The Confederation of Indian Textile Industry (CITI) is convening a meet of stakeholders in Coimbatore on September 26. Different textile-related forums/associations have been invited to take part in the meeting to discuss and put forth the sector’s demand in one-voice to the government, said CITI Chairman T Rajkumar. CITI plans to compile and the industry demands and submit the list to the government by October 15. Hailing the various measures initiated by the government to revive the economy, Rajkumar said the textile industry is no exception to the meltdown. “We met Finance Minister Nirmala Sitharaman last Wednesday and explained our situation. While indicating her readiness to bail the textile industry out of its present imbroglio, Sitharaman asked us to consolidate, highlight and submit a report on the industry’s plight. This meeting is aimed at eliciting the issues from the different textile associations across the value chain.” Earlier at a meeting convened jointly by CITI, Texprocil and the Southern India Mills Association (SIMA), Rajkumar said the textile and clothing industry is under a severe liquidity crunch, mainly due to huge accumulation of TUF subsidies amounting to ₹12,000 crore (over the past six years) and RoSL/RoSCTL arrears since early March this year and GST refund. “These should be released immediately. The government has sought updation on TUF subsidy release by September 30. Unfortunately, banks have done away with the TUF cell. We have therefore appealed for extension of time.” Rajkumar stressed the need for extension of debt restructure to the textile and clothing sector, similar to the MSME debt restructure package. Texprocil Chairman KV Srinivasan said that the industry continues to suffer due to various external factors, and the spinning sector is at its worst. It is facing a crisis that is unprecedented in the last three decades. Production surplus and stagnation in yarn movement over the last four years, coupled with a steep slide in yarn exports of over 35 per cent in recent months, has aggravated the situation. The impact has been more due to external reasons such as the US-China trade war, duty-free access enjoyed by Vietnam and other countries in Chinese market, delay in FTAs and so on. “The situation is likely to worsen in the coming year” he said, emphasising the need for extending the export benefit to cotton yarn as well.
“Cotton yarn has been singled out under the RoTDEP (remission of Duties/Taxes on Export Products — the new export benefit scheme). This has to be included to make this capital-intensive sector competitive”. Srinivasan further said that cotton yarn was outside the purview of interest subvention, suggesting the need for making it applicable to all sectors of the textile industry.
Source: The Hindu Business Line
India’s free trade agreement (FTA) with Indonesia and Vietnam is impacting the Indian textile mills in a big way and leading to closure of majority of these mills.
In just 26 months, polyester yarn has seen a whopping 855 per cent increase in import, which is a worrying sign.
Polyester yarn (finished product of mills) is included in the list of items being cleared with SAFTA/AIFTA certificate at zero duty whereas the raw material for this product, polyester staple fibre (PSF), is not included in this list and hence cleared at a full duty rate of 5 per cent.
The PSF production is controlled in India largely by Reliance Industries Ltd. (accounting for more than 50 per cent of the total production); the domestic prices of PSF are calculated taking into account the landed rate of PSF from Indonesia.
As per the available information, the average total monthly import from Indonesia and Vietnam in the pre-GST period was 565 tonnes. The average monthly import in the last 2 months has been 5,400 tonnes, which is an increase of 4,835 tonnes per month in % terms – A staggering 855 per cent jump in quantity in a period of just 26 months.
Industry experts believe that if this same trend is extrapolated, imports will reach 50,000 tonnes per month, or 600,000 tonnes per year by October 2021 valued at US $ 1.02 billion per year.
Besides, the size of the spinning mills in Indonesia is huge and if left unchecked, this figure will surely threaten the survival of Indian textile mills.
t is also pertinent to mention here that pre-GST, there used to be some protection against the influx of imports under these FTAs as imported yarns were subject to CENVAT @ 12 per cent and a special additional duty (SAD) of 4 per cent, whereas the domestic yarn was exempt from CENVAT.
