MARKET WATCH 29 NOV, 2019

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INTERNATIONAL

Govt announces 'Special Package' for garments and made-ups sectors, says Textiles Minister

New Delhi:  Union Minister of Textiles Smriti Zubin Irani has said that the government had announced a Special Package for garments and made-ups sectors for the welfare of textiles sectors. In a written reply in the Rajya Sabha, Irani said, ''To boost exports and enhance competitiveness, of the textiles sector, Government has 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.'' While speaking further on RoSL scheme, she said since it has been replaced by the scheme for Rebate of State and Central Taxes and Levies from 7th March 2019. Assistance is also provided to exporters under Market Access Initiative (MAI) Scheme. The Minister also informed the Government has enhanced interest equalisation 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 2.11.2018. Benefits of Interest equalisation Scheme has been extended to merchant exporters from 2.01.2019 which was earlier limited to only manufacturer exporters. Textile industry in India is subject to provisions of the WTO Agreement on Subsidies and Countervailing Measures (ASCM) which stipulate that if a developing country member’s exports of a product has reached a share of at least 3.25% of world trade of that product for two consecutive calendar years, it will be considered as export competitive in that product. Further, export subsidies on such products shall be gradually phased out over a period of eight years.

Source: KNN

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India seeks review of FTAs with ASEAN, Japan: minister

India has sought a review of its existing free trade agreements (FTAs) with the Association of Southeast Asian Nations (ASEAN) and Japan, commerce and industry mMinister Piyush Goyal informed parliament lower house yesterday. He said eight rounds of negotiations have been held with South Korea for upgrading the existing comprehensive FTA. He also said that India and the European Union have held eight stock taking level meetings since the resumption of their negotiations in 2016 on a proposed bilateral trade and investment agreement (BTIA), according to an official release.

Source: Fibre2fashion

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India's growth may have dropped, but not recession yet: FM

Finance minister Nirmala Sitharaman strongly defended the state of the Indian economy yesterday in parliament upper house (Rajya Sabha) and assured that the government is taking steps in the interest of the country. Blaming the United Progressive Alliance (UPA) for continuing with ‘regressive measures’, she said growth may have come down but it is not recession yet. "We are coming out with a lot of reforms and we want to assure the members of the response of the government. The PM himself is giving personal attention with all the time to understand the details to take decisions so that the economy can be better and move to a higher growth trajectory," Sitharaman told the Rajya Sabha. She said the government has unveiled 32 measures to revive growth since her July budget and those steps were yielding results. Comparing the economic report card of the UPA and the Narendra Modi-led Bharatiya Janata Party (BJP) government since 2014, she said inflation is below the targeted range and economic growth and other macroeconomic indicators under the present government is much better, India media reported.

Source: Fibre2fashion

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Indian textile industry can grow to $300 bn by 2030: CII vice-chairman

Chennai: “The Indian textile industry can grow to be $300 billion industry by 2030 and create an additional 35 million jobs, provided it enhances its focus on exporting higher value added products, modernisation and sustainable business practices,” said vice-chairman of CII Tamilnadu State Council and executive director of Thiagarajar Mills (Pvt) Ltd, Hari Thiagarajan. He added that synthetic fabrics and performance garments are going to be two most promising segments in the textile industry. Thiagarajan was delivering the keynote address at the second edition of Weaves 2019 textile fair, a four-day exhibition and conference. According to a press release, the event is being organised by Texvalley in association with the Confederation of Indian Industry. He said that the textile industry accounts for 5 per cent of India’s GDP and 13 per cent of the country’s export earnings. The press release said, Weaves 2019 has attracted the participation of 200 exhibitors representing a wide cross section of the textile industry from yarns, fabrics, handlooms to readymade garments. The event saw the participation of vice-chairman, AEPC and CMD, Poppys Group A Sakthivel presenting “Young Inspirations of India” awards to ten successful personalities from various segments of the textiles industry, the release added. In his address, chairman, Confederation of Indian Textile Industry T Rajkumar pointed out the Indian textile industry is highly-fragmented. It has been facing unprecedented challenges in the recent past. He urged the Centre to help the industry in the areas of export promotion, access to working capital, and loan restructuring.

