National
The commerce and industry minister chaired Board of Trade (BoT), which advises the government on foreign trade policy (FTP), will meet on September 12. A top advisory body on external trade will meet next week to discuss issues related to export promotion, domestic manufacturing and competitiveness in the wake of a fall in exports of traditional, employment-generating sectors such as gems and jewellery, leather, handloom and cotton yarn and fabrics. The commerce and industry minister chaired Board of Trade (BoT), which advises the government on foreign trade policy (FTP), will meet on September 12. It last met in June when it was merged with the Council of Trade Development and Promotion to streamline the consultation process with all stakeholders for promoting trade. “Besides export promotion and domestic manufacturing, India’s free trade agreements and domestic competitiveness are also on the agenda,” said an official in the know of the details. The meeting comes in the wake of a decline in outward shipments in July by gems and jewellery (6.82%), engineering goods (1.69%) and petroleum products (5 %). In April-July 2019, exports dipped 0.37% to $107.41 billion, while imports contracted 3.63% to $166.8 billion. The new board provides a platform to states and union territories for articulating their perspectives on trade policy and help states to develop and pursue export strategies in line with the national foreign trade policy. Its members include state ministers who are in charge of trade, secretaries of different departments like revenue, commerce, health and agriculture besides NITI Aayog CEO, Deputy Governor RBI, and CBIC chairman. Presidents and chairpersons of industry chambers among others are ex-officio members.
Source: The Economic Times
Despite its size, India's textile industry has struggled on the global market. India’s share in global textile exports has declined while countries like Bangladesh and Vietnam are expanding their market share. A new study suggests India’s textile exports are constrained by high costs, unhelpful customs policies and competition from abroad. In an article published on Ideas for India, a policy research portal, Saon Ray of the Indian Council for Research on International Economic Relations (ICRIER) explores the reasons for Indian garment exporters' struggles by drawing on data from surveys conducted in 2010. The survey covered 127 firms and 25 respondents in five apparel production centers in Bangalore, Delhi, Kolkata, Ludhiana, and Tirupur. She finds that, partly because of India’s large domestic garment market, garment production in India is organized according to the production logistics of a handful of large firms. This results in low integration of Indian garment exporters into the global value chain According to the survey, the biggest constraints for Indian firms are production costs, time involved in exports and competition from other countries. Specifically, factors such as high electricity and raw material costs make it difficult for manufacturers to meet strict quality requirements for exports and deliver exports on schedule. In terms of competition, India’s garment export competition comes from countries like China, Vietnam and Cambodia which produce similar garments, rather than neighbouring countries such as Bangladesh and Sri Lanka which produce different types of garments. To make Indian textiles more competitive, the government should improve infrastructure networks to streamline the textile input-procurement process and ease credit constraints for textile exporters, the authors suggest.
Source: Live Mint
The eleventh edition of India ITME 2020 will be held in India Exposition Mart Ltd, Noida, from December 10-15, 2020. The total number of halls will be 15 with a total area of 2,35,000 sqm, making it the largest in this industry segment. The event is expected to host more than 1800 exhibitors in 21 chapters and have over 1,50,000 visitors over 6 days period. The main objectives of the event are a)To develop India as a textile and textile engineering sourcing destination b)To encourage investment in India for textile machinery manufacturing and thus support Government initiative to develop India 'as a manufacturing hub' for textile engineering c)To encourage new market development to generate new custom lead from 2nd tire and rural markets for the manufacturers d)To facilitate connect to agents, dealers, distributors for overseas market as well as the domestic market for the manufacturers e)To facilitate joint ventures and technology transfer f)To promote/support the growth of textile Industry in India through new technologies along with Ancillary and Allied Industries & Trade. India ITME 2020 will offer unmatched business to the exhibitors as the Indian textiles industry is set for strong growth, buoyed by strong domestic consumption as well
as export demand. It will open windows to various business verticals in form of leads, contacts enquiries on a massive platform. Participation from 91 countries and 21 chapters, will make India ITME 2020 a one stop platform for the engineering solutions and technical technology for textile industry, servicing the whole of Indian textile industry and building India brand.
