The Cabinet Committee on Economic Affairs on Wednesday approved setting up of National Technical Textiles Mission which aims at positioning India as a global leader in technical textiles. The mission, announced in this year’s Union Budget, will have an outlay of Rs. 1,480 crore and have an implementation period of four years—2020-21 to 2023-24. The Cabinet also approved all recommendations of the standing committee on the Surrogacy Regulation Bill, 2019, exemption of India Ports Global Ltd (IPGL) from the Department of Public Enterprises (DPE) guidelines, except reservation and vigilance policies, for speedier development of Iran’s Chabahar Port and issuance of an order for adaptation of central Acts in the Union territory of Jammu and Kashmir under Section 96 of the Jammu and Kashmir Reorganisation Act, 2019. According to Union minister Prakash Javadekar, the cabinet also granted the status of institute of national importance to the National Institute of Food Technology and the Food Processing Institute.
TECHNICAL TEXTILES
The National Technical Textiles Mission will have four components — research, innovation and development, promotion and market development, export promotion and education, and training and skill development. The focus will be on usage of technical textiles in key flagship missions and programmes of the country, including in the strategic sectors of agriculture, defence, water and infrastructure. India has nearly 6% share of $250 billion global technical textiles market. However, the annual average growth of the segment in India is 12% as compared with world average growth of 4%.
Source: Economic Times
The Goods and Services Tax Network (GSTN) on Wednesday said it has launched a new toll-free number for GST helpdesk, which will be operational 365 days for answering queries related to the indirect tax. In a statement, the GSTN said it has revamped GST helpdesk by introducing new features to improve taxpayers' experience by making the system more robust and transparent. The GSTN has come up with a new GST help desk toll-free calling number '1800 103 4786'. The caller may call on this number on 365 days in a year from 9 am to 9 pm. With the introduction of the toll-free number, the existing contact number for the GST helpdesk (0120-24888999) has been discontinued, the GSTN added. Further, 10 new languages were introduced on helpdesk. Till now, taxpayers had a facility to interact with the GST helpdesk agents in Hindi and English. Now they can interact in 10 other Indian languages -- Bengali, Marathi, Telugu, Tamil, Gujarati, Kannada, Odia, Malayalam, Punjabi and Assamese, Further, an improved version of Grievance Redressal Portal too has been launched. The GST helpdesk receives average 8,000 to 10,000 calls every day.
Source: Economic Times
A 120-strong delegation from Australia is currently in India as part of the Australia-India Business Exchange (AIB-X) Ministerial Business Mission to India, February 23-28, 2020. The delegation which consists of different industry streams including, Resources, Smart Infrastructure and Education is being led by Simon Birmingham, Australian Minister for Trade, Tourism and Investment. John Madew, Senior Trade and investment Commissioner at the Australian Trade and Investment Commission (Austrade) said delegation is keen on leveraging business opportunities in India in light of the growing significance of India -Australian economic relations. Apart from manufacturing, it is also looking at growing prospect of retail and lifestyle products like Australian wine and foods in India. Indian students form the second largest group in Australia after China and the India diaspora Down Under which is already 0.7 million-strong. After reaching Delhi, the delegates have fanned out across India to cities like Chennai, Bangalore, Mumbai and Kolkata. Some of the delegates have already forged partnerships in India. This includes Robert Keast, president Coresafe Core Solutions who said the company is looking forward to the start of its manufacturing operations in India in June this year. The company has finalised plans to start contract manufacturing of equipment like core trays, used widely in mining industries, with Nilkamal, one of the leading makers of moulded furniture and plastic moulded products. The capacity of the new unit which will be located near Mumbai is likely to be around 1,300 per day. “This will be our second manufacturing presence outside Australia. While we have operations in Canada, I expect the Indian unit to emerge as a significant growth driver in coming years given India’s potential in mining sector,” Keast told ET. Janine Herzig, president of Australasian Institute of Mining and Metallurgy(AusIMM), one of the oldest facilities in the area of mining and metallurgy and was founded in 1893. Herzig said the Carlton, Victoria-based AusIMM had entered into a MoU with IIT-Indian School of Mines (ISM) Dhanbad, one of the country’s top mining institutes. Commenting on it, Devi Prasad Mishra Associate Professor department of Mining Engineering at IIT-ISM said the tie up will help expose the students to Australia’s mining industry, which is one of the largest globally.
