India’s trade deficit with China has been bridged by about $9.5 billion in FY19 to $53.5 billion, but New Delhi wants deeper cuts this year. Pushing for more action from the Chinese side to increase imports of agricultural commodities and certain other goods from India, Commerce Ministry officials will meet representatives from the General Administration of Customs of China (GACC) on Thursday in New Delhi to discuss ways to raise exports and close the bilateral trade gap further. “The Chinese Vice-Minister of GACC will meet Commerce Secretary Anup Wadhawan on Thursday and the two are expected to discuss the extent to which the steps taken to increase India’s exports of farm goods to China have yielded results and what more needs to be done. Some protocols for agriculture exports may also be signed,” a government official told BusinessLine.
Trade deficit
In FY19, India’s trade deficit with China narrowed a bit to $53.5 billion compared to $63 billion the previous fiscal, but that was partly due to a decline in China’s exports to India to $70.31 billion from $76.38 billion the previous year and an increase in Indian exports of some items such as organic chemicals, plastic raw materials and cotton yarn. This followed assurances given by Chinese Premier Xi JinPing last year that his country would take concrete measures to address the problem of trade imbalance with India. China has also adopted a friendlier approach towards India after it got entangled in a trade war with the US. The Trump regime has threatened China with more retaliatory tariffs to be imposed on Friday. “While India’s exports to China in FY19 went up to $16.75 billion from $13.33 billion, there wasn’t any significant increase in exports of agriculture and allied products except for certain items such as spices and marine products,” the official said.
Eye on potential exports
New Delhi believes that a bulk of the existing trade gap between India and China can be rectified through an increase in trade of not just the items already doing well, but where potential exists. The Commerce Ministry, which has done a detailed analysis of the areas where there is scope for China to import more from India, submitted a list of 380 items earlier this year where export from the country could go up. These include agriculture, horticulture, pharmaceuticals, textiles, chemicals, tobacco and some engineering products. While China has started importing grapes from India, a number of other fruits such as pomegranates, bananas, copra, pineapple and chillies are in the pipeline. Soyabean is another product where there is a huge scope for exports. “We hope that the Chinese Minister takes forward discussions on at least some of these items and exports start soon,” the official said.
Source: The Hindu Business Line
The Apparel Export Promotion Council (AEPC) has sought a clarification on disbursal of the recently-announced rebate of state and central taxes and levies (RoSCTL) on export of garments and made-ups from the Union commerce ministry. AEPC acting chairman A Sakthivel had met union commerce minister Suresh Prabhu in Delhi on Monday in this regard. “Though RoSCTL was announced on March 7, there is clarity on how to apply for it and disbursal mechanism. The ministry should also clarify how exporters would get RoSCTL refunds in the transition period,” Sakthivel said. Pointing out that export business has significantly picked up after the announcement of the scheme, he also requested the minister to implement it as early as possible to help exporters to take full benefit of the scheme. The rebate on state levies (RoSL) for the apparel exports was reduced to 1.7% from 3.5% when the GST was implemented. Now, along with 1.7% RoSL, 4.35% rebate of central embedded taxes and levies would be provided to exporters under the RoSCTL scheme, which would be valid only up to March 31, 2020.
Source: Times of India
Wilbur Ross, Suresh Prabhu calm US nerves in a rather unconventional way. After facing repeated complaints on the widening trade deficit from US Commerce Secretary Wilbur Ross, Commerce and Industry Minister Suresh Prabhu (pictured) chose to calm US nerves in a rather unconventional way. Addressing a large public gathering of US officials and industry, Prabhu said while India's exports to the US far outpace its imports now, a day might come when the exact opposite will happen, forcing India to deal with it's own trade deficit crisis. While US officials appreciated Prabhu's candour, some Indian representatives in the room were visibly shocked, fully aware of New Delhi's own problems in controlling runaway imports from China.
That sinking feeling
A floating restaurant on Tehri lake, which the Uttarakhand government had launched last year to boost tourism in the state, sank partially in the lake earlier this week. While no one seems to know how it got submerged, local authorities are working to pull it out. The restaurant, named Marina, was a first-of-its-kind restaurant in the region and had wowed many when it was unveiled. However, the boat was not in use for months since its opening — apparently none of the local tour operators came forward to take it on lease or rent, as hoped by the state government. Some jumped on to social media to ask if it represented the fate of the state government too.
Hoping for divine intervention
Looks like the two top contenders in the high-stakes battle for the Bhopal Lok Sabha seat are hoping for divine intervention to see them through. Congress candidate Digvijaya Singh (pictured) and Bharatiya Janata Party candidate Pragya Singh Thakur (pictured) have been frequenting temples and other holy places in the area. In the last 43 days of campaigning, Digvijaya Singh has visited as many as 83 temples. Pragya Singh Thakur, who started campaigning since April 19, has visited 21 temples since then. Such is the fervor that on Wednesday when Congress' Singh took part in a roadshow with religious leaders, groups of people were seen roaming around with saffron scarves draped around their necks. While many claimed they were police personnel in civilian clothes, the state police rejected the claim, stressing that the organisers had enrolled volunteers and that these volunteers were free to wear whatever they wanted.