Source: Fibre2Fashion
Ahead of the crucial Goods and Services Tax (GST) Council meeting on September 20, the finance ministry has begun crunching the numbers to estimate the revenue it would lose in the event of rate reductions aimed at boosting demand during the festive season. The fitment panel that examines rate changes is expected to meet shortly to consider suggestions mooted by some states as well as industry, two officials aware of the development told ET. The panel comprises central and state officials. Among big-ticket consumer items, automobiles, tyres, cement, air conditioners and large LCD televisions are currently in the 28% bracket. Automobiles also bear a cess, depending on the size of the vehicle, further increasing the total tax incidence. “Issues are being examined in detail… Numbers are also being looked at,” said one of the officials. Some states have already written to the Centre highlighting the need to cut rates on autos and cement to provide a boost to the economy. Some state policymakers are of the view that a more radical view of the rate structure needs to be taken, for instance merging the 12% and 18% slabs into one. The key issue before the council meeting in Goa will be a possible cut in the tax incidence on automobiles, though there are differences among states on this issue. Punjab has suggested a comprehensive look at the rate structure while reducing levies for sectors such as automobiles to help turn the economy around. But Kerala is opposed to any such move. West Bengal has also sought steps for the auto sector, particularly hybrid and Bharat Stage VI vehicles. BS VI prescribes more stringent emission norms for vehicles. The Centre is weighing all options, one of the persons quoted said. After the Reserve Bank of India cut the policy rate by 35 basis points in August, market watchers say it’s now up to the government to take fiscal measures to boost the economy. A basis point is 0.01 percentage point. India’s economy grew 5% in the June quarter, its slowest pace in six years. Private consumption expenditure slowed to 3.1%, an 18-quarter low, while manufacturing grew 0.6%. With consumption having helped prop up growth in the past few years amid sluggish private investment and exports, any revival plan hinges on Indians loosening their purse strings during the festive season, which is when the bulk of sales take place traditionally. High-frequency indicators have pointed to the slowdown getting more entrenched. The country’s largest car maker Maruti Suzuki said Wednesday that it will halt production for two days this month as inventory piles up. On Sunday, most companies including Maruti Suzuki, Hyundai, Mahindra & Mahindra, Tata Motors and Honda reported a further drop in sales in August. While Maruti Suzuki reported a 33% decline, Tata Motors witnessed a 58% drop. GST rate cuts do not necessarily lead to a reduction in collections as they spur demand as well, experts said. “Given the economic slowdown, there is certainly a case for reduction in rates for a few sectors such as auto,” said Pratik Jain, national leader, indirect taxes, PwC. “This has been done in the past and worked more often than not. Of course, this has to be backed up with other economic stimulus (measures) as well.” For sectors such as real estate and railways, where input tax credit is restricted, there is a case for reduction in rates on key inputs, he said. Jain said the GST Council may also want to consider merging the 12% and 18% slabs into a single one of possibly 15% or 16%, which will also simplify the rate structure. “However, it will not be an easy decision for the council and a larger consensus needs to be built for any major rate change,” he said.
Source: The Economic Times
The rupee appreciated by 27 paise to 71.85 against the US dollar in early trade on Thursday as gains in the domestic equity market enthused investors. At the interbank foreign exchange market, the rupee opened at 71.87, then gained further ground and touched a high of 71.85, registering a rise of 27 paise over its previous close.The rupee had settled at 72.12 against the US dollar on Wednesday. The domestic unit, however, could not hold on to the gains and was trading at 71.93 against the dollar at 0955 hrs.Forex traders said a higher opening in domestic equities supported the rupee.Domestic bourses opened on a positive note on Thursday, with the benchmark indices, the Sensex trading 119.07 points higher at 36,843.81 and Nifty up 40.95 points at 10,885.60. Market participants, however, said sustained foreign fund outflows and rising crude prices weighed on local the currency.Foreign institutional investors (FIIs) remained net sellers in the capital market, pulling out Rs 1,738.49 crore on Wednesday, according to provisional exchange data.Brent crude futures, the global oil benchmark, rose 0.07 per cent to trade at $60.74 per barrel.Moreover, the strengthening of the American currency vis-a-vis other currencies overseas also dragged the rupee down.The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.03 per cent to 98.48.The 10-year government bond yield was at 6.58 per cent in morning trade.
