The new System of Units (SI) to measure weight, temperature, amount of substance, and current came into operation in India from Monday on the occasion of the World Metrology Day, an official release said. The resolution to redefine four of the seven base units - the kilogram (SI unit of weight), Kelvin (SI unit of temperature), mole (SI unit of amount of substance), and ampere (SI unit of current) - was adopted at the 26th General Conference on Weights & Measures (GCWM), which is comprised of 60 member countries, in November 2018. "This decision has now enabled scientists and researchers to base the SI units entirely on fundamental properties of nature, which will ensure their ongoing refinement and improvement for years to come," the Science and Technology Ministry Ministry said in a release. "The fundamental constants are invariants of time and space and successfully replaced the artifact-based units, and aptly opened up the new era for quantum world by linking all seven base units to fundamental constants/quantum standards." The existing definition of the kg is over 130 years old. The new SI system, which is defined in terms of Planck's constant, would be stable in the long term and practically realisable. The new SI System will be helpful in bringing in accuracy while dealing with international trade, biotechnology, high-tech manufacturing and human health and safety. The new definition of kg involves accurate weighing machines called 'Kibble balance', which uses Planck's Constant to measure the mass of an object using a precisely measured electromagnetic force.
Source: Business Standard
Private markets in Maharashtra will now have to upload their daily sales reports on the website of the State Marketing Directorate, failing which they stand to lose their licences. Private markets in Maharashtra will now have to upload their daily sales reports on the website of the State Marketing Directorate, failing which they stand to lose their licences. A decision to this effect was taken at a recent meeting of the stakeholders with the marketing directorate. Confirming this development, AL Gholkar, joint director, Marketing, State Marketing Directorate told FE that uploading the daily sales information is one of the pre-conditions when the licences are granted to such markets. Maharashtra now has 57 private markets, he said, adding that although these markets are slowly beginning to find their feet, it was noticed that several such markets did not upload any information. An in-built software now ensures that notices are automatically sent to such markets in the event of their failure to upload their daily reports within a period of 15 days, he said. Around 307 Agriculture Produce Market Committees and 57 private markets will henceforth have to upload daily reports online. The markets will have to upload information on the commodities that have been brought in for sale, daily market prices and the sales concluded for the day. Senior officials said that this would also make it easier for the farmers to decide if they wished to sell their produce in these markets based on the market prices. The meeting was also called to collect financial information from these markets to mark the end of the fiscal. At present, around 250 market committees upload information on a daily basis online. The turnover of private markets has gone up from `1,500 crore to `5,000 crore for the financial year 2018-19. Although Maharashtra encouraged private markets, the state marketing directorate had no direct hold over such markets since the information was not available. The directorate therefore has begun taking steps to monitor the functioning of these markets. These were meant to overcome the monopoly of agriculture produce market committees and bring in professionalism in the functioning of such markets. There are a total of 307 agriculture growth trading yards and 600 sub-yards as compared to barely 57 private markets in the state. APMCs have been in existence for over 50 years while private markets are new to the state since the last 5 years. The private markets deal in most commodities including soybean, maize, pulses and foodgrains. The Directorate has now approached the state government seeking creation of branches at the district and taluka levels for establishing ground level framework for this purpose. Gholkar said the Directorate has sought additional staff of 10 people at the district level so that they could monitor operations and also promote the concept of private markets and direct marketing licences. The Marketing Directorate currently only has a head office and daily operations are taken care of by District Deputy Registrars for whom this is an additional charge and therefore not a priority. Farmers also are not aware that such options exist and they can go to private markets to get better prices, he added. The state has issued licences for 57 private markets, 1,000 direct marketing licences and 35 single licence holders, Gholkar said. If the government agrees to expand the scope of direct marketing, agriculture marketing in the state can get the required push, he added.
Source: Financial Express
The World Trade Organization’s quarterly outlook indicator showed on Monday that global goods trade growth was likely to remain weak, with a reading of 96.3, unchanged from February, the lowest since 2010. “The outlook for trade could worsen further if heightened trade tensions are not resolved or if macroeconomic policy fails to adjust to changing circumstances,” the WTO said, adding that the latest indicator did not reflect major trade moves in the last few days.
Below-trend growth
A score of below 100 in the indicator, a composite measure of seven drivers of trade, signals below-trend growth in global goods trade, which the WTO’s April forecast estimated at 2.6 per cent this year, the mid-point of a forecast range from 1.3 per cent to 4.0 per cent. But WTO economists warned that there were several scenarios that could pull trade growth towards the bottom end of that range, including worsening trade tensions between the US and China, or Britain leaving the European Union without a deal on their future relationship. Since April there has been no resolution to the Brexit impasse and US President Donald Trump has ordered a massive increase in tariffs on Chinese goods and said car imports are a national security threat, although he postponed a tariff he had threatened to impose on cars from around the world.
Trade volume
The quarterly indicator is based on merchandise trade volume in the previous quarter, export orders, international air freight, container port throughput, car production and sales, electronic components and agricultural raw materials.
Source: The Hindu BusinessLine
Withdrawal of GSP (generalised system of preferences) by the US administration will have a short-term effect on bilateral trade, but the disadvantages will even out in the long term, said KV Kumar, Chairman and CEO, Indian American International Chamber of Commerce (IAICC). “In the long term, business will take care of itself. There may be short-term impacts of GSP withdrawal,” he told the media here on Monday.
Trade volume
Bilateral trade in goods and services has registered a 12.6 per cent rise to $142 billion in 2018, compared with $126 billion in 2017.
The target is to take it to $500 billion by 2023-24. The IAICC works with entrepreneurs, professionals, businesses and governments to develop entrepreneurship and commerce through mentor-protégé programmes, seminars, etc. According to Kumar, one of the major disadvantages that India faces in the US is the absence of “lobbying” and “proper marketing of its goods and companies.” In fact, other countries have been much better at lobbying and marketing themselves because of which their voices are heard more often, he added. “India is not doing enough when it comes to lobbying in the US. Some countries are known to spend millions of dollars on marketing themselves,” he said. Speaking on the rising trade tensions between the US and China, Kumar said “China is now a strong country” and it was a matter of debate whether trade concessions should continue or not.
MoU with Bengal Chamber
Meanwhile, the Bengal Chamber has signed an MoU with IAICC with a view to offering greater trade advisory services to small businesses of India and the US. The Chamber could collaborate in facilitating B2B connects between American businesses and its Indian counterparts from East and North-East. According to Kumar, a plan is afoot to build a B2B platform, which will help small businesses tap the global market.
Source: The Hindu Businessline
European firms are caught in the crossfire of the US-China trade war and fewer are optimistic about their future in the world’s second-largest economy, a business survey showed, on Monday. The clash between Beijing and Washington does not benefit European companies, contrary to what some might have hoped at the beginning of the dispute last year, according to the European Union Chamber of Commerce in China. “Now the trade tensions are seen as another uncertainty on the business environment, something that won’t be sorted out quickly whether there is a deal or not,” said Charlotte Roule, Chamber Vice President. “The trade tensions, according to our members, are not good for business,” she said. According to the survey, the trade war is one of the top concerns for European firms in China, about 23 per cent(23 per cent), after the Chinese economic slowdown (45 per cent), the global economy (27 per cent) and rising labour costs in China (23 per cent). The study, which received replies from 585 firms, was conducted in January, as trans-Pacific trade tensions eased. They ratcheted up again in early May with the United States and China slapping steep increases in punitive customs tariffs on each other. But early this year, a quarter of European companies in China said they were already suffering from the US increase in tariffs on Chinese products. Many European companies manufacture products in China and export them all over the world. A small number (six per cent) have already relocated to circumvent the US penalties, or are planning to do so elsewhere in Asia or Europe. But Europeans say they share many of the grievances raised by the Trump administration in its campaign against Beijing. “The fundamental issues driving the trade war need to be resolved by addressing market access barriers and regulatory challenges while also tackling SOE reform and forced tech transfer,” Roule stressed.