As a part of AIB-X, Austrade had organised a panel discussion on India’s Mining Industry –Targets, Reforms and Roadmaps in Kolkata on Tuesday. The panel discussion focused on providing an update on the Indian Mining Industry and identifying areas of collaboration with Australia. The key participants were V K Arora, Past President, Confederation of Indian Industry (Mining & Construction equipment Division) and Chief mentor, Karam Chand Thapar & Bros, (Coal Sales) Limited, R P Ritolia, Adviser, Swyambhu Natural Resources Ltd, Harsh Sachdev, Managing Director, S&T Mining Company Pvt Ltd and Nandini Chakravarty, Managing Director, Mine Line Pvt. Ltd.
Source: Economic Times
U.S. President Donald Trump and Indian Prime Minister Narendra Modi have agreed to "promptly" conclude ongoing trade talks that they hope can lead to the first phase of a bilateral U.S.-India trade deal, the White House said. "They (Trump and Modi) agreed to promptly conclude the ongoing negotiations, which they hope can become phase one of a comprehensive bilateral trade agreement that reflects the true ambition and full potential of the bilateral commercial relations", the White House said late on Tuesday, giving no details on what would be included in the deal. The statement follows Trump's visit to India on Feb. 24-25.
Source: Economic Times
Goods procured from units in special economic zones (SEZ) by single brand retailers, owned by foreign companies, would qualify for meeting the mandatory 30% local sourcing norms, the government said in a clarification. The Department for Promotion of Industry and Internal Trade (DPIIT) said goods which are proposed to be sourced by a single brand retailer from SEZ units will have to be manufactured in India. As per the foreign direct investment (FDI) rules, 100% overseas investment is allowed in the sector but sourcing of 30% of the value of goods procured is mandatory from India for such companies having FDI beyond 51%. SEZs, developed as export hubs, are treated as foreign territory in terms of customs laws. Procurement of goods and services from units in these zones are treated as imports. “As regards sourcing of goods from units located in SEZs in India, it may be clarified that sourcing of goods from such units would qualify as sourcing from India for the purpose of 30% mandatory sourcing from India for proposals involving FDI beyond 51%, subject to SEZ Act, 2005,” the department said in the clarification. The statement came in the wake of the government having received representations from various business entities seeking clarification whether sourcing of goods from units located in SEZs would qualify as sourcing from India as per the FDI policy. The department stated that compliance with all the conditions enumerated in the FDI policy and as notified under the Foreign Exchange Management Act (FEMA) would continue to be the responsibility of the manufacturing entity. In January 2018, the government allowed 100% FDI in the sector, permitting foreign players in single brand retail trade to set up own shops in India without government approval.
Insurance Intermediaries
Separately, the department on Tuesday notified the government's decision to allow 100% FDI in insurance intermediaries. Intermediary services include insurance brokers, re-insurance brokers, insurance consultants, corporate agents, thirdparty administrators, surveyors and loss assessors. In a press note, the DPIIT said 100% FDI is allowed in insurance intermediaries under the automatic approval route. The FDI policy earlier allowed 49% foreign investment in the insurance sector, which includes insurance intermediaries. As per the press note, the insurance intermediary that has majority share holding of foreign investors shall undertake measures including incorporation as a limited company under the provisions of the Companies Act 2013 and that at least one from among the chairman of the board of directors or the CEO or principal officer or MD of the company shall be a resident Indian citizen. It also said the intermediary shall take permission of the Insurance Regulatory and Development Authority (Irda) for repatriating dividend and not make payments to the foreign group or promoter or associate entities beyond what is necessary or permitted.
