The Central Board of Indirect Taxes and Customs (CBIC) has notified that the customs duty exemption against Scrips issued under Regional Authority under the Scheme for Rebate of State and Central Taxes and Levies (RoSCTL) Scheme. In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 the Central Government, had satisfied that it is necessary to do for the public interest, to exempts goods, when imported into India against a duty credit scrip issued by the Regional Authority under the Scheme for Rebate of State and Central Taxes and Levies (RoSCTL). The scrip, against which goods, when imported into India, are exempted from duties mentioned in clauses (a) and (b) below, may include duty credit provided under the Additional Ad Hoc Incentive.
(a) The whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act, 1975 and
(b) The whole of additional duty leviable thereon under subsections (1), (3) and (5) of section 3 of the said Customs Tariff Act.
The exemption shall be subject to the following conditions, namely:
The duty credit in the said scrip is issued against exports of garments and made-ups and their respective rates and cap as listed in Schedules 1, 2, 3 and 4 to the notification of Government of India, Ministry of Textiles notified vide notification for the RoSCTL scheme and made in terms of the Foreign Trade Policy. And also permitting clearance and loading of goods for exportation against the export of garments and made-ups under the RoSCTL scheme has been made on or after the 7th March 2019 and till 31st March 2020. The imports and exports are undertaken through the seaports, airports or through the inland container depots or through the land customs stations as mentioned in the notification of the Government of India, Ministry of Finance, Department of Revenue as amended. Provided that the Principal Commissioner of Customs or the Commissioner of Customs may within his jurisdiction, by special order, or by a Public Notice, and subject to such conditions as may be specified by him, permit import and export through any other seaport, airport, inland container depot or through any land customs station within his jurisdiction. The CBIC said that the exports of said goods transacted through e-commerce platform subject to the items listed in Appendix 3C of Appendices and Aayat Niryat Forms of the Foreign Trade Policy are undertaken either through international courier terminals or through such foreign post offices, as notified by the Foreign Trade Policy. The scrip is produced before the proper officer of customs at the time of clearance for debit of the duties leviable on the goods and the proper officer of customs after taking into account the debits already made under this exemption and debits made under the notification of Government of India, dated on 14th February 2020 shall ensure the debit of the duties leviable on the goods, but for this exemption and the said scrip and goods imported against it shall be freely transferable. If the importer does not claim exemption from the additional duty of customs leviable under subsections (1), (3) and (5) of section 3 of the said Customs Tariff Act, he shall be deemed not to have availed the exemption from the said duty for the purpose of calculation of the said additional duty of customs. The importer shall be entitled to avail of the drawback of the duty of customs leviable under the First Schedule to the said Customs Tariff Act against the amount debited in the said scrip and also the importer shall be entitled to avail drawback or CENVAT credit of additional duty leviable under subsections (1), (3) and (5) of section 3 of the said Customs Tariff Act against the amount debited in the said scrip.
Source: Tax Scan
Central Board of Indirect Taxes and Customs (CBIC) has started capturing district-wise data on origin of export goods that will feed into national level trade policy making. The move is aimed at turning districts into export hubs. The additional information from the export declarations will provide a key statistical input to policy makers on the importance of each district for exports and will help in aligning the policies to enhance local capacity, the board said in a statement Monday. Additionally, the export declarations would also capture declarations by exporters intending to avail free trade agreements or preferential trade agreements for exports to partner countries. “This would provide critical data on the gains being made by Indian exporters under FTAs/PTAs and help the government align India’s foreign trade policy in nation’s best interests,” the board said. Further, CBIC has now made it mandatory that every goods and services tax (GST) registered importer and exporter must declare their GSTIN on the import and export declarations. Not only will this help the taxpayers to claim the input tax credit and integrated GST refunds, it would also help in combating frauds. The initiative, which will help policy makers take data-driven decisions, follows directives set by the Prime Minister, which was reiterated by the finance minister in her Budget speech earlier this month.
Source: Economic Times
Commerce and Industry Minister Piyush Goyal on Monday asked the industry to look for ways to expand the country''s export basket by adding more value-added products and cut shipments of raw materials. He said the country''s export basket is changing but it is not changing at fast pace. "We are moving from some raw materials to intermediates. Can we collectively look at changing basket of exports to do more value-added products? Can we reduce exports of, let''s say, iron ore and export high-quality steel? Can we stop exporting alumina, and stop importing aluminium products?," he said here. "Can we see how we can become value-added producers so that the indian basket of manufacturing changes," the minister questioned. He said India''s share in the world''s trade is in single digit for many products. "Our government has identified a few champion sectors, like textiles, fisheries and IT, to expand and become a world leader in exports. Our government is swadeshi and personally, I am swadeshi. Therefore, we want to encourage our domestic investors on priority. We will fight for their cause," Goyal said. He also said any country, which does not allow equal and reciprocal access to our products and services in their country, by law "we will stop them from participating in government contracts in India".Talking about scale of production, he said the Indian industry needs to boost its scale to take advantage of the China-US trade war. "Now, with the China-US trade war, we were trying to see how we can get more Indian companies to benefit from it. The sad part is that we are not producing to scale in our country," he said. Citing an example of retail giant Walmart, the minister said the company wanted 40,000 pieces of some footwear product. On this, a big Indian company stated that they can give 20,000 pieces over the next year. Walmart wanted 40,000 pieces every month without which they cannot place an order as they have 3,000-odd stores all over the world, the minister said. "So, unless we start looking at scale, we are going to get out of the market very soon," he said. He asked DPIIT and the department of commerce to identify sectors where India has competitive advantage and where the Indian industry can see business opportunities. He also asked the industry to highlight their problems in terms of harassment by inspectors of any sort. Further, Goyal added that although he does not differentiate between domestic and foreign investors, "given a choice, I would urge the domestic industry to invest more than FDI (foreign direct investment)" as " we want to encourage domestic investors".The minister also asked the DPIIT to discuss with the cabinet secretariat about signing a legally binding agreement with states for abiding contractual obligations. He said there are cases where states back out from their commitment, when there is a change in leadership. He asked the industry to identify sectors where the government can promote assembling of products at a lower rate of duty and finished items at a higher rate of duty. "In a phased manner, we will restrict products'' import and ensure that domestic industry can achieve scale," he added
