MARKET WATCH 16 MARCH, 2020

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39th GST Council Meeting: Nirmala Sitaraman Explained Changes and Highlights [Shoes, Mobile Phones and Textile Raised by 18%]

GST (Good and Services Tax) is an indirect tax levied on the supply of goods and services. The GST Council is an apex member committee meets to discuss and lay GST laws that will benefit dealers across the nation. Union Finance Minister Nirmala Sitharaman, along with Minister of State Finance Anurag Thakur, is chairing the 39th GST Council Meeting in New Delhi on March 14, 2020.

The highlight of the 39th GST Council Meeting:

  • Implementation of the new GST return system has been postponed to October 1, 2020. Also, the application of e-invoicing, the QR code has been deferred to October 1, 2020.
  • Changes in the GST rates. Now GST on mobiles and its parts are increased from 12% to 18%.
  • All types of matchsticks, whether handmade and machine-made, have been rationalized to 12 percent from 5 percent for handmade and 18 percent for machine-made earlier.
  • Interest for delated GST payment will be calculated on the net cash tax liability instead of gross with effect from July 1, 2017.
  • GST-9C filing deadline for a small business relaxed.
  • Due to date for filing annual return and reconciliation statement for FY19 extended.
  • For those less than Rs. 2 crore aggregate turnover in FY 2017-18 and FY 2018-19, there won’t be any late fee charged.
  • Know your supplier being introduced so that every business has information of suppliers they are in business.
  • The tax rate on maintenance, repair, and overhaul of aviation was cut from 18 percent to 5 percent.
  • The time limit for finalization of the e-wallet scheme for consumers is extended till March 31, 2021.

Nirmala Sitharaman said that the GST Council told Infosys that there needs to be a sustainable solution to the series of technical glitches and reports of the Goods and Services Tax Network being unable to handle the load.

Source: Live Mint

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India's CCEA approves scheme for RoDTEP to boost exports

India’s cabinet recently approved the Scheme for Remission of Duties and Taxes on Exported Products (RoDTEP) under which a mechanism would be created for reimbursement of all taxes or duties or levies that are currently not being refunded under any other mechanism, but which are incurred in the process of manufacture and distribution of exported products. The approval came from the Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi. The scheme is going to boost the domestic industry and Indian exports providing a level playing field for Indian producers in the international market, according to an official release. Under the scheme, an inter-ministerial committee will determine the rates and items for which the reimbursement of taxes and duties would be offered. In line with the ‘Digital India’ project, refund under the scheme, in the form of transferable duty credit/electronic scrip will be issued to the exporters, which will be maintained in an electronic ledger. The scheme will be implemented with end-to-end digitisation. The refunds under the RoDTEP scheme would be a step towards ‘zero-rating’ of exports, along with refunds such as drawback and integrated goods and services tax (IGST). This would lead to cost competitiveness of exported products in international markets and better employment opportunities in export-oriented manufacturing industries. At present, GST taxes and import/customs duties for inputs required to manufacture exported products are either exempted or refunded. However, certain taxes/duties/levies are outside GST, and are not refunded for exports, such as, value-added tax on fuel used in transportation, mandi tax and duty on electricity used during manufacturing. These would be covered for reimbursement under the RoDTEP Scheme. The sequence of introduction of the scheme across sectors, prioritisation of the sectors to be covered, degree of benefit to be given on various items within the rates set by the committee will be decided and notified by the department of commerce. The rebate would be claimed as a percentage of the Freight on Board (FOB) value of exports. A monitoring and audit mechanism, with a risk management system (RMS), would be put in to physically verify the records of the exporters. As and when the rates under the RoDTEP scheme are announced for a tariff line/ item, the Merchandise Exports from India Scheme (MEIS) benefits on such tariff line/item will be discontinued.

Source: Fibre2fashion

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Exports post first rise in 7 months, grow by 2.91 pc in Feb

India's exports rose for the first time in seven months in February growing by 2.91 per cent to USD 27.65 billion, according to the commerce ministry data released on Friday. Imports too grew by 2.48 per cent to USD 37.5 billion, leaving a trade deficit of USD 9.85 billion as against USD 9.72 billion in February 2019. Oil imports jumped by 14.26 per cent to USD 10.76 billion in February compared to 9.41 billion in the year-ago month. Exports during April-February this fiscal dipped by 1.5 per cent to USD 292.91 billion. Imports during the period declined by 7.30 per cent to USD 436 billion, leaving a trade deficit of USD 143.12 billion.

