The Commerce Minister also emphasised on focussing on district-development led growth to drive inclusivity in the society. Strategic investments based on a clear sectorial analysis will further strengthen India's economic growth, Union Commerce Minister Suresh Prabhu said on Thursday. He also emphasised on focussing on district-development led growth to drive inclusivity in the society. "To increase economic growth, we need to facilitate strategic investments, based on clear sectorial analysis," said Prabhu at the 'Policy Round Table' organised by industry body CII in Mumbai. "At a time when the global economy is reeling under uncertainty due to the ongoing trade war between the US and China, India has seen its exports grow and will benefit further due to this," a statement said quoting the minister. Prabhu said that for inclusive and holistic development of the economy, it is key to focus on district development. Experts from the financial sector opined that re-routing is good for Google Maps, but not for the financial sector. They suggested that the regulators and non-banking financial companies (NBFCs) need to closely track the signals coming from the providers of risk capital about the NBFCs they are investing in. They further said that the Indian private sector with its enormous depth and breadth has shown increased maturity and is a major recipient of private equity flows. "India has also emerged as the investment market of choice for the world's largest pension funds and sovereign wealth funds," experts said. Similarly, on the FDI front, India has already surpassed China to become the most favoured FDI destination, they noted. Further during the interaction, the importance of 'Capital mobility' in facilitating progressive business opportunities for foreign investors in India was highlighted. The importance of the need to have a revised tax benefit in the manufacturing industry was also discussed to encourage channelised re-investments in India which will further strengthen sustainable investment opportunities. The round table discussion which was attended by over 30 industry thought leaders and business innovators from across industry sector was aimed to discuss the various ways and means of enhancing domestic investments and also at attracting strategic foreign investments into India. The round table discussion also addressed several important investment proposals which will further strengthen India's stand in the global ease of doing business.
Source: Indian Express
Apparel imports increased nearly 47 per cent to $1 billion in 2018-19 (April 2018-February 2019) even as exports fell five per cent, according to data compiled by the Clothing Manufacturers Association of India (CMAI). The surge in imports is mainly due to big retailers opting more for low-cost foreign garments. Imports from Bangladesh, one of the world's largest apparel exporters, have increased by 96 per cent. Besides, imports from Sri Lanka and Hong Kong have also shown a significant rise of 120 per cent and 171 per cent, respectively. Apparel makers say the Chinese apparel makers are reducing direct exports, but are making massive investments in countries like Bangladesh, Vietnam, Cambodia, Myanmar and Sri Lanka due to the availability of low-cost manpower. Moreover, the European Union and the United States have low customs duty rates for exports. This helps them further reduce their costs and increases their competitiveness. Industry sources say imports from India's bordering countries are flooding the domestic market and defeating the purpose of Make in India. The source, who did not want to be named, said that the South Asian Free Trade Area (SAFTA) route is generally used to capture Indian market. Leading retail stores in India setup by foreign brands are sourcing apparel from Bangladesh. This could be detrimental to the Indian garment sector's growth. Vietnam and Cambodia are the other two major countries that export to India. Rahul Mehta, president of Clothing Manufacturers Association of India says that while actual imports numbers are not worrying, the increase of imports year-on-year are hurting small and medium busineseses in the apparel manufacturing industry. After satisfying the 30 per cent compulsory sourcing norm, foreign brands prefer to source the rest from their respective central sourcing avenues to save costs. These avenues are mostly in Bangladesh, which gives them a cost advantage of 10-15 per cent. Major Indian retail brands, too, follow this strategy. "This trend (high imports) is expected to continue," said Mehta. When Puma was negotiating a sourcing deal with Raja M Shanmugham's Tirupur-based Warsaw International, the leading sports apparel maker made it a point to not breach a certain target price fixed by their German office. The cost difference between importing and sourcing domestically is around 7-10 per cent, which attracts these brands to look at imports. "We blame India's liberal policy with neighbouring countries, especially Bangladesh," said Shanmugham. The news that the government is considering relaxing the policy of complusorily sourcing at least 30 per cent of products locally for single-brand retailers with foreign direct investment will further impact the industry, as the brands might look at the cheaper option of importing. The increase of imports from Bangladesh is a looming threat and could eventually hit India's exports too. Moreover, jobs in the sector might take a hit and non-confirmation of orders could have a cascading effect till the cotton farmer stage, thereby affecting the economy significantly, says Shanmugham.
Source: Business Standard
No major country has managed to reduce poverty or sustain economic growth without a robust manufacturing sector. The contribution of manufacturing to GDP in 2017 was only about 16%, a stagnation since the economic reforms began in 1991. The contrast with the major Asian economies is significant. For example, Malaysia roughly tripled its share of manufacturing in GDP to 24%, while Thailand’s share increased from 13% to 33% (1960-2014). In India manufacturing has never been the leading sector in the economy other than during the Second and Third Plan periods.
