The Goods and Services Tax (GST) Council, which is likely to meet for the first time after elections in the first half of this month, is likely to take up rationalisation of rates in the textile sector in line with the global markets. “Removal of anomalies in tax rates in the sector is one of several issues that needs immediate attention,” said a government source. Differential rates of textile items are causing hardships, especially on refund to exporters, he said. The government is concerned about the issue, he said. At present, there are three rates — 5, 12 and 18 per cent — for various items under the textile sector. While other countries, such as Thailand (10 per cent), China (16 per cent), and Indonesia (7 per cent) have a single rate regime. This makes them more lucrative and competitive. Besides, custom duties for textile items make the situation worse for exporters. Ideally, there should be rationalisation in customs duty and GST rates, the source said. Though any such change in customs duty requires proper discussion and need to keep World Trade Organisation (WTO) norms in mind, he added. The council will also consider reducing the rate of cement to 18 per cent from 28 per cent. However, this needs a consensus as it will hit the exchequer by Rs 13,000 crore.
Source: Business Standard
Tirupur: The Social and Labour Convergence Program (SLCP), an international quality certification programme, was launched in the city on Monday. The Apparel Export Promotion Council (Aepc) will facilitate the programme in the dollar city. Aepc vice-chairman A Sakthivel said the programme will be a boon for the industrial city. “Nowadays, there are many certifications and audits in the market. Each buyer has own certification, which is really a problem for the exporters as they have to spend a lot of money and time on them. SLCP will address alternate measures for all these issues. A lot of brands, buyers and other stakeholders have signed up for the programme across the globe. Also, the International Trade Centre (ITC) is also supporting the event and is a part of SLCP.” SLCP will eliminate multiple social audits, Sakthivel said. “After a year, we do not have to go for each buyer with various certifications. International buyers will have the information to compare facilities and decide with whom they would like to work with,” he added.
Source: Time of India
New Delhi (Sputnik) — Days after India vowed to uphold national interests amid a rift with the the US over trade privileges, India's major trade body has claimed the government is firmly planning to counter the Trump administration's decision to withdraw the Generalised System of Preferences (GSP) on Indian goods by imposing retaliatory tariffs from the coming month. President Donald Trump last Friday ordered the Treasury to disband the preferential trading regime with India which had granted the Asian country trade preferences under a 1975 agreement recognising India as a beneficiary developing country. The new status will come into effect from 5 June. "India might counter the US decision to withdraw GSP on its exports by imposing retaliatory tariffs from the coming month. The Industry estimates, this move will impose an additional burden of $290 million per year on US items exported to India," Mohit Singla, chairman of the Trade Promotion Council of India (TPCI), said. India has been extending the date to impose a retaliatory tariff on twenty-nine items imported from the US, including walnuts, lentils, boric acid and diagnostic reagents, among others that will face higher duties. Indian residents photograph India's tallest flag as it is unveiled in Faridabad on the outskirts of New Delhi on March 3, 2015
India Downplays Trump's Intent to Withdraw Trade Benefits
The trade body claimed that the US withdrawal of GSP status is only going to inject the estimated, additional burden of $190 million, which is miniscule compared to India's total exports to the US "even the US was benefiting from the GSP regime, since the intermediary inputs provided by India helped keep its industry competitive". India was the largest beneficiary of the GSP programme in 2017 with $5.7 billion in imports to the US given duty-free status. India's top exports to the US under the GSP in 2017 included motor vehicle parts, ferro alloys, precious metal jewellery, building stone, insulated cables, leather products, garment (marginal) and wires. President Trump had repeatedly pressured New Delhi to open its markets to US trade to close the deficit, which is around $27.3 billion, and protested the country's protectionist tariff policies, including recently re-elected Prime Minister Narendra Modi's 'Make in India' project.
