MARKET WATCH 21 FEB, 2020

NATIONAL

INTERNATIONAL

Govt rolls out 1% additional ad-hoc incentive for garments and made-ups

The government has introduced a scheme for additional ad-hoc incentive of 1 per cent of free on board (FOB) value for garments and made-ups. This comes at a time when benefits under the Merchandise Exports from India Scheme (MEIS) for exports of such items were withdrawn. Exporters said the incentive would be added if rebate of state and central taxes and levies scheme (RoSCTL) is less than remission of state levies (RoSL) plus MEIS.  The government issued the notification for the incentive in mid-January and has now issued the guidelines. This is mainly to compensate ...

Source: Business Standard

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Address GST ambiguity in new policy: Gujarat textile units to ask Centre

Textile industry also wants easy availability of loans from banks, non-tariff barrier on imported garments, increase in time limit for the textile machinery imported from China under the Export Promotion Capital Goods (EPCG) scheme and increase in capital subsidy. In view of upcoming Textile Policy-2020, Gujarat-based textile industry has decided to make presentation before the Union ministry of textile to address the issue of different slabs of good and services tax (GST) on textile value chain. Currently, different slabs are applicable on raw material, yarn and grey fabric, says Ketan Desai, president of South Gujarat Chamber of Commerce (SGCCI), adding that on raw material, GST is as high as 18%, GST on yarn is 12% and on fabric, it has been kept at 5%. Instead of filing returns and refund system, the GST authority should come out with one-time tax scheme to make the taxation simpler for the thousands of textile units not only in Gujarat but across the country, said Gaurang Bhagat, executive committee member of Gujarat Chamber of Commerce & Industry (GCCI). Bhagat who is also president of Maskati Cloth Market Mahajan said that instead of subsidies, the government should work on providing electricity at lower rates to textile industry which is the second largest employer after agriculture in the country. Textile industry also wants easy availability of loans from banks, non-tariff barrier on imported garments, increase in time limit for the textile machinery imported from China under the Export Promotion Capital Goods (EPCG) scheme and increase in capital subsidy. They are also demanding to extend EPCG scheme for textile machinery and inclusion of weaving machinery under Amended Technology Up-gradation Fund Scheme (ATUF). Suggestion for one-nation one-power tariff for the sector was also welcomed during the meeting. Recently, SGCCI has also made a representation before Gujarat government to reduce stamp duty on mortgage deed at a time of availing loan from banking sector. The Surat-based textile industry has also demanded for Textile Processing Park in the vicinity of the city.

Source: Financial Express

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Textile lobby warns of hurdles if coronavirus contagion continues

  • India exports 25 mn kg cotton yarn a month to China, but a closure of units there has led to a drop in demand
  • A shortage of such textiles from China could increase cost of finished goods by 3-5%

The Clothing Manufacturers Association of India (CMAI) has warned that the Indian textile importers as well as exporters of raw material could suffer amid the ongoing novel coronavirus outbreak in China, which has led to a partial clampdown across its apparel manufacturing units. India exports cotton yarn to China, and imports synthetic yarn and fabric worth over $450 million and $350 million, respectively. Moreover, India also imports accessories, such as buttons and zippers, worth $140 million. Local manufacturers will now need to scout for alternatives amid a shortage of Chinese raw material. A shortage of such textiles from China could increase cost of finished goods by 3-5%, P. Chandrasekharan, secretary, CMAI, said on Thursday. CMAI represents 20,000 firms, including makers of ready-made garments, exporters, retailers and ancillary industries. However, the association said that there could be a possible upside to the outbreak—at least for manufacturers in Bangladesh and India—as global suppliers rush to look for alternatives to procure garments and textiles beyond their spring-summer collection. “The outbreak has equally affected the textile and apparel industry, where China plays a core role in the global supply chain," CMAI said in a note. The prevailing situation in China, along with the uncertainty over production resuming, is posing a major challenge for Indian manufacturers who are dependent on supplies of raw materials from China, the note added. India exports 20-25 million kg of cotton yarn every month to China, but a partial closure in manufacturing units there has led to a drop in demand for cotton yarn. This, in turn, has led to a 3-4% drop in cotton yarn prices in the domestic market, as traders anticipated a fall in demand from China. According to CMAI, if the coronavirus contagion continues unabated, China’s imports of cotton yarn could decline further and, hence, impact the cotton yarn export business of India. “Chinese textile factories have halted operations since the Chinese New Year. If the outbreak continues, Indian garment manufacturers will need to look at other alternatives, including local sourcing, which in turn may increase the finished goods cost by 3-5%," the CMAI statement said.

Source:  Live Mint

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Govt to reveal steps on trade issues over coronavirus soon, FM chairs meet

The Finance Minister reviewed the preparedness to deal with issues surrounding the outbreak at a time when several sectors including manufacturing and distribution raised concerns. Finance Minister Nirmala Sitharaman on Thursday chaired a meeting of secretaries to assess the impact of the deadly Coronavirus outbreak on India, as the Centre chalks out measures to address trade concerns. The Finance Minister reviewed the preparedness to deal with the issues surrounding the outbreak at a time when several sectors, including manufacturing and distribution, raised concern about businesses taking a hit and prices soaring. The Finance Ministry is likely to announce measures to deal with the issues over the outbreak after a meeting with the Prime Minister’s Office (PMO). Earlier in the day, the industry body, Federation of Indian Chambers of Commerce and Industry (Ficci) pitched for incentivising local manufacturers to exhort them towards making investments and tackle supply disruptions. "There should be incentives and other opportunities to fast track investments in India and position India as an alternative source," Secretary-General, Ficci Dilip Chenoy said. Both, the finance ministry and the Niti Aayog were "very responsive and the idea of doing sectoral approach to this (problem) and setting up of an inter- ministerial coordination system to address was also appreciable", the secretary-general told PTI. While the finance minister had earlier denied there was a shortage of raw materials in the manufacturing sector, Niti Aayog along with top executives of the pharma industry and senior officials discussed ways to boost domestic manufacturing of Active Pharmaceutical Ingredients (APIs) amid concerns of a disruption in supplies from China.

