 million in February from $224.5 million a year earlier, its imports declined to $18.6 million during the month from $33.5 million in the year before, showed the latest official data sourced from the DGCIS. Importantly, between April 2018 and January 2019 (before the curbs were slapped), India’s exports to the neighbour had risen 22.1% from a year earlier to $1,768.7 million, while imports from Pakistan had inched up by 12.6% to $473.5 million, according to the data. The exports of key items such as cotton, organic chemicals and plastics, which made up for over 55% of India’s outbound shipment to the neighbour in FY19, crashed by 59.3%, 49.6% and 35.5%, respectively, in February. Similarly, imports of key products such as edible fruit and nuts, cement & salts and products crashed by 56% and 45.5%, respectively, in February. “The decision to withdraw the MFN status and impose the punitive duty on imports from Pakistan was taken, keeping in mind broader national interest, and not short-term commercial gains. Pakistan is known to impose non-tariff barriers against us and they have done it in the past as well. In any case, the trade levels are low, so it (the fall) doesn’t hurt us in any manner,” a senior government official told FE. “Ultimately, national security has to be of paramount importance.” Despite the fall in exports as well as imports, the impact of the MFN status withdrawal is limited for India due to the low level of bilateral trade. However, symbolically, the move has been seen as the strongest retaliation in trade yet, given the status was not revoked even after the Kargil war and the 26/11 Mumbai attacks. For its part, Pakistan hasn’t granted the MFN status to India and continues to trade with New Delhi with a negative list of 1,209 products. This means barring those products on the list, India can ship out other items to the neighbour. However, New Delhi’s retaliation may offer Pakistan an excuse to raise its negative list of tradable items with India. In 2012, Pakistan had committed to granting India the MFN status but retracted later due to domestic opposition. India’s merchandise exports to Pakistan constitute just 0.6% of the country’s total exports. Similarly, its imports from the neighbour made up for 0.1% of New Delhi’s overall purchases from overseas. For Pakistan, though, the impact will be greater, as the neighbour’s purchases from India stood at over 3% in 2017-18. India had last reviewed the MFN status after the 2016 Uri attacks — which were traced to militant outfits based in Pakistan·but refrained from revoking it. In 2012, Pakistan announced the negative list, departing from its decades-old practice of trading on the basis of a positive list that had severely restricted prospects of Indian exports to that country.

Source: Financial Express

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Robust plan in place to import oil: MEA

U.S. refuses to extend sanctions waiver to India on Iran oil import; OMCs stop placing orders from Iran. India has a “robust plan” to import oil from other countries, the Ministry of External Affairs said, even as the deadline for the U.S. sanction waiver for oil imports from Iran expired on Thursday without an extension from the U.S.Last year, the U.S. re-imposed sanctions on Iran, prohibiting countries from importing oil from it, but waived these sanctions for eight countries, including India. That waiver has now expired and the U.S. announced last month that it would not be extending it.The U.S. refused to change its stance despite a last-minute call by External Affairs Minister Sushma Swaraj to U.S. Secretary of State Mike Pompeo on Saturday. “Whatever decisions we take will be a combination of a number of factors [including] commercial negotiations and keeping our legitimate security interests and economic interests in mind,” Ministry of External Affairs (MEA) spokesperson Raveesh Kumar said.

‘Responded accordingly’

“We continue to engage with the U.S. on this matter. But a decision has been taken by them and accordingly we have responded.” “We have a robust plan in place to import oil from other countries,” Mr. Kumar added. “This is a decision that will be taken in a considered manner.” Indian oil companies, meanwhile, have stopped placing orders for Iranian oil. “The oil companies do not take a decision on this, that is taken by the government,” a spokesperson for the Indian Oil Corporation said. “The official position is what was stated by the MEA. But we have not placed any further orders with Iran.” Prior to the sanctions and the subsequent reduction in the quantity of oil imported from Iran, Iran accounted for about 10% of India’s oil requirements.