Technology transfers
Around 20 per cent of the companies surveyed, complained of being forced into technology transfers for the benefit of a Chinese partner, double the figure two years ago. “The authorities are saying there are no technology transfers any more but this is not what we see in our survey,” she said. Chinese foreign ministry spokesman, Lu Kang, reiterated Beijing’s denial. “We do not have a national policy of forcing foreign companies to transfer technology,” Lu said at a regular press briefing as he recalled the country’s rubber-stamp parliament adopted in March, a foreign investment law that prohibits the use of “administrative means” to force the transfer of technology. More than half of the companies said legal protection of intellectual property was inadequate, and 45 per cent say they suffer unequal treatment compared to their Chinese counterparts. State firms and their subsidies are their main bone of contention. The Europeans largely accuse these companies of enjoying preferential treatment, with 62 percent saying they have better access to public contracts. And the outlook is getting gloomier: only 45 per cent of the firms surveyed say they are optimistic about growth prospects for their sector over the next two years, compared to 62 per cent a year ago. Half do not expect to see a level playing field in the next five years or even beyond. Fifty-three per cent say business has become more difficult in the past year, up from 48 per cent a year ago, with ambiguous rules and regulations topping the list of obstacles cited by companies. Difficulties with access to the internet, which is closely monitored and censored by the Communist government, is an unfavourable factor for 51 per cent of respondents. Despite the problems, China remains one of the top three global destinations for future investment by 62 per cent of the surveyed companies, a slight increase from last year, while 56 per cent plan to expand their business in the country this year.
Source: The Hindu Businessline
It is imperative that businesses obtain a registration in each state where they have an establishment or any business activity is undertaken even if such activities are only provided to the head office of such businesses.Here, we discuss some of the key issues surrounding the valuation to be adopted for taxing such support services under GST. With the levy of tax on inter-branch/office transactions, every supply of goods or services or between the establishments of the same business, but located in different states or having separate registrations, would now be required to be tracked by the businesses for the purpose of payment of tax. As these transactions are within the same legal entity, it would typically not involve any consideration and thereby carry no value to estimate the GST liability. Consequently, there arises a need for attributing an appropriate value for these transactions. This is for the purpose of arriving at the amount of tax liability to be discharged thereon. With regard to this, the GST law has prescribed the following values to be adopted for such transactions, in the following order, as mentioned below:
– ‘Open Market Value’ of such supplies; or
– Value of supply of goods or services of like kind and quality; or
– 100% and 10% of the cost of production or manufacture or the cost of acquisition of such goods or the cost of provision of such services; or
– Value determined using reasonable means, consistent with the principles and provisions under the GST law.
In addition to the above, the provisions also state that wherever the recipient is eligible for full input tax credit of the GST applicable on such inter branch/office transactions, the value declared in the invoice raised by the supplying branch/office, shall be deemed to be the ‘Open Market Value’ of the goods or services. On a conjoint reading of these provisions, it can be understood that where the recipient/receiving branch/ office is eligible for availing the full credit of the GST chargeable on such supplies, whatever value is charged in the invoice by the supplier/supplying branch shall be considered to be the ‘Open Market Value’ of such supply. Also, as the supplies undertaken at the branch locations are essentially input services provided to the receiving branch for the furtherance of business, such supplies shall be eligible for the full credit of the GST discharged on the value of these supplies. Accordingly, as the full credit is available, businesses can adopt any reasonable estimate of the costs of as the value for payment of GST. Interesting to note is, as the above provisions provide a certain amount of lenience in the value to be adopted, businesses may choose to adopt nil or values which are far lesser than the costs of such supplies. This could then be disputed by tax authorities, leading to litigations in some cases. Further, such practices could also result in the supplying branch/office locations not being able to make use of the Input Tax Credit of the goods or services or both received by them from third parties. For instance, if the cost of goods procured is Rs 100 and the GST paid thereon is Rs 18 (i.e., @ 18%), and these goods have been transferred to another branch of the entity for a value of Rs 50 with GST of Rs 9 (@ 18%), then the receiving branch would only be able to avail the credit of GST of Rs 9 declared in the tax invoice by the transferring branch. The balance credit of Rs 9 shall remain with the transferring branch and not be available for utilisation by the receiving branch towards the output of GST on the subsequent supply of the said goods. This declaration of lower values in the invoices, more often than not, could lead to accumulation of credits at the transferring branch. On the contrary, a declaration of higher values in the invoices, could result in accumulation of credits at the receiving branch in the absence of any substantial output tax liability. In order to avoid such scenarios leading to possible litigation and unutilised credits, it would be advisable for businesses to consider adopting appropriate valuation mechanisms, based on evaluating the facts on a case-to-case basis.
Source: Financial Express
The country’s largest man-made fabric (MMF) hub in Surat has taken a big leap from manufacturing saris and dress material to readymade garments. About 100 readymade garment manufacturers from the city have come under one roof to take on their counterparts in Ahmedabad, Jaipur, Kolkata and Delhi. More than 105 shops of readymade wholesale garment will be inaugurated at the supermarket located in the textile hub of Ring Road on Tuesday where garments including gown, legging, jeggings, kurtis, salwar kameez, plazzo sets, Indo-western etc. will be made available to the buyers from different states on wholesale rates. Anoop Agarwal member of Surat Readymade Garment Manufacturers Association (SRG) told TOI, “Surat is fast emerging as the readymade garment hub in Gujarat after Ahmedabad. There are over 200 manufacturers making complete range of ladies wear products.” Agarwal added, “Two years ago, the annual turnover of readymade garments in the city was pegged at Rs 400 crore, which has seen a phenomenal rise to Rs 1,500 crore in 2018-19.” The garment manufacturers said that they have advantage over other garment manufacturers in other parts of the country as they have wide range of synthetic fabric available to suit different quality and products of ladies wear.
