To become an export powerhouse, India needs ‘specialisation’ focus on labour-intensive manufacturing sectors, said KV Subramanian, Chief Economic Advisor. Delivering the 7th Dr Raja J Chelliah Memorial Lecture at the Madras School of Economics here, he said India lagged significantly behind China in export performance due to inadequate specialisation in some sectors. Though India is doing well on the diversification part with its entry into many sectors, there was no specialisation at all in the past one-and-half decades during which China zoomed in exports to become a powerhouse with specialisation focus. He was of the view that ‘specialisation’ focus would create more jobs and wealth,thanks to the availability of a large workforce and the country’s demographic dividend. Comparing China’s edge in specialisation, Subramanian said China assembled every iPhone that was sold all over the world. It helped the country to become a large exporter. China imports components at a lower cost, assembles the equipment using its large workforce and exports to various markets. Assembly of network products, according to him, is one of the few sectors that offered huge scope for India to leapfrog in exports. The export of network products is expected to grow to $7 trillion by 2025 and held the potential to create 4 crore jobs by the same year and 8 crore jobs by 2030. He also highlighted how the openness of the economy and competition enabled prosperity of society and job creation.
MCA-21 data issue
C Rangarajan, former RBI Governor and Chairman, Madras School of Economics, said calculation of manufacturing growth was showing some dissonance and he urged Subramanian to ask his colleagues to look at MCA-21 data more carefully. There is certainly a problem in using the MCA-21 data. Because the corporate data are in value terms and the national income is looking at in real terms. How is the the translation done? Also, MCA-21 data is not in the public domain and none of us can really look at what has gone wrong, he said. “Look at it sectorwise and see whether manufacturing growth of a particular sector is in accord with what the sector experts say. That is the most important thing. Whatever methodologies being discussed are not the answer. Trust in statistics and numbers has become a question mark and that should be clarified. It would be in the interest of the country,” he added.
Source: Business Line
The RBI needs to find room for more rate cuts to deal with the impact of coronavirus on the economy, says IDFC Mutual Fund report. The report titled 'The Coronavirus and Revealed Preferences' further said the RBI, on its part, has a dominant revealed current preference for bringing back credit growth. "Again the revealed preference in MPC (on aggregate, not necessarily for each individual member) seemed to be to look for room to ease as soon as inflation allowed, even before the impact from the coronavirus had taken hold. With new evolving information, the nudge is likely to come sooner than before," the report said. It is also noteworthy that the central bank chose to put out an assurance statement with respect to evolving developments, despite already being in the midst of substantial incremental non-traditional monetary easing, the statement said. "All of this means that monetary policy, conventional and otherwise, will continue to play a pivotal role for now with consequent benefits for quality interest rates," it added. The report pointed out that the finance minister's revealed preference is also similar to that of the RBI, i.e to get credit growth to rebound. "This is also basis a recognition that scope for incremental fiscal response has been somewhat limited given the well documented constraints. "In fact this space may get even further constrained if lack of growth buoyancy stresses tax growth and tepid financial markets stress capital receipts targets," it said. The report, however added that it is unlikely that the government will compromise on spending to meet the fiscal deficit targets. Noting that the global monetary policy will continue to be extremely supportive, it said in India too, the RBI's revealed preference will get a further leg up and conventional easing may start supporting unconventional tools already in deployment. "Indeed the swap market is already pricing the next 40-50 basis points of repo rate cuts," it said. The US Federal Reserve on Tuesday cut interest rate by 50 basis points to deal with coronavirus. The virus has spread to over 60 countries and killed more than 3,100 people since its outbreak in the Chinese city of Wuhan in December. Over 90,000 have been infected.
Source Economic Times
Indian Ambassador Pranay Verma speaks to Việt Nam News about business opportunities between Việt Nam and India in the context of the Covid-19 epidemic.
What is your opinion on the economic relationship between Việt Nam and India?
Economic and commercial ties are an important pillar of the Comprehensive Strategic Partnership between India and Việt Nam. There has been steady growth in bilateral economic engagement over the years. From a meagre US$200 million in 2000, our bilateral trade has grown to nearly $13 billion in 2019. India is today Việt Nam’s seventh largest trading partner. For India, Việt Nam is the fourth largest trading partner in ASEAN. As two fast growing economies and countries aspiring for deeper integration with world and regional economies, there is a huge potential for our economic engagement waiting to be tapped.