Source: The Hindu

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Rupee rises 9 paise to 69.47 vs USD in early trade

Forex dealers said, selling of the American currency by exporters, fresh foreign fund inflows and positive opening in domestic equities supported the rupee. The rupee appreciated by 9 paise to 69.47 against the US dollar in early trade on Thursday driven by weakening of the greenback in overseas markets and sustained foreign fund inflows. Forex dealers said, selling of the American currency by exporters, fresh foreign fund inflows and positive opening in domestic equities supported the rupee. At the interbank foreign exchange, the rupee opened on a weak note at 69.60, but gathered momentum and rose to a high of 69.47 against the US dollar, showing 9 paise gain over its previous closing. The local unit, however, pared some gains and was quoted at 69.54 against the American currency at 0951 hrs. The rupee had settled at 69.56 against the US dollar on Tuesday. Currency market was shut on Wednesday on account of Maharashtra Day. Meanwhile, foreign institutional investors (FIIs) remained net buyers in capital markets, putting in ₹114.59 crore Tuesday, according to provisional exchange data. Brent crude futures, the global oil benchmark, fell 0.29 per cent to trade at USD 71.97 per barrel. Domestic bourses opened on a cautious note Thursday with benchmark indices Sensex trading 43.96 points up at 39,075.51 and Nifty down 7.15 points at 11,741.00. Meanwhile, the U.S. Federal Reserve officials held key interest rates steady amid lack of inflationary pressures.

Source: The Hindu

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Shades of White

One tends to judge a fabric on the basis of its colour and texture but what happens if you take the colours away? Titled Safed, a textile installation aims to focus on textures and take away the element of colour. The all-white hanging installation — made up of huge panels of various indigenous textile patterns and weaves — was on display at Delhi’s Indira Gandhi National Centre for the Arts recently, and will now travel to the US, the UK and cities across India. The exhibit is part of The Craft Project by Sayali Goyal, Founder of independent web magazine Cocoa and Jasmine, which aims to celebrate cultural diversity through objects, folk art, craft and design. There was a session at the venue with Purnima Rai of Delhi Crafts Council, Ritu Sethi of Craft Revival Trust and Bindu Manchanda of INTACH as speakers, on the representation of Indian crafts in the West.

Kantha embroidery                                         

On the concept of Safed, Goyal says, “While travelling to different textile regions in India, I was always fascinated with the workshops and homes of dyers, embroiders and weavers. Some of these workshops had loose white fabric hung for natural bleaching, and I wanted to translate this experience for the viewers.” She adds that a common string in most textile crafts of India is the white fabric, and the colour for her stands for purity and unity. Though she admits that it isn’t possible to visually showcase all Indian crafts in white, for instance kalamkari, but most weaves, embroideries and some prints can be. The crafts covered in the installation include pashmina, Eri silk, khadi, cashmere, Maheshwari cotton, jamdani and kora khadi. For Goyal and her team, a tangible exhibition was a natural progression to Cocoa and Jasmine. She says, “Even though the online medium has its own pros, it could take away the beauty of things, especially in art, craft and design.” The panel discussion during the inaugural day of the exhibit had Rai, Sethi and Manchanda talk about three aspects: craft documentation, sustainability within crafts communities (cultural, economic and environmental) as well as representing Indian crafts in the West. “It’s important to make crafts aspirational. In the West, Indian crafts are perceived as luxury, as people are able to appreciate the process and the artisans, proving that with design intervention, we can preserve culture and communities,” adds Goyal.

Sayali Goyal

To implement some of the suggestions and recommendations made during the session, the team will be travelling to the US and the UK with Safed in August-September. “There is a lot of information on the internet about each craft, however, we have curated it for the luxury buyers and designers who wish to connect with artisans. Soon we will be publishing a directory of artisans on the website,” she explains. The installation will also travel across India post October. In each city, a different panel will be curated. Also, more craft forms will be added to expand the scope of the display. Goyal says, “So far we have documented seven crafts, however, I will be travelling to Kutch and other textile regions to document more. There are more white fabrics being added to the Safed material library as well. The craft project will be an ongoing conversation between the makers, designer and consumers.”