Source: Business Standard
US commerce secretary Wilbur Ross pulled no punches while accusing India of creating market access barriers and a discriminatory regulatory regime against foreign companies. US commerce secretary Wilbur Ross pulled no punches while accusing India of creating market access barriers and a discriminatory regulatory regime against foreign companies. US President Donald Trump has called India ‘tariff king’. ET explains the US charges and the factual position
Source: Economic Times
India is only going to get more important, more interesting as a partner country and an investment destination for Sweden and Swedish firms, according to Swedish Ambassador Klas Molin. Unlike in the past when primarily large entities dominated the Swedish investments in India, it will be small and medium enterprises that are set to accelerate the engagement ahead on the back of a combination of factors. While the large market in India remained a key attraction for them, the decision is also bound to be influenced by a favourable business climate in the country as well as prospects of shaping innovative products and solutions jointly with Indian firms. Seeking to highlight this trend during an interaction, the Ambassador said such a shift was already happening. Many of the 100 companies that forayed into India over the last decade are smaller, innovative and start-ups. Number of Swedish companies has doubled to 200 in the last ten years, he said. Mr. Molin was here for a meeting held as part of the Government of India investments facilitation mechanism with officials of Telangana government and senior executives of Swedish firms. He also attended a India-Sweden Innovations Accelerator-workshop that introduced small Swedish cleantech companies to India through a two-year B2B programme in collaboration with CII. Josa Karre, Counsellor, Head of Section, Trade, Economic and Cultural Affairs in the Embassy of Sweden, said in Telangana there were more than 25 Swedish companies that together employed 5,000 to 6,000 people. Home furnishing major IKEA, which last year opened its first India store in Hyderabad, alone employed 1,000 people. “We are encouraging small and medium size companies to do more… get them out of their comfort zone which is Sweden, Scandinavia and sometimes the Baltic countries and the EU internal market,” Mr. Molin said. Aiding their India foray was an innovation partnership India and Sweden forged a few years ago.
Considerable scope
While it was aimed at encouraging companies from both the countries to work together for solutions contributing to a sustainable future, the partnership was also driving interest for collaboration in other areas too. “You are going to see many more companies, but smaller companies and JVs between Swedish and Indian companies,” he said, adding there was considerable scope to grow Indian investments in Sweden too. A free trade agreement between India and the European Union as well as an investment protection treaty would go a long way in enhancing the bilateral trade, Mr.Molin said.
Source: The Hindu
Tariff and non-tariff barriers, multiple regulations putting foreign firms at disadvantage: Ross
While the U.S. is India’s largest export destination, India is only the 13th largest for the U.S. due to “overly restrictive market access barriers,” U.S. Commerce Secretary Wilbur Ross said on Tuesday.
Rapid growth
“India is already the world’s third largest economy, and by 2030, it will become the world’s largest consumer market because of the rapid growth of the middle class,” Mr. Ross said, while speaking at the Trade Winds conference organised in the national capital. “Yet, today, India is only the U.S.’s 13th largest export market, due to overly restrictive market access barriers,” he added. “Meanwhile, the U.S. is India’s largest export market, accounting for something like 20% of the total. There is a real imbalance.” Mr. Ross went on to say that while American technology and expertise can play an important role to meet India’s developmental needs, U.S. companies faced significant market access barriers in India. “These include both tariff and non-tariff barriers, as well as multiple practices and regulations that disadvantage foreign companies,” he said. “India’s average applied tariff rate of 13.8%, and that remains the highest of any major world economy. The very highest.” “It has, for example, a 60% tariff on automobiles; it has a 50% on motorcycles; and 150% on alcoholic beverages,” Mr. Ross added, highlighting a stress point U.S. President Donald Trump had mentioned several times. “These are not justified percentages. They are way too high.” The U.S. Commerce Secretary said that the U.S. was working with the Indian government and the private sector to address the market access issues through the U.S.-India Commercial Dialogue, and the recently re-convened U.S.-India CEO Forum. “Our goal is to eliminate barriers to U.S. companies, operating here, including data-localisation restrictions that actually weaken data security and increase the cost of doing business,” Mr. Ross said.
‘Price controls’
“Other obstacles include price controls on medical devices and pharmaceuticals, and restrictive tariffs on electronics and telecommunications products,” he added. Mr. Ross, on Monday, reportedly said that the U.S. would not be able to sell oil to India at lower rates because oil is owned by private players and the U.S. government would not be able to force them to offer concessionary rates.
Source: The Hindu
Senior officials of India and China will meet here Thursday to discuss trade-related issues, particularly matters concerning the agriculture sector, an official said. The Chinese side will be headed by Li Guo, Vice Minister of the General Administration of Customs of China (GACC). From the Indian side, officials from different departments including commerce, agriculture, animal husbandry and the Agricultural and Processed Food Products Export Development Authority (APEDA) would participate in the meeting, the official added. The meeting assumes significance as India is seeking greater market access for its manufactured and agricultural products in the Chinese market to bridge the widening trade deficit. Recently, India has identified and shared with China a list of 380 products, including horticulture, textiles, chemicals and pharmaceuticals products, as their shipments hold huge export potential. Increasing exports of these products will help India narrow the widening trade deficit with China, which stood at USD 50.12 billion during April-February 2018-19. Indian exporters face certain non-tariff barriers in the Chinese market that are restricting exports.
Source: Financial Express
Despite the geopolitical challenges, India must work towards closer economic ties with Bangladesh, Myanmar and Nepal. Over the past decade, India has marginally increased its regional trade with its neighbours, specifically Bangladesh, Bhutan, and Nepal. Currently, India’s actual trade in South Asia accounts for $19.1 billion, which is just three per cent of its total global trade at $637.4 billion and around $43 billion below the potential. It has recently been estimated that by reducing man-made trade barriers, trade within South Asia can grow three times, from $23 billion to $67 billion. Replacing the old days of burden, when India’s proximity was peppered with geopolitical strongholds and economic insecurities, India is now advocating a “free, open, and prosperous Indo-Pacific.” India is determined to bring down non-tariff trade barriers so as to enable seamless cross-border trade and connectivity with its neighbours. In this scenario, three emerging avenues of bilateral cooperation are gaining economic momentum for India’s story of economic growth.
Trade through border haats
From being mere diplomacy tools, border markets between India and Bangladesh are currently exhibiting tremendous economic potential. Border haats were initially designed to rejuvenate the traditional cross-border trade through informal markets to support the livelihoods of communities living along the remote border areas. Interestingly, the first Memorandum of Understanding (MoU) between India and Bangladesh, signed in 2010, expired in 2013. However, on the ground, border haatcontinued functioning on “good faith” among the haatcommittees until 2017. The MoU signed in 2017 between the two countries recognised the economic potential of border haats. Hence, the current purchasing limit within the haat has been increased to $200 and the validity of the MoU is now automatically extended for successive tenures of five years. In 2019 alone, it is estimated that India-Bangladesh will establish six more border haats along the international borders in Tripura and Meghalaya. India plans to set up around nine border haats along the India-Myanmar international border. Border haats have successfully demonstrated that trust deficits (even among local communities) can be dismantled in India’s contemporary relationship with old neighbours like Bangladesh.