Source: The Hindu Business Line
Yarn, fabric exporters seek help from Centre as shipments fall, mills close down.
The on-going US-China trade war provides big opportunity for India to attract US investments in garments. American clothing companies, scouting for greater investment opportunities in India following the US-China trade war, have made a case for a free trade agreement between the US and India to increase trade in the sector. Other suggestions given by a group of fifteen American companies to Textile Minister Smriti Irani, during their meeting on Tuesday, was to improve the ease of doing business on the ground, provide higher skills to workers and draw up a sustainable growth plan for the sector, according to Tara Joseph, President, AMCHAM Hong Kong. “We are at an inflexion point. Manufacturing is moving away from China. There is a window of opportunity for India to attract investments in manufacturing. However, there is a lot of competition from countries like Bangladesh, Vietnam and Indonesia, and and India needs to do all it can to increase its relevance,” Joseph said addressing a press conference. In the last four years, investments worth $30 billion in textiles had moved out of China because of various factors including rising input costs, but very little had come to India, Gautam Nair, Chair, CII Textiles Task Force, pointed out. With the on-going trade war between the US and China, a greater number of American companies are looking at moving their investments from China. “On paper, India has significant strength and could be the natural successor to China. We have to speak with potential investors to find out why this has not been happening and act accordingly,” Nair said. The delegation, which comprises representatives from American textile majors such as Ralph Lauren, the PVH Group (which owns brands like Calvin Klein, Timmy Hilfiger, Van Heusen and Arrow) and Carter's Inc, also discussed future possibilities with Niti Aayog CEO Amitabh Kant. According to Joseph, an FTA between the US and India would promote business in the textiles sector. “Where there is a will, there is a way,” she said, on being pointed out that the two countries have not even been able to work out a limited trade agreement involving a few products. The Amcham delegation also met the faculty of the National Institute of Fashion Technology (NIFT) to exchange ideas on the latest trends in design.
Source: The Hindu Business Line
The All Pakistan Textile Mills Association (APTMA) Punjab Chairman Adil Bashir has said that the textile industry is ready for adopting renewable (solar hybrid) energy solutions to deal with sustainability and competitiveness issues. He was speaking at an awareness session organised for member mills at the APTMA Punjab office in association with Solar Quality Foundation (SQF). Senior Vice Chairman APTMA Punjab Abdul Rahim Nasir, Vice Chairman APTMA Punjab Aamir Sheikh, Treasurer-elect APTMA Punjab Kamran Arshad, and a large number of representatives of mills were also present on this occasion. While pointing out the energy affordability issue of Punjab-based industry, he emphasized the importance of energy in the whole energy mix of industry and stated that its share has become more than 35-40% in total conversion cost in the basic textiles, i.e., spinning and weaving
Source: The Nation
Nigerians should have every reason to be tired of reports of every government’s move to revive the textile industry since 1999 when democracy returned with some promise. Despite all the noise and vaunting about revamping the industry, it is still in a sorry state. The industry used to be investors delight in the 1960s when businessmen mainly from Asian countries found it very attractive to commit their capital given the large market the Nigerian economy presented then. This is the same industry that used to provide employment to myriads of skills and cadres of staff ranging from the very low, semi and highly skilled, which led to immense boom in the national economy, particularly the economies of cities such as Kaduna, Asaba, Aba, Ikeja, among others where textile production was a success story. In the sixties and years later, these cities were centres of excellence of some sort with many trooping in from the hinterland, to eke out a living for themselves, through small and medium-sized industries that sprang up, by forward or backward linkages with these textile firms, with tremendous positive effects on general commerce, increased tempo in economic activities and enhanced living standards generally. The story is now very different – a far cry from the glory days of the past. Workers in such industries, including the current National Chairman of the All Progressives Congress, APC, Comrade Adams Oshiomhole indeed have had reminiscences of such situations that laid the foundation for vibrant labour unionism in the country. Indeed, more significant citizens like Oshiomhole cut their teeth in trade unionism and thereby had a rewarding career that propelled them to greater heights. Those were the days of yore. Hence it was no surprise at the enthusiasm expressed by the representatives of the National Union of Textile, Garment and Tailoring Workers, NUTGTW