Rating agency Ind-Ra has revised the outlook on India''s textile sector to negative from stable for 2020-21 as weak domestic demand growth, threat of cheap imports and dwindling incentives and exports are likely to keep volumes muted. Ind-Ra expects withdrawal of incentives under the merchandise exports from India scheme (MEIS) to affect export players of made-ups (home textiles) and garments. "Exporters are likely to remain uncompetitive against counterparts in Pakistan, Bangladesh, Turkey and Vietnam, due to further delays in the implementation of Rebate of State and Centre levy of Taxes. All these factors would lead to margin pressures for exporters in FY21," India Ratings and Research (Ind-Ra) said. However, it expects key raw material prices to remain low in 2020-21, after a correction in 2019-20, contributing to a modest recovery in margins, stable working capital requirements and steady cash flows. Ind-Ra also anticipates cotton prices to stabilise with improved cotton supply and an inventory build-up in the next fiscal. "The industry adjusting to a low dealer inventory is becoming the new normal. Easing of the GST implementation issues might only provide modest support to demand growth, unless liquidity improves. Liquidity remains chocked, with lack of bank funding and sluggish end-consumer demand," it said. The rating agency estimates yarn production for 2020-21 to remain muted, with lack of visibility on wholesale demand. It also remains negative on the commodity segment and expects a marginal improvement in capacity utilisation in spinning mills under the cotton yarn segment. Sector consolidation will continue in 2020-21, while the mid and small commodity players continuing to struggle. According to Ind-Ra, domestic textile exporters are likely to witness reduced demand on the back of a weak Chinese demand, accompanied by declined cost competitiveness, leading to lower production volumes in 2020-21. However, the rating agency expects regulatory support in form of GST refunds for spinning chains and availability of input tax credit from units operating in the unorganised sector or composition scheme, to improve liquidity in the value chain.
Source: Outlook India
The State Government has constituted a State-level committee under the Chairmanship of Chief Secretary to give suggestions for formulating new Textile policy. As per the order issued by the General Administration Department, the committee will work with an aim to implement integrated development schemes and programmes of Textile Ministry of Government of India to provide job opportunities in textile sector to the youth, to modernise the cotton production, spinning, weaving and garment manufacturing industry besides export promotion of textile products. Additional Chief Secretary Finance, Additional Chief Secretary Energy, Principal Secretary Industrial Policy and Investment Promotion, Principal Secretary Famers Welfare and Agriculture Development, Principal Secretary Micro, Small and Medium Enterprises, Principal Secretary Cottage and Village Industry, President MP Textile Mills Association, Vice President MP Textile Mills, President Madhyanchal Cotton Ginner and Traders Association, President Readymade Garments Association-Jabalpur have been nominated as members of the committee. Managing Director MPIDC has been made member secretary of the committee. The committee will submit its report in a month time. Apart from these members, subject experts may be invited in the committee in the case if other points are under consideration. In the context of formulating the new textile policy, the committee under Madhya Pradesh's Industrial Promotion Policy 2014 will compare the provision of special facilities in the textile sector with the textile policies of other States to extend benefits of various schemes of the Textile Ministry of Government of India in the state and will hold discussions with the stake holders of textile sector for giving suggestions to develop special infrastructure.
Source: The Pioneer
The Special Economic Zones (SEZs) continue to take the lead in expanding the exports for the country. Even in the midst of volatile global economy, SEZs in India have shown resilience and have achieved 100-billion-dollar worth of exports in FY 2019-20,as on 17thFebruary 2020. It may be mentioned that SEZs achieved this land-mark of 100-billion-dollar worth of exports in 2018-19 in full financial year. It is observed that while the services segment, constituting majorly of IT &ITeS services was driver of the export growth at 23.69 %.Therewas almost 4% growth in manufacturing segment also. This reflects overall expansion and interest in SEZs in the country.Numberof operational SEZs have grown to 241 as against 235 at the end of FY 2018-19. Important sectors that saw healthy growth in this financial year include Gems & Jewelry (13.3%), Trading & Logistics (35%), Leather & Footwear (15%), Non-Conventional Energy (47%), Textiles & Garments (17.6%). Petrochemicals constitute a major segment of SEZ exports, howevergrowth was muted in this segment; which may be attributed to softening of global crude prices.
Source: PIB
Abundant young talent, simple trade agreements, income tax breaks, cheap labour and power, friendly tax laws, strategic geographical position and the announcement of African Continental free trade area (AfCFTA) makes Africa the preferable destination for apparel manufacturing industry. The easy availability of land also favours industry growth in Africa. Tapping the global market is on the radar for several African governments, and they are implementing policies for helping the garment and textile industries flourish. The African Growth and Opportunity Act (AGOA) also helps boost the industry as it allows African countries to export apparel to US in a duty-free mode. Countries like Kenya and Ethiopia are becoming prominent garment manufacturing hubs in Africa, followed by Rwanda, Uganda and Tanzania to a great extent. India-based Raymond is one of the companies to have recently signed an MoU with the Ethiopian government to set up a garmenting facility. "Countries like Ethiopia are wooing global and Indian textile players by doling out sops and benefits for shifting or partially relocating manufacturing capacities in textile. This has potential of shifting value addition and job creation abroad with implications for India’s manufacturing growth and Make-in-India campaign," Sudhir Soundalgekar, director – Projects, Raymond, told Fibre2Fashion. Ethiopia has duty-free access to the US under AGOA for 10 years till 2025, and also duty-free access to EU under GSP. Another Indian company to set up a garment unit in Ethiopia is KPR Mill Ltd, which has opened its factory in Mekelle Industrial Park under a collaborative partnership with ITC's Supporting Indian Trade and Investment for Africa (SITA) programme. The textile and apparel industry in Africa has grown rapidly in past couple of years, and is estimated to grow at a CAGR of ~5 per cent over the next five years. The industry can grow even faster if the countries focus on improving some of the grey areas like infrastructure, strategic supply chain, and skill management.