Addressing the representatives of 48 textile associations at Coimbatore recently, Capoor said the Centre would look into all the structural issues in its new national textile policy that might be announced in a couple of months. The Union government would address all the structural issues in its national textile policy and the textile sector should diversify into polyester segment to boost exports, said Union textiles secretary Ravi Capoor at a meeting organised by the Confederation of Indian Textile Industry (CITI). Addressing the representatives of 48 textile associations at Coimbatore recently, Capoor said the Centre would look into all the structural issues in its new national textile policy that might be announced in a couple of months. He also said the new policy would ensure basic raw materials are available at international price, encourage scale of operation by developing 10 mega textile parks with 1,000 acre closer to ports and give plug-and-play facilities, including the necessary safeguard measures in labour laws. The textiles secretary also indicated the ministry would address the power cost, credit cost and its availability. The government would also make efforts to expedite conclusion of free trade agreements with the EU, the UK and Bangladesh, along with other countries to boost the exports. Capoor also strongly advised the sector to grab opportunity of diversifying into polyester segment to boost exports. While appreciating the Tirupur garment cluster for its sustainable initiatives including implementing zero liquid discharge to protect the environment, he advised the clusters to brand garments and products under sustainable programme that might fetch them larger margin globally and the government would extend all support. T Rajkumar, chairman, CITI, said the country had been suffering with surplus production capacities across the value chain created during the past four years with huge investments that could be utilised for polyester textile manufacturers. The government has identified the textile industry as the thrust area and in real terms encourages ‘Make in India’ initiative as without any imports, ensures inclusive growth by providing jobs to all skill levels especially the rural masses and women folks. According to the CITI chairman, the government would also announce a scheme to set up dedicated textile parks for technical textiles, textile machinery manufacturing with the latest technology spares, accessories, parts to promote import substitution thereby reducing the capital cost substantially. The government was also exploring the possibilities of setting up R&D centres with facilities for each segment, he added.
Source: Financial Express
Ramesh Chand Meena, Minister for Food, Civil Supplies & Consumer Affairs, Government of Rajasthan, today said that crimes related to counterfeiting and smuggling have increased across the world. He made the observation while speaking at FICCI CASCADE (Committee Against Smuggling and Counterfeiting Activities Destroying the Economy) seminar on 'Containing Counterfeiting and Smuggling - A Step Towards Prosperous Nation Building'. "Counterfeiting and smuggling related crimes have increased manifold in the global market resulting in revenue loss to government and businesses and adversely impacting the health and safety of the consumers" Mr Meena said. Extending his support, the Minister sought close collaboration with FICCI CASCADE to address the issue. The seminar discussed the importance of increased awareness on the hazards of counterfeiting and smuggling, and need for effective enforcement to enhance India?s economic development. KL Jain, Member, FICCI Rajasthan State Council & Honorary Secretary General, RCCI, said that illicit trade has a serious decelerating effect on growth which must be curbed substantially. Consumers must be emphasized on taking a bill on every purchase for making India a tax compliant nation and encouraging citizens to be a part of progressive nation building. FICCI CASCADE's recent study titled 'Invisible Enemy: Impact of Smuggling on Indian Economy and Employment' quantitatively estimates both revenue and employment opportunity lost due to smuggling in five specific industries. As per the report, total loss to the industry on account of illicit markets in just seven manufacturing sectors is about Rs 1,05,381 crore and the loss to the government is Rs 39,239 crore. Amongst the various sectors, maximum revenue loss of Rs 9,139 crore is attributed to tobacco products, followed by mobile phones at Rs 6,705 crore and alcoholic beverages at Rs 6,309 crore. The total direct employment opportunity lost in textiles, cigarettes, readymade garments, capital goods and consumer electronics is about 5.01 lakh in 2017-18. Direct employment opportunity lost in readymade garments and tobacco products, both largely labour-intensive industries, is 3.55 lakh, the report said. While the total employment opportunity lost in the economy is about 16.36 lakh in 2017-18 due to backward linkage and multiplier effects of these five industries, the Indian economy loses Rs 1,17,253 crore due to smuggling in these five sectors. Another FICCI report titled 'Illicit trade: Fueling Terror Financing and Organized Crime', highlights that the total employment losses globally due to counterfeit and piracy stood at 2 to 2.6 million jobs in 2013 and is expected to rise to 4.2 to 5.4 million jobs in 2022, suggesting an approximate increase of 110 per cent. As per reports, seizures of highly smuggled goods such as gold, cigarettes etc. have been carried out in the state of Rajasthan. Smuggled cigarettes are widely available in major cities such as Jaipur, Jodhpur, Udaipur, Jaisalmer, etc, apart from other small towns. The customs, police department and the state enforcement agencies have taken actions in the state against those dealing in smuggled products. Mr PC Jha, Advisor, FICCI CASCADE and Former Chairman, Central Board of Excise and Customs, said, "During the last twenty years, the volume of the counterfeiting activity globally has increased 100 times and the size of trade in counterfeited goods is 10% of the legal international trade (around 2% of the world?s overall economic output). The problem of illicit trade is much more serious than it is commonly perceived."