Source: Economic Times
The government is working to rank States on the basis of their efforts to promote micro, small and medium enterprises (MSMEs), a senior official said. “We are making a state ranking system where we will rank States, we are in talks with Niti Aayog for this,” MSME Secretary AK Panda said at the National MSME Awards ceremony here on Wednesday. “We will rank states on the basis of 4 E's. Employment generation, for enterprise creation, third, exports, and fourth for ease of doing business,” Panda said. “Ultimately, the action is taking place in states,” he said. Panda added that MSMEs are increasingly registering themselves on the Goods and Services Tax network (GSTN), which is bringing them into the formal sector. “MSMEs account for the maximum number of registered entities on GSTN. There is a silent, but massive formalisation of our economy which is happening because of GST,” Panda said. Panda said that while MSMEs contribute around 45% to the country’s exports, there are only 33,000 registered MSME exporters, and that many such enterprises route their products through larger export houses. The ministry is developing a platform for providing a consolidated database of export-related information for MSMEs. “We are also developing a global market intelligence system. All export related info will be put in one place, in very simple, intelligible language,” Panda said. The information will be available in 22 languages, he said. Panda added that growth of MSMEs is crucial to the $5 trillion-economy goal of the Indian government. The ministry has also set itself a target of increasing MSMEs’ contribution to the country’s GDP to 50%, from 29% at present.
Source: Economic Times
India’s economy is likely to have grown at the same pace as in the third quarter at 4.5%, most independent economists said, though others expect growth to be a tad faster, based on a slight pickup in agriculture and government spending. “Our composite leading indicator (index of 33 major leading indicators) suggests that gross domestic product growth to remain flat at 4.5% as in Q3 of FY20,” said Soumya Kanti Ghosh, group chief economic adviser, State Bank of India. India’s economic growth slipped to a 26-quarter low of 4.5% in July-September from 5% in the first quarter. The statistics office lowered the FY19 GDP growth rate to 6.1% from the provisional estimate of 6.8% and has forecast 5% growth in FY20, its slowest pace in 11 years. The Economic Survey 2020 sees a recovery to 6-6.5% in FY21. “We were earlier anticipating a downward revision in FY20 growth rate from 5% to 4.6%,” Ghosh said. This downward revision, as per Ghosh, will have statistical benefits as it could push up FY20 GDP to 4.7%. “There is not much improvement. We have retained our full year GDP target at 4.7%,” said Upasna Bhardwaj, economist at Kotak Mahindra Bank. Manufacturing activity is likely to remain pressured and unlikely to better the 6.4% growth in the corresponding period the year ago. Falling growth seen in sales of commercial vehicles, railway freight traffic and cargo handled by civil aviation has also contributed to the projection being significantly lower. “There is no joy in the GDP story. Consumption could be slightly better because of PM-KISAN but there is no systematic improvement anywhere,” said IDFC First Bank chief economist Indranil Pan. The Reserve Bank of India has cut policy rates by 135 bps since February, 2019, and the government reduced corporate rate tax to 22% in order to attract investment and boost growth. Despite these steps, indicators available till the quarter ended December, 2019, are not particularly robust, said Madan Sabnavis, chief economist at CARE Ratings. “The sharp decline in October and November seems to have been reversed in December,” said Devendra Kumar Pant, chief economist at India Ratings.
