The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 15 JUNE, 2019

NATIONAL

INTERNATIONAL

 

Economists seek Budget push to boost growth

Economists on Friday urged the Finance Minister Nirmala Sitharaman to use the General Budget to set the tone for the next five years. Earlier, social sector experts suggested that the Finance Minister should focus on education, hygiene, woman safety, nutrition of infants in the forthcoming Budget. These views were expressed during two pre-Budget meetings held on Friday. The Budget will be presented on July 5. In a meeting with economists, the main areas of discussion included boosting economic growth, job-oriented growth, increased macro-economic stability, fiscal management including ideal size of public sector sorrowing requirements and increase in investments among others. Suggestions included tariff reforms, removing bottlenecks in supply-chain, EXIM policy for agriculture, removal of specific duties on textiles, maintaining fiscal consolidation, revival of Inter-State Councils for holistic domestic growth, and boosting employment by focusing on skilling and giving fillip to services and manufacturing sector, Economists also pressed for making the tax regime, both direct and indirect taxes, friendly. Here they opined further simplification of GST along with implementation of the Direct Taxes Code. Another area, where economists wanted to draw attention of the Finance Minister was the NBFC sector. They suggested Insolvency & Bankruptcy Code (IBC)-type framework for NBFCs. Also they were in favour of infusing capital in banks.  Economists, who attended meeting, include Rathin Roy (CEO & Director, NIPFP), Shekhar Shah (DG, National Council of Applied Economic Research), Surjit S. Bhalla (MD, O(X) US Investment), Soumya Kanti Ghosh (Chief Economist, SBI), Ajit Ranade (Chief Economist, Aditya Birla Group), Pranjul Bhandari (Chief India Economist, HSBC). Earlier in the day, in another meeting, social sector experts asked the Minister to levy higher taxation on sweetened and salted products, rationalise taxes on medical devices, and earmark funds for healthcare infrastructure, and providing free drugs as well as diagnostic facilities. The main areas of discussion included issues relating to health, education, social protection, pensions and human development. The stakeholders of social sector gave suggestions like focus on education and hygiene particularly for rural women, audit of cities to identify security gaps to strengthen women safety, increased budgetary allocation towards nutrition of infants, full operationalisation of one-stop centres for women in all districts, a finance ministry statement said. They also suggested expansion of healthcare infrastructure, provision of free drugs and diagnostic facilities, rationalisation of taxes on medical devices, promotion of public private partnership in secondary and tertiary healthcare sectors, fiscal incentives for recycling of waste water and rainwater harvesting, among others. National Commission for Women Chairperson Rekha Sharma, Centre for Policy Research President Yamini Aiyer, Helpage India Chief Operating Officer Rohit Prasad, and National Commission for Protection of Child Rights Chairperson Priyanka Kanoongo attended the meeting.

Source: The Hindu

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India, Kyrgyzstan have prepared 5-yr roadmap to increase bilateral trade: Modi

Prime Minister Narendra Modi on Friday said India and Kyrgyzstan have prepared a five-year road map to increase the bilateral trade and urged the business communities from both countries to explore the untapped potential in various fields. Addressing the India-Kyrgyz Business Forum, he said that India and Kyrgyztan have given the final shape to the Double Taxation Avoidance Agreement (DTAA) and the bilateral investment treaty, which would help in creating a proper atmosphere for the bilateral trade. Modi and Kyrgyz President Sooronbay Jeenbekov jointly inaugurated the India-Kyrgyz Business Forum. Modi said that "at a time when the world economy is rapidly changing, we need to look at the opportunities of the economic partnership between the two countries"."There are three catalysts for the growth of the bilateral trade and investment opportunities. They are proper atmosphere, connectivity and business-to-business exchanges," he said. Ahead of the Modi's visit to Kyrgyzstan, the Union Cabinet, chaired by Prime Minister Modi, has approved the signing and ratification of bilateral investment treaty between India and Kyrgyzstan. The bilateral treaty is likely to increase flow of investment between India and Kyrgyzstan and provide protection to investors from the two nations making investments in both the countries. He said Kygyzstan provides good opportunities for Indian businessmen in the field of textiles, railways, hydro power, mining and mineral explorations. He also invited Kyrgyz businessmen to come to India to explore opportunities of bilateral trade. Modi said connectivity plays an important role for the ease of trade between two countries and Chabahar port (in Iran) has emerged as new route between India and Afghanistan. "There is a need for us to focus on increasing connectivity between India and Central Asia.The Republic of Kyrgyzstan is part of Eurasian Union and we are working to increase the trade with the Eurasian Union," he said. Modi is in Kyrgyz capital to attend the Shanghai Cooperation Organisation (SCO) Summit. The SCO is a China-led 8-member economic and security bloc with India and Pakistan being admitted to the grouping in 2017. Other members of the grouping are China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan.