Source: Business Standard

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AEPC identifies products to enhance apparel exports

In a bid to benefit from the decline in supplies from China across the globe, Apparel Export Promotion Council (APEC) on Thursday identified 10 major products which India can export and fill up the supply gap vacated by the coronavirus-hit country. An AEPC statement said that that the top 10 Chinese products exported to the US where India also has a presence include jerseys, pullovers, cardigans, waistcoats made of cotton or man-made fibres (MMF), trousers, shorts made of cotton or synthetic fibres, hosiery, T-shirts, singlets and tracksuits. The development comes a day after Union Minister for Textiles Smriti Irani called on textile exporters to move into spaces vacated by China. Irani also said that the government will identify ambitious MSMEs who meet export compliances and delivery schedules, and support them with finance, legislation, certification, quality control programmes and research and development (R&D) to help them grow big. AEPC Chairman A. Sakthivel said: "Of the $2.4 billion apparel market vacated by China in the US, India has captured a mere $237 million, or less than 10 per cent. However, the ''revealed comparative advantage'' shows India has a good potential in seven of the 10 product lines." The council has similarly identified top 10 Chinese apparel exports to European Union, Japan and South Korea, and highlighted the product lines where India has the potential to make a mark. Sudhir Sekhri, Chairman, Export Promotion Committee, AEPC, said: "Of the 36 per cent space vacated by China, only 5 per cent has come our way. While there are huge emerging opportunities, there is a need for introspection as to what needs to be done." Further, the statement said that AEPC plans to identify the top 20 buyers of the identified product lines and request the government''s support in engaging the embassies. Sakthivel said: "While there is no problem with the US market, we will need the support of the textile and commerce ministries to gain access to some of the countries. In the US, the deciding factors will be sheer competitiveness and appetite of the Indian players, while in UK and EU early FTAs (free trade agreements) will help."

Source: Outlook India

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Centre releases Rs 19,950 crore as GST compensation to states and UTs

In a move that will surely address the growing concerns among states, the centre released Rs 19,950 crore as GST compensation to states and Union Territories ahead of the GST council meet, thereby taking the total amount released to them to over Rs 1.2 lakh crore. In a statement, the finance ministry said Rs 19,950 crore was released to states and union territories on last Monday. Finance Ministry officials said total GST compensation cess of Rs 62,611 crore was collected in the FY 2017-18, out of which Rs 41,146 crore was released to the states/UTs that fiscal as GST compensation. In FY 2018-19, Rs 95,081 crore was collected as GST compensation cess of which Rs 69,275 crore was released to the states/UTs as GST compensation. Finance Minister Nirmala Sitharaman on February 17 said that the compensation cess collection saw a dip in December, which led to the delay in handing out GST compensation to the states. Sitharaman in her Budget speech said the government has decided to transfer to the GST Compensation Fund balances in two instalments. In December 2019, the Centre had released Rs 35,298 crore to states to compensate for the revenue loss on account of GST rollout. During the Budget session, Union minister Anurag Thakur said that the GST Compensation had been released till September, 2019 and the next bi-monthly GST Compensation was due for October-November, 2019. A total of Rs 2,10,969.49 crore has been released as GST compensation to states so far including UTs of Delhi and Puducherry after implementation of GST, the minister said. Under GST law, states were guaranteed to be paid for any loss of revenue in the first five years of GST implementation, which came into force from July 1, 2017. It was agreed that the Centre would compensate states for shortfall in GST collections as per a defined formula.

Source: Economic Times

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Shaktikanta Das felt economy needs more monetary stimulus: MPC minutes

Minutes of the meeting show Das felt economy needs more monetary stimulus as inflation outlook remains uncertain. When the Monetary Policy Committee (MPC) members met earlier this month they decided to keep the policy repo rate unchanged as they wanted to maximise the impact of any future rate cuts, show minutes of the meeting. The MPC, which met on February 4 and announced its decision on February 6, focused on having banks pass on the past rate cuts and letting the economy show signs of improvement following the growth supportive measures of the government. Unlike the previous policies, the six members of the MPC were not unduly alarmed on the inflation front, and took comfort in the fact that inflation expectations surveys showed the households expected moderation in prices. The members also deliberated on the coronavirus outbreak and its economic risks. Even as the consumer price index inflation spiked to 7.35 per cent in December, much higher than Reserve Bank of India’s (RBI’s) comfort level of 6 per cent, it was largely because of onion prices rising 328 per cent, which alone accounted for a 210 basis-point (bp) increase in headline inflation despite its small weighting (0.64 per cent) in the overall bucket, the members noted. According to the RBI survey, “the three-month ahead inflation expectation is expected to moderate by 60 bps and one year by 70 bps”. The members also noted that the growth-supportive measures by the government and the tax cuts would help the economy, but not in the short term. Governor Shaktikanta Das said some green shoots were visible. “Monetary transmission and bank credit flows have improved, but they need to become stronger. While the macroeconomy needs further monetary stimulus, the inflation outlook continues to be uncertain,” said Das. “Considering the overall evolving growth-inflation situation, it would be prudent to continue the focus on growth in the context of the expected moderation in inflation,” the RBI governor said, adding barring the intensification of global risks, there was policy space that needs to be timed optimally and opportunistically to maximise its impact on growth. RBI’s executive director and newly inducted member in the MPC Janak Raj said the recent rise in food prices should boost rural incomes and help strengthen rural demand. While the stress in the automobile sector seems to be gradually receding, the real estate sector remains stressed. If the coronavirus crisis prolongs and spreads, “it will have ramifications for the global economy and its net impact on the Indian economy might be negative even if oil and other global commodity prices decline”, Raj said. “Weak demand conditions warrant further monetary policy easing, while elevated inflation and the highly uncertain inflation outlook call for a cautious approach. More data are needed for greater clarity,” Raj said. Deputy Governor Michael Patra said there was no definitive evidence that the downturn is bottoming out. “The endeavour now should be to improve transmission of the cumulative 135-bp rate reduction effected since February 2019,” Patra said. According to external member Chetan Ghate, the September 2019 corporation tax cuts did not result into any discernible increase in net profits in the third quarter across several firm types in RBI’s Industrial Outlook Survey. The profit margin expectations for the fourth quarter also continued to remain pessimistic.