Core to growth
No major country managed to reduce poverty or sustain growth without manufacturing driving economic growth. This is because productivity levels in industry (and manufacturing) are much higher than in either agriculture or services. Manufacturing is an engine of economic growth because it offers economies of scale, embodies technological progress and generates forward and backward linkages that create positive spillover effects in the economy. In the U.S. and Europe, after the 2008 crisis, the erstwhile proponents of neo-liberal policies started strategic government efforts to revive their industrial sectors, defying in principle their own prescriptions for free markets and trade. The European Union has identified sector-specific initiatives to promote motor vehicles, transport equipment industries, energy supply industries, chemicals and agro-food industries. The United Nations Conference on Trade and Development or UNCTAD finds that over 100 countries have, within the last decade, articulated industrial policies. However, India still has no manufacturing policy. Focussing (as “Make in India” does) on increasing foreign direct investment and ease of doing business, important though they may be, does not constitute an industrial policy. Even neo-classical economists accept government intervention in the case of market failures. Mainstream economists point to specific instances of market failure that require a government-driven industrial policy: deficiencies in capital markets, usually as a result of information asymmetries; lack of adequate investments inhibiting exploitation of scale economies; imperfect information with respect to firm-level investments in learning and training; and lack of information and coordination between technologically interdependent investments. These are good reasons why an economy-wide planning mechanism is needed in India. However, the Indian state should steer clear of the “command and control” approach that harks back to pre-1991 days
Key reasons for a policy
So why have an industrial policy in India now? First, there is the need to coordinate complementary investments when there are significant economies of scale and capital market imperfections (for example, as envisaged in a Visakhapatnam-Chennai Industrial Corridor). Second, industrial policies are needed to address learning externalities such as subsidies for industrial training (on which we have done poorly). In fact, industrial policy was reinforced by state investments in human capital, particularly general academic as well as vocational education/training aligned with the industrial policy, in most East Asian countries. However, a lack of human capital has been a major constraint upon India historically being able to attract foreign investment (which Southeast Asian economies succeeded in attracting). Third, the state can play the role of organiser of domestic firms into cartels in their negotiations with foreign firms or governments — a role particularly relevant in the 21st century after the big business revolution of the 1990s (with mega-mergers and acquisitions among transnational corporations). In fact, one objective of China’s industrial policies since the 1990s has been to support the growth of such firms (examples being Lenovo computers, Haier home appliances, and mega-firms making mobile phones). Fourth, the role of industrial policy is not only to prevent coordination failures (i.e. ensure complementary investments) but also avoid competing investments in a capital-scarce environment. Excess capacity leads to price wars, adversely affecting profits of firms — either leading to bankruptcy of firms or slowing down investment, both happening often in India (witness the aviation sector). Even worse, price wars in the telecom sector in India have slowed profits (even caused losses), which hampers investment in mobile/Internet coverage of rural India where access to mobile phones and broadband Internet, needs rapid expansion. The East Asian state managed this role of industrial policy successfully. Fifth, an industrial policy can ensure that the industrial capacity installed is as close to the minimum efficient scale as possible. Choosing too small a scale of capacity can mean a 30-50% reduction in production capacity The missing middle among Indian enterprises is nothing short of a failure of industrial strategy. Contributing to the missing middle phenomenon was the reservation of products exclusively for production in the small-scale and cottage industries (SSI) sector (with large firms excluded) from India’s 1956 Industrial Policy Resolution onwards. By the end of the 1980s, 836 product groups were in the “reserved” category produced only by SSIs (which encouraged informal enterprises). Astonishingly, in 2005, there were still 500 products in this category, 15 years after the economic reforms were launched. Thereafter the reservation of products of small firms was cut sharply to 16 products. By then, small scale and informality had gotten entrenched in Indian manufacturing. Incentivisation to remain small in scale cost India dearly. Sixth, when structural change is needed, industrial policy can facilitate that process. In a fast-changing market, losing firms will block structural changes that are socially beneficial but make their own assets worthless. East Asian governments prevented such firms from undermining structural change, with moves such as orderly capacity-scrapping between competing firms and retraining programmes to limit such resistance. Finally, manufacturing will create jobs; its share in total employment fell from 12.8% to 11.5% over 2012 to 2016. Unfortunately, the potential role of industrial policy has been consistently downplayed in developing countries outside of East Asia ever since the early 1980s after the growing dominance of the orthodox paradigm with well-known consequences in much of India, Latin America and also sub-Saharan Africa.
The Asian story
The East Asian miracle was very much founded upon export-oriented manufacturing, employ surplus labour released by agriculture, thus raising wages and reducing poverty rapidly. This outcome came from a conscious, deliberately planned strategy (with Five Year Plans). The growing participation of East Asian countries in global value chains (GVCs), graduating beyond simple, manufactured consumer goods to more technology- and skill-intensive manufactures for export, was a natural corollary to the industrial policy. India has been practically left out of GVCs. Increasing export of manufactures will need to be another rationale for an industrial policy, even though India has to focus more on “make for India”. From 2014 to 2018 there has been an absolute fall in dollar terms in merchandise exports. In this quest for increased exports, economies of scale are critical. Such economies were not possible with the policy-induced growth of micro-enterprises and informal units (the unorganised sector accounts for 45% of India’s exports).
Lessons from IT taking root
If evidence is still needed that the state’s role will be critical to manufacturing growth in India, the state’s role in the success story of India’s IT industry must be put on record. The government invested in creating high-speed Internet connectivity for IT software parks enabling integration of the Indian IT industry into the U.S. market. Second, the government allowed the IT industry to import duty-free both hardware and software. (In retrospect, this should never have continued after a few years since it undermined the growth of the electronics hardware manufacturing in India.) Third, the IT industry was able to function under the Shops and Establishment Act; hence not subject to the 45 laws relating to labour and the onerous regulatory burden these impose. Finally, the IT sector has the benefit of low-cost, high-value human capital created by public investments earlier in technical education. Without these, the IT success story would not have occurred. These offer insights to the potential for industrial policy when a new government takes over soon.
