The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 01 APRIL, 2020

NATIONAL

INTERNATIONAL

Foreign Trade Policy 2015-2020 extended for one year;Other immediate relief measures also announced

The Union Commerce and Industry Ministry today announced changes in the Foreign Trade Policy (FTP) of Government of India. The present Policy which came into force on 1st April, 2015, is for 5 years and has validity upto 31st March, 2020. In view of the unprecedented current situation arising out of the pandemic Novel COVID-19, the Govt. has decided to continue relief under various export promotion schemes by granting extension of the existing Foreign Trade Policy by another one year i.e. up to 31st March, 2021. Several other relief measures have also been announced to support trade and industry. Salient points of the changes made in the FTP are as follows:

  1. To provide continuity in the policy regime, the current FTP, valid till 31.03.2020 has been extended till 31.03.2021. Similar extension is made in the related procedures, by extending validity of Hand Book of Procedures.
  2. Benefit under all the Export Promotion Schemes (except SEIS) and other schemes, available as on date, will continue to be available for another 12 months.Decision on continuation of SEIS will be taken and notified subsequently.
  3. Similarly, validity period of the Status Holder Certificates is also extended. This will enable the Status Holders to continue to avail the specified facilities/benefits.
  4. Exemption from payment of IGST and Compensation Cess on the imports made under Advance/EPCG Authorisations and by EOUs etc. has been extended up to 31.03.2021.
  5. The scheme for providing “Transport Marketing Assistance on the specified Agricultural Products” is further extended for one year.
  6. Validity period for making imports undervarious duty free import authorizations (AA/DFIA/EPCG) expiring between 01.02.2020 and 31.07.2020,has been allowed automatic extension for another six months from the date of expiry, without requirement of obtaining such endorsement on these authorizations.
  7. Whereever the period to make export is expiring between 01.02.2020 and 31.07.2020 under various authorizations, automatic extension in the export obligation period is allowed for another six months from the date of expiry, without payment of any composition fee.
  8. Last dates for applying for various duty credit Scrips (MEIS/SEIS/ROSCTL) and other Authorisations have been extended.
  9. Time lines for imposing late cuts, on the applications which are filed after the prescribed dates, have been relaxed.
  10. Validity period of Letter of Permission/ Letter of Intent as granted to EOUs, units in STPs/EHTPs/BTPs is further extended up to 31st December, 2020.
  11. Last date of filing applications for refund of TED/Drawback, Transport and Marketing Assistance has been extended.
  12. Extension in time has been allowed for filing various Reports/Returns etc. under various provisions of the FTP.

Source: PIB

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Finance Ministry issues Taxation and other Laws (Relaxation of Certain Provisions) Ordinance, 2020 today

In order to give effect to the announcements made by the Union Finance Minister vide Press Release dated 24.03.2020, regarding several relief measures relating to statutory and regulatory compliance matters across sectors in view of COVID-19 outbreak, the govt has brought in an Ordinance on 31.03.2020 which provides for extension of various time limits under the Taxation and Benami Acts. It also provides for extension of time limits contained in the Rules or Notification which are prescribed/ issued under these Acts. It may be noted that the outbreak of Novel Corona Virus (COVID-19) across many countries of the world has caused immense loss to the lives of people, and accordingly, it has been termed as pandemic by the World Health Organisation and various Governments including Government of India. Social distancing has been unequivocally accepted to be the best way to contain its spread, leading to announcement of complete lockdown in the country. Keeping in view the challenges faced by taxpayers in meeting the compliance requirements under such conditions, the Union Finance Minister had announced several relief measures relating to statutory and regulatory compliance matters across sectors in view of COVID-19 outbreak on 24.03.2020 vide a press release.