Source: Times of India
Should it win a second term, the NDA should get right down to pursuing urgent economic reforms. More than 50 different exit polls in Australia were proved wrong in the surprise victory of the coalition led by the Conservatives. This is in a country whose population is barely 2% of India’s. Three years ago, the outcome of the Brexit poll in Britain also shocked most of the forecasters. Not only did the pundits get it wrong, but even the punters, who put their money where their mouth is, got it completely wrong. Apparently, five times more money was riding on a non-Brexit outcome. After Brexit came the surprise victory of US President Donald Trump, who defied all experts in not only defeating competitors from his own Republican party, but also a strong and well-funded rival from the opposition Democratic party. There’s a lesson in all these outcomes, but it is not obvious. Is it that people have started being coy of truthfully answering the questionnaires of exit pollsters? Is there a deep distrust of the so-called elites, who dominate and control the narratives on media, and even social media? Is this a sort of revenge of the silent majority, the unseen undercurrent? This is enough fodder for political scientists and sociologists for years to come. As of writing this column, it appears most likely that the National Democratic Alliance will cruise to an easy victory in the Lok Sabha elections just concluded, and Prime Minister Narendra Modi of the Bharatiya Janata Party will return to power for a second term. If so, it would be an unprecedented outcome, much like the one in 2014, which was also unprecedented. This would be the first time in the post-Jawaharlal Nehru period of Independence that a party is given a second strong mandate by voters in the absence of an extraneous factor like a sympathy wave or a single dominant theme. A second term would be a time for consolidation and for reaping the gains of investments, physical, social and financial, for the ruling party. However, it should be clear that the economy needs urgent attention and top priority. The latest monthly economy report published by the department of economic affairs in the finance ministry highlights a highly worrisome three-year trend. Gross domestic product (GDP) growth has been steadily declining from its peak of 8.2% three years ago. The last quarter figure was 6.7%, and if it declines further, this would be a four-year trend. This is at a time when world growth is quite steady and improving. Second, the country’s investment-to-GDP ratio has remained stagnant at 28% for nearly four years. It was at a peak of 38% in 2008. Clearly, we need to move it up at least a couple of percentage points, which would translate into investments of nearly ₹3 trillion. The challenge, of course, is that this has to come mostly from the private sector. That would mean urgently addressing debt issues in such large sectors as power, telecom, and civil aviation. It also means ensuring that the contribution of mining in GDP doubles. India is rich in mineral wealth, but all of it lies beneath the land or sea and does not translate into jobs, investments, and incomes. The manufacturing sector is seeing tepid growth because of lack of perceived demand, pressure from imports, debt-stressed balance sheets, and most importantly, still-unwieldy regulations that hurt the ease of doing business. State and local regulatory requirements are still a significant drag. Labour- intensive sectors such as textiles and garments, construction, agro-processing, footwear and tourism need a leg up. The footwear industry was disrupted by new laws on cattle slaughter and transportation. This needs to be modified. The third trend evident from the ministry’s monthly report is on the current account deficit. It has risen steadily in the past three years and is closing in toward 3% of GDP. The net growth in exports over the past five years was zero. This can be attributed to a variety of factors, not all oaf which can be fixed easily. However, surely zero-rating of the Goods and Services Tax (GST) on exports is essential. Or at least instant refunds. The cost of delayed refunds completely wipes out profits and this especially hurts small and medium entrepreneurs. The still-strong rupee is also an export impediment. All of East Asia and China rode their export-led growth for decades on the back of an undervalued currency. Surely there’s a lesson in that? India must also aggressively explore the possibility of rupee-linked trade with Iran. Paying for imports of Iranian crude oil in rupees does not give the sellers access to hard currency dollars, so this should not displease the US, if that is what is preventing rupee trade. India must also aggressively woo tourists, especially from China, as this will also go some way towards reducing the bilateral trade deficit. The fourth trend in the monthly report is the decline in agricultural output, or gross value added (GVA), over three years. We have to aggressively promote farmer producer companies with downstream linkages with farm production, with the use of tax and other incentives. Lastly, India’s current fiscal situation is quite bleak, as the headline numbers hide the true picture. This is slow acting poison, but is surely detrimental to medium and long term growth. The dust will soon settle on election outcomes and celebrations and a honeymoon period will begin. That’s the time to move decisively ahead and spend some early political capital on hard decisions that need to be taken on economic reforms.
Source: Live Mint
The 10-year bond yields also fell to close at 7.29 per cent, from its previous close of 7.36 per cent. The rupee rose 0.69 per cent from its previous close on exit polls indicating strong performance for the incumbent National Democratic Alliance (NDA) government in the Lok Sabha elections. The possibility of NDA continuing in the government, and offering political stability, would be a strong pull for foreign investors to put their money in Indian assets, and the swing in equity indices reflected that. Sensex rose 1421.9 points, and Nifty 50 rose 421.1 points, both up 3.7 per cent from the previous close. The rupee reflected that sentiment, strengthening to close at 69.74 a dollar, from its previous close of 70.23 a dollar. In the morning trade, the rupee had strengthened to 69.45 a dollar, but weakened subsequently as importers, including oil marketing companies rushed in to buy cheaper dollars for their future commitments. Exporters were also seen selling their dollars fearing the rupee to become stronger in the coming days.
Rupee had last seen a similar jump on March 18.
The strength in the rupee happened despite oil prices remaining firm on middle-east tensions. The dollar index, which measures the greenback’s strength against major global currencies, fell 0.07 per cent to 97.92. Other Asian currencies in the region also strengthened marginally, but not as close as the rupee. There is still some room for the rupee to improve, say experts. Year-to-date, rupee has strengthened .038 per cent, aided by Monday’s performance. Most of the other currencies in Asia have remained weaker than their year-ago level against the dollar.The 10-year bond yields also fell to close at 7.29 per cent, from its previous close of 7.36 per cent. Bond prices rise as yields fall. “The markets reacted to the exit polls. If the final results are broadly in-line with the polls, the momentum of the rupee will continue in the short run,” said A Prasanna, chief economist of ICICI Securities Primary Dealership. According to currency dealers, the Reserve Bank of India (RBI) was largely absent from the market, and let importers to hedge. “Monday’s rupee movement has largely captured the actual event of the government getting formed. But the bias will continue towards a stronger rupee. However, if the actual number comes around 260-270 for the NDA, the markets may react negatively,” said Ritesh Bhansali, vice-president, Mecklai Financial. “We saw lots of smart money moving in on Monday. If the NDA comes with a great majority, then foreign inflows will be strong and that may push rupee to 68-68.5 a dollar level,” he said. The markets will start following policies and soundbites once the government is formed but till that time rupee is placed favourably, Prasanna said. If the NDA returns to power with a clear majority in line with exit polls, markets would rejoice the policy continuity, said Madhavi Arora, Economist, FX & Rates- Edelweiss Securities. For the bond market, the near-term implications would be positive, backed by the predictable fiscal guidance, near-term inflation certainty, positive Gsec supply dynamics, strengthening further rate cuts expectations, and globally dovish monetary stance amid growth concerns, according to Edelweiss.
Source : Business Standard
The next government should reduce corporate tax by 5 per cent, should expand income support scheme, abolish the minimum support price (MSP) mechanism in the next three years and bring reforms in agriculture sector, noted economist Surjit Bhalla said Monday. An estimated 61 crore Indians voted during the seven-phase general election. The counting of votes is slated for May 23. "The next government should cut corporate tax by 5 per cent, should expand income support scheme formers, abolish MSP in the next three years. There should be zero interference in agriculture. "The cost of capital and corporate tax in India is high. The RBI is on misguided path for certainly 5-6 years. We can't have effective real interest rate of 3.5 per cent," he said while speaking at an event organised by industry body FICCI. Bhalla further said India's potential growth rate is around 8-8.5 per cent per annum. The former Economic Advisory Council to the Prime Minister (EAC-PM) member also said India is unlikely to fall in the middle income trap. "Middle income trap concept is the most misunderstood economic concept and Indian is not heading towards middle income trap," Bhalla said. Recently, EAC-PM member Rathin Roy had said the Indian economy is heading for a structural slowdown. On the US-China trade tensions, he said China has taken undue advantage of the world economy for a long period and it is now paying for extra advantage it took earlier. Terming the ban on cow slaughter as anti-Muslim, Bhalla said this policy needs to go as it is hurting Indian economy also. "This anti-Muslim policy called banning of cow slaughter is despicable, and policy needs to go. It's hurting Indian economy, its hurting Muslims," he said. Asked to rate performance of Prime Minister Narendra Modi, Bhalla said it is the most inclusive government that any country has seen in the past 4-5 years. "Modi needs to look as a visionary and in the same league as Singapore's Lee Kuan Yew. He has the vision and mission and getting majority(in the general election) is very much part of the mission," he said.