Source: Business Standard

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Coronavirus will impact export-import, says MSMEs

Coronavirus has infected hundreds since the outbreak began in Wuhan, China, in December last year and has brought Indian industries to its knees, who are largely dependent on China for several raw materials to manufacture their finished products and goods. There is also decline exports in January by 1.66 per cent at USD 25.97 billion during the month. With major global players including China, which is now facing an epidemic like situation, is not only losing its sheen in exports but has dented its economy in a big way. To get into more details, KNN India spoke to President of the Federation of Indian Micro and Small & Medium Enterprises (FISME) Animesh Saxena who asserted that it's going to ruin Micro Small and Medium Enterprises (MSMEs) in the coming days. ''It will impact the import industry badly and to some extent it will disturb export industries also because many raw materials also come from China,'' said FISME president. ''Imports include materials like Pharmaceutical and auto parts while exports include materials related to textiles which we export. So, there will be a disruption in both sectors long with prices of the commodity going up,'' Saxena added. When being asked that instead of depending on China, shouldn't India develop such parks or base from where raw materials can be produce to feed the India industries, Saxena replied, ''as of now, we haven't develop such a big base in manufacturing sector.''''The world is moving towards the global value chain. Wherever, the best commodities price is available let it be there and the other activity of theirs should be in another country. So, expecting everything is one country is a tough task and this won't be competitive,'' he asserted. ''Producing everything in our country is a wishful thing but it's not logical and practical,'' he said. On the other hand, a Lucknow based industrialist VK Aggrawal who is also past president of FISME opinined that industries like Pharmaceutical, electronics, renewable energy and telecom are heavily dependent on China due to which they will be brought down to their knees in the coming days. ''India will suffer a lot during this virus outbreak. Can't say about the Gross Domestic Product (GDP) but banks will suffer, too'' he said. Aggrawal, further said that some are people of the view that in this scenario some Indian industries will bloom but what i feel is that we are not ready for that. ''If the opportunities come then also we won't be able to make use of that because we are not prepared,'' he added. Meanwhile, Confederation of All India Traders (CAIT) has written to Union commerce minister Piyush Goyal urging him to convene a meeting of trade and industry immediately to discuss the current situation of Coronavirus impacting the trade and commerce of India. The over-dependence on China for finished products, spare parts and raw material will cripple the trade and small Industries in India, if prevented steps are not taken by the Government to carve out alternate measures and bringing out an immediate policy to empower domestic trade and industry to maintain the supply chain. Both B C Bhartia and Praveen Khandelwal, the President and Secretary General of CAIT, said that India's trade and Industry is highly dependent upon China for broadly three reasons. We import finished goods which are re-distributed in the country, raw material which is being used for producing goods and import spare parts used in assembling the goods by traders and small Industries. They further said, “Since, coronavirus broke out in January, the trade and Industry in China is closed and there is no manufacturing or supply of goods. Because of the deadly virus, the Indian importers have stopped imports of China and have cancelled their visits to China or other coronavirus affected Countries. Generally, the importers keep stocks of these goods as a buffer stock for two months and now the situation has arisen when supply chain will get affected badly. The situation will become more vulnerable as it appears that even after resuming production in China, it will take months to have regular supplies from China”. They further said, “Under long term measures, the government should also carve out ways and means to ensure that over-dependence on any country should not happen as it will cripple our economy”

Source: KNN India

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Madhya Pradesh forms committee to formulate textile policy

The Madhya Pradesh State government has constituted a committee under the chairmanship of chief secretary to offer suggestions for formulating a new textile policy. The committee will work to implement integrated development schemes and programmes of the central textiles ministry to provide employment opportunities in the sector to the youth. It will also work to modernise cotton production, spinning, weaving and garment manufacturing apart from promoting export of textile products. The committee will submit its report in a month time, according to a report in an Indian newspaper. 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 union textile ministry in the state and will hold discussions with the stake holders of textile sector for giving suggestions to develop special infrastructure.