Source: News Today

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India's apparel exports to US rise 5% post withdrawal of duty concessions

India's apparel exports to the US post removal of duty concessions under Washington's Generalized System of Preferences programme has seen a rise of 5 per cent compared to the same period last year when the duty benefits were available, Parliament was informed on Thursday. US President Donald Trump in July 2019 terminated India's designation as a beneficiary developing nation under the key Generalized System of Preferences (GSP) trade programme after determining that it has not assured the US that it will provide "equitable and reasonable access" to its markets earlier this year. "Balance of apparel trade was in favour of India by USD 4 billion during 2018. Post-withdrawal of GSP, imports of apparel will be subject to higher tariff. As per provisional data, exports of apparel (post withdrawal of GSP) has increased by 5 per cent as compared to the corresponding period before withdrawal," Textiles Minister Smriti Irani said in a written reply in the Rajya Sabha. Replying to a a separate query, she said the Textile industry in India is subject to provisions of the WTO Agreement on Subsidies and Countervailing Measures (ASCM) which stipulate that if a developing country member's exports of a product have reached a share of at least 3.25 per cent of world trade of that product for two consecutive calendar years, it will be considered as export competitive in that product. "Further, export subsidies on such products shall be gradually phased out over a period of eight years. As per this provision, India is obligated to phase out subsidies which are export contingent," Irani said in another written reply in the Rajya Sabha.

Source : Business Standard

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More worries for govt as Q2 GDP growth likely to be below 5%

The government’s worries over the economy is likely to increase as the GDP growth rate for the three-month period ending September 30 could be below 5 per cent. The Central Statistics Office will release this data on Friday. GDP growth rate in real terms was 7 per cent for the three-month period ending September 30 during the 2018-19 fiscal. The growth rate has since been sliding continuously with 6.6 per cent during October-December of FY19, 5.8 per cent during January-March of FY19 and further to 5 per cent during April-June of FY20. With all sectors showing signs of stress — industry or agriculture and even services — almost all research agencies see a further dip in the growth rate, with projections in the range of 4.3 to 4.7 per cent. Although, some economists term this as ‘growth recession,’ Opposition parties are calling it a recession.

Recession or slowdown?

This issue figured in the Rajya Sabha on Wednesday. Finance Minister Nirmala Sitharaman ruled out the possibility of a recession. “It is because if actually you are looking at the economy with a discerning view, you see that the growth may have come down but it is not a recession yet or it won’t be a recession ever. So, consciously, all of us have to rise above because the economy also has a very big foundation and sentiments,” she said. Technically speaking, there is difference between a slowdown and a recession. An economic recession signifies a drop in the GDP, while a slowdown is merely a decline in the growth rate of the GDP. A slowdown usually precedes a recession, but does not necessarily lead to one.Since the GDP is still growing albeit at a slow pace, India may be facing only a slowdown and not a recession. India Ratings in its latest research report says that despite a favourable base effect, declining growth momentum suggests that even the second half of the current fiscal (October-March) will now be weaker than previously forecast and is likely to come in at 6.2 per cent. It estimates the growth rate for the entire fiscal to be at 5.6 per cent and that too will require some heavy lifting by the government. Although government expenditure did not witness much traction in the first three months (April-June) due to Parliamentary elections, it picked up significantly in the second three months (July-September) of the current fiscal. With almost no headroom available, the government will have tough time raising expenditure.

Source: The Hindu Business

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GST e-invoicing must for businesses with Rs 100-cr turnover from April 1