Source: Business Standard
The significant rise in gold imports has been the most worrying aspect of the rising trade deficit. The new government will have to sort out the mess in foreign trade As if all the bad news from the domestic economy were not enough, foreign trade data suggest worrisome trends on the external front as well. The latest report of monthly trade data from the Ministry of Commerce and Industry indicates that merchandise exports (in US $ terms) in April 2019 increased by only 0.64 per cent over April 2018, while imports grew by 4.48 per cent. This stagnation of exports is truly worrying because it is well below the rate of growth of world exports in the same period. But is this just some current problem, or have external trade concerns been building for a while? Figure 1 considers the movement of the trade balance over the past 15 years, since the start of the first UPA-1 government. The year 2014-15 showed a seriously large merchandise trade deficit for India, at $138 billion. This declined in the subsequent two years, but then started rising again so that in 2018-19 it reached as much as $184 billion — or a whopping 6.7 per cent of the estimated GDP! In normal times, this would have been ringing alarm bells for any government, and when combined with the bad news within the economy such as falling investment, clear evidence of sagging demand, falling employment and historically high open unemployment rates, it should have been seen as another indicator of economic emergency. But the government has been adept at deflecting attention from this, to the country’s detriment. Consider then how the trade indicators have performed under the tenure of the Modi government. It is often argued that India’s external trade balance is hugely driven by the world oil price, since India remains a significant net importer of oil and petroleum products. By mid 2016-17, these had caused the oil import bill to fall to less than half of its level in the first quarter of 2014-15, when the government assumed office.
Rising oil imports
Thereafter, as oil prices have risen, so has the oil import bill. But this increase was not as much as could be expected, because domestic demand has not been rising in sync with the supposedly high GDP growth. What may be more alarming is the continued increase in the non-oil deficit. As Figure 3 indicates, non-oil exports have been growing sluggishly if at all, except for an apparent spurt in the most recent quarter. However, non-oil imports have continued to increase suggesting greater substitution of domestic production in a situation of already stagnant demand. This bodes ill for domestic producers, especially small producers that are more threatened by cheaper import competition, and therefore it is no surprise to learn of survey data pointing to significant declines in manufacturing output. Indeed, the latest monthly trade data suggest that the sectors showing the most rapid increase in imports in April 2019 are precisely those manufacturing sectors that also include many small and medium sized enterprises: pulp and waste paper; textile yarn and fabrics and made-up articles like garments; leather and leather products; dyeing, tanning and colouring materials; machine tools; electronic and professional goods; chemicals and pharmaceuticals. In such a context, we can hardly be surprised that employment in such manufacturing activities has been declining. But one of the biggest reasons for the rising trade deficit is also one of the least desirable: the significant increase in gold imports. Figure 4 shows how these have exploded in the past year, with the value in April 2019 as much as 60 per cent higher than in the previous year. In fact, non-oil non-gold imports actually declined by 2.2 per cent in April 2019 (year-on-year) which shows how significant the role of gold imports has been in causing this ballooning trade deficit. By April 2019, gold imports alone accounted for nearly 30 per cent of the trade deficit.
The gold factor
India has always been “a sink for precious metals” as Keynes described it nearly a century ago, but gold imports tend to rise particularly in periods of domestic economic uncertainty. But these completely unnecessary imports can also be controlled through appropriate policy action, which has unfortunately simply not happened recently. This is one more economic problem that could be quite simply and effectively dealt with by a proactive government, yet nothing is being done about it. It is surprising — and speaks volumes for the subservience of India media — that, while the last few years of the UPA-2 government were condemned for their “economic policy paralysis”, there has thus far been very little negative commentary on the economic mismanagement of the Modi regime. Problems created within the country by incompetent economic policies are being multiplied by headwinds from the global economy. As a result, whichever government is formed after May 23 will face many major challenges in dealing with the economy, including in sorting out the mess in the foreign trade account.
Source: The Hindu
India can benefit from the US-China tariff war if it plays its cards well. A year into the US-China tariff war, its implications for India are still unfolding. The glass, as it were, could be seen as half empty, or half-full. What we know is India is losing its surplus with the US. It is gaining exports, and hence, narrowing its deficit with China. What we are yet to find out is if India can take the space vacated by the warring partners.
Here are some points to consider.
No doubt, the simmering tensions between the world’s two largest economies has wrought a knock-on effect, taking down global growth, disrupting trading arrangements and production systems and, above all, injecting uncertainty into the already fragile global environment and weakening investor sentiment. India hasn’t escaped unhurt. Its exports slowed to 5.5 per cent in the second half of fiscal 2019, compared with 12.7 per cent in the first half. Overall growth for the fiscal printed at 8.6 per cent on-year, lower than 10 per cent in the previous year. These overall figures, however, hide some crucial details, which tell us not all is lost. Specifically, India’s exports with US and China have seen sharp reversals. India’s trade surplus with the US had increased significantly since fiscal 2012. However, this surplus started to shrink in fiscal 2019, as export growth slowed to 9.5 per cent from 13.4 per cent in fiscal 2018, while import growth rose sharply to 32.6 per cent from 19.3 per cent. Protectionist measures by the US were beginning to tell on India’s exports. Key items hit by US tariffs last year were iron, steel, and aluminum. The impact, though, was not significant, as these account for less than 1 per cent of India’s total exports.
The opposite was the case with China.