led by its President, John Adaji at the promise by President Muhammadu Buhari to the union, at the Presidential Villa in Abuja, to revive the textile industry and thus enhance job creation, as one of the key pillars of his economic agenda in his second term in office. This promise by the president is cheery news, not only to members of the NUTGTW but to the generality of Nigerians who would be glad at the return of those days of boom. However, on second thought, it must be clearly expressed that good wishes are indeed good and that “if wishes were horses then beggars might ride.” Since the days of the structural adjustment programme which commenced in 1986, Nigeria has gone through a series of economic policy frameworks that have had negative effects on its competitive relations with the rest of the world such that production capacities for various sectors such as textile manufacturing have been lost, leading to the setting in of de-industrialisation in the country. Nigerian firms do not currently have the necessary comparative advantage in the production of many exportable commodities, even in producing for the local market. With adjustments in the exchange rates, among other changes in the macro-economy, which are different from what obtained in the days of the textile industry boom, imported textile products have become much cheaper than those produced locally thus making local industries largely unprofitable in production and thus very difficult to sustain the existence of these firms. To change this narrative, much work would need to be done in combination with good policy articulation and thus bring a return of the good old days of the textile industry boom in Nigeria. First, Nigeria must come up with a functional commercial and industrial policy to be able to address the issue of the reversal of de-industrialisation in Nigeria. This would have to be situated within the context of the Economic Recovery and Growth Plan (ERGP). This invariably must not be at variance with the African Continental Free Trade Area (AfCFTA) arrangement of which Nigeria is a signatory. The commercial policy to revive the textile industry must be holistic, for it to have any meaningful impact on textile production in Nigeria. One good thing that can be achieved from this is to divert trade away from nonAfCFTA members and prepare for competition with other African producers. It must be clear that the world economy is currently averse to trade protectionism unlike what obtained in the days of textile industry boom in Nigeria. There is the existence of the World Trade Organisation (WTO) which is focused on promoting free trade among nations based on specified criteria. The current trade war between the U.S. and China is quite instructive given the turbulence the global economy is currently going through by such flexing of muscles by these global economic powers. What the president and his economic team should be focusing on in the interim is the revival of production for the domestic market by the textile firms. This can be backed up by appropriate government policy pronouncements compelling officials of government ministries, departments and agencies to patronise locally made textile wears and adorn them at public functions. This is feasible and has been clearly demonstrated in our neighbouring country, Ghana where it is common to see government officials wearing their local “kente” fabrics at public and private functions. This has to be followed closely by a massive public enlightenment campaign by the National Orientation Agency (NOA) to sensitise Nigerians on the need to buy “Made in Nigeria” textiles. Another policy posture the government must take is the effective surveillance of the borders, to check incessant resort to smuggling by businessmen who want to evade paying duties or bring in prohibited fabrics into the country for maximisation of profit. This definitely distorts the structure of production in the economy. Specifically, as this newspaper has been reiterating on this, smuggling must be dealt a heavy blow to revive the textile industry; else domestic textile production will be a mirage, as these firms will find it tough to survive in an uncensored economic environment. Focusing on producing for the local market would also revive the cultivation of cotton which used to blossom in the Northern parts of the country. That will also create jobs in the agricultural sector. One fact government must make clear to the operatives of the textile industry is that it would take a lot of hard work to revive the industry and that all hands must be on deck. A curious mix of good policy formulation, tariff measures and border control, exchange rate management and good industrial incentives would have to be deployed to achieve this great dream most Nigerians would want to be realised. The least the country can do in this regard is to satisfy the domestic market and have a total reorientation of the populace in the preference for locally made fabrics to those imported. We hope that the textile industry and its good old days of boom in the sector will be revived. The only way to achieve that is to migrate from rhetoric to action that the nation can feel.
