Textile exporters in Surat, the country’s largest manmade fabric (MMF) sector, are upbeat over the ongoing trade war between the US and China, as they forsee a major advantage of increase in fabric and readymade garment exports to the US following imposition of import duty by America on Chinese products. The Synthetic and Rayon Export Promotion Council (SRTEPC) has even predicted around 25% growth in the textile exports in 2019-20 from this political turn. Chairman of SRTEPC, Narain Agarwal told TOI “There is an ample opportunity for the Indian textile companies to grow and increase the share of textile exports to the US in the next year.” The US has hiked tariff on $200 billion imports from China to 25 per cent with effect from May 10, 2019, including on textile related chapters 50-60. An analysis reveals that this hike will put India at an advantageous position. “India is the largest exporter of MMF textiles to US. In comparison to China, the imports of textile products from India stood at $1.71 billion in 2018. In 2018, it is expected to cross $2.2 billion,” Agarwal added. Amid the enthusiasm, exporters are worried that in order to offset loss, the Chinese textile manufacturers may dump cheap goods in India creating problems for the indigenous manufacturers. They believe that the hike is likely to create a reverse impact on local Indian businesses. Textile exporter and chairman of Pratibha Textile group, Pramod Agarwal told TOI that he apprehends a reverse impact from the tariff hike on China. “It’s going to affect both ways — rise in export of fabrics and garments from India to US, but also India becoming a Chinese manufacturers’ dumping yard.” The new government in the Centre must frame a policy to safeguard the Indian textile manufacturers against the Chinese onslaught, asserted the SRTEPC chairman, adding that it should also introduce major hike in the anti-dumping duties to protect indigenous manufacturers.
Source: Times of India
With the Lok Sabha election process coming to an end, the finance ministry has prepared 100-day agenda for the new government with an aim to push the economy which has slipped to 6.6 per cent in the third quarter of 2018-19. Among other things, the agenda is likely to focus on increasing private investment, employment generation and giving relief to the farm sector, sources said. Besides, the agenda also include improving direct and indirect tax collection. Simplification of tax procedure especially with regards to the goods and services tax is also on the cards. As announced in the interim Budget, the decision with regard to changes in tax slab or tax rate as far as income tax is concerned could be taken in the final Budget for 2019-20 probably in July. The Prime Minister's Office had asked all ministries and departments to prepare 100-day agenda for the new government which is likely to take office in the next few days. Reinvigorating industrial growth, increasing credit growth, consolidation in the banking sector and funding the unfunded would also be part of the 100-day agenda, the sources said. There would be emphasis on raising corporate governance in the banking sector including a more diversified board structure. The finance ministry in the process of further improving its EASE (Enhanced Access and Service Excellence) focusing on six themes of customer responsiveness, responsible banking, credit off take, PSBs as Udyami Mitra, deepening financial inclusion and digitalisation and developing personnel for brand of public sector banks. It is to be noted industrial output growth slowed to a 20-month low of 0.1 per cent in February, mainly due to contraction in the manufacturing sector. Factory output, as measured in terms of the Index of Industrial Production (IIP), had grown by 6.9 per cent in February 2018, according to data released by the Central Statistics Office (CSO). During April-February 2018-19, industrial output grew at 4 per cent as against 4.3 per cent in the corresponding period of the previous fiscal. At the same time, passenger vehicle sales in India dropped 17.07 per cent in April, the steepest fall since October 2011, as weak customer sentiment led by liquidity crunch, uncertainty revolving elections and high product prices hit sales. The domestic sales declined for sixth straight month in April to 2,47,541 units against 2,98,504 units in the year-ago month. It is the worst dip in passenger vehicle sales since October 2011 when sales had dropped by 19.87 per cent. All major segments, including two-wheelers and commercial vehicles, witnessed a decline in sales in April, according to data released by the Society of Indian Automobile Manufacturers (SIAM). Various experts have pointed out the new government should take on the challenge of introducing reforms in areas including land and labour in order to push economic growth. Macroeconomic stability will guide India's high growth trajectory. According to the interim Budget 2019-20, the government has pegged fiscal deficit target of 3.4 per cent for the current fiscaly. Deviating from the path laid down in the Fiscal Responsibility and Budget Management (FRBM) Act, the government has pegged the fiscal deficit for the next financial year at 3.4 per cent of GDP, as against the original target of 3.1 per cent.