Source: Business Standard

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Rupee rebounds 48 paise to 73.80 a dollar on RBI assurance

Rebounding from its record low of 74.50, the rupee traded higher by 48 paise at 73.80 against the US currency on Friday after the Reserve Bank's assurance that steps will be taken to maintain sufficient liquidity in the panick-stricken currency market. At the interbank foreign exchange, the rupee opened lower at 74.39 and slid further to the day's low of 74.50 against the US dollar as investors panicked weighing turmoil in financial markets due to coronavirus fears. But, the domestic unit recovered sharply to 73.80, up 48 paise against the US dollar, buoyed by measures by the central bank to arrest the rupee free-fall. In the current month so far, FPIs have pulled out a whopping Rs 37,954 crore (USD 5.14 billion) from Indian capital markets. Foreign investors remained net sellers in Indian capital markets for a fifth straight day, pulling out more than Rs 4,700 crore on Friday amid a global sell-off in equities, market data showed. The benchmark 10-year Indian government bond yield was higher at 6.32 per cent. Meanwhile, the global crude oil benchmark Brent Futures surged nearly 6 per cent to trade at USD 35.11 per barrel. The dollar index, which gauges the greenback's strength against a basket of six currencies, rose 0.44 per cent to 97.90. The RBI has said it is closely monitoring the current global situation and assured that it will take all steps to keep markets adequately liquid and stable. "The RBI is closely and continuously monitoring the rapidly evolving global situation and will take all necessary measures to ensure that money, debt and forex markets remain adequately liquid and stable, and continue to function normally," the central bank said in a statement. The RBI earlier also announced measures to infuse liquidity in the foreign exchange market, including the US dollar swaps worth USD 2 billion. On the equity front, recovering over 5,380 points from its intra-day low of 29,388.97, the BSENSE -2.78 % Sensex ended 1,325.34 points or 4.04 per cent higher at 34,103.48. Similarly, the NSE Nifty settled 365.05 points, or 3.81 per cent, up at 9,955.20. As coronavirus-led recession fears triggered panic selling globally, indices plunged over 10 per cent in the opening session, hitting their lower circuit levels. Stock exchanges halted trading for 45 minutes within 15 minutes of market opening. Normal trading resumed at around 1030 hours.

Source: Financial Express

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Ludhiana: Industry in bad phase, shipments put on hold

While the local industry was seeing a golden opportunity to gain a foothold in the world market as production in China had come to a virtual halt due to the spread of Corona virus since December, contrary to the belief, the industry is suffering the most in this bad phase. European countries, the US and the UAE have asked exporters to “hold” the entire shipments. Besides, no new orders are being placed. Talking to The Tribune, Avtar Singh Bhogal from Bhogalsons said there were no new orders. Even the shipments which were ready for dispatch have been put on hold by the buyers for the time being. “It is the worst state of affairs in industry. Never in previous times was industry in this bad state, not even during the recessionary phase. We do not know when the things are going to improve. We were expecting the European/UAE countries to place new orders with Indian companies, but look at their own condition. They are the worst sufferers, busy saving the lives of their citizens. The malls, cinema halls, gyms, etc, have been shut in many states. These days people are not interested in buying anything except daily commodities,” said Bhogal. Expressing concern over this bad phase, SC Ralhan, former president of FIEO, said the Covid virus had spread all over. “But China, the worst affected country, is coming back to normalcy and people there have been asked to join back work. But now, the other countries are under the virus threat due to which none is placing new orders. Nobody wants to travel anywhere to buy products or place orders. The stock market has crashed. It seems the entire world has come to a standstill. It is a very bad phase for the industry. We are suffering huge losses and have no idea when the situation will improve,” said Ralhan. Sonu Nilibar, Secretary of Punjab Cloth Merchants Association, said this was a long-term slowdown of Punjab businesses (fashion/apparel industry) as these are primarily dependent on the NRI demand. “After 1995, the textile and fashion industry had witnessed the demand graph going up continuously. Even during the global recession of 2007-09, there was not much impact. We are a worried lot in the present situation,” said Nilibar.