Some of the important features and time limits which get extended by this Ordinance are as under:-

Direct Taxes & Benami:

  1. Extension of last date of filing of original as well as revised income-tax returns for the FY 2018-19 (AY 2019-20) to 30th June, 2020.
  2. Extension of Aadhaar-PAN linking date to 30th June, 2020.
  3. The date for making various investment/payment for claiming deduction under Chapter-VIA-B of IT Act which includes Section 80C (LIC, PPF, NSC etc.), 80D (Mediclaim), 80G (Donations), etc. has been extended to 30th June, 2020. Hence the investment/payment can be made up to 30.06.2020 for claiming the deduction under these sections for FY 2019-20.
  4. The date for making investment/construction/purchase for claiming roll over benefit/deduction in respect of capital gains under sections 54 to 54GB of the IT Act has also been extended to 30th June 2020. Therefore, the investment/ construction/ purchase made up to 30.06.2020 shall be eligible for claiming deduction from capital gains arising during FY 2019-20.
  5. The date for commencement of operation for the SEZ units for claiming deduction under deduction 10AA of the IT Act has also extended to 30.06.2020 for the units which received necessary approval by 31.03.2020.
  6. The date for passing of order or issuance of notice by the authorities under various direct taxes& Benami Law has also been extended to 30.06.2020.
  7. It has provided that reduced rate of interest of 9% shall be charged for non-payment of Income-tax (e.g. advance tax, TDS, TCS) Equalization Levy, Securities Transaction Tax (STT), Commodities Transaction Tax (CTT) which are due for payment from 20.03.2020 to 29.06.2020 if they are paid by 30.06.2020. Further, no penalty/ prosecution shall be initiated for these non-payments.
  8. Under Vivad se Vishwas Scheme, the date has also been extended up to 30.06.2020. Hence, declaration and payment under the Scheme can be made up to 30.06.2020 without additional payment.

Indirect Taxes:

  1. Last date of furnishing of the Central Excise returns due in March, April and May 2020 has been extended to 30th June,2020.
  2. Wherever the last date for filing of appeal, refund applications etc., under the Central Excise Act, 1944 and rules made thereunder is from 20th March 2020 to 29th June 2020, the same has been extended to30th June 2020.
  3. Wherever the last date for filing of appeal, refund applications etc., under the Customs Act, 1962 and rules made thereunder is from 20th March 2020 to 29th June 2020, the same has been extended to30th June 2020.
  4. Wherever the last date for filing of appeal etc., relating to Service Tax is from 20th March 2020 to 29th June 2020, the same has been extended to30th June 2020
  5. The date for making payment to avail of the benefit under Sabka Vishwas Legal Dispute Resolution Scheme 2019 has been extended to 30th June 2020 thus giving more time to taxpayers to get their disputes resolved.

In addition to the extension of time limits under the Taxation and Benami Acts as above, an enabling section has got inserted in the CGST Act, 2017 empowering the Government to extend due dates for various compliances inter-alia including statement of outward supplies, filing refund claims, filing appeals, etc. specified, prescribed or notified under the Act, on recommendations of the GST Council.

PM CARES FUND

4.    A special fund “Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES FUND)” has been set up for providing relief to the persons affected from the outbreak of Corona virus. The Ordinance also amended the provisions of the Income-tax Act to provide the same tax treatment to PM CARES Fund as available to Prime Minister National Relief Fund. Therefore, the donation made to the PM CARES Fund shall be eligible for 100% deduction under section 80G of the IT Act. Further, the limit on deduction of 10% of gross income shall also not be applicable for donation made to PM CARES Fund.

As the date for claiming deduction u/s 80G under IT Act has been extended up to 30.06.2020, the donation made up to 30.06.2020 shall also be eligible for deduction from income of FY 2019-20. Hence, any person including corporate paying concessional tax on income of FY 2020-21 under new regime can make donation to PM CARES Fund up to 30.06.2020 and can claim deduction u/s 80G against income of FY 2019-20 and shall also not lose his eligibility to pay tax in concessional taxation regime for income of FY 2020-21.  