Waterways connectivity
India shares multiple rivers and tributaries with its neighbours — Bangladesh, Bhutan, and Nepal. As roadways choke with congestion and fuel prices increase, waterways are being rejuvenated as an alternate and environmental friendly mode of transport among the BBIN countries. Strategising its maritime connectivity in the Indo-Pacific, India has initiated multiple waterway development efforts along its riverine international borders. Bhutan and Nepal are keen to access the large-scale markets in the Bay of Bengal region through waterways in India. The recent MoU on waterway use between Bhutan and Bangladesh through the Narayanganj river port is evidence for this emerging economic interest. Traditionally, India has faltered on multiple fronts with respect to “hydro-diplomacy” when cooperating with Bangladesh and Nepal. Hence, allowing its neighbours to utilise its waterways for access to sea could be an ideal opportunity to build trust on mutually beneficial trade arrangements. For instance, Nepal currently employs a rent model at the Kolkata port to utilise India’s seaport for maritime trade. Similarly, Nepal can utilise India’s Sahebganj multi-modal river port to access India’s waterways. Bhutan can access the Pandu river port in Assam to access further waterway connectivity to the Chittagong port in Bangladesh. Similarly, river tourism has been a stronghold for riverine communities along the India-Bangladesh protocol river route aiming for sustainable and localised economic growth.
Energy networks
India is keen on expanding its LNG pipeline networks to Myanmar through Bangladesh. The Hydrocarbon Vision 2030 for the North-East has identified increasing gas pipeline capacity to Sittwe (in Myanmar) and Parbatipur (in Bangladesh). South Asia’s first transnational petroleum pipeline, the Motihari-Amlekhganj pipeline, is also aimed at building sustainable economic cooperation between India and Nepal. Alternatively, India has also developed positive economic relations with Nepal and Bhutan for hydro-power electricity generation. India’s signing of the Power Trade Agreement with Nepal in 2014 has further strengthened the framework for imports by Indian entities of surplus power generated from future hydroelectric plants in Nepal. India has constructed three hydroelectric projects in Bhutan (Chukha, Kurichhu, and Tala) for domestic consumption, which also export surplus power to India. As the BBIN countries emerge as distinct economic powerhouses, energy demands for infrastructure development is bound to increase. India is ideally placed, geographically and economically, to support and buy into its neighbours’ economic boom.
If trade stops, wars start
After India ratified the WTO Agreement on Trade Facilitation in 2016, it set up the National Committee on Trade Facilitation. The committee now has a fast-track agenda for a ₹4,500-crore border business plan to increase trade and improve ties with India’s old neighbours. As part of this initiative, upgrading Land Custom Stations (LCSs) to the improved Integrated Check Posts (ICPs) along its land borders alone has enhanced the quantum of border trade two-folds. Hence, India is bound to increase its domestic budget to enhance trade infrastructure with the land borders that it shares with Bangladesh, Bhutan, and Nepal. The outlier in the cross-border trade of India is its trade equations with Pakistan. India and Pakistan, have recorded a minuscule $2 billion trade value which has the potential to increase, without impeding artificial barriers, up to $37 billion. Due to political conflicts, most of the formal trade between the countries is routed through a third country, thereby depriving the trade benefits to the regional value chain. As a result, mending trade relations with Pakistan shall continue to be an uphill task for India. India is also keen to shed its image of the weak link in the Quadrilateral Security Dialogue. The Asia Reassurance Initiative Act of 2018 (ARIA) combined with the Better Utilization of Investments Leading to Development Act of 2018 (BUILD) indicate the increased US interests in the Indo-Pacific region. ARIA and BUILD are closely aligned with India’s verbatim of “advancing a free, open, and inclusive Indo-Pacific region.” Therefore, India’s new economic partnerships in trade, connectivity, and energy networks with its old neighbours in the region would also contribute to a stronger security presence in the region. India is certain to engage in exponential infrastructure development for facilitating trade with Bangladesh, Bhutan, and Nepal. In an increasingly unstable globalisation era, India recognises that it should keep its overseas partners close and its adjacent neighbours closer. The Hobson’s choice that creates this need is the choice between seamless connectivity for trade and transit or bending to strategic geopolitical security hang-ups. As South Asia gallops towards economic boom, it is categorically India’s prerogative to develop new businesses with its old neighbours. The writer is a Policy Analyst for CUTS International. This article is by special arrangement with the Centre for the Advanced Study of India, University of Pennsylvania.
Source: The Hindu Business Line
Members of Erode Vhisaithari Urimayalargal Sangam (Erode Power Loom Owners Association) has urged the Department of Handloom and Textiles to increase the labour charges for producing free dhotis, saris and school uniforms.
Letter sent
In a letter to the department’s Deputy Director, Erode, they said that there are 48 power loom cooperative associations functioning in the district and the government’s free dhotis, saris and school uniforms are produced in over 20,000 power loom units. Most of them are small units and labour charges for producing the items were not hiked in the past four years.
Huge loss
They said that in 2011, production charge of ₹16 for a dhoti and ₹28.16 for a sari was paid to them that were gradually increased to ₹21.60 per dhoti and ₹39.27 per sari in 2013. However, from 2014 to 2019, charges were not hiked causing huge loss to the power loom owners. The letter said that for producing a dhoti, they are spending ₹23.50 including ₹9 as weaving charges, and ₹14.50 towards electricity, spare parts and rent. Though the cost had gone up by five times, the labour charges were not hiked by the department, the letter said. They said that though the State’s allocation towards free dhotis, saris and uniforms had gone from ₹225 crore in 2013 to ₹447 crore in 2018, charges paid to them were not hiked. The letter from the association wanted the charges to be hiked to ₹35 for a dhoti, ₹52 for a sari and ₹12.60 for a school uniform.