How do you rate the investment from India to Việt Nam and vice versa?
According to official statistics, based on invested capital, Indian investment in Việt Nam as of 2019 is close to $925 million. If you include Indian investment coming through third countries, then this number grows to nearly $2 billion. Indian companies have invested in Việt Nam mostly in the areas of energy, mineral exploration, agro-processing, agro-chemicals, IT and auto components. In comparison, Vietnamese investments in India are modest at currently around $30 million, covering areas such as pharmaceuticals, building materials and chemicals. We are encouraging businesses in Việt Nam to look at India as a preferred investment destination.
In what areas do you think India can invest more in Việt Nam?
Given India’s capabilities and Việt Nam’s priorities, Indian companies are looking to invest in Việt Nam in sectors, like energy, including renewable energy, IT, pharmaceuticals, infrastructure development and the automotive industry, etc.
How can India and Việt Nam promote trade during the Covid-19 epidemic?
Covid-19 has disrupted established supply chains for manufacturers based in both India and Việt Nam. As we deal with this challenge, there is also an opportunity for our businesses to explore alternative supply chains located in each other’s country. As a large economy, India is willing to step forward and plug some of the supply chain gaps for our partner countries. These open up new opportunities. For example, in areas like agro-products, textile and garments, machinery, etc., suppliers and manufactures in India and Việt Nam can establish new partnerships to diversify their supply chains. India has a big and growing start-up community and a number of unicorns. Việt Nam also wants to develop its start-ups. What can Việt Nam learn from Indian experience? Is there some potential cooperation between start-up communities of the two sides?
India has one of the world’s largest start-up ecosystems driving technology and innovation, attracting new investments and generating tens of thousands of direct jobs. According to our industry estimates, India today hosts nearly 9,000 start-ups with 24 unicorns valued at over $1 billion. The government of India’s ‘Start-up India’ mission has been proactively creating an enabling environment for development of start-ups and harnessing the large pool of talent with innovative ideas. Việt Nam, too, is increasingly focused on innovation to improve productivity, and its start-up industry is well-recognised. This is certainly an area of significant potential where we may learn from each other’s experiences, policies and enabling environments, as well as explore collaborative partnerships in areas such as IT services, e-commerce, fintech, healthcare services, logistics, etc.
How is India supporting Southeast Asian countries, including Việt Nam?
India has announced a concessional line of credit of $1 billion for ASEAN countries to develop connectivity infrastructure, both physical and digital connectivity, as part of our commitment to seek closer integration with ASEAN. Connectivity is an important dimension of India’s Act East Policy and the Indo-Pacific vision. It is also a priority under ASEAN’s Outlook on Indo-Pacific. Connectivity therefore provides a strong basis for cooperation between India and Việt Nam, as well as other ASEAN partners, to promote closer economic cooperation, seek shared prosperity and enhance people-to-people exchanges.
What are your expectations for economic development between the two sides?
I am very optimistic about the prospects of our economic partnership. As two fast growing economies and as two youthful and aspiring societies, there is a huge potential for our economic engagement. As India strives to become a $5 trillion economy, the demands and capacities it would generate will offer significant economic opportunities for partners like Việt Nam. We are proactively focused on enhancing the economic dimensions of our engagement, with regular visits of officials and business delegations taking place in both directions. Our Embassy in Hà Nội and Consulate in HCM City are constantly at work to bring our business communities closer together and help them explore new opportunities. The recent launch of direct flights between our two countries is another positive development that will hopefully encourage businesses on both sides to work on their complementarities and push the level of our economic ties.