Source: SME Times
Multiple rates, exemptions and implementation challenges are affecting goods and services tax (GST) collections in India, an analysis by an International Monetary Fund (IMF) team has said. The study of India’s resource mobilisation for next five years has estimated that in 2018- 19, GST collections were 5.8% of GDP, which was better than some of the comparable developing countries, but far below the potential of 8.2% of GDP, indicating that the efficiency gains from the new regime have not fully accrued. “The IMF team has estimated that the compliance gap may be of the order of 40%,” a government official told TOI. The team included Ruud de Mooij, Arbind Modi, Li Liu, Dinar Prihardini, and Juan Carlos Benitez. While it blamed multiple factors for the divergence between actual collections and potential revenue, the assessment flagged exemptions such as those on food articles as an area of concern. Exemptions for food products alone are estimated to cost up to 0.4% of GDP, and it suggested that the government could look at a direct benefit transfer for the bottom of the pyramid segments to tackle this issue. In fact, a committee of Indian government officers had pointed out that exemptions available to food products were being misused and segments such as basmati rice companies had sought to deregister their brands to avoid paying taxes. The IMF team has also said that other design flaws — which include multiple rates, as opposed to one or two rates in most countries, and the threshold for businesses to be included in the GST net — reduced the revenue potential and the incentive for compliance. Besides, some of the issues created economic distortions, including refund problems. While there are four slabs — 5%, 12%, 18% and 28% — there are other rates for bullion and real estate apart from cesses on luxury and sin goods such as cars, tobacco and soft drinks adding to the complexity. It has also pointed to the debate about implementation challenges such as electronic filing or returns, e-way bills for transporting goods beyond a certain value and cross matching of invoices, which trade and businesses have argued are cumbersome and increase the compliance cost. With GST collections falling short of the target, the government is seeking to plug leakage and also fix some of the design issues, including the possibility of an upward revision in some of the slabs. While the last meeting of the GST Council rejected the demand for a rate revision, some of the issues are expected to be taken up at next month’s meeting of the ministerial panel.
Source: Times of India
Ratings agency Moody's on Monday slashed its 2020 growth projection for India to 5.4% from 6.6% forecast earlier on the back of slower recovery, citing largely domestic factors and cautioning that global economy will be adversely impacted by the novel coronavirus (Covid-19) outbreak. It also revised downward the GDP growth forecast for China to 5.2% in 2020, warning severe downside risks to the global economy if the coronavirus grows to pandemic proportions. India is forecast to grow 5.8% in 2021 against 6.7% estimated earlier, while China is pegged slightly lower at 5.7% in 2021. In its February update of Global Macro Outlook, the agency said India’s economy has decelerated rapidly over the last two years. Real GDP grew at a meagre 4.5% in the third quarter (October-December) of 2019-20, it estimated. “Among emerging market countries, we have materially revised downward our growth forecasts for India, Mexico and South Africa. In all four cases, the revisions reflect wholly domestic challenges, rather than external factors,” Moody’s said. Moody’s estimate is significantly lower than that of S&P, which had last week forecast India will recover to 6% next year and 7% in 2021. Official numbers will be released at the end of month. According to statistics office estimate, Indian economy is expected to grow 5% in the current fiscal while the Economic Survey presented on January 31estimates 6-6.5% rise in GDP next fiscal.
Slow recovery
Moody’s cited data from the Reserve Bank of India (RBI) to say that credit impulse in the economy has deteriorated throughout the last year as a result of the drying up of lending from non-bank financial institutions as well as from banks. “Banks have been both unwilling to lend and to lower lending rates despite successive interest rate cuts by the central bank.” “With a weak economy and depressed credit growth reinforcing each other, it is difficult to envision a quick turnaround of either, even if economic deceleration may have troughed,” it said. Improvements in the latest highfrequency indicators such as Purchasing Managers’ Index (PMI) data suggest that the economy may have stabilised. Moody’s suggested revival of domestic demand, both rural and urban, and resumption of credit growth will be the key to stronger economic momentum but added the Union Budget 2020 did not contain a significant stimulus to address the demand slump. Finance minister Nirmala Sitharaman had last week said there were green shoots of recovery. Tax cuts are unlikely to translate into higher consumer and business spending when risk aversion is high, Moody’s said. Moody’s expects additional monetary easing by the RBI but situation could become challenging for more interest rate cuts if higher food prices have second-round effects.
Global growth
On the global prospects, Moody’s said the coronavirus outbreak has diminished optimism on prospects of an incipient stabilisation of global growth this year. With the virus continuing to spread, it is still too early to make a final assessment of the impact on China and the global economy. “We have revised our global GDP growth forecast down, and we now expect G-20 economies to collectively grow 2.4% in 2020, a softer rate than last year, followed by a pick-up to 2.8% in 2021,” it said. Global GDP grew by 2.6% in 2019, significantly below the 3.2% growth rate in 2018.
Source: Economic Times
Skills development ministry will soon roll out a detailed and ready-toimplement road map for taking skilling to another level as Prime Minister Narendra Modi envisions making India the skills capital of the world. The ministry will hold a day-long meeting with representatives of all states and union territories, seeking their views on strengthening the skilling ecosystem in the country. The ministry is likely to seek inputs from states on critical issues like apprenticeship training and long-term skilling, entrepreneurship, new version of Pradhna Mantri Kaushal Vikas Yojana (PMKVY) besides, SANKALP AND STRIVE, following which the roadmap will be firmed up. The government spends nearly Rs. 15,000 crore on skilling through different schemes scattered across 20 different ministries. This is topped up with matching contribution from states, taking the total spend on skilling to Rs. 30,000 crore annually and hence the focus on nudging states to undertake skilling. The government has imparted skills training to 6.9 million people since 2016 under its flagship PMKVY scheme, which is being implemented with an objective to provide skilling to 10 million people under short-term training and recognition of prior learning across the country for four years (2016-20) with an outlay of Rs. 12,000 crore. Skills Acquisition and Knowledge Awareness for Livelihood (SANKALP) is an outcome-oriented programme of the skills development ministry with a special focus on decentralised planning and quality improvement. It is a centrallysponsored scheme with a project of size of $675 million, including World Bank assistance of $500 million, in two tranches of $250 million each, with a six-year implementation schedule. The Skills Strengthening for Industrial Value Enhancement (STRIVE) project is a World Bank assisted-government of India project with the objective of improving the relevance and efficiency of skills training provided through industrial training institutes (ITIs) and apprenticeships.