Source: Fibre2fashion

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India & US delink trade deal from Donald Trump's visit, eye FTA

India and the US have delinked the much-anticipated bilateral trade deal from the upcoming visit of President Donald Trump, while affirming to continue talks with the larger purpose of eventually moving toward a free trade agreement (FTA). “We can have a trade deal with India, but I am really saving the big trade deal for later on. We are doing a big trade deal with India. We will have it. I don’t know whether we will have it before the election, but we will have a very big deal with India,” Trump said in Washington. Hours later, senior government officials in Delhi sought to convey a similar message. They indicated that more deliberations were needed for a deal, while pointing toward the larger ambition of having an FTA. US trade representative Robert Lighthizer, who had called off an earlier visit to India, is still a part of the delegation accompanying Trump, along with commerce secretary Wilbur Ross. The list, however, is not final and is expected to change. The Indo-US partnership had matured beyond being tied down to a ‘big-ticket item’ ahead of a summit meeting, said government officials. “The absence of a trade pact has not dented the mutual enthusiasm to expand trade,” they said. Foreign secretary Harsh Shringla said bilateral trade is growing, and would cross the $150-billion mark this year. 'No Dead-End for Talks’ “The US is India’s largest trading partner in goods and services combined. Bilateral trade grew at over 10% per annum over the past two years to reach $142 billion in 2018. It is expected to cross $150 billion this year. The US is now also our sixth-largest source of crude oil imports, with inbound hydrocarbon shipments rising to $7 billion in the past two years,” Shringla said. The proposed FTA could find mention in the joint statement after talks in New Delhi, though it is still a work in process. “Both sides have agreed that they will continue to engage not only on the trade deal, but a larger FTA. This trade deal will be on the most favoured nation (MFN) basis, but an FTA will be bilateral,” officials said. Denying that trade talks have reached a dead-end on any issue, officials said an issue of high priority for India is the restoration of Generalized System of Preferences (GSP), which had been withdrawn by the US last year. “The withdrawal of GSP has not had the imagined impact as we have increased trade by 10% during the period. But it is a priority, and we are also looking at market access in other areas,” they added. On repeated remarks from the US side over high tariff barriers, government officials said India is a developing nation and the current regime is in line with other comparable countries. “We are not higher than other developing countries. Even nations such as South Korea and Japan have higher tariffs in many areas than us,” officials said. Sources said trade will become more balanced within two years with increased sourcing of oil and gas from the US, and the purchase of a large number of civilian aircraft. “We want to diversify our sources of oil and gas, and we want to become partners and stakeholders in the oil and gas industry in the US. Much of this is driven by the private sector,” the sources said.

Source: Economic Times

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View: The diminishing importance of cheap labour makes five reforms India’s need of the hour

In 1967, retired British civil servant Leonard Woolf wrote, ‘I have no doubt that if the British government had granted in 1900 what they refused in 1900 but granted in 1920; or granted in 1920 what they refused in 1920 but granted in 1940, or granted in 1940 what they refused in 1940 but granted in 1947 — then ninetenths of the misery, hatred, and violence of India’s partition would have been avoided.’ India’s inevitable but delayed Independence created needless human suffering. India’s formal job explosion is being delayed by five pending economic reforms that are, similarly, unavoidable, inevitable and overdue. The earlier they happen, the earlier India creates the 200 million new formal, private and productive jobs it needs.

Plunge into the Cold Waters

India faces a very different world in 2020 than China did in 1978. Companies are moving production closer to customers so they can respond faster to demand changes. Automation is slowing the attractiveness of lower wages. In his book, Fully Grown: Why a Stagnant Economy is a Sign of Success, economist Dietrich Vollrath suggests that a rich country’s slow growth is a good thing. Research, design and maintenance are starting to matter more than production. Politics is having an antibiotic reaction to trade and immigration. This means that rich countries — with their skilled workforces, large capital pools, huge customer bases, better infrastructure, higher State capacity, world-leading universities and hi-tech companies — are actively authoring a globalisation different from the one China took advantage of 30 years ago — a supercycle of global growth, policy trade openness, and a deconstruction of manufacturing supply chains that made low-cost labour valuable.

This makes five Indian reforms urgent:

Labour law: India’s labour is handicapped without capital, and our capital is handicapped without labour. We need urgent reform on wages (reduce the gap between gross and take-home salary), social security — the costs and governance of Employees’ State Insurance (ESI) and Employees’ Provident Fund Organisation (EPFO) — and employment law (we should have one code instead of four, and it should be more than a word-processing exercise). Outcome: 50% formal employment. Public sector banks (PSBs): Raising India’s credit-to-GDP ratio needs three things — RBI raising its game in regulation and supervision; more private sector bank competition; and reform of PSB governance and human resources (HR). PSBs got Rs 2.5 lakh crore capital infusion in the last 24 months. Yet, their risk-weighted assets are lower than 24 months ago. Outcome: raising our credit-toGDP ratio from 50% to 100%, and higher growth and productivity for our micro, small and medium enterprises (MSMEs). Higher education: India’s low gross enrolment ratio, and variable graduate quality, mean the current licence raj in education isn’t working. This needs three things: massifying higher education (India’s gross enrolment ratio needs to rise to 50%), vocationalising higher education (link apprenticeships to higher-education and enable modularity for certificates and diplomas to degrees), and allowing innovation — and let’s not confuse university buildings with building universities, please. Outcome: lower graduate unemployability with higher wages and productivity. Clean Up the Act Ease-of-doing business: India’s employer regulatory cholesterol universe of 57,000-plus compliances, 3,100+ filings and 5,000-plus annual changes is painful. This needs rationalisation (more than half can be ended without compromising enforcement); digitisation (going paperless will reduce corruption and improve enforcement); and simplification (we need a single universal enterprise number for all laws). Outcome: a reduction in our 63 million total enterprises, but a rise in our social security-paying enterprises from one million to 12 million (GST registrants). Central government: The Indian State has too many central ministries. 52 is much more than Japan’s 8, the US’ 14 and Britain’s 22. Additionally, too many big ministries in Delhi operate in state subjects. India must devolve more funds, functions and functionaries to state capitals. Our civil services need differentiated performance management, lateral entry, specialisation and top-heaviness rationalisation (there are 250 people with the rank of secretary in Delhi!). Outcome: a State that does less so it can do more around human capital, investment and productivity-led growth. Reforms since 1991 have radically improved the Indian economy, and reforms since 2014 have radically improved the formal Indian economy. But every doctor knows that a treatment 90% complete is incomplete. In his book, Backstage: The Story Behind India’s High Growth Years, former Planning Commission chairman Montek Singh Ahluwalia recounts a prime minister’s longing: ‘What we need is growth that falls like the rains on the mountains and flows down in streams to the valleys and plains below, not growth that is like snow, which sticks to the mountain tops.’ People like Winston Churchill believed the British empire would last a thousand years. But the British raj began declining at its peak because it stopped listening and taking risks. Nations on the rise dream big, dare greatly and see failure as a challenge to be overcome. To paraphrase economics Nobel laureate Paul Romer, the world is ‘conditionally optimistic’ about India. We have the ability to end this conditionality. We must act boldly and quickly, because the economic status quo is not only immoral or wrong, but also unsustainable.