Source: Vietnam News
Investors, however, turned nervous following an increase in the number of coronavirus cases in India amid emerging fears that the rate cut would not be sufficient to boost markets due to supply constraints and limit the rate of infection. The Indian government on Wednesday said 28 positive cases of coronavirus have been detected so far in India. The rupee gave up gains as the US dollar, considered as a safe bet in event of a crisis, strengthened, falling to the day's low of 73.64. After swinging 74 paise between the day's high and low, the rupee closed flat at 73.19 to the dollar in line with some recovery in stock markets. On the stock market front, the BSE Sensex swung over 945 points during the day. The 30-share index settled 214.22 points or 0.55 per cent lower at 38,409.48. The broader NSE Nifty closed 52.30 points or 0.46 per cent down at 11,251. Foreign investors remained net sellers in capital markets, offloading securities worth Rs 878.38 crore on Wednesday. The benchmark 10-year 6.45 government bond yield jumped 11 points to 6.22 amid volatile equity markets. Global crude oil benchmark Brent shot up 1.51 per cent to trade at USD 52.38 per barrel amid buzz that oil producing countries might consider production cut in a bid to cushion the impact of the coronavirus epidemic on prices. The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.20 per cent to 97.35. "A heavy selling was witnessed in rupee after positive opening. The weakness crossed the 73.50 mark against the dollar as the USD/INR pair traded above 73.50 for first time since November 2018. "The panic of corona plays into our domestic market as well as the global front which has forced the funds outflows," said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities. The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 72.8733 and for rupee/euro at 81.23. The reference rate for rupee/British pound was fixed at 93.14 and for rupee/100 Japanese yen at 67.62.
Source: Financial Express
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
921.77 |
USD/Ton |
-0.54% |
3/5/2020 |
|
VSF |
1382.30 |
USD/Ton |
0% |
3/5/2020 |
|
ASF |
2018.84 |
USD/Ton |
0% |
3/5/2020 |
|
Polyester POY |
941.17 |
USD/Ton |
0.77% |
3/5/2020 |
|
Nylon FDY |
2169.72 |
USD/Ton |
0% |
3/5/2020 |
|
40D Spandex |
4123.90 |
USD/Ton |
0% |
3/5/2020 |
|
Nylon POY |
5388.38 |
USD/Ton |
0% |
3/5/2020 |
|
Acrylic Top 3D |
1214.18 |
USD/Ton |
0% |
3/5/2020 |
|
Polyester FDY |
2004.48 |
USD/Ton |
0% |
3/5/2020 |
|
Nylon DTY |
2198.46 |
USD/Ton |
0% |
3/5/2020 |
|
Viscose Long Filament |
1099.23 |
USD/Ton |
0% |
3/5/2020 |
|
Polyester DTY |
2406.81 |
USD/Ton |
-0.59% |
3/5/2020 |
|
30S Spun Rayon Yarn |
2047.58 |
USD/Ton |
0% |
3/5/2020 |
|
32S Polyester Yarn |
1623.70 |
USD/Ton |
0% |
3/5/2020 |
|
45S T/C Yarn |
2421.18 |
USD/Ton |
0% |
3/5/2020 |
|
40S Rayon Yarn |
2198.46 |
USD/Ton |
0% |
3/5/2020 |
|
T/R Yarn 65/35 32S |
1947.00 |
USD/Ton |
-0.73% |
3/5/2020 |
|
45S Polyester Yarn |
1767.39 |
USD/Ton |
0% |
3/5/2020 |
|
T/C Yarn 65/35 32S |
2284.67 |
USD/Ton |
0% |
3/5/2020 |
|
10S Denim Fabric |
1.27 |
USD/Meter |
0% |
3/5/2020 |
|
32S Twill Fabric |
0.70 |
USD/Meter |
0.83% |
3/5/2020 |
|
40S Combed Poplin |
0.98 |
USD/Meter |
0.59% |
3/5/2020 |
|
30S Rayon Fabric |
0.54 |
USD/Meter |
0% |
3/5/2020 |
|
45S T/C Fabric |
0.67 |
USD/Meter |
0% |
3/5/2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14369USD dtd. 05/03/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Base metals’ prices jumped 1-2 per cent on Wednesday after the US Federal Reserve (US Fed) announced a 50 basis points (bps) emergency interest rate cut. The Fed also confirmed high downsi...
Source: Business Standard
Philippines revives its textile and garment industry. The Industry roadmap has not been finalized yet, however, the plan will oversee the activities of an integrated textile-garment industry, fortified linked between the industry, government and the private sector, along with a dedicated trade office. Drawn up by the government’s Board of Investments, the guideline demands from the part of the government that see to seek to tackle unfair competition for local suppliers via trafficking and the renowned ukay-ukay, according to Just-style. This would prohibit the sale of garments of second apparel imported from North America and Europe for charity distribution that are unlawfully diverted from the ports to grey market retailers. The devious activity results in the trading of these item at a 10% to 20% increase to that of the original retail price. The roadmap also requests the increase of capital provision and land in order to increase the production of clothing and textile across the Philippines. It additionally encourages the purchase of new material and the necessity for fiscal incentives via reduced value-added tax and power rates.