Source: Economic Times
Niti Aayog is working on the economic agenda for the new government where the focus will be on achieving long term sustainable growth and boosting private investments in the country, the think tank's Vice Chairman Rajiv Kumar said on Wednesday. Lok Sabha election results would be announced on Thursday and the new government would be in place in the coming weeks. In an interview to PTI, Kumar said Niti Aayog would submit an action plan to the new government. "Niti Aayog is preparing something (economic agenda) and that will be submitted to the new government. "The basic thing is that we need to take steps to increase private investments in the economy. That's a real issue and to increase the private investment, it requires greater access to credit for small and medium enterprises (SMEs)," Kumar said. According to him, the economic agenda might also pitch for extending labour subsidies to textile and leather sectors to reduce cost of production. Cost of capital in India is quite high, which needs to be brought down, and there is also a need to create a land bank owned by public sector undertakings so that private investment can be attracted, Kumar said. On whether he sees a case for fiscal stimulus as the economy is slowing down, Kumar said there is always a case for fiscal stimulus provided the fiscal balance is maintained. "So there is no case at all of busting all fiscal norms. I think, we can create fiscal space through non-tax revenues being increased. "And also including tax compliance, there is a need for expanding public capital expenditure while maintaining fiscal balance," the eminent economist opined. Emphasising that India can achieve double-digit growth by 2022, Kumar said a good foundation for such a trajectory has already been laid in the last five years. During this period, there has been unprecedented macro stability as well as an average annual growth of 7 per cent growth. "And also including tax compliance, there is a need for expanding public capital expenditure while maintaining fiscal balance," the eminent economist opined. Emphasising that India can achieve double-digit growth by 2022, Kumar said a good foundation for such a trajectory has already been laid in the last five years. During this period, there has been unprecedented macro stability as well as an average annual growth of 7 per cent growth. "So there is also a social basis now for ramping up our growth," he said. Noting that the government has done enough in last five years to be now ready to take that few steps to ramp up growth to 9 per cent, Kumar said, "I think, that by fiscal 2022, we should be able to get there (double digit growth)." For the current fiscal ending March 2020, Kumar expects Indian economy to record a growth of around 7 per cent. In February, the Central Statistics Office (CSO) revised downwards the growth estimate for 2018-19 fiscal from 7.2 per cent to 7 per cent, the lowest in five years. According to a report released by the United Nations on Tuesday, India is projected to grow at 7 per cent in 2019 and 7.1 per cent in 2020. Most exit polls have predicted a sweeping victory for the BJP-led National Democratic Alliance (NDA)
Source: Economic Times
More than seven out of 10 US companies in China (74.9 per cent) are being adversely affected by the ongoing trade war between China and the US, according to a survey released on Wednesday by the American Chamber of Commerce in China. "The negative impact of tariffs is clear and hurting the competitiveness of American companies in China," according to the report which includes the findings of the survey of member companies made by AmCham China and AmCham Shanghai. The survey was carried out from May 16 to 20. About 250 companies participated in it of which 61.6 per cent were manufacturing-related, 25.5 per cent were service-related, 3.8 per cent retail and distribution-related, while 9.6 per cent belonged to other industries. The survey was carried out after US President Donald Trump issued a tariff increase from 10 per cent to 25 per cent on $200 billion worth of Chinese goods on May 10, escalating the trade war between the two countries. The survey was carried out after the rise in tensions unleashed by Trump, which in turn triggered a reaction from the Chinese authorities with new tariffs. The impact of the tariffs has been felt through lower demand for products (52.1 per cent), higher manufacturing costs (42.4 per cent) and higher product sales prices (38.2 per cent), Efe news reported. To address the impact of tariffs, the survey reported that companies are taking measures such as delaying or cancelling investment decisions (33.2 per cent) or adopting a "China, for China" strategy (35.3 per cent) which seeks to establish manufacturing and sourcing within China to mainly serve the Chinese market. "Such strategy constitutes a rational choice for many companies to insulate themselves from the effects of tariffs while maintaining their ability to pursue domestic market opportunities," the report added. Although over half of the respondents (53.1 per cent) have seen no increase in non-tariff retaliatory measures by the Chinese government, about one in five has experienced an increase in inspections (20.1 per cent) and slower customs clearance (19.7 per cent). They have also felt slower approval for licenses or other applications (14.2 per cent), as well as complications arising from increased bureaucratic oversight or regulatory control (14.2 per cent). The survey revealed that 40.7 per cent of respondents are considering moving or have moved their manufacturing facilities outside China, with Southeast Asia (24.7 per cent) and Mexico (10.5 per cent) being the primary destinations. Less than 6 per cent of the member companies said that they have considered or are considering relocating manufacturing to the US.
Source: Business Standard
It’s quite clear it is the US side that more than once changed its mind overnight and broke the tentative deal already reached, said Chinese Ambassador to Washington Cui Tiankai. Beijing is ready to resume trade talks with Washington, China's Ambassador to the United States Cui Tiankai said, as a top US business lobby in China said nearly half its members are seeing non-tariff barrier retaliation in China due to the trade war. No further trade talks between top Chinese and US negotiators have been scheduled since the last round ended in a stalemate on May 10, the same day US President Donald Trump sharply increased tariffs on $200 billion worth of Chinese goods and took steps to levy duties on all remaining Chinese imports. Acrimony has intensified since Washington last week blacklisted Chinese telecom equipment company Huawei Technologies Co Ltd, a potentially devastating blow for the company that has rattled technology supply chains and investors. Another big Chinese tech firm, video surveillance equipment maker Hikvision Digital Technology Co Ltd, could also face limits on its ability to buy US technology, the New York Times reported, citing people familiar with the matter, sending the firm's Shenzhen-listed shares 10 per cent lower at the opening on Wednesday. Negotiations between the United States and China have soured dramatically since early May, when Chinese officials sought major changes to the text of a proposed deal that the Trump administration says had been largely agreed.