Source: The Hindu
They say that even after three years, business is down by about 40%. A good three years after demonetisation, the traditional weavers of Ilkal are yet to recover from its aftershock. They say that even now, business is down by about 40%. “Though we have recovered from the initial impact of demonetisation, the market is yet to pick up,” says Vijaykumar Guled of the 147-year-old P.K. Guled Sarees, the oldest surviving master weavers in Ilkal, trading in handloom products. They are trying to reach out to global buyers through Internet marketing, in the hope of balancing this loss. Another master weaver, Nagaraj Seetharam Sarode of the 106-year-old S.P. Sarode Saree House says: “Business is down by nearly 40% even after more than three years.” According to him, business came down post demonetisation as visitors to the weaving town drastically reduced. “A large number of people from Maharashtra, Andhra Pradesh, and surrounding regions of Ilkal would come here to buy granite. Given the fame of Ilkal saris, they would also come into the town looking for our produce,” he said, adding that crackdown on quarrying has further affected their business. The market for Ilkal saris has also remained restricted to its traditional base of Maharashtra and a few big cities in India, despite receiving the Geographical Indication tag. While a few like Mr. Guled market the saris online and continue to send products to big cities, master weavers like Mr. Sarode have stopped sending saris to showrooms in big cities that work on credit system. “Our margins are so low, we cannot sustain by giving credit and with high raw material cost, we need cash flow too. I have stopped sending my products to big centres,” said Mr. Sarode. Weavers like Shamanna Bandi, Hussein Sab Annapur, and Mahadevappa Mallappa Kvatakundi, who are all dependent on master weavers for sustenance, echoed similar feelings. “Many powerlooms also, unable to pay salaries or procure raw materials, closed after demonetisation. There is no guarantee that they will start again,” Mr. Bandi said. Officials in the Department of Handlooms and Textiles acknowledged that demonetisation has had its effect on the handloom sector. “However, business has not been affected for cooperative societies and the weavers associated with it,” said an official.
Source: The Hindu
India’s cotton production is expected drop by over 5% in cotton season 2019 (the CS is usually from October 1, 2018, to September 30, 2019) due to low water availability and inadequate south-west monsoon in key cotton producing states and higher incidences of pest attacks. The operating margins of domestic cotton yarn spinners are likely to shrink 100-150 basis points (bps) in financial year 2020 mainly because of lower cotton output, rising cotton prices, and moderating demand. This will reverse the recovery seen in the previous fiscal year. But this will faintly impact the credit profiles of spinners, given the continuation of three major spurs of FY 2019 — modest capex intensity, prudent working capital management, and strengthened balance sheets. India’s cotton production is expected drop by over 5% in cotton season 2019 (the CS is usually from October 1, 2018, to September 30, 2019) due to low water availability and inadequate south-west monsoon in key cotton producing states and higher incidences of pest attacks. Lower production is expected to shrink India’s cotton stock to a two-year low of 1.2 months by the end of CS 2019, leading to firming up of domestic cotton prices to Rs 128-Rs 140 per kg this fiscal year — a rise of 7-8% over previous financial year. Meanwhile, global cotton prices are expected to remain steady at Rs 128-134 per kg as the lower production in India, the US and Australia will be offset by higher production in China and Brazil. This would narrow the gap between domestic and global cotton prices, said CRISIL on Tuesday. Demand for cotton yarn is found to be turning south due to moderation in domestic as well as exports demand. CRISIL estimates the overall cotton yarn demand (volume terms) to grow at a slower pace of 4.5% in fiscal year 2020 as compared with 5.6% in the previous financial year. The slowdown will be mainly driven by tepid growth in domestic demand (comprising three-fourths of overall demand) at 2.9-3% in fiscal 2020. Growth in exports is also expected to be slower at 9-10% in FY2020, compared with 13.5% in FY2019, amid trade tensions between the US and China, and commissioning of yarn capacities in Vietnam, which enjoys preferential access to Chinese markets. “This is not good news for Indian spinners,” said Hetal Gandhi, director, CRISIL Research. “Higher cotton costs and moderate demand outlook mean they may not be able to get commensurate increase in yarn prices, which would reduce their operating margins by 100-150 bps in this fiscal year,” he added. CRISIL rates 309 cotton spinners. Considering lower profitability, debt/Ebitda (earnings before interest, tax, depreciation and amortisation) of CRISIL’s portfolio is expected to be 3.5-4 times in FY2020, compared with 3.5 times in FY2019 and 4.6 times in FY2018. “The credit profiles of spinners are not expected to be impacted materially, as capital spending is likely to remain moderate given current capacity utilisation levels of 75-80%,” said Gautam Shahi, director of CRISIL Ratings. “Spinners are also expected to continue managing their working capital prudently,” he added. Besides, strengthening of balance sheets owing to healthy demand and softer cotton prices, and moderate capex in FY2019 will help spinners absorb impact of lower operating profits in the current fiscal. However, small cotton spinners (spindles less than 20,000) with leveraged balance sheets could face some challenges because of higher cotton prices, the ratings agency noted.