Source: Economic Times
Although chemical industries in Gujarat and Maharashtra meet nearly 80 per cent of Tirupur's demand for synthetic dyes and chemicals, it is China that supplies them with the raw materials. Doyens of textile sector foresee a not-so-colourful future as the price of synthetic dyes has increased by 5 to 15 per cent within a few weeks after import of raw materials from China was stopped due to Coronavirus outbreak. If this situation continues, traders and industrialists fear that they will go out of business by April 2020. Although chemical industries in Gujarat and Maharashtra meet nearly 80 per cent of Tirupur's demand for synthetic dyes and chemicals, it is China that supplies them with the raw materials. However, pigment production in these states has taken a hit as shipping from Chinese ports slowed down in the past four weeks, says former president of Tirupur Dye Chemicals Merchants Association K Nakesh.
'Natural dyes, not an option'
"On an average, over 470 units in Tirupur require 500 tonnes of synthetic dyes every month. Now, its unavailability has forced traders to look for alternatives -- natural dyes. However, it is not possible to procure them in such huge quantities, considering their limited sources. Besides, when a unit uses synthetic dyes on fabric, it is not practically feasible to make a switch to, or experiment with, natural dyes," Nakesh explains.
'No scarcity of dyes yet'
Explaining the extent to which the viral outbreak has had an impact on Tirupur's textile business, dye trader Raju Iyer says, "In the past one month, local availability of dyes and pigments has decreased by 20 per cent. Though there is no scarcity for dyesas such, its price has risen by 5 to 15 per cent from February 15. In this scenario, there will be a huge scarcity for raw materials in April 2020."
Hike in garment price
A hike in the price of pigments is sure to increase the fabric's rate as well, says Secretary of Dyers Association, Tirupur, S Murugsasamy. "There will be a 15-20 per cent increase in the cloth's price. However, the difference in the rates will reflect on the garment orders, both domestic and export, only in the next financial year. By the end of March, traders will have a fair idea of what is coming their way," he adds.
Source: Indian Express
Uttar Pradesh government is likely to sign an agreement with textile major Raymonds to supply indigenous fabric for modern retail. The UP Khadi Board has already provided fabric samples to Raymonds, which is expected to procure 200,000 metres of UP Khadi annually. “We will start the supply of khadi to Raymonds as soon as the samples given by the Khadi Board are approved,” UP Khadi principal secretary Navneet Sehgal, who is also the state trade facilitation commissioner, told Business Standard here. He informed that khadi to be supplied to Raymonds would be manufactured at the UP Khadi production centres situated at different places in the state. Besides, the UP Khadi Board is looking to supply uniforms to the students of UP government-run primary schools made from fabric blended with cotton and khadi. At present, nearly 18 million students are enrolled in government-run schools and require 36 million pairs of uniforms every year. There is a proposal to mix 70 per cent and 30 per cent cotton and polykhadi to prepare the school uniforms. “We have recently held a meeting with the basic education department and urged them to finalise the order by February so that the required uniforms could be supplied by July for the next academic session,” Sehgal added. The required fabric and uniforms would be prepared at the 6-7 khadi spinning institutions in the state, although it would be an uphill task to undertake such a high-volume order within the next few months. He said these two initiatives would give a major push to UP Khadi and generate nearly 100,000 fresh job opportunities. Last year, the Adityanath government had introduced similar khadi uniforms, as a pilot project, in the primary schools of select blocks across four districts - Lucknow, Sitapur, Bahraich and Mirzapur. To showcase UP Khadi, the government is also giving due importance to contemporary designs and packaging and arranging for the training and mentoring of the state khadi artisans and designers. The state has engaged National Institute of Fashion Technology (NIFT), Rae Bareli for the training of artisans and dress designers. Besides, the state is setting up modern UP Khadi retail outlets under the public-private partnership (PPP) model. In February 2018, the state had signed a Memorandum of Understanding (MoU) with e-commerce giant Amazon to promote ‘UP Khadi’ over its online marketplace, apart from the training and handholding of entrepreneurs. Now, the government is looking to firm up similar alliances with other e-commerce majors as well, including Alibaba and Flipkart. In fact, the state had earlier also proposed to set up Khadi Parks. At the UP Investors Summit 2018, the state had signed MoUs to the tune of Rs 30,000 crore with Indian and foreign companies across the entire khadi value chain.
Source: Business Standard
According to garment-makers and exporters in Udyog Vihar, Western buyers, who typically rely on China’s advanced factories and cheap labour, have started placing orders with them instead, and several potential buyers have been enquiring about the units’ production capacity. The garment industry in Udyog Vihar, which saw a major slowdown in 2019 with little hope of recovery, has a chance at revival owing to the coronavirus outbreak in China. Garment-makers are expecting a rise in the demand of finished clothes over the next few months as a result of US- and Europe-based buyers diverting business to India from China, where factories have shut down, causing a break in the global supply chain. According to garment-makers and exporters in Udyog Vihar, Western buyers, who typically rely on China’s advanced factories and cheap labour, have started placing orders with them instead, and several potential buyers have been enquiring about the units’ production capacity. The coronavirus outbreak in China has led to a disruption in industries, even as factories and shops have shut down and flights have been suspended, multiple reports state. Exporters and manufacturers say that if the crisis continues, they expect a rise of at least 20-30% in the export of finished garments this year.