Source: The Hindu
The trade war between US & China has intensified after talks broke down between the world’s two largest economies last week. The US increased tariff from 10% to 25% on cworth $200 billion, and also started the process of raising tariffs on remaining imports from China, valued at around $300 billion. China retaliated by announcing a hike in tariff from 10% to 20% or 25% on American exports worth $60 billion that include beer and wine, swimsuits, shirts and liquefied natural gas. How will the intensified trade war between these two giants affect India? Will this create an opportunity for India or will it suffer collateral damage due to the trade war? In the short run, with increase in tariffs on its products by US, China will search for other markets where it can dump the products it exported to the US. With a population of 1.3 billion and a reasonable purchasing power, no country other than India will provide a ready-made market for these Chinese products. Therefore, the trade war will result in an increase in Chinese exports to India. India’s exports to China may also increase, particularly for alcoholic beverages and readymade garments. However, considering the export and import elasticities of these products, the increase in imports is expected to be more than the increase in exports, resulting in a higher trade deficit with China in the coming months. The trade war will adversely affect global trade and financial markets. IMF has predicted that a full-blown trade war would cause the global economy to slow down by more than 0.8% in 2020. This will lead to shrinking of Indian exports in the coming months, not only to the US and China but also to other countries This will negatively affect income and the US and China but also to other countries. This will negatively affect income and employment generation in export-driven sectors and downstream industries. Also, given the inelastic nature of our imports owing to a huge dependence on oil, a slowdown in exports will result in a higher trade deficit. This will lead to a further fall in the Indian rupee’s value, exerting pressure on other macroeconomic indicators to tackle a depreciating currency. The continued trade war between US and China will also undermine the credibility of the WTO. Unilateral actions by the two countries will accentuate lawlessness in the multilateral trading system and weaken the rule-based system. This will not be in India’s interest as the country is not only a strong supporter but also a beneficiary of the multilateral trading system. Nonetheless, there will be opportunities for India to increase its exports to the US and China. Unctad estimated that of the $250 billion Chinese exports subject to US tariffs, about 82% will be captured by firms in other countries, about 12% will be retained by Chinese firms, and only about 6% will be captured by US firms. Similarly, of the $110 billion US exports subject to China’s tariffs, about 85% will be captured by firms in other countries, and US firms will retain less than 10%, even as Chinese firms will capture only about 5%. Thus, more than 80% of the market earlier captured by the US and Chinese firms will be available to the rest of the world, including India, in the aftermath of the trade war. Will India be able to capitalise on this opportunity? It may not, as China and India export different products to the US. India’s exports to the US are primarily raw material, semifinished goods, pharmaceuticals and minerals, whereas Chinese exports to the US mainly consist of finished goods, electronics, plastics, toys, etc. Thus, there is not much overlap between Chinese and Indian exports to the US. Moreover, India does not have the competitiveness in many of the items China exports to the US. In the long run, higher tariff by the US may lead to relocation of manufacturing firms from China to other countries. This will be another opportunity that India may like to tap. However, that is easier said than done. India will face strong competition from other economies to attract Chinese investment into its territory. Asean economies, including Malaysia (15), Thailand (27), Vietnam (69) and Indonesia (73), rank higher than India (77) on the World Bank’s Ease of Doing Business index. Other countries, such as Bangladesh, Myanmar, Laos and Cambodia, though rank lower on this index, provide significant incentives and low-cost advantage to foreign investment. They will also strongly compete for relocation of Chinese firms to their countries. Apart from the international competition, Chinese investment in India will also be constrained by RBI regulations that prohibit acquisition or transfer of immovable property in India by citizens of select countries. These regulations do not allow persons from select countries, including China, to acquire or transfer immovable property in India without prior permission of the RBI, other than lease, not exceeding five years. The government may like to review such regulations and examine whether it would like to relax these conditions for select sectors and geographic areas to attract Chinese investment. The writer is associate professor at the Centre for WTO Studies, IIFT, New Delhi.
Source: Economic Times
Now the price hike in raw materials like colours and dyes that is estimated at 20 per cent to 30 per cent per kilogram has added to the woes. The mill owners have not raised the production cost to remain in the challenging market. Hike in labour and power charges, besides high price of raw material and coal are among several factors that have forced as many as 16 dyeing and printing mills in Surat to shut shops in the last three months, leaving thousands jobless. Dyeing and printing mill owner D K Agrawal, who had shut shop in Pandesara GIDC around one month ago, said for the last few months, he was facing losses to the tune of Rs 10 lakh to Rs 20 lakh. “The business had not been running smoothly since notebandi (demonetisation in 2016), followed by introduction of Goods and Services Tax (GST) in 2017. The present situation of the textile industry is not favourable due to hike in the prices of raw materials, power and coal, besides several other factors. Now to overcome the loss, we have decided to give our mill on rent. But nobody has come forward as of now,” said Agrawal who has also scrapped his machinery. For the last two years the textile processing industry (dyeing and printing) has been struggling due to the Goods and Services Tax. Now the price hike in raw materials like colours and dyes, that is estimated at 20 per cent to 30 per cent per kilogram, has added to the woes. The mill owners have not raised the production cost to remain in the challenging market. South Gujarat Textile Processing Association president Jitubhai Vakharia said the 16 textile printing mills in Surat city had shut down in last three months after they failed to compete in the prevailing market situation. “The industry has experienced hike in the labour charges, followed by price hike in raw materials, power and coal. The processing charges had been hiked during last Diwali,” he said, adding they had made representations to the state government before the new textile policy that came into being last year. “We had made representations that certain relaxations should be given to the industry in terms of power rates, but nothing has been done so far. So the weakest in the industry could not survive and shut their business.” He added the only way to save this industry is to come up with certain schemes and subsidies. Now the factory owners are looking for business possibilities in other sectors. “We have sold all the machinery and now we have decided to shift to other business. We will wait for a few more months. The labourers will get job in some other mills.” said Agrawal. There are at present 350 dyeing and printing mills in Surat, wherein lakhs of people are employed. The major work force into the dyeing and printing sector comes from UP, Bihar, Maharashtra and Odisha among other states. Apart from the dyeing and printing mills, there are over 6 lakh power looms in the Surat. Besides, there are over 65,000 textile trading shops in around 150 textile markets of Surat city. The sarees and dress material made in Surat are sold across India.