Source: Economic Times

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Sustainable fashion: What India must do for the textiles sector

While India may not have mainstreamed sustainable fashion, there are some efforts happening without the ‘explicit’ mention of the term. The idea of sustainable fashion does not often ring a bell in policy corridors. The government is rightly bothered about more pressing concerns. Sustainable fashion is considered to be a past time of elites and holds little value in the eyes of policy stakeholders. This belief reflects in countless national policy documents which make no mention of sustainable fashion. These documents, after all, are serious documents which should make tangible impact in lives majority of Indians. Sustainable fashion is not taken seriously because people who have forayed into the space have not made a compelling case of why it is important and how it does not deflect, and rather supports the national priorities—economic development, resource efficiency, and cleaner environment. The fashion industry has some startling statistics on environmental degradation. For instance, it can take 2,700 litres of water to produce the cotton needed to make a single T-Shirt. As per World Resources Institute, 5.9 trillion litres of water are used each year for fabric dyeing alone. Around 20% of industrial water pollution in the world comes from treatment and dyeing of textiles, and about 8,000 synthetic chemicals are used to turn raw materials into textile. As per another report, every second, an equivalent of one garbage truck of textiles is either burnt or landfilled. As per Ellen MacArthur Foundation, the global textile industry emits 1.2 billion tonnes of CO2 equivalent per-year, close to the level of emissions from the automobile industry. With India’s high share of global population and increasing purchasing power, it would be quite soon that India starts accounting for a major share in these statistics. Besides, there is no credible recycling chain for the billions of tonnes of fast fashion items sold every year. Majority of them are made from non-biodegradable fibres. Each year, about 60 million tonnes of new fibers are used to make garments, and no plausible concept exists on what to do with them when they are no longer needed. As a result, three-quarters of these products are disposed off in landfills or incineration plants. While India may not have mainstreamed sustainable fashion, there are some efforts happening without the ‘explicit’ mention of the term. For instance, Khadi and Village Industries Commission (KVIC) is doing a good job in promoting khadi products. They have tied up with leading brands—Arvind Mills and Raymonds—and are also working with Air India to promote khadi products. Khadi is seeing its own ‘yoga moment’ on the back of internationalisation of demand, undergirded by demand from millennials and rising awareness. Likewise, NITI Aayog’s Forum for North East has highlighted the role of bamboo in the development of North East. Over 60% of India’s bamboo is grown in the North East and the government recognises its role for development of the region. There are certain bamboo products such as bamboo charcoal fibre that can be used in the fashion industry. There is a compelling case for sustainable fashion in India which can achieve resource efficiency, reduce waste and minimise carbon emissions—all this while supporting India’s economic development. What are the ways in which the government and industry can partner for this cause? First, sustainable fashion should find a seat whenever textiles industry is brought to the table. Second, the government can suggest and industry can voluntarily comply posting the details of resources consumed while producing a particular product. Can a T-shirt mention it used x litres of water to be produced? Indians have always been conscious consumers, and this will automatically lead to sensible consumption. Third, the government can keep re-plugging the campaigns such as #wearlocalgoglobal or #Indiaforindigenous which will promote local textiles. Fourth, sustainable fashion can be used as a lever for FTAs as the West continues to push for better working conditions and resource efficiency. The textile industry operates on the back of global supply chains—where Vietnam and Bangladesh account for 6% of the market share, China for 34%, while India accounts for 4%. Sustainable fashion can, over the years, emerge as India’s competitive advantage. Fifth, some behaviour changes should be championed by both the government and the industry. If we use products such as bamboo, khadi, hemp, etc, we might not need to wash our clothes often and the same can be communicated by the government. This fits squarely with the Jal Shakti Ministry’s vision on conservation. Lastly, we should highlight how states like Uttar Pradesh and Uttarakhand have policies geared towards sustainability, like ones on hemp production, and ecnourage other states to follow suit. Hemp is one of the most eco-friendly fabrics, uses less water and can be cropped multiple times a year. This will help in doubling farmers’ income, too. Mainstreaming the issue is the first, and possibly, the toughest, task of policy making. If there are clear benefits, we can start holding dialogues on this issue to better understand the contours of sustainable fashion. Issues of sustainability can be easily part of mainstream agenda if they do not hurt the economic development. Prima facie, it seems that the sustainable fashion industry will only aid the economic development in India. Dhar is public policy specialist, NITI Aayog and Singh is co-founder, ASLEE