The slowdown
Udyog Vihar houses at least a thousand garment-manufacturing and export units that have a combined turnover of more than a thousand crores, according to experts. The demand for finished garments had reduced considerably in 2019, leading to several small export units shutting shop, industry experts say. A delay of around four months in GST refunds also took its toll, garment-makers say. “Small units working with limited capital and under thin margins could not afford to keep running. The factors that led to the slowdown still persist,” Ramandeep Singh, the director of a garment manufacturing unit here, says, adding that his factory faced a slump in demand of 20%-30% in 2019. Others say they saw a fall of 20% in sales last year as compared to the previous year, as they lost business to countries such as China, Vietnam and Bangladesh due to several reasons—high labour and transport costs, lack of clear government policies and technological advancements in other countries. According to a 2019 study published in Ideas for India, India’s share in global textile exports declined while countries like Bangladesh and Vietnam expanded their market share. It says India’s textile exports are constrained by high costs, unhelpful customs policies, and competition from abroad.
JOB MARKET
The slowdown in the industry also led to large-scale job losses and a freeze in hiring. According to labour rights activists, hundreds of workers—both men and women—were laid off in 2019. The garment industry in India is woman-dominated—according to the Confederation of Indian Textile Industry, 2016, of 35 million employed in the textile industry, nearly 20 million are women. Savitri, 28, is one of 30 workers at a medium-sized factory who were ‘temporarily suspended’ in September 2019. For the workers, redundancy had not been a problem earlier because they often found a new job in another factory, she says. However, she hasn’t found another job yet in the industry as factories tell her they are full and can’t hire an extra workforce. “Two-three years ago, factories would usually keep one or two extra staff members for backup in case of sickness or emergencies. That seems to have stopped for the last few months,” Savitri, who had been working in the industry for six years, says. Gurugram has seen thousands of layoffs in its factories since last year. It has the country’s largest automotive hub in Manesar, and more than 40,000 workers, according to labour rights activists, have been affected by the slowdown. Companies with greater contractualisation have seen higher retrenchment, according to the workers. Many of those who have been laid off are migrant workers from Bihar, Uttar Pradesh, Odisha, and West Bengal. After searching for jobs in vain, most of them have now returned to their hometowns, members of the workers’ unions at the industries say. Workers retrenched from auto firms say they tried moving to the garment sector to find employment but were met with closed doors. Gurmeet Singh, 26, who hails from Ambala, says many units refused to take him in, saying there was no vacancy. “For several months in 2019, extra labour was removed. No hiring is taking place in the industry,” Praveen Yadav, president, Gurgaon Udyog Association, says. However, industry owners say an expansion in the workforce will depend on the number of orders diverted to them in the coming month.
The health crisis as an opportunity
In an industry that has not recovered from the slowdown, garment industry owners say the crisis in China could be a huge opportunity for India’s business if the government steps in to give the industry incentives. Satyendra Singh, the general manager at a garment-manufacturing unit in Udyog Vihar Phase-5 that employs around 300 workers, says they have received orders from at least two ‘new’ customers from France since the health scare grew in China. “Many wary Western buyers have been approaching us the last one month; we expect the queries to turn into orders in the next few weeks,” Singh says, adding that he is expecting a rise in exports this quarter. Their clientele, he says, is clothing brands such as GAP and Walmart, among others. Animesh Saxena, managing director at another manufacturing unit in Udyog Vihar and president of the Federation of Indian Micro and Small & Medium Enterprises (FISME), says they have received preliminary enquiries from Western buyers in the wake of the virus, and that if the health crisis escalates, huge amounts of business could be diverted to other South Asian countries, including India. He adds that this could serve as a ‘golden opportunity’ for the industry to revive, but only if the government responds quickly. Others reiterated their concerns about losing business to Bangladesh in the next few weeks due to low labour costs and export-conducive policies. “Factories in Bangladesh are bigger; manpower is cheaper. Bangladesh has a duty-free import policy of raw material from India and China, which is their advantage,” Ramandeep Singh says, adding that the rate of duty refund under the Central government’s rebate scheme hasn’t been announced and there is still no clarity on the incentive. Earlier, a 4% incentive was available for garments under the Merchandise Exports from India Scheme, which was discontinued in August last year. According to the Apparel Export Promotion Council, Bangladesh’s garment export has risen exponentially for the same reason. In 2005, Bangladesh’s exports were valued at $3 billion and India’s were at $5 billion. In 2019, Bangladesh’s exports rose to $36 billion while India’s were at $16.5 billion, shows data with the council. IS Yadav, joint director, district industrial centre, Gurugram, says the garment industry here is being provided trade subsidies, and that the state government has several schemes to boost the industry. “No immediate plans to increase incentives exist,” he says, adding that more than 200 units have benefited from the government’s incentives. However, industry experts say only the next two months will decide what the future of the garment trade will look like.
Source: Hindustan Times
India emerged as the world's fifth largest economy by overtaking the UK and France in 2019, says a report. A US-based think tank World Population Review in its report said that India is developing into an open-market economy from its previous autarkic policies. "India's economy is the fifth largest in the world with a GDP of USD 2.94 trillion, overtaking the UK and France in 2019 to take the fifth spot," it said. The size of the UK economy is USD 2.83 trillion and that of France is USD 2.71 trillion. The report further said that in purchasing power parity (PPP) terms, India's GDP (PPP) is USD 10.51 trillion, exceeding that of Japan and Germany. Due to India's high population, India's GDP per capita is USD 2,170 (for comparison, the US is USD 62,794). India's real GDP growth, however, it said is expected to weaken for the third straight year from 7.5 per cent to 5 per cent. The report observed that India's economic liberalisation began in the early 1990s and included industrial deregulation, reduced control on foreign trade and investment, and privatisation of state-owned enterprises. "These measures have helped India accelerate economic growth," it said. India's service sector is the fast-growing sector in the world accounting for 60 per cent of the economy and 28 per of employment, the report said, adding that manufacturing and agriculture are two other significant sectors of the economy. The US-based World Population Review is an independent organisation without any political affiliations.