Source: Economic Times
Apart from India’s high import duties, the stand on stents and GM crops only worsened matters, and also hurt India. The optics of US President Donald Trump’s visit and the signal it sent of strong Indo-US ties notwithstanding, it has to be disappointing that even a ‘limited’ trade deal—to use the term put out by the Indian side in the run-up to the visit—wasn’t signed. President Trump saying he was saving the big trade deal for later, though, saved India—and him—the blushes. There are, it goes without saying, legitimate Indian concerns, such as on freeing up agriculture, given the huge subsidies the US gives, even if they are fashioned in such a way as to be WTO-compliant. Similarly, loosening IPR norms, as the Americans want, can’t be in India’s interests since a lot more drugs will then get patent protection even if they represent no major innovation. But, surely, the Indian position on putting price controls on high-end medical stents was quite uncalled for? It is possible the high-end medical stents are overpriced, and that they don’t deliver anywhere near the value the manufacturers claim, but does that really matter since it is the only the well-heeled who are buying them and, in any case, there are several non-US stents available in the market? And, given how the US president was going on about the large import duties that Harley Davidson had to pay, would it really have hurt the Indian side to address this? In any case, had India managed to put together a package of incentives to help Apple move more of its assembly operations to India, surely this would have facilitated a deal? President Trump is too much of a realist not to recognise a good deal when he sees one, and facilitating US industry to expand operations in India is part of the good deal. Indeed, the worry for a country that never tires of talking of how India and the US are natural allies is that the Indian side doesn’t seem to understand that many of the issues that are upsetting the Americans are also those that hurt India. Going after Monsanto and its GM seeds (bit.ly/2TfHdSZ) has certainly hit Indo-US relations, but more than that, it has hit Indian cotton farmers who, thanks to Monsanto, became among the world’s largest suppliers of cotton. There is, then, the issue of FCI’s procurement of rice and wheat at the MSP, and since the stock it buys cannot all be disposed of via ration shops, FCI sells it off at a discount to traders. The discount, of course, is relative to what it cost FCI and not with respect to the market price since FCI’s operational costs are very high. Yet, the fact that the grain is being sold at a discount is enough to get the US and WTO to argue that this is trade-distorting since some part of this grain is then exported. And yet, as this newspaper has pointed out often enough, disbanding the FCI-cum-ration-shop-system and replacing it with direct cash transfers to the 75% of citizens covered by the National Food Security Act would still save Rs 50,000 crore every year; getting rid of FCI’s excess mountain of stocks could fetch over `1 lakh crore as well. In this case, too, there is a substantial overlap in Indian and US interests, and it is difficult to argue that progress here wouldn’t help soften the US trade position. How soon even a limited trade deal with the US will take is not clear, though commerce minister Piyush Goyal has said a first draft could be ready quite soon. It does seem, though, that little progress can be expected till India jettisons its swadeshi ideology. No one can possibly argue against self-sufficiency, but India’s real challenge right now is not unbridled imports but unacceptably poor export competitiveness. In the six years since prime minister Narendra Modi came to power, India’s exports have grown by just 0.5% per annum.According to the latest Economic Survey, India’s exports-to-GDP ratio fell from 16.8% in FY12 to just 11.3% in the first half of FY20 while imports of non-oil and non-gold fell from 15.2% of GDP to 10.3% in the same period. When you add gold and oil, however, imports were a higher 26.8% of GDP in FY12, and 17.6% in the first half of FY20. In other words, even if India is to hike tariffs on items like crude oil or gold—and increasingly electronics—the imports will still take place. So, the real solution lies in boosting export competitiveness, and not import tariffs, which, as President Trump made clear, he had a big problem with. A related issue that anyone who has studied macroeconomics at even the graduate level will understand is that if a country tries to stimulate investment without enough local savings—as India is doing—there is no option but to raise the current account deficit. The other problem with hiking import duties in the manner that India has been doing is that it needs to be time-bound. If, for instance, India hikes the import duty on plastic toys by three times, as it did in the last budget, it has to have a plan to raise the competitiveness of Indian toy manufacturers over a fixed time period. If not, the duty just ensures that Indian manufacturers get more uncompetitive globally. Similarly, the hiking of import duties on Indian steel over the last few years may have protected local steel producers, but since this makes anything produced out of local steel uncompetitive, it is bad in the long run. In other words, India’s import-substitution policy may work for a while, but more often than not, high duties result in higher levels of smuggling. At the end of the day, import-substitution policies and export-promotion ones simply don’t go together.