Source: Business Line
Representatives of central and state governments, industry and exporters will meet on June 6 to discuss ways to boost exports amidst growing protectionism globally, an official said. Members of the Council for Trade Development and Promotion and the Board of Trade will be meeting to deliberate upon all issues related to the country's trade, the official said. Meanwhile, Minister of State for Commerce and Industry Som Parkash said the meeting will be headed by Commerce and Industry Minister Piyush Goyal and discuss various issues related to the industry. He was speaking with reporters at Phagwara in Punjab. The Board of Trade (BoT), a 70-member top advisory body on external trade, would also seek views of all stakeholders on the forthcoming foreign trade policy (FTP). It advises the government on policy measures related to the foreign trade policy in order to boost the country's trade. It last met in February. On the other hand, the council provides a platform to state governments and UTs for articulating their perspective on trade policy to help them develop and pursue export strategies in line with the national foreign trade policy. It was constituted in July 2015 to promote India's overseas shipments. The meeting assumes significance as states play a proactive role in promoting outbound shipments. The commerce ministry has advised all the states to formulate their export policies and appoint export commissioners. Since 2011-12, India's exports have been hovering at around USD 300 billion a year. During 2018-19, the country's exports touched USD 331 billion as against USD 303 billion in 2017-18. Promoting exports helps a country create jobs, boost manufacturing and earn more foreign exchange. After taking charge of the ministry on May 31, Goyal held meetings with the officials of the department of commerce and industry on Saturday and Sunday. Junior ministers Hardeep Singh Puri and Som Prakash also attended the meetings.
Source: Business Standard
Recently, the government changed the Interest Equalisation Scheme (IES) which is available to some exporters. The broad objective of the IES is to provide exporters with a cheap source of rupee credit both for pre-shipment and post-shipment activities. In India, nominal and real rates of interest are relatively on the higher side compared to some of the other countries. This makes cost of capital expensive and it may affect competitiveness of exporters. The government uses the IES as an export incentive, whereby eligible exporters get interest subvention on their export credit. It is expected that cheaper working capital will enable these exporters to become more competitive. The original IES, which was launched in 2015, provided incentive to all manufacturer-exporters who were MSMEs and all manufacturer-exporters under 416 specific tariff lines at 4-digit HS code. These 416 products were largely labour intensive manufactured goods and chosen with a broader goal to promote export-led job growth in manufacturing. However, the IES-2015 did not become very popular among exporters in India. While launching the scheme, the government estimated the financial implication of the scheme to be ₹2,500-2,700 crore per year. However, from a Rajya Sabha question dated July 18, 2018, it appears that only ₹4,829 crore was spent in the first three-and-a-half years of its implementation (2015-16 to July 2018). This implies only about 55 per cent utilisation of the scheme by the exporters. There can be several reasons why the IES was underutilised even when funds were available. Generally, low export growth and slowdown in global demand may have led to low demand for export credit during this period. Also, the implementation of the IES, to a large extent, coincided with the imposition of demonetisation and GST. As highlighted in a paper by the RBI, these twin shocks may have disrupted the MSME supply chain and had a negative impact on exports from MSMEs. Apart from these, lack of awareness among exporters and banks about this facility may have resulted in low utilisation. Also, high interest rate in India could have discouraged the exporters. It is possible that, even with an interest subvention of 3 per cent, the rate of interest plus the assortment of processing fees charged by banks for export credit may still have been high, discouraging Indian exporters from borrowing from the domestic banking sector.
Major changes
To make the scheme more popular, the government introduced some major changes in the IES. In November 2018, a change in policy increased interest subvention from 3 per cent to 5 per cent for exporters from the MSME sector. However, non-MSME large exporters, who export the 416 eligible products, will continue to receive interest subvention at 3 per cent. Subsequently, in January 2019, another change in policy was introduced. This amendment now allows merchant exporters of these 416 products to take advantage of the interest equalisation scheme at 3 per cent. It is notable that previously only producer-exporters were eligible for the IES. It is argued by the government that MSMEs export a significant amount of products through merchant exporters; they play an important role in finding overseas markets and getting export orders. Extending these benefits to the merchant exporters should facilitate higher exports from the MSME sector. While it is perfectly fine for a government to create an exporter-friendly interest rate structure, the recent changes in the IES have not been able to address a major shortcoming of the scheme. In its present form, the IES will be categorised as an export subsidy in the WTO. According to the WTO Subsidies and Countervailing Measures (SCM) agreement, any measure by a national government, which is either a financial contribution or revenue foregone and is contingent upon export performance, is considered an export subsidy. Export subsidies are prohibited by the WTO and if a country is found to be providing them, it must remove them at the earliest. The IES is contingent upon exports and hence would be treated as prohibited subsidy in the WTO. The WTO has a rapid (three-month) dispute settlement mechanism for complaints regarding prohibited subsidies. This problem was not there in 2015 when the IES was introduced. Till 2017, India was under a special status for poor countries in the WTO which allowed exemption from the prohibition on export subsidies. However, India graduated from that exemption in 2017. Therefore, according to the WTO rules, IES will be treated as a prohibited subsidy. In the present global trade scenario where countries are combative and protectionist, it is expected that they will challenge these measures and Indian exporters are unlikely to get away with these. Therefore, export contingent incentive measures may not be a prudent policy.