Source: Fibre2fashion
Indian business leaders are calling for cuts in import duties on antibiotic drugs, mobile parts and other items to help cope with the fallout from the coronavirus outbreak which has disrupted supplies from China, government and industry officials said. The outbreak of the virus in China has hit India's manufacturing and exports of medicines, electronic, textile and chemicals as China is the biggest source of intermediate goods, worth $30 billion a year, according to a presentation by the Confederation of Indian Industries (CII), seen by Reuters. After being shown the presentation on Tuesday, Indian finance minister Nirmala Sitharaman said the government would announce measures in the coming days after discussing them with other ministries and the prime minister's office. She did not elaborate on the measures. Sitharaman met more than 200 business leaders to assess the impact of the coronavirus and discuss plans to contain the damage. The government should "remove higher import duties on certain products, primarily imported from China" but available in other countries, the presentation by the CII said. "The government may offer credit with a backstop facility of guarantee for companies which have the capability to start immediate production of items that can feed into domestic consumption," it said. The coronavirus outbreak, which has now killed more than 1,800 people in China, has disrupted supplies of raw material to other countries. "India sources about 65-70% of active pharmaceutical ingredients and close to 90% of certain mobile phone parts from China," a presentation by another industry chamber, which represents more than 250,000 companies but did not wish to be identified, said. Ratings agency Moody's said on Tuesday the coronavirus outbreak added to pressures on growth in Asia, with the impact felt primarily through trade and tourism, and for some sectors through supply-chain disruptions. Moody's cut its economic growth forecast for India to 5.4% for 2020 from an earlier estimate of 6.6%, and to 5.8% for 2021 from 6.7%, saying the revisions were also affected by weakening domestic demand. "Overall, the impact of coronavirus on industry has been moderate so far," said an industry official, who declined to be named, adding the impact could continue for at least two quarters. Daara Patel, secretary general of the Indian Drug Manufacturers Association, which represents over 900 drug producers, said the industry was facing rising prices of raw material and supply shortages. "The prices of some antibiotics, vitamins and other medicines have gone up by 15-50% following fear of disruption in supply of ingredients," he said. The pharmaceuticals industry is concerned that stocks of active ingredients for drugs like paracetamol, ibuprofen, could last for 15 days and for two-three months for other drugs, the presentation by the unnamed industry chamber showed.
Source: Reuters
Finance minister Nirmala Sitharaman has allayed fears of any price rise in short term due to supply disruption from China on account of Coronavirus outbreak. "There are no concerns about price rise so far due to Coronavirus," she said, adding it is too early to talk about the impact of Covid-19 outbreak on the Make in India initiative. Sitharaman was addressing the media after a meeting with industry and trade associations to assess the impact of the virus outbreak on the businesses. The minister assured that there is no shortage of raw material with industries as of now. The finance minister said that a meeting of the concerned secretaries will be held tomorrow, and she will then announce measures to deal with the situation in consultation with the Prime Minister's Office. She also said there were no reports of shortage of medicines or medical equipment, instead the pharma industry is asking for lifting of ban on exports of certain items. However, there could be some disruptions in supplies and concerns have been expressed by the representative of pharma, solar and chemical industries, she said. Sectors like pharma and electronics are worst hit due to the outbreak in China as it has affected the supply of essential raw materials from the country. The supply disruption comes at a time when the economy is experiencing stress and inflation is on the way up.
Source: Economic Times
Kala Kumbh – Handicrafts Thematic Exhibition, with an objective to promote Geographical Indication (GI) craft and heritage of India, has been organised by Ministry of Textile. The exhibitions are planned in various major cities like Bengaluru, Mumbai, Kolkata, and Chennai. The exhibitions are sponsored by the Export Promotion Council for Handicrafts (EPCH). The exhibition has started on February 14th and will continue till February 23rd, 2020 in Bengaluru & Mumbai and will be organised in Kolkata & Chennai in March 2020. The GI tag is used on handicrafts which correspond to a specific geographical location or origin (e.g., a town, region, or country). As of August 2019, 178 GI handicraft products were registered from all over India. The artisans are the backbone of Indian handicraft sector and possess inherent skill, technical and traditional craftsmanship. During the 10-day exhibitions, the visitors will be able to see a wide variety of handicrafts with their friends and family and by buying these handicrafts they can directly contribute to the improvement of the livelihood of these artisans and also create awareness of the rich heritage of the country. In Bengaluru exhibition, GI crafts like Mysore rosewood inlay, Channapatna lacquerware, Dharwad kasuti embroidery, Kolhapur chappal, Bidriware, Molakalmur hand block printing, Ananthapur leather puppet, Thrissur screwpine, Vishakapatna lacquerware, Sandur lambani embroidery, Jodhpur terracotta, Jaipur handprinted textile, bronze casting, Medinipur mat weaving, Birbhum artistic leather and Khurdah palm leaf engraving is being displayed. In Mumbai exhibition GI crafts like Chittoor kalamkari painting, Thrissur screwpine crafts, Pokharan terracotta crafts, Kutch embroidery & crochet crafts, Pingla patachitra, Birbhum kantha embroidery, Jajpur photachitra painting, Madhubani Mithila painting, Kolhapur chappal, Palghar Worli painting, Kondagaon wrought iron craft, Agate stone crafts and Krishna hand block printing are being displayed.