Source: Financial Express
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1260.76 |
USD/Ton |
-1.16% |
5/8/2019 |
|
VSF |
1818.80 |
USD/Ton |
-1.44% |
5/8/2019 |
|
ASF |
2548.09 |
USD/Ton |
1.29% |
5/8/2019 |
|
Polyester POY |
1240.09 |
USD/Ton |
-0.59% |
5/8/2019 |
|
Nylon FDY |
2790.21 |
USD/Ton |
-0.53% |
5/8/2019 |
|
40D Spandex |
4665.11 |
USD/Ton |
0% |
5/8/2019 |
|
Nylon POY |
2731.16 |
USD/Ton |
0% |
5/8/2019 |
|
Acrylic Top 3D |
1372.96 |
USD/Ton |
-0.53% |
5/8/2019 |
|
Polyester FDY |
3070.70 |
USD/Ton |
0% |
5/8/2019 |
|
Nylon DTY |
5580.41 |
USD/Ton |
0% |
5/8/2019 |
|
Viscose Long Filament |
1476.30 |
USD/Ton |
-0.50% |
5/8/2019 |
|
Polyester DTY |
2642.58 |
USD/Ton |
-0.56% |
5/8/2019 |
|
30S Spun Rayon Yarn |
2524.47 |
USD/Ton |
-0.58% |
5/8/2019 |
|
32S Polyester Yarn |
1993.01 |
USD/Ton |
-0.37% |
5/8/2019 |
|
45S T/C Yarn |
2871.40 |
USD/Ton |
0% |
5/8/2019 |
|
40S Rayon Yarn |
2391.61 |
USD/Ton |
-0.61% |
5/8/2019 |
|
T/R Yarn 65/35 32S |
2133.25 |
USD/Ton |
-1.03% |
5/8/2019 |
|
45S Polyester Yarn |
2524.47 |
USD/Ton |
0% |
5/8/2019 |
|
T/C Yarn 65/35 32S |
2804.97 |
USD/Ton |
0% |
5/8/2019 |
|
10S Denim Fabric |
1.36 |
USD/Meter |
0% |
5/8/2019 |
|
32S Twill Fabric |
0.81 |
USD/Meter |
-0.18% |
5/8/2019 |
|
40S Combed Poplin |
1.08 |
USD/Meter |
-0.14% |
5/8/2019 |
|
30S Rayon Fabric |
0.63 |
USD/Meter |
-0.47% |
5/8/2019 |
|
45S T/C Fabric |
0.70 |
USD/Meter |
0% |
5/8/2019 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14763 USD dtd. 08/05/2019). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Beijing responded with penalties on $110 billion of American imports, but is running out of goods for penalties due to their lopsided trade. China said on Thursday it will retaliate if President Donald Trump goes ahead with more tariff hikes in a fight over technology and trade, ratcheting up tensions ahead of negotiations in Washington. Beijing will be forced to take “necessary countermeasures” if the increases go ahead on Friday as planned, the Commerce Ministry said. It gave no details of possible penalties. Mr. Trump threw global financial markets into turmoil with his surprise threat Sunday to raise import duties on $200 billion of Chinese goods from 10% to 25%. Mr. Trump complained talks were moving too slowly and Beijing was trying to backtrack on earlier agreements. “China deeply regrets that if the U.S. tariff measures are carried out, China will have to take necessary countermeasures,” said a Commerce Ministry statement. Mr. Trump has raised import duties on $250 billion of Chinese goods starting last July over complaints Beijing steals or pressures companies to hand over technology. The negotiations also include complaints about China’s trade surpluses and plans for government-led creation of global competitors in robotics and other fields. Washington, Europe, Japan and other trading partners say those violate Beijing’s market-opening commitments. Beijing responded with penalties on $110 billion of American imports, but is running out of goods for penalties due to their lopsided trade. Chinese authorities already have extended retaliation beyond imports by targeting operations of American companies in China. Regulators have slowed down customs clearance for their shipments and delayed issuing licenses in finance and other industries. Beijing has an array of other weapons including launching tax, anti-monopoly or other investigations that can hamper a company’s operations.
Source: The Hindu Business Line
The United States will raise tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent effective on Friday, according to a notice posted to the Federal Register on Wednesday. The U.S. Trade Representative’s office will establish a process to seek exclusions for certain products from additional tariffs, the Federal Register notice said. U.S. President Donald Trump said in a tweet that he would be “very happy with over $100 Billion a year in Tariffs filling U.S. coffers.” His comments followed a Reuters report that quoted U.S. government and private-sector sources as saying China had backtracked on almost all aspects of a draft trade agreement with the United States. Global equities tumbled toward five-week lows as the escalating trade fight fed worries about the world economy and investors sought the safety of bonds and the Japanese yen, which hit a six-week high against the U.S. dollar.
Source: Reuters
Vietnam gained over 9.4 billion U.S. dollars from exporting garments and textiles in the first four months of this year, up 9.8 percent year-on-year, according to the country's Ministry of Industry and Trade on Wednesday. In April alone, the country raked in 2.3 billion U.S. dollars from selling the products offshore, rising 7.1 percent. Between January and April, largest importers of Vietnamese garments and textiles included the United States, Japan, the European Union and South Korea. The revenue surge was mainly attributable to strong market demand, with many orders already placed for the first six months of this year or even the whole year, said the ministry. Vietnam's garment and textile export turnovers may reach 40 billion U.S. dollars in 2019, the Vietnam Textile and Apparel Association forecast. Vietnam, which is among the world's five biggest exporters and producers of garments and textiles, posted garment and textile export turnovers of over 30.4 billion U.S. dollars in 2018, up 16.6 percent from 2017. However, Vietnam had to spend more than 12.9 billion U.S. dollars importing cloth last year, up 13.5 percent, the association said, noting that most of local cloth has yet to satisfy quality requirements of the country's key garment export markets.
Source: Xinhua
The State of Global Islamic Economy Report 2018/2019 states that fashion consumption among Muslims across the world is currently valued at US$270 billion and is projected to continue to increase at a growth rate of five percent. By 2023, the consumption will be worth US$361 billion. A little over a year ago, United States (US)-based business magazine, Fast Company, noted that despite the fact that the Muslim fashion industry is worth hundreds of billions of dollars, top brands such as Burberry, Dolce & Gabbana, DKNY have been unable to penetrate that market. The magazine quoted Islamic Fashion and Design Council (IFDC) founder Alia Khan – who is based in New York – as saying that she felt it was, instead, many of the emerging designers who were more in tune with their target audience than the fashion bigwigs. Designers like Blue Meets Blue’s Shahd Alasaly, for instance, are Muslim women themselves and since Alasaly is based in Chicago, her tastes are also inflected with American culture and fashion. The United Arab Emirates (UAE) is currently the world’s largest producer of Muslim fashion, but ASEAN’s own Indonesia is targeting to emerge as the world’s leading Muslim fashion mecca by 2020. At the opening of the recent 2019 Muslim Fashion Festival, Indonesian Industry Minister Airlangga Hartarto said that the market for Muslim wear is big, both outside and inside the country, and that “it needs to be dominated” by the Indonesian Muslim fashion industry.