India’s trade deficit with China has risen rapidly over the past decade. However, this deficit narrowed in fiscal 2019, as exports to China galloped 25.6 per cent, while imports declined by 7.9 per cent. In fact, the top exported commodities to China in fiscal 2019 — petroleum products, cotton, chemicals and plastic products — were products on which China imposed import tariffs on the US last year. A word of caution here, though. Declining imports from China were accompanied by a rise in same products from Hong Kong. Such instances have signalled that the current trade war could lead to trade diversion rather than trade destruction. Until now, the tariff actions by US and China have been one-on-one, making imports from each other expensive. What that has done, quite unintentionally, is also to improve relative competitiveness of other economies exporting the same products. If this trade war continues over a longer horizon, it could even result in shift of production bases and restructuring of global supply chains. Chinese firms are already moving production to their plants in other countries. India also figures in the list of such probables. But such opportunities for growing exports have come and passed earlier too. Even before the trade war, low-end manufacturing (readymade garments, leather garments and footwear) had started moving out from China, as labour costs rose and it moved to more sophisticated manufacturing. However, India fell behind countries like Vietnam and Bangladesh in capturing export share in these sectors because of higher costs and lower incentives. That brings us to a more fundamental issue. What hinders India from becoming an export powerhouse? First, it lags in competitiveness. At 58, India still ranks below China (28) in World Economic Forum’s Global Competitiveness Rankings for 2018. In World Bank’s Logistics Performance Index 2018, it ranks 44, below China (26) and Vietnam (39). Land and labour reforms are still pending, hindering largescale investments in export sectors. Two, India remains a tightly regulated market. Under the World Bank’s Doing Business rankings, India ranks 77, compared with China at 46 and Vietnam at 69. Three, India’s slow progress in drafting trade agreements impacts its ability to participate in global value chains, affecting export growth. India must proactively address these concerns. Reaping every opportunity that presents itself has become more crucial now, given that the global environment is in for even more challenging times. Joshi is chief economist and Tandon is junior economist, CRISIL Ltd
Source: Indian Express
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1202.41 |
USD/Ton |
-0.36% |
5/20/2019 |
|
VSF |
1714.01 |
USD/Ton |
-0.67% |
5/20/2019 |
|
ASF |
2494.42 |
USD/Ton |
0% |
5/20/2019 |
|
Polyester POY |
1147.49 |
USD/Ton |
0% |
5/20/2019 |
|
Nylon FDY |
2572.46 |
USD/Ton |
0% |
5/20/2019 |
|
40D Spandex |
4494.57 |
USD/Ton |
-0.64% |
5/20/2019 |
|
Nylon POY |
2673.62 |
USD/Ton |
0% |
5/20/2019 |
|
Acrylic Top 3D |
1279.00 |
USD/Ton |
-0.56% |
5/20/2019 |
|
Polyester FDY |
2890.40 |
USD/Ton |
-0.50% |
5/20/2019 |
|
Nylon DTY |
5462.86 |
USD/Ton |
0% |
5/20/2019 |
|
Viscose Long Filament |
1387.39 |
USD/Ton |
0% |
5/20/2019 |
|
Polyester DTY |
2456.84 |
USD/Ton |
-1.73% |
5/20/2019 |
|
30S Spun Rayon Yarn |
2442.39 |
USD/Ton |
-0.29% |
5/20/2019 |
|
32S Polyester Yarn |
1878.76 |
USD/Ton |
-2.62% |
5/20/2019 |
|
45S T/C Yarn |
2803.69 |
USD/Ton |
0% |
5/20/2019 |
|
40S Rayon Yarn |
2731.43 |
USD/Ton |
-0.53% |
5/20/2019 |
|
T/R Yarn 65/35 32S |
2312.32 |
USD/Ton |
0% |
5/20/2019 |
|
45S Polyester Yarn |
2037.73 |
USD/Ton |
-2.08% |
5/20/2019 |
|
T/C Yarn 65/35 32S |
2442.39 |
USD/Ton |
-1.17% |
5/20/2019 |
|
10S Denim Fabric |
1.33 |
USD/Meter |
0% |
5/20/2019 |
|
32S Twill Fabric |
0.79 |
USD/Meter |
0% |
5/20/2019 |
|
40S Combed Poplin |
1.05 |
USD/Meter |
0% |
5/20/2019 |
|
30S Rayon Fabric |
0.62 |
USD/Meter |
0% |
5/20/2019 |
|
45S T/C Fabric |
0.69 |
USD/Meter |
0% |
5/20/2019 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14452 USD dtd. 20/05/2019). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
USTR provides instructions to companies seeking to comment. The US Trade Representative (USTR) is now accepting comments on the latest proposed round of 25% tariffs, which will impact home textiles imported from China. The Home Fashion Products Association (HFPA) and its members are submitting their arguments against imposing tariffs on home textiles and are asking to appear at the June 17 hearing to testify on the matter. Individual companies can also make their case to the USTR by submitting written comments by June 17. Comments must include:
• The specific tariff subheadings to be subject to increased duties, including whether the subheadings listed in the Annex should be retained or removed, or whether subheadings not currently on the list should be added.
• The level of the increase, if any, in the rate of duty.
• The appropriate aggregate level of trade to be covered by additional duties. According to the USTR commenters should address specifically whether imposing increased duties on a particular product would be practicable or effective to obtain the elimination of China’s acts, policies, and practices, and whether imposing additional duties on a particular product would cause disproportionate economic harm to U.S. interests, including small- or medium- size businesses and consumers.
During an earlier round of proposed tariffs, the HFPA and the American Down and Feather Council were able to successfully get imported feathers from China removed from a list. All submissions must be in English and sent electronically via www.regulations.gov. Enter docket number USTR–2019–0004 on the home page and click ‘search.’ The site will provide a search-results page listing all documents associated with this docket. Find a reference to this notice and click on the link titled ‘comment now!’ For further information on using the www.regulations.gov website, consult the resources provided on the website by clicking on ‘How to Use Regulations.gov’ on the bottom of the home page. USTR will not accept hand-delivered submissions. The www.regulations.gov website allows users to submit comments by filling in a ‘comment’ field or by attaching a document using an ‘upload file’ field. USTR prefers comments are submitted in an attached document. If you attach a document, it is sufficient to type ‘see attached’ in the ‘comment’ field. USTR prefers submissions in Microsoft Word (.doc) or searchable Adobe Acrobat (.pdf). If you use an application other than those two, indicate the name of the application in the ‘comment’ field. According to Robert Leo, HFPA legal counsel, due to the expected large amount of companies, associations and individuals planning to testify, the hearings could last five days or longer. “The effective date for the List 4 additional duties is likely in mid- to late July but could be earlier depending on the negotiations’ status,” said Leo, a partner at Meeks, Sheppard, Leo & Pillsbury. “The notice provides no specific information on exclusion requests for either List 3 or 4.