Extend the reach
A possible solution can be to make interest subvention available to the entire MSME sector. The government can make it contingent on non-trade measures like production, value addition and job creation. There are two advantages of this. First, this way the interest subvention scheme will not be an export-contingent subsidy; hence it will not be treated as a prohibited subsidy in the WTO. And, second, this will extend lower cost of capital for the firms in the MSME sector who are producing for the domestic market. Given the sluggish global demand and tensions related to potential trade-wars, facilitating the entire MSME sector may make more sense than focussing only on exporters from the MSME sector. Non-MSME labour-intensive firms may also be given some incentives for job creation. The policymakers must redesign the IES to make it more effective under the present global trade regime. A more horizontal and cross cutting interest subvention scheme may take care of the relatively high rate of interest prevailing in the Indian economy now and help in employment generation.
Source: Business Line
New Delhi : A rise in the purchasing managers' index (PMI) for manufacturing for May, along with low bond yields, low oil prices and a high rupee on Monday, gave the finance ministry enough indication to sense that high gross domestic product (GDP) growth is just round the corner. The Nikkei PMI for manufacturing rose to 52.7 in May from 51.8 in April, pointing to the strongest improvement in the health of the sector in three months. In PMI parlance, a print above 50 means expansion, while a score below that denotes contraction. The data came in a few days after official figures showed that GDP growth fell to a five-year low of 5.8 per cent in the fourth quarter of FY'19. This has also pulled down economic growth to 6.8 per cent for FY19, also a five-year low. Meanwhile, the rupee ended at Rs 69,26, up 44 paise. This prompted Finance Secretary Subhash Chandra Garg to tweet that high economic growth was not far off. Manufacturing PMI hits 3-month high of 52.8, govt sees demand picking up “A turnaround in demand and financing conditions (is) beginning very well. PMI manufacturing is at 52.7. Crude is moving towards 60 dollars (a barrel). Government bond yield has gone below 7 per cent. Spread for NBFCs/HFCs over government bond is narrowing. Rupee is firmly below 70 (against the dollar). (These are) sure signs of coming high growth,” Garg tweeted. The PMI rose as companies lifted output amid strengthening demand conditions, leading to further job creation in the sector, said a commentary associated with the monthly survey. “A revival in new order growth promoted a faster upturn in manufacturing production, as Indian firms sought to replenish inventories utilised in May to fulfil strengthening demand,” said Pollyanna De Lima, principal economist at IHS Markit and author of the report. The upbeat mood among goods producers, coupled with a solid increase in new work, underpinned job creation in the sector. "Employment has risen in each month since April 2018, with the latest expansion the most marked since February," the survey noted. Indian goods producers were confident of a rise in output in the year ahead, with sentiment improving since April. Expectations of pro-business public policies, marketing initiatives, projects in the pipeline and favourable economic conditions were among the reasons boosting optimism, the survey noted. On inflation, the survey noted that price pressures remained relatively muted, with goods producers leaving selling prices unchanged on the back of a mild rise in overall cost burdens. “When we look at the survey's over 14-year history, the sector is growing at a below-trend rate," Lima said, and added that “shortening the horizon to the last two years, May's increases in output, total order books and exports all outperformed”. The latest data also comes ahead of the Reserve Bank of India's monetary policy meet. The Monetary Policy Committee (MPC), which decides on key interest rates, will hold a meeting on June 3, 4 and 6.