US ‘broke’ the deal
Speaking to Fox News Channel, Chinese Ambassador to Washington Cui Tiankai said Beijing was still open for talks. “China remains ready to continue our talks with our American colleagues to reach a conclusion. Our door is still open,” Cui said on Tuesday. He blamed the US side for frequently “changing its mind” on tentative deals to end US-China trade disputes. Cui turned the tables and said it was US negotiators that had abruptly backed away from some previous deals that had been tentatively agreed over the past year. “It’s quite clear it is the US side that more than once changed its mind overnight and broke the tentative deal already reached.” Cui said. “So we are still committed to whatever we agree to do, but it is the US side that changed its mind so often.” In June 2018, US Commerce Secretary Wilbur Ross held negotiations with Chinese Vice Premier Liu He on an offer by China to increase its purchases of US goods by around $70 billion, US officials said at the time. But US President Donald Trump did not accept the offer, choosing instead to begin imposing tariffs on Chinese goods. This week, Chinese President Xi Jinping urged people to prepare for “a new Long March”, evoking the patriotic spirit of the 1934-36 route march of Communist Party members fleeing a brutal civil war to a remote rural base, where they re-grouped and eventually took power in 1949. Xi did not draw a direct connection to the trade war, but financial market analysts interpreted his remarks as a sign that Beijing was girding for a protracted dispute with Washington.
Chinese retaliation
US firms are beginning to face retaliation in China for the trade war. The American Chamber of Commerce of China and its sister body in Shanghai, citing a recent survey of members on the impact of tariffs, said on Wednesday that members said they face increased obstacles such as government inspections, slower customs clearance and slower approval for licensing and other applications. It also said that 40.7 per cent of respondents were considering or had relocated manufacturing facilities outside China. Of the almost 250 respondents to the survey, which was conducted after China and the United States both raised tariffs on each other's imports earlier this month, almost three-quarters said the impact of tariffs was hurting their competitiveness. To cope, around one third of companies said they were increasingly focusing their China operations on producing for Chinese customers and not for export, while another one-third said they were delaying and cancelling investment decisions. Long considered a solid cornerstone in a relationship fraught with geopolitical frictions, the US business community in China in recent years has advocated a harder line on what it sees as discriminatory Chinese trade policies. The United States is seeking sweeping changes to China's trade and economic policies, including an end to forced technology transfers and theft of US trade secrets. Washington also wants curbs on subsidies for Chinese state-owned enterprises and increased access to US markets. Cui told Fox News that US restrictions on Huawei “are without any foundation and evidence” and could undermine the normal functioning of markets. “Everybody knows Huawei is a privately owned company. It is just a normal Chinese private company,” Cui said. “So all the action taken against Huawei are politically motivated.”
Source: The Hindu Business Line
India can save $218 billion – around Rs 14 lakh crore or 11 per cent of its GDP – annually by 2030 by promoting circular economy. India is leading the developing nations in circular economy investments that are aimed at pursuing a sustainable and climate-resilient growth and has an opportunity to save as much as $218 billion – around Rs 14 lakh crore or 11 per cent of its GDP – annually by 2030, according to a new report released today by Chatham House, the London-based Royal Institute of International Affairs. According to the study An Inclusive Circular Economy: Priorities for Developing Countries, India is one of a number of developing countries set to unlock climate-resilient growth and the national policymakers are investing in the circular economy – an economic model based on recycling, reusing and repairing raw materials and products. “It is estimated that this could open up opportunities to the value of $218 billion per year by 2030 in India” the report said, quoting a study by the Ellen MacArthur Foundation. It added the concept of circular economy is fast gaining traction amongst business leaders and policymakers in Europe, China and other developed economies but its potential for developing countries has so far been overlooked. The report is the first to look at the opportunities circular economy offers in the developing world, and the current barriers to progress. It highlights how India’s thriving reuse and repair sectors provide a strong base for policymakers and businesses to replicate sustainable, circular production models across the economy. “The circular economy can be a win-win for sustainable growth in emerging countries – meeting consumer demand, creating jobs and protecting the environment. India is leading the pack, but the present policy vacuum means opportunities for scaling up this approach are being missed,” said Laura Wellesley, research fellow at Chatham House. “International policy makers and investors must urgently find ways to foster greater coordination before a critical window of opportunity passes,” she said. The reports says India’s efforts emphasise the broader potential of the circular economy to create more jobs and resilient industries, limit environmental impacts and “leapfrog” to more sustainable development patterns. This has enabled the government to progress multiple policy goals at once. “The country boasts one of the highest plastic recycling rates in the world – it recycles or reuses over 90 per cent of all the PET that is manufactured in the country. India has also made strides in improving electronics recycling. More than 700 electronics producers have signed up for e-waste ‘extended producer responsibility’ authorisation. Car-sharing firms have helped generate thousands of new jobs and reduce congestion in major cities,” the report said. The report calls for national policy makers to weave circular economy approaches into existing policy programmes. It also recommends that international policy and financial institutions like the OECD, World Bank, UNDP and EU should prioritise sustainability when making financial investments and developing regional trade and processing hubs.