Source: KNN India
Issuing tax invoice without supply of goods to facilitate fraudulent availment of credit cannot be put on par with inability of the buyer to check compliance of seller. The Central Board of Indirect Taxes & Customs (CBIC) has instructed its officers to initiate measures to recover interest payable for delayed filing of monthly returns (GSTR-3B). As per FE (February 13), the instruction from Member of the Board puts the figure at over Rs 46,000 crore. Considering the shortfall in tax collections, and the financial year coming to close, the concern and drive are understandable. Under the GST law, tax payments and filing of returns go hand in hand. As per Section 39(7) of CGST Act, the due date for filing the monthly summary return (GSTR-3B) is the prescribed date for payment of tax as well. The GST law does not provide the option to pay the tax on time when return could not be filed for reasons like technical issues with GST portal. If a taxpayer is forced to file return belatedly due to factors beyond her control, then tax payment also becomes delayed. The consequence is liability to pay interest for the period of delay in payment of tax. Delinking payment of tax from return filing and making the GST portal glitch-free should precede such missives to officers to initiate recovery proceedings against taxpayers. A taxpayer has the option to pay tax by cash using electronic cash ledger or by using input tax credit as reflected in her electronic credit ledger maintained in the government portal. At the time of filing return and payment of tax for a month, interest for delayed payment of tax is required to be calculated on the total tax liability without adjusting the input tax credit available in the credit ledger. This is done so that till the time the credit amount is utilised and appropriated to the government account, such credit cannot be considered as tax paid. A benevolent amendment was brought as part of the full Budget last year in August, whereby interest will be payable only on that part of tax which is paid by cash. This was based on the recommendation made in December 2018 by the GST Council. An amendment to Section 50 of CGST Act restricting interest to net tax liability has not yet been brought to force. Seeking interest on delayed payment of tax prospectively after notifying such provision may soften the burden on taxpayers. As pressure on share from compensation cess increases even while performance on revenue front remains below par, measures to plug revenue leakage are becoming more stringent. The focus is on restricting input tax credit through various amendments and initiating action to recover the dues. The taxpayer-friendly GST regime has the potential of becoming harassing if the extreme powers vested with the tax department are not used with circumspection and discretion. Two recent changes have caused much consternation among the trade and industry. Input tax credit for a buyer has been restricted to 10% of credit amount as available in invoices, details of which are uploaded by her suppliers in outward supply return (GSTR-1). This will apply to those invoices for which details have not been uploaded by the suppliers. All persons procuring goods and services for use in further supplies will have to verify the compliances of their suppliers if the tax credit availed is to be protected without risking reversal. The flow of various returns and modifying details by counter-party, as envisaged under GST law, have not been implemented. In such a scenario, restricting tax credit for deficiencies in auto-populated details in purchase returns (GSTR-2A) of buyer based on outward supply return of seller appears to be on a weak wicket. This has come as an additional burden as many taxpayers are being issued letter-cum-notices to reverse credit taken for mismatch between purchase returns and monthly summary returns. Even when goods and services have been received and tax invoices are available with the buyer, for absence of details in auto-populated return, reversal of credit is insisted. This has no legal sanction and businesses suffer immensely due to such action. Secondly, a new Rule 86A has been brought to check fake invoicing and fraudulent availment of credit. This rule empowers the officer to block input tax credit in certain situations. The rule puts fraudulent practices adopted by supplier and lack of due diligence by buyer in the same basket. Credit can be blocked by the department if buyers fail to ensure that their suppliers have paid tax as shown in the invoices. GST law provides for compliance rating, and it has not been implemented. The buyer has no facility to know about the compliance behaviour of her sellers. In this backdrop, neither can the buyer be asked to share burden of the department to verify compliances of assessees nor is the buyer equipped with resources to undertake such verification with all her suppliers. Issuing tax invoice without supply of goods to facilitate fraudulent availment of credit cannot be put on par with inability of the buyer to check compliance of seller. Such rough edges in the new provisions need to be ironed out so that the compliant taxpayers are allowed to do business using rightfully earned tax credits without hassles.
