The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 15 JULY, 2019

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Interest equalization rate for pre & post shipment credit for MSME Textile exporters enhanced: Irani

Government has enhanced interest equalization rate for pre and post shipment credit for exports done by Micro, Small and Medium Enterprises (MSMEs) of textile sector from 3% to 5% from November 2, 2018, said Smriti Zubin Irani, Union Minister of Textiles. In a written reply to Lok Sabha, she said “Benefits of Interest Equalization Scheme has been extended to merchant exporters from 2.01.2019 which was earlier limited to only manufacturer exporters.” To reduce the cost of garment industry, GST rate on manmade fibre yarns has been reduced from 18% to 12%, Irani added. GST rates for garments and made up articles is 5% of sale value not exceeding Rs 1000 per piece and 12% for articles of sale value exceeding Rs 1000 per piece. The GST rates are lesser than the pre-GST incidence of taxes on these goods, Irani informed Lok Sabha. Further, she added that the refund of accumulated input tax credit on fabrics has also been allowed to reduce cost of fabrics which is a major input for garments. As per the data of Directorate General of Commercial Intelligence and Statistics, export of textile and apparel including handicrafts has increased by 0.2% from USD 40.1 billion in 2014-15 to USD 40.4 billion in 2018-19. Increase in imports is primarily due to increase in imports of MMF and cotton textiles, said Irani. In addition, she mentioned that to increase competitiveness of textile industry, Government announced a Special Package for garments and made-ups sectors. The package offers Rebate of State Levies (RoSL), labour law reforms, additional incentives under Amended Technology Upgradation Fund Scheme (ATUFS) and relaxation of Section 80JJAA of Income Tax Act. The RoSL scheme has been replaced by the new RoSCTL (Rebate of State and Central Taxes and Levies) scheme from 7th March 2019 and will remain in force up to March 31, 2020.

Source: KNN India

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IIP dips to 3.1% in May on slowdown

Growth in industrial activity slowed in May to 3.1% driven by an across-the-board deceleration, especially in the consumer durables sector, according to official data released on Friday. Retail inflation in June quickened marginally to 3.18% due to a rise in food price inflation, a separate release showed. Growth in the Index of Industrial Production slowed in May from 4.32% in April. Within the index, the mining sector slowed to 3.16% in May from 5.07% in April. The manufacturing sector saw growth slowing to 2.46% from 3.98% over the same period. Driven by increased demand during the summer months, the electricity sector saw growth accelerating in May., one of the only sectors to do so, to 7.41% from 5.99% in the previous month. “The fact that IIP has come down and that the effect is rather pronounced in the case of durable goods is indicative of the continuing slowdown in the first quarter of the fiscal year,” DK Srivastava, Chief Policy Advisor at EY India said. “High frequency data shows there is a continuing slowdown in demand, so IIP will be subdued for a few more months.” The consumer durables sector contracted 0.7% in May compared with a growth of 2.17% in April. The overall consumer goods sector, however, was buoyed by stronger growth in the consumer non-durables sector, which registered 7.72% growth in May compared with 5.87% in the previous month. The capital goods sector saw growth slowing to 0.75% in May from 1.23% in the previous month. The infrastructure and construction sector also saw growth slow significantly, to 5.54% from 7.21% over the same period. Retail inflation, as measured by the Consumer Price Index, accelerated somewhat in June to 3.18% from 3.05% in May. The CPI trend of marginally going up is because it follows the movement of food prices with a lag,” Mr Srivastava explained. “In the previous months, food prices had gone up and even though they are now falling, that rise is only now registering in CPI. The important thing is that core inflation is stable so there doesn’t seem to be any real inflationary pressures.” Inflation in the food and beverages category quickened to 2.37% in June from 2.03% in May. The pan, tobacco and other intoxicants category saw inflation accelerating to 4.11% from 3.93% over the same period. Inflation in the clothing and footwear segment eased to 1.52% in June from 1.82% in the previous month. The fuel and light segment saw inflation slowing to 2.32% in June from 2.48% in May.

Source: The Hindu

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Exemption to handloom sector from GST

Turnover of most of the weavers does not exceed Rs 20 Lakh and therefore they do not require registration under the Goods and Service Tax (GST), said Union Minister of Textiles, Smriti Zubin Irani. In a written reply to Lok Sabha, she said GST is implemented through an Act of Parliament with states as equal partners in GST Council with Government of India. GST has been introduced by the Government of India to rationalize multiple taxes on goods & services and to bring transparency in the taxation system. It is applicable to the textile sectors also, including handlooms, Minister added. GST is an indirect tax (or consumption tax) imposed in India on the supply of goods and services. It is a comprehensive multistage, destination based tax. It is comprehensive because it has subsumed almost all the indirect taxes except few and multi-staged as it is imposed at every step in the production process. And destination based tax, as it is collected from point of consumption and not point of origin like previous taxes.

Source: KNN India

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India enthusiastic about sealing RCEP

Asean's plan to complete talks this year on the Regional Comprehensive Economic Partnership (RCEP) got a boost after India, one of the dialogue partners outside Asean, gave a positive political commitment to support negotiations that are to conclude in November.  According to acting commerce minister Chutima Bunyapraphasara, who just returned from a three-day visit to India, the country welcomed the chance to finish all negotiations relating to the RCEP later this year. The conclusion of the talks is expected to be announced at the Asean summit held in Bangkok in November, Ms Chutima said. She and Enggartiasto Lukita, Asean secretariat and Indonesia's minister of trade, met Piyush Goyal, India's commerce and industry minister, to discuss ways to speed up the negotiations, especially in the opening of goods, services and investment, so that the pact is in place by year-end. "India has been asked to become more flexible on the talks," she said. "India has welcomed the request but asked the dialogue trading partners to heed its calls to open the service sector more. Thailand as Asean chair has requested India to specify the lists of services it wants bloc members to open." According to Ms Chutima, India is amenable and would like to finish the talks by late this year. There are still two RCEP ministerial meetings before the November summit, with the first scheduled for August in Beijing and the second for September in Bangkok. "India has initially agreed to cut import tariffs to 0% for 70% of total goods items, and the remaining items will have gradual tariff cuts," Ms Chutima said. The RCEP was launched in November 2012 with the aim of establishing deeper economic cooperation among the 10 Asean members and six dialogue partners (China, Japan, South Korea, Australia, India and New Zealand). Signatory countries to the RCEP have a combined population of 3.56 billion, with a trading volume of more than US$10.3 trillion (319 trillion baht) or 29% of the world's trade. Thailand's trade volume with RCEP members amounted to $290 billion in 2018 or 59.7% of total trade. The figure rose by 12.6% from 2017. "We've made 60% progress in the RCEP talks, as we've already completed the negotiations on seven chapters of the 20 RCEP chapters," Ms Chutima said. "We are also negotiating on the remaining 13 chapters and aim to finish the talks within this year, as announced by Asean leaders, with the pact due to become effective by late 2020 at the latest." She said negotiators made preliminary agreements on an additional two issues, competition policy and dispute settlement.

Source: Bangkok Post

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India involved in 14 disputes at WTO currently, says Piyush Goyal

At present, India is involved in 14 WTO disputes, all of which are being handled by domestic law firms. India is involved in 14 WTO disputes currently and domestic law firms are handling all of them, Parliament was informed Friday. In one of these disputes, the expertise of the Geneva-based international law organisation 'Advisory Centre on WTO Law' was engaged to guide a domestic law firm, Commerce Minister Piyush Goyal said in a written reply to the Rajya Sabha. 'Advisory Centre on WTO Law' assists developing countries on WTO law. The World Trade Organisation (WTO) is a global trade rule making body. India is a part of the 164-member multi-lateral organisation. "At present, India is involved in 14 WTO disputes, all of which are being handled by domestic law firms," Goyal said. The disputes include measures concerning importation of certain agricultural products with the US and certain measures on imports of iron and steel products with Japan. In a separate reply, he said there is no proposal to set up a separate logistics department under active consideration of the ministry. In another reply, he said as many as 55 FDI proposals have been received till June this calender year under the government approval route.