Source: ET Energy World
Skills, personality traits and practices of management may be the most important determinant of a firm’s productivity, suggests a new study Skills, personality traits and practices of management may be the most important determinant of a firm’s productivity, suggests a new National Bureau of Economic Research study by Achyuta Adhvaryu of the Ross School of Business, and others. The authors show, based on a study of production line supervisors in Indian ready-made garment factories, that managerial quality plays a key role in production efficiency and the growth of a firm. They argue that it is the differences in the managerial practices of firms that explain a substantial portion of the large productivity gap between rich and poor countries. The authors single out middle managers, such as line supervisors, as especially important for more efficient production. They argue that in many low-income countries, the quality of these middle managers is particularly low. The researchers match granular production data from several garment factories in India to results from a survey conducted on line supervisors employed in those factories to ascertain which managerial skills contribute the most to productivity. They find that the tenure of the supervisor, their autonomy, who they controlled and the attention to their work had substantial effects on productivity. However, as many of these skills are intangible and hard to gauge in a managerial candidate, the job market fails to reward these skills through higher wages and salaries. The authors find evidence that more easily observable characteristics, such as industry tenure, are better rewarded, while less observable characteristics, such as attention to work, are rewarded less commensurately, despite their importance in productivity. As a result, the authors argue that good managers typically tend to be underpaid.
Source: Live Mint
The Rupee appreciated by 26 paise to 69.40 against the U.S. dollar in early trade on Thursday as counting of votes for the seven-phase Lok Sabha elections began across the country. The counting exercise is on in over 4,000 counting centres. Most of the exit polls have predicted that the BJP-led National Democratic Alliance (NDA) is on course to retain power for a second term. The Rupee opened strong at 69.45 at the interbank forex market, then gained further ground and touched 69.40, displaying gains of 26 paise over its last close. The Rupee had settled at 69.66 against the U.S. dollar on Wednesday. Forex traders said, besides the Loka Sabha election outcome, easing crude prices and higher opening in domestic equities also supported the rupee. Foreign fund outflows however dampened the sentiment of forex traders. Foreign institutional investors (FIIs) were net sellers in the capital markets, pulling out ₹965.02 crore on Wednesday, according to provisional exchange data. Brent crude futures, the global oil benchmark, eased 0.58% to USD 70.58 per barrel. Domestic bourses opened on a bullish note on Thursday with both benchmark indices Sensex and Nifty hitting all-time highs. The 30-share Sensex was trading at 39,722.15 points, up 611.94 points while Nifty was trading higher by 226.80 points at 11,964.70.
Source: Financial Express
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1161.22 |
USD/Ton |
-0.12% |
5/22/2019 |
|
VSF |
1711.42 |
USD/Ton |
0% |
5/22/2019 |
|
ASF |
2499.08 |
USD/Ton |
0% |
5/22/2019 |
|
Polyester POY |
1107.64 |
USD/Ton |
-2.55% |
5/22/2019 |
|
Nylon FDY |
2548.30 |
USD/Ton |
-1.12% |
5/22/2019 |
|
40D Spandex |
4502.97 |
USD/Ton |
0% |
5/22/2019 |
|
Nylon POY |
5473.06 |
USD/Ton |
0% |
5/22/2019 |
|
Acrylic Top 3D |
1375.51 |
USD/Ton |
-1.04% |
5/22/2019 |
|
Polyester FDY |
2446.95 |
USD/Ton |
0% |
5/22/2019 |
|
Nylon DTY |
2678.62 |
USD/Ton |
0% |
5/22/2019 |
|
Viscose Long Filament |
1266.91 |
USD/Ton |
-1.13% |
5/22/2019 |
|
Polyester DTY |
2881.32 |
USD/Ton |
0% |
5/22/2019 |
|
30S Spun Rayon Yarn |
2446.95 |
USD/Ton |
0% |
5/22/2019 |
|
32S Polyester Yarn |
1846.07 |
USD/Ton |
-0.39% |
5/22/2019 |
|
45S T/C Yarn |
2779.97 |
USD/Ton |
0% |
5/22/2019 |
|
40S Rayon Yarn |
2417.99 |
USD/Ton |
-0.60% |
5/22/2019 |
|
T/R Yarn 65/35 32S |
2736.53 |
USD/Ton |
0% |
5/22/2019 |
|
45S Polyester Yarn |
2287.68 |
USD/Ton |
-0.63% |
5/22/2019 |
|
T/C Yarn 65/35 32S |
2041.54 |
USD/Ton |
0% |
5/22/2019 |
|
10S Denim Fabric |
1.33 |
USD/Meter |
-0.11% |
5/22/2019 |
|
32S Twill Fabric |
0.79 |
USD/Meter |
-0.18% |
5/22/2019 |
|
40S Combed Poplin |
1.05 |
USD/Meter |
-0.14% |
5/22/2019 |
|
30S Rayon Fabric |
0.62 |
USD/Meter |
0% |
5/22/2019 |
|
45S T/C Fabric |
0.69 |
USD/Meter |
0% |
5/22/2019 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14479 USD dtd. 22/05/2019). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Ukraine plans to attract up to US$ 300 million of investments in the development of the domestic technical textiles and nonwovens industry in the next several years, according to the Ukrainian Cabinet of Ministers. This is seen as a response to the recent plans of the Russian government to make heavy investments in the development of technical textiles, mainly to be supplied for the ever-growing needs of the Russian defence sector. According to Vladimir Groysman, Ukraine’s Prime-Minister, the majority of funds for the implementation of these plans will be provided by private domestic and foreign investors, while the remaining will be allocated from the state sources.