Current status
Indonesia is currently home to the largest number of Muslims in the world. This should put it in a good position to become the leader for Muslim fashion but the Thomson Reuters’ State of the Global Islamic Economy Report 2017/18 seems to suggest otherwise. Indonesia’s large population has helped it in terms of ensuring it has a strong market size. According to the report, it currently holds fifth place for market size at US$13.5 billion after Turkey, UAE, Nigeria and Saudi Arabia. Unfortunately, Indonesia does not even make the top 10 when it comes to having the best developed Islamic economy for fashion. The report measures countries by looking at the amount of clothing exported to the Organisation of Islamic Cooperation (OIC), awareness of modest fashion through news and events, and social factors such as pricing and labour fairness. The two ASEAN countries which did make the top 10, in fact, were Malaysia and Singapore which earned scores of 31 and 33, respectively.
Opportunities
Nevertheless, there are also several factors that could work in Indonesia’s favour towards its target of becoming the centre for Islamic fashion, apart from its large population and significantly huge market.
Despite the fact that other countries may have better developed economies for the Islamic fashion industry, Indonesia; along with Bangladesh, Turkey, Morocco, and Pakistan; still holds a spot for one of the largest clothing producers and exporters within the OIC. According to a 2016 report from the Islamic Chamber of Commerce, Industry and Agriculture (ICCIA), entitled “Textiles and Ready-made Garments: Sector Overview for the OIC Countries”, in 2015, Indonesia exported US$12.3 billion worth of textiles, and US$7.3 billion worth of ready-made garments. Something else working in favour of Indonesia is the sheer demand of modest wear, especially in Southeast Asia. This was apparent following a study conducted by J Walter Thompson’s (JWT) creative think tank, Innovation Group. In the 2017 study, some 1,000 Indonesian and Malaysian Muslim women were surveyed. The majority polled in the study were defined as millennials (77 percent) aged between 18 to 39 and 23 percent were aged 40 and over; most respondents (90 percent) lived in urban and suburban areas. The study found that young Southeast Asian Muslim women were not only more religious, they were also more progressive. In the study, religion is cited as a key aspect of life for most women, with many saying Islam is “very” important to them (94 percent). About a third of the women say they travel outside their country at least once a year, and nearly all felt that there are many more opportunities available for women now than in the past. However, many surveyed also felt that young women should have more freedoms than they now do, and also a stronger voice in their communities and in local and national government. It would be safe to assume that among the things that religious and progressive Southeast Asian women may be interested in is modern albeit modest fashion. Indonesia, being placed in Southeast Asia and boasting the largest Muslim population in the world, would be in a good position to take advantage of this demand. While there are certainly obstacles in the way of Indonesia becoming the mecca of Muslim fashion, there are also many opportunities for it to achieve its goals by 2020. The question is, how badly does the country want it.
Source: The ASEAN Post
The National Council of Textile Organizations (NCTO) appreciates the Trump administration’s action to crack down on unfair trade practices from China through the Section 301 mechanism. A Federal Register notice, set to be published on Thursday, states the administration’s intent to raise tariffs on $200 billion of imported Chinese goods from 10 percent to 25 percent on May 10. NCTO urges the administration to ensure an expeditious and transparent exclusion process and the inclusion of finished apparel and textile end products to this remedy. “It’s long past time we address China’s unfair trade practices, particularly relating to intellectual property abuses,” said NCTO President and CEO Kim Glas. “However, we remain very concerned that finished Chinese textile home furnishings and apparel are not on the administration’s retaliatory tariff list,” Glas said. “Chinese imports of finished goods into the U.S. market have the most significant impact on domestic textile and apparel production, investment and jobs. In order to address the crisis, we need to get to the very heart of the problem.” According to U.S. government data, China predominantly ships end items to the U.S. versus intermediate inputs. Finished apparel, textile home furnishings and other made-up textile goods equate to 93.5 percent of U.S. imports from China in our sector, while fiber, yarn, and fabric imports from China represent only 6.5 percent. “NCTO also remains seriously concerned that some inputs critical to the competitiveness of U.S. textile manufacturers remain on the retaliation list and will now face a 25 percent tariff. Duty increases on inputs alone, without addressing the growing problem of end products can raise the cost of U.S. textile manufacturers trying to compete with like Chinese products,” Glas said. “We are pleased that the administration intends to announce an exclusion process and we urge that the process be fair, transparent, and expeditious.” For more on this issue, see: NCTO Testimony to the Section 301 Committee on August 20, 2018NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers, including artificial and synthetic filament and fiber producers.