Source: Financial Express
Finance Minister Nirmala Sitharaman on Wednesday said the government is keeping a close watch on the impact of the coronavirus outbreak on the Indian economy. The minister also said that the process of merger of public sector banks was underway as per the schedule. The government has announced to merge 10 sector state-run banks to create four bigger lenders. The governemnt is "closely monitoring" the impact of the coronavirus outbreak on the economy, she said. Over 2,700 people have died due to Novel Coronavirus 2019 (COVID-19) while the number of those infected is around 80,000. In the wake of the virus outbreak, whose epicentre is China, many airlines, including Indian carriers, have cancelled some of their overseas flights. On bank mergers, Sitharaman said there is "no uncertainty about bank merger" and the process is on as per the schedule. Last year in August, the government announced merger of 10 public sector banks into four. United Bank of India and Oriental Bank of Commerce are to be merged with Punjab National Bank, making the proposed entity the second largest public sector bank (PSB) from April 1 this year. It was also decided to merge Syndicate Bank with Canara Bank, and Allahabad Bank with Indian Bank. Similarly, Andhra Bank and Corporation Bank are to be consolidated with Union Bank of India. In April 2019, Bank of Baroda, in the first three-way merger exercise, amalgamated Vijaya Bank and Dena Bank with itself. SBI had merged five of its associate banks - State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore and State Bank of Hyderabad as well as Bharatiya Mahila Bank with itself effective April 2017.
Source: Economic Times
RBI said on February 10 that banks need not maintain the cash reserve ratio (CRR) on new loans given between January 31 and July 30 for autos, homes and MSMEs for a period of five years. The Reserve Bank of India (RBI) has notified banks to link all new medium enterprise loans to the external benchmark. “With a view to further strengthening monetary policy transmission, it has now been decided that all new floating rate loans to the Medium Enterprises extended by banks from April 01, 2020, shall be linked to the external benchmarks as indicated in the aforesaid circular,” RBI said. The regulator had announced linkage of external bench-marking to medium enterprise loans in the last credit policy held on February 6. This announcement is an extension to earlier direction from RBI to link new floating rates to retail, micro and small enterprises (MSEs) to external benchmark, effective October 1, 2019. The government and regulator had announced several measures in the recent past to give boost to micro, small and medium enterprises (MSME) sector. RBI said on February 10 that banks need not maintain the cash reserve ratio (CRR) on new loans given between January 31 and July 30 for autos, homes and MSMEs for a period of five years. RBI also sought to free up capital for lenders by extending the forbearance on asset classification on their MSME portfolios till December 2020.
Source: Financial Express
India is the fifth-largest economy in the world, with GDP of $2.94 trillion in 2019, according to the IMF’s World Economic Outlook of October 2019. The US, China, Japan and Germany are larger. It already is the third largest, behind China and the US, when economic size is measured in purchasing power parity dollars. But in per capita terms, India ranks low, thanks to its large population. Given its still favourable demographics, large internal market, high savings rate, varied agro-climatic conditions that permit almost any kind of crop husbandry and still low levels of overall development, the potential to grow fast for decades is high. The point is to realise the potential and not fritter it away. Human capability drives growth, more than any endowment of natural resources. India has plenty of humans, the challenge is to develop their capability. This calls not just for more investment in education, healthcare, sanitation, governance, law and order, and enabling physical and institutional infrastructure but better quality in every one of these determinants of capability. The ability to allocate capital to growth opportunities is a crucial enabler of growth. This calls for efficient capital markets, at one level, and reliable standards of accounting, corporate governance and the ability to enforce contracts and redeploy resources from bets that go wrong, at another level. India is making progress on all these fronts, but nowhere near fast enough. Governance is a key challenge. Rules that inhibit and arbitrary rule keepers remain hurdles. India’s uneven development, across regions and communities, adds complexity. This means that India can have a staggered, protracted demographic dividend. It also means that the scope for social schism is huge, which has to be managed.