Measures and strategy
The news has been confirmed by the Ukrainian Presidential Administration. The Ukrainian authorities are counting on support from the US businesses, which in recent years have significantly increased the volume of investments in different sectors of the Ukrainian economy, including technical textiles. Several days ago, the Ukrainian government delegation concluded its visit to the US, where it discussed the funding opportunities. In addition, the national government and a former Ukraine’s President Petr Poroshenko have recently started developing a special agreement with the US in the area of technical textiles. It is expected that Ukraine’s newly elected President Vladimir Zelensky will continue this work. Such an agreement would help the US business to better protect its investments and interests within Ukraine. The Ukrainian government also completed a roadmap aimed at making the Ukrainian technical textiles and nonwovens industry more attractive to investors. The implementation of this strategy will be evaluated by the US government and the country’s business sector already by the end of the first quarter of this year.
New production facilities
According to the Ukrainian Ministry of Industry and Infrastructure, a state agency responsible for attracting investments in Ukrainian technical textiles industry, the majority of allocated funds will be used for the establishment of production facilities, specialising in the production of technical textiles and end-products, to be located in different parts of the country. Most of these facilities are initially expected to be established in central part of the country, as well as in Western Ukraine, a region not traditionally well-known for textiles production. Historically, most of the Ukrainian technical textiles and chemical production has been concentrated in the eastern part of the country, and in particular, the Donbass region. However, due to the current control of the area by pro-Russian rebels, the majority of the existing production facilities were lost. According to the government, from 2019-2021, up to US$ 300 million will be invested in the establishment of at least five-six large and medium size enterprises. To support the investments strategy, the Ukrainian government also announced its intention to provide investors with significant stakes in the newly established enterprises.
Source: Innovation in Textiles
Industrial development is crucial for development and exports promotion. This article refers to some literature (Ahmed et al. 2015, Sánchez-Triana et al. 2014) in this article to review issues of industrial development. The government plans pin high hopes on the industrial development. However, the industry in Pakistan has not proven to be the driver of economic growth and higher productivity-oriented employment. The uneven economic growth patterns have had adverse impact on favourable outcomes for the growth of industry. Industry adds the highest value addition in the production processes, yet its share of total employment in Pakistan is lowest at around 20 percent. Less than optimal industrial growth patterns are linked to the macroeconomic framework that is tilted towards promoting consumption rather than investment in manufacturing. The appreciated exchange rate equilibrium further fuels growth based on consumption. It is illustrated by the fact that in the recent past, the financial institutions in the country focused on providing personal loans rather than the manufacturing sector loans. The industrial development is critical to boost exports and to help plug the current account deficit. Manufacturing contributes 80 percent to total exports of Pakistan. The top five manufacturing sectors account for more than 70 percent of exports overall volume. One of the critical top five sectors, textiles and garments’ share has been declining in the recent past, whereas the share of small and medium enterprise (SME) manufacturing and cement exports, amongst others, has gone up. Despite the decline in the textiles and garments share, it still accounts for more than half of exports of Pakistan. Therefore, exports growth policy cannot plan for increasing the total exports of Pakistan in the medium term, unless it provides for a higher growth of the textiles and garments exports. One of the challenges is low value addition in the textiles and garments sector. Pakistan is the second largest cotton yarn exporter in the world for the low and medium count yarn, yet there is not much value addition during the spinning phase. Initially, spinning and weaving of cotton were central in driving exports, investment and employment in the manufacturing sector. However, this initial success became an impediment later on since it restricted import of manmade fibers (MMF) or a cotton-MMF mixture. Both of them are required to increase exports in the textiles and garments sector. Due to this restriction, Pakistani exporters in the textiles and garments only part of a small portion of the world exports in this sector. Despite the decline in the textiles and garments share, it still accounts for more than half of exports of Pakistan. Therefore, exports growth policy cannot plan for increasing the total exports of Pakistan in the medium term, unless it provides for a higher growth of the textiles and garments exports The prevalent government policies also favour low value addition in the textiles and garments sector. There is a need for an alternative export policy focused on the higher value addition that would both impose duty on export of low count yarn as well as remove import barriers for MMF fibers, fabrics and yarns. As a result of this perverse incentive structure, Pakistan’s share of higher value-added textiles and garments has decreased and lower value added cotton yarn and fabric has increased. Pakistan’s exports in the garments sector are overly dependent on medium count cotton yarn and fabric and therefore produce only limited range of products. The textiles sector and government bureaucrats’ nexus is strong in perpetuating the vested interests of the cotton-oriented production lobby and this nexus prevents formulation and implementation of policies that would diversify to MMF fibers and fabric. Other than the need to add value to the textiles and garments sector, other medium-term drivers of exports are SME production, agricultural products such as the cotton and rice, and other higher value products of the agriculture sector. Other factors that provide the enabling environment for increasing exports such as infrastructure development and improving the regulatory system in the country also needs to be focused on. In terms of the regulatory framework (covered in literature other than cited above), there is also the need to both focus on the need for higher productivity of labour as well as to ensure their occupational health and safety. In terms of higher labour productivity, skills development and a focus on human development is crucial. For occupational health and safety, better regulation of safety standards in agriculture, construction, garments, ship breaking and coalmines, amongst others, are needed. Shipping can be hazardous and better freight facilities need to be provided. Similarly, there is need to promote establishment of industrial clusters as backward and forward linkages of the industrial clusters to the production processes play a key part in boosting productivity. A conducive environment for innovation also needs to be promoted to improve production, quality and designs. Manufacturing in the industrial clusters is intrinsically linked to offer product innovation. A survey of 400 manufacturing units revealed that a unit’s presence in the industrial cluster increases the probability of it offering new production processes and products. SME sector has major potential as it employs 80 percent of the non-agricultural labour force, contributes 40 percent to the country’s GDP and accounts for 25 percent of exports in the manufacturing sector. However, 87 percent of SMEs have five or less than five employees per unit. Small size of the units poses a challenge in terms of their access to markets for inputs of raw material and output. SMEs also often lack infrastructure and skilled workers. Given its immense potential, there is need to enhance productivity in the SME sector. The literature recommends to restructure the SMEDA for this purpose. Promotion of industrialization in Pakistan also needs to be viewed through the prism of social and environmental sustainability. Cleaner and socially compliant production processes have a higher chance of creating a niche in the market. Social and environmental standards must be made part of the production processes and the capacity of relevant government departments and ministries must be strengthened for this purpose. The writer is an Islamabad-based social scientist.