Source: Tribune India

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Textile minister’s attention brought on merger of textile institute     

Coimbatore: CPIM MP, P R Natarajan, representing Coimbatore, Sunday urged union textile minister, Smriti Irani to take up the issue on demand of merger of Sardar Vallabhai Patel Institute of Textile Management here with Central University of Tamil Nadu Thiruvarur. In a letter to Smriti Irani, Natarajan said that the Institute has signed a MoU with the University, which is offering  B.Sc- Textile 2 years full time Post graduate Diploma in Management (PGDM) and MBA courses for various  streams  connected with the Textile Industry from 2016-17. The Institute administration had assured that it will be merged with the University which is promoting textiles related courses. After passing an exam, conducted by the varsity, the students get admission in the Institute, with the expectation that the fee structure will be reduced and the Degree certificate would be a merit for future employment opportunities. However, the issue of merger was not materialised as assured by the management and the students representative were not given an opportunity to meet the Textiles secretary to  know the status of merger. Despite aggrieved students boycotting the classes for two weeks to show their protest, the management was not ready to meet and clarify the position, but sent letters that the merger stood cancelled. The institute, which is having international standard of textile education is said to be closed and converted as an Advanced Textile Research Centre by stopping the present admission for UG/PG courses. With the future of existing students at stake as the certificates issued by the closed Institution would be treated as substandard college and it will not be useful for getting employments. As Textiles minsitry was very much interested in promoting the textile Industry through several programs and textile related studies, closing of the only college which is offering textile related courses in Tamil Nadu have no rationale, Natarajan said. Considering the seriousness of the issue, Natarajan brought the issue of merger to the attention of Smriti Irani, so that the existence of the Institute and research Centre would be mutually beneficial both for the Textile Industry and society in large.

Source: Covaipost

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Textiles Home Décor Are Taking the Industry by Storm: Here’s Why

Textile home décor industry is fast transforming into an “IT” industry. Once dominated by independent interior designers and big box retailers, the market for textile home décor has witnessed proliferation of a number of startups. Online crowdsourcing and affordable outsourcing are key trends catching on in the market, wherein online provisions of style boards & design ideas, and hiring designers at affordable costs have become convenient. These trends are primarily driven by the marketplace attributes such as new online business models, price transparency, and standardization. In a bid to help consumers in making effective decisions apropos purchases of home textiles, style profiling has gained utmost importance by articulating preferences and narrowing down scope of choices of consumers. Several entrepreneurs, aware of challenges involved in product marketing, are tailoring their merchandizing strategies to organize their products on the basis of theme, instead of category. The global textile home décor market involves a long supply chain, which in turn adds to cost of the final product. Therefore, companies are focusing on remodeling the supply chain and trimming the price tags, by working directly with manufacturers. Transparency Market Research, in its recent research report, has envisaged the global textile home décor market to register a splendid expansion during the period 2018 to 2027. Global sales of textiles home décor are projected to bring in revenues over US$ 185,000 Mn by 2027-end. Prevailing consumer confidence and broader economic trends directly impact demand for home décor textiles. With key economies across the globe making a steady recovery, a steady spike has been observed in consumer confidence over the past couple of years. According to Reserve Bank of India’s December 2017 round of Consumer Confidence Survey (CCS), Households’ current perceptions on the general economic situation improved and edged up towards the neutral level after five quarters of pessimism. According to OECD’s Consumer Confidence Index (CCI), consumer confidence has witnessed a steady growth in the last couple of years. In February 2018, the OECD CCI was at 101.10 (with long term average at 100), signifying a positive perception among consumers on the economy. Positive perception on the entire economy is traditionally linked with increasing activities pertaining to home refurbishment. Sustained period of greater consumer confidence can be a key future growth determinant for the global home décor textiles market. Demand for bed linen is expected to rise at a brisk pace across the globe, driven by a steady stream of opportunities emerging in both developing and developed markets. Sensing profitability of bed linen, key manufacturers are concentrating on consolidating their market position. For instance, Boutique Living, a bed linen brand by Indo Count Retail Ventures P. Ltd. (ICRVL) is planning to increase its focus on the bed linen segment. A key challenge for stakeholders in this segment is the highly fragmented presence of unorganized players. In a bid to counter the challenges from the unorganized sector, leading players are focusing on offering entry-level bed linens that are priced attractively. TMR’s report has profiled key participants supporting growth of the global home décor textiles market, which include Kurlon Ltd., Leggett & Platt Inc., Williams-Sonoma, Inc., Ashley Furniture Industries Ltd., Inter IKEA Systems B.V., Mohawk Industries, Inc., Berkshire Hathway Company, and Nitori Holdings Co. Ltd.