Source: Economic Times
He noted that since about 2003, India has been growing at an average rate of about 7% and the first five years of the Modi government was characterised by 7.5% growth on an average. India's slowdown has bottomed out and now its economy needs to be opened up if the country wants to realise the ambition of a 10 per cent growth rate, former NITI Aayog Vice Chairman Arvind Panagariya has said. In his keynote address at a discussion on India's Union Budget 2020, he said in the next fiscal year, India's GDP growth is expected to be 6 per cent and then it will get back to 7-8 per cent which has been the case in the last 15-16 year period. "On the slowdown, my own assessment is that we have bottomed out," Panagariya, a Professor of Economics at the Columbia University, said at the discussion organised by India's Consulate General here in partnership with the US-India Strategic Partnership Forum (USISPF) on Tuesday. "In the second half of the current fiscal year, which would be ending on March 31, we should see some bit of recovery, not a big one but certainly the second half (of the fiscal year) should look better than the first half," he said. Panagariya noted that since about 2003, India has been growing at an average rate of about 7 per cent and the first five years of the Modi government was characterised by 7.5 per cent growth on an average. Emphasising that the Indian economy "can do a lot better no doubt", he said that in his assessment, the main factor which led to the slowdown has to do with the financial markets and that translated into weakening of the balance sheets of both the banks as well as the corporates. "I think you could criticise the government here for being a little slow in beginning the process of cleaning up of the bank Non-Performing Assets (NPAs). The problem was known actually by 2013" but this particular problem of NPAs never gets solved very quickly," he said. Sounding an optimistic note, he said as the clean up happens, "we should see the growth returning". On the Budget, Panagariya welcomed positive steps taken by the government including on fiscal consolidation, fiscal deficit, corporate tax reduction, initiation of simplification for the personal income taxation as well as privatisation. Pointing to a "negative" in the Budget, Panagariya said that one of the things that has been going on for the last 2-3 years is that India is turning more and more towards import substitution. "Trade economists use a more aggressive term - protectionism. And I've been saying that this is something that should not only be stopped but has to be reversed. "Unfortunately, this budget goes very far in the direction of raising duties and particularly disconcerting is the fact that a lot of the items on which the duties have been raised and that too quite a bit are all labour intensive products," he said.
These are the products in which India ought to be exporting and "we should not be afraid of foreign competition. We should take on the foreign competition head on in the global markets. If we are not doing that, something is very wrong," he said. Panagariya said that if a country with a 500 million-people strong labour force cannot compete in the labour intensive products, it points to the fact that something is fundamentally wrong with the way some of the degradation in the system is. "So one has to go to the root cause what is causing it and remove those obstacles, hurdles and not try to give them some advantage by putting in tariffs. That only is encouraging inefficiency and small plants," he said. He also pointed out that one of India's big problems is that there is too much pre-occupation with small and micro and small enterprises. "What India lacks big time, especially in these labour intensive sectors, are medium and large firms. But when you start raising these protections, you are only encouraging micro and small, you are not encouraging medium and large firms which ultimately are the most efficient firms, compete in the global marketplace and define the ecosystem in the domestic market. "And this is where I unhappily come to the conclusion that unless we reverse that, the ambition of 10 per cent growth or double digit growth which is very much realisable for India, I think will not get realised," he said. Panagariya said that India can still achieve the 8 per cent or so growth rate because of the other measures and reforms that are being undertaken. "So we will get to 8 per cent but I think if we want to get to that extra 2 per cent to 10 per cent, then we need an economy which is open, competes in the global marketplace," he said. Panagariya noted that he does not agree with the "noise" and "common perception" that the second term of the Modi government is ignoring the economy and is only focusing on social issues such as the abrogation of Article 370 and the Citizenship Amendment Act. "This is not true," he said, adding that reforms have continued. He highlighted the "major reforms" undertaken by the Modi government including the Insolvency and Bankruptcy Code, the Goods and Service Tax, Direct Benefit Transfer and the corporate profit tax.