Source: Business Standard

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Trade deficit widens to $15.36 bn in May

India’s trade deficit widened in May 2019 to $15.36 billion, with imports growing faster that exports during the period, official data released on Friday showed. Exports grew 3.93% in May to $30 billion compared with $28.86 billion worth of exports in the same month last year. The industries that saw a major growth in exports include electronic goods (50.97%), organic and inorganic chemicals (20.64%), and readymade goods of all textiles (14.15%).

‘Sub-optimal level’

“Export growth for May remains at sub-optimal level requiring immediate government intervention,” Engineering Export Promotion Council India chairman Ravi Sehgal said. “For engineering sector, exporters need crucial raw material like steel at international prices. Exporters are looking forward to Budget for fiscal relief,” he said. “Such a growth in exports is a reflection of extremely modest growth in global trade and increasing protectionism,” said Ganesh Kumar Gupta, president, Federation of Indian Export Organisations.

Liquidity concerns

“MSME sectors are still facing the problem of liquidity besides various other challenges, including uncertainties owing to tariff war, volatility in commodities/currencies, rapid rise in trade restrictive measures and constraints on the domestic front,” he added. Imports into India grew 4.31% in May 2019 to $45.35 billion, up from $43.48 billion worth of imports in May of last year. The segments that saw strong growth in exports include pulses (84.2%) and gold (37.4%).

Source: The Hindu

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India to impose retaliatory tariffs on 29 US goods worth $235 million

India on Friday has decided to impose retaliatory tariffs on 29 US products worth $235 million after Donald Trump administration on March 23, 2018, applied a 25 percent tariff to all US steel imports and a 10 percent tariff to all US aluminium imports, citing an investigation that showed national security concerns. Products on which Indian retaliatory tariffs will be imposed are almonds, apples, walnuts, chickpeas and some stainless steel products. Also, India will apply a 10 percent tariff on aluminium and a 25 percent tariff on steel. The Narendra Modi government has extended its deadline to impose retaliatory import duties on 29 products from the US eight times till June 16 due to Lok Sabha elections. Last month, Trump has terminated India's designation as a beneficiary developing nation under the key GSP trade programme after determining that it has not assured the US that it will provide "equitable and reasonable access to its markets." The Generalized System of Preference (GSP) is the largest and oldest US trade preference programme and is designed to promote economic development by allowing duty-free entry for thousands of products from designated beneficiary countries. On March 4, Trump announced that the US intends to terminate India's designations as a beneficiary developing country under the GSP programme. The 60-day notice period ended on May 3. Under the GSP programme, nearly 2,000 products including auto components and textile materials can enter the US duty-free if the beneficiary developing countries meet the eligibility criteria established by Congress. India was the largest beneficiary of the programme in 2017 with $5.7 billion in imports to the US given duty-free status and Turkey the fifth largest with $1.7 billion in covered imports, according to a Congressional Research Service report issued in January.

Source: CNBC TV 18

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India and WTO: Immediate removal of export subsidies would hurt country