From April 1 next year, electronic invoicing (e-invoicing) will be mandatory for businesses with a turnover of Rs 100 crore, the government said on Thursday. This will help curb goods and services tax (GST) evasion and make compliance easier. The e-invoicing system will be rolled out in a phased manner from January 1 on a voluntary and trial basis, beginning with firms with a turnover of Rs 500 crore, while businesses with a turnover of Rs 100 crore or more will be required to do it from February 1. "The basic aim behind the adoption of the e-invoice system is to facilitate convenience to the taxpayers by further simplifying the GST return system. Though e-invoicing the tax department would help business and taxpayers by pre-populating the returns, resulting in reducing reconciliation problems," a government release said. There are about 7,500 GST identification numbers (GSTIN) for businesses with a turnover of Rs 500 crore and above. From April 1, it will be voluntary for businesses with a turnover of less than Rs 100 crore. The e-invoicing system will allow small and medium enterprises to take instant loans from banks. "With the e-invoicing system, banks may not require a plethora of physical documents and their validation. Rather, they could do MSMEs ratings for the loan on the basis of their e-invoicing," the government release said. The move comes at a time when the GST collections have been dismal and government is looking for ways to plug evasion. GST collection plummeted to a 19-month low in September at Rs 91,916 crore, and remained well under the Rs 1 trillion mark for the third straight month in October at Rs 95,380 crore, 5.3 per cent lower than the corresponding month last year. M S Mani, partner, Deloitte India said that the e-invoicing system is expected to plug input tax credit evasion loopholes and would lead to increased collections over a period of time. "The new system will cause disruption, but we do not want complete disruption in the system, hence will start with large firms, based on their readiness. Small companies may not be ready for a big information technology change at this point as it will cause them huge discomfort, hence we are leaving them out" said a government official. According to the proposed system, the companies' systems will be linked to the GSTN portal, wherin the generated invoices will be passed on to the GSTN portal within 24 hours. E-invoicing is in works in many countries including South Kore and other Latin American countries.  As per the structure finalised by the government, an invoice will be reported to the Invoice Registration Portal (IRP) by the taxpayer, which will generate a unique Invoice reference number and digitally sign the e-invoice and sign a QR code. "Eventually it will also do away with the need of electronic way bill requirement for those companies that opt for the system," said the official. Pratik Jain, partner, PwC India said that introduction of this mechanism on a voluntary basis to start with, that too linked with turnover threshold, provides an opportunity to the government as well as industry to prepare for this change.  "Over a period of time, this should make the compliances easy, particularly if input credit is completely linked with E invoices.  It would be good if large companies start using this on a voluntary basis as soon as they can." Abhishek Jain, partner EY India said that with the system being voluntary initially and proposed phased implementation, addressal of system hiccups/load and business hassles on change also seem to well planned for"

Source: Business Standard

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Karnataka govt exempts SEZs from labour laws for 5 yrs

Karnataka has exempted all industrial establishments in special economic zones (SEZ) from labour laws for five years, provided they constitute committees to deal with complaints of sexual harassment and other grievances. The state labour department notification this week excluded SEZ units from the Industrial Employment (Standing Orders) Act provisions. The act regulates terms of employment like termination, misconduct, wages and holidays. According to the ministry of commerce and industry, Karnataka has 32 operational SEZs covering information technology (IT), pharmaceuticals, textiles, aerospace and product engineering sectors. The exemption for SEZs is subject to four conditions: Industrial establishments must constitute internal complaints committee as per the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act; constitute grievance redressal committee; furnish information about cases of disciplinary action like suspension, dismissal etc, to the authorities; furnish details on service conditions of employees as sought by the authorities, according to a report in a regional newspaper. Earlier this year, the state government exempted the IT and IT-enabled services sector from the Industrial Employment (Standing Orders) Act for another five years. The last exemption was granted in January 2014. The department has also specified the minimum wages employers should pay workers in coffee curing and forestry & timbering industries.

Source: Fibre2fashion

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Rupee declines 27 paise to a week's low on trade concerns