Source: Financial Express
External Affairs Minister S Jaishankar met top leaders of the European Union and held wide-ranging talks on issues, including economic cooperation, climate change and capacity building, that would "benefit both India and EU". Jaishankar, who was in Germany during the weekend for the Munich Security Conference, arrived here on Monday to prepare the ground for Prime Minister Narendra Modi's planned visit for the India-EU summit here next month. The foreign minister met EU Commissioner for International Partnerships Jutta Urpilainen and the two leaders discussed experiences in capacity building and development partnerships. He appreciated President of the European Council Charles Michel for his vision for the EU and Eu-India relations and expressed confident that "his (Michel) leadership can translate that into substantive outcomes." Jaishankar held a very "engaging" conversation with Executive Vice-President for the European Green Deal Frans Timmermans and the two leaders discussed experiences on sustainability, climate change, environment and innovation. Jaishankar also had an open discussion with members of the European Parliament representing a broad spectrum of politics and member states. "The interaction covered political, economic and social issues. Noted their deep interest in India and our relations with the EU," he tweeted. Jaishankar's visit comes weeks after the European Parliament postponed until March a vote on a joint motion, combining five different resolutions tabled by its members against India's Citizenship Amendment Act, which was debated at its Plenary session in Brussels. During the debate, Helena Dalli, the Vice-President of the European Commission and High Representative of the Union for Foreign Affairs and Security Policy, had said the Commission was looking forward to Prime Minister Modi's visit to Brussels in March for the 15th India-EU Summit.
Source: Economic Times
Ministry of Skill Development and Entrepreneurship (MSDE) organized a day long consultative workshop here today, with representatives from States and Union Territories, to review skill development across geographies and segments and to seek their valuable suggestions on streamlining the upcoming initiatives. The key thrust of the workshop was to increase the participation of the District Committees for better coordination of the skill efforts in each district and to achieve the broader objectives of the Hon’ble Prime Minister’s vision of making India the skill capital of the world. During the workshop, Vision 2025 was also discussed which lays out the key focus areas and ready-to-implement roadmap for promoting Skill Development and Entrepreneurship in country. The aim for organizing today’s workshop was to unlock the true potential of the youth by making skills aspirational and building sustainable livelihood pathways for them. The State and Union Territory representatives shared their regional perspective on the various aspects of the Skill India Mission including Apprenticeship, Long Term Skilling; Sankalp and Strive initiatives; Entrepreneurship; Short Term Skilling and the next stage of the Pradhan Mantri Kaushal Vikas Yojana (PMKVY), PMKVY 3.0 and the related challenges and opportunities. The center proposed that the District Skill Committees (DSCs) should be further empowered with substantial fund allocation to ensure stringent monitoring and evaluation of skill training under the next phase of PMKVY. Towards this, MSDE has recently introduced the Mahatma Gandhi National Fellowship (MGNF), an initiative designed and implemented by IIM Bangalore in collaboration with State Skill Development Missions (SSDMs), where fellows will be posted in district for 2 years working closely with the district administration to create specific State Skill Development Plans. Relevant local and state level programs will also receive additional funding under the SANKALP scheme of MSDE, beyond the already allocated state incentive grants. The workshop also deliberated on integration of skill development in the plans of Gram Panchayats ensuring last mile connectivity. Urging the states to increase scale and standards of skill development, Dr. Mahendra Nath Pandey, Minister for Skill Development and Entrepreneurship said, “Our endeavor is to move away from the low skill equilibrium and contribute towards economic growth and wealth creation through skill development and entrepreneurship. This will eventually lead to increased employment prospects for the youth of the nation. The success of Skill India is dependent on the increased participation of the States and the District committees to drive demand-driven skill development in market relevant courses and prepare our youth to be industry ready.” “There should consistent research and analysis on skill gaps at a local level, so that our strategies match the demand of the market and the aspiration of the youth. We should enable industry surveys to enable outcome-based skilling,” said Shri R K Singh, Minister of State (IC) Power and New & Renewable Energy, MoS in the Ministry of Skill Development and Entrepreneurship. MSDE assured its support to States in keeping pace with the industry best practices by enabling upgradation of Industrial Training Institutes (ITIs) and encouraging more participation from industry giants. Initially, MSDE will focus on the top 500 ITIs, on the basis of the grading of these institutes, and will also determine surplus existing capacity for Short Term Training in ITIs. MSDE has also identified 100 industrial clusters for improved and broadening Apprenticeship training. Out of these, agreements have already been signed with eleven clusters. To promote entrepreneurship in the country, the Ministry proposed entrepreneurship development unit in each State which will be anchored with State Skilling Mission. It also proposed developing mentorship and handholding of existing and new entrepreneurs, through district entrepreneurship incubation lab in existing skilling institutions.
Source: PIB
India is considering closer scrutiny of foreign direct investment in sectors crucial to national security, a top government official said, the latest nation looking to tighten oversight amid growing unease about China’s acquisition of tech assets. The industries department is in talks with the ministries looking at finance and internal security, and any changes would include transactions under the so-called automatic route, Industry Secretary Guruprasad Mohapatra said in a recent interview in New Delhi. Under current rules, the Reserve Bank of India seeks some disclosures from companies applying to invest. Prime Minister Narendra Modi’s administration considers India to be one of the most open economies for overseas investment after it eased regulations for several sectors in the past five years. However, governments across the globe have been increasingly blocking the entry of foreign investment on national security grounds, according to a December report from the United Nations Conference on Development and Trade, which identified at least 20 such planned takeovers exceeding $50 million from 2016 to 2019. “There are some sensitivities in certain strategic sectors on automatic route so discussion is on to see if there should be any intervention,” Mohapatra said. He declined to name the sectors. India permits foreigners to directly invest in areas including oil exploration and airports without seeking any government approvals, in other words, these are ushered in through the automatic route. As much as 49% of overseas investment is allowed in a few industries - such as telecom services - through the automatic route. The European Union in 2018 approved new rules that will allow EU governments to request information and offer comments on a foreign direct investment in a particular member country. Officials hope the mechanism will provide a broader overview of Chinese investment in Europe amid concerns that companies with indirect ties to the state are snapping up strategically important businesses. India received $26 billion FDI in the first six months of the financial year that started April 2019, up from $22 billion in the whole of the previous year, according to the industry department.