Source : PIB

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Covid-19 impact: Tax and duty relief likely in package for industry

India is close to finalising a second economic relief package that may include tax concessions for industry sectors hit hard by the disruption due to Covid-19, particularly micro, small and medium enterprises (MSMEs), services and exports.The government has also initiated talks with the World Bank for an unprecedented package from the multilateral lender to speed up the creation of healthcare infrastructure that’s urgently needed besides support for some key economic sectors to tackle Covid19’s impact. “It is being worked out ... it will be announced shortly,” said a government official. Some of the steps that are being considered include a moratorium on select tax payments for some sectors, reduction in import and export duties, relaxation in payment of dues and fees and additional interest subvention for exports. Some Conditions may be Eased Conditions are also likely to be eased for performance-linked incentives for exports, said another government official. Exports, retail, consumer durables and most service sectors — aviation, hospitality, food, travel and tourism among others — have been hit by the 21-day lockdown that began on March 25. “This would be a targeted package for sectors most impacted... Discussions are going on between finance ministry and stakeholder ministries as also the Prime Minister’s Office,” said the official cited above. Finance minister Nirmala Sitharaman had announced a package worth Rs 1.7 lakh crore targeted at the poor and marginalised sections of society last week. The focus was on getting food and cash handouts to the needy and those who have no income to support themselves. The Reserve Bank of India (RBI) had unveiled several measures on Friday, including a repo rate cut of 75 basis points, a reduction of 100 basis points in the cash reserve ratio to free up liquidity and a three-month moratorium on loan repayments. The second economic relief package is aimed at making sure that the sectors worst hit by the lockdown are able to rebound quickly once the country reopens. Industry has called for a fiscal stimulus worth 1% of country’s GDP amounting to Rs 2 lakh crore to counter the economic impact of the Covid-19 outbreak. It has also sought the removal of long-term capital gains tax apart from incentives for the export sector. Most agencies have cut India’s growth forecast for FY21. Standard & Poor’s on Monday pared its growth estimate to 3.5% in the wake of the lockdown from 5.2% forecast earlier.

Source: Economic Times

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Centre of Excellence develops coverall suits

The PSG Tech Centre of Excellence for Industrial Textiles here has developed coverall suits that can be used by members of the healthcare sector who are involved in treating COVID-19 affected people. According to G. Thilagavathi, head of the department of textile technology department of PSG College of Technology, the fabric was tested at South India Textile Research Association (SITRA) and it had met the synthetic blood penetration test standards. The centre has non-woven fabric lamination machinery and the breathable membrane used in making infant beds was laminated at the centre for this project. The fabric was then tested at SITRA. It has been stitched into a coverall and the seams need to be tested too. The centre will test the seams and if these meet the standards, the coveralls can be stitched.“This fabric will not allow micro-organisms to penetrate. Some industries are also said to be getting into production of these coveralls here,” she said. The Centre of Excellence has the capacity to make nearly 5,000 metres of fabric a day and the stitching can be outsourced, she said. The centre worked on the fabric before the lockdown came into force and got the test result recently. The centre is also into making of masks.

Source: The Hindu

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Coronavirus pandemic: Maharashtra govt announces 8 per cent cut in electricity tariff for 5 years

The Maharashtra government on Monday announced an average of 8 per cent electricity tariff cut for the next five years to help businesses and people tide over the Covid-19 crisis. While the industry has been given the highest benefits, farmers will have to contend with a 1 per cent reduction in electricity costs, according to an official statement. It also added that all the revisions are for a period of five years.For the consumers served by private sector discoms Adani Energy and Tata Power in the financial capital, industrial units will have their power rates slashed by 18-20 per cent, commercial establishments by 19-20 per cent and residential ones by 10-11 per cent, it said. The Maharashtra Electricity Regulatory Commission (MERC) has approved a move to cut tariffs by an average of 7-8 per cent as part of the move, which is first such measure in the past 10-15 years, an official statement said. Maharashtra is the state with the largest number of corona virus cases, and the move comes amid a spate of measures being taken by governments and policymakers to push economic activity amid the pandemic. Industrial consumers in the state, excluding the capital Mumbai, will enjoy a tariff cut of 10-12 per cent, while residential ones will see their rates go down by 5-7 per cent, it said.In the financial capital, state-owned BEST's tariffs for industrial consumers will go down by 7-8 per cent, while the same for commercial establishments will be down 8- 9 per cent, it said adding that residential dwellings will have to make do with a 1-2 per cent reduction. MERC Chairman Anand Kulkarni said the announcement has been made after extensive consultations with all the stakeholders and also made it clear that the revised tariffs will not be limited to the next one year alone. The Commission has put up an in-built system through which the revisions will be applicable for five years, the official statement said. There will not be any burden on the state exchequer through this move, Kulkarni said, hoping that the electricity distribution companies will be more commercially prudent to supply power to consumers at the lower rates. Kulkarni also appealed people not to misuse power because it is available at lower rates.