Source: The Daily Times
Imposing further tariffs in the escalating trade disputes between the United States and China would lead to widespread closures of softline stores and cause substantial disruption across the industry, according to a report by Swiss investment bank UBS. The UBS warned that over 12,000 U.S. brick and mortar stores of apparels and textiles, which have about 40 billion U.S. dollars of annual revenue but only less than 3 percent of earnings before interest and tax (EBIT) profit margin, would be at risk because of the possible new tariffs. After increasing tariffs on 250 billion dollars' worth of Chinese imports to 25 percent, the White House then threatened to levy extra tariffs on more Chinese goods including clothing and footwear. U.S. unilateral acts have triggered countermeasures from China, which said it "will fight to the end" if someone brings the war to its doorstep. "We think potential 25 percent tariffs on Chinese imports could accelerate pressure on these companies' profit margins to the point where major store closures become a real possibility," said UBS analyst Jay Sole. The U.S. retail industry lost 3,125 stores, or more than 5 percent in the first quarter of 2019, marking the highest rate of year-on-year decline in at least a decade, Sole said. According to the report, a big wave of store closures would be highly negative and create intense inventory dislocations and discounting in addition to impacts on jobs and the economy. UBS tracks 524 public and private softlines retailers operating 116,364 stores as of the end of March in comparison with a peak of 132,860 in 2012.
Source: Xinhua
Some 436 textile and readymade garment (RMG) factories across Bangladesh are 'vulnerable' to labor unrest over payment of wages and festival allowance, officials in the country said. Sources said non-payment of dues, varying amounts of festival allowance, workload ahead of Eid and sudden closure of factories are among the reasons that might fuel unrest. Out of the 436 factories, some 328 are the members of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) while 89 are registered with Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) and 19 are affiliated with Bangladesh Textile Mills Association (BTMA), according to Industrial Police (IP) who shared the details in a recent meeting held at the home ministry. IP has also categorised the factories as A, B and C, ranging the possible risks to labour unrest ahead of Eid-ul-Fitr. It put some 120, 29 and 03 factories of BGMEA, BKMEA and BTMA members into A category where the majority of units are subcontracting their work and most vulnerable to labor unrest, according to its officials. The factories which fall into B category included 87 from BGMEA members while 25 from BKMEA and 10 from BTMA, they added. Some 121 BGMEA, 35 BKMEA and 06 BTMA member factories have fallen into C category. The units are located in Ashulia, Gazipur, Chattogram, Narayanganj, Mymensingh and Khulna areas. Intelligence agencies, however, identified some factors for possible labor unrest that include absence of fixed festival allowance in garment factories, and non-payment of wages and allowance (including festival) seven to eight days before Eid vacation starts. Besides, not getting Eid holidays timely and as demanded, sudden lay-off or closure of factories in Ramadan or ahead of Eid, workers' termination, heavy workload at night during Ramadan, and no provision of fixed working hours in the fasting month are also among the factors. IP also identified a good number of factories, located in the export processing zones (EPZs), as vulnerable to labor unrest, the officials said. There are some other factories that are not the members either of BGMEA or BKMEA. There is also jute, plastic, chemical and re-rolling mills and the number of non-RMG and non-textile factories, according to IP, is 238. They all run the risk of witnessing labour unrest anytime, the officials added. When contacted, Abdus Salam, additional inspector general of the IP, said this time they have categorised the factories according to possible level of their risk to unrest based on a wide range of issues. "We've sent the lists to BGMEA, BKMEA and BTMA so that they can take necessary steps to avert any untoward incidents in industrial units ahead of Eid," he told the FE. The IP is in contact with the units identified as vulnerable to labour unrest, he said, adding that they have kept them under close surveillance too. The authorities of the units have assured them of paying wages and festival allowance along with other dues to their workers before Eid vacation starts, he added. Rights organizations, on the other hand, alleged that uncertainty and confusion have been created among the workers as the labor ministry is yet to fix any deadline for making payment of wages and festival allowance. A meeting of the crisis management core committee under the labor ministry on May 13 failed to fix any deadline for paying monthly wages and festival allowance to the country's garment workers. Besides, leaders from the apparel sector at the meeting demanded payment of wages for 15 days of May before Eid. The committee has been fixing deadlines for paying wages and festival allowance since 2013. Labor leaders warned that factory owners would be held responsible for any unstable situation over non-payment of wages and allowance. National Garment Workers-Employees League (NGWEL) President Sirajul Islam Rony said the number of untoward incidents over non-payment of wages has declined in recent years. But in absence of any clear instruction from the government related to wages for the month of May and festival allowance, there are still a good number of factories where the workers are worried over getting their monthly wages and festival allowance in time, he added. "We demand that both monthly wages and festival allowance be paid before Eid so that workers can buy tickets to go home and do some shopping," he stated. He also urged the government to fix an amount equal to the basic pay as festival allowance.