Source: Economic Times
Last week ended with the gloomy news that India’s merchandise exports fell for the sixth straight month. It reiterates the fact that the role of exports in economic growth is declining. This trend has also slowed down the pace at which the economy is growing. Prevailing economic wisdom is that a country is unlikely to become prosperous without exports playing an important role. The typical remedy for India’s current situation has been to look for best practices of East Asian countries, trailblazers in the export-led growth approach. We may be better off looking closer east: at Bangladesh. Bangladesh and Vietnam are the newer examples of low income countries using exports to propel their economy. Bangladesh in the last couple of decades has emerged as a key hub for apparel exports. To put this in context, about three decades ago its exports of footwear and apparel accounted for less than 1% of the global exports in these products. Now, it’s about 7%, behind only China and Vietnam. These sectors employ about 3.6 million people, of whom over half are women. Bangladesh’s success in this area has over the last five years helped it register a steady increase in the speed at which its economy has been growing, from about 6.5% to 8%. The country, on average, outperforms its Asian peers. The salience of the Bangladesh story comes from a regressive recent policy trend in India. Over the last three years, the Narendra Modi government has gone back to a trade policy characterised by protectionism, reversing an approach that took root in 1991. Prior to the regression into protectionism, India often unilaterally reduced import tariffs and exports were an important contributor to that period of fast-paced economic growth. A reversion to protectionism is counterproductive because it diminishes India’s chances to integrate more tightly into global value chains (GVCs). GVCs are the most important development in cross-border trade over the last three decades. They arose as a combination of technological improvements and worldwide reduction in tariffs made it viable for big firms to split their production process across countries. A lot of trade in products is really within different arms of the same corporation as the inputs are made in one country and the final product assembled elsewhere. Bangladesh has used the GVC phenomenon well to quickly expand its export of readymade garments. For a poor country with a large pool of low skilled workers, GVCs offer a quick path to transition from exporting largely commodities to basic manufactured products. The lessons that India needs to absorb are that GVCs work well when imported inputs are made cheaper by lower tariffs. This of course has to be supplemented by smart and targeted government intervention. Lower tariffs on their own will not work. Bangladesh’s interventions in areas such as reduction in the cost of working capital for firms have played an important role in getting its garment sector more tightly integrated into GVCs. This is not something that the Indian government is unaware of. The finance ministry’s most recent Economic Survey devotes a lot of space to suggesting ways to integrate Indian firms into GVCs. Apparently, the government’s economic advisers and decision makers are not on the same wavelength. Two other important lessons that Bangladesh offers are significant. One, it is not averse to trade agreements. India, on the other hand, is now wary of regional trade agreements at a time when WTO is increasingly ineffective. Trade agreements play an important role in creating a conducive environment for linking local firms to international ones. The presence of foreign firms encourages domestic firms to raise their quality and look for new opportunities. Two, Bangladesh has managed to keep its labour costs in line with its per capita income. This is important to generate opportunities for low skilled workers as labour costs matter in investment decisions of basic manufactured products. India hasn’t fared well in this area, with a poor regulatory framework playing a part. The world today is more hostile to cross-border trade than it was 15 years ago. Yet, opportunities persist for countries willing to tailor their policies to grab them. One source of opportunities is the uneasy trade relation between the US and China. They may have recently called a truce in their trade war but underlying problems remain. China aspires to be a strategic competitor to the US, which will induce many corporations to shift some their production lines out of the former. India should look to grab these opportunities. A low income country such as Bangladesh offers relevant lessons to design the set of changes needed to attract more GVCs to India. In popular imagination, Bangladesh may be a basket case, still sending economic migrants into India. This view masks the changes there. It’s almost 50 years since Bangladesh achieved liberation, with India’s help, after a bloody war with Pakistan. Not many gave the country a chance. Not only has it recorded considerable progress in economic and social indicators, it has left Pakistan behind in important areas such as per capita GDP. If the economic growth rates of India and Bangladesh diverge for a few more years, Bangladesh will surpass India in per capita GDP terms. For sure, success in apparel exports have not overcome other problems. Bangladesh has a weak financial system, with banks burdened by stressed loans which amount to almost 9% of GDP. There is overdependence on apparel exports and a skills deficit. Yet, Bangladesh’s policies offer some lessons for India and it will be our loss to ignore them.