Source: Times of India

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Corona virus lockdown: Govt may extend tax holiday, incentives for SEZs

Sunset clause under India's SEZ policy that provides generous tax benefits to SEZ units & developers, ends on March 31 Bogged down with the current coronavirus outbreak, the government is likely to extend tax-holiday and other incentives to Special Economic Zones (SEZs) under it's Sunset Clause policy, the window for which ends on March 31.After endless rounds of talks on the issue, domestic industry had accepted the end of the sunset clause but the government may allow the tax-free window to remain operational for some time to help companies battle the downturn emerging from the latest global pandemic. The clause promises 100 per cent Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for first 5 years, 50 per cent for next 5 years thereafter and 50 per cent of the ploughed back export profit for next 5 years, according to the SEZ India, an office under the Commerce Department. Duty free import/domestic procurement of goods for development, operation and maintenance of SEZ units, make up the other benefits, which have led to SEZs being the source of major foreign exchange earners like IT, engineering goods and textiles exports. The clause also assures the developers of SEZs, income tax exemption on income derived from the business of development of the SEZ in a block of 10 years in 15 years under Section 80-IAB of the Income Tax Act. With SEZs being home to the majority of Information Technology companies, industry body Nasscom had made a detailed petition to the government before the last budget to continue with the exemptions, and further expand them. Nasscom had pushed for retaining existing tax benefits under Section 10AA of Income Tax. It had also pitched for a concessional rate of 9 per cent Minimum Alternative Tax (MAT), and exemption from Dividend Distribution Tax (DDT).

Other benefits planned

The government is also expected to accept the demands, if latest deliberations on the issue just before the coronavirus outbreak took place, are to be considered. "To raise investments and boost exports from the SEZs nationwide, the government is considering removing MAT, reduction of duties on domestic sales and allowing job work, a senior Niti Aayog official said. At multiple inter-ministerial meetings, the Commerce Department has also repeatedly asked the revenue department to consider whether MAT can be removed from the export turnover from SEZs, sources said. The government had cut MAT to 15 per cent from 18.5 per cent last year, while also slashing the corporation tax rate to 22 per cent from 30 per cent. However, the Central Board of Direct Taxes also issued a detailed circular that MAT credit will not be available to a company that opts for lower corporation tax rate. As a result, SEZ developers have continued to push for an exemption from MAT, arguing that the provisions make SEZs an unfavorable investment sector. Case in point, of the 370 notified SEZs, only 234 are operational, according to official statistics. Some of the latest suggestions originated from the Baba Kalyani Committee on SEZs which also recommended promotion of MSME investments in SEZs by linking with MSME schemes and allowing alternate sectors to invest in sector specific SEZs. It had also batted for additional enablers and procedural relaxations as well as granting SEZs infrastructure status to improve their access to finance and enable long term borrowing. The commerce department has also pointed out that many SEZs are also operating at sub-par levels with the number of current units being much lower than the original target. On the other hand, Commerce and Industry Minister Piyush Goya last week informed Parliament that the Board of Approval on Special Economic Zones (SEZs) has approved 101 cases of de-notification between April 1, 2008 and February 29, 2020. The reasons given for these requests for de-notification include poor market response, lack of demand for space and change in the fiscal incentive regime for SEZs, he had said.

Source: Business Standard

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Gujarat lockdown: Surat dyeing, printing mill owners told to pay salary to all labourers in 3 days