Source: Business Standard
We were unable to claim MEIS benefit within three years of the shipping bill date. Is it time-barred? Is there any remedy? According to Para 3.15 of HBP, the application for obtaining Duty Credit Scrip under MEIS shall be filed within a period of 12 months from the Let Export (LEO) date, or three months from the date of uploading of EDI shipping bills onto the DGFT server by Customs, or printing/release of shipping bills for Non-EDI shipping bills, whichever is later, in respect of shipments for which the claim is being filed. Para 9.12 gives a further period of two years from the prescribed date for filing the claim and sanction with a late cut in the entitlement. There is no provision to claim MEIS after the period of two years after the prescribed last date. We exported our goods on payment of IGST and claimed refund of the same under Rule 96(10) of the CGST Rules, 2017. After receiving the refund, we realised that by mistake we had paid less IGST and taken refund. By oversight, we paid IGST on FOB value instead of the invoice value, which was higher at CIF value. The IGST paid an FOB value was declared on shipping bill and was refunded. Later, on discovering the mistake, we paid the difference between IGST paid on FOB value and the IGST payable on invoice value. Please advise how to obtain refund of the difference of IGST paid, quoting any instructions. I suggest you take your chances on the basis of CBIC Circular no. 40/2018-Customs dated October 24, 2018. That facility is officer interface-based and is similar to the procedure for processing certain SB005 refund claims referred to in Circular No. 05/2018-Customs, dated February 23, 2018. This facility is available only in cases where shipping bills have been filed till November 15, 2018. To claim the differential amount, the exporter is required to submit a duly filled and signed Revised Refund Request (RRR) annexed to that circular to the designated Assistant/Deputy Commissioner of Customs. We are manufacturers and exporters of alloy steel wire nails. We obtain advance authorisation for the import of our five inputs. We have made substantial exports. We have partially or fully imported four inputs duty-free. For one of the inputs, we are unable to get suitable suppliers from abroad and our local supplier is unwilling to supply against invalidation letter. Now, can we claim set-off of GST paid against local purchase of this locally-purchased input and at the same time opt for adjustment of inputs imported against the advance authorisation certificates in the same shipping bill, without claiming drawback against such shipping bill? You can take credit of the GST paid on the locally procured inputs. If you have imported four inputs under advance authorisation without IGST payment and exported the finished goods without IGST payment against LUT, you can claim refund of the unutilised credit in accordance with Rule 89 of the CGST Rules, 2017.
Source: Business Standard
About 0.5 % of India’s apparel exports to the United States will not continue to enjoy the benefits as the United States has removed GSP (Generalised System of Preferences) for Indian exports. According to Sanjay K. Jain, chairman of Confederation of Indian Textile Industry, the only main item to be affected is woven silk garments for women. The Confederation is following up the issue with the Central Government. “The impact of removal of US GSP on India’s apparel exports to the United States will be marginal. However, we continue to take up the issue with the Commerce Ministry,” he said. As many as 15 varieties of ready made garments were covered under the GSP. The tariff on these varies from 0.86 % to 14.60 % and India was getting duty free access. These 15 products contribute to 0.46 % of India’s apparel exports and the women silk dress constituted more than 50 % of it. The Confederation will appeal to the Ministry to take steps to maintain status quo, he said.
Source: The Hindu
India would need over $1 trillion investments every year for the next five years if annual GDP growth is to reach 10 per cent, the Confederation of Indian Industry (CII) said on Monday while presenting its wish list to the new government led by Prime Minister Narendra Modi. Ahead of the Budget and the Reserve Bank of India’s (RBI’s) monetary policy committee (MPC) meeting, it also called for reduction in rates of various taxes and repo rate. Around $5.74 trillion would be needed to boost GDP growth to levels that can pull up 270 million Indians from below the poverty line, and generate 7-8 million jobs a year, CII president Vikram Kirloskar said. Of this, total investment for infrastructure required will be an estimated $1.18 trillion while sectors including agriculture, industry and services together would demand $ 4.56 trillion, the CII said. CII president-designate Uday Kotak said equity is currently charged at multiple levels. He said, “If we want to bring back the animal spirits for entrepreneurs and businesses to be investing in building of the country, the cost of equity needs to go down. Since equity cost is too high, most favour putting their money into debt, leading to lack of risk capital in the economy, which can go into the building of new and existing businesses.” The Modi government, during its first tenure, had promised to reduce corporation tax by five percentage points to 25 per cent, but it was not done for all companies. On fiscal deficit management, the CII suggested the use of a composite index, which captures both the deficit and its quality. To boost investment, it wanted the MPC to cut the repo rate. Kotak also called for re-structuring of interest rates in the economy to enable banks to reduce the rates. “Banks are competing for financial savings. The ability of banks to drop their deposit rates are linked to the interest rates offered by the sovereign and others parts of the economy. Therefore, if we move to a more balanced and more linear basis of financial savings across the economy, that would make the price of money more attractive for users,” he said. This, he said, would effectively boost demand. “So, in addition to the lowering of interest rates, we need some sort of structural look at interest rates by different instruments and segments which are creating this distortion in the system,” Kotak said. Within debt, to boost small savings, the government has effectively launched schemes such as the national savings certificate. The rates of interest on, say, provident funds are at 8-8.5 per cent today, and they’re available across the country, Kotak said. So, savers are getting attracted to these sovereign schemes. If you take deposit rates today offered by most banks, they're in the range of 7-7.4 per cent, he said. “If we want to reduce the cost of money, we need some clarity on how we in the system can reduce the deposit cost for being able to give lending rates which are more attractive,” Kotak said.