Source: Times of India
MUMBAI: The rupee tumbled by 22 paise to settle at a nearly three-week low of 71.54 against the US dollar on Tuesday as concerns over the economic fallout from coronavirus outbreak continued to roil forex market sentiment. Besides, sustained foreign fund outflows and subdued equities also put pressure on the rupee. Starting off the session on a weaker note, the rupee weakened further to hit the day's low of 71.56 against the American currency. The domestic unit finally settled down by 22 paise at 71.54, a level not seen since January 30. The dollar index, which gauges the greenback's strength against a basket of six currencies, rose by 0.15 per cent to 99.15. The 10-year government bond yield was at 6.39 per cent. Global crude oil benchmark Brent futures dropped 1.89 per cent to trade at $56.58 per barrel. "Rupee started the day on a weak note crossing beyond 71.50, majorly on back of selling from institution in risky assets as FIIs (are) likely to be pulling out money from equities as the global market weighs slowdown effects of rising coronavirus threat in China," LKP Securities senior research analyst (commodity & currency) Jateen Trivedi said. The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.4259 and for rupee/euro at 77.4162. The reference rate for rupee/British pound was fixed at 93.1737 and for rupee/100 Japanese yen at 65.02. On the equities front, the sensex was down 161.31 points or 0.39 per cent at 40,894.38, while the NSE barometer Nifty settled at 11,992.50, showing a fall of 53.30 points or 0.44 per cent. According to the provisional exchange data, FPIs remained net sellers in the capital markets as they off-loaded equities worth Rs 74 crore on a net basis on Tuesday. Meanwhile, worries over rising death toll and the economic fallout from the novel coronavirus continued to haunt investors globally. The coronavirus epidemic that emerged in central China has now killed nearly 1,800 people and has spread around the world.
Source: Economic Times
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
935.86 |
USD/Ton |
0% |
2/19/2020 |
|
VSF |
1357.36 |
USD/Ton |
0% |
2/19/2020 |
|
ASF |
2007.46 |
USD/Ton |
0% |
2/19/2020 |
|
Polyester POY |
1003.73 |
USD/Ton |
-0.71% |
2/19/2020 |
|
Nylon FDY |
2214.64 |
USD/Ton |
0% |
2/19/2020 |
|
40D Spandex |
4100.66 |
USD/Ton |
0% |
2/19/2020 |
|
Nylon POY |
5358.00 |
USD/Ton |
0% |
2/19/2020 |
|
Acrylic Top 3D |
1257.34 |
USD/Ton |
-0.28% |
2/19/2020 |
|
Polyester FDY |
2050.33 |
USD/Ton |
0% |
2/19/2020 |
|
Nylon DTY |
2257.50 |
USD/Ton |
0% |
2/19/2020 |
|
Viscose Long Filament |
1146.61 |
USD/Ton |
0% |
2/19/2020 |
|
Polyester DTY |
2450.39 |
USD/Ton |
0% |
2/19/2020 |
|
30S Spun Rayon Yarn |
1993.18 |
USD/Ton |
0% |
2/19/2020 |
|
32S Polyester Yarn |
1621.69 |
USD/Ton |
0% |
2/19/2020 |
|
45S T/C Yarn |
2400.38 |
USD/Ton |
0% |
2/19/2020 |
|
40S Rayon Yarn |
2157.49 |
USD/Ton |
0% |
2/19/2020 |
|
T/R Yarn 65/35 32S |
1928.88 |
USD/Ton |
0% |
2/19/2020 |
|
45S Polyester Yarn |
1771.71 |
USD/Ton |
0% |
2/19/2020 |
|
T/C Yarn 65/35 32S |
2200.35 |
USD/Ton |
0% |
2/19/2020 |
|
10S Denim Fabric |
1.26 |
USD/Meter |
0% |
2/19/2020 |
|
32S Twill Fabric |
0.69 |
USD/Meter |
0% |
2/19/2020 |
|
40S Combed Poplin |
0.97 |
USD/Meter |
0% |
2/19/2020 |
|
30S Rayon Fabric |
0.53 |
USD/Meter |
0% |
2/19/2020 |
|
45S T/C Fabric |
0.67 |
USD/Meter |
0% |
2/19/2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14288 USD dtd. 19/02/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The ice between Pakistan and Turkey on Free Trade Agreement has thawed and to this effect the commerce ministry will highlight the potential sectors on FTA in March and begin negotiating on the FTA in Ankara in April. Pakistan, in the meanwhile, has asked Turkey to take advantage of the Pak-China FTA by either outsourcing its industrial units or diverting its investment in export-oriented units in Pakistan. Speaking exclusively with The News here on Tuesday, Adviser to Prime Minister on Commerce, Textile, Industries & Production and Investment Abdul Razak Dawood said that there was substantial progress towards initiating an FTA between the two countries. "Pakistan will finish its study on FTA by March and start parleys on FTA in Ankara." Dawood also said that Pakistan has asked Turkey to persuade its entrepreneurs to either outsource its industrial units and invest in export-oriented sectors in Pakistan and take advantage of the FTA with China. Under the FTA, both Pakistan and China will liberalize 75 percent of total tariff lines for each other in a period of 10 years and Turkish entrepreneurs can take advantage of it by investing in export-oriented sectors in Pakistan. About the recent visit of Turkish President Recep Tayyib Erdogan to Pakistan along with a huge delegation of business leaders who held B2B in Islamabad, the adviser on commerce said the meetings were meant for foreign direct investment in higlighting the industrial plan in joint ventures and training facilities in joint ventures with NUST. They also showed interest in investments in IT, a joint venture in tourism with local operators. The Turkish businessmen also evinced interest in investing in construction, agriculture, dairy, and services sectors and several other sectors except textile and leather. However, Pakistan encouraged Turkish entrepreneurs to help Pakistan in the textile and garment sectors. "There are many areas in the textile sector where Pakistan is found lacking and we want the Turkish entrepreneurs to come and either to invest in Pakistan or help Pakistan’s textile business leaders in joint ventures. And to this effect, a delegation from Pakistan textile industry would visit Turkey." The existing trade volume between the two countries has dropped drastically from $1.08 billion to $792 million after the imposition of a protective textile duty by Turkey. Previously, the textile exports to Turkey were based on normal tariffs, but later Turkey imposed a very high 18pc protective duty, leading to a decline in the textile exports. However, President Erdogan pledged to increase the bilateral trade by up to $5 billion in the next five years.