Source: Business Standard

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Modi government's 100-day plan to execute 167 big bang ideas

NEW DELHI: The Union government has shortlisted 167 ‘transformative ideas’ for implementation in the first 100 days of the Modi government’s second stint — that is by October 15. In a communication to all secretaries on July10, cabinet secretary Pradeep K Sinha said that based on the recommendations of the Sectoral Group of Secretaries, and after further consideration by the Group of Ministers, “it has been decided to implement 167 transformative ideas as the 100-day programme of the government”. ET has learnt that Sinha’s note, which marks July 5 to October 15 as the period during which the ideas—shortlisted after several rounds of presentations by all the ministries and top-level deliberations—will be implemented. While secretaries have been tasked with implementing these ideas under their own supervision, Sinha has said he will monitor the progress of this plan through weekly status reports that each secretary will be expected to send every Friday by 5 pm. All ministries have also been asked to put out performance monitoring dashboards on all major schemes to enable public access to the progress made on these schemes. A consolidation of training institutions and printing presses under every ministry has also been sought, officials told ET. Among the approved ideas are said to be the department of administrative reforms and public grievances’ plan to upgrade the Centralised Public Grievance Redress and Monitoring System to expedite processing of public grievances, plans to launch a national eservices delivery assessment and a new Central Secretariat Office Manual of Office procedure. The human resource development ministry has been tasked with launching a mega drive to fill up 300,000 faculty vacancies across all higher education institutes within 100 days, the sources said. The ministry of culture is expected to ensure completion of the structure of the museum on prime ministers of India at Nehru Memorial Museum & Library, inauguration of three new barrack museums at Red Fort, besides several activities associated with the commemoration of Mahatma Gandhi’s 150th birth anniversary. The idea behind the 100-day plan is to ensure that the Modi government 2.0 wastes no time in deciding its course of action, officials said, adding that the BJP-led government had begun preparations for it even as the Lok Sabha elections were underway. While the political class and even sitting ministers were immersed in election campaigns since March, each department and ministry was tasked by the PMO to draw up clear 100-day governance plans. Several rounds of meetings were held in the bureaucracy to ensure that the new government gets moving as soon as it takes office.

Source: ET Bureau

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India to overtake Japan to become 3rd largest economy in 2025

India will overtake the UK to become the world's fifth largest economy in 2019. India will this year overtake the UK to become the world's fifth biggest economy, and is poised to surpass Japan to be the third largest in 2025, IHS Markit said in a report Friday. Following the re-election of the BJP government led by Prime Minister Narendra Modi to a second term of office in May 2019, the Finance Ministry has published an economic roadmap to 2025 in its latest annual Economic Survey. The key goal is to transform India from a $3 trillion economy in 2019 to a $5 trillion economy by 2025, lifting India into the ranks of the world's upper-middle-income countries, it said. "IHS Markit estimates that India will overtake the UK to become the world's fifth largest economy in 2019, and forecasts that Indian GDP will reach $5.9 trillion in 2025, surpassing Japanese GDP to make India the world's third-largest economy," the report said. "IHS Markit estimates that India will overtake the UK to become the world's fifth largest economy in 2019, and forecasts that Indian GDP will reach $5.9 trillion in 2025, surpassing Japanese GDP to make India the world's third-largest economy," the report said. Also, the size of the Indian consumer market is forecast to increase from $1.9 trillion in 2019 to $3.6 trillion by 2025. "As India continues to ascend in the rankings of the world's largest economies, its contribution to global GDP growth momentum will also increase. As the size of its consumer market continues to grow at a rapid pace, India will also play an increasingly important role as one of the Asia-Pacific region's major economic growth engines, helping to drive Asian regional trade and investment flows," IHS said. But to achieve this, the country's new economic roadmap highlights the importance of creating a virtuous cycle of investment, savings and exports in order to sustain rapid economic growth over the next five years. The role of investment is seen as a critical enabler for innovation, rapid productivity growth and new technology, helping to boost jobs growth. The roadmap described in the latest Economic Survey highlights the importance of creating a favourable ecosystem for private investment, particularly in the new economy. IHS said accelerating the development of new economy startups and growing new unicorns is a critical strategy for creating value-added and skilled jobs growth. "Despite significant achievements in new infrastructure construction during PM Modi's first term, rapid infrastructure development in key sectors such as transport and power infrastructure remain important priorities, as well as reducing the regulatory burden of government red tape," it said. India was ranked 77 out of 190 countries that are included on the World Bank's Ease of Doing Business Index for 2019. The Economic Survey highlights the importance of reforms to the legal system, citing the World Bank's Ease of Doing Business Report, which ranks India 163rd in the world for contract enforcement. It recommends the hiring of additional judges to rapidly reduce the number of unfilled vacancies and clear long backlogs in the court system. Another important reform that is highlighted as a priority in the Economic Survey is changing labour market law to remove restrictive labour regulation. "However, although India still lags behind other large emerging markets such as Turkey (43rd), China (46th) and Mexico (54th) on this ranking, India has made remarkable progress in improving its ranking compared with its ranking at 142nd out of 189 countries in the Ease of Doing Business ranking for 2015," IHS said. Moreover, the increase in India's total population between 2015 and 2050 is projected at around 350 million persons, creating significant fiscal challenges for the government in order to deliver adequate physical infrastructures such as electricity, sanitation, affordable housing and public transport. At the same time, India's population growth rate is also projected to slow rapidly over the next two decades, resulting in gradual ageing of the population, bringing additional fiscal challenges relating to healthcare, pensions and social welfare for senior citizens. "Despite the wide range of economic challenges facing the nation, the economic outlook looks positive for the second term of the Modi-led BJP government, with GDP growth forecast by IHS Markit to average around 7 per cent per year over the 2019-2023 period," it said.

Source: Economic Times

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Avoid Traps in GSTR 9: Achieve 100% GST Compliance With Zero Tension

On July 1, 2019, the GST regime in India completed two years of existence. During this time, this nation-wide transformation project has succeeded on multiple counts. By June 2019, more than 1.22 crore entities have registered under GST, over 28 crore GST returns were filed by then, and the government collected over ₹ 11.77 lakh crore payments between April 2018 and March 2019. The government also took substantial pains to plug most of the technical loopholes that the GSTN portal was found to be suffering from. Amidst these successes, there exist some teething challenges today faced by taxpayers and accounts professionals alike. At the end of every financial year, entities who have done business even for a day during the fiscal year have to mandatorily file annual GST returns using GSTR 9 form. For the composition taxpayers, the form to be used is GSTR 9A. There are a few serious traps in these filings. Taxpayers need to be extra careful in these, since there is a very high likelihood that these data is used for analysis for inconsistency checks, and could land you in the red category for notices and fines. There are two types of issues that people encounter: i.e. Those related to Outward Supplies, and ii. Those related to Inward Supplies. Let’s examine these one-by-one and how best they can be addressed.

Challenges related to outward supplies

A1. Annual bifurcation of revenue for SEZ suppliers:

Under GST, business entities are classified as business-to-consumer (B2C), business-to-business (B2B), composite, and SEZ suppliers. In case of SEZ suppliers, i.e. businesses selling goods or services to SEZ units, GSTR 9 (or 9A) mandates that taxpayers specify in Table 4 whether the goods/services sold have been for ‘local market’ or ‘deemed export’. The deemed export attracts GST at the rate of 0.1 percent whereas the goods or services sold for ‘local market consumption’ attract GST at different rates. Since this information pertains to numerous transactions carried out throughout the financial year, it becomes cumbersome for taxpayers to pull out all that information at one go. The right way to address this is to raise two separate invoices—one for ‘local market consumption’ and one for ‘deemed export’ every time goods or services are sold to SEZ units. This way, the taxpayer can easily mention the consolidated values for both revenue types while filing GSTR 9.

A2. Classification of supplies:

The Table 5 of GSTR 9 (or 9A) requires a taxpayer to declare the information about outward supplies under three categories:

i. Exempted supplies list: These supplies are taxable in normal course but because of certain notification(s), they are exempted

ii. NIL rated: These supplies are taxable at the rate of zero percent.

iii. Non-GST supplies: These are items where GST is not at all applicable. e.g. Petrol, Alcohol, Jaggery, Grains, Salt, Bread, Fresh fruits, Fresh Milk, etc.