Only PSF was subject to CENVAT. Therefore, domestic yarn had the benefit of 12 per cent CENVAT on the value-added component during yarn production as well as the benefit of 4 per cent SAD. This was sufficient to protect against the clearance at zero duty under FTAs.
However, post-GST, with the removal of CENVAT & SAD, polyester yarn is being cleared at zero duty. This has led to very high increase in the quantity of yarn being imported from these countries which can be seen in above figures.
The Northern India Textile Mills’ Association (NITMA) has raised this issue strongly to the Government and sent a detailed representation to Ministry of Finance, Ministry of Textiles and Ministry of Commerce & Industries.
Sanjay Garg, President, NITMA says, “To overcome this challenge and to give domestic textile mills get a level playing ground, it is must to increase the Basic Custom Duty (BCD) on polyester yarns (55092100) from the current level of 5 per cent to 10 per cent. Besides,the Government needs to modify the FTAs to exclude this item from the list of items that are being cleared at zero duty in India or alternatively by including the raw materials of the yarn, that is PSF and PTA in this list.”
All the large textile mills in the Northern part of India are associated with NITMA and the combined turnover of its members is approximately 50,000 crore (US $ 8 billion).
Sanjay also added that if India is to achieve its goal of being a US $ 5 trillion economy in 2024, the domestic MMF industry must clock double digit growth rates.
Source: The Apparel News
Free trade agreements signed between major consuming countries and manufacturing countries pose a major challenge for Indian apparel exporters. This threat comes even as the growth in exports moved back to the positive zone after two years. Continued access to export incentives remains crucial for the Indian apparel exporters to garner a larger pie of the global apparel trade, though recent measures announced by the central government have provided some relief. After a fall in exports for the last two consecutive years, apparel exports were up 4 per cent in the last four months of this fiscal. As per an ICRA note, though domestic apparel exports are expected to remain in the positive zone for the rest of the year, there are multiple threats which could affect the pace of growth make it challenging for apparel exporters. In terms of region-wise trends, the growth in India’s apparel exports during the first four months of the current fiscal was primarily driven by a 7 per cent increase in exports to the US market, while exports to the European and the UK markets declined by 2-3 per cent during the period.
In addition to a general slowdown in EU’s import demand amid weakening of currency with euro depreciating by 4 per cent against USD in first half of this calendar year, exports to the EU market have been adversely affected by the preferred access to competing nations like Bangladesh and Vietnam, by way of Free Trade Agreements (FTAs). These include Comprehensive and Progressive Agreement for Trans-Pacific Partnership between 11 nations, including Vietnam, which had come into force for seven nations by January, and EU-Vietnam Free Trade Agreement, which was signed this June. These could make it increasingly difficult for India’s apparel exporters to maintain their competitiveness in the EU, its largest market, which accounts for 35 per cent of India’s apparel exports. Jayanta Roy, Senior Vice-President, ICRA, said that external environment for India’s apparel exporters remains challenging amid a pick-up in activity on several FTAs among the key trading nations, which has intensified competition from nations having a cost advantage over India. “Apart from challenges in the EU market, retail trends in the US also remain unencouraging, which could exert additional pressure on the order flow for India’s apparel exporters going forward,” added Roy. Retail sales of clothing and clothing accessories in the US have remained flat during last eight months, following a comfortable growth of 4.6 per cent in 2018. Besides affecting order flow, this could potentially result in renegotiation of realisations as well as elongated receivable cycle for the exporters.