Source: Textile Focus

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Global Textile Raw Material Price 15-03-2020

Item

Price

Unit

Fluctuation

Date

PSF

871.71

USD/Ton

0%

3/15/2020

VSF

1365.35

USD/Ton

-0.10%

3/15/2020

ASF

2004.51

USD/Ton

0%

3/15/2020

Polyester    POY

888.83

USD/Ton

-0.64%

3/15/2020

Nylon    FDY

2068.72

USD/Ton

-0.68%

3/15/2020

40D    Spandex

4094.63

USD/Ton

0%

3/15/2020

Nylon    POY

1890.38

USD/Ton

-1.12%

3/15/2020

Acrylic    Top 3D

2182.85

USD/Ton

0%

3/15/2020

Polyester    FDY

1048.62

USD/Ton

0%

3/15/2020

Nylon    DTY

2339.79

USD/Ton

0%

3/15/2020

Viscose    Long Filament

5350.13

USD/Ton

0%

3/15/2020

Polyester    DTY

1162.76

USD/Ton

0%

3/15/2020

30S    Spun Rayon Yarn

1990.25

USD/Ton

-1.76%

3/15/2020

32S    Polyester Yarn

1569.37

USD/Ton

-2.65%

3/15/2020

45S    T/C Yarn

2361.19

USD/Ton

-1.19%

3/15/2020

40S    Rayon Yarn

2168.58

USD/Ton

0%

3/15/2020

T/R    Yarn 65/35 32S

1897.51

USD/Ton

-1.48%

3/15/2020

45S    Polyester Yarn

1726.31

USD/Ton

0%

3/15/2020

T/C    Yarn 65/35 32S

2239.92

USD/Ton

-1.26%

3/15/2020

10S    Denim Fabric

1.26

USD/Meter

0%

3/15/2020

32S    Twill Fabric

0.69

USD/Meter

0%

3/15/2020

40S    Combed Poplin

0.97

USD/Meter

0%

3/15/2020

30S    Rayon Fabric

0.53

USD/Meter

-0.80%

3/15/2020

45S    T/C Fabric

0.66

USD/Meter

-0.85%

3/15/2020

Source: Global Textiles

 

Note: The above prices are Chinese Price (1 CNY = 0.14267 USD dtd. 15/03/2020). 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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Coronavirus impact: Pak exports may dip by 25pc in March

ISLAMABAD: In a serious development, impact of the deadliest wave of coronavirus has forced buyers from the world in general and Europe in particular to send emails to Pakistani exporters, asking for immediate halt in shipping of consignments containing export products to them. "And against those consignments that have already been shipped to their destinations, the exporters will get export proceeds after six months' long time," say the essence of the emails from buyers. This will result in dip of exports by 25 percent in the current month and 50 percent next month and more importantly it will aggravate the cash flow situation for exporters. Till the disappearance of coronavirus’s deadliest spread, the halt of exports may continue in the mammoth damage to Pakistan’s economy. "This has been intimated by eminent exporters to commerce and textile ministry," a senior official confided to The News. "The halting of shipping of consignments for prepared products and late payments from buyers for the consignments that have already been shipped has caused the cash flow situation." Executive Director of All Pakistan Textile Mills Association (APTMA) Shahid Sattar, when contacted, confirmed the development saying that many exporters had received emails from buyers of European Union asking for halt of consignments of export products to them because of the spread of coronavirus and in the emails, buyers also intimidated the delay of amount against the consignments that have already been shipped to them. Under this new scenario, the exports of the country are feared to go down by 25 percent in the ongoing month of March and 50 percent in next month i.e. April. Sattar said that ports and docks of the main economies in the world are no more functional, which is why the buyers have asked Pakistani exporters to immediately halt shipping of consignments. To a question, he said that right now Pakistani exporters are flooded with orders and the industry is working in full swing, but exporters will not be able to exploit the situation because of halt of export on account of coronavirus. According to a senior official of the Commerce Ministry, currently trade between Pakistan and China is already on halt since the emergence of coronavirus in China in December 2019 and the government is working to seek compensation from Beijing for dip in exports to China.

Source: Pak News

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Pakistan: Special economic zones to increase exports to $1.5bn