Source: Global Times
Basic research advance leads to production of more than 250,000 chips embedded within fibers in less than a year. In the summer of 2018, a team led by MIT researchers reported in the journal Nature that they had successfully embedded electronic devices into fibers that could be used in fabrics or composite products like clothing, airplane wings, or even wound dressings. The advance could allow fabrics or composites to sense their environment, communicate, store and convert energy, and more. Research breakthroughs typically take years to make it into final products — if they reach that point at all. This particular research, however, is following a dramatically different path. By the time the unique fiber advance was unveiled last summer, members of Advanced Functional Fabrics of America (AFFOA), a not-for-profit near MIT, had already developed ways to increase the throughput and overall reliability of the process. And, staff at Inman Mills in South Carolina had established a method to weave the advanced fibers using a conventional, industrial manufacturing-scale loom to create fabrics that can use light to both broadcast and receive information. Today, less than a year after the technology was first introduced to the world, around a quarter of a million semiconducting devices have been embedded in fibers using the patented technology, and companies like New Balance, VF, Bose, and 3M are seeking ways to use the technology in their products. “AFFOA is helping cutting-edge basic research to reach market-ready scale at unprecedented velocity,” says Yoel Fink, CEO of AFFOA and a professor of materials science and electrical engineering at MIT. “Chip-containing fibers, which were just recently a university research project, are now being produced at an annual rate of half a million meters. This scale allows AFFOA to engage dozens of companies and accelerate product and process development across multiple markets simultaneously.” Fink says that AFFOA’s work is unleashing a “Moore’s Law for fibers,” wherein the basic functions of fibers will grow exponentially in the coming years, allowing companies to develop value-added fabric and composite products and services. “Chip-containing fibers present a real prospect for fabrics to be the next frontier in computation and AI,” he says.
Sowing the seeds of fabric innovation
In 2015, MIT President L. Rafael Reif called for the formation of public-private partnerships he named “innovation orchards,” to reduce the time it takes new ideas to make an impact on society. Specifically, he wanted to make tangible innovations as easy to deploy and test as digital ones. Later that year, AFFOA was formed by MIT and other key partners to accept Reif’s challenge and take advantage of recent breakthroughs in fiber materials and textile-manufacturing processes. “The gap between where research ends and product begins is the so-called valley of death,” Fink says. “President Reif introduced the concept of orchards of innovation as a way for us, as a university, to organize these collaboration centers for technology to help bridge basic research to the market entry point.” In 2016, AFFOA was selected by the federal government to serve as the new Revolutionary Fibers and Textiles Manufacturing Innovation Institute, receiving more than $75 million in government funding and nearly $250 million in private investments to support U.S. based, high-volume production of these new technologies. Since then, speed has been paramount at AFFOA. As MIT and other research entities have advanced the field, AFFOA has helped facilitate pilot production of these sophisticated textiles and fabrics so companies can engage consumers with small batches of advanced fabric products, or prototypes, in a manner similar to how software companies roll out minimally viable products to quickly gather feedback from customers and consumers.
Fabrics at the speed of software
A key element in the success of software has been the ability to rapidly prototype and test products with the target customer. Tangible products, on the other hand, experience a much more difficult path to consumers, and fabrics are no exception. The reason for this is the absence of efficient prototyping mechansims at scale. To allow fabric products to move faster to market, AFFOA has created a national prototyping network with dozens of domestic manufacturers and universities, allowing it to rapidly test advanced fabric products directly with customers. The prototyping network is currently actively pursuing more than 30 projects, called MicroAwards, with industry and academia designed to incorporate the latest advances in fibers and textiles into mass manufacturing processes. Industry and academic participants are required to operate within short timeframes, typically 90 days or less and divided into two week sprints. For instance, Teufelberger, a manufacturer of ropes located in Fall River, Massachusetts, is working with AFFOA on integrating advanced fibers into their braided ropes. The ropes can help climbers or divers communicate or store information on how the rope was used. At the end of May, AFFOA will roll out at the Augmented Reality Expo a fabric augmented-reality experience that will allow conference attendees to connect with each other using AFFOA’s fabric LOOks system.