Owners of dyeing and printing mills in Surat have been told to pay the salaries of labourers within three days so that they can survive during the lockdown period. Passes will be issued by the District Collector and police department to the factory owners and their accountants, to enable them reach the factories and make arrangements to pay the salaries. The decision was taken after a meeting held by Surat police commissioner RB Brahmabhatt and Surat District Collector Dr Dhaval Patel on Tuesday where members of South Gujarat Textile Processing Association (SGTPA) were also present. Surat police commissioner RB Brahmabhatt said, “We have given three days to the mill owners, from March 31 to April 2 to deposit salaries of the labourers in their bank accounts. We have also intimated the police team to allow the textile workers to go to their factories for salaries.” On Sunday night, the situation took a violent turn in Surat when police tried to stop about 500 textile factory workers – mostly migrants from Uttar Pradesh, Bihar, Madhya Pradesh and Chhattisgarh. When police stopped them near Sachin area, about 2 km from Pandesara, some of the workers reportedly started pelting stones. While nobody was injured, some police vehicles were damaged. Later, police resorted to a lathicharge and fired 30 teargas shells, pushing them back to Pandesara. Ninety-six workers were arrested for rioting and were released on bail on Monday. During investigation, it was revealed that the labourers were not given salaries and they had no money for food or rent. All the dyeing and printing mills owners were alerted about this at the meeting and around 600 passes were issued to the owners and accountants since Tuesday afternoon. Talking to The Indian Express, member and former president of SGTPA, Pramod Chaudhary, who owns four dyeing and printing mills in Surat, said, “There are 4,000 workers working in our factory and after getting pass from the District Collector and police, we started depositing the salaries of labourers in their bank accounts. After demonetisation and GST, we opened bank accounts for all labourers working in our factories. For the few labourers who don’t have bank accounts, we handed over cash to the contractors.” “After the arrest of 96 people, we came to know that these people didn’t have money for food. We provided morning tea with snacks and afternoon food for them on Monday. We also requested some NGOs to supply food in the labour colonies,” Brahmabhatt said. Police also made the labourers aware about the lockdown and asked them not to believe in rumours, the commisisoner said. “We told them to contact police if they face any problems with food or ration. We also explained to them about COVID-19 and how it is spread. These 96 labourers will now convince other labourers to stay at home,” he added.

Source: Indian Express

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136 million jobs at risk in post-corona India

On a Monday afternoon, a day before India announced a 21-day lockdown to flatten the curve of covid-19 infections, Sunil Gupta, chairman and managing director of Travel Bureau, a tour operator in Agra, sat alone in his office in Agra’s Fatehabad Road. More than 10 million tourists visited the Taj Mahal in 2019 but things have nosedived since February 2020. Gupta’s 145 employees are at home. His company’s 80 cars and 36 coaches are gathering dust. “There will be no tourists until September," Gupta said in a soft, resigned tone. “That means I have to keep paying salaries without income for six months." Travel Bureau is one of the larger travel agencies. While Gupta stressed he can afford paying salaries for six months, many other operators cannot. Already, there is talk of tour agencies in Agra asking employees to take a haircut. This is bad news for tour guides and drivers. That bridge to a “living wage", or a minimum wage plus tips, has fallen to pieces. The worst-case scenario is for employees who don’t have a regular salary. In the tourism industry, for instance, this category includes people who either work on short-term contracts or even without them. This includes guides, of course, but also employees of parking contractors, cleaners working in shops, waiters in restaurants, suppliers of vegetables, meat and flowers to the hotels among others. For these workers, the virus outbreak has meant a loss of livelihood. Industry body CII said that more than half of the tourism and hospitality industry can go sick with a possible loss of over 20 million jobs if recovery in the industry stretches beyond October 2020. The script is similar in many other services industries, in manufacturing and non-manufacturing sectors such as construction. Lower growth because of falling demand and supply constraints would not only make fresh job creation tougher, but also hurt those who are currently employed. Overall, about 136 million non-agricultural jobs are at immediate risk, estimates based on National Sample Survey (NSS) and Periodic Labour Force Surveys (PLFS) data suggested. These are people who don’t have a written contract and include casual labourers, those who work in non-registered nano businesses, registered small companies, and even the self employed. While the daily-wage earners are bearing the brunt in the first phase of retrenchments, companies across industries could pink-slip employees on short-term contracts next. Over five million Indians have job contracts less than a year in tenure.