Source: Indian Express

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Time To Encourage Local Industry,reduce Imports: Razak Dawood

MULTAN: Advisor to Prime Minister on Commerce,Textile, Industries, Production and Investment Abdul Razak Dawood said here Thursday that the government was committed to encourage local industry and reduce imports to give a new direction to the national economy for stability, subsequent growth and progress. It was time to pursue a policy of encouraging local industries which provided jobs and export products and to discourage import of finished products, he said while addressing a gathering of industrialists and business tycoons at the Multan Chamber of Commerce and Industry (MCCI). He said that South Punjab was rich in cotton production and stressed efforts to meet 15 million cotton bales mark or even go beyond it. He said that cotton and textile exports contribution was 51 per cent to the national economy. He said that agriculture rich Multan was hub of agro-based industry and Argo food Processing (AFP) facility was doing good in producing pulp from fruit. He, however, underlined the need for enhancing its capacity by 150 per cent. However, he added, farmers, industrialists and traders should also come forward to make it happen. Razak Dawood said the government would formulate a mango policy and take steps for proper marketing of mangoes.He announced to hold big mango festival in Multan. He said the government was heading to a clear direction on economic front, adding that the country remained a victim of de-industrialization during the last decade and the incumbent government had to make arrangements for jobs for 200 million people. It would not just be trading but robust industrialization, he said. He criticized elements bringing in products through under-invoicing and selling these at low price at the cost of local industry. He said that it would not happen from now onwards. Razak Dawood said that Pakistani tractors were being exported to South Africa and local motorcycle industry was assembling 2.7 million units every year. He said the government was committed to revive the closed industry. However, loan facility would not be extended repeatedly to one individual for the purpose, he added. Razak Dawood said that Pakistan had signed free trade agreements (FTAs) with five countries. He said that under the phase-I of FTA with China, imports worth US$15 billion were pouring in and US$1.5 billion were being exported to China. However, under the phase-II, Pakistan would enjoy zero-rated or duty free export of over 300 products, a facility that was being availed by Asian countries. He said that with the signing of FTA phase-II government has done its job and now it was up to the industrialists and business persons how they capitalise on this opportunity. He said, he planned to lead a big delegation to China in September and another delegation in November 2019 and asked the Multan industrialists to be ready for the opportunity. He asked industrialists to give at least 50 acre land for export display center in Multan, adding that rest would be done by the government. He added that Faisalabad industrialists had given 78 acre land for export display center, adding that the government could not do everything alone and would need cooperation and support from the industrialists and traders. He asked chambers to prepare a detailed report on problems and apprehensions with regard to trade with Iran, adding that these would be discussed with Iranian trade minister upon his visit to Pakistan expected in July 2019. He said that past governments failed to take up the SME sector development seriously, adding that the government was holding talks with Japanese government for provision of working capital to SMEs and their up gradation. He said the government would soon look into the auto policy. He had talked to the Advisor to Prime Minister for Finance on refund issues, he said and added that he was aware that businesses faced problems in case of delayed refund payment. He reiterated the government's commitment to continue to work for women empowerment, adding that women must be brought to the mainstream for progress. To a question on urban expansion at the cost of trees being cut, he said it was a serious issue and he would talk to the prime minister. He disclosed that new textile policy was under preparation and would be announced within the next few weeks. He said that chambers of commerce and industry could also give their feedback.

Source: Urdu Point

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Digital, textile printing experts to gather at FESPA