Source: The Hindu Business Line
The deal will affect access to medicines and seeds by raising the standards of intellectual property rights, claims Forum of Trade Justice. Regional Comprehensive Economic Partnership (RCEP) negotiations going on in Vietnam will strengthen investor rights against the rights of Indians, claimed Forum of Trade Justice (FTJ), a pan-India people’s network. The two ongoing deals with India and the USA will impact common people’s interests, it added. If India agrees to adverse provisions in the investment chapter, it will be disastrous for the country, claimed the forum in a statement released on September 24, 2019. The RCEP will affect access to medicines and seeds by raising the standards of intellectual property rights, said FTJ. The ongoing deal has witnessed strong opposition from various sectors in the country including automobiles, steel, copper, textile, dairy and many others. They fear that cheap imports from other countries will ruin their businesses. However, the government has not heard their concerns, they claimed. India has proposed auto trigger and snapback as a safeguard measure, which has not been agreed upon yet. Even if the negotiating countries agree to it, it will not protect India from actual import surges, the forum claimed. “Farmers, fishermen and the dairy sector, which supports the livelihoods of millions of small dairy farmers, have repeatedly asked the government to protect them from the flood of imports from ASEAN members, New Zealand and Australia. But our plea has gone unanswered,” said Yudhvir Singh, national coordinator, All India Coordination Committee of Farmers’ Movements. In another development, India is negotiating a trade deal with the US. The main focus of this deal is stronger intellectual property (IP) along with reducing tariffs in the automobile and agriculture sector, claimed the forum. If India agrees to US’s demand, it will reduce the competition from Indian generic manufacturers of medicines, it added. “The US has, for long, been demanding for IP provisions that go beyond World Trade Organization rules such as patent term extensions, data exclusivity and amendment of the patentability criteria that India adopted to prevent patenting of new forms and new uses of known medicines. It will create monopolies in the crucial area of pharmaceuticals,” said Jai Prakash, president, The Delhi Network of Positive People.
Source: Down to Earth
“We are doing very well. I think very soon we will have a trade deal. We will have a larger deal later on,” Trump said during a joint press conference with Prime Minister Narendra Modi. Prime Minister Narendra Modi met Donald Trump on the sidelines of the UN General Assembly session and discussed with him bilateral ties. India and the US will soon have a trade deal to be followed by a bigger agreement later, US President Donald Trump said on Tuesday, suggesting that the two nations may be close to resolving current disputes. “We are doing very well. I think very soon we will have a trade deal. We will have a larger deal later on,” Trump said during a joint press conference with Prime Minister Narendra Modi after their bilateral meeting in New York on the sidelines of the UN General Assembly on Tuesday. External Affairs minister S Jaishankar and commerce and industry minister Piyush Goyal were also present during the meeting. The announcement of a trade package along with a larger trade deal is something Trump would want to claim credit for with polls just over a year away. “When President Trump and PM Modi met last, they had a broad understanding that issues on trade must be resolved quickly, and those discussions are ongoing,” MEA spokesperson Raveesh Kumar said on Monday night, without divulging details. On the table are discussions on restoration of the Generalized System of Preferences (GSP) for India, which will allow the country to resume select exports and concessional duties. India had exported $5.6 billion worth of goods last year under this regime. Price controls on medical devices, duty cuts on Harley Davidson bikes and market access to American agricultural commodities, among others, are US trade issues. Specifically, there is a discussion on India making a commitment to revisit current price controls on medical devices within a certain period of time, if not an immediate release of these caps. The US wants India to do away with price controls on devices with innovative features and keep them separate from mass products. The US also wants India to scrap 20% tariffs on information and communication technology goods. New Delhi has also been cautious about liberalising the ICT sector as it fears that markets will be flooded with Chinese goods. For India, there could be a partial reinstatement of preferential market access to American markets under GSP which was revoked on June 5. Representations from the domestic medical device and dairy industries had been partly reasons why USTR initiated a GSP review and subsequently withdrew the benefit. The trade package could see market access for some Indian agricultural products such as table grapes and pomegranates. In areas where there is already market access for India, the US is likely to enhance facilitation of processes, like a certification of irradiation for fruit before export. The two sides have been engaged in talks to iron out the differences which began last year when the US levied global additional tariffs of 25% and 10% on the import of steel and aluminum products, respectively. India responded by levying retaliatory tariffs on 28 products originating or exported from the US with effect from June 16 for which Washington dragged it to WTO. The office of the US Trade Representative had linked market access in the two areas of dairy and medical devices to continuation of GSP and also sought datarelated relaxations, including in India’s e-commerce policy. New Delhi may also work on a separate HS Code so as to facilitate further duty reduction or elimination on Harley Davidson bikes.