Immediate removal of export subsidies would hurt India, eight-year phase out period under special and differential flexibilities must stay. Recently in Delhi, a few WTO economies met to discuss trade rules in the context of least developed and developing countries. The G20 is going to meet again this month to discuss, amongst others, this issue. The last few years have been contentious for India as developed countries, led by the US, have upped the ante. Widely used incentives given to Indian exporters have been challenged on the grounds that India has exceeded the time period within which these benefits could be given. These kinds of export contingent subsidies are prohibited under Article 27 of the WTO Agreement on Subsidies and Countervailing Measures (ASCM) for their trade-distorting effects. The basic tenet is that a subsidy that alters the allocation of resources within an economy should be subject to discipline. Under this, select least-developed and developing countries, whose gross national income (GNI) per capita is below $1,000 a year (at the 1990 exchange rate), are allowed to provide export incentives to any sector with a share below 3.25% in global exports. However, they must stop these if the figure is breached for three straight years. Given that India’s GNI has continued to remain above $1,000 since 2015, the Merchandise Exports from India Scheme (MEIS), which is extended to 7,914 tariff lines, has come under scrutiny. Phasing out subsidies impacts India’s competitiveness, especially of SMEs accounting for 40% of exports. As far as product share of exports is concerned, ASCM says that if the export share of a product is at least 3.25% in world trade for two consecutive calendar years, subsidies have to be phased out for that product. India’s textile exports crossed the 3.25% mark in 2010, requiring export incentives to the sector to end by December 2018. Rough estimates show that 1,063 of 6,110 HS code 6-digits products exported by India have already exceeded 3.25% share in world exports—however, not all necessarily receive subsidies. Taking off subsidies in the case of agriculture products and textiles could impact the sectors significantly—around 33% products by value in agriculture and 88% in textiles have breached the share. While the dichotomy between developed and developing is a foregone conclusion, amongst the developing economies too there is a stark contrast. For example, in 2017, the per capita GNI of India was just $1,800, much below that of China ($8,690). The figures get more dismal for India, with 21.2% of the population being classified as poor, against 7.9% in China. The extent of poverty in India led to almost 15% of the population remaining undernourished, compared to 8.7% in China. In the 2017 HDI Report, India occupied the 130th position, while China ranked 86th. Most importantly, India needs to continue to up the ante and confront the dichotomy amongst nations. The special and differential treatment flexibilities under WTO, which include various export subsidies to developing countries, are being disputed by the US, EU, and Japan. Benchmarking development assistance against GNI alone, and not including human development, would defeat the aim of the Development Assistance Committee of 1961, which was convinced of the need to help the less-developed countries extend loans and grants on concessional terms. Secondly, India needs to continue to impress upon the WTO to have an 8 year phase-out period for export subsidies, from the time a country crosses the GNI threshold, which would be the same benefit as what accrued to countries that had benefitted from the same at the time the WTO’s ASCM was implemented in 1994. This would allow Indian exporters in particular to prepare accordingly. Lastly, policymakers need to work on a contingency plan to replace existing export incentive schemes, with WTO-compliant, production-oriented schemes targeting R&D and modernisation. This could be in the form of establishing technology upgradation funds or capital incentive schemes. At the same time, embedded taxes and unrebated levies outside GST, like electricity duty, duty on petroleum products, and raw materials in agri and allied activities, should be rebated. In fact, the MEIS can be transformed into an embedded duty neutralisation scheme. Though India is amongst the largest market globally, its social parameters are not encouraging. Much required is such change in the WTO framework—which is almost 25 years old—as would take cognisance of these contradictions. The new government may also like to resolve the WTO conundrum by introducing appropriate solutions in the new trade policy.

Source: Financial Express

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FM Nirmala Sitharaman urged to waive e-form 22A for firms