Source: Business Standard
Govt agrees to provide electricity to textile sector at 7.5cents/kWh, withdraw all additional surcharges till June 2020. The federal government has agreed to provide electricity to the textile and other zero-rated industries at the rate of 7.5 cents/kWh (which is approximately Rs11.58 as of today) all-inclusive till June 2020. Sources told Pakistan Today that the All Pakistan Textile Mills Association (APTMA) also managed to persuade the government to take back all additional surcharges and add-ons over and above the concessionary rate till June. According to a press statement issued by the Finance Division, the government also agreed to provide Rs20 billion total subsidy for power and petroleum in the form of cross subsidy and/or allocation, in the next budget. However, sources in APTMA said that they had not yet agreed to the government’s recommendation. Prime Minister Imran Khan was scheduled to meet the textile sector and address the issues faced by the export-oriented sector, however the premier could not attend Wednesday’s meeting. Adviser to Prime Minister on Commerce Abdul Razzak Dawood chaired the meeting in his place. Economic Affairs Minister Hammad Azhar, PM’s Adviser on Petroleum Nadeem Babar, Federal Minister for Power Omar Ayub Khan and Punjab Governor Chaudhry Muhammad Sarwar were also present. The APTMA delegation was led by Gohar Ijaz and comprised APTMA Chairman Dr Amanullah Kassim Machariya, APTMA Punjab Chairman Adil Bashir, APTMA Punjab Senior Vice Chairman Abdul Rahim Nasir, APTMA’s Executive Director Shahid Sattar and other leading textile millers and office-bearers of the association. After the three-hour-long meeting, Hammad Azhar tweeted: “We have reached an agreement with all stakeholders of the textile exporting sector that addresses their concerns and also ensures that no additional financial burden is borne by the power and finance division for current and next financial year combined. Details to follow tomorrow.”
Source: Pakistan Today
Textile firms across Vietnam are facing the possibility of closure as the coronavirus outbreak hampers material imports from China. Truong Van Cam, deputy chairman of Vietnam Textile and Apparel Association (VITAS), told a recent forum many small and medium textile producers would run out of feedstock by the end of this month and may have to close down next month. These companies, which account for around 90 percent of the industry, have reduced working hours, with supply orders remaining unfulfilled due to the coronavirus, he explained. Limited cross-border trade with China, where 60 percent of textile materials are sourced, have seen producers struggle to supply buyers in Thailand, Indonesia, South Korea and Japan, it was added. In Binh Xuyen District of northern Vinh Phuc Province, where a lock down order serves to contain the spread of the virus, many garment factories are running at minimum capacity as staff are quarantined. Exports to China are also struggling. Vietnam Cotton and Spinning Association (VCOSA) stated most producers had reported plummeting cotton orders from the country, and are concerned about this year’s profits. Vietnam’s textile exports in January fell 23.5 percent year-on-year, while imports fell 28.5 percent. "The industry has never seen such a steep drop," said Cam, blaming the seven-day Lunar New Year holiday (January 23-29) and coronavirus outbreak. Fitch Solutions, a unit of credit rating firm Fitch Group, said small and medium textile producers would struggle to tap an alternative source of input, with unemployment and closures expected. Tran Thanh Hai, deputy head of the Trade Department, said even after the epidemic is contained the industry would still struggle due to its reliance on Chinese imports. Some companies have been looking for alternative markets as Chinese businesses won’t resume full operation until mid-March, with Indonesia, India, Bangladesh and Brazil potential sources. Insiders have proposed lower road and port tariffs to support textile companies amid the outbreak. Textiles were among the largest export categories in Vietnam last year with a value of $32.8 billion, up 7.8 percent from 2018. The U.S. was the largest export market, followed by the E.U. and Japan.
Source: Vietnam Express
“Modern sensor technology and data processing systems can be used to control all the important processing parameters and also to implement a wide range of optimisation measures. The production sequences can be optimised, as well as entire value-added chains. The efficient monitoring of yarn tension and feed during warp preparation can increase weaving efficiency by up to 5 %,” textile machinery manufacturer Karl Mayer reports. “The new Multiguard stop motion from Karl Mayer can make an important contribution here. This innovative system gives a warning in the event of yarn breakages or tension peaks and generates parameters that can be used for internal production data management as well as external quality assurances within the framework of a quality management system,” the German company says.
Yarn tension levels at a glance
Multiguard continuously determines the tension values of each individual yarn at the exit of the creel and transmits the data to a computer for comparison with the target values. This generates a clear status report. The coloured indicators show the customer immediately which creel position lies within the tolerance, warning or stop ranges. “This enables him to intervene quickly in the warping process if there are any deviations from the target values. The specific, measured tension values are displayed in a compact diagram. They can be used for internal analyses and for quality management of the warping process,” Karl Mayer explains. Karl Mayer has also developed the Proactive-Warping three-level, modular recording system, whereby each level contains more information. Module 1 manages all the basic data supplied by sensors on the warping machine relating to the warping or beaming quality. For example, the data relates to the exact positioning of the bands in relation to the drum axis. Level 2 complements these values with optical analyses from an integrated camera on the machine, whereby the focus is on the width, position and parallel arrangement of the bands. In module 3, the data is also transferred to the quality record from the creel monitoring system, i.e. the individual yarn tension values from the Multiguard system.