Source: Textile World
According to the Export Promotion Bureau (EPB) provisional data, in July-April of FY19 readymade garment sector earned $28.49 billion. Bangladesh apparel exports to global markets have seen a 12.59% rise to $28.50 billion in the first ten months of the current fiscal year. According to the Export Promotion Bureau (EPB) provisional data, in July-April of FY19 readymade garment sector earned $28.49 billion, up by 12.59% from $25.30 billion during the same period of the previous fiscal year. Of the total export earnings by the apparel sector, knitwear products earned $14.08 billion, which is 12.32% higher than the $12.54 billion earned during the same period of FY2017-18. Woven products earned $14.40 billion, up by 12.85% from $12.76 billion during the same period of the previous fiscal year. The specialized textile sector saw a 36% growth to $125 million from $92, while home textile products saw a negative growth of 3.74% to $723.60 million, down from $752.67 million. Talking to Dhaka Tribune, trade analysts and industry people have cited improved safety standards in the apparel sector and political stability as reasons for the growth. “The present growth rate is quite good as December-March was peak season for closing the shipments. Safety improvement in the sector and political stability after the election were positive indicators for the country’s business environment,” Faisal Samad, senior vice-president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), told the Dhaka Tribune. "But", he said, "the work order flow is not so good." "So, I cannot rest assured that the growth momentum will continue in the months to come as the sector is going through competition due to rise in wage and production cost," said Faisal, also managing director, Surma Garments Ltd. Amid challenges, the new board just took charge of the BGMEA and it was working to identify new areas having more opportunity to grow, he added. Economists, however, are hopeful about continued growth momentum as the trade war between the USA and China was still heating up. “In beginning of the year, the government projected single digit growth but there has been a double digit growth. It is a positive sign for the apparel sector,” Khondaker Golam Moazzem, research director of the Centre for Policy Dialogue (CPD), told the Dhaka Tribune. What needed to be looked into was if the buyers increased prices of products or not as it was crucial to adjust new cost caused by the new wage structure, said the economist. He also expressed hope about sustaining the double digit growth as the demand for Bangladeshi goods would remain higher due to the China-US trade war. “It was assumed that the trade war would calm down but recent developments do not show that,” he noted. Meanwhile, the sector people want continuation of government policy support in the upcoming budget to sustain the growth. “In the last few years, production costs went up but the prices did not increase and rather fell both in EU and the US market,” Exporters Association of Bangladesh (EAB) President Abdus Salam Murshedy told Dhaka Tribune. He urged the government to continue the existing fiscal policy support for the sector as it had to spend a lot of money to improve the safety standard as per the retailers' requirement.
Source: Dhakha Tribune
The order index for Italian textile machinery carried out by ACIMIT, the Association of Italian Textile Machinery Manufacturers, for the period of January-March 2019, has dropped by 3 per cent compared to the same period of the previous year. ACIMIT’s promotes Italian textile machinery sector and supports its activity via innovative and promotional means. Italian textile machinery manufacturers, thus, recorded declining orders on foreign markets, where orders fell by 11 per cent. On the domestic front, orders increased by 84 per cent compared to the first quarter 2018, according to a press release by ACIMIT. “The domestic market is experiencing a dynamic showing similar to late 2017. Investments in the textile sector have benefitted from the push towards a greater degree of digitalisation in production processes, thanks to the fiscal incentives. Regarding foreign markets, on the other hand, the slowdown is a result of a deep rooted feeling of uncertainty currently permeating the global economy with multiple pressures on global trade in different geographical areas,” ACIMIT president Alessandro Zucchi said. “We had already predicted a slowdown for early 2019, in line with what was observed in 2018. The entire sector is waiting to see what happens at ITMA, the leading world trade fair for our sector, which will be held in Barcelona from June 20-26, 2019. There will verify whether a recovery is effectively under way in global demand for textile machinery,” he added. (GK)
Source: Fibre2Fashion
Australia is one of the development partners of the Better Work Bangladesh program, supporting since 2016. Recently they along with ILO have toned up the support to uplift the RMG sector of Bangladesh. The Better Work Bangladesh program (BWB) is a partnership between the International Labour Organization (ILO) and the International Finance Corporation (IFC), aims to contribute to improving the lives of the workers, their families and their communities, and increase the competitiveness of the ready-made garment sector in Bangladesh. The aim is to ensure a production-friendly environment by providing workers safety and potential competition of the ready-made garment sector. 485,708 workers in 210 factories who work with 22 international brands have affiliated with this program so far. During her visit to Bangladesh, Australia’s Ambassador for Women and Girls, Dr. Sharman Stone, said, “Our commitment to funding this program until June 2020 demonstrates Australia’s support for industrial safety, labor law governance and women’s economic empowerment in Bangladesh.” In Bangladesh, women have just seven percent of supervisory roles, through their participation in the workforce is remarkably more than men. “With the support of the Australian Government, we will continue to bridge the gender gap in leadership positions and create opportunities for women in the readymade garment sector – the backbone of Bangladesh’s economy.” BWB strengthens the process of women empowerment, reduction of sexual harassment and gender pay gap through promoting direct participation in worker-management bodies. As per the Australian High Commission, some 196,185 workers voted to elect 1,121 workers’ representatives, 42 percent of whom are women, in BWB-affiliated factories. And some 78 safety committees were formed, with 207 out of 586 representatives being women. This program conducts feasible changes to workplace safety and sustainable progress in the garment industry. “Alignment of the Bangladesh Government, unions and employer organizations with the ILO supported Remediation Coordination Cell, the Accord on Fire and Building Safety and the Alliance-backed Nirapon initiative, will strengthen the garment industry,” said Australian High Commissioner to Bangladesh, Julia Niblett. “The ILO is proud to be working with the Australian Government who share our vision of uniting multiple stakeholders, promoting decent work for all and helping the garment industry in Bangladesh thrive. Better Work has made measurable impacts in the lives of millions of workers and their families,” said ILO Bangladesh Country Director Tuomo Poutiainen. “Now the challenge is to broaden our impact further. It is only by pooling our efforts and our expertise that we can create lasting, transformative change in the industry,” Tuomo Poutiainen added. IFC is committed to this partnership with ILO to promote career progression for female sewing operators through GEAR, Better Work’s new training program. “With the support of the Australian Government, we will continue to bridge the gender gap in leadership positions and create opportunities for women in the readymade garment sector – the backbone of Bangladesh’s economy,” said IFC Country Manager for Bangladesh, Bhutan and Nepal Wendy Werner. Affiliated factories with BWB have successively improved compliance with ILO core labor standards and national legislation covering compensation, contracts, occupational safety and health and working time.