The fabric of entrepreneurship and education
AFFOA has also partnered with schools such as the Fashion Institute of Technology in New York and the Greater Lawrence Technical School, where students are learning how to design and make an advanced chip-containing fibers, as well as other skills related to manufacturing advanced functional fabrics and the products that will emerge from them. Additionally, over 30 entrepreneurs have been working on establishing startups around advanced fabrics as part of the advanced fabric entrepreneurship program managed by AFFOA in collaboration with the Venture Mentoring Service at MIT. AFFOA is currently evaluating the prospects of raising an investment fund dedicated to funding startups in the advanced fabric sector. For Fink, AFFOA’s work is about turning fabric, an ancient yet largely unchanged material, into a new platform for innovation. “Fabrics occupy a very significant real estate, the surface of our bodies, and yet we’re not doing much with that real estate — it’s underdeveloped,” Fink says. “AFFOA is setting the stage for a fabric revolution by allowing these ancient forms to become high tech and deliver value-add services in the years ahead.”
Source: MIT News
Trump's government is trying to renegotiate trade agreements with major economies to lower the U.S. trade deficit and address what it considers to be unfair trade practices. Donald Trump, Donald Trump trade policy, US-Japan trade, world economy, US china trade war, japan exports, US trade deficitWashington?s stance is doubly harmful to Japan because it has slammed the breaks on exports to neighbouring China and exposes the trade-reliant economy to curbs on its shipments of cars to the United States. Japanese exports contracted for the fifth month in April due to a slump in shipments of chip-making equipment to China, underlining the growing threat to the world’s third-biggest economy from a bruising Sino-U.S. trade war. Data also showed Japan’s trade surplus with the United States rose for a second month as auto exports accelerated, which could draw U.S. President Donald Trump’s ire before U.S.-Japan trade negotiations begin this week followed by a leaders’ summit a few days later. Trump’s government is trying to renegotiate trade agreements with major economies to lower the U.S. trade deficit and address what it considers to be unfair trade practices. That approach has set-off an intensifying tariff dispute between the United States and China – two major trading partners of Japan – in a blow to global businesses, trade and overall growth. Washington’s stance is doubly harmful to Japan because it has slammed the breaks on exports to neighbouring China and exposes the trade-reliant economy to curbs on its shipments of cars to the United States.”Some Japanese companies are still optimistic about a resolution to recent trade friction, but the implications are quite serious,” said Hiroshi Miyazaki, senior economist at Mitsubishi UFJ Morgan Stanley Securities. “On one hand, we may reach a point where Japanese companies shift production from China or other places. On the other hand, Japanese policymakers need to make sure U.S.-Japan trade stays out of the spotlight.” Ministry of Finance (MOF) data showed on Wednesday Japan’s exports fell 2.4% in April from a year earlier, down for a fifth straight month. That compared with a 1.8% drop seen by analysts in a Reuters poll, and a similar 2.4% decline in March. Exports to China fell 6.3% in April from a year earlier, down for the second consecutive month.The data also showed Japan’s trade surplus with the United States rose 17.7% in April from a year earlier to 723.2 billion yen ($6.55 billion), partly led by an 8.3% increase in auto exports. U.S. Trade Representative Robert Lighthizer will visit Japan on May 24 to meet Economy Minister Toshimitsu Motegi to accelerate trade talks ahead of a leaders’ summit a few days later, according to two sources with direct knowledge of the plan.
TRUMP THREAT, AUTO EXPORT RISK
Trump angered foreign automakers by declaring that some imported vehicles and parts posed a national security threat, and Tokyo fears the U.S. government could attempt to set a quota on Japanese car imports. The spectre of a drawn-out trade war comes at a delicate time for Japan’s economy. Gross domestic product (GDP) data out Monday showed Japan’s growth unexpectedly accelerated in January-March because imports fell more than exports, suggesting domestic consumption was weakening at the same time external demand had turned down. Indeed, the GDP data showed declines in consumer and business spending, a bigger source of concern as companies worried about the future. Last month, imports rose 6.4% on-year from a 1.2% gain in March, thanks to increases in oil and related purchases. Faltering overseas demand and weak consumer spending could keep policymakers under pressure to forego a twice-delayed tax hike in October, although a rebound in manufacturers’ confidence may ease some fears of a recession in the world’s third-largest economy. Japanese manufacturers’ morale improved in May for the first time in seven months, a Reuters poll showed on Wednesday. However, two-thirds of companies surveyed expect economic growth to remain flat in the second quarter, while 82% of firms believe Japan’s economy is not fully prepared for a planned tax hike, a Reuters monthly poll showed. Investors are closely watching the government’s monthly report due later this week for a possible downgrading of its view that the economy is in a gradual recovery, which would rekindle speculation about a tax hike delay. To be sure, there are some positive signs for Japan’s economy. Core machinery orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, rose 3.8% in March, separate data on Wednesday showed. That confounded expectations for a 0.7 percent decline. Furthermore, manufacturers surveyed by the Cabinet Office forecast core orders to jump 15.7% in April-June after a 3.2% decline in the previous quarter. In Japan, a sales tax increase to 8% from 5% in April 2014 hit consumers hard and triggered a sharp economic slump. Since then Abe has delayed the planned tax hike to 10% twice as he prioritised economic growth over fiscal reforms, despite the industrial world’s heaviest public debt burden, which sits at twice the size of Japan’s $5 trillion economy.
Source: Financial Express