Memorandum to Finance minister explains why the provision can’t be implemented. Finance and Company professionals based in Chennai strongly feel that the Ministry of Corporate Affairs (MCA) recent notification mandating all incorporated companies to file what in technical parlance is known as 'e-form Active (Active Company Tagging Identities and Verification) on or before June 15, 2019, and its attendant rider to necessarily appoint a 'Whole Time Company Secretary', as totally impracticable and missing the spirit of compliance with Law. At the outset, congratulating the new Finance Minister in the new BJP government, Dr Nirmala Sitharaman, who has her roots in Tamil Nadu, for taking over a very crucial portfolio as "a very proud moment for the entire country," Mr S Sundar Raman, an independent practicing chartered accountant here, has urged her immediate intervention in this issue as there are barely three days to go for the compliance date, after which many registered companies may be in trouble. In a five-page memorandum to the FM, he said the filing of 'e-form Active' for all companies incorporated by December 31, 2017, except two or three categories that include firms under liquidation and so on, has been made mandatory. 'ACTIVE' is the e-form that enables MCA "to geo-tag the location of the registered office (both interior and exterior) of Applicable Companies, and the 'Applicable Company' should have its unique e-mail ID, "not being used by any other company." This is fair enough. But the MCA also wants all sorts of other nit-picking details, like the latitude and longitude details of the registered office of the company, photograph of the registered office with at least one of its directors seated on his/her chair and so on, which makes it very impractical to comply in the first place. Further, Sundar Raman said in respect of companies which has not appointed 'Whole Time Company Secretary', when the form is submitted, "it throws an error and does not allow to file the form." Sundar Raman, for the benefit of the Finance Minister, has also appended a screenshot of that page which says a 'Whole Time Company Secretary', has to be appointed before filing this e-form. Referring to the modified provision in the Companies Bill which has lowered the paid-up capital limit from Rs 10 crore to Rs 5 crore for compulsory appointment of 'Whole Time Company Secretary', Mr Sundar Raman, citing details from the monthly bulletin of the Ministry of Corporate Affairs', points out that the total number of 'ACTIVE' companies limited by shares in the country is presently 11,49,580. Though exact numbers were not available, approximately 58,000 qualified company secretaries are available all over India, as against a requirement of 89,623 companies needing to appoint a 'Whole Time Company Secretary', he explained. Of them 40 per cent are already employed and hence for only about 20,000 company secretaries are presently available for the purpose of complying with the new Law, which is just only 25 per cent of the total requirement. Hence, Mr Sundar Raman contended that "it is very sad that the Ministry has enacted a Law, which in the first place is not possible to comply." Secondly, the penal provisions for non-compliance was very high for many of the smaller companies in the country, even as there were other difficulties of company secretaries unwilling to move to smaller towns like in Tamil Nadu for various reasons. For many other companies, Mr Sundar Raman pointed out that appointing a 'Full Time Company Secretary' was not possible within their budget requirement. They take care of the compliance with Company Law requirements with the help of practicing company secretaries and hence the "appointment of a Whole Time CS is not just within their business requirement." Stating that such companies "cannot appoint" a 'Whole Time Company Secretary' just to file one 'ACTIVE e-form', Sundar Raman said the predicament was worse as most of them would be deemed 'Inactive' merely because they cannot file this e-form for want of a 'Full Time Company Secretary'. It is a paradoxical situation both ways and Mrs. Nirmala Sitharaman should intervene and help the business community, given other ways to secure the spirit of compliance.

Source: Deccan Chronicle

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FICCI for structural changes in RBI June 7 circular

FICCI’s Secretary Dilip Chenoy has said that the new framework very aptly balances the interest of all stakeholders in the eco-system. Federation of Indian Chambers of Commerce and Industry (FICCI) has suggested structural changes in revised stressed asset framework issued by the Reserve Bank of India on June 7. In a letter to the RBI governor Shaktikanta Das, the industry association has recommended a few structural changes to prevent build-up of future stress and proposed that these be taken up at the appropriate policy level for further consultations. FICCI’s Secretary Dilip Chenoy has said that the new framework very aptly balances the interest of all stakeholders in the eco-system. The industry association has further offered suggestions taking into account that power sector is besieged with problems arising out of unanticipated events and circumstances not within its control and considering also the present-day energy dynamics and demand uncertainties. One of the suggestions is to future shift from lending by commercial banks to infrastructure, pension and insurance funds to handle asset-liability mismatch to be a long term view. Chenoy has also suggested deepening of short term markets enabling capacities to participate and meet demand in forecastable periods based on flexible trade with progressive introduction of derivatives as risk management tool. “Purpose is to avoid idling of capacities in absence of long term contracts because of demand uncertainties,” he noted in his letter. Another suggestion is configuring a liquid fuel market which can align with the power market and facilitate supply of coal and gas, as the case may be, to power plants wanting to enter into flexible and shorter duration contracts. On June 7, RBI had issued revised guidelines for resolution of stressed assets. Under the new framework, it is a mandatory requirement for lenders to enter into an Inter-Creditor Agreement (ICA) during the review of the borrower account within 30 days from date of first default to any lender. The New Framework further lays down some parameters to be included in the InterCreditor Agreement including decision-making by lenders holding 75% (by value of total outstanding facilities) and 60% by number and protection of dissenting lenders. The InterCreditor Agreement is required to be executed by all lenders covered under the New Framework and asset reconstruction companies.