ISLAMABAD: Special economic zones (SEZs) could help Pakistan enhance its exports to around $1-1.5 billion annually in the short run by ensuring effective planning, said an industry official on Sunday. “Investors from China, Turkey, Korea and Britain have pumped $1.10 billion into SEZs and they are bringing in more investors from their countries to invest in Pakistan,” stated Mian Kashif Ashfaq, chairman of the Faisalabad Industrial Estate Develop­ment and Management Company (FIEDMC). He said these investors expressed their eagerness to explore the possibility of investment in diverse sectors of Pakistan, especially ceramics, chemicals, steel, food processing and automobiles. He stated that the FIEDMC, which was a successful example of public-private partnership and first-ever state of the art SEZ, would ultimately prove to be an economic engine of the country through China-Pakistan Economic Corridor (CPEC) initiatives. Appreciating the economic vision of Prime Minister Imran Khan, he said the premier had directed the departments concerned to remove hurdles in the way of development of SEZs and establish them on a priority basis. Fortunately, he said, almost hundred per cent plots in M-3 Industrial Estate had already been sold out while hundreds of units had become operational and were playing their role in providing exportable surplus in addition to employing thousands of workers. Mian Kashif said the M-3 industrial city would house more than 400 people and units of textile, steel, pharmaceuticals, engineering, chemicals, food processing, plastic and agriculture app­liances would provide jobs to nearly 250,000 workers. He claimed that Faisal­abad was expecting to at­­tract Rs400bn local and foreign direct investments. “Faisalabad is strategically located in the heart of Pakistan and is flanked by two motorways passing from its eastern and western sides. This city has the unique privilege of contributing 60 per cent to textile exports and 45pc to total exports of the country,” he added. “Faisalabad is not only known for its iconic textile industries but also brimming with hundreds of small and medium enterprises manufacturing chemicals, steel and food processing products,” he said.“A good sign is several Chinese industries have started investing in SEZs in Pakistan perhaps because the production cost in China has increased and the country is probably benefiting from the ongoing US-China trade war,” he added.

Source: Dawn

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Automated textile sorting machine Fibersort launches

Recently, the Fibersort consortium presented the market ready Fibersort machine, a cutting-edge automated sorting technology that revolutionises textile to textile recycling of post-consumer textiles. Fibersort, a Near Infrared (NIR) based technology, is able to categorise textiles in 45 different fractions based on their fibre composition and colour. The accelerating consumption and disposal practices in fashion cause textiles entering the market to reach their end-of-use rapidly. In north-west Europe alone, around 4,700 kilo tonnes of post-consumer textile waste are generated every year, a small portion of the global mountain of textile waste. On average, only 30 per cent of these textiles are collected separately, the rest is lost within household waste. In the best-case scenario, these textiles are sold in the second-hand market both locally and internationally. The remaining textiles are considered non-rewearable textiles due to their unsuitability for the second-hand market or the market saturation that second-hand clothing is currently facing. Almost all of these textiles are currently being downcycled, incinerated or landfilled. Nevertheless, 24 per cent of the textiles collected have the potential to be recycled into new textiles, but currently are not. These textiles represent 486 kilo tonnes per year, the equivalent to the weight of 50 Eiffel towers! Automated sorting technologies could enable the industry to turn non-rewearable textiles that currently have no other destination than downcycling, landfill or incineration into valuable feedstock for textile-to-textile recycling. One of these technologies is Fibersort. Over the past years, the technology has been optimised, tested and validated to prepare it for commercialisation. The Fibersort is now able to sort 900 kgs of post-consumer textiles per hour. The success of the technology is highly dependent on the end-markets that help transform textile waste into new resources. The Fibersort project partners Circle Economy, Valvan Baling Systems, ReShare, Procotex, Worn Again Technologies and Smart Fibersorting have worked with industry stakeholders to better understand these end-markets, assess the potential of the sorted materials and validate the business case of automated sorting as a key enabler of textile-to-textile recycling. Results from these activities are available through project publications and Fibersorted materials are now commercially available for other organisations to test their potential for textile-to-textile recycling. There are clear opportunities to successfully integrate automated sorting technologies and recycled post-consumer textiles across the value chain. Over the past years, innovation has spurred across this sector of the industry. However, several challenges remain to ensure the long-term implementation of these technologies in relation to financial and technical feasibility as well as the opportunities to scale. Collectors, sorters, recyclers, manufacturers, brands and policymakers have both opportunities and responsibilities to address these challenges. On March 12, the Fibersort was in action at the Interreg NWE project's Final Symposium. During the day, the project partners hosted a visit to the updated machine, where current performance information was shared, welcoming feedback and insights from the industry to create lasting industry transformation. Parallel sessions were hosted in the afternoon, designed to discuss the experiences with post-consumer textiles so far, as well as the challenges that remain ahead in the spaces of collection, sorting, chemical and mechanical recycling as well as enabling policies and financial incentives to maintain and scale these practices. The Fibersort project is funded by Interreg North-West Europe (NEW). Interreg NWE is a European Territorial Cooperation Programme funded by the European Commission with the ambition to make the North-West Europe area a key economic player and an attractive place to work and live, with high levels of innovation, sustainability and cohesion.

Source: Fibre2fashion

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