Taxpayers find it difficult to collect and declare such category-wise information about all outward supplies delivered throughout the year. The ideal way to deal with this issue is by avoiding the need to reclassify transactions at the end of the year —by being careful at the time of the transaction itself. Each zero-tax item needs to be classified either as Exempted, NIL rated or Non-GST right at the time of generating an invoice and tagging the category-information for every item sold. It’s only then that the mandatory declaration of item-wise classification under GSTR 9 (or 9A) can be hassle-free.

A3. HSN code summary report

GSTR 9 mandates that taxpayers provide an HSN code summary report under Table 17 for all items sold during the financial year. A similar challenge arises here as it calls for identifying the HSN code of every item sold in the year. The correct approach here is to include HSN code of every item sold in the invoice itself. This confusion may have been caused due to misinterpretation of a notification which says that if your turnover is less than ₹ 1.5 crore then you do not need to issue tax invoice with HSN code and if it is between ₹ 1.5 crore and ₹ 5 crore, then you need to declare only the first two digits of the code. Many taxpayers (and consultants) misinterpreted this notification and stopped adding HSN code information at the time of invoicing. But it becomes a challenge at the end of the year when taxpayer has to file the annual return with a mandatory HSN code declaration. The right approach is to prevent the occurrence of the issue by tagging every item sold with the relevant HSN code at the time of invoice creation itself—for every invoice generated during the year.

Challenges related to inward supplies

Taxpayers can be seen facing a similar issue with respect to inward supplies as well.

B1. Category-wise declaration of ITC claim

Inward supplies are classified as i. input goods, ii. input services, and iii. capital goods. In order to claim an input tax credit (ITC), a taxpayer has to specify a consolidated value of the GST paid items procured in GSTR 3B (which is a replacement for erstwhile GSTR 2 and GSTR 3). However, GSTR 9 (or 9A) mandates that the taxpayers declare inward supplies separately as per the three above-mentioned categories. As taxpayers do not mention these details while filing monthly returns, reconciliation becomes a tedious, time-consuming task. Taxpayers can, thus, be seen hassled by the process of GSTR filing and spending their valuable time and resources on the unproductive task of information gathering. I have seen examples where companies have appointed four to five dedicated resources just to collate such information from thousands of invoices generated during the financial year.

The best foot forward

While we discussed how being careful at the time of raising invoices or filing monthly returns is the best way to avoid future-trouble, the best way to do so is by embracing automation. There are a few good software products available in the market today that can be a help.

Source: Businessworld

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U.S. will consider ‘301 probe’ on India, says trade official

The U.S. will consider a “301 investigation”, a probe employed as a precursor to tariffs and other trade measures against a country, against India if the trade issues between the two countries are not resolved quickly, Deputy U.S. Trade Representative (USTR) Jeffrey Gerrish said on Thursday.  Mr. Gerrish also said India finalising data localisation policies could be deal-breaker across the board between the two countries.

Explained: What is India’s stand on data storage?

His comments were made at a U.S.-India Strategic Partnership Forum (USISPF) event in Washington during a discussion with Susan Esserman, a former Deputy USTR in the Clinton Administration. “We believe that we should utilise the full range of trade rules, including Section 301, where warranted. And we’re certainly looking at these policies and practices that India has engaged in light of that. We are doing it in a very deliberate, thoughtful way and trying to determine what the best approach is here,” Mr Gerrish said. “And we’ll see where that goes. At this point, we’re clearly in the very early stages of our engagement with the new Indian government and we want to see, of course, what the willingness is to address the trade issues that we have.” Mr. Gerrish declined to give a timeline for these actions but said issues would need to be resolved quickly. However, Mr. Gerrish added that if the market access issues related to GSP (Generalized System of Preferences) were resolved quickly, it would be a confidence building step and would help the process. Section 301 of the U.S. Trade Act (1974) was also to authorise a 2017 probe that resulted in tariffs on Chinese exports to the U.S. from July 2018. Earlier this week, the USTR announced a 301 probe against France on a digital services tax. “We certainly recognise the pivotal role that India plays as a vibrant democracy in the region to a free and open Indo-Pacific region and the important strategic relationship that our two countries have and in everything we do, we approach it with that in mind,” Mr. Gerrish said. Mr. Gerrish, a former lawyer and Trump appointee to the U.S.’s trade office, was confirmed by the Senate in March 2018. He said the two countries needed to move beyond the GSP review and take a more “comprehensive approach” to the issues between them. The US, in June, cancelled India’s benefits under the Generalized System of Preferences (GSP) programme for market access reasons. “But it goes well beyond that [GSP] and we have a number of other market access issues relating to agricultural and non-agricultural products, but also other critical issues and areas involving digital trade, services and intellectual property protection enforcement,” Mr. Gerrish said.

A 301 probe, if launched, would be comprehensive.

“Just on the IPR issue, this is something that India has been on our Priority Watch List that we issued as part of our Special 301 Process since 1989,” Mr. Gerrish said. A Special 301 Report is prepared annually by the USTR and is different from a 301 investigation. Mr. Gerrish said his trade colleagues were in New Delhi not to negotiate but to ascertain whether the new government had the “willingness and wherewithal” to address and resolve the trade issues between the two countries, adding the U.S. has had “good interactions so far” with Commerce Minister Piyush Goyal. A USTR delegation has been in New Delhi this week for talks, including with Commerce and Industry Minister Piyush Goyal. The issues, however, are not long-standing ones, Mr. Gerrish said, but included recent developments such as with regard to digital trade. “We’ve even had some... unfortunately... some additional troubling issues that have developed in the last year, particularly in the digital trade area,” Mr Gerrish said, adding India had taken a number of “troubling actions” in the data localisation arena. Mr. Gerrish cited the RBI electronic payments regulation, the draft e-commerce policy released earlier this year and the draft data privacy as examples of these actions. The RBI had, in 2018, said payment system operators operating in India would need to store payment systems data within the country. In the context of data localisation, Mr. Gerrish welcomed the fact that the Indian government had indicated that it would be consulting stakeholders on policies they are considering but indicated that data localisation policies, if finalised, would be deal breaker for U.S.-India trade. “It would be a really problematic step if those [data localisation policies] were to be put in place and could really, I think, hurt the new engagement that we have and potentially halt that altogether across the board on the trade issues.”

Source: The Hindu

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Dubai chamber plans to boost India-UAE trade by 60% in five years

Dubai and India plan to expand economic cooperation in the future, in fields such as IT, manufacturing, infrastructure and finance. Led by non-oil trade, India and the UAE aim to boost bilateral trade by 60% in the next five years, Hamad Buamim, President & CEO, Dubai Chamber has said. “Plans are currently in place to boost UAEIndia trade by 60% over the next five years. There are several strategic bilateral agreements that have been signed in recent years which aim to boost cooperation between the two countries in several economic sectors and fields such as manufacturing, IT, renewable energy, infrastructure and finance,” Buamim said Going forward, bilateral trade and investment in other key sectors and areas such as healthcare, electronics and electrical, real estate, technology and gems and jewellery, will be the focus areas. He further said that as Dubai and India expand economic cooperation in the future, this trend will result in boosting bilateral non-oil trade beyond the $31.4 billion accounted for in 2018. “In addition, Expo 2020 will provide Indian companies with an ideal platform to boost their global profile and showcase their capabilities on the world stage,” he said. The two sides are also actively exploring partnerships on the startups front. “More recently, we have seen growing interest from Indian startups that are keen to enter the Dubai market and expand their presence in the GCC region,” Buamim said, adding that there is a surge in Indian startups applying to the UAE’s various programmes and competitions offered through Dubai Startup Hub. The Hub offers a wide range of programmes, support, resources and tools to familiarise entrepreneurs and businesses with Dubai’s fast-growing startup ecosystem. Earlier this year, it was announced that the Annual Investment Meeting, one of the region’s most important investment-focused events, opened the door for Indian startups to participate and pitch their ventures to international investors. This is a very positive step forward which will create new areas of synergy and cooperation between UAE and Indian startups.