Source: Themds
ISLAMABAD: Despite economic challenges confronted by Pakistan Tehreek e Insaf (PTI) government, the textile sector of Pakistan was showing a remarkable progress for the last two months. These views were expressed by Adviser on Commerce, Textile, Industry & Production, Abdul Razak Dawood while talking to a private tv channel. Thirteen percent increase in the Textile sector was a sign of victory for the traders and exporters community, he said. He further stated that the government was trying to facilitate the textile sector with affordable gas and electricity prices. The government was taking decisions to resolve the genuine issues of the exporters community, he added. About foreign investors, he said international companies had started exploring business opportunities in Pakistan. The government, he said was also taking keen interest in the export of information technology and softwares. To a question about high interest rate and difficulties faced by the industrial sector, Abdul Razak Dawood said in the next week, suggestions would be forwarded to the participants of the meeting going to mull over monitoring policy issues. He hoped that matters relating to mark up rates would be considered for speeding up the industrialization in the country.
Source: BRecorder
Adviser on Commerce and Textile Abdul Razak Dawood has said the government is trying to facilitate the textile sector with affordable gas and electricity prices. Talking to Private TV Channel, he said the textile sector of Pakistan is showing a remarkable progress for the last two months. The Advisor said thirteen percent increase in the Textile sector is a sign of victory for the traders and exporters community. He said the government is also taking keen interest in the export of information technology and software. About foreign investors, he said international companies have started exploring business opportunities in Pakistan. He hoped that matters relating to mark up rates would be considered for speeding up the industrialization in the country.
Source: Radio Gov PK
The country’s bed linen foreign sales grew by fourfold, while textiles export deliveries surged 25 times for the past four years,» he noted addressing the parliamentary hearings at the Senate. As stated there, the bulk export volumes of cotton fiber and yarn fall on China, Moldova, Latvia, textiles on China and Russia, bedclothes on Russia. He also reported on the decrease in import deliveries of clothes by 15%, leather products by 54%. In 2019, number of GOTS certified facilities globally grew by 35 per cent, from 5,760 to 7,765 located in 70 countries. The certified organic fibres protect the climate by absorbing CO2 and every processing step from field to fashion, has to meet the stringent social and environmental criteria before a finished product is allowed to carry GOTS label. This huge leap forward was seen in both, production and consuming regions. Countries with largest growth in GOTS-certification in percentage in 2019 are: Netherlands (73 per cent), Bangladesh (73 per cent), Spain (71 per cent), and Turkey (65 per cent). In terms of total numbers of certified facilities, the highest increase is reported from Bangladesh (+505), followed by India (+438) and Europe (+396). The top ten countries in terms of total numbers of GOTS-certified facilities in 2019 are: India (2411), Bangladesh (1194), Turkey (858), Germany (565), China (448), Italy (444), Portugal (301), Pakistan (276), USA (147), and the UK (75). “The enormous growth shows that GOTS successfully serves as sustainable solution from certified organic fibre to finished product. With more and more GOTS certified operations and products we altogether substantially contribute to sustainable development,” said Claudia Kersten, GOTS managing director. GOTS certification helps to ensure compliance with each of the 17 UN Sustainable Development Goals. More than 3 Million workers working in GOTS-certified facilities were reported in 2019 by the 17 accredited independent Certification Bodies. 2019 was also a GOTS revision year resulting in the new GOTS Version 6.0, due to be released in spring 2020. GOTS is the stringent voluntary global standard for the entire post-harvest processing (including spinning, knitting, weaving, dyeing and manufacturing) of apparel and home textiles made with certified organic fibre (such as organic cotton and organic wool), and includes both environmental and social criteria. Key provisions include a ban on the use of genetically modified organisms (GMOs), highly hazardous chemicals (such as azo dyes and formaldehyde), and child labour, while requiring strong social compliance management systems and strict wastewater treatment practices. GOTS was developed by leading international standard setters - Organic Trade Association (US), Japan Organic Cotton Association, International Association Natural Textile Industry (Germany), and Soil Association (UK) to define globally recognised requirements that ensure the organic status of textiles, from field to finished product. GOTS is a non-profit organisation which is self-financed.