Source: Economic Times

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Raymond Creates 30 lakh Work Hours of Employability for Khadi Artisans

Raymond Group, Indian textile major has created over 3 million (30 Lakh) work hours of employability for Khadi artisans at 30% higher wages in more than 75 clusters across 16 states during FY 2018-19. “We created over 3 million hours of employability for Khadi artisans in more than 75 clusters across 16 states in India.”, said Gautam Hari Singhania, Chairman and Managing Director in Annual Report 2018-19. “In a bid to encourage inclusive growth, Raymond continues to enrich the tailoring ecosystem, providing a platform for skill development in the textiles and apparel manufacturing industry by rapidly adding tailoring hubs across the country.”, Gautam Hari Singhania said. The first Khadi store by Raymond was started at Kala Ghoda, Mumbai in February 2019. Raymond has established a Greenfield linen manufacturing plant of Amravati during the year. India’s apparel market is majorly driven by menswear, which holds major share in the apparel business, accounting for 43% of the total market. Women’s wear contributes almost 36%, while kids wear constitutes 21% of the apparel market. The sector is one of the fastest growing markets globally, supported by a robust demand growth. “With world-class product quality and steadily increasing sourcing capability, we are committed to make Khadi a global currency of fashion from India.”, Said, Sanjay Behl, CEO – Lifestyle Business. “With a strong financial performance during FY 18-19 by all our businesses and purposeful strides on strategic milestones, we are making steady progress towards our vision of Raymond Reimagined.” report added. India’s textiles industry is among the oldest industries in the country dating back several centuries. It is one of the largest contributors to the economy accounting for 4% of the GDP. It is the second largest contributor towards employment generation, after agriculture, contributing 10% to the country’s manufacturing, owing to its labour-intensive nature. The industry is characterised by its robust vertical integration in almost all the sub-sectors. As a flagship business of Raymond Group, its Branded Textile segment has a dominant position in the Indian market as a B2C branded player for suiting and shirting fabrics. The vertical has grown over the years on the back of strong channel partner relationships, some lasting more than 50 years, as well as wide distribution reach. With a strong distribution network that addresses robust fabric demand across Tier 1 cities to Tier 6 towns, the business has consistently launched new products and services keeping up with the customers’ needs and preferences. In FY 2018-19, it witnessed strong growth driven by network expansion supported by growth in institutional and exports category. The textiles and apparel industry constitutes 14% of the total exports of the country. India is the second largest producer and exporter of textiles after China and fourth largest producer and exporter of apparel after China, Bangladesh and Vietnam. The fundamental strength of India’s textile industry is its strong production base with a wide range of fibres and yarns that include natural fibres like cotton, jute, silk and wool; and synthetic and manmade fibres such as polyester, viscose, nylon and acrylic.The Indian apparel industry was worth an estimated $54 billion in 2018 and projected to reach $118 billion in 2028 growing at CAGR of 8% over 2018-28 period.

Source: India CSR

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Remove double taxation on commodity trading: CPAI

Since CTT introduction in 2013, market volume has plunged 63%, says commodity association. The Commodity Participant Association of India (CPAI) has urged the government to remove double taxation on commodity traders in the form of commodity transaction tax (CTT) and further tax on business income. In a presentation made to the Finance Ministry, the Association said, CTT is in the nature of a presumptive direct tax levied upfront when a transaction is executed irrespective of loss or profit, and hence, it is regressive according to progressive economic theory as it is neither on profits nor on value-addition. The CPAI delegation including Ashok Agarwal, Chief Mentor, Narinder Wadhwa, President and past presidents Shiv Kumar Goel and BK Sabharwal met Anurag Thakur, Minister of State for Finance, Sanjay Sanyal, Principal Economic Advisor, and Rose Merry, Director — Commodities, MoF, in New Delhi to make their representation. When CTT was introduced in 2013, the Association said the market volume fell 63 per cent and the government’s hope to collect higher tax also did not materialise as it collected hardly ₹500 crore. Securities transaction tax was introduced in lieu of zero long-term capital gains and concessional short-term capital gains. However, commodities is subject to 34 per cent tax.

‘Treat CTT as tax’

The current problem is that after paying CTT, traders have to pay normal tax which leads to double taxation rates of 70-80 per cent as CTT is treated as an expense not as a tax paid. “We request that instead of an expense, CTT be treated as a non-refundable tax or rebate under Chapter VIII like Section 88E,” it said. All instruments that are covered by a transaction-based tax and resulting in settlement in dematerialised manner should be brought under the Depository Act, 1996, and be exempted from further levy of stamp duty. Further, when GST was implemented, the government assured that there would be only two taxes — a direct income tax and an indirect GST which would subsume all other taxes. In the commodity sector, GST is paid on brokerage on physical delivery of goods and on exchange charges and warehouse charges. Hence, stamp duty should not be levied, it said.