Source: The Indian Express
Taiwan looking for higher tech, precision tools exports; India wants OEMs to set up shop here. With an eye on carving out a larger share of the Indian tech products and precision tools market, Taiwan is looking to fast-track discussions on a trade deal with India. “Talks are on and we expect things to move quickly after the bilateral investment promotion agreement was signed last year. We look forward to the prospects of a free trade agreement (FTA),” James C F Huang, chairman of the Taiwan External Trade Development Council (TAITRA), said, on the sidelines of the Taiwan Expo 2019. New Delhi had hitherto decided against vigorously pursuing investments from Taiwan because it did not want friction with China, which considers Taiwan its own and has refused to recognise the Taipei-based government over the past 70 years. But the situation has changed, and trade talks are expected to move smoothly, a commerce department official said. “We have few FTAs due to political difficulties. As a result, our products have to be more competitive and of better quality, as they face high import duties in most countries,” Walter M S Yeh, president and chief executive officer of TAITRA, said. However, the nation is systematically building up trade partnerships, currently with seven FTAs and three preferential trading agreements, one of which is with manufacturing and consumer behemoth China.
China’s replacement
While Taiwanese firms specialising in heavy machinery and engineering tools have figured primarily on the list, original equipment manufacturers for electronic devices are also moving in. New Delhi wants these crucial components to be gradually manufactured at home or shipped in from other countries rather than being imported entirely from China. The largest of these — Foxconn — assembles electronic parts for Apple smartphones at six places and has plans to increase the number of facilities it operates in India and shore up production, the diplomat added. The country’s bilateral trade with India grew almost 10 per cent in the first 11 months of 2018-19 to $6.64 billion, with $2.45 billion worth of exports to the island nation. While total trade has grown in double-digit figures for the last three years, imports remain twice as hefty. Taiwan’s Golden Valley region, home to 1,000 precision machinery manufacturers and 10,000 suppliers, has the highest density of any machine tool industry cluster in the world. The industry is varied across 72 categories, with cutting and grinding tools along with those used for planing, shaping, and boring having the majority share of the market. Also, many other Taiwanese firms manufacturing networking devices, bicycles, car components, and vehicle electronics are returning from China, where labour costs are rising. Subsequently while the Taiwanese government has launched a ‘welcome back’ programme, with incentives such as free rent for the first two years, favourable bank loans, and access to tax consultation, a tighter standards regime has dampened their mood. As a result, a cross-section of the manufacturing sector is looking at India to shift facilities. This mood has been hastened by Taipei City’s desire to enter the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, which includes large economies like Australia, Canada, Japan, and Singapore, among others. To this end, a proposal to create special economic zones (SEZs) exclusively for Taiwanese firms is also being explored by both governments, Taiwanese officials added. India already has SEZs for Chinese and Japanese companies. “Many mid-size companies are looking to shift factories to India as market demand is expected to keep on growing. We would do the same if we found a local partner,” Berny Sung, business development manager at Sinpro, an equipment manufacturer for the e-vehicles industry, said. However, existing businesses has a different perspective. “The central government does the job of a facilitator very well but working with state governments remains difficult. Their enthusiasm for new investments in manufacturing does not match their response when on-ground help is required,” chairman of Taiwan India Business Association, Theodore M H Huang, said. Huang has visited India 17 times in the past two years and added that registration still takes an unnecessarily long time, while red tape remains an issue. While he didn’t mention the states in question, a senior official hinted most Taiwanese firms preferred were manufacturing hubs in Gujarat, Maharashtra, and Karnataka. Foreign direct investment from Taiwan crossed $300 million in December 2018.
Source: Business Standard
Handicraft exporters to Iran have got a shot in the arm with the government acceding to their long-pending demand to do away with the requirement for e-BRC (Bank Realisation Certificate) to get benefits under a popular export promotion scheme as banks were not being able to generate the documents for countries in the Office of Foreign Assets Control (OFAC) list. OFAC countries are the ones against which economic sanctions have been imposed by the US and include Iran, Iraq, North Korea, Belarus, Syria and Cuba.
Payments stuck
Satpal Pugla, an exporter based in Moradabad, said: “A lot of our payments are stuck because of non-fulfilment of the eBRC requirement. We are grateful to the Commerce Ministry for allowing the benefit against another document which is available with all exporters. Hopefully the money will be released to us now.” Ever since banking sanctions against Iran were re-imposed by the US late last year, handicraft exporters were facing a challenge in applying for the benefit of 7 per cent of export value they were entitled to under the Merchandise Export from India Scheme (MEIS). This was happening as banks were refusing to accept shipping documents presented by exporters shipping to Iran for clearance of GR (guaranteed remittance) form to the Reserve Bank of India and as a result, no bank realisation certificates (BRC) were being issued to exporters. Without BRC, exporters were not able to claim benefits under the MEIS scheme with their due payment getting stuck. India’s exports of handicrafts to Iran is estimated at ₹500 crore annually.
‘Will enhance exports’
“With this initiative, the exporters are going to get the much-needed MEIS benefits for their exports and it will energise them to continue their efforts towards enhancing exports from the country,” said Rakesh Kumar from the Export Promotion Council for Handicrafts (EPCH). He pointed out that the council had taken up the matter of non-issuance of e-BRC at the highest level in all concerned Ministries including Textiles, Commerce, Finance and also the DGFT and finally action was taken. As per the trade notification issued by the DGFT, in case a shipment has been made to countries which are in the OFAC list and e-BRC has not been generated by the bank concerned for that specific shipment, then the exporter while making the MEIS application has to submit a declaration to that effect along with a self-attested copy of the proof of payment such as Foreign Inward Remittance Certificate.