Source: India Today
Irish textile firm Union Street (Lurgan) will open a yarn-spinning factory in India to reduce its exposure to price volatility in China, according to the company's recently published annual accounts, which reveal another year of double-digit sales growth. The company is involved in weaving, dyeing and finishing of linen and linen cotton fabrics. It is also feeling the pinch from price fluctuations in Asia, according to a report in an Irish newspaper. In a strategic report accompanying its financials, the directors confirmed Union Street was in the process of establishing a new factory in India. "It is anticipated we will be in a position to spin half of our yarn requirements by April 2020, thereby reducing our exposure to Chinese yarn manufacturers, who increased prices substantially in the early part of 2018,” the directors said. "It is the board's expectation to increase the group's production capacity at its spinning factory in order to produce all of its yarn requirements by the end of the financial year April 2021," they wrote. Union Street, which sells more than 90 per cent of its wares outside either the United Kingdom or Europe to major worldwide conglomerates, saw its profit after tax almost halve from £813,765 to £420,333. But over the year its staff numbers increased from 653 to 683, most of them operating at factories in India. Meanwhile subsidiary company WFB Baird, which was also once based in Lurgan and specialised in the fine end of the linen trade (cambrics, sheers, corded linen handkerchiefs etc), saw its turnover rise by nearly a third over the year from £7.9 million to £10.2 million, while it also saw a 10 per cent uplift in operating profit from £1,973,000 to £2,176,000.
Source: Fibre2Fashion
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
938.03 |
USD/Ton |
0% |
2/18/2020 |
|
VSF |
1360.50 |
USD/Ton |
0% |
2/18/2020 |
|
ASF |
2012.10 |
USD/Ton |
0% |
2/18/2020 |
|
Polyester POY |
1013.21 |
USD/Ton |
-1.32% |
2/18/2020 |
|
Nylon FDY |
2219.76 |
USD/Ton |
0% |
2/18/2020 |
|
40D Spandex |
4110.13 |
USD/Ton |
0% |
2/18/2020 |
|
Nylon POY |
1149.26 |
USD/Ton |
0% |
2/18/2020 |
|
Acrylic Top 3D |
2456.05 |
USD/Ton |
0% |
2/18/2020 |
|
Polyester FDY |
5370.38 |
USD/Ton |
0% |
2/18/2020 |
|
Nylon DTY |
1263.83 |
USD/Ton |
0% |
2/18/2020 |
|
Viscose Long Filament |
2055.06 |
USD/Ton |
0% |
2/18/2020 |
|
Polyester DTY |
2262.72 |
USD/Ton |
0% |
2/18/2020 |
|
30S Spun Rayon Yarn |
1997.78 |
USD/Ton |
0% |
2/18/2020 |
|
32S Polyester Yarn |
1625.43 |
USD/Ton |
0% |
2/18/2020 |
|
45S T/C Yarn |
2405.93 |
USD/Ton |
0% |
2/18/2020 |
|
40S Rayon Yarn |
1775.80 |
USD/Ton |
0% |
2/18/2020 |
|
T/R Yarn 65/35 32S |
2205.43 |
USD/Ton |
0% |
2/18/2020 |
|
45S Polyester Yarn |
2162.47 |
USD/Ton |
0% |
2/18/2020 |
|
T/C Yarn 65/35 32S |
1933.34 |
USD/Ton |
0% |
2/18/2020 |
|
10S Denim Fabric |
1.27 |
USD/Meter |
0% |
2/18/2020 |
|
32S Twill Fabric |
0.69 |
USD/Meter |
0% |
2/18/2020 |
|
40S Combed Poplin |
0.97 |
USD/Meter |
0% |
2/18/2020 |
|
30S Rayon Fabric |
0.53 |
USD/Meter |
0% |
2/18/2020 |
|
45S T/C Fabric |
0.67 |
USD/Meter |
0% |
2/18/2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14321 USD dtd. 18/02/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Myanmar will take measures to raise overseas demand for indigenous goods as cheaper imports from the region are expected to rise now that the country will participate further in the ASEAN Free Trade Area (AFTA). This should also keep the country’s trade deficit, which was down to $627 million in fiscal 2019-20 from $5.2 billion in 2016-17, stable. Under AFTA, Myanmar is expected to substantially lower the import duties for a list of goods to as little as zero and no more than 5 per cent. The country has in place the Import Protection Law to ensure domestic manufacturers are not threatened, said deputy commerce minister U Aung Htoo. It will also receive benefits from AFTA, as it will enjoy lower duties when exporting within ASEAN, he said. The Import Protection Law gives Myanmar the right to raise duties for a period of three years on imported goods that severely affect or threaten local manufacturer. Some traders have voiced their approval over the changing trade environment. Daw Yin Yin Moe, CEO of Hla Yin Moe, a textile and garment company, said that over the past five years her company was able to import industrial apparatus and machineries. “With lower duties, it was easier to import more modern machineries to upgrade our operations,” she said, adding that her factory now produces 100,000 pieces of clothing a month compared to 30,000 before the new machineries were brought in. To leverage on that environment, Myanmar has launched its second five-year National Export Strategy (NES) for the 2020-2025 period. Under the second NES, six sectors - gems and jewellery, agriculture-based food products, textiles and garments, machinery and electrical equipment, fisheries and forestry and digital -have been added on as priority sectors, according to a report in a Myanmarese newspaper. Five other support services sectors - digital products, logistics, quality control, trade information and innovation and entrepreneurship - will also be implemented under a framework to be set up within the next five years, added Htoo.