Source: Home Textiles Today
Simultaneously, the US announced a number of stimulus measures of investment in infrastructure where the existing Make in USA policy and costly steel imports benefited the indigenous steel manufacturers to derive maximum benefits by raising steel prices. The current capacity utilisation of US steel industry at 82% is significantly higher by 10% as compared to the level achieved prior to March 2018.The current capacity utilisation of US steel industry at 82% is significantly higher by 10% as compared to the level achieved prior to March 2018. The issue of US China trade war is gradually becoming a critical factor in destabilising the world economy in a number of areas. Thanks to an ever-awaken media coverage, each and every progress on this issue by declaration, notification, address, interview, personal visits or even similar contemplation, anywhere in the globe, finds a mention in any discussion on current affairs. The direct and indirect significance of this event on the world economy, individual country’s economy and the security considerations appears to engulf the welfare of all concerned. All that started in March 2018 with US President Donald Trump’s announcement of imposing a unilateral duty of 25% and 10%, respectively on all steel and aluminium imports to the US under Section 232 of US Trade Act associating the surge in imports with the national security considerations of the country. It was explained that steel imports from China were used to make defence equipment and hence considered unsafe from the national security points of view. However, for the next 8-10 months, the shock treatment to the global steel and aluminium trade in the aftermath of all imports to the US containing these two categories made import access ineffective and gave ample scope to US steel industry to gradually replace costly import with supply of domestically manufactured steel at competitive prices. The current capacity utilisation of US steel industry at 82% is significantly higher by 10% as compared to the level achieved prior to March 2018. The US economy as a whole enjoyed the benefits — unemployment rate reached 3.6%, manufacturing sector displayed higher productivity and industrial production rate rose. Simultaneously, the US announced a number of stimulus measures of investment in infrastructure where the existing Make in USA policy and costly steel imports benefited the indigenous steel manufacturers to derive maximum benefits by raising steel prices. The agitated user industry in the US specifically, the pipes and tubes manufacturers, engineering industry using high performance steel not domestically available, the joint venture entities contractually bound to use imported special grade steel were served with exemption certificates (more than 4,000 in numbers) enabling them to continue the operations unabated by introducing pragmatic policy prescriptions. The immediate response from the steel exporting countries was to impose retaliatory tariffs on US imports. EU issued definitive safeguard measures (diverted US exports adding to EU imports) culminating in settling at quota type restrictions amounting to 70% of last 3 years’ exports. The affected countries, namely South Korea, Japan, Turkey and China got some reprieve. However, it was short lived as more threats came from US China trade war. What was initially thought to be a passing phase with both the warring groups agreeing to sit at negotiating table, the trade tensions went on. The US had already announced a 25% duty on $200 billion worth of Chinese exports and additional 25% duty on $325 billion of Chinese goods. In retaliation, China has threatened to fix 25% duty on imports of crude oil and LNG from the US. Meanwhile, as US removed the MFN (most favoured nations) duty facility on GSP (generalised system of preferences) preferences from India, the retaliation by India in terms of enhancing duties on 29 products imported from the US has been extended in anticipation of resuming this facility by the US. The US sanction on trade with Iran (including metal products) got intensified and paved way for disrupting the world oil trade. The 6 month deadline on US sanction on Iran which allowed oil imports from Iran by countries like India is over and India now has to look for other oil sources, including the US, to make up the shortfall. Thus, it is not only steel, but other goods of trade, including agricultural, petroleum products and IT services are subject to a great deal of uncertain future. The rebuff on the steel trade and the continuing protests of job losses inside the US arising out of hassle free entry of IT savvy personnel from other countries including India made the US adopt a hardened policy on visa entries by foreign nationals to the US. India exports to the US an average 100 mt of steel (semi finished steel, bars and rods and pipes) and imports from the US, average 85-90 MT, comprising of tinplates, pipes and melting scrap. The US market for Flat/SS Flats is inaccessible to India due to ADD/CVD imposed by the US. It is therefore not difficult for Indian steel exporters to find alternate markets for its exports. But in the post March 2019 scene, India has been receiving significant US diverted exports from China, Japan and South Korea at competitive prices. India, as the rising consumption point for many capital, consumer and infrastructure products, would require good amount of steel in the coming months/years that may be targetted by exporters from China, Korea and Japan. The US is also attempting to destroy WTO, specifically its Dispute Settlement Body’s power to protect the Special and Differential Treatments granted to the developing countries in trade disputes nullifying the appeals made by India, South Africa, Brazil and a host of other countries. Apart from the above implications of US action on India, there is a distinct plausibility of the US enhancing domestic interest rate to attract FII (Quantitative Easing) to support its investment need and this may usher in a sudden flow of capital from India. The battle between two large entities has the potential to sweep across the fertile terrains of all countries and leave them barren, and rocky.
Source: Financial Express
Despite Eastern European countries being an important export market for Vietnamese goods, the total trade revenue between both sides fell short of the potential, with bilateral trade reaching $10.1 billion in 2018—2.65 per cent of the country’s total export revenue, according to Vietnam’s deputy minister of industry and trade Hoang Quoc Vuong. Items like textiles and footwear, seafood, fresh and processed fruit and vegetables, electronics and electronic components, will have more opportunities to be exported to this market, he noted. Vuong was speaking at the Vietnam-Eastern Europe Trade Forum with the theme ‘Promoting Vietnam’s agricultural, textile and footwear exports to Eastern European countries in the new situation’ organised by his ministry in Ho Chi Minh City last week. Institutions and legal frameworks for developing cooperation between both sides include 14 intergovernmental committees, a mechanism for economic cooperation consultation between Vietnam and Poland and a free trade agreement between Vietnam and the Eurasian Economic Union, a Vietnamese newspaper report quoted the deputy minister as saying.
Source: Fibre2Fashion
Recently, the Nigerian Export Promotion Council (NEPC) AGOA Trade Resource Centre, Lagos unveiled the AGOA Textile Visa Stamp. The Textile Visa Stamp according to the NEPC would enable garment manufacturers in Nigeria to have tariff concession on textile and garments manufactured in the country for export to the USA under AGOA. In this interview, CEO of the NEPC, Mr. Olusegun Awolowo in this interview with FRIDAY EKEOBA, explained the Textile Visa Stamp; its importance and benefit for Nigerian garment manufacturers. Awolowo who was represented at the Asian-African Chambers of Commerce and Industry’s inauguration in Lagos recently is of the opinion that the NEPC and the Nigerian Customs Service would synergise to ensure the Textile Visa Stamp is well utilised for the benefit of garment manufacturers to bring more revenue to the Federal Government of Nigeria. Excerpts: NEPC – AGOA Trade Resource Center recently organised a workshop on utilisation of the AGOA Textile Visa Stamp, can you enlighten the public on this Textile Visa Stamp? The AGOA Textile Visa Stamp is an instrument established by the US government for use by the AGOA eligible countries for textiles and apparels export into USA. The instrument is to be administered by the Nigerian authorised Customs Officers on the Commercial Invoice of garment manufacturers exporting to the US under AGOA. It is a major requirement for the export of textiles and garment under the scheme and has to be strictly adhered to by Nigerian garment exporters in order to benefit from the tariff concession provided by the Act.
What was the role of the Nigerian Customs at the Workshop?
The esteemed uniformed officers of the Customs were invited to the Workshop because they are the sole administrator of the Visa Stamp. The Stamp is in their custody and they need to be informed on its application and as well as interface with the Nigerian garment manufactures. More importantly, the interface facilitated expression of challenges by garment manufactures in accessing the Visa Stamp from the Customs. Are the Nigerian Customs officials well trained on this AGOA Textile Visa Stamp’s administration since they are the officials Nigerian exporters would be interacting with at the export desks? They are now well informed on the Visa Stamp administration so also on AGOA. The Custom Officers were always invited to training programmes on AGOA organised by the NEPC AGOA Trade Resource Center. The garment manufactures now know the locations of Customs officers to access the Visa Stamp. What would the Nigerian Garment manufacturers benefit from the Visa Stamp? Nigerian Garment manufacturers have a lot of gains by utilising the Visa Stamp. Their products – textiles and apparel will enjoy duty-free access to the US market under AGOA. The tariff concession will give made in Nigeria products more competitive advantage over non-AGOA countries that must pay normal tariff rates to enter the United States. They will also be able to retain market share regarding certain apparel products. More jobs related to apparel manufacturing are created through increased production. Trade relationship with US investors and other sub-Saharan AGOA eligible countries counterparts will be built. Through technical assistance provided for garment manufacturers they will be able to comply with US standards as well as international market standards in the garment world. Nigerians still depend largely on imported garments, especially from Asia. Do you think Nigerian manufacturers can ever meet the garment needs at home? Indeed, the Nigerian garment markets are saturated with products from Asia but Nigerian garment manufactures through trainings are now informed and have embraced the value chain production systems. They only need to be encouraged and be well funded because, value chain system of mass production is capital intensive and many of the manufacturers are still at the workshop level struggling to meet delivery. If they are well funded for expansion into large factories, backed up with firm-level technical training and government policy support for solely made in Nigeria garments; the Nigerian manufacturers can meet the needs at home because it will be more profitable. Take the case of the use of General System of Mobile (GSM) telephone, it started late in Nigeria, but within a limited period, market women of course now use mobile phones such that Nigeria is now the largest user of mobile telephones in Africa. When there is a will, there will be ways.