Source: The Hindu Business Line
Mumbai: The rupee surged by 31 paise to close at 70.03 against the US dollar Thursday amid a sharp rebound in the domestic equity markets, even as oil prices firmed up. This is the third straight session of gain for the domestic currency, during which it has strengthened by 48 paise. At the interbank foreign exchange market, the rupee opened at 70.26 per dollar and advanced to a high of 69.99 during the day. It finally settled at 70.03, up 31 paise against its previous close of 70.34. Persistent foreign fund outflows and rising crude oil prices capped the gains for the rupee, forex dealers said. Globally, stocks markets wobbled and the Japanese yen rose after the US slapped sanctions on Chinese telecom major Huawei, escalating its trade conflict with China. "Indian rupee strengthened for third session against US dollar. Even after surge in crude oil prices and foreign fund outflow in equity cash segment, rupee manages to gain," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities. Sharma further said all eyes are now on the upcoming exit polls scheduled on May 19. "Huge volatility is expected in domestic currency between May 20 and 23," he added. Foreign institutional investors (FIIs) remained net sellers in the capital markets, pulling out Rs 953.23 crore Thursday, as per provisional data. Brent crude futures, the global oil benchmark, rose 1.21 per cent to USD 72.64 per barrel amid heightened geopolitical tensions in the Middle East. The dollar index, which gauges the greenback's strength against a basket of six currencies, inched up 0.03 per cent to 97.59. Domestic benchmark indices finished with smart gains Thursday as investors accumulated stocks after the recent spell of weakness. The BSE Sensex finished at 37,393.48, up by 278.60 points, or 0.75 per cent, while the broader NSE Nifty rose 100.10 points, or 0.90 per cent, to 11,257.10. Meanwhile, the Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 70.2087 and for rupee/euro at 78.6880. The reference rate for rupee/British pound was fixed at 90.6319 and for rupee/100 Japanese yen at 64.01.
Source: Economic Times
To edge the government towards artificial intelligence, NITI Aayog recently asked the state and central ministries to identify key tech-based projects which can be used to resolve problems in agriculture, education and health, among other sectors. According to a report in a national news wire, Amitabh Kant, the CEO of NITI Aayog, wrote to the state and central ministries, saying, “I write to request you to identify key projects where AI can be developed to solve problems affecting the health sector that you wish to drive forward… Niti Aayog has a team that works on the AI programme and I would like to extend all help in providing the necessary support, connecting to the concerned stakeholders and any other matter that may be required.” NITI Aayog has estimated that AI has the potential to add $15.7 trillion to the global GDP by 2030, making it the biggest commercial opportunity in today’s fast-changing Indian economy. During the interim budget session this year, in the absence of Union Finance Minister Arun Jaitley, Piyush Goyal, had said that importance will be given to creating a national centre for AI very soon. To make this happen, the Government gad identified nine priority areas to work towards creating a national portal for AI in 2019. The last couple of years, especially the year 2018 has been a very important year for the adoption of new technologies in the public sector. The National Institution for Transforming India (NITI Aayog) had unveiled a discussion paper which addresses the national strategy on AI and other emerging technologies in India. Here, the government think tank had identified five sectors to focus its efforts towards the implementation of AI to serve societal needs. The five sectors are healthcare, agriculture, education, smart cities and infrastructure, smart mobility and transportation.
Source: Analytics India Mag
The streets are narrow and empty. Most homes appear shut, except a few where you find weavers and artisans working meticulously, stealing an occasional glance at passersby. Pedana, a village in Andhra Pradesh’s Krishna district, known for handloom weavers and Kalamkari specialists for the past four centuries, has lost the exuberance that it held as recently as 10 years ago. “About a decade ago, there were 10,000 handlooms here, but now there are hardly 1,500,” Joganda Rao, the only handloom weaver who operates a shed now, with 30 looms, told BusinessLine. The others are individual single-loom operators. Apart from a weaver, each looms indirectly supports at least four other workers for various related functions. Pedana, a municipality with 17 wards, has a population of about 31,000, according to Census 2011. This means that from about 30 per cent of the total population, the number of weavers has dropped to a little over 5 per cent now. “You should probe this further and ensure help rather than merely writing about it,” said Rao, an unmistakable streak of irritation in his voice. The weaves of Pedana had travelled to global shores in the 16th and 17th centuries, when the Machilipatnam port was flourishing under Qutub Shahi rule at Golconda. It was also a favourite of European trading companies.
Multiple challenges
The challenges today are several, an interaction with the villagers revealed. These include the poor availability of formal credit, the lure of taking up screen-printing for a quick buck, and the migration of the youth to urban areas in search of jobs. Pitchika Srinivas, a manufacturer of natural colour handblock-printed Kalamkari, another traditional art of Pedana, rues the exodus of workers from the handblock technique to automated screen-printing. “Problems have increased manifold for Kalamkari exports after the introduction of GST,” he said. “We are not eligible for input tax credit. Since June 2018, incentives such as Rebate on State Levies (ROSL) have been pending.” The imposition of 5 per cent GST on handlooms and Kalamkaris is resulting in losses for the weavers, further weaning them away from their traditional craft, said industry watchers. Both handlooms and Kalamkari are on the decline; this should be stopped to protect the rich historical and business legacy of Pedana, observed Srinivas.
Source: The Hindu Business Line
The Export Promotion Council for Handicrafts (EPCH) will set up a dyeing unit at International Lace Trade Centre (ILTC) at West Godavari District at Narsapur to facilitate artisans, according to an official release of EPCH. In a release, Director General of EPCH, Rakesh Kumar said “EPCH is going to set up a dyeing unit at ILTC as the artisans have to travel very long for such services which are available approximately 200 km away from Narsapur.” He said that quantum jump in exports of lace and lace products has been witnessed after the setting up of International Lace Trade Centre at Narsapur. The exports of lace and lace products was to the tune of Rs 17.75 crores in 2013-14 which has now reached to Rs 26.57 crores in 2017-18. Narsapur is an important craft cluster from the point of view of concentration of women artisans, producers and exporting community of lace products, Council has set up ILTC at West Godavari District at Narsapur with the support of O/o Development Commissioner (Handicrafts) under Comprehensive Handicrafts Cluster Development Scheme (CHCDS) of Ministry of Textiles.