Source: Fibre2Fashion
The current decline in global merchandise trade volumes is expected to continue in the early months of 2020, as uncertain business conditions fueled by protectionism further reduce export orders in key sectors, the World Trade Organization (WTO) has said. The global body’s Goods Trade Barometer (GTB) on Monday signaled further weakening of trade volumes in fourth quarter of 2019 and first quarter of 2020. “World merchandise trade volume was 0.2 per cent lower in Q3 2019, relative to the same quarter in 2018 in line with expectations from the barometer index of November 2019,” the WTO said. The GTB provides real-time information on the trajectory of world trade relative to recent trends. Its latest estimates showed a reading of 95.5, suggesting a further weakening after merchandise trade growth slowed during the first quarter of 2019. Readings of 100 indicate growth in line with medium-term trends, while readings greater than and below 100 indicate above-trend and below-trend growth, respectively. The direction of change reflects momentum compared to the previous month. The latest barometer reading is driven by further drops in container shipping (94.8) and agricultural raw materials (90.9), as well as the plateauing of growth for automotive products. However, the WTO said decline in export orders (98.5) and electronic components (92.8) appeared to be stabilising, and the weak performance of air freight (94.6) throughout 2019 seemed to have bottomed out.
Fall before revival
India’s exports contracted 1.6 per cent in January, the sixth straight month of fall, as major foreign exchange earning sectors such as engineering goods, jewellery, and textiles continued to be plagued by broad-based contraction. This occurred despite India’s biggest exports — petroleum — picking up. Exports have fallen in seven of the 10 months of financial year 2019-20 (FY20). Till January, cumulative exports stood at $265.3 billion, which is 1.9 per cent lower than in the corresponding period in the previous fiscal year. The WTO said growth prospects for global trade remained shaky over the past two years, without even factoring in the latest coronavirus outbreak in manufacturing powerhouse China. As a result, the data of the goods trade barometer may actually show further decline. However, other global bodies are betting on a sharp recovery. Last month, the International Monetary Fund lowered global economic growth forecast in 2020 to 3.3 per cent, following a 2.9 per cent growth the previous year, the lowest in a decade. But World Bank said despite persisting downward risks, global economic growth was forecast to edge up to 2.5 per cent in 2020 as investment and trade gradually recover from last year’s significant weakness.
Corona hurdle severe
However, most of the latest macro estimations calculations do not account for recent developments such as the outbreak of COVID-19, the new coronavirus disease, which may dampen trade prospects further. Commentators have pointed out this will give a major blow to manufacturing in East Asia and trade patterns worldwide. But China continues to insist the breakout, now officially classified as an epidemic by the World Health Organization, is on the verge of being completely stabilised and factories will open soon. Earlier this month, Chinese officials brought up the issue at a meeting of the WTO Special Committee on Customs Cooperation and Trade Facilitation. They reportedly asked nations to respect the authority and professional advice from the World Health Organization (WHO), and to prevent excessive reactions by imposing unnecessary restrictions. Recently, China asked the members of the WTO to abstain from implementing unnecessary restrictions to trade with the Asian country as a pretext to prevent the outbreak of the Covid-19 coronavirus.
Source: Business Standard
Textile stocks have been on an temporary upswing thanks to the recent ratification of the EU-Việt Nam Free Trade Agreement (EVFTA) but textile enterprises still face difficulties due to heavy dependence on imported raw materials and machinery as well as reduced demand worldwide. In the latest trading sessions, from February 5 to February 14, shares of Đức Quân Investment and Development JSC (FTM) continuously increased with six session witnessing ceiling prices. FTM soared by 38.01 per cent. During the same period, Sông Hồng Garment Joint Stock Company (MSH) also increased by 9.5 per cent, the Việt Nam National textile and Garment Group (VGT) rose 21.2 per cent. According to Trần Xuân Bách, a stock analyst at Bảo Việt Securities Co (BVSC), the ratification of EVFTA has boosted textile stock prices as the agreement is believed to offer a huge advantage to the industry. “But this is only a short-term impact, textile firm can enjoy the benefits the agreement brings if they can meet market demand and expand production scale,” Bách wrote in a daily report. “Under the tariff reduction plan, tariffs on most yarn and fabric products will be immediately exempted while tariffs on garments will gradually decrease to 0 per cent in 6-8 years,” said Ngô Trí Vinh, a stock analyst at BVSC. “Subsequently, Việt Nam’s garment products will gradually decrease the price gap in line with Bangladesh (currently at 0 per cent tax) and gain advantages over China (12 per cent tax) while the preferential tax for Cambodia (0 per cent) is currently discontinued due to recent labour rights violations,” Vinh wrote in a daily report. However, EVFTA’s impact in the short term will be marginal due to limited capability of material autonomy while EVFTA includes “fabric-forward” rule of origin, which means to enjoy preferential tariffs, the products must be made from fabrics of Vietnamese origin, he noted. “EVFTA only opens opportunities for businesses with material autonomy as well as those with large EU groups of customers, such as TNG Investment and Trading JSC (TNG) and Thành Công Textile Garment-Investment-Trading Joint Stock Company (TCM)." "EU is the largest market of TNG, accounting for 54 per cent of sales. For TCM, EU currently contributes only about 5 per cent of sewing revenue, however, with 60-70 per cent material autonomy, TCM is expected to meet EVFTA rules of origin,” Vinh noted. According to SSI Securities Joint Stock Company (SSI), Việt Nam’s textile and garment industry is heavily dependent on importing of machinery and raw materials (60 per cent). “Free trade agreements, on the other hand, impose strict requirements on the origin of products, demanding capability of material autonomy. Since few of Vietnamese business can produce raw materials, they can not fully exploit the benefits brought in by the FTAs”, SSI said. The textile and garment industry will also face challenges caused by the novel coronavirus (COVID-19), the company said, adding that business activities of Vietnamese textile enterprises will be negatively affected as many China-based textile factories have been shut down since January. Currently, China is the largest raw materials supplier of Việt Nam. According to SSI, textile stocks dropped sharply last year as businesses did not perform pretty well. The Việt Nam National Textile and Garment Group (VGT) decreased by 10.9 per cent in 2019 due to poor business results. VGT's net revenue reached VNĐ18.4 trillion (US$792 million), down 3.4 per cent compared to the same period last year. Pre-tax profit reached VNĐ671 billion, fulfilling 75 per cent of the yearly plan. Post-tax profit touched VNĐ628 billion, down 10.6 per cent compared to 2018. Đức Quân Investment and Development JSC (FTM) witnessed shares plunged 88 per cent last year. FTM net revenue recorded a decrease of 13 per cent compared to 2018, reaching nearly VNĐ1 trillion. The company also recorded a net loss of nearly VNĐ95 billion in 2019. Therefore, FTM only fulfilled 66 per cent of its revenue plan.