What is NEPC’s role in addressing this?
The Council established the Human Capital Development Center (HCDC) in 2006, with modern industrial machines and engaged both local and international garment experts to train and manage the Center for mass production of garments for export under AGOA into the US. In 2016 to be precise, the NEPC engaged five garment experts from The Philippines and four local resource persons to train at the garment factory on how to make garments of international standards within limited time and the value chain system of mass production. Each batch of training at the center was usually for a minimum period of three months on pattern drafting and garment production except for special requested cases. NEPC has consistently offered this service at Zero cost to the trainees and even offered free lunch for students. The good news is that after graduation, some of the students were retained at the NEPC Factory to perfect their skills and then employed to produce for other fashion designers, a few were gainfully employed by some Nigerian garment factories thus reducing unemployment, others form synergy and established enterprises to mass produce T-shirts for sale and for other industries. Kudos to Vlisco Academy Nigeria, which at one time collaborated with NEPC for training at the HCDC in Lagos. So far from inception, over 850 people have been trained and graduated from the HCDC. In addition to the above, the NEPC is currently providing technical support for export ready garment companies by bringing into Nigeria and paying for the services of international garment experts from Sri Lanka and Ghana. The technical support started with the Calabar Garment Factory in Cross Rivers State where firm-level training was conducted for over 600 factory hands in December 2018. The garment experts are now at Wessy Creations garment factory in Abeokuta, Ogun State. This is to assist in bringing the companies to the level of mass production in line with international standard practice and for export to the US under AGOA. With individual efforts, government supports (policy wise and financially) for the existing garment factories, navigation of the numerous garment workshops to factories and establishment of more garment factories, the garment manufacturers can meet the garment needs of Nigerians because we have cheap labour readily available.
Source: National Wire Nigeria
Italy's fashion industry increased revenues by just 0.2% in the first quarter of 2019, held back by trade tensions between the United States and China, the national sector body said on Monday. The industry, whose annual revenues account for around 4 percent of Italy's gross domestic output, has grown by 3% on average every year in the last decade, said Carlo Capasa, chairman Italy's National Fashion Chamber (CNMI). "We hope to recover in the second part of the year," Capasa told reporters at a press conference to present Milan's Men Fashion Week, which will take place on June 14-17. Turnover in the Italian fashion industry rose 2.8% to 66.6 billion euros (£58.3 billion) in 2018, according to CNMI estimates. Including textiles, leather and shoes, sales reached 89.3 billion euros, up 2.3% year on year. Exports accounted for over 75% of sales. Capasa urged the Italian government not to raise the sales tax on fashion goods. Speculation the government could hike VAT on targeted products, including luxury items, has increased amid concerns Rome could struggle to manage deteriorating public finances in the second half of the year.
Source: Euronews
China's loss is India's gain. Atleast, that's what, when it comes to chemicals, especially, specialty chemicals market. The downturn in China's chemicals and specialty chemicals market in the recent years, has come as a boon for the Indian chemicals and specialty chemicals industry, said a recent Crisil Research report. Traditionally, the European Union (EU) and the US were the key chemical hubs globally. Together they contributed nearly 40 per cent of global chemical sales till 2006. However, the 'Great Recession' of 2008 changed everything. Developing countries started faring better than the relatively mature economies of the West. Over the last decade, the core of the chemical industry has shifted from the West to Asia, with China being the key benefactor. However, China's specialty chemicals market has seen a downturn in recent years, for more reasons than one, most prominent being the introduction of stringent environmental norms, which has led to the shutdown of several chemical plants. The labour cost (hourly cost of compensation) in China was lower than that of India till 2007. However, over 2005-2015, the average labour cost in China increased nearly 19-20 per cent CAGR, against 4-5 per cent CAGR in India. In fact, over the last five years, this cost has more than doubled compared with India, rendering Chinese manufacturers' uncompetitive vis-à-vis India in labour cost."The domestic chemicals industry in China is witnessing a slowdown as a result of an overall slower economic growth. Over the next 2-3 years, China's GDP is projected to grow at 6-6.5 per cent, against 8-10 per cent witnessed over the last decade (2009-2018). This slowdown would translate into lower off-take of specialty chemicals from large segments such as construction, automobiles, textiles and consumer durables. Thanks to shutdowns in China and lack of capacity additions in other developed countries, India stands to benefit in the export market. Also supporting the growth in India is its ability to manufacture at a lower price compared with its western counterparts. This along with the emergence of established players bodes well for Indian manufacturers," said the report. Interestingly, India also faces threat from environmental concerns. However, the threat is limited only to smaller players and shall serve as an opportunity for larger players.
Source: Deccan Chronicle
The future of the textiles industry is more and more determined by Industry 4.0, which has many dimensions and possible fields of application. In three of them (smart services, operations and factory), key solutions are provided by the machinery industry. The other ones from smart textile products, marketing and sales, employees up to strategy and organisation are specific know-how issues for textiles mills. At the ITMA 2019 in Barcelona, next month, visitors will have the chance to see how Industry 4.0 solutions are impacting the textiles process chain. Six weeks prior to the show, Nicolai Strauch, press officer of the VDMA Textile Machinery Association, Germany, spoke to experts of VDMA member companies about their products and services with regard to digitisation and Industry 4.0. Interview partners were: Andreas Hannes, Marketing Manager, Sedo Treepoint; Maximilian Kürig, Managing Director, KM.ON, a software start-up company of Karl Mayer; Wilhelm Langius, Division Head, Neuenhauser; Andreas Lukas, Managing Director, Andritz Küsters; Rainer Mestermann, Managing Director, Mahlo; Axel Pieper, CEO, Brückner Trockentechnik; Eric Schöller, Managing Director, Groz-Beckert; and Dr Christof Soest, CTO, Trützschler. Nicolai Strauch: Dr Soest, what is Trützschler’s latest I4.0 innovation? Dr Soest: We have developed intelligent, self-optimising machines and connect them through digital monitoring systems. The latest examples are cloud-based monitoring solutions which enable customers to literally steer and optimise their spinning mill anytime from anywhere in the world. This combination of complete, intelligent machinery solutions and digital support systems means a big step in automation and ensuring high quality.
NS: And what is the exact benefit for a spinning mill?
Dr Soest: Customer benefits range from improved productivity and quality to fewer downtimes, machine failures and reduced scrap. One of our monitoring systems, for example, warns operators about potential issues or optimisation needs. It also specifies where exactly they occur and advises what needs to be done. There is no need for time-consuming searches for the source of the issue. This saves a lot of time and money! By connecting all machines in a unified data set, we eliminate the information silos that made it difficult to steer production in the past. NS: Let’s stay in the spinning sector. Mr Langius, company Neuenhauser specialises in the handling of yarn packages within the yarn spinning process. Are transportation systems also influenced by Industry 4.0? Langius: Indeed, a good example is a new development for the automated handling of sliver cans. Have you ever heard of AGVs?