Source: Business Standard
The rupee could be set to gain as Prime Minister Narendra Modi’s sweeping election victory boosts foreign inflows. That may present a dilemma for India’s central bank, analysts said. The rupee is emerging Asia’s top performer in the past three months, thanks to the gush of foreign cash. With inflows poised to accelerate after the election result, the Reserve Bank of India may have to rein in the currency or risk making the nation’s exports less competitive as rival currencies weaken. “The RBI would not be comfortable with a sharp appreciation in light of competitiveness considerations,” said B. Prasanna, group head- Global Markets –Sales, Trading and Research at ICICI Bank Ltd. “The Modi mandate is likely to result in rupee appreciation.” The central bank didn’t immediately respond to a request seeking a comment. India may lure $22 billion of capital inflows in the year to March, prompting the RBI to buy dollars to bolster the nation’s reserves and ease a cash deficit, according to Bank of America Merrill Lynch. That would put the central banks at odds with its peers in China, Indonesia and South Korea that are taking steps to stem losses in their currencies amid a raging trade war. The RBI bought $9.4 billion of dollars in March, the most since January 2015, according to the latest data. The authority also took in $10 billion through two swap auctions held since March to ease a cash crunch. BofAML says the central bank could kill two birds with one stone by intervening to soak up anticipated dollar inflows. “The RBI will prevent a significant rupee strength because at the end of the day they want to buffer up reserves,” said Rohit Garg, BofAML’s emerging-markets strategist in Singapore. “They still want to inject liquidity. They can do both through unsterilized FX intervention.” India was removed from the US Treasury Department’s currency manipulation watch-list last week, and the RBI will want to be cautious about excessive intervention so as to not draw attention from the US, said Trang Thuy Le, macro-strategy analyst at Macquarie Bank Ltd. in Hong Kong. To be sure, the RBI has said it intervenes in the forex market to curb undue volatility and doesn’t target any particular levels for the rupee. The currency rose 0.4% to 69.4150 per dollar as of 9:35 a.m. in Mumbai, adding to the 2.2% gain of the past three months. The rupee could face some pressure in the near term after the US eliminated an exception that allowed India to export nearly 2,000 products to the US duty-free. The move may lead to exporters losing $260 million worth of benefits, according to the Federation of Indian Export Organisations. “I don’t think the US export restrictions will have significant impact on inflows and the rupee,” said Anindya Banerjee, currency strategist at Kotak Securities Ltd. in Mumbai. “Inflows will stay and the RBI is expected to curb gains in the currency.” Global funds plowed $1.45 billion into local shares and bonds last week, the most since the end of March, as Modi’s win boosts the appeal of Indian assets. The drop in US yields and in the price of oil -- the nation’s biggest import -- have also helped improve the rupee’s prospect, according to Macquarie.
Source: Business Standard
Indian real estate developer SPR Group recently signed a memorandum of understanding with the Chennai Apparel Association (CAA) to set up 100 shops at the proposed organised wholesale trade centre called ‘Market of India’ at the planned SPR City in Tamil Nadu. The group had signed a similar MoU with the Jaquar Group earlier for an experience centre. SPR Group managing director Hitesh Kawad signed the MoU with CAA president Bharat Sarda, according to a press release. Sarda said CAA will ensure all types of garment manufacturers and retailers are presented under one roof to boost business growth in the sector. (DS)
Source: Fibre2fashion
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1080.13 |
USD/Ton |
-1.84% |
6/3/2019 |
|
VSF |
1672.32 |
USD/Ton |
0% |
6/3/2019 |
|
ASF |
2499.08 |
USD/Ton |
0% |
6/3/2019 |
|