Mumbai: The rupee dropped by 27 paise to close at 71.62 against the US currency on Thursday, ending its two-day winning run due to month-end dollar demand from oil importers and growth concerns ahead of release of GDP data on Friday.Fresh trade concerns after China said it was ready to take firm counter-measures against the US which passed a law supporting Hong Kong protestors also weighed on the domestic currency. fund inflows, weak crude prices and losses in the dollar against global currencies capped the rupee losses. At the interbank foreign exchange market, the local currency opened on a positive note at 71.33 but lost ground during the day to touch a low of 71.67. It finally settled at 71.62, lower by 27 paise against its previous close. On Wednesday, the domestic unit had closed at 71.35 against the US dollar. Forex traders said the domestic unit was trading in a narrow range as investors are awaiting clarity on the US-China trade deal front. US President Donald Trump signed a law that voiced support for the pro-democracy protests in Hong Kong. Traders fearthat the move could derail the trade talks between the two major economies. "India's rupee snapped a two-day gain amid month-end dollar demand seen from importers ahead of the release of GDP number. Market is already pricing the 4.5 per cent growth in June-September quarter, the least since the Q1, 2013," said V K Sharma, Head PCG & Capital Markets Strategy, HDFC securities. "Asian emerging market currencies traded mostly lower after US President Trump signed a bill backing Hong Kong protesters, spurring threat of retaliation from China and raising concerns about the prospect for an interim trade deal," Sharma said. The second-quarter GDP number is scheduled to be announced on Friday. India's economy grew at 5 per cent in the first quarter of 2019-20 -- the slowest pace in over six years. According to Rushabh Maru, Research Analyst - Currency and Commodity, Anand Rathi Shares and Stockbrokers "the near term outlook of the rupee depends upon outcome of the trade talks between the US and China. "As US continued to interfere in Hong Kong issue, there are concerns that whether the deal will happen or not. If the trade talks fail then the US will go ahead with tariffs on Chinese goods from December 15. There is also a threat of Yuan devaluation if the trade talks fail," Maru said adding that the outcome of the trade talks will determine the direction of the rupee. Meanwhile, the 10-year government bond yield was at 6.46 per cent on Thursday. Brent crude, the global oil benchmark, fell 0.25 per cent to USD 63.90 per barrel in futures trade. On the domestic market front, market benchmark indices ended at fresh closing highs on Thursday following gains in index-heavyweights ICICI Bank and RIL, which became the first Indian firm to breach the Rs 10-lakh crore market valuation mark. After touching its lifetime high of 41,163.79 during the day, the 30-share Sensex rose by 109.56 points or 0.27 per cent to end at a fresh closing peak of 41,130.17. The broader NSE Nifty closed at a record high of 12,151.15, up by 50.45 points or 0.42 per cent over the previous close. Foreign investors purchased equities worth Rs 1,000 crore on Thursday, according to provisional exchange data. The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.3627 and for rupee/euro at 78.5632. The reference rate for rupee/British pound was fixed at 91.6711 and for rupee/100 Japanese yen at 65.37.

Source: Economic Times

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RBI's efforts to lift economy a bane for “rupee”

The currency is the worst performer in emerging Asia this quarter, and analysts say that’s because the central bank is mopping up dollars gushing into local stocks and bonds. The RBI bought has about $18 billion of foreign exchange since the end of September, according to estimates by Bloomberg Economics. While the purchases have propelled reserves to a record, the rupee has fallen about 0.7% since Sept. 30. Weakness in the rupee despite robust inflows is seen as a sign the central bank wants to curb a sharp appreciation in the currency that can hurt exports. With slew of data pointing to weak economic activity, boosting shipments is high on agenda for t... “Part of the rupee’s under performance is deliberate,” said Mitul Kotecha, a senior EM strategist at TD Securities in Singapore. “Higher reserves prove that the central bank is probably making determined efforts to keep the rupee’s competitiveness.” The RBI has said it does not target any particular level of exchange rate and steps in only to curb undue swings in the currency. Though, as the rupee was heading for its worst quarterly decline in a year in the three months ended September,  Governor Shaktikanta Das said Sept. 19 that the currency is fairly valued, indicating tolerance for a weaker rupee. India’s exports have shrunk for three months in a row, contributing to further deepening of a growth slowdown. A report on Nov. 29 is likely to show gross domestic product grew 4.6%, which would be the weakest pace of expansion since the first three months of 2013. India’s exports have shrunk for three months in a row, contributing to further deepening of a growth slowdown. A report on Nov. 29 is likely to show gross domestic product grew 4.6%, which would be the weakest pace of expansion since the first three month. Expectations that the government will continue to take steps to revive growth has prompted foreign funds to pump $4.6 billion into local shares and more than $600 million into debt this quarter. The purchases have pushed up the nation’s main stock index to a record. The central bank will continue to soak up the inflows to address the rupee’s overvaluation, according to Kotak Securities Ltd. The central bank will continue to soak up the inflows to address the rupee’s overvaluation, according to Kotak Securities Ltd. “When you have decent inflows, there is no reason for the rupee to depreciate and the RBI’s sharp dollar purchases are the predominant reason behind the weakness,” said Anindya Banerjee, a currency analyst at Kotak in Mumbai.