Source: KNN India
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1218.62 |
USD/Ton |
-0.59% |
5/16/2019 |
|
VSF |
1742.13 |
USD/Ton |
0% |
5/16/2019 |
|
ASF |
2509.95 |
USD/Ton |
0% |
5/16/2019 |
|
Polyester POY |
1173.54 |
USD/Ton |
0% |
5/16/2019 |
|
Nylon FDY |
2617.56 |
USD/Ton |
-1.10% |
5/16/2019 |
|
40D Spandex |
4551.65 |
USD/Ton |
-0.32% |
5/16/2019 |
|
Nylon POY |
1308.78 |
USD/Ton |
0% |
5/16/2019 |
|
Acrylic Top 3D |
2952.03 |
USD/Ton |
0% |
5/16/2019 |
|
Polyester FDY |
5496.88 |
USD/Ton |
0% |
5/16/2019 |
|
Nylon DTY |
1417.85 |
USD/Ton |
0% |
5/16/2019 |
|
Viscose Long Filament |
2515.77 |
USD/Ton |
-1.14% |
5/16/2019 |
|
Polyester DTY |
2690.27 |
USD/Ton |
0% |
5/16/2019 |
|
30S Spun Rayon Yarn |
2464.87 |
USD/Ton |
-0.29% |
5/16/2019 |
|
32S Polyester Yarn |
1941.36 |
USD/Ton |
0% |
5/16/2019 |
|
45S T/C Yarn |
2821.15 |
USD/Ton |
0% |
5/16/2019 |
|
40S Rayon Yarn |
2094.05 |
USD/Ton |
0% |
5/16/2019 |
|
T/R Yarn 65/35 32S |
2486.68 |
USD/Ton |
0% |
5/16/2019 |
|
45S Polyester Yarn |
2762.98 |
USD/Ton |
0% |
5/16/2019 |
|
T/C Yarn 65/35 32S |
2326.72 |
USD/Ton |
-0.62% |
5/16/2019 |
|
10S Denim Fabric |
1.34 |
USD/Meter |
0% |
5/16/2019 |
|
32S Twill Fabric |
0.79 |
USD/Meter |
0% |
5/16/2019 |
|
40S Combed Poplin |
1.06 |
USD/Meter |
0% |
5/16/2019 |
|
30S Rayon Fabric |
0.62 |
USD/Meter |
0% |
5/16/2019 |
|
45S T/C Fabric |
0.69 |
USD/Meter |
0% |
5/16/2019 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14542USD dtd. 16/05/2019). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
US President Donald Trump in a proclamation Thursday terminated the designation of Turkey as a beneficiary nation under its Generalized System of Preferences (GSP) while the suspense on India continued. GSP is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries. The termination of Turkey, a NATO ally, becomes effective May 17. On March 4, President Trump announced that the US intends to terminate India's designation as a beneficiary developing country under the GSP programme. The 60-day notice period ended on May 3. There was no word either from the White House or the US Trade Representative (USTR) on the fate of India's status as a GSP beneficiary nation. For all practical purposes, it can come any moment now, but some unconfirmed reports said that after the recent India visit of Commerce Secretary Wilbur Ross, the Trump Administration has agreed not to take a formal decision on India's termination from GSP at least till the ongoing elections are over. In recent weeks, several top US lawmakers and industry representatives have written to the Trump Administration to pause their decision on it till the new government is formed after the results of the elections are declared on May 23. But there has been no word from the Trump Administration on this so far. Trump, in the proclamation issued Thursday, said he has determined "the designation of Turkey as a beneficiary developing country is terminated, effective May 17, 2019." Further, the exemption for Turkey from application of the safeguard measures on CSPV products and large residential washers is removed, effective May 17, 2019, he proclaimed. "Consistent with my determination that it is appropriate to terminate the designation of Turkey as a beneficiary developing country under the GSP, effective May 17, 2019, I have determined to remove it from the list of developing country WTO Members exempt from application of the safeguard measures on CSPV products and large residential washers," Trump said in his proclamation. The United States had designated Turkey as a GSP beneficiary developing country in 1975. An increase in Gross National Income (GNI) per capita, declining poverty rates, and export diversification, by trading partner and by sector, are evidence of Turkey's higher level of economic development, according to a USTR statement on March 4. Under the GSP program, certain products can enter the United States duty-free if beneficiary developing countries meet the eligibility criteria established by the Congress. GSP criteria include, among others, respecting arbitral awards in favour of United States citizens or corporations, combating child labour, respecting internationally recognized worker rights, providing adequate and effective intellectual property protection, and providing the US with equitable and reasonable market access. Countries can also be graduated from the GSP program depending on factors related to economic development.
Source: Business Standard
The Pakistani rupee dropped to 147 rupees to the dollar on Thursday morning. Pakistan’s currency has reached a new all-time low against the dollar after the government last week reached a preliminary agreement with the IMF for $6 billion bailout. The Pakistani rupee dropped to 147 rupees to the dollar on Thursday morning. The rupee was traded at 141 to the dollar earlier this week, prompting government officials to meet with currency dealers to discuss how to stabilize the currency. Last week, Pakistan in a preliminary agreement with the International Monetary Fund agreed to follow a market-determined exchange rate. Currently, Pakistan’s central bank controls the currency exchange rates. Pakistan is currently facing significant economic challenges, with declining foreign exchange reserves, diminishing growth and increasing trade deficit.