Polyester POY |
1082.31 |
USD/Ton |
-0.60% |
6/3/2019 |
|
Nylon FDY |
2417.99 |
USD/Ton |
-0.60% |
6/3/2019 |
|
40D Spandex |
4416.10 |
USD/Ton |
0% |
6/3/2019 |
|
Nylon POY |
2678.62 |
USD/Ton |
0% |
6/3/2019 |
|
Acrylic Top 3D |
1230.72 |
USD/Ton |
0% |
6/3/2019 |
|
Polyester FDY |
2707.57 |
USD/Ton |
-1.58% |
6/3/2019 |
|
Nylon DTY |
5473.06 |
USD/Ton |
0% |
6/3/2019 |
|
Viscose Long Filament |
1332.07 |
USD/Ton |
0% |
6/3/2019 |
|
Polyester DTY |
2287.68 |
USD/Ton |
-0.63% |
6/3/2019 |
|
30S Spun Rayon Yarn |
2432.47 |
USD/Ton |
-0.30% |
6/3/2019 |
|
32S Polyester Yarn |
1788.16 |
USD/Ton |
-0.40% |
6/3/2019 |
|
45S T/C Yarn |
2707.57 |
USD/Ton |
0% |
6/3/2019 |
|
40S Rayon Yarn |
1954.67 |
USD/Ton |
0% |
6/3/2019 |
|
T/R Yarn 65/35 32S |
2331.12 |
USD/Ton |
0% |
6/3/2019 |
|
45S Polyester Yarn |
2722.05 |
USD/Ton |
0% |
6/3/2019 |
|
T/C Yarn 65/35 32S |
2215.29 |
USD/Ton |
0% |
6/3/2019 |
|
10S Denim Fabric |
1.33 |
USD/Meter |
-0.11% |
6/3/2019 |
|
32S Twill Fabric |
0.78 |
USD/Meter |
-0.19% |
6/3/2019 |
|
40S Combed Poplin |
1.04 |
USD/Meter |
-0.14% |
6/3/2019 |
|
30S Rayon Fabric |
0.61 |
USD/Meter |
0% |
6/3/2019 |
|
45S T/C Fabric |
0.69 |
USD/Meter |
0% |
6/3/2019 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14479 USD dtd. 03/06/2019). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Import of knitted fabrics is spiralling thanks to the growing tendency of the Western retailers to demand the use of fabric from a particular country or vendor to manufacture apparel in Bangladesh. In 2018, knitted fabrics worth Tk 9,590.41 crore were imported, up 27.69 percent year-on-year, according to data from Bangladesh Textile Mills Association (BTMA). In the first four months to April 2019, imports were Tk 3,629 crore. In 2017, the knitted fabrics import grew 49.16 percent year-on-year to Tk 7,510.62 crore, according to the BTMA data. In 2017, Bangladesh brought in 140,142 tonnes of knitted fabrics, up from 107,903 tonnes in the previous year. Local spinners can supply nearly 90 percent of the required yarn and fabrics for knitwear. In case of woven fabrics, the local weavers can supply below 40 percent of the requirement because of which the woven garment industry remained dependent on foreign fabrics. “International buyers are progressively nominating yarn and fabrics of any particular country as they place orders,” said Monsoor Ahmed, secretary to the BTMA, the platform of spinners, weavers and dyeing industries. For instance, some Western retailers recently suggested using knitted fabrics from India as the apparel products would be sold in the neighbouring country, where foreign brands have set up shop. “It is setting a dangerous precedent,” said A Matin Chowdhury, managing director of Malek Spinning Mills, a leading spinner. This trend has led to stockpiling of yarn and knitted fabrics. Local spinners are in big trouble due to rising import of knit fabrics, jeopardising the $8 billion invested in the primary textile sector over the years to get the industry up to speed, he added. “We are losing competitiveness due to buyers’ nomination of fabrics. Stockpiling of unsold yarn and knit fabrics has been growing every month due to such decision by the buyers,” Chowdhury said. The buyers have been doing so in the name of cost and quality control of garment items, he said. Meanwhile, last week the Indian Texpreneurs Federation (ITF) appealed to domestic and international brands operating in India to focus on sourcing from within and increase engagement levels with apparel clusters in the country, according to Fibre2Fashion. The appeal comes in the wake of a 53 percent jump in imports of garment products from Bangladesh. The increase in import has cost approximately Rs 7,500 crore in garment business in India, according to ITF. “It would have created an additional 6,000 jobs in the spinning sector, 500 jobs in the processing sector, 100,000 jobs in the garmenting sector and another 40,000 jobs in the printing and embroidery sector of textile value chain,” ITF convenor Prabhu Dhamodharan told Fibre2Fashion.