Source: Economic Times

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Apparel exports rise 16 pc: Minister

Union Minister of Textiles, Smriti Zubin Irani, said on Friday that export of apparel has shown an increase of 16% from 116 million units in 2016-17 to 157 million units in 2018-19. Export of total textiles and clothing has shown an increase of 2.7% from 35,666 US million dollars in 2017-18 to 36, 627 US million dollars in 2018-19. In a written reply to the Lok Sabha, the minister said the government has been taking multi-pronged efforts through various schemes/programmes for expansion of textile manufacturing, infrastructure development, upgradation of technology, supporting innovation, enhancing skills and traditional strengths in the textile sector that lead to improvement in textile sector in the country including in Tiruppur. A separate scheme for development of Knitting and Knitwear Sector was launched in January 2019 with an outlay of Rs.47.72 crore for a period up to 31.3.2020to boost production in knitting and knitwear clusters at Ludhiana, Kolkata and Tiruppur, she added. Government launched a Special Package of Rs.6000 crore in 2016 for garments and made-ups sectors, she added. Amended Technology Upgradation Fund Scheme is being implemented to upgrade technology/machinaries of textile industry with an outlay of Rs. 17,822crore during 2016-2022 which will attract investment of Rs.1 lakh crore and generate employment in the textile sector by 2022, she said. Under the Scheme of Integrated Textile Park (SITP), Government provides 40% subsidy with a ceiling of Rs.40 crore to set up Textile Parks for infrastructure creation and employment generation, the minister added. As a part of Government’s focus on skill development and employment generation in the textile sector, Government is implementing the ‘Samarth – Scheme for Capacity Building’, to train 10 lakh youth for a period of three years from 2017-18 to 2019-20, at an estimated cost of Rs.1300 crore, Irani informed.

Source: SMETimes

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Anglo-French Textiles mills yet to come out of severe crisis

In a shambles: The prestigious Anglo-French Textiles mills was closed in 2013 as it incurred losses for many years. Established in 1898, fabric from the unit used to be exported to many countriesIt was in 2013 that the management of the government-run Anglo French Textiles (AFT) mills declared a 45-day layoff causing concern among its hundreds of labourers. More than five-and-a-half years after the mill stopped operations in its A, B and C units except spinning unit, more than a century-old textile mill is now in the throes of a severe crisis with its net worth on the downward spiral. Two expert committees constituted by the Puducherry Government in 2017 and 2018 to go into the causes of sickness of the mill and to look into its rehabilitation had submitted their recommendations. However, the government had not taken steps to modernise the mill, offer jobs to the workers and revamp the undertaking, which is in a critical condition, said a trade union leader. One of the few surviving industrial vestiges from the colonial era, the Anglo-French Textiles, once known as Rodier Mill, was established in 1898 by a firm with its headquarters in London. In 1899, the mill was even provided with a railway branch line connecting the Puducherry-Villupuram railway mainline to facilitate freight movement and went on to become a major exporter of cotton fabrics to the U.S., the U.K., France, Italy, Germany, Australia and Belgium. The government of Puducherry took over the company in 1986. However, in recent years, it had been downhill journey for the company, thanks to huge losses. Its negative net worth had aggregated to ₹207.13 crore and funds were not available to meet even the day-to-day expenses.

Sale of land

The mill has remained closed since 2013 following mounting losses, rapid erosion of net worth of the company, and prevailing labour unrest because of non-payment of statutory dues to employees. A top government official said while the Madras High Court had allowed the sale of land to help the management pay gratuity to the workers, the Union Home Ministry had not given its clearance. As against the strength of 4,000 employees in the past, the manpower had been reduced to 700 workers. An employee of AFT said the cost of production had increased manifold and was now six times that of competition. “Most machineries in the AFT Mill are outdated and the newest machine was 20 years old. Most buildings situated in ‘A’ unit have been declared unsafe by the Inspector of Factories for employees to work. Although the government decided to sell the timber and other material in the dilapidated buildings, the move was dropped following strong resistance from the workers,” he said. From 1985-86 to 1992-93, the Pondicherry Textile Corporation had earned marginal profits. Subsequently, it had started incurring losses. The government had released ₹367.35 crore as share capital and ₹275.60 crore as grant-in-aid till September 30, 2018. The public sector undertaking, which earned marginal profits from 1985-86 to 1992-93, started incurring heavy losses over the years. This resulted in drastic reduction of grant-in-aid and share capital and the present assistance was used for payment of compensation for lay-off only and not adequate to run the mill. The machineries were old and without modernisation, it was very difficult to run the mill effectively. Blatant administrative transgressions committed by non-political chairmen and senior IAS officers who had held the reigns of the mill in the past had led to its present status, sources added. “Around 55 acres of land in Pattanur in Villupuram district, quarter of an acre in Thengaithittu and 1.5 acres of land at Thirubhuvanai in Puducherry were all estimated at ₹73.38 crore. The total liability to be settled by the mill is ₹166 crore. But the move to dispose of over 55 acres of land belonging to the mill in Puducherry and neighbouring Tamil Nadu by way of public auction would only fetch ₹80 crore which will be insufficient to settle all the dues,” said an official. According to R. Viswanathan, former MLA of the Communist Party of India, “decades of mismanagement and poor policy of successive governments had led to the present condition. AFT is a composite mill and the machines including copper bearings which are in perfect working condition were sold for a meagre price and are now being used by textile manufacturers in Tirupur and Coimbatore in Tamil Nadu. “The government should take steps on a war footing to sell 59 acres of land at Pattanur, which was bought with the profit earned by the mill in 1990. The unions had already submitted in writing to sell the land to settle VRS dues, pending salary and others,” he said.

Deep financial crisis

The mill suffered serious damages following the Thane cyclone in 2011. Despite steps taken to renovate the mill, the management had to face continuous loss and financial crunch. The Employment Provident Fund Organisation classified the bank accounts of the mill as non-performing accounts as the mill failed to pay the provident fund of workers. The management had not settled the gratuity with interest to the tune of ₹43.83 crore for 990 employees as on June 30, 2018.

Source: The Hindu

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Pakistan: Govt misses exports target by wide margin

ISLAMABAD - The PTI-led federal government has missed the exports target by wide margin during last fiscal year despite depreciating the currency and giving incentives to the exports-oriented sectors of the country. The country’s exports were recorded at $23 billion during the fiscal year 2018-19 as against the government’s target of $27 billion. Adviser to Prime Minister on Commerce Abdul Razak Dawood had promised to increase exports to $27 billion by June this year – a target that the government has missed by $4 billion. The government’s decision of depreciating currency had failed to boost the country’s exports. The government had also provided cash assistance to major sectors, mainly textile and clothing for increasing the overall exports. Similarly, the government had also announced to reduce the gas and electricity prices for the exports oriented sectors. However, Pakistan’s exports had reduced by 1 percent to $23 billion in last fiscal year from $23.2 billion of the preceding year. However, the government has reduced the volume of soaring imports by $6 billion. The country’s imports have recorded at $54.8 billion during the year 2018-19 as compared to $60.8 billion of the year 2017-18. The government had controlled the pace of soaring imports during ongoing fiscal year. The imports have decreased by imposing Regulatory Duties (RD) on the imports of furnace oil and other luxury items of food and automobile. The massive reduction in imports has helped in controlling the trade deficit of the country. Pakistan’s trade deficit has shrunk by 15.33 percent in previous fiscal year. The country’s trade deficit has recorded at $31.8 billion during last fiscal year as compared to $37.6 billion of the corresponding period of the previous year showing decline of 15.33 percent. The reduction in trade deficit would help in controlling current account deficit of the country, which had touched historic $18 billion in fiscal year 2017-18. The reduction in trade deficit is easing the pressure on the country’s foreign exchange reserves. The reserves are under pressure due to massive repayment on previous loans and interest payment. According to the fresh PBS data, Pakistan’s exports had recorded a negative growth by 8.77 percent and down to $1.72 billion in the month of June 2019 from $1.88 billion of June 2018. Similarly, the imports had recorded decline of 22.8 percent to and reached $4.36 billion in June 2019 from $5.65 billion in the same period of the last year. The trade deficit was recorded at $2.65 billion in June 2019 as against $3.77 billion of June 2018, showing a reduction of 29.8 percent in last one year. According to the Annual Plan 2019-2020, there is improvement in exports receipts in certain major groups like; textile and petroleum while decline in food, other manufacturing groups and all other items exports offset the positive gains and overall exports declined. Slowdown in economic activities at our certain export destinations has also affected demand side of exports. On the other hand, the import bill of machinery, textile, transport, food and metal groups declined while agriculture and other chemical and petroleum groups witnessed rise. The import bill of these two groups ballooned because of rise in import of fertilizer and chemicals for agriculture and petroleum crude and LNG under petroleum group. However, the import bill of other major groups witnessed decline, which led towards overall contraction in the import bill.