Digital and textile printing manufacturers are all set to present the latest technologies and applications to the speciality print sector at FESPA Global Print Expo 2019 to be organised in Munich during May 14-17. The expo will see print service providers (PSPs) and sign-makers gather to experience variety of print technologies, consumables and materials. With Print Make Wear one of the key features at this year’s Global Print Expo, textile is set to be a key talking point at the event, counting over 160 exhibitors showing textile solutions. First time exhibitor Omniprint will be using FESPA 2019 as a platform for displaying its range of direct-to-garment (DTG) printing technologies, including its latest system, the Cheetah Industrial DTG. With quality prints up to 1800dpi, the Cheetah is one of the fastest industrial DTG printers on the market, boasting high print quality and compatibility with a wide range of materials, including 100 per cent polyester and cotton/poly blends. Digital sublimation and direct-to-textile printers will also be a key feature on the Mutoh stand. Visitors will be able to see first-hand the high speed ValueJet 1948WX digital dye-sublimation printer, with print speeds ranging from 125 m²/h to 195 m²/h. The system is ideal for businesses looking for a printer capable of handling high volumes and intensive use. FESPA Global Print Expo 2019 will see the world premiere of Karibu, the first roll-to-roll printer from swissQprint. Little is known about the new system at present, but the Swiss company will come with a range of standout features, including a roll handling system that enables fast loading, a finely segmentable vacuum system, new output software, and a bespoke ink set. Canon will exhibit its range of wide format digital print and automated workflow solutions, including the successful Océ Arizona flatbed series and the Océ Colorado printer, featuring Canon UVgel technology. The new Océ Arizona 1300 Series will be displayed for the first time at an international event since its launch in February 2019. The Océ Arizona 1380 GT model will show customers how it can help them produce an even broader range of applications working with almost any rigid or flexible media. The new printer will be demonstrated with Océ Arizona Xpert, an innovative software solution that simplifies and automates complex print jobs, including multi-layered and double-sided applications. Ricoh will also present its assorted solutions designed to support and improve print production environments. Among these systems will be the Ricoh Pro L5160 latex roll-to-roll large format printer, designed to deliver broader job capabilities, as well as faster short run production and elevated productivity. The printing system delivers increased performance, while also reducing maintenance requirements and outstanding quality. SPS TechnoScreen will introduce the new SPS ASTRON QX, a full servo-driven cylinder machine designed for high-end industrial screen printing applications. The key features of the new system reflect the gradual introduction of camera control and registration systems that’s been taking place in the screen printing industry for the past decade. There will also be a section on inks. German ink manufacturer, Marabu will be presenting its offering for screen, digital and pad printing, for both graphic and industrial applications. International ink manufacturer, Sun Chemical will also showcase its portfolio of screen, industrial, wide format and super wide format inkjet inks. Mimaki Europe will exhibit its recently launched UV-curable metallic ink, MUH-100-Si. As more print technology providers continue to embrace greener practices, Brand Management Group, the official partner of HP Large Format Media, will be placing special focus on HP’s latest sustainable solution for printed canvases, a huge market segment in the wide format print industry. Roz Guarnori, exhibitions director at FESPA, comments: “The best feedback we’ve received from our visitors in the past is that they learn something new at every FESPA event and we are confident that they will once again be inspired by what’s on show. FESPA is known as a platform for product launches and innovation, and we’ll be expecting more announcements from our exhibitors before the beginning of the event.” (SV)

Source: Fibre2fashion

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Uganda : Government planning to revive cotton, textile sector

Kampala. Government has identified cotton, textiles and apparel sectors to tap into its high potential for value addition, foreign investment and job creation. Uganda is now working on a new strategy to revamp the sector to benefit from the booming global market. The cotton, textiles and apparel sector ranks high under the third edition of the National Development Plan to be launched later this year. The Development Plan - a comprehensive sector development strategy for the cotton value chain - will be developed under the National Planning Authority (NPA). The NPA is working with Msingi East Africa as the lead in the project, which in turn has contracted consultancy firm Bradan Consulting Services to formulate the new strategy. In a presentation at a recent stakeholders’ meeting, Msingi East Africa said the global apparel manufacturing market was worth $785.9b in 2018. But Uganda’s cotton, textiles and apparel earnings totalled just $22m (Shs82b) of that, with the European Union being the main importer. Lint dominated and only 12 per cent of the 37,000 tonnes of cotton lint that Uganda produced during the 2017/18 season was consumed locally. While neighbours such as Ethiopia and Kenya have annually on average grossed between $221.5m and $436.5m respectively from exports through the US-sponsored Africa Growth and Opportunity Act (Agoa) in the decade to 2017, Uganda’s fortunes have been muted. The country’s average annual earnings under the scheme averaged just $56 million over the same period with clothing, textiles and apparels exports contributing nothing. The new strategy is therefore expected to refocus the underexploited Agoa. Although Agoa represents a huge opportunity for Uganda, its prospects in the past have been hampered by a number of policy and market issues. Exports have been dominated by low-volume products such as handicraft and interior décor.

Seeking to create jobs

According to Diana Mulili, the director business development and innovations at Msingi, a not for profit organisation based in Nairobi, they are working with governments in the region to create industries for future jobs to curtail unemployment in the region. The organisation has been engaging different actors across the region to discuss what needs to be done to kick-start and revive sectors such as the cotton, textiles and apparel industry to create jobs.

Source: Daily Monitor

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