Source: Financial Express

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Rupee slides 10 paise to over 1-month low of 71.64 against US dollar

Mumbai, Feb 20 (PTI) The rupee on Thursday declined by 10 paise to settle at a more than one-month low of 71.64 against the US dollar lower by 10 paise amid heavy selling in domestic equities and strengthening of the American currency in the overseas market. Forex traders said investor sentiments remained fragile amid coronavirus fears and sustained foreign fund outflows. The death toll from the coronavirus epidemic in China has climbed to 2,118, while the overall confirmed cases increased to 74,576, Chinese officials said on Thursday. At the interbank foreign exchange market, the local currency opened at 71.75. During the day, it lost ground and touched a low of 71.80 and finally settled 10 paise lower at 71.64 against the US currency, a level not seen since January 8. The rupee had settled at 71.54 against the US dollar on Tuesday. Forex market was shut on February 19, on account of Chhatrapati Shivaji Maharaj Jayanti. "Indian rupee recovered early morning losses following Asian peers. Foreign fund inflows, dollar selling by state owned banks and stable crude oil prices also supported the rupee," said V K Sharma, Head PCG and Capital Markets Strategy, HDFC Securities. Sharma further said that the near-term bias for rupee is bearish amid stronger dollar vis-a-vis major trading currencies.

On a weekly basis, the rupee lost 33 paise.

"Despite a lackluster week, we saw an appreciation in USD/INR spot tracking some uncertainty over coronavirus along with sharp surge in dollar index and crude oil prices," said Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.15 per cent to 99.85. The 10-year Indian government bond yield was at 6.42 per cent. Meanwhile, Brent crude fell 0.20 per cent to trade at USD 59.00 per barrel. On the domestic equity market front, the 30-share BSE gauge settled 152.88 points, or 0.37 per cent, lower at 41,170.12. Similarly, the broader NSE Nifty slipped 45.05 points, or 0.37 per cent, to 12,080.85. Foreign institutional investors sold equities worth Rs 190.66 crore on a net basis on Wednesday, according to provisional exchange data. The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.4013 and for rupee/euro at 77.3628. The reference rate for rupee/British pound was fixed at 92.8193 and for rupee/100 Japanese yen at 65.04.

Source: Financial Express

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Global Textile Raw Material Price 21-02-2020

Item

Price

Unit

Fluctuation

Date

PSF

0.93

USD/Ton

0%

2/21/2020

VSF

1.36

USD/Ton

0.32%

2/21/2020

ASF

2.00

USD/Ton

0%

2/21/2020

Polyester    POY

1.00

USD/Ton

0.36%

2/21/2020

Nylon    FDY

2.21

USD/Ton

0%

2/21/2020

40D    Spandex

4.09

USD/Ton

0%

2/21/2020

Nylon    POY

5.34

USD/Ton

0%

2/21/2020

Acrylic    Top 3D

1.25

USD/Ton

0%

2/21/2020

Polyester    FDY

2.04

USD/Ton

0%

2/21/2020

Nylon    DTY

2.18

USD/Ton

0%

2/21/2020

Viscose    Long Filament

1.14

USD/Ton

0%

2/21/2020

Polyester    DTY

2.44

USD/Ton

0%

2/21/2020

30S    Spun Rayon Yarn

1.99

USD/Ton

0%

2/21/2020

32S    Polyester Yarn

1.61

USD/Ton

0%

2/21/2020

45S    T/C Yarn

2.39

USD/Ton

0%

2/21/2020

40S    Rayon Yarn

1.77

USD/Ton

0%

2/21/2020

T/R    Yarn 65/35 32S

2.26

USD/Ton

0%

2/21/2020

45S    Polyester Yarn

2.15

USD/Ton

0%

2/21/2020

T/C    Yarn 65/35 32S

1.94

USD/Ton

0%

2/21/2020

10S    Denim Fabric

0.00

USD/Meter

0%

2/21/2020

32S    Twill Fabric

0.00

USD/Meter

0%

2/21/2020

40S    Combed Poplin

0.00

USD/Meter

0%

2/21/2020

30S    Rayon Fabric

0.00

USD/Meter

0%

2/21/2020

45S    T/C Fabric

0.00

USD/Meter

0%

2/21/2020

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14244 USD dtd. 21/02/2020). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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UK to have its own GSP Plus scheme for maintaining current level of goods exports: envoy