Source: The Hindu
Textile companies have rejected the proposal to raise employees’ retirement ages, saying most women workers suffer from huge workloads. The government is drafting a bill to raise the retirement age by two years for men to 62 and by five years for women to 60. But textile firms firmly oppose this proposal. Bui Duc Thinh, chairman of Song Hong Garment JSC, said at a recent forum that an increase of five years would cause too much stress for female textile workers, who work up to 10 hours a day in a job that requires intense focus. Many women workers in fact want to retire at 45, so the existing retirement age of 55 is already unreasonable, he said. "Some even bribe doctors to have medical grounds for early retirement." A representative of the Vietnam Leather, Footwear and Handbag Association (LEFASO) said women textile workers tend to retire at 35-40 and use their retirement benefits to open their own small business like a garment or barber shop. "Most of them quit before 50." Truong Van Cam, general secretary of the Vietnam Textile and Apparel Association, said the retirement age should be increased first for administrative jobs, while in manufacturing it could come in the next five or 10 years. Dao Thi Thu Huyen of the Japanese Business Association in Vietnam (JBAV) said Vietnam’s life expectancy is 10 years less than Japan’s, but both countries have the same retirement age of 60. "Vietnam’s population is young, so we should give the younger generations the opportunity to work. The retirement age should be raised only for senior positions." The proposal to increase the retirement age stems from the fact that social insurance funds are limited, Pham Minh Huan, former Deputy Minister of Labor, Invalids and Social Affairs, said. Vietnam’s retirement and social benefit funds are forecast to face shortfalls from 2023, and the government will be required to subsidize the pension system from 2034, according to the International Labor Organization.
Source: VN Express International
Dive Brief:
Dive Insight:
Although China is currently the country’s largest supplier of textiles and apparel, accounting for nearly 36% of total U.S. importsin 2017, according to the World Bank, previous tariff lists left the industry largely unscathed. The items included were highly specialized apparel categories like "Articles of apparel, of reptile leather." However, the fourth tranche includes nearly all consumer apparel categories in addition to a wide range of material inputs like cotton, textiles, rubber and leather. "(Apparel) Importers and manufacturers are startled,"U.S. Reshoring Institute Executive Director and Chairman of the Board Rosemary Coates told Supply Chain Dive in an interview. "A lot of apparel is included in the fourth tranche, and I think people hoped [Trump]was just using it as a negotiating tactic,"she said. According to the NRF, the proposed rate of up to 25% is more than businesses can absorb without passing the cost onto their customers. "The people buying cheap clothing at Walmart and Target are going to be the most affected by this,"Coates said. "These tariffs are a tax on [those]who just can’t afford a 25% price increase. I’m shocked at this." The Trump administration's stated rationale for the tariff increases over the past year has been to rebalance the "trade deficit"between the U.S. and China and to punish Beijing for persisting intellectual property violations and other offenses. "We know China has IP issues, human rights issues, currency manipulation issues, etc."Coates said, "but the way to address that is through diplomacy not lunacy." When asked whether she believed the tariffs would actually go into effect, Coates responded that while many in the apparel industry assumed the administration’s announcement was just a scare tactic to bring China to the negotiating table, ultimately she believes American consumers will pay the price as the negotiations drag on. In anticipation of this, some apparel and footwear companies like Nike and Gap have begun shifting their sourcing, procurement, and manufacturing to other affordable southeast asian countries like Vietnam and Indonesia. While these preventative measures will be helpful if the latest round of tariffs goes into effect, shifting operations at the country level will take will take time and resources that not every company has the capacity to spend. "With 41% of all apparel currently produced in China, retailers will need to take a close look at their sourcing and logistics strategies to weigh the costs and benefits of moving elsewhere"American Global Logistics CEO John Slangerup told Supply Chain Dive via email."We’re already seeing a number of our own customers shift production to neighboring countries...As conditions continue to evolve, apparel businesses that combine a technology-enabled supply chain with experienced logistics support will be best-positioned to manage costs while still meeting customer expectations." American companies will have the opportunity to challenge the tariffs during the USTR open comment period in June. Bethany Aronhalt, Senior Director of Media Relations at the NRF, told Supply Chain Dive in an interview that if the fourth tranche of tariffs go into effect it could take years for retailers to adjust. She said the organization is ready to testify in Congress during the comment period where they hope to make a convincing case on behalf of the businesses, manufacturers, and consumers who will be negatively affected by the new regulation.