NS: Should I?
Langius: AGV stands for Automatic Guided Vehicles, a technology that has been around for many years but has been fuelled recently by the introduction of Industry 4.0. Neuenhauser saw with the recent advances in autonomous vehicles and navigation systems that an AGV is also a good solution for spinning mills. We thought it is a useful tool to automate the labour-intensive handling of sliver cans in a spinning plant. Within twelve months, our team developed a state-of-the-art transport system using a large fleet of intelligently controlled automated guided vehicles. The AGV will pick-up sliver cans which are filled with cotton sliver material and deliver them to the spinning frame where empty cans will be exchanged with full cans. The empty cans are then returned to the equipment which will refill the sliver cans with cotton sliver to repeat the cycle. Within a typical spinning mill, very large numbers of sliver cans are required to be moved each hour. NS: And how do you make sure these vehicles find their way in a spinning mill? Langius: The vehicles are equipped with the latest state-of-the-art safety sensors to ensure the vehicles operate safely alongside plant personnel who need to share the same floor space and aisles within the spinning mill. The plant personnel are also equipped with specialised sensors they wear on their safety vest, to inform the AGV where the operators are working and moving around within the manufacturing floor. With such a system both the AGVs and local plant personnel can work safely together within the same manufacturing area. NS: Let’s go a step forward in the textiles chain. Industry 4.0. is also an issue in fabric production. Mr Kürig, at ITMA ASIA 2018 Karl Mayer launched its own digital brand, KM.ON. What is new in the associated digital solutions portfolio with regard to production? Kürig: KM.ON’s range of features has been extended considerably. A good example from Karl Mayer is a new digital tool that combines a PDA system with a ticket system to enable any disruptions in production to be managed efficiently. The relevant information can be input easily and quickly at the machine and forwarded to the appropriate location in real time. Any problems can be dealt with quickly, and the root cause can be tackled rapidly by displaying the relevant sequence. NS: What does this tool mean for the machine operator? Is it an operator friendly technology? Kürig: This system is very easy to operate, which means that this new development can be used immediately. NS: Integral parts in knitting, warp knitting and sewing are needles. Mr Schöller, will needle handling also move to a digital level? Schöller: Yes, indeed. Groz-Beckert has developed a quality and life cycle management system for needles. It organises each needle in a clearly structured process and documents them digitally, from arriving at the factory to leaving for recycling. NS: How do customers benefit from this system? Schöller: This quality management system makes it possible to efficiently conduct audits and, as part of the digitalisation process, provides a complete overview of KPIs (Key Performance Indicators) with the option of implementing predictive maintenance measures. Customers also benefit from the ability to improve machine utilisation and identify weak points in production. The use of the system reduces needle consumption at factories by up to 10%. Downtime during needle changes also decreases by 50% on average. Moreover, the risk of contractual penalties due to non-compliance with brand owner specifications goes to zero. The use of the system also eliminates the need to store used needles for documentation purposes; the needles can be sent for recycling right away – a decisive benefit in the sense of sustainability. NS: Mr Lukas, Andritz Küsters specialises in technologies for the nonwovens industry. Which steps have been taken recently to address the topic I4.0? Lukas: Andritz has pooled its relevant expertise under a new technology brand that covers smart sensors, big data analytics and augmented reality. NS: Augmented reality is a good topic that has not been mentioned so far. What are the advantages of this technology? Lukas: Portrayal of important information where operations are taking place and always with respect to the product or object are compelling arguments in favour of using Augmented Reality. Other benefits for customers: Conventional operating manuals are converted into digital instructions, virtual tools can be displayed in the real work environment, and users can perform difficult work sequences with a lower error rate. NS: Gentlemen, in the daily press I get sometimes the impression that I4.0 / digitization is an end in itself. Mr Pieper, in textile finishing, energy consumption plays a crucial role. Can I4.0-solutions help to reduce energy costs? Pieper: Brückner has developed an intelligent machine assistance system that monitors the settings of the entire system in the background. Deviations from default values are immediately signaled to the machine operator and stored in the production history logbook. A new simulation tool helps the machine operator to get the highest possible productivity and/or energy savings out of the system. Maintenance and spare part suggestions are displayed preventively after a certain interval. Upcoming maintenance tasks are comprehensively visualised for the maintenance department and can even be retrieved from mobile devices. NS: How can a finishing company realise savings potentials with this solution? Pieper: During production, a production assistance system helps the operator to decide which parameters need to be adjusted to make the system even more energy-efficient and productive. Optimised recipes can be stored for future processes and are therefore very easy to reproduce. At the customer's request, we can also connect his system to a higher-level control station system. This allows recipe data to be researched in a central data base and to be shared with other users. This new intelligent assistance system in combination with the simulation tool allows productivity increases of up to 40%. Energy consumption can be reduced by up to 30% with these systems. NS: Let’s stay in the finishing process. Mr Mestermann, company Mahlo develops and produces measurement and control equipment for the textiles and nonwoven industry. A basic idea of Industry 4.0 is collecting and processing data for better production results. How is Mahlo addressing this issue? Mestermann: A new platform from Mahlo realises these ideas of industry 4.0 with digital technologies. In the digitisation concept for all Mahlo products, the functionalities are grouped, optimised and standardised as "services". This results in modular hardware and software function blocks that can also be retrofitted. There are modules, e.g. for the acquisition and processing of measured values, for control tasks or for the long-term archiving, data logging and analysis. NS: Why should manufacturers and finishers of textile fabrics invest in your solutions? Mestermann: Our new platform makes it easier for customers to use data in a meaningful manner to optimise their processes. Networking of Mahlo devices with each other and with other systems ensures consistent data exchange and enables the bundling of information as a basis for process improvement. Higher machine availability through remote maintenance via better product quality by adaptive control or flexible data analysis as the basis for better decisions provide immediate monetary benefits.
NS: Can you quantify the benefits, please? Mestermann: One example is the control module in our weft straighteners. Together with a renowned university, the distortion control was revised and digitised. Optimised hardware and software resulted in a faster and more efficient controller. Evaluations confirmed by customers prove that the control module regulates 20% faster and more precisely than before. Better straightening results reduce the production of second-choice goods and the need to pass the same fabric through the stenter several times. NS: Mr Hannes, tell us something about the portfolio of Sedo-Treepoint. Hannes: We are known for smart factory integration and offer integrated textiles management systems along the textiles production chain, such as spinning, weaving, knitting, dyeing, finishing, printing and inspection. For all departments, PPS, routing of orders (track and trace) or energy management is available. Existing ERP systems are integrated as well, so double entry of existing information is avoided.
NS: What can we expect from your company at ITMA in Barcelona? Hannes: We will introduce a new series of our dyehouse controllers. The new series is specially designed for Industry 4.0. The open connectivity on production and machine level improves the M2M-communication. Important information for the production floor is displayed wherever required. NS: Gentlemen, thank you very much for this discussion. More than 200 VDMA member companies will exhibit at ITMA end of June. We are eagerly looking forward to a fantastic and successful ITMA in Barcelona.
Source: Innovation in Textiles