Source : The Daily Star
Medusa Source, an international supply chain management company for fashion, home and lifestyle brands and retailers, is promoting sustainable fabrics which they source for their clients. With a commitment to sustainability, these fabrics are all produced naturally using new bio-engineering techniques and from GOTS certified manufacturers. Medusa Source supplies several innovative fabrics namely Rose Petal Fabric, Soybean Protein Fabric, Milk Fiber, Banana Fabric, Lotus Fiber Fabric, Corn Fabric, Organic Aloe Vera Fabric and Bamboo Fabric. A signature combination of global positioning and local industry insight in the vast and richly developed Indian manufacturing districts enables Medusa Source to fully support brands and retailers with unparalleled production, merchandising and logistics solutions. Moreover, placing a high level of importance on social and ethical compliance, Medusa Source ensures all the products are ethically sourced and manufactured. The company builds and develops solid partnerships with suppliers and vendors guaranteeing the high standards that Medusa Source sets for itself. The company attentively monitors every stage of the production life cycle, including regular auditing and reporting by members of its senior management team who are asked to verify the respect of the highest social and environmental parameters. Placing a high level of importance on social and ethical compliance, Medusa Source ensures all the products are ethically sourced and manufactured. The company attentively monitors every stage of the production life cycle, including regular auditing and reporting by members of its senior management team who are asked to verify the respect of the highest social and environmental parameters. (RR)
Source: Fibre2fashion
A hike in Chinese tariffs on most US imports on a $60 billion target list became effective on June 1 as scheduled, which is being viewed as Beijing’s retaliation to Washington’s escalation of the ongoing trade war between the two. Announced on May 13, the decision applies additional 20-25 per cent tariffs on more than half of the 5,140 US products targeted. Beijing had earlier imposed additional rates of 5-10 per cent on the targeted goods. After the last round of trade talks between the two sides ended in a stalemate on May 10, no further talks have been scheduled. President Donald Trump announced on May 10 higher tariffs on $200 billion worth Chinese imports and then initiated steps to levy duties on all remaining Chinese imports. China’s latest tariff hike is a response to Trump’s move, according to global newswires. The Chinese commerce ministry said it had decided to create an ‘undesirable entities’ list to combat ‘unilateralism and trade protectionism’. China’s rhetoric against the United States has toughened, particularly after Washington blacklisted Chinese tech giant Huawei Technologies from conducting business with US firms. Chinese state-owned newspapers have reported that Beijing is prepared to use its dominance in the production of rare earths—chemical elements used in everything from high-tech consumer electronics to military equipment—in the trade war. (DS)
Source: FIbre2fashion
World trade is in deceleration mode. After having recovered smartly from 2.3 and 1.6 per cent in 2015 and 2016 to 4.6 per cent in 2017, the growth in the volume of world merchandise trade slowed to 3.0 per cent in 2018. The deceleration has been greater in recent quarters. Quarter-on-quarter growth rates, as estimated by the Netherlands Centraal Planbureau (CPB) indicate that trade growth fell from 1.1 per cent in the third quarter of 2018 to -0.6 per cent in the fourth quarter and -0.3 per cent in the first quarter of 2019. The prognosis is not positive either. The WTO’s World Trade Outlook Indicator (WTOI) released in May 2019, for example, stood well below its baseline value of 100 at 96.3, which is its weakest level since 2010. That signals that world trade growth has fallen in the first half of 2019. Moreover, according to the WTO: “The outlook for trade can worsen further if heightened trade tensions are not resolved or if macroeconomic policy fails to adjust to changing circumstances.”
US-China trade war
Given the intensification of the trade and tech war against China unleashed by the US, with several rounds of tit-for-tat imposition or escalation of tariffs and leading into a US effort to paralyse the Chinese telecommunications giant Huawei, this trade slowdown is often attributed to the disruption caused by this stand-off. While the role of US economic aggression cannot be denied, there is reason to believe that that cannot be the whole story. The effects of the trade war work in multiple ways, making the magnitude of the net negative effect on the volume of world trade uncertain. The signs of a medium-term loss in the momentum of trade growth perhaps signal one more step down the path to a global recession. China has been the main loser in the trade war. US imports of Chinese goods have fallen from $52.2 billion in October 2018 to $31.2 billion in March 2019, compared to $38.3 billion a year earlier. The effect on the US has been smaller in absolute terms, with US exports to China having fallen from a lower $12.4 billion in March 2018 to $10.4 billion in March 2019. This is partly because China has been circumspect in responding to the provocative measures adopted by the Trump administration, given its own persisting dependence on exports, even as it seeks to rebalance growth away from exports and in favour of the domestic market. This is, of course, the direct effect of the US attempt to browbeat China on grounds varying from unfair trade policies and practices and coercive appropriation of intellectual property from US firms to adoption of measures that threaten US national security. That triggers in turn second-order effects, which result partly from adoption of similar measures relative to other countries (true especially of the US with respect to Europe for example), and partly from the fall-out of the growth decleration and consequent fall in imports resulting from the US-China showdown, which would be more significant in China.