Source: The Economic Times
The Indian rupee on Tuesday dropped 7 paise to close at 71.01 against the US dollar as foreign fund outflows and subdued equities weakened forex market sentiment. However, easing crude oil prices and weaker greenback against rival currencies restricted the rupee fall to some extent. Foreign investors pulled out Rs 828.49 crore from Indian equities on Tuesday, according to exchange data. At the interbank foreign exchange market, the local unit opened on a strong note at 70.72, then lost ground and fell to an intra-day low of 71.05 against the American currency. The domestic unit finally settled for the day at 71.01 against the US dollar, down 7 paise over its previous close. On Monday, the local unit settled unchanged at 70.94 against the US dollar.
Source: The Hindu Business Line
The inaugural Florida Industrial Hemp Conference & Exhibition (FIHCE 2019) will be held November 3-5, 2019, at the Rosen Centre Hotel in Orlando, Florida, US. FIHCE 2019 is a networking and educational event designed to foster the development of an industrial hemp industry in Florida. The topics to be discussed at FIHCE include textile applications of hemp. Hemp market forecast; federal and state regulations and legislation; industrial hemp research; growing, cultivation and harvesting industrial hemp; analytic testing, etc are among the tentative topics to be discussed at the conference, the organisers said in a statement. Hemp is distinct from marijuana and has no narcotic capability. It is used in more than 25,000 products spanning agriculture, textiles, recycling, automotive, furniture, food, nutrition, beverages, paper, construction materials and personal care.
Source: Fibre2Fashion
The current account is one story that keeps getting better. The trade deficit has narrowed down to multi-month low, but is primarily driven by import compression. One way to look at the export numbers is reading the year-on-year growth at an unimpressive 2.8 percent. There is little doubt that the exports in value terms have not grown as fast as the authorities would have wanted, especially with the massive currency depreciation. But a good look at export numbers would tell that the glass is half full. Questions were being raised on Pakistan’s capacity to export and if the country even had the exportable surplus. It is a long road to travel, but Pakistan’s export oriented sectors have surely demonstrated that the capacity is very much there. The volumes had started picking up, as the government last year, announced support measures for export industries, especially in lieu of energy prices and financing access. The most heartening bit is the continued rise in volumes of textile sector’s most vital categories: bedwear, knitwear and readymade garments. The three combined constitute 38 percent of the country’s total exports, and have all witnessed double digit volumetric growth. What is of greater significance is the fact that the 2MFY20 growth has come on the back of a very strong FY19. Readymade garments and bedwear volumes in FY19, were already at all-time high, and that for knitwear at an 8-year high. Even on sequential basis, the trend in volume growth is encouraging across the textile group. The pricing end of the equation has not really been that favourable, restricting the impact of the very impressive volumetric growth in key exporting items. Pricing is not a Pakistan specific phenomenon, and most countries have witnessed sharp decline in unit prices for their respective exports. The export prices tend to have a strong correlation with international oil prices. Should that happen, Pakistan stands a good chance of pouncing on the opportunity, as many of the exporters’ woes have been or are being addressed – ranging from energy, to refunds. Other than textiles, food export quantities have also witnessed an encouraging trend, with Basmati coming back to the fore. Among most categories, unit prices have moved in opposite direction to the volume. That said, the quantum of volumetric increase still outdoes the drop in unit price. The base seems firm, and a reversal in pricing fortunes, could well put Pakistan back on track, in terms of dollar increase in exports.