Source: The News
The "China Textile City," Asia's largest textile distribution center in the city of Shaoxing, east China's Zhejiang Province, reopened Tuesday. The center holds more than 30,000 merchants and 100,000 daily customer visits. It boasts a sales network covering 192 countries and regions. The opening date this year was 18 days later than in previous years. On Feb. 10, the center opened to its customers online. Merchants can connect with their clients all over the world 24 hours a day, seven days a week on the online platform. On the same day, the Yiwu International Trade Market, the world's leading small commodities market, also reopened to customers. According to the province's economy and information technology department of Zhejiang, as of Feb. 16, 24,888 industrial enterprises above designated size have resumed work, with a resumption rate of 56.2 percent, 12.1 percent higher than the previous day.
Source: Xinhua
Recycling textiles, batteries and packaging will be the priority in a new plan to halve waste in the European Union by 2030, the head of the EU’s “Green Deal” said on Tuesday. Frans Timmermans, who is leading the EU’s drive to become the first climate-neutral continent by 2050, told European lawmakers in Brussels that the share of materials recovered and recycled in the EU economy had to increase, or “by 2050 we would need three planets to sustain our consumption habits.” “It’s not about forcing our citizens to go live in caves and eat grass, it’s about ensuring a high level of comfort, of development in a new economy,” said Timmermans, who is also vice-president of the European Commission, the EU’s executive. Under the new plan, the Commision will present initiatives aimed at prolonging the life of products such as electronic devices, and encourage consumers to seek repairs. France has taken a lead with the adoption last month of its first anti-waste law. This will ban all disposable plastics by 2040, including packaging for household and skincare products, disposable cutlery in fast food restaurants, plastic tea bags and confetti. Bans for some items will start from January 2021. Junior environment minister Brune Poirson told reporters in Brussels that the new French law would as a priority tighten regulation covering planned obsolescence in electronics and unsold stocks in the fashion industry. France also became the first country in the world to commit to introducing filters on new washing machines from January 2025 to reduce the spread of plastic microfibers from synthetic clothing, which make up of a third of plastic particles that end up in waste waters and contribute to pollution in the oceans. The European Commission is due to present its so-called circular economy plan for a less wasteful future on March 10, along with a new European industrial strategy.
Source: Reuters
The economic planners have developed a very narrow export base of the country by refusing to think beyond textiles, and the export potential of other sectors of the economy remains neglected. Hardly a few sectors in Pakistan are part of the billion dollar club, which includes few subsectors of textiles which cumulatively export goods worth $13.5 billion. The next highest export item is rice, not a manufactured good, with exports of $3 billion. Exports of all other items are less than $1 billion. One cannot expect much with its total exports hovering around $24 billion. If we look at neighbouring India, there are over three categories where exports are worth $40 billion or above. These include mineral fuels, including oil, gems and precious metal, textiles and clothing. Exports from pharmaceuticals, machinery including computers, organic and inorganic chemical fetch over $20 billion. There are many sectors that are in $10 billion club. Those include vehicles ($18 billion), electrical machinery equipment ($11.8 billion) and iron and steel ($10.1 billion). Apart from these, scores of sectors including handicrafts register exports of around or above $5 billion. Total Indian exports are worth $330 billion which is over 13 times higher than Pakistan’s textile exports. India is the world’s fifth-largest meat producer and exporter, accounting for 6.9 percent of global meat production. Last year, India produced 4.50 million tons of meat. Meat exports fetch India over $4 billion a year. In Pakistan the economic planners have periodically been paying rebates, refunds on textile exports based on calculations conducted in consultation with the textile industry. The refunds are provided only on inputs where the sales tax has been paid or in other words where the purchases have been made from sales tax registered persons. Though the refunds in recent years are being delayed, still the exporters have legal and genuine claim over these refunds that the government is bound to pay. Since textile sector had government support and facilitations, they mostly procure inputs from sales tax registered persons and then claim back that amount after exports are made. This also includes the sales tax they pay on electricity and gas. For most of the other sectors of the economy, the refund of taxes paid on exported goods remains a problem. They do not even get the refunds on the general sales tax paid on electricity and natural gas. For the textile sector there is a precise calculation made with the assistance of the private sector on the amount of gas and electricity used in manufacturing any item, and the sales tax paid is calculated and refunded accordingly. For other sectors no such exercise has been conducted. Most of them export goods without claiming refunds because their inputs are available with persons that are not registered in sales tax. Even the sales tax paid on power and energy bills is not refunded. In some cases, the FBR has arbitrarily fixed some refunds on exports that are much less than the amount they paid at the time of buying inputs. Exports the world over are zero-rated, but in Pakistan the exports are made almost zero-rated through refunds for only five sectors. Of these five, textiles sector claims the highest refunds in terms of the zero-rated facility. For all other exporters, planners have made no such provisions. The non-textile exporters of the country are real heroes who are earning foreign exchange against all odds. If we look at the profile of Indian exporters, we find similar sectors in Pakistan. If we see the textile export performance in our official export records, handlooms do not export. In fact, handlooms are things of the past in Pakistan, but these very handlooms, considered the primitive weaving machines operated manually are adding billions of dollars to Indian exports. Our gems and jewellery exports are still in nascent stage even 15 years after this concept was promoted. The Indians are way ahead. Why can we not add $5 billion in our exports through gems and jewellery? It needs similar handholding that government and the financial institutions provide to the textile sector. We produce top quality drugs, but the regulators here are more interested in controlling prices than ensuring global standards on manufacturing and storage of drugs. The pharmaceutical industry should be facilitated to get approvals from developed economies so their products can be exported.