Source: Supply Chain Dive
The Cambodian economy grew 7.5 per cent in 2018, according to the World Bank’s (WB) recently released Cambodia Economic Update, which said this better-than-expected growth was driven largely by the rapid expansion of exports and ongoing construction boom. The report called for filling skills gaps and investing in human capital to underpin long-term growth. Exports of garments, footwear and travel goods, which account for more than two-thirds of total merchandise exports, recorded a five-year high, rising by 17.6 per cent in 2018, up from 8.3 per cent in 2017. The construction, real estate and tourism sectors accounted for about 60 per cent of total approved investment in 2018. To support the construction boom, manufacturing of building materials, furniture metals, and plastic products also increased rapidly, said the report. The European Union (EU) market, including the United Kingdom, currently accounts for more than one-third of Cambodia’s exports, particularly garments, footwear and bicycles. The potential end of the country’s duty-free access to the European market for exports—or the ‘Everything But Arms’ arrangement—will likely result in slower exports, it cautioned. The Cambodia Economic Update is a biannual report that provides up-to-date information on short- and medium-term macroeconomic developments in Cambodia. (DS)
Source: Fibre2fashion
Slapping higher tariffs on Chinese imports cannot fix any trade problem between China and the United States, but will only hurt American consumers and businesses, said a senior executive of a major U.S. trade association. "Taxing Americans is not the way to resolve the trade war," Nate Herman, senior vice president for supply chain of the American Apparel and Footwear Association (AAFA), told Xinhua on Wednesday, echoing the argument that additional tariffs are effectively a tax on Americans. "It's not effective and only hurts American businesses, American consumers and American workers," he said. The United States increased additional tariffs on 200 billion U.S. dollars' worth of Chinese goods from 10 percent to 25 percent on Friday and has threatened to raise tariffs on some 300 billion dollars' worth of Chinese imports yet to be hit. Herman said his association, which represents over 1,000 well-known brands worldwide, is seriously affected by the tax increase and concerned about the latest tariff threat in particular. The AAFA said in a statement Monday that the latest U.S. tariff threat is "catastrophic for the U.S. economy," adding it is "severely disappointed" that the potential duties will cover products "including clothing, shoes, and other textiles." "We're trying to prepare (for the new tariffs), but as you know, it's not easy to move supply chains that have been built up, in many cases, over 15 to 20 years in China," he said, adding that AAFA member companies' relationships with Chinese suppliers are "unique." According to Herman, today 82 percent of all travel goods and fashion accessories, 69 percent of all shoes, and 42 percent of all apparel sold in the United States come from China. Before the interview, Herman testified at a hearing held by the Office of the United States Trade Representative (USTR), which was soliciting public comments regarding the potential imposition of more tariffs on imports from the European Union (EU). Washington alleged that the EU and certain member countries subsidized large civil aircraft manufacturers, consequently harming U.S. interests in the aviation sector. Herman said in his testimony that the industry AAFA represents was "dragged into" the U.S.-EU aviation dispute. "It makes no sense, but here we are," he said. The industry's global value chains, Herman said, directly employ over four million Americans, and "are under a sustained attack right now by our own government." With respect to China, Herman said "most companies making clothes, shoes, and fashion accessories in the United States today rely on textiles and other inputs from China to manufacture their products." He lamented the fact that due to the U.S. tariff measures, "exports to China of U.S.-made cotton, textiles, clothes, shoes, travel goods, and fashion accessories all face significant retaliatory tariffs." "We urge the government not to impose retaliatory tariffs on our industry. We shouldn't be here," Herman said in the closing remarks of his testimony. "Just as important, our industry, and our four million American workers, can't afford yet another new tax on our businesses and our consumers," he said.
Source: Xinhua
Workers of nine state-run jute mills in Khulna, who have been demonstrating for arrears and better pays since early this month, yesterday accused their leaders of failing to draw the attention of the higher authorities to their plights. Talking to The Daily Star, they said the “go-slow” strategy would not help and they needed to go for a tougher movement. “From the beginning, the leaders have failed to draw the attention of the policymakers,” said Sariful Alam, 63, a permanent worker of Platinum Jubilee Jute Mills. “Workers want a solution through peaceful demonstrations, but given the present situation, it won’t work.” Around 35,000 workers have refrained from work since May 5 and holding street protests. Salina Banu, a worker of Crescent Jute Mills, said, “My past experiences suggest that no government did anything for jute mills workers without a greater movement.” “The leaders’ go-slow strategy will not bring any solution. We should block all the roads to Khulna. Only then the authorities will solve our problem.” Yesterday, thousands of workers blocked roads and rail tracks in Khulna and Jashore for around three hours from 4:00pm. They blocked Dhaka-Khulna highway in Kabirbottala, Notunrasta Mor, Daulatpur, Atra industrial area, and railway lines in Notunrasta and Rajkhat, reports our Khulna correspondent. Meanwhile, Sardar Mozahar Uddin, president of Bangladesh Jute Mills Workers League, a pro-government workers’ platform, said they were observing the overall situation. Every problem could be resolved through discussions, he said, adding that the government would certainly come up with a solution. A meeting between workers’ leaders and Bangladesh Jute Mill Corporation (BJMC) is scheduled for tomorrow in Dhaka. Workers threatened that they would launch tougher protests if their demands were not met. Sohrab Hossain, secretary of a workers’ platform at Crescent Jute Mills, said, “We are waiting for May 18. We hope the wage commission would make a commitment on that day. “If we don’t get paid within the time, we will go for tougher demonstrations,” he said.
‘GOVT WORKING ON PAYING ARREARS’
Textiles and Jute Secretary Mizanur Rahman has said the government is working to pay the arrears of the agitating workers directly to their bank accounts from the finance ministry. “Hopefully, we’ll able to hand over to the finance ministry the list of workers, their bank account numbers and the amount of arrears by Sunday,” he told The Daily Star last night.After a series of meetings, the Prime Minister’s Office, the finance ministry, the textiles and jute ministry and the BJMC have agreed to pay the arrears to end the stalemate. The secretary, however, could not confirm when the finance ministry would disburse the money.Mozahar, president of Jute Mills Workers League, said they would not call off the demonstration until the arrears were paid.“Nobody has informed us anything…. We won’t stop our movement until we see the money deposited in the workers’ accounts,” he told The Daily Star last night.
Source: The Daily Star
Textile machinery manufacturer Truetzschler opened its new customer and technology centre for nonwovens in Egelsbach (near Frankfurt am Main) this week, to push technological innovation in nonwovens products and related manufacturing processes. The family-owned company was established in 1888 and is one of the world’s leading manufacturers of textile machinery. “The key factors for the success of Truetzschler Group are sustainable technological innovation, the quality of its machines and its strong customer orientation. Thus, the investment in the new nonwoven’s customer and technology centre is the logical consequence to further develop the solid status of today to technology and quality leadership in this segment,” the company said today in a statement. The technology centre presents two complete production lines: an inline carding line with thermobonding and spunlacing equipment and a spunlace-crosslapper line in an industrial working width. Both lines feature a wide range of possible variations and options to realise innovative end products. On opening its new customer and technology center, Truetzschler invited all customers to jointly design the ‘way into the future’.
Source: Innovation in Textiles