Source: The Nation

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South Korea to consider duty-free access of BD products to its market

During the talks, Sheikh Hasina requested South Korea to consider allowing duty-free quota-free market access for all of Bangladeshi products without any exception. South Korean Prime Minister Lee Nak-yon on Sunday assured Bangladesh of considering duty-free quota-free market access for all Bangladeshi products to their market as the bilateral trade was heavily tilted towards Korea. The assurance came during the official summit talks between Prime Minister Sheikh Hasina and her South Korean counterpart at the Prime Minister's Office, reports UNB. During the talks, Sheikh Hasina requested South Korea to consider allowing duty-free quota-free market access for all of Bangladeshi products without any exception to narrow down the trade imbalance as the trade between the two countries is heavily tilted towards Korea. Prime Minister’s Press Secretary Ihsanul Karim briefed reporters after the official talks. Both the prime ministers led their respective sides at the 40 minute summit talks. "The Korean side informed that they have earmarked US $1 billion ODA (Overseas Development Assistances) for Bangladesh for 2020," Ihsanul said. He said different bilateral issues, including trade, commerce, investment, technical cooperation and Rohingya, were discussed at the summit. At the bilateral talks, Sheikh Hasina said Korea has substantial investment in textiles, tanneries and footwear factories in export processing zones EPZs of Bangladesh. Recalling that Korean companies were the first to invest in the RMG sector in Bangladesh during her first term from 1996-2001, the prime minister said: “Korea may invest in 'Bangabandhu Sheikh Mujib Shilpa Nagar' which is the most potential investment hub for the investors under G2G and PPP model.” She urged South Korea to import woven garments, pharmaceuticals, knitwear, jute and jute products, leather and leather goods, frozen food, ceramic items from Bangladesh. Noting that Bangladesh is a very potential country, the Korean team members said there are huge investment opportunities here. They said Korea wants to cooperate with Bangladesh in energy, ICT and defence sectors. On his arrival at the Prime Minister's Office at 4:20pm, Sheikh Hasina received the South Korean Prime Minister at the Tiger gate with bouquet and then the two leaders moved to the meeting room. Both the prime ministers also held a tete-a-tete before the official talks. After the talks, three instruments were signed between Dhaka and Seoul. The South Korean prime minister arrived in Dhaka on Saturday afternoon on a three-day official visit.

Source: DhakaTribune

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China’s Economic Growth Slows as Trade War with U.S. Deepens

BEIJING — China’s growth fell to its slowest pace in nearly three decades, officials said on Monday, as a resurgence of trade tensions with the United States and lingering financial problems take an increasing toll on one of the world’s most vital economic engines. Chinese officials said the economy grew 6.2 percent between April and June compared with a year earlier. While such economic growth would be the envy of most of the world, it represented the slowest pace in China since the beginning of modern quarterly record-keeping in 1992. That marks a significant slowdown from earlier this year, when growth came in at 6.4 percent, matching a 27-year low reached during the global financial crisis a decade ago. Premier Li Keqiang set a target in March for economic growth to be between 6 and 6.5 percent this year. The figures on Monday fell within that range. But much of the growth in the quarter may have taken place in April and early May, when public confidence was higher because of a tax cut in March and heavy infrastructure spending as spring began. Trade talks broke down on May 10 and President Trump raised tariffs sharply on Chinese goods, a step that damaged consumer confidence within China. Growth early in the quarter also would have taken place before the contentious government takeover of a bank in late May hurt financial confidence. Monthly economic data, particularly for imports, suggests that the second quarter started strong but then slowed. “There was certainly a surge in activity through April,” said George Magnus, a longtime specialist in the Chinese economy who is now at Oxford University. “Something happened in May.” The number may also understate the extent of the slowdown. Economists widely doubt the veracity of the top Chinese growth figure, which shows far more stability than comparable numbers from the United States and elsewhere. A few sectors of the Chinese economy are doing fairly well. The strongest sector appears to be the construction of infrastructure, much of it paid for with money borrowed by local, provincial and national government agencies. The biggest drag on the Chinese economy lies in trade, which grew powerfully over the past three decades but has stopped rising in recent months. Exports dipped 1.3 percent in June from a year earlier, the government said on Friday, and imports fell 7.3 percent. While the trade war has hurt American purchases from China, economic weakness in Europe and many Asian countries has caused overseas demand to weaken far more broadly than just in the United States. Last week, Singapore unexpectedly announced that its trade-dependent economy had shrunk at an annualized rate of 3.4 percent in the second quarter. “The economy is definitely in a broad decelerating trend because the global economy is slowing down, so exports are slowing down,” said Larry Hu, the chief China economist at Macquarie Capital, the investment banking unit of a big Australian multinational. China’s troubles have their roots not just in trade but also in a debt-laden financial system that has been shaken by a series of large shocks in the last few weeks. On May 24, Chinese financial regulators took over Baoshang Bank in Inner Mongolia, a small institution that is part of a financial empire previously controlled by Xiao Jianhua, a financier who disappeared into the custody of government investigators two years ago. Regulators tried to force a few of its largest creditors to accept losses rather than bailing them out as a way to teach financiers to be more careful about where they put their institutions’ money. Problems in some of the shadowy corners of China’s financial system have also frightened investors. China’s shadow banking system plays an important role in funding property projects and other private business ventures. But managers of some riskier investment products have had a hard time making high-interest payments to investors in recent weeks. In some cases they have also had trouble even repaying principal. These incidents have set off a broader shift in recent weeks away from riskier investments. Institutions and households alike have been putting money into larger, more stable financial institutions run by the central government. Big state-controlled banks have steered the bulk of their lending to state-owned enterprises. That long-running trend has hurt the real estate market and the broader private sector. Regulators have repeatedly urged the big banks to lend more to small businesses and the private sector, and Mr. Li, the premier, did so again on July 2. But these exhortations have had limited effect so far. Bank lending officers worry that they might be blamed, or even investigated for corruption, if they extend large loans to struggling private businesses that then default as the economy weakens. The Chinese economy has come to rely largely on government investment in infrastructure projects. Andrew Collier, the managing director and founder of Orient Capital Research, a Hong Kong investment and economic research firm, said that troubles at Baoshang and in the shadow banking system had rattled financial markets but seemed to have been contained, at least so far. “The Chinese central bank is watching carefully, and for now will use quiet means to avoid any shaky financial shenanigans,” he said. Economists are watching for other potential warning signs, like inflation. Price increases have been tame, according to official statistics. But many in China complain that the actual cost of living is rising fast, particularly for food but also for rent and other daily expenses. Industrial production has weakened this year, as has private sector investment. Housing sales have slowed, as buyers look harder for bargains but sellers have been reluctant to cut prices. Car factories have sharply reduced output in response to weak sales, although there were signs last month that consumer interest in buying luxury automobiles may finally be stabilizing. The long-running trade war has prompted many multinational companies to look at ways to shift supply chains elsewhere. But many continue to invest in China to supply China’s own market as well as others, especially in Asia. “The Chinese government will continue to work hard to create a more stable, fair, transparent and predictable investment environment,” Gao Feng, spokesman for the Ministry of Commerce, said at a news briefing on Thursday. He later added that “China has not experienced large-scale withdrawals of foreign capital.” For now, though, the economy keeps running to a considerable extent because the Chinese government is pumping huge sums of money into infrastructure. It is building high-speed rail lines, immense highway bridges, ports and other facilities to connect ever smaller and less affluent cities and towns to the rest of the country. These are the flyovers of Guiyang city, capital of Guizhou province, one of the poorest provinces in China.

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That infrastructure is making it easier to do business and move around even in some of the poorest and most remote areas of China. But bankers and economists worry about whether some of these investments will ever earn enough of a return to cover their cost. “There’s a very weak commercial basis,” Mr. Magnus said, “for this credit-fueled infrastructure spending.”