Source: Textile Today
A group of international garment businesses, including Nike, Adidas, and Levi Strauss, recently expressed concern over the labour and human rights situation in Cambodia. In a letter to Prime Minister Hun Sen, the group urged him to listen to the concerns of the European Union (EU) regarding labour and human rights violations in the country. The situation is posing a risk to trade preferences for Cambodia and many of the signatories have previously raised these concerns through multiple channels with the Cambodian Government, the letter said. The success of the country’s garment sector has gone hand-in-hand with its adoption and adherence to high labour standards, such as those set by the International Labour Organisation (ILO), a report in a Cambodian newspaper cited the letter as saying. In February, the European Commission launched the process that could lead to the suspension of the country’s preferential access to the EU market under the Everything-But-Arms (EBA) trade scheme. The EU is concerned about democratic setbacks in the country, including the dissolution of the main opposition party, the Cambodia National Rescue Party (CNRP), in 2017. In January, US senators Ted Cruz and Chris Coons introduced the Cambodian Trade Act of 2019, which would require the US Government to review the preferential trade treatment Cambodia receives under the generalised system of preferences (GSP) scheme. Cambodia has around 1,200 garment and footwear factories, employing nearly 800,000 people, four-fifths of whom are women. (DS)
Source: Fibre2fashion
Bangladesh readymade garment (RMG) exporters recently called on buyers and retailers to ensure a sustainable RMG sector by raising product prices. They also demanded a 5 per cent cash incentive for the sector for three years, saying the industry experiences huge pressure of wage hike, energy price rise, remediation cost and low prices of products. The demand was made at a meeting on sustainability of the RMG sector in the country organised by the Dhaka Chamber of Commerce and Industry. Despite having a decent number of green factories, the country is not getting decent prices for its products, said Rubana Huq, president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA). The sector is yet to gain maturity in price negotiation, she said. Commerce minister Tipu Munshi said energy prices, cost of port and infrastructural weaknesses are reducing the competitive edge of the RMG sector, which needs some incentives and support for a certain period. Munshi said a free trade agreement with Sri Lanka may be signed within a month. (DS)
Source: Fibre2fashion
The Kenyan Government recently approved setting up of a big textile factory by Mas Holdings Singapore, a Sri Lankan apparel and textile manufacturer, in the export processing zone (EPZ) in what is being projected as a big boost for President Uhuru Kenyatta’s employment generation plans. The unit will create jobs for 3,100 once operational in Machakos County. With an investment of Sh1.5 billion, Mass Holdings Singapore Pte EPZ Ltd will leave behind Hela Clothing, which employs 1,500 workers, as the largest apparel and textile manufacturer in the country, according to a Kenyan newspaper report. The unit in the Athi River textile hub is expected to start operations in June. Mas Holdings will export products to the United States, the United Kingdom and the Netherlands. Mas Holdings has a presence in 16 countries. It has received financing of Sh1.1 billion, including Sh900 million in foreign loans, Sh181 million in paid-up capital from shareholders, and a similar amount of money in authorised capital. The President aims to create over 500,000 cotton jobs and 100,000 apparel jobs.
Source: Fibre2fashion
While US president Donald Trump and commerce secretary Wilbur Ross have slammed India for creating ‘tariff barriers’ to trade, New Delhi has told Washington that it will lose as much as $3.2 billion a year in customs revenue if it scraps the up to 20% duties on the seven ICT products, including high-end cell phones and smart watches, acceding to the US demand, according to a source. Its potential revenue loss, says New Delhi, will be way above the export incentives of $190 million that the US offered India in FY18 under the so-called generalised system of preferences (GSP). Even that incentive amount might have dropped further in FY19 when the US first dropped 50 items from the list of items eligible for incentives and later, in March, announced the withdrawal of the programme in 60 days. Also, even if India scraps or trims the duties, only China and Hong Kong will be the biggest beneficiaries of the move and the US will hardly gain, New Delhi has conveyed to Washington. This is because the US made up for only 2% (or $415 million) of India’s imports of these seven products worth $20.5 billion in FY18. Instead, New Delhi is willing to cut duties on those ICT (information and communications technology) products that will be of greater interest to the US, said the source. The potential customs revenue loss estimate is based on India’s imports of such items in FY18, added the source. Ross on Tuesday flayed India for imposing “not justified” tariff on ICT products (20%), motorcycles (50%) automobiles (60%) and alcoholic beverages (150%). Echoing Trump’s charge of India being a “tariff king”, Ross said at a trade event in New Delhi: “India’s average applied tariff rate of 13.8%, and that remains the highest of any major world economy. The very highest.” Trump has frequently accused India of imposing “high” duties on Harley Davidson and whiskey. Ross added: “(Indian) Tariffs for network routers and switches and parts of cellular phones are as high as 20%. In stark contrast, the US rate for these same products exported from India to the US is zero — zero versus 20%.”The American demand for the elimination/reduction of tariff in ICT products and the relaxation in New Delhi’s price control regime for medical equipment is the biggest stumbling block in sealing an elusive bilateral trade package and have contributed to the flaring up of trade tussle between the two countries, said the source. The items on which the US wants India to cut/scarp duties include high-end mobile phones costing over Rs 10,000, mobile phone parts, smart watches, telecom network equipment (such as switches and routing equipment), radio receivers and certain print circuit assemblies. New Delhi feels any move to cut duties drastically would run contrary to its Make-in-India initiatives, apart from raising non-essential imports (which it wants to curb) and causing customs revenue losses. Higher customs duty collection in FY19 (Rs 1.3 lakh crore in the revised estimate against the budgeted Rs 1.12 lakh crore) partly offset the wide shortfall in the government’s goods and services tax collection. For the current fiscal, the interim Budget has pegged the customs duty collection of Rs 1.45 lakh crore. India and the US didn’t hold the annual trade policy forum meeting so far last year (it is usually convened around October), in a sign that bilateral relations were far from perfect. For its part, in the hope for a “mutually-acceptable” trade package, India has already deferred its plan a number of times to retaliate against the extra US duty on its steel and aluminium (The fresh deadline for the tit-for-tat action is May 16).
Source: Financial Express