Demographic disaster

The covid-19 epidemic comes at a difficult demographic time for India and would only exacerbate a looming jobs crisis. India needs to create nearly 10 million jobs every year to absorb people moving into the working-age population, besides those that are already unemployed. The Adecco Group India, a staffing company, has mapped the impact of covid-19 spread across employment in some Indian industries. It said about nine million jobs can be reduced across the manufacturing clusters of textiles, capital goods, cement, food products, metals, plastics, rubber and electronics. Manpower cuts in the automotive industry started last quarter owing to falling sales. The coronavirus situation will only exacerbate unemployment. Adecco estimated that the automobile industry can lose up to a million jobs in the dealer ecosystem, front-line roles, and the semi-skilled. Around 600,000 ground and support roles on contract in the aviation industry are at risk. Clearly, a labour market crunch right now can easily turn into a nightmare. Besides the possibility of social unrest, expect more demands for more reservations in government jobs.“The brunt of the economic impact will be borne by the economically disadvantaged," Sabina Dewan, the president and executive director of JustJobs Network, a think tank, said. “The implications of this crisis will be dire. We will inevitably have less fiscal space to make much-needed investments in, for example, education, skills, preventative healthcare, and infrastructure. This will not just prevent us from moving forward but will set us back. Our large and growing youth population will be further disenfranchised, potentially spurring social discord, crime, and instability," she added.

136 million at risk

Santosh Mehrotra, a human development economist and professor at the Centre for Informal Sector and Labour Studies in Jawaharlal Nehru University, pegs India’s labour force at 495 million. In 2017-18, about 30 million were unemployed, which implies that 465 million are currently employed. Who among the already employed are the most vulnerable? The easy answer is those that don’t have the security of employment; those without any social protection. They are often bracketed as “informal" workers. In a paper Mehrotra co-authored with Jajati K. Parida of the department of economic studies, Central University Punjab (India’s Employment Crisis: Rising Education Levels And Falling Non-agricultural Job Growth), the share of the informal sector was pegged at 90.7% overall and 83.5% in the non-farm sectors. Most estimates in the paper are based on NSS and PLFS data. Since there are 260 million people employed in India’s non-farm sector (agriculture employs another 205 million), the number of informal workers totals about 217 million across services, manufacturing and non manufacturing sectors. One shade of precarious employment among the informal cohort are those that have no written jobs contract. Numbers pieced together from the Mehrotra paper suggests that about 28 million have no written jobs contracts in manufacturing; 49 million in non-manufacturing; and 59 million in services in 2017-18. Overall, about 136 million workers in India, or over half the total workers employed in non-agricultural sectors, have no contracts and remain the most vulnerable in the aftermath of the corona outbreak. They can be fired without notice or severance. Most daily-wage earners or casual labourers fall in this bracket. Their pain is seen in Twitter and television feeds—videos of hundreds of migrant workers walking back to their villages are doing the rounds. Many of them work in construction. Employment in real estate construction, for example, is impacted because housing launches and sales are headed south given that lower economic growth is now a certainty.

Stuck cogs

Tiruppur’s textiles cluster in Tamil Nadu is a cradle of entrepreneurial activity and is a mix of organized and unorganized companies. A few sewing-machine operators often gang up to start a business. One could argue most of them remain uncompetitive and die, but that’s another story. One first generation entrepreneur who survived and thrived is Raja M. Shanmugham, partner at Warsaw International. The company makes T-shirts for German and Dutch brands. For the first time since he started the company in 1992, Shanmugham faces a black swan moment. All European markets are closed and the T-shirts he shipped haven’t been distributed to the stores. Many of his batches are stuck on the high seas. “The remaining batch of orders placed with us are on hold. I have taken a hit of ₹30 crore on bookings. We have also not received payments for the shipments made, another ₹10 crore," he said. Across the cluster in the city, ₹5,000 crore in payments remain unrealized from the buyers for shipments made in January and February. The orders on hold add up to another ₹2,500 crore. All this is bad news for employment. “Tiruppur has 1,500 exporting companies besides thousands of smaller supporting units. They employ six lakh. Most are daily wage labourers who earn up to ₹450 a day. Now, they are not employed," Shanmugham said. Like mentioned earlier, it is easy to fire workers without contracts when demand dips. Daily-wage earners, mostly, have no written contracts. Overall in India’s manufacturing sector, textiles and apparel employs nearly 18 million and falling demand now puts many jobs at risk.The manufacturing sector is stressed beyond textiles. Leather footwear exporters from Agra face similar predicaments. Footwear manufacturing in Agra predates the Taj Mahal by nearly two centuries—Agra has been making shoes since the 15th century, the Agra Footwear Manufacturers and Exporters Chamber claims on its website. Today, the city has 250 mechanised factories and another 5,000 cottage industries who can churn out half a million pairs a day. The cluster employs over 400,000 and half this workforce are daily-wage earners. With the dip in demand and eventual lockdown, they have no income. Over the past two months, more than ₹450 crore worth of export orders were cancelled by European brands, Chandra Sekhar, a merchant exporter from Agra, informed. Manufacturing, which employs 56.4 million people in India, is just one part of the story. The non-manufacturing sector, which includes construction, mining, electricity, water and gas engages another 59 million. But India’s largest employer by far is services with an estimated 144.4 million workers.