Source: The New York Times

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Apparel exports to non-traditional markets post 21.77% growth

Of the $34.13 billion, $5.68 billion came from non-traditional export markets and the rest $28.44 billion from traditional markets, mainly the USA and the Euro Apparel exports to non-traditional markets have posted a sharp growth by 21.77% to $5.68 billion in the just concluded fiscal year, with the clothing business to both traditional and non-traditional destinations hitting $34.13 billion during the period.

Of the $34.13 billion, $5.68 billion came from non-traditional export markets and the rest $28.44 billion from traditional markets, mainly the USA and the Europe, according to the latest data of Export Promotion Bureau (EPB). Woven products earned $2.79 billion, which was 22.91% higher than $2.27 billion fetched in the previous fiscal year. Knitwear items raked in $2.88 billion, up by 20.68% from a year ago. Earnings from apparel items saw a 14.49% growth to $34.13 billion in the last fiscal year. Australia, Brazil, Chile, China, India, Japan, Korea, Mexico, Russia, South Africa, and Turkey are considered as the major non-traditional export destinations for Bangladeshi products. As per the data, Japan imported apparel goods worth $1.09 billion, which was 28.90% higher from the previous year. China, the second largest non-traditional market for the country’s RMG, imported products worth $506.51 million, up by 29.33% from the previous year. In addition, exports to India rose by 79.09% to $499.09 million during the period, the highest growth of apparel registered in the just concluded fiscal year. Only export to Turkey posted a negative growth by 27% to $190 million, which was $260 million a year earlier. Talking to Dhaka Tribune stakeholders have attributed the cash incentive and initiatives to explore new markets to the sharp and continued rise in export earnings from the new destinations. “Bangladesh’s export earnings from new markets are increasing faster due to market diversification initiatives from the government and the apparel manufacturers,” former BGMEA senior vice president Faruque Hassan has told Dhaka Tribune. In the last couple of years, BGMEA in collaboration with the government created opportunities for the manufacturers to participate in the global expositions to connect new buyers, which contributed a lot to enhanced exports to new markets, adds Hassan, also managing director of Giant Group. Besides, safety improvement in the apparel sector expedited the export growth as it boosted investors’ confidence, leading to more work orders, sector people say. As a part of the government’s market diversification step, the government increased cash incentive from 3% to 4% for the last fiscal year, which encouraged exporters to go for new destinations, former commerce minister Tofail Ahmed has told Dhaka Tribune. Currently, apparel exporters enjoy 4% cash incentive for exports to non-traditional markets, while 1% incentive for traditional markets for the current fiscal year. Economists also think incentive played an important role in the sharp growth. Cash incentive for non-traditional export markets yielded good result for apparel business, which needs to be continued, Centre for Policy Dialogue (CPD) research director Khondaker Golam Moazzem says.

Source: Dhaka Tribune

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China imports from US plunge 31% in June amid tariff war

China’s trade with the United States plunged in June amid a tariff war with Washington over Beijing’s technology ambitions that has battered exporters on both sides. Imports of US goods fell 31.4 per cent from a year earlier to $9.4 billion, while exports to the American market declined 7.8 per cent to $39.3 billion, customs data showed on Friday. China’s trade surplus with the United States widened by 3 per cent to $29.9 billion, potentially giving its critics ammunition to demand Washington take a hard line with Beijing. Presidents Donald Trump and Xi Jinping agreed in June to resume talks on the fight over US complaints about Beijing’s trade surplus and plans for government-led development of technology industries. That helped to calm financial markets but economists say the truce is fragile because the conflicts that caused talks to break down in May persist. Trade has weakened since Trump started hiking tariffs on Chinese goods last June. Beijing retaliated with its own penalties and ordered importers to find non-US suppliers. Envoys talked by phone on Tuesday in their first contact since Trump and Xi met in Japan, the Chinese Commerce Ministry said. It gave no details or a date for more contacts. “Our base case remains that trade talks will break down again before long,” said Julian Evans-Pritchard of Capital Economics in a report.

China’s global trade

China’s global exports sank 1.3 per cent to $212.8 billion, while imports fell 7.3 per cent to $161.9 billion. Trade weakness has added to pressure on Xi’s government to shore up economic growth and avoid politically dangerous job losses. Washington is pressing Beijing to roll back plans for government-led creation of Chinese global competitors in robotics, electric cars and other technologies. The United States also wants other changes including cuts in subsidies to Chinese industry. Beijing agreed last year to narrow its trade surplus with the United States by buying more American natural gas and other exports but scrapped that plan after one of Trump’s tariff hikes. The Chinese government said in June that any purchases must be at a reasonable level, suggested Beijing was becoming more cautious about making big commitments before it sees what Washington offers in exchange. Trump accused Beijing on Thursday of backsliding on promises to buy more American farm goods. He said on Twitter that “China is letting us down.” Trump’s statement “highlighted how more speed bumps may remain in the road ahead,” said Craig Orlam of OANDA in a report. “While a deal makes sense for both sides this year, it’s far from guaranteed and could hit many more snags.” Chinese leaders express confidence their economy can survive the tariff fight. Importers of American soyabean and other goods are trying to switch to Brazilian, Russian and other sources, but supplies are limited and costs are higher. Farmers who use soybeans as animal feed have been told to switch to other grains. While American exporters have been hit hardest, Chinese industries including electronics that Beijing sees as its economic future have suffered double-digit declines in sales to the United States, their biggest market.

Source: The Hindu

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‘Pakistan needs free access to US markets to stabilise its bleak economy’

Business community Sunday hoped that Prime Minister Imran Khan’s upcoming visit to United States of America (USA) would bring both the countries closer and help exploring new venues for mutual cooperation besides seeking direct access to American markets on zero rate duty to help stabilize its bleak economy. In a press statement issued here today, Founder Chairman Pak-US Business Council Iftikhar Ali Malik said Pakistan needs immediate direct access to US markets and not aid as it has suffered irreparable colossal financial loss for playing frontline role in the war on terror and US must support Pakistan to achieve its economic prosperity and self-reliance. He said joint efforts are needed to further cement the existing economic ties between Pakistan and US private sector. He said Pakistan and US are enjoying amicable relationship and coalition partners against war on terror. He also demanded that the US president Donald Trump should announce packages of incentives for the quick revival of the Pakistani economy as the country has also suffered losses a lot economically in the war against terror. Iftikhar Malik who is also Senior Vice President of SAARC Chamber said that USA is the largest trading partner of Pakistan with trade volume US$ 6.7 billion. He said that Pakistan’s major exports to United States are sports goods, surgical goods, leather and finished leather products, textile, cotton yarn, garments, carpets, and rice. Pakistan’s main imports from United States are electrical machinery, equipment, medicines, dry fruits, perfumes, coffee, mangoes, dates and other food items, he added. He also called for need of negotiation on bilateral investment treaty for promotion of investment.

Source: Daily Times Monitor

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Tex-Summit focuses on China's textile industry development