Source : The Hindu

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Use of jute pulp in sanitary napkins can aid farmers, create jobs for women: Ministry

The Ministry of Textiles hopes that jute-based sanitary napkins, produced using indigenous raw materials as against imported wood pulp, would assist farmers in getting a remunerative price and enhance employment generation for women. The Ministry through the National Jute Board has earlier sponsored a project to Indian Jute Industries’ Research Association (IJIRA) on development of jute-based, low-cost sanitary napkins. Now, the government wants farmers to involve in the project. The Ministry added, “ Currently, the pilot project being envisaged for jute sanitary napkin is expected to produce one lakh jute sanitary napkins per day. The project will assist jute farmers in getting remunerative price and will enhance women employment generation.” According to the government, most of the sanitary napkins available in the market are derived out of wood pulp which is imported from the USA/China. “IJIRA-developed sanitary napkin out of jute pulp where both jute fibres and jute sticks have been used in optimum ratio would be an import substitute of wood pulp,” the Ministry had stated in Rajya Sabha in February last year. Jute-based sanitary napkin has been certified by the National Test House, Kolkata, and it meets the requirement as laid down in IS:5405-1980. Jute is obtained from annually renewable agricultural resource against fast-depleting wood biomass. The cost of jute pulp is 30-40 per cent less than the conventionally used wood pulp. Only 12-13 per cent and 6-7 per cent of annual jute fibre and jute stick production respectively would be enough to meet the total requirement of sanitary napkins in India As per the National Family Health Survey 2015 – 16 (NFHS–4), 57.6 per cent women in the age group 15–24 years use hygienic methods of protection during their menstrual period. These include locally prepared napkins, sanitary napkins and tampons. The jute crop is grown in nearly 83 districts of seven states - West Bengal, Assam, Orissa, Bihar , Uttar Pradesh, Tripura and Meghalaya. West Bengal alone accounts for over 50 per cent raw jute production.

Source: The Hindu Business Line

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WPI inflation for apparel up 0.5% in May 2019

India’s annual rate of inflation, based on monthly wholesale price index (WPI), stood at 2.45 per cent for the month of May 2019 over May 2018. The index for textiles rose by 0.3 per cent while for apparel it was up by 0.5 per cent in May, according to the provisional data released by the Office of the Economic Adviser, ministry of commerce and industry. The official WPI for all commodities (Base: 2011-12 = 100) for the month of May 2019 rose by 0.2 per cent to 121.2 from the previous month’s level of 120.9, the data showed. The index for manufactured products (weight 64.23 per cent) for May 2019 rose by 0.1 per cent to 118.4 from the month level of 118.3. The index for ‘Manufacture of Wearing Apparel’ sub-group rose by 0.5 per cent to 139.2 from 138.5 for the previous month due to higher price of woven apparel, except fur apparel (1 per cent). However, the price of knitted and crocheted apparel declined by one per cent. The index for ‘Manufacture of Textiles’ sub-group rose by 0.3 per cent to 119.7 from 119.4 for the previous month due to higher price of knitted and crocheted fabrics (3 per cent) and cordage, rope, twine and netting and weaving & finishing of textiles (1 per cent each). However, the price of viscose yarn declined by one per cent. The index for primary articles (weight 22.62 per cent) rose by 0.2 per cent to 139.5 from 139.2 for the previous month. The index for fuel and power (weight 13.15 per cent) also increased by 0.6 per cent to 103.4 from 102.8 for the previous month due to higher price of naphtha, ATF, LPG, kerosene, furnace oil and HSD. Meanwhile, the all-India consumer price index (CPI) on base 2012=100 stood at 3.05 (provisional) in May 2019 compared to 2.99 (final) in April 2019 and 4.87 in May 2018, according to the Central Statistics Office, ministry of statistics and programme implementation.