Source: Fibre2fashion
AMONG Asian economies, Vietnam is the most vulnerable to China supply shocks while Singapore is the least, according to a Deutsche Bank research note on March 3. "This suggests that unless Vietnam can reduce its dependence on China for its intermediate goods, it should not be seen as an alternative to China, although that may be the case for a few sectors like electronics," said the report. In contrast to the widespread view that Asia is dependent on China for intermediate goods in electronics, such vulnerability is actually low, the report shows. Instead, Asia's vulnerability to the electronics supply chain in China is in finished consumer goods. In its study, Deutsche Bank built a trade database of individual goods which have a dependence on production in China, such that a risk is posed to the importing economy. Ten Asian economies were assessed for their vulnerability to supply disruptions in China, including six in Asean: Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. Imported items were deemed to be "China critical goods" (CCG) if an economy a net importer from China and two-thirds or more of its imports of that good come from China.Among the economies studied, Vietnam was the most vulnerable with China critical goods making up 15.1 per cent of total imports. At the product level for Vietnam, textile intermediate imports were the most vulnerable, with nearly half coming from China. But Vietnam's vulnerability to supply disruptions of electronics and parts was low, with a CCG share of 1 per cent, as most such components come from South Korea. Thailand was the second most vulnerable, with CCG imports making up 11 per cent of all imports. Similarly, however, the vulnerability of electronics was low at 1 per cent. While Indonesia had the third highest CCG share of total imports at 8 per cent, disruption to domestic manufacturing, "is likely to be significantly lower, given that finished products dominate much of its CCGs", said the report. Consumer-focused goods such as electronics and household goods account for over two-fifths of Indonesia's CCGs. The Philippines came in sixth, after India and Sri Lanka, with a CCG share of 7 per cent. Its manufacturing vulnerability was highest for textile intermediates. Steel was also significant, with disruptions in steel supply for China potentially having an impact on infrastructure projects in the Philippines. Malaysia and Singapore were least at risk, with CCG shares of 3.5 per cent and 2.6 per cent respectively. Regarding Singapore, the report noted: "Its vulnerability is largely due to its status as an entrepôt hub, not to disruptions to its own manufacturing." Nonetheless, the report did caution: "It takes just one missing component in the supply chain – however insignificant and low value-add it may appear to be – to stop the entire production line altogether, as has been the case in the auto sector."
Source: Business Times
The onset of the coronavirus COVID-19 outbreak catalysed major slowdowns in regional trade and halted export-import activities in several impacted countries. China, one of the biggest global suppliers of raw materials, experienced a decline in commodity prices and the volume of raw materials exports as the coronavirus rapidly spread across the country. China’s manufacturing sector is experiencing productivity decline. According to China’s National Bureau of Statistics (NBS), the country’s Purchasing Managers’ Index (PMI)—an indicator of growth in the manufacturing and service sectors—dropped from 50.2 in December to 50.0 in January. Any index below the neutral-point mark of 50 would signal a decline in sector growth. In February, China’s PMI fell to 40.3—the lowest point in the last 12 years. Wuhan seafood market closed after the New Coronavirus was detected there for the first time. The global coronavirus outbreak was traced back to a market in Wuhan in China’s Hubei province. The Chinese government is quarantining nearly 50% of its population, severely impacting industrial activity. Many Chinese factories have ceased operations since the outbreak and a large segment of manufacturing sector employees have yet to resume work. The Chinese government has extended the Chinese Lunar New Year holiday and permitted all manufacturing companies to remain closed. For Southeast Asian businesses that depend on Chinese imports in their production, the virus has caused major disruption to supply chains. In the Cambodian textile industry, demand is outstripping supply as China’s distributors remain shuttered. 60% of Cambodia’s garment industry sources supplies from China. A lack of local garment suppliers means Cambodian factories depend on these imports. Approximately 200 garment factories in Cambodia risk losing business or closures as a result of China’s diminishing textile imports. If the shortage persists, many Cambodian factories may run out of garment materials by the end of this month, and their workers could be put on leave with no guaranteed compensation. Cambodia’s forecasted export volumes already took a hit over the suspension of its preferential trade access to the European Union (EU). They could slide further if the disruption to supply chains persist. Even if the shortage lifts and Chinese factories resume taking orders, it takes approximately 40 days for a Cambodian garment factory to receive its order of fabric from China. For those that don’t have ample fabric stocks, the wait may lead to substantial business losses.
Source: Asean Today