The services rout

On a good day, marigolds, lilies, roses, orchids, gerberas, irises, and anthuriums from India and all over the world land up at the flower trading market in Ghazipur, Delhi. Traders buy the flowers from growers and sell it to hotels, corporates, event organizers, government offices and smaller florists. Flower trade is an allied industry to both tourism and the events business. “Everyday, we did sales of about ₹50,000-60,000 a day. I have five employees," Sanjay Agarwal, a flower trader in the market, said. With trade shut, all employees in the market, mostly daily-wage earners, don’t know how to put bread on the table. Worse, the Hindu marriage season, the biggest propeller for flower trade, can get pushed out. “The marriage season starts around 15 April. There is no way marriages could be held now," Agarwal said. Besides marriages, artistic festivals have been a casualty as well. Sanjoy Roy, managing director of production house Teamwork Arts, is the producer of the Jaipur Literature Festival held in January. “We got past Jaipur. But we had to postpone festivals in Hong Kong, Singapore, Turkey, Morocco and India. In February, we lost ₹15 crore from the festivals we postponed," he said. If people don’t have food on the table, they are not going to see a show. This, by extension, is bad news for anyone in the creative industry, which includes a vast array of freelance artists. “It could wipe out ₹40,000 crore over the next two months in the events and the entertainment industry," Roy calculated. The implications for employment? “The industry employs 10 million between direct and indirect. There are lighting people, infrastructure companies that provide tents, flower traders— 80% of those employed could go under," he said. Meanwhile, the retail trade, which employs over 37 million—the largest employer in the services sector—will face job losses as well, particularly in the non-essential segments. With malls and stores closed, the front-end staff have little to do. Akhil Jain is an executive director at Jain Amar, a vertically-integrated textiles firm with manufacturing plants in Ludhiana and 47 operated stores in north, central and western India. The company sells casual wear for women under the brand Madame, employing 750 people in retail. Jain said he would hold on to these people till 15 April. If the lockdown continues beyond this date, the industry would have little option but to ask people to leave. Many brands are, therefore, trying to negotiate with malls to waive off rentals for a few months. The bigger question is demand. Brands are grappling to understand the psychological impact of the lockdown. Isolation can lead to anxiety. “When would consumers feel good about buying a nice bag, and go out in the evening? We are discretionary spending. That’s the bigger issue," Dilip Kapur, founder and chairperson of leather bag-maker Hidesign, wondered. Kapur is locked down, in his home in Auroville, outside Puducherry, with books and two Rhodesian Ridgebacks. “This is clearly something we have not faced since World War II. Any illusion that this will resolve itself within a month is going to land us in trouble. How the businesses have to reorient themselves to survive is not clear," he said.

Source: Live Mint

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Relaxations in time line for compliance under ECGC scheme due to COVID 19

For Exporter

1. ECGC has extended time limit up to 31.5.2020 for all returns, extension requests, default notification, etc to Policyholders.

2. Time for filing claim, reply to claim queries, representations is extended up to June 2020.

3. Specific Shipment Policy expiring in March 2020 is extended automatically up to June 2020.

For Bank

1. With regard to time limit for filing of extension in due date for the advances which have crossed 360 days under PC and 180 days under PS advances (360 days for status holders) and filing of Report of default under the ECIB covers will be available upto May 2020.

2. Extension in time for filing of monthly declaration for the month of March 2020, has been extended upto May, 2020 ( available for all the exporters and banks). However, please note that the extension of time is not applicable for payment of premium, as it can be made through digital mode viz, RTGS/ NEFT etc. The premium can be paid on the basis of estimation also, when actual premium payable is not workable.