Source: Fibre2Fashion

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More worry for China as industrial growth disappoints

China's economy showed further signs of weakness last month, with industrial output posting its slowest growth in 17 years, placing further pressure on the government as it tries to steady the ship while battling a trade war with the US. Authorities have for years been attempting to transition the world's number two economy from a reliance on state investment and exports to a more stable model driven by consumption, with the tariffs stand-off complicating that mission of late. Retail sales actually beat expectations, rising 8.6 per cent year-on-year in May, the National Bureau of Statistics (NBS) said on Friday. That compares to an 8.1 per cent increase forecast in a Bloomberg poll of analysts. But the NBS also said industrial output rose just 5.0 per cent, the slowest increase since 2002, and missing a 5.4 percent analyst forecast. Fixed-asset investment growth also underwhelmed with 5.6 per cent growth. The readings are likely to fan speculation that authorities may launch another round of stimulus. Beijing has rolled out huge tax cuts and other measures this year to try to blunt the impact of a trade war, which has seen the US impose tariffs on hundreds of billions of dollars worth of Chinese goods, causing worries for exporters. China's exports beat gloomy forecasts to rebound somewhat in May, though imports sank more than expected, according to official data released earlier in the week. But the overall downward trend gives Xi little room to fight back forcefully against the US, which is using tariffs as leverage to try to force China into opening up its economy. ANZ Research said it expected further gloom ahead and revised down its 2019 estimate for Chinese economic growth. "The economic data coming out of China over the past two months have not lived up to our expectations," it said in a commentary on Friday. It had adjusted its gross domestic product growth forecast to 6.2 per cent for 2019, from a previous estimate of 6.4 per cent. "The industrial outlook will remain gloomy over the next few months in our view. Consequently, China's headline Q2 GDP figure will likely slow to 6.2 percent," ANZ Research said. China's economy grew 6.4 per cent in the first quarter of 2019, according to official data. The International Monetary Fund on Wednesday also said it was lowering its China economic growth forecasts for 2019 and 2020, citing "uncertainty" over the trade war. It now expects 6.2 per cent growth this year and 6.0 per cent in the next, down from previous forecasts of 6.3 per cent and 6.1 per cent, respectively. ANZ said expectations of a US Fed rate cut would give Chinese policymakers room to adjust reserve requirement ratios and money market rates, adding that it expected Beijing to do so.

Source: Business Standard

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Pakistan: Exporters protest against new taxes

Owners of the five zero-rated sector associations, who have been excluded from tax exemption in the new budget, protested across the country on Friday. They said that the present budget had delivered a fatal blow to exporters’ liquidity and demanded the restoration of ‘no-payment – no-refund’ system. The protesters belonged to the following trade associations: the Council of All Pakistan Textile Associations, Pakistan Apparel Forum, Pakistan Hosiery Manufacturers & Exporters Association, Pakistan Readymade Garments Manufacturers & Exporters Association, Pakistan Knitwear and Sweater Exporters Association, Pakistan Cotton Fashion Apparel Manufacturers & Exporters Association, Pakistan Bed-ware Exporters Association, Towel Manufacturers Association, Pakistan Cloth Manufacturers Association, Pakistan Denim Manufacturers & Exporters Association, All Pakistan Textile Processing Mills Association, All Pakistan Bedsheets & Upholstery Manufacturers Association, Pakistan Textile Exporters Association, Pakistan Weaving Mills Association, Pakistan Textile Sizing Industry Association, All Pakistan Cotton Power Looms Association, Council of Loom Owners Associations, Surgical Instruments Manufacturers Association of Pakistan, Pakistan Leather Garments Manufacturers & Exporters Association of Pakistan, Pakistan Tanners Association, Pakistan Sports Goods Manufacturers & Exporters Association and the Pakistan Carpet Manufacturers & Exporters Association of Pakistan.

Source: Daily Times

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UK Government launches plastic packaging and textiles recycling fund

The UK Government has launched a £4.7m fund for organisations to increase the recycling of textiles and hard-to-recycle plastic packaging, including plastic trays, pots, tubs, films and pouches. Plastic recycling projects powered by the fund could include innovative sorting or segregation equipment and smarter systems to sort different polymers. For textiles, projects could include machinery for recycling, technology for disassembling and sorting, automated processes for removing items such as zips, and technology for sorting textiles by fibre type and colour. UK environment minister Thérèse Coffey said: “We are committed to going further and faster to reduce, reuse, recycle and cut waste. Valuable waste ending up in landfill makes no sense environmentally or economically. “We are making progress but there is more to do, and I encourage organisations to apply for our multi-million-pound grant to drive-up the recycling of these valuable materials.” The UK produces around 2.4 million tonnes of packaging waste per year, with around 40% of all plastic packaging produced used to package of goods, according to UK sustainability charity WRAP. The recycling fund is part of an ongoing crackdown by the UK Government to drive sustainability programmes among UK companies. It confirmed a ban last month on the sale and use of plastic straws, drink stirrers, and plastic-stemmed cotton buds in England from April 2020. Earlier this year, the UK Government awarded a four-way technology coalition an £800,000 grant to tackle black plastic wasteand MPs backed a national plastic packaging plan for zero plastic waste exports. Major UK retailers were found to be failing to commit to sustainable fashion practices, by the Environmental Audit Committee, a House of Commons select committee.