Source: Deccan Herald

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Global Textile Raw Material Price 28/11/2019

Item

Price

Unit

Fluctuation

Date

PSF

948.12

USD/Ton

-0.96%

11/28/2019

VSF

1443.40

USD/Ton

0%

11/28/2019

ASF

2171.47

USD/Ton

0%

11/28/2019

Polyester    POY

976.42

USD/Ton

-1.29%

11/28/2019

Nylon    FDY

2080.20

USD/Ton

-0.68%

11/28/2019

40D    Spandex

4061.34

USD/Ton

0%

11/28/2019

Nylon    POY

2306.61

USD/Ton

0%

11/28/2019

Acrylic    Top 3D

1089.63

USD/Ton

0%

11/28/2019

Polyester    FDY

2363.22

USD/Ton

0%

11/28/2019

Nylon    DTY

5349.08

USD/Ton

0%

11/28/2019

Viscose    Long Filament

1216.99

USD/Ton

0%

11/28/2019

Polyester    DTY

1981.14

USD/Ton

0%

11/28/2019

30S    Spun Rayon Yarn

2040.57

USD/Ton

-0.21%

11/28/2019

32S    Polyester Yarn

1549.53

USD/Ton

0%

11/28/2019

45S    T/C Yarn

2391.52

USD/Ton

0%

11/28/2019

40S    Rayon Yarn

1896.23

USD/Ton

0%

11/28/2019

T/R    Yarn 65/35 32S

1740.57

USD/Ton

0%

11/28/2019

45S    Polyester Yarn

2278.31

USD/Ton

0%

11/28/2019

T/C    Yarn 65/35 32S

2306.61

USD/Ton

0%

11/28/2019

10S    Denim Fabric

1.25

USD/Meter

0%

11/28/2019

32S    Twill Fabric

0.69

USD/Meter

0%

11/28/2019

40S    Combed Poplin

0.96

USD/Meter

0%

11/28/2019

30S    Rayon Fabric

0.54

USD/Meter

-0.26%

11/28/2019

45S    T/C Fabric

0.66

USD/Meter

0%

11/28/2019

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14151 USD dtd. 28/11/2019). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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Bulk textile chemical impurities remain big challenge

WAKEFIELD – Progress to eliminate the use of huge amounts of commodity chemicals in textile production that come heavily contaminated with potentially hazardous substances, appears to have ground to a halt. But it would be wrong for the industry to sweep this important environmental issue under the carpet – even if there’s no immediate or obvious solution right now, argues John Mowbray.

Source: Eco Textile

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Indonesian textiles highlighted at traditional fashion show in Myanmar

Jakarta (ANTARA) - Indonesian textiles were promoted through the medium of a traditional fashion show titled “The Multicolored Indonesia” held in Yangon, Myanmar, on November 27, 2019. "Like Myanmar, Indonesia is home to various tribes, and each has a textile, with its own motives and ways of making," Indonesian Ambassador to Myanmar Iza Fadri noted in a written statement received in Jakarta on Thursday. Ambassador Fadri remarked that the Indonesian fashion show epitomized that the difference was beautiful and must be embraced. Not only batik that is already known globally, a variety of textiles from various regions in Indonesia, including Lampung, Palembang, Padang, Kalimantan, Bali, Aceh, North Sulawesi, and North Sumatra, should also be promoted. Highlighting friendship, the models sashaying Indonesian fabrics were Indonesian friends and partners from Myanmar and other ASEAN countries, the United States, Saudi Arabia, Bangladesh, and Turkey. The event, focused on bringing the people of Indonesia and Myanmar closer to fashion, was held as part of a series of celebrations to mark the seven decades of diplomatic relations between the two nations. Fashion shows are expected to always place Indonesia in the hearts and minds of the people of Myanmar, so that more are interested in visiting Indonesia and will thereby broaden opportunities for cooperation. The textile and apparel industry was the manufacturing sector registering the highest growth of 15.08 percent in the third quarter of 2019, or surpassing the national economic growth of 5.02 percent during the corresponding period. Industry Minister Agus Gumiwang Kartasasmita stated that the textile and apparel industry was one of the five sectors whose development is prioritized in the “Making Indonesia 4.0” Roadmap. The Ministry of Industry is targeting the exports of textile and apparel products to reach US$15 billion in 2019.

Source: Antara News

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Ghana plans industrial transformation

ACCRA – Ghana’s Ministry of Trade and Industry has indicated a desire to aggressively roll out its Strategic Anchor Industries initiative next year, following successful deliberations with fashion powerhouse’s VF Corp, PVH and H&M. The initiative holds ambitions of industrial transformation for its native fashion and textiles, petrochemicals, metals and automotive and pharmaceuticals markets. It’s just component of Ghana’s Ten-Point Industrial Transformation Plan to ensure future prosperity.

Source: Tevo News

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