Source: The News
Blockchain technology is the new trend in almost all the business sectors, starting from finance to education, healthcare, security, and now it is the textile industry that the blockchain technology is all set to bring in the transformation. Blockchain makes the textile and fashion industry more transparent. It helps in fixing the issues that the textile industry is currently facing pertaining to fraudulent supply chain networks and brand positioning. With the help of the DLT (distributed ledger technology), fashion brands can easily communicate product provenance to customers and partners, and at the same time can mitigate various environmental risks associated with it. In fact, blockchain benefits fashion both from the perspectives of the consumers as well as the business. Because of the blockchain technology taking the front seat in revamping the textile industry, the shoppers all across the world can have access to an attractive product assortment. Also, the products are made accessible to them via mobile, product customization, immediate delivery and easy returns. At the same time, manufacturing also has become more effective than it was ever before due to increased computerization and automation in areas such as sewing, pattern making, and knitting. How Does the Integration of Blockchain and the Textile Industry Can Help? With the integration of the decentralized and peer-to-peer blockchain technology, it brings in all the major stakeholders like farmers, raw material suppliers, designing houses, transporters, manufacturers, banks, retail outlets, distributors, consumers, and other parties under the same supply chain roof. In fact, with the integration of the blockchain technology in the fashion industry, the luxury brands can promote a more ethical manufacturing process right from the beginning till the end, thereby proving the sustainability and authenticity of their products. Thus, with the help of blockchain technology, the transparency of the supply chain can be guaranteed, intellectual property can be secured and, data sharing efficiency can be improved. Here is a list of some of the companies that have incorporated blockchain in fashion. Read below to know more about their blockchain applications.
1. Loomia
The company manufactures textile circuitry to heat and light garments and also collects data from them using sensing technologies installed in them. Blockchain helps in delivering some data back to the brand so that by utilizing the data, the brand can manufacture better products in the future.
2. Curate
It is a decentralized app (DApp) that is to say it is a blockchain-based smart contract platform, that uses digital tokens like BTC or ETH or its very own digital currency CUR8 tokens to reward users who curate various fashion styles. Various fashion brands collaborate with Curate to increase their online sales or raise their brand awareness.
3. Fashion Coin
It is a crypto-based wallet that uses the P2P network of blockchain technology.
4. Textile Genesis
The Hong Kong-based technology firm Textile Genesis uses blockchain technology to trace its Tencel fibers. The blockchain-based Tencel Fiber coins are used as an authentication mechanism to protect against any form of adulteration, and also provide digital security to each step of apparel manufacture.
5. Arianee
This company uses blockchain for independent, decentralized, and secure verification. It relieves the users from relying on a single and centralized third party. As all the network nodes are required to verify any transaction on the protocol, therefore there are no chances of fraud.
6. Fushsia
The Seattle based company Fuchsia uses the blockchain platform named Provenance to share details about the workers who manufacture the shoes of the brand in Pakistan.
7. The fabricant
This company uses blockchain technology for creating digital-only fashion apparels that are compatible to be traded in the virtual world. Apparel, Blockchain, Consumers—The New ABC of Apparel Industry. Apparel, Blockchain, Consumers or the ABC approach brings in the apparel industry and consumers under one roof. Right from the beginning of the procurement of the fiber to the manufacturing of the clothes to selling them to the consumers, the textile industry follows the ABC approach. Blockchain has made it easy for the apparel industry to fetch every information pertaining to the fiber providers, manufacturers, processors, shippers, and retailers within seconds. Moreover, blockchain also gives detailed information about the compliance and sustainability of the raw materials used for the manufacture of apparel. Apart from this, blockchain helps in establishing the authenticity of the garments where the customers can scan the tags attached to each apparel to find out relevant information about the brands and the products. It also helps in rooting out counterfeit goods. Therefore, blockchain is an important component in the apparel industry right from the beginning till the end.
Conclusion
Providing an exceptional customer experience is very important for the fashion industry to excel in its field. This has increased rapidly with the advent of technology and digital thinking of the customers, but then providing the customers with the best experience needs timely funding and significant investment, which is still at a very nascent stage as far as the textile industry is concerned. The product journey has received far less investment as compared to the consumer journey. Therefore, to balance this, blockchain and DLT can play a very important role. In fact, the blockchain models will eventually help in reducing counterfeiting and improving labor practices by establishing higher levels of ethical standards in the business.
Source: Crypto News