Off to a good start
Multiguard was launched as a prototype for the first time at ITMA 2019, and this innovative system generated a huge level of interest, according to the company. “The possibility of detecting critical deviations in yarn tension levels early on, and to intervene in order to adjust them was well received by our customers,” says Martin Fuhr, the Head of Development in Karl Mayer’s Warp Preparation Business Unit. A Belgian customer has already ordered the new yarn monitoring system. Further promising projects are currently being negotiated. Multiguard is suitable for every type of creel. It is integrated into the machine’s software and monitor on new machines.
Source: Innovation in Textiles
Non-tariff measures (NTMs) could cause major fractures in post-exit trade relations between the United Kingdom (UK) and the European Union (EU), knocking up to $32 billion, or 14 per cent, off of UK exports to the EU, according to a new study by the United Nations Conference on Trade and Development (UNCTAD), which projects that even if a ‘standard’ free trade agreement (FTA) were to be signed by the parties, UK exports could still drop by 9 per cent. NTMs are policy measures other than ordinary customs tariffs that can potentially have an economic effect on international trade in goods, changing quantities traded, or prices, or both. They are the key factors mediating market access in the world economy. Potential losses under a ‘no-deal’ Brexit from tariffs that may be imposed by the respective parties are estimated at between $11.4 billion and $16 billion or 5-7 per cent of current exports. The new study, titled ‘Brexit beyond tariffs: The role of non-tariff measures and the impact on developing countries’ says NTMs would double those losses, according to an UNCTAD press release. The losses would deal a major blow to the British economy, as the EU market accounts for 46 per cent of the United Kingdom’s exports. Mounting trade costs due to NTMs and potentially rising tariffs would more than double the adverse economic effects of Brexit for the UK, the EU and developing countries, the study notes. “EU membership has its advantages to deal with non-tariff measures that even the most comprehensive agreement cannot replicate. This offers important lessons to other regions trying to deal more effectively with such non-tariff measures,” said UNCTAD’s director of international trade, Pamela Coke-Hamilton, while presenting the study’s findings. On the flipside, exports from developing countries into the UK, and to a smaller extent into the EU, could increase if the former doesn’t increase tariffs for third countries. A no-deal Brexit could offer some opportunities for developing countries as trade barriers between the UK and the EU would benefit suppliers from third countries. By contrast, a deal between them would preclude the incentive to turn to third countries, the study finds. However, the positive third-country effect could be diminished by increasing regulatory divergence. If the UK’s regulations divert over time from the EU’s, trade costs would rise for third countries due to production process adjustment costs and potential duplication of proofs of compliance. This would disproportionately affect smaller and poorer countries as well as small and medium-sized enterprises. The study quantitatively explores the post-Brexit role of NTMs and the consequences for developing countries by simulating possible impacts using a panel data gravity model. Under a tariffs-only scenario, exports of developing countries to the UK would increase 1.3 per cent to 1.5 per cent while a tariffs-and-NTMs scenario would see them rise 3.5 per cent to 4 per cent, according to the study. The positive impact would be strongest in agriculture, food and beverages, wood and paper sectors and weakest in electrical and machinery, metal products, chemicals, and textiles and apparel industries. The UK left the EU in January. The two parties aim to determine their future trade relations during a transition period that lasts until the end of this year. While a ‘hard’ exit scenario would result in the study’s projections, the economic effects of a ‘soft’ exit in which the status quo is largely maintained pending negotiation of a future trade relationship would depend on the details of that relationship. Around one-third of the EU’s total trade promoting effect among members is accounted for by the way in which it deals with NTMs.
Source: Fibre2Fashion