This year’s Tex-Summit Global forum interpreted the development trend of China’s textile industry and related policies, global textile industry and machinery trade data. It also addressed problems and opportunities in development of global printing, dyeing and finishing industry, and carried out discussions to help the industry improve quality and efficiency. The forum was held in Barcelona, Spain and sponsored by China National Textile and Apparel Council and the People’s Government of Shaoxing, jointly organised by China Textile Magazine, Shaoxing Keqiao District People’s Government, and the Management Committee of Shaoxing Keqiao Economic and Technological Development Zone, supported by the International Textile Manufacturers Federation (ITMF), Association of Italian Textile Machinery Manufacturers, Spanish Textile Machinery Manufactures, China Textile Machinery Association, China Dyeing and Printing Association, and The Sub-Council of Textile Industry, CCPIT. Distinguished guests from China National Textile and Apparel Council, International Textile Manufactures Federation, European Committee of Textile Machinery Manufacturers, Shaoxing City and Keqiao District People’s Government, representatives of EU - China Industrial Park, China dyeing and printing enterprises, Association of Italian Textile Machinery Manufacturers (ACIMIT), Spanish Textile Machinery Manufactures - amec amtex, and Swiss Textile Machinery Association, as well as more than 200 CEOs and heads of textile machinery enterprises from Switzerland, Singapore, Italy, Spain, Germany, US, Argentina, Pakistan, South Africa, India, Bangladesh, the United Kingdom, Turkey, China, China Hong Kong, and other 30 countries and regions participated in the forum which was chaired by Zhao Hong, vice president of China Knitting Industry Association. The year 2019 is the 70th anniversary of the founding of China. At the forum, Fritz P Mayer, president of the European Committee of Textile Machinery Manufacturers, Gao Yong, party secretary & secretary-general of China National Textile and Apparel Council, and Sheng Yuechun, mayor of the Shaoxing Municipal People’s Government delivered speeches. “The Tex-Summit Global with the theme, Sustainable Trends and Demand, is timely. Participants will be able to learn about China’s textile industry development trends and policies, global textile industry outlook and insights into the challenges and opportunities in global dyeing, printing and finishing sectors. They will also be able to hear from leading experts on how intelligent technologies can contribute to a cleaner and greener textile industry,” said Mayer. In his speech, Yong interpreted the development status of China’s textile industry and the new characteristics of China’s textile industry. He pointed out that the main economic operation indicators of China’s textile industry achieved positive growth in 2018, but the external environment became more severe in 2019. He emphasised that at present, there are many new features in the development of China’s textile industry, mainly because enterprises are more interested in going global to build factories. ‘Internet +’ is changing the status quo of China’s textile industry, and technological innovation is constantly injecting new impetus into the industry, ‘green’ sustainable development has gradually become mainstream. Yuechun said in his speech that Barcelona has a strong economic strength and relatively developed industry, especially the world leader in automation and intelligent technology of textile machinery manufacturing. Keqiao Economic and Technological Development Zone in Shaoxing City has the largest green dyeing and printing manufacturing base in China, with an annual dyeing and printing capacity of more than 16 billion meters, a vast market and abundant resources. It has a strong complementarity and correlation with Barcelona’s industrial economic development. He sincerely hopes that the two sides can seek common development and share the future, deepen cooperation between China and the West and achieve more fruitful results. Dr. Christian Schindler, director general of International Textile Manufacturers Federation, delivered a keynote speech entitled ‘Competition Drives Innovation in the Textile Industry’. He introduced what is the driving force of the current textile industry, which countries are investing, and what are the expectations for future development. He emphasised competition-driven pricing strategy and technological innovation, and pointed out that China’s competitiveness in the textile and apparel industry is still strong. He presented various trade statistics that indicated the countries that are growing across the world. “Changing consumption patterns, growth in online retail, decrease in energy consumption and recycling, etc as the main drivers of this change,” said Schindler. “However, continuing political tensions in Turkey, elections in India and trade dispute in China have impacted the buyer sentiments,” Schindler added. Suggesting, what to expect from future, he noted, “Investing in high technology, increasing productivity and depending less on human resource to balance the labour cost increase, increasing consumption of polyester fibre and polyester filament will reduce water consumption, chemical process, energy consumption, driving the industry to next level.” He also indicated based on the statistics, design development and manufacturing with new bio based fibres, digital printing, product development based on integration of supply chain and intelligent manufacturing with reducing cost, better automation, productivity, flexibility and quick market response are the trends that are being foreseen. Chen Zhihua, president of China Dyeing and Printing Industry Association, delivered a keynote speech entitled “The endogenous power of sustainable development of dyeing and printing industry”. He introduced and interpreted the three aspects of ‘high-quality dyeing and printing product design and manufacture’, ‘intelligent manufacturing’ and ‘advanced technology of energy saving and emission reduction’. He emphasised that scientific and technological innovation is the most important driving force for the transformation, upgrading and sustainable development of the dyeing and printing industry. Patrick Wong, China sales director of CHTC Fong’s International Co, Ltd, gave a keynote speech entitled ‘To meet the market need and trend on Complete Solution for Smart Dyeing and Finishing in Textile Industry’, emphasising what CHTC Fong’s has perceived and done in Chinese market. “In China market, it is not simply to run textile dyeing and finishing green when dealing with the policy of environmental issues. Our customers in China, under the circumstances, they have also to run their dye houses sustainable enough for global competition. Energy saving, less manpower, high efficiency and quality assurance etc., are the factors concerned. Besides, innovation of technology so as to deal with quick response in supply chain is required to meet the satisfaction of fashion brands. Running the dye houses smart is necessary.” According to Wong, in 2018, the total output of dyed and finished fabric in China is about 49 billion meters, yearly growth at 2.6 per cent. The total product value is up to more than $40 billion, yearly growth at around 3 per cent. The profit of textile printing and dyeing industry sums up to $2.25 billion, yearly growth at about 18 per cent. 8 major items of exported fabrics including cotton dyed and finished fabric contribute total $26.6 billion, growth at 6.65 per cent resulting in a total trade surplus of $22.77 billion. These figures indicate that the demand of dyeing & finishing equipment in China is still enormous. The volume of textile industry in China remains strong and energetic. It is still standing in the leading position of the world. He also introduced that CHTC Fong’s is to set up a production base for manufacturing auxiliary devices for smart dyeing and finishing system in Keqiao, Shaoxing, China. “Shaoxing has become the center of finished fabrics in China meanwhile moving towards as the fabric world center of textile. We are confident our work put in Keqiao, Shaoxing will allow us to be more successful.” Gu Ren, president of Changzhou Hongda Technology (Group), introduced ‘Leading Hawkvision artificial intelligence technology for the global textile industry’. He pointed out that the intelligent products of Changzhou Hongda Technology (Group) occupied the leading position in the domestic dyeing and printing industry market and technology, and the online detection system of dyeing and printing process parameters occupied more than 80 per cent of the domestic market, leading the technological progress in this field. Hawk Vision takes the world’s leading on-line detection device and system of textile dyeing and printing process parameters as its core advantage, and uses the new generation of industrial Internet, big data, artificial intelligence technology to lead the textile dyeing and printing industry into a new era of development. Li Chuanhai, president of Keqiao Dyeing and Printing Association, delivered a keynote speech entitled ‘Sustainable development for a smart future’. He pointed out that the textile dyeing and printing industry must develop digitally and intelligently. Green development is the eternal theme. How to achieve new breakthroughs in textile dyeing and printing industry and how to achieve new breakthroughs in fashion creativity should be innovated forever. Jürgen Ströhle, CTO of Benninger AG, also an officially UNIDO expert for ‘Environmental sound textile production’, delivered a keynote speech entitled ‘Sustainable textile finishing process’, pointing out that market demands are permanently changing, and Benninger masters market changes since 160 years, for example, “Continuous Open Width is the most efficient way to save planet resources. Benninger high efficient washing can save 70 per cent water, and the CPB Dyeing is salt free dyeing at liquor ratio 1:1.” Adele Genoni, vice president and general manager of EFI Reggiani, delivered a keynote speech entitled ‘EFI Reggiani Innovation Trendsetter’. She introduced that EFI Reggiani is blazing a path to the next level of the industry with their new products for the customers’ benefit from such aspects as performance and productivity, reliability and low maintenance, cost effectiveness, full green process and new applications. EFi Reggiani is at the edge of technology in terms of continuous ink recirculation system, proprietary electronics and software, higher uniformity printing modes, new recirculation print head integration, and pigment with binder. Genoni emphasised EFi Reggiani Bolt at ITMA 2019 which is mainly featured with unparalleled speed, no time lost for maintenance, superior coverage and printing uniformity, compact footprint, proprietary IP combining digital and rotary technologies for special effects and hybrid solutions, and competitive ROI thanks to high productivity and unmatched reliability. Zhao Rulang, head of Keqiao District People’s Government of Shaoxing City, comprehensively introduced the current situation and future development direction of Keqiao District of Shaoxing City with the theme of ‘Charming Shaoxing, Silk Road in Keqiao’. Rulang said that Keqiao will make every effort to build a science and technology city with an area of 80 square kilometers, to become a gathering high-tech area of high-level talents; continuously improve traditional industries such as textile dyeing and printing, and introduce modern industries such as new materials and artificial intelligence. Li Guogang, deputy secretary of the Party and labour committee of the Management Committee of Keqiao Economic and Technological Development Zone, Shaoxing, made a panoramic perspective of Shaoxing Technological Development Zone. During the conference, Shaoxing Keqiao District People’s Government signed strategic cooperation agreement with Association of Italian Textile Machinery Manufacturers (ACIMIT) and Spanish Textile Machinery Manufactures - amec amtex respectively. In addition, enterprise representatives from Shaoxing Keqiao Economic and Technological Development Zone signed strategic cooperation agreements with investors from Europe: Wichelhaus GmbH & Co KG and Shaoxing Shumei Knitting Co, Ltd; LAWER SPA and Zhejiang Yingfeng Technology Co, Ltd.