British Ambassador Gillian Rogers has said that UK is establishing its own GSP Plus scheme or a similar arrangement to maintain the current level of merchandise exports by Pakistan to UK. Increase in bilateral trade is obviously of more interest to the both governments. Addressing the members of Pakistan Textile Exporters Association (PTEA), here on Thursday, Rogers said that by taking the advantages of forthcoming Brexit, economic ties between Pakistan and UK can be taken to the next level. She said that Pakistan is an emerging frontier market that deserved greater attention, hence, the Department for International Trade (DIT) is increasing its resources for Pakistan. UK being a major trade partner of Pakistan would continue to extend its diplomatic and political support to help explore more avenues for bilateral business. “UK is currently focusing on green energy and energy efficiency in Pakistan including consultancy for individual enterprises on energy conservation in their production processes. We are working in different sectors of economy to enhance the productivity and the working conditions to further improve the quality and quantity of exportable surplus from Pakistan," she added. Earlier, PTEA Vice Chairman Haris Yousaf welcomed the British envoy and briefly enlightened the core functions of the Association. Highlighting the warm friendly relations between Pakistan and UK, he said that UK no doubt is one of the vocal and reliable supporter of Pakistan and has taken extreme measures to support its economy. He said that textile industry in Pakistan is the largest manufacturing and the 8th largest exporter of textile products in Asia. This sector contributes 8.5% to the GDP and provides employment to about 15 million people or roughly 38% of the 49 million workforce of the country. Pakistan is the 4th largest producer of cotton with the third largest spinning capacity in Asia after China and India and contributes 5% to the global spinning capacity. Highlighting the post-Brexit effects on Pakistan-UK textile trade, he said that Brexit can potentially have a major negative impact on Pakistan's exports as exports to UK are currently governed by GSP Plus scheme. Pakistan benefits from a positive and growing balance in its merchandise trade with UK as it is fourth largest market for Pakistani exports. 85% of Pakistan's exports to the UK consist of other made-up textile articles, articles of apparel, cotton and articles of leather. All these products currently enjoy duty-free access to the UK under the GSP+. He stressed the need for continuation of the GSP Plus or a similar arrangement to increase the export volume from Pakistan to UK.

Source: Business Recorder

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Taiwan's textile & apparel industry poised to grow slow and steady

At present, Taiwan is one of the major manufacturers and exporters of textile and apparel in the world. The country has invested and developed a new technology to integrate the entire value chain of the industry. In the beginning, Taiwan used to import raw materials and export the finished products to the overseas market. Now it is using materials derived from petrochemicals and importing raw cotton yarn and manmade staple yarn. Apparel industry of the country is highly export oriented. Approximately 75 per cent of the apparels produced are exported. Production Value of Taiwan's Textile and Apparel Industry. The total production value of textiles and apparels have significantly declined by 12.31 per cent in the last five years from $14.7 billion in 2013 to $12.9 billion in 2018. The production value has 3 components i.e manmade fibre, textiles and, apparel and made ups. In last five years, their production values have decreased by 24.09 per cent, 6.77 per cent and 19.03 per cent respectively. But the production value of manmade fibre and textiles is improving from 2017. The values have increased with a CAGR of 2.60 per cent and 0.55 per cent from $3.2 billion and $9.1 billion in 2018 to $3.4 billion and $9.2 billion in 2021 respectively.

Manufacturers of Taiwan's Textile and Apparel Industry

The textiles and apparel factories of the country have increased. In 2018, the textiles factories were 3519 and apparel factories were 1158. They are expected to grow at the rate of 11.25 per cent and 1.22 per cent to reach 3915 and 1172 respectively in 2021. Together, they are expected to grow at the rate of 8.77 per cent from 4677 in 2018 to 5087 in 2021. The growth rate of the textile factories is much higher than the apparel factories.

Employees of Taiwan's Textile and Apparel Industry

In 2018, employees in the textiles and apparel industry of Taiwan were 100111 and 32198 and expected to move up to 105117 and 33808 respectively in 2021 with a growth rate of approximately 5 per cent. Average monthly wage of the textiles and apparel industry workers of Taiwan have been improving at a high rate since 2016. The average monthly wage were $1,263 and $1,090 in 2016 and increased to $1,345 and $1,245 in 2018 respectively. It is expected to surge with a CAGR of 3.21 per cent and 6.88 per cent to reach $1,479 and $1,520 in 2021 from 2018.

Export and Import Value of Textile & Apparel Industry

Exports and imports of textiles and apparels in the country were $9,930 million and $3,350 million in 2016 and swelled to $10,070 million and $3,680 million in 2018. It is expected to rise to $10,283.71 million and $4,236.94 million in 2021 with a CAGR of 0.70 per cent and 4.80 per cent respectively from 2018.

Taiwan Textile and Apparel Exports by Product Type

In 2018, out of total textiles and apparel exports of the country, fabrics contributed 66.06 per cent and yarn contributed 16.63 per cent. The growth rates of fibre and yarn were considerable but declined in the case of fabrics and apparels. Also, apparel exports of the country were not much significant in 2018. The exports of fibres and yarns rose by 4 per cent and 9.69 per cent respectively in 2018 over the previous year.

Taiwan's Textile Exports to Major Markets

In 2018, the top export destinations of the country for textiles and apparels were Vietnam, China, the US, Hong Kong and Indonesia and accounted for 21.64 per cent, 19.26 per cent, 7.25 per cent, 6.45 per cent, 5.36 per cent of total exports respectively. Growth in exports were observed only in Vietnam and China in 2018 over 2017 with a growth rate of 4.80 per cent and 4.86 per cent.

Taiwan's Exports to Main Markets by Region

In 2018, the top export regions of the country for textiles and apparels were ASEAN 10, China Hong Kong, NAFTA, EU 28, Middle East and Japan Korea, and accounted for 38.82 per cent, 24.68 per cent, 8.81 per cent, 4.49 per cent, 4.92 per cent and 4.70 per cent of total exports respectively. Growth in exports were observed only in ASEAN 10 and Japan Korea in 2018 over 2017 with a growth rate of 2.08 per cent and 3.50 per cent.

Taiwan's Textile and Apparel Imports by Product Type

In 2018, out of total textiles and apparel imports of the country, apparels contributed for 52.46 per cent. The growth rates of import of fibre and apparel remained high and climbed by 18.01 per cent and 10.97 per cent respectively in 2018 over the previous year.