Source: Business Recorder
Russia was one of the first countries to establish diplomatic relations with Vietnam, laying the groundwork for a strong bilateral and economic relationship between the countries. Vietnam and Russia set up a strategic partnership back in 2001 and elevated this relationship to a comprehensive strategic partnership in 2012 paving the way for increasing economic ties. The Vietnam-Eurasian Economic Union Free Trade Agreement (EAEU) which took effect in October 2016 lifted trade and economic ties to a new level. Last year, the trade turnover between the two countries increased by 28.6 percent year-on-year while exports from Russia to Vietnam more than doubled. The total export value to Vietnam reached US$2.1 billion while Vietnam’s exports to Russia topped US$2.44 billion – up 12.8 percent year-on-year.
In the first four months of this year, the trade turnover was worth US$1.52 billion – up by 5.92 percent year-on-year. Leaders in both countries are aiming to achieve US$10 billion in bilateral trade by 2020.
While Vietnam and Russia are far apart geographically, there are increasing business opportunities between the two. Russia ranks 24 among 129 countries and territories investing in Vietnam, with 123 registered projects – mainly in oil and gas. The total registered capital of these projects is US$932 million. Russia’s largest company in electronics, ROSTEC is one of the biggest and oldest Russian investors in Vietnam, providing the country with military engineering and technology. In recent years, the company has been expanding its investment in other civilian fields like healthcare, automotive, agriculture technology and more. According to their statement, their share of civilian products in the total revenue will exceed 50 percent by 2025 in Vietnam. Russia’s main exports to Vietnam include grain crops, food products, mineral raw materials, and metals. Russia is also the largest supplier of military arms and equipment. Vietnam’s main export to Russia includes electrical engineering products, mobile phones, textiles, food and beverage, and coffee. Of the most important pillars of Russia-Vietnam economic ties is the energy (oil and gas) sector. The agriculture and food, and tourism industries are also becoming increasingly important in the bilateral trade and economic relationship of the two countries.
Vietnam has 22 investment projects in Russia which are worth nearly US$3 billion. One of the biggest and most notable Vietnamese investment include TH Groups’ US$2.7 billion in dairy farms in the Primorye region. Oil and gas exploration and exploitation have been an important pillar of Vietnam-Russian economic cooperation. The Russian-Vietnamese enterprise Vietsovpetro is the eighth largest company in Vietnam and produces one-third of the country’s oil. In the first five months of 2018, the company exploited 1.8 million tonnes of oil and 81.9 million cubic meters of natural gas. Leaders in both countries are encouraging oil and gas exploration and exploitation on the continental shelves of both countries. In May this year, Novatek, Russia’s largest independent gas producer, signed a Memorandum of Understanding (MoU) with Vietnam’s Ninh Thuan Provincial People’s Committee to develop an integrated LNG (low-tonnage liquefied natural gas) energy-generating project within Vietnam. Major Russian oil and gas groups like Gazprom and Rosneft are expected to engage in many more projects in Vietnam’s continental shelf by 2030. The economic growth of Vietnam is driving up the energy demand of the country especially in coal, oil, and gas. The demand in the electricity sector has risen by 13 percent since 2000 and is expected to grow at 8 percent through 2030. Considering this, investors from Russia, which is one of the largest exporters of natural gas and is home to the second-largest coal reserves in the world, will find it profitable to supply to this growing market. In terms of food products, Vietnam’s main exports from Russia consist of confectionary, milk powder, cereals, raw materials for animal feed, alcohol, cooking oil among others. According to the Russian Export Centre in Vietnam, increasing Russian agricultural products are making their way into Vietnam’s domestic market. Sunflower oil, pine nuts, walnuts, and cereals are among some of the most popular Russian products in Vietnam. Russia is the top supplier of wheat to Vietnam while Vietnam is the fourth largest buyer of Russian wheat, importing around 1.7 million tons of the product in the first four months of last year.
Last month, the Association of Vietnam Retailers (AVR) organized the Vietnam-Russia Trade Connection program. 100 delegates including those from Russian production and supply enterprises, retail distribution and import-export enterprises took part, introducing Russian food products in Hanoi. Large supermarkets in Hanoi were also visited to enhance trade connectivity between the two economies.