Source: Packaging Gateway

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Trump administration suspends trade complaint against China

The Trump administration has suspended a complaint it had made against China to the World Trade Organization, a shift that might signal a slight opening in the administration's trade war with Beijing. The WTO says it's granted a request to suspend work until December on the administration's complaint that Beijing has failed to safeguard the intellectual property of US companies operating in China a major issue in the trade war. The Geneva-based WTO weighs disputes between its members, and if a country prevails, it can impose tariffs on imports from the other. President Donald Trump has already imposed tariffs on many Chinese goods. The WTO's announcement did not say why the administration had made the request, and the US trade representative's office didn't respond to a request for comment.

Source: Business Standard

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Bangladesh creating database with 27000 RMG units' details

After creating a database of information on 4,808 readymade garment (RMG) factories, Bangladesh is now working on a database containing details of 27,000 such units, finance minister AHM Mustafa Kamal announced in his 2019-20 budget speech. To boost female employment, 4,706 day-care centres have been set up in different factories till February 2019, he said. The centres will be supervised by the Department of Inspection for Factories and Establishments, he said. Four RMG sub-sectors are receiving export incentives now at 4 per cent. Kamal proposed to offer one per cent export incentive in the next fiscal to the rest of the RMG sub-sectors. An additional allocation of Tk 2,825 crore will be made in the budget for this purpose. The RMG tax rate is 12 per cent and 10 per cent if there is green building certification. For textile sector, the tax rate is 15 per cent. These sectors are enjoying reduced tax rates for long and this advantage will expire on June 30. Considering the contribution of these sectors to the country’s economy, particularly in boosting exports and generating employment, the finance minister proposed to continue this provision of reduced rate of taxes for these sectors. A complete inspection checklist based on labour laws in the country has been formulated, which will enable labour inspectors to ensure compliance while inspecting factories and establishments. Compliance of 8,261 factories and establishments has been ensured from fiscal 2015-16 to February 2019, he said To promote a worker-friendly atmosphere in mills and factories, a piece of legislation called Bangladesh Labour Act (Amendment), 2018, was enacted in line with standards of International Labour Organisation (ILO). In addition, the government promulgated the EPZ Labour Ordinance 2019, which introduced provisions for the recruitment of workers in industries, owner-worker relationships, determination of the minimum wage rate, payment of wages, compensation for injuries to workers due to accidents during working hours, introduction of provisions on health, safety, etc. of workers, formation of workers’ welfare associations, and formation of the EPZ Workers’ Welfare Association the minister noted.  In December 2018 of the current fiscal, minimum wages were fixed in eight industrial sectors including readymade garments. The ‘Bangladesh Labour Welfare Foundation Fund’, formed to ensure the welfare of workers employed in both formal and non-formal sectors, have provided assistance amounting to Tk 28.05 crore to a total of 6,052 workers from fiscal 2012-13 till now, he said. A sum of Tk 57.05 crore has been provided to 2,981 workers employed in 100-percent export-oriented garment industries from the aforementioned fund from fiscal 2016-17 till now.

Source: Fibre2Fashion

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Shandong sees robust trade with SCO countries

East China's Shandong Province has seen robust trade with member countries of the Shanghai Cooperation Organization, statistics from Qingdao customs showed. From June 2018 to May 2019, the total trade volume between Shandong and SCO member countries climbed 30.9 percent year on year to 156.1 billion yuan (22.5 billion U.S. dollars), according to Qingdao customs. The province's trade with Russia and India grew 33.4 percent and 26.9 percent respectively, while its trade with Kyrgyzstan and Tajikistan also increased by 24.7 percent and 23.8 percent respectively during the period. Shandong mainly exports machinery and electronic products, auto parts, textile and clothing, steel and agricultural goods to SCO countries and imports crude oil, agricultural products, food and consumer goods from them. Since the coastal city of Qingdao in Shandong hosted the SCO summit in June 2018, trade between the province and SCO countries have grown rapidly thanks to customs clearance facilitation, said Du Chaopeng, a customs officer in Qingdao.

Source: Xinhua

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