Taiwan's Textile Imports by Major Markets

In 2018, the top textiles and apparels suppliers of Taiwan were China, Vietnam, the US, Japan and Indonesia and accounted for 42.52 per cent, 12.25 per cent, 7.96 per cent, 5.00, and 3.53 per cent of total imports respectively. A very high import growth was observed in US in 2018 over 2017 with a growth rate of 22.59 per cent.

Future of Taiwanese Textiles and Apparel Industry

1) Value addition through product differentiation

Taiwan's textile manufacturers have created high value products through differentiation, unique materials, technology and alertness to fashion trends to get more business.

2) Development of value chain with eco-friendly materials

Taiwanese textile and apparel manufacturers have started investing in eco-friendly materials such as recycled nylon, dope dyed fibre, bio-based eco-textiles, waterless dyeing processes, marine yarns etc. Among all these materials, renewable PET fabrics prepared with the help of recycled plastic bottles, have become a hit.

3) Development of functional and fashion textiles

Today's demand is more inclined towards quality of textiles. People have become more selective in purchase and usage. Taiwan, one of the top manufacturers of functional textiles, has combined the concepts of functional textiles with fashion. Smart textiles and wearable technologies are emerging in the country with demand for performance, comfort, sensing and monitoring, and intelligent interpretation, backed by advanced IT and innovative biomedical industries.

4) Building the design capacity and revamping branding

Taiwanese textiles and apparel are well-known in the global market. The big brands are also looking for Taiwanese manufacturers for functional textiles. For increased profit margins, Taiwanese manufacturers are focusing more on improving the branding of a company.

5) Intellectualising textile supply chain

Industrial upgradation and transformation, corporate social responsibility and business sustainability are the major concerns today for the Taiwanese textile industry for further development and to compete in the global market. With the support and assistance of the government, the industry intends to develop lean manufacturing, maximise production efficiency by bringing in Internet of Things (IoT), big data and cloud technologies.

Source: Fibre2Fashion

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Ghana: Textiles ‘dumped’ abroad prompts TRA warning

The Textile Recycling Association (TRA) has called for “better regulation” in the sector following an ITV report which showed several tonnes of imported textile waste dumped in Ghana. ITV News published a report earlier this week (Tuesday, 18 February) which highlighted a 30 foot high ‘waste mountain’ in Ghana made up of clothes which had been imported, many of which were ending up in the sea too. Ghana is one of the largest markets for UK second hand clothes, much of which is used in market stalls, however the report featured many stall holders which said that a large proportion of this was unsellable.

Shipments

In a statement on its website yesterday (19 February), the TRA reiterated that there should be no waste in any shipments of used clothing destined directly for sale into African retail markets. The statement read: “the Textile Recycling Association is restating its position that there must be better regulation of the sector and existing regulation around the exports of used clothing need to be enforced more robustly. There should be no waste in any shipments of used clothing destined directly for sale into African retail markets.”

Contamination

Textile recyclers in the UK have long been saying that contamination levels have been rising in the UK, as well as the quality of clothing falling. This comes as regulation is incoming as part of the EU’s Circular Economy Package which mandates the separate collection of textiles by 2025. However, the TRA says that sorting operations which take place within Europe are effective at removing waste from clothes, and greater regulation is required to clamp down on those operating “outside the system”. The Textile Recycling Association (TRA) asserts that it would “make no business sense for reputable businesses to export waste to their clients in recipient countries”, as this would cause severe reputational damage.

‘Crucial’

Alan Wheeler, director of the Textile Recycling Association, said: “ITN’s coverage, highlights how crucial the used clothing industry is for the economy of Ghana, the main market in Accra employs 30,000 people alone. “It also stated the importance for people in the UK to continue donating their used clothing to charity shops, textiles banks and other reputable outlets. The environmental and social benefits of supporting the industry are huge and it has a vital role in tackling climate change and helping the UK to meet its obligation. “However, it also emphasises how important it is that proper and robust checks are made by customs officers both in the UK and recipient countries.” The TRA statement also said that it already has checks in place to verify that its members comply with the Environmental Protection Act 1990 and other key aspects of Environmental legislation.

Source: Lets Recycle

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WTO goods barometer signals further trade weakening in Q1

World merchandise trade growth is likely to remain weak in early 2020, according to the World Trade Organisation (WTO) Goods Trade Barometer released this month. The real-time measure of trade trends now reads 95.5—less than the 96.6 recorded last November and well below the index’s baseline value of 100. This could reduce further by the coronavirus threat. The Goods Trade Barometer provides information on the current trajectory of world merchandise trade relative to recent trends, based on best-available forward-looking data. It does not account for recent developments such as the coronavirus outbreak, which may dampen trade prospects further. WTO trade statistics show that the volume of world merchandise trade was down 0.2 per cent in the third quarter of 2019 compared to the previous year. While the year-on-year growth figures for the fourth quarter may pick up slightly, the latest barometer reading provides no indication of a sustained recovery. Indeed, year-on-year trade growth may fall again in the first quarter of 2020, though official statistics to confirm this will only become available in June, WTO said in a press release. The drop in the barometer since November has been driven by additional declines in indices for container shipping (94.8) and agricultural raw materials (90.9), as well as the plateauing of the automotive products index (100.0). Although indices for export orders (98.5), air freight (94.6) and electronic components (92.8) are all below baseline, they appear to have stabilized and would normally be expected to rise in the coming months. However, every component of the barometer will be influenced by the economic impact of the virus outbreak and the effectiveness of efforts to treat and contain the epidemic.

Source: Fibre2Fashion

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