Global impact
China, because of its rapid growth and growing demand for raw material and intermediates, and because it has served as a final-stage export platform for global production chains, has been a major source of import demand in the world economy. So any slowdown in China resulting from the US actions is bound to affect world trade adversely. However, the trade war triggered by US actions also has positive effects on growth both within and outside China. To start with, it would result in a diversion of the export trade to the US and China, away from Chinese and American exporters to suppliers from third countries. To the extent that there is such trade diversion, the total volume of world trade is unaffected. Further, to the extent that Chinese and US producers, restrained by import competition in the past, benefit from the new protectionism, the growth-reducing effects of the protectionist actions would be neutralised. Taking these factors into consideration, and noting that the effects of the trade war are still working themselves through, the recent slowdown in world trade must be explained by a more generalised slowdown in world demand. The slowdown in import growth is visible in all locations except the US and Japan, with the deceleration being significant in the Euro area, Other advanced economies, Eastern Europe/CIS and Latin America, and import volumes stagnating in Africa and the Middle East. Growth of imports in value terms showed up a better picture, largely because the prices of fuels which had fallen by 14.6 per cent in 2016, registered positive increases of 22.2 per cent in 2017 and 27.2 per cent in 2018.
Emerging economies hit
What is noteworthy is that the deceleration in import volume growth has been particularly marked in the emerging economies of Asia and Latin America, pointing to a loss of momentum in the countries that were expected to be new growth poles in the immediate aftermath of the 2007 crisis. Leading the decelerating trend was China, with imports into China falling 4.8 per cent in the first quarter of 2019, when compared with a year earlier. What this points to is a more generalised depression of global demand, resulting in a loss of growth momentum. This is not captured adequately in the first quarter GDP numbers that have transformed the pessimism reflected in the April 2019 edition of the IMF’s World Economic Outlook into the optimism seen in some of the subsequent assessments of global growth prospects. The fundamental failure is of the policy adopted by leading OECD countries of reliance on monetary measures to pull the economy out of the recession that set in a decade ago. That failure has led to the backlash against corporate-led globalisation that has taken a peculiar turn in the form of the rise of Trump, the Brexit mess, and the ascent of the far right in Europe and elsewhere. A real global recovery requires different strategies.
Source: Business Line
General Director of the Vietnam National Textile and Garment Group (Vinatex) Le Tien Truong has said Vinatex will promote trade in Canada to tap opportunities brought by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). In the first five months of this year, the firm’s exports to Canada hit nearly 900 million USD, or 6 percent of Canada’s apparel imports. It hopes to earn about 1.5- 1.7 billion USD in Canada this year, taking more than 12 percent of market share. Recently, Vinatex and its affiliates held a trade exchange, the second of its kind, with Canadian apparel importers and distributors. Apart from clothing products, they also introduced knitted fabrics by domestic firms such as Dong Xuan, Hanosimex, Dong Phuong and Lien Phuong. Truong said following the event, Canadian partners will sign more contracts because they value made-in-Vietnam textile and garment products.
Source: Vietnam Plus
The Home Fashion Products Association (HFPA) issued an alert on the latest developments in tariffs on imports from China. Late on Friday, May 31, the US Trade Representative (USGTR) announced it would not boost 10% tariffs on List 3 products to 25% effective June 1, as had been originally planned. The new effective date is June 15. However, the delay only applies to products shipped from China prior to May 10, 2019. List 3 products include certain types of rugs and carpeting. The delay was enacted because of custom enforcement factors and transit time between China and the US. “HFPA members that have products affected by this delay should contact their customs broker regarding entries made the last 3 days and early this week, as the Customs electronic ACE system might have automatically charged the additional 15%. That increase should be removed by Customs but it might not happen automatically,” wrote HPFA legal counsel Robert Leo. He also provided an update on proposed List 4 tariffs, which will impact all home textiles imports from China. Hearings are set begin on June 17, and the USTR has reserved hearing space for two weeks due to the high volume of companies expected to comment. If the hearings last until June 27, rebuttal comments would be due July 4, or more likely July 5 due to the holiday, according to Leo, who is a partner at Meeks, Sheppard, Leo & Pillsbury. “Because of the number of total comments expected (likely in the tens of thousands), it should take several weeks for the government to process them all and make decisions. A reasonable ‘guestimate’ for an effective date would be the week of July 15, however there are a number of factors that could affect that,” he added. He also warned that the effective date could come earlier. “Given the past impatience of the Administration in imposing these tariffs, the effective date could be earlier. China just imposed additional tariffs effective June 1 against another $60 billion of US goods. China is also objecting to the US actions against Huawei, the telecommunications company. There is no sign of either side backing down and there are no additional negotiations scheduled,” said Leo. “Unless negotiations resume at some level, there would be no reason for the US to delay the effective date.”
Source: Home Textiles Today