Source: Fibre2Fashion

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GOTS ranked best in textile traceability test by Stiftung

Global Organic Textile Standard (GOTS) was ranked best in the test ‘Traceability of Clothing with Textile Seals’ by German consumer product testing organisation Stiftung Warentest. GOTS was found to offer complete transparency and traceability while complying with strict social and ecological criteria at all stages of production from field to finished textile. For the test Stiftung Warentest selected three certified garments per audited seal. All scope and transaction certificates were examined. The scope certificates confirm GOTS-certified companies’ ability to manufacture according to the GOTS criteria, said GOTS in a press release. Transaction certificates serve as shipping documents which prove that the garments are certified. Independent auditors confirmed full traceability of GOTS certified textiles from cotton cultivation via spinning, knitting, finishing up to the finished textile and compliance with the stringent ecological and social criteria. “We are extremely pleased to receive this great recognition from such a renowned institute”, said Franziska Dormann, GOTS representative in Germany, Austria and Switzerland. Products may only be sold with a GOTS label if the entire supply-chain is certified and the necessary scope and transaction certificates have been obtained. In order to guarantee consistent product assurance of GOTS certified textiles, an independent on-site inspection, according to the GOTS standard, is carried out annually by GOTS approved certifiers.

Source: Fibre2Fashion

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Vietnam strains to reap the rewards of the U.S.-China trade war

HO CHI MINH CITY, Vietnam — The requests that textile factory manager Huynh Thi Ai Diem receives are almost always the same: A foreign company is desperately trying to relocate production from China to Vietnam. Tariffs imposed by the U.S. have eaten away their profit margin. Can she help? Huynh would like nothing more but is swift to provide a reality check. She only has enough workers, raw materials and factory space to produce one-fifth the volume of bath towels and apparel churned out by her chief competitors in China. Her prices are competitive, she says, but contrary to popular belief, they aren’t cheaper than those of her Chinese rivals. “Our prices are reasonable and we can deliver good quality, but we can only take small orders,” said Huynh, a manager at Phong Phu, a 54-year-old manufacturer. Few countries have benefited more than Vietnam from the year-old trade war between the United States and China. Companies, already under pressure from rising production costs in China, have been scrambling to identify factories to work with in the Southeast Asian country to avoid heavy tariffs. In the first five months of 2019, Vietnamese exports to the U.S. have surged 36% compared with the same period last year. With $25 billion in shipped goods through May, Vietnam has become the eighth biggest source of American imports, up from 12th place a year ago. But as Huynh explained, the “Made in Vietnam” label comes with a disclaimer. The country of 97 million has one of the fastest growing economies in the world — punctuated by towering new real estate here in Vietnam’s economic center — but it’s not nearly big or developed enough to absorb the sudden exodus from China. As some Vietnamese factory managers turn down orders because they don’t have the capacity, competition for increasingly expensive labor is forcing low-cost clothing companies to rethink their expansion plans. In addition, ports are struggling to deal with container ship traffic that’s almost doubled in the past year, according to data from MarineTraffic. The strain on resources is helping temper expectations in a country that experts say is being unfairly compared to China, the behemoth to the north which dictated the rules of global trade the last two decades. For one thing, Vietnamese producers, unlike those in China, have to import much of their raw materials such as steel, fabric and chemicals. “If it can be made, it’s probably being made in China. That’s not true of Vietnam,” said Jim Kennemer, founder and managing director of Cosmo Sourcing, a U.S. company with business across Asia. “Vietnam is taking over cheap and easy production, but it hasn’t done the same with more complex manufacturing yet.” Still, Vietnam has made massive strides this decade diversifying beyond shoes and apparel to higher value products by attracting companies such as Samsung, Intel and Canon. Samsung alone employs over 150,000 workers in Vietnam producing smartphones that accounted for nearly a quarter of Vietnam’s exports last year. The world’s biggest smartphone manufacturer started shifting production to Vietnam from China in 2011 to chase lower labor costs. The South Korean giant could serve as a model for its biggest rival Apple, which is looking to move some production out of China. A key to attracting more multinational firms to Vietnam is infrastructure improvements, experts say. In addition to crowded ports, roads remain spotty across the country. And a first-of-its-kind metro rail project in Ho Chi Minh City has been plagued by major delays and cost overruns. Vietnam’s Communist leaders hope some of those problems can be alleviated by foreign direct investment, which is on pace to grow in 2019 for the eighth consecutive year. Like China, the ruling party introduced major market reforms, which have attracted billions of dollars from abroad. Vietnam is under growing pressure to modernize its logistics network, which the World Bank ranks 39th in the world — 13 and 14 places behind China and South Korea, respectively. “Businesses from China, Europe and the U.S. want to see Vietnam further position itself as a viable alternative for lower-end production,” Pham Hong Hai, chief executive of HSBC Vietnam, said in a statement. “However, to convert its much-touted supply chain potential, the country needs to build more visibility and credibility among international firms, particularly in their ability to handle and deliver production orders.” Logistics networks that do exist are being tested like never before. Much of the increase in exports here is believed to be the result of companies in China rerouting finished goods through Vietnam to parry American tariffs — a practice that has drawn the ire of President Trump, who last month said Vietnam was “the single worst abuser” on trade with the U.S. Hanoi has since pledged to purchase more U.S. goods to reduce a trade deficit with Vietnam that hit a record $39.4 billion last year (Hanoi and Washington have grown closer over a mutual distrust for Beijing, underscored by Vietnam’s resistance to Huawei in future 5G networks.) The clamor for factories in Vietnam could subside if Washington and Beijing strike a long-term trade deal. But optimism remains high that the country that launched market reforms in 1986 is on a steady economic ascent. More than two-thirds of Vietnam’s population is under 35 years old, meaning favorable demographics to fuel its rise. Free trade agreements, including one struck with the European Union at the end of June, could further bolster the economy. “There’s so much opportunity here,” said Tia Nguyen, who is among a growing number of overseas Vietnamese, known here as Viet Kieu, who have returned to their native country. Nguyen, 28, left Australia in February after living in Melbourne for five years. Her boyfriend, an automotive engineer, will join her this month and was offered a lucrative job at VinFast, Vietnam’s first domestic carmaker. Nguyen now works at Sourcify, a San Diego-based start-up that links clients with factories and has offices in Vietnam, China, India and Cambodia. Its founder, Nathan Resnick, said about a quarter of his customers are moving production from China to Vietnam. “My inbox was flooded,” Resnick said of the days following U.S. tariff announcements against China in May and last July. Inquires to Sourcify have doubled in recent months, he said, because foreign companies can’t easily find factories in Vietnam like they can in China by searching Alibaba. One of those factories is Tellbe Vietnam, a metal fabrication plant located in an industrial suburb of Ho Chi Minh City on land that used to be a snake-infested lemon grove. For more than two decades, the factory has seen growth in its business making stainless steel racks, metal dolly carts and display signs, including ones for Volvo (the company has Swedish investment). But general director Lam Trong Nhan laments the factory could become more profitable with more government support such as tax relief and a reduced reliance on Chinese steel imports. “My costs go up every year,” said Lam, who is currently able to match the prices of competitors in China. “But I can’t increase my prices, or I risk losing customers.” His wife, Che Lam, Tellbe’s art director and product development manager, said the factory has room to add more orders and hopes to win new U.S. customers as a result of the trade war — one of the reasons why it responded to an inquiry from Sourcify. “The world is turning its eyes to Vietnam,” she said. “It’s still the Wild Wild West here, but you get the sense anything is possible. We’re trying to ride the wave.”

Source: Los Angeles Times

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