Source: Vietnam News
The use of automation in manufacturing faces challenges, but also presents opportunities. US. textile and apparel shipments totaled $76.8 billion in 2018. Automation continues to assist in the growth of U.S. manufacturing, and this is particularly the case in the textiles, clothing and footwear industries. From the intelligent harvesting of cotton to digital printing processes — a revival in the US textile industry is underway. The geographical distribution of textiles production has seen a dramatic shift in the past 50 years, with manufacturers moving a proportion of their production facilities from Europe and North America, to Asia and other developing parts of the world. However, things are changing. According to the International Federation of Robotics (IFR) Executive Summary World Robotics 2019 report, there are five major markets for industrial robots — China, Japan, the United States, the Republic of Korea and Germany — which account for 74 percent of global robot installations. In recent years, the increase in automation, coupled with the rapidly rising wages in Asia, has seen some manufacturers shun the offshore production business model. Instead, aided by good transportation infrastructure and a workforce that can handle new technologies, home soil offers new production draws. According to the Washington-based National Council of Textile Organizations (NCTO), the U.S. textile industry invested $22.8 billion in new plants and equipment from 2006 to 2017. It’s clear that textile manufacturers are shifting priorities to increase productivity and boost efficiency.
The Challenges
The latest statistics from the IFR Executive Summary World Robotics 2019 Industrial Robots report shows the growing uptake of automation. However, compared with the success of automation in the automotive industry, which accounts for 30 percent of all robot installations worldwide; and the electrical industries, which has seen robot installations increase by 24 percent on average each year since 2013, the textile industry has seen a relatively lower rate of change. During the early Industrial Revolution, entrepreneurs in the U.S. cotton textile industry began to use mechanized looms to keep up with production demands. Fast-forward to the present day, and today’s technology objective hasn’t changed. Today, the textile industry aims to meet the demands of today’s consumer, who wants high-quality goods at reasonable price points delivered quickly. Machines have played a role in textile manufacturing for centuries, but human workers have historically taken on the labor-intensive craft of garment assembly — sewing each piece of fabric together to create a finished product. Largely because of the overarching properties of fabric, automated handling tasks such as the precise placement of parts becomes more difficult when dealing with flimsy and flexible materials. This could however be changing.
Speed And Efficiency
In the sewing process, automation traditionally has been limited because of the level of control and complex motions required. New robots are now using mapping technology, cameras and artificial intelligence to adjust fabric as needed in automated textile supply chains. The new automation possibilities could boost production volumes and save businesses money. Automation could produce results with higher accuracy than human workers, while needle placements can be tracked with variations less than half a millimeter. This improves consistency in size of product. Even fabrics prone to folding and stretching are compatible with these new robots, which can detect fabric positioning and make the necessary adjustments without human input. The production of more simple garments such as socks is already highly automated, but offers further scope for improvement. Machinery is becoming more flexible and could adapt to rapid alterations in patterns, personalization and design.
Quality Control
Another area of textiles manufacturing that can benefit from automation is quality control. Consider the following example. During the fabric dyeing process, it is essential that parameters such as the temperature, pressure, water level, water flow, time of treatment and formula all remain consistent to achieve a uniform shade. To ensure quality standards are met, a central computerized management system can control these processes extremely accurately. A computerized color matching system (CCMS) can ensure accurate repeatability. After all, if a human worker accidentally altered a pigment measurement by as little as a milligram, this would result in a color variation and a defective product. Eliminating this human error may result in cost savings for manufacturers, by reducing product waste. Automation in the textiles sector will have a massive impact on other jobs too. In fact, the U.S. government estimates that one textile manufacturing job in this country supports three other jobs. In 2018, the U.S. textile industry supply chain employed 594,147 workers. In the years to come, we may see human workers removed entirely from the garment manufacturing process, in favor of automated sewing robots. However automated technologies will not replace jobs, they will simply create new roles demanding employees with an entirely different skill set, to implement, control and maintain new technology. From spinning, knitting, weaving and dyeing to printing, gluing and bonding, automated technologies are having a profound impact on the textiles manufacturing process. Robots and automation are addressing the challenges of high labor costs in a commercial environment where consumers are expecting more. Mark Howard, is the U.S. country manager for automation parts supplier EU Automation.
Source: Textile World
“Textile companies are facing increasingly complex challenges - higher labour costs and employee turnover rates, not to mention the need to automate material flow, reduce lead times and boost productivity. Furthermore, companies increasingly require comprehensive automation solutions due to greater demands on yarn quality and ease of use as well as the trend towards large and heavy packages,” spinning solutions provider Saurer comments. Saurer already has 30 years of experience in planning and installation of transport systems, especially between roving frames and ring-spinning machines. The company has successfully implemented over 100 systems worldwide. “The new product line Saurer Automation Solutions serves as customers' expert engineering partner for integrated automation solutions across the entire textile value chain. It consists of specially designed automation elements that the project engineering team combines into tailored system solutions that are seamlessly integrated into customers' processes. Thanks to these solutions, Saurer is meeting the growing demand for cost-effective automation of spinning and further processing in staple fibre spinning and twisting mills as well as in filament yarn processing,” Saurer says. “Comprehensive data management with innovative quality functions has become indispensable along the entire textile value chain. With Senses, the digital mill management system from Saurer, customers can consolidate and analyse company-wide production, quality and performance data, even for machines from other manufacturers.” Saurer Automation Solutions offer tailor-made automation solutions in the following areas:
Source: Innovation in Textiles