Vietnam is becoming a tourism hotspot for the Russians. In 2017, more than 512,000 Russian tourists arrived in Vietnam, a 30 percent increase year-on-year. Last year, around 600,000 Russian people visited Vietnam, ranking sixth among all countries in terms of visitor numbers. Amongst the most popular destination is the coastal city of Nha Trang, formally home to Russia’s biggest naval base outside its territory. With 75 percent of its tourists coming either from China or Russia, several shops have Russian signboards, tour guides, and drivers, with even Vietnamese residents speaking Russian to cater to the increasing number of Russian visitors. The town has also been dubbed as “a little Russia”. Russian trade has also been increasing in the town as natives of the country start their own businesses in sectors like retail and hospitality. The total number of tourist arrivals from Russia is expected to leap by 1 million in 2020. According to the Vietnam National Administration of Tourism (VNAT), the number of arrivals of Russian tourists in Vietnam is growing by 30 percent annually on average. In July this year, the two countries signed an MoU to build joint tourism cooperation programs. The government of Vietnam hopes for Russia’s support in developing the country’s digital government and smart cities, as well as cybersecurity. Vietnam is pushing for a higher level of data security and data connection and sharing among public agencies. Russian leaders have emphasized the importance of establishing the country’s legal foundation (legal institutions and documents) to help build Vietnam’s e-Government. Another impediment to developing Vietnam’s e-Government would be difficulties in linking data of different ministries, sectors, and localities. However, Russian, authorities have expressed willingness to work closely and share their experience with Vietnam through free-of-charge consultancy, technology transfer, and training of experts.
Source: Vietnam Briefing
A health and safety expert from Amsterdam office of Bangladesh Accord, Miriam Neale, has said that Pakistan industries are in dire need to have an organised mechanism to ensure workplace safety and for this purpose, an agreement on the pattern of the accord be made. She said this while giving a presentation to the members of civil society outfits, trade union, labour support bodies and media on achievement of the accord during an event organised by the Pakistan Institute of Labour Education and Research (PILER) at the Karachi Press Club on Tuesday. The accord is an independent and legally binding agreement between brands and trade unions to work towards a safe and healthy garment and textile industry in Bangladesh. Since 2014, Neale has led Bangladesh Accord’s signatory engagement work supporting almost 200 company that are signatories to implement the accord’s workplace safety programmes with their suppliers. She also supported the governance processes of the accord coordinating the steering committee and protocol development. The accord covers factories producing Ready-Made Garments (RMG) and at the option of signatory companies, home textiles and fabric and knit accessories, she said. She said because of Bangladesh accord the local exporting industries had been benefitted, and their labour force was now more organised and trade unions were playing their role in implementation of the laws regarding occupational safety and health. Neale said that the accord was signed in the immediate aftermath to the Rana Plaza building collapse on 24 April, 2013 which killed 1,133 workers and critically injured thousands. Over 220 companies signed the five-year Accord, and by May 2018 the work of the Accord had contributed to significantly safer workplaces for millions of Bangladeshi garment workers. To maintain and expand the progress achieved under the 2013 Accord, over 190 brands and retailers had signed the 2018 Transition Accord with the global unions, a renewed agreement which entered into effect on 1 June 2018. Neale told the audience that the accord had provided training to over 1.2 million workers in Bangladesh and now they were playing their role. She emphasised the need to have a similar accord in Pakistan, especially after the Baldia Factory Fire incident in 2012. Executive Director PILER Karamat Ali informed Neale that Pakistani trade unions and workers also wanted a similar type of arrangement like Bangladesh Accord. Nasir Mansoor from the National Trade Unions Federation, Zulfiqar Shah of the PILER and senior trade union leader, Liaquat Sahi, also spoke on the occasion.
Source: The News