Source: The Guardian
US and Chinese trade negotiators will resume talks in Washington in early October, Beijing said Thursday, after new punitive tariffs raised fears of a breakdown in the protracted negotiations. The world's two biggest economies have been embroiled in a tense year-long trade war, which escalated further on September 1 when both sides implemented fresh levies. The negotiations were supposed to have resumed this month but the Chinese commerce ministry said Vice Premier Liu He, Beijing's pointman on trade, agreed to October talks in a phone call with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday. The officials agreed to "work together and take practical actions to create favourable conditions for consultations", the ministry said in a statement. It said the two sides would "maintain close communication" ahead of the talks. The top officials last met in Shanghai in July for a round of trade talks, which were described as "constructive" but ended with no announcements.US President Donald Trump announced afterwards he would increase tariffs on more than half-a-trillion dollars' worth of imports in a new round of punitive measures, prompting Beijing to respond with fresh tariffs on US goods worth $75 billion. Tensions continued to mount over the summer, with Trump accusing Chinese negotiators of holding out for a better deal in hopes he will be voted out in next year's presidential elections. But at the recent G7 meeting of rich democracies in France, Trump spoke of new communications between US and Chinese negotiators -- giving financial markets a brief boost -- while China's foreign ministry said it was unaware of such contacts. This week China said it had lodged a complaint against the US with the World Trade Organization (WTO), one day after new tariffs came into force. While the US-China negotiations began in earnest in January and seemed at first to make progress, they were abruptly called off in the spring by Trump. They resumed in June at the highest levels in the margins of the G20 summit meeting in Osaka, Japan, when Trump met his Chinese counterpart Xi Jinping. But in its complaint to the WTO, Beijing accused the new US tariffs of "seriously violating the consensus reached by the leaders of our two countries in Osaka". The new round of talks will be seen as a sign of optimism in a trade war that has weighed on the global economy and shaken diplomatic relations between the two global powers.
Source: The Economic Times
Turkey may lose trade with Britain worth up to $3 billion (£2 billion) in the event of a nodeal Brexit, Trade Minister Ruhsar Pekcan said on Wednesday, adding that many Turkish companies lacked information on the consequences of such a scenario. Pekcan, speaking at a Turkey-UK Business Forum in Istanbul, said the losses would stem from Britain hiking import tariffs after Brexit in sectors including steel, automotives and textiles. “We expect that the most affected sectors will be automotive by a trade loss worth up to $1.2 billion, textile with $1.3 billion and electronic and white goods by $500 million,” Pekcan told a business forum in Istanbul. “Unfortunately, even though both the British side and us want to sign a free trade deal, we cannot do so because of our international commitments with the EU,” she added. She said her ministry would begin touring the country to inform companies on the potential impact of a no-deal Brexit. “It seems that Brexit under a deal would be okay, but a no-deal Brexit will leave the Turkish businesses in a difficult position,” Pekcan said. British lawmakers, who on Tuesday seized control of the parliamentary timetable to avert a no-deal outcome, are expected to introduce a bill on Wednesday seeking to stop Britain from leaving the European Union on Oct. 31 without transitional arrangements.
Source: Euro News