ECGC took additional measures like

1. Waiver of Credit Limit Application fee till 30th June, 2020.

2. 50% reduction in policy proposal fee for policies due to renewal/issue from 1st March,2020 to till 30th June 2020.

3. Discretion to exporters:

(a) to extend due date for payment by buyers for shipments accepted earlier. (b) to decide about resale / reimport / or abandonment for the shipments that reached destination but not cleared by overseas buyers due to lockdown in the destination countries.

4. Reduced Claim eligibility period (waiting period) from the present 4 months to 1 month.

Source: ECGC

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Domestic apparel industry could take a hit of Rs 1 lakh crore due to lockdown: CMAI survey

Deeply concerned by the economic impact due to the lock down in the country caused by COVID-19 the Clothing Manufacturers Association of India (CMAI) conducted a survey amongst its members to get a sense of how the members were facing up to the current circumstances and how they were forecasting the period after lock-down is lifted. An analysis of the first 1500 responses, indicates the significant crisis is brewing in the domestic garment industry. Only a comprehensive support package from government can cushion the potential collapse of the Industry. Several important measures have been announced by the Government, but it is clear that the industry, especially its MSME members which constitute 90% of the industry, needs more support. Wage subsidy and working capital support for the long working capital cycle is the need of the hour. 1500 plus CMAI Members with sales of about Rs. 60,000 crores and employing 400,000 plus people, have reported that there could be more than 40% drop in demand after the lockdown. Based on this, CMAI which has close to 4000 members primarily in the Domestic Branded Apparel Manufacturing, believes that the Domestic Apparel Industry could take a hit of almost Rs 1 lakh crore due to the lock down and the expected significant slow down in economic growth once the lock down is lifted. The estimated drop in sales would mean that almost 50 lacs jobs in the Apparel Industry are at risk. With a global slow down, and the cascading effect on other sectors of the Textile Industry, almost 1 crores job may be lost in Textiles & Apparels alone. 80% of the members who participated in the survey have indicated that they will need to down-size their organisation immediately. A minimum 30% reduction in employee count and about 20% reduction in salaries for all continuing employees is the action that CMAI Members are likely to take to ensure survival after the lock down is lifted. 90% of the members expect 30-40% increase inventory due to Zero sales during the lock down. Further 100% of members are worried of collection from trade post the lock down. 25% of the collections may become bad-debts and members expected a minimum 90 days additional delay in collections. The choking of working capital, will lead to a delay in reviving factories and thus 75% of the members expect normalcy in the market only in FY 2021-22. 20% of the members, have indicated that they may consider closing down their business, as they will not have the required additional resources to pay for costs during lock down and the inevitable slowdown in the economy.  CMAI, has appealed to Hon Prime Minister, Ministry of Textile, Government of India, Finance Ministry, Government of India and various State Government to provide support to the Domestic Apparel Manufacturers to overcome the impact of lock-down and reduce the potential job loss.

Source: Economic Times

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India- Garment sector MSMEs fear more drop in demand, says CMAI survey

New Delhi, Mar 31 (KNN) Despite several measures announced by the government, domestic garment industry, especially its Micro Small and Medium Enterprises (MSME) fear more drop in demand, said the Clothing Manufacturers Association of India (CMAI) in its survey. CMAI conducted a survey amongst its members to get a sense of how the Members were facing up to the current circumstances and how they were forecasting the period after lock-down is lifted. As per the survey, demand in apparels may shrink by almost 40 per cent in 2020. 'Over 1500 CMAI members with sales of about Rs. 60,000 crores and employing 400,000 plus people, have reported that there could be more than 40 percent drop in demand after the lock down. Based on this, CMAI which has close to 4000 members primarily in the Domestic Branded Apparel Manufacturing, believes that the Domestic Apparel Industry could take a hit of almost 1 lac crores due to the lock down and the expected significant slowdown in economic growth once the lock down is lifted,' said the survey. CMAI in its survey also mentioned that only a comprehensive support package from Government can cushion the potential collapse of the Industry.'Wage subsidy and Working capital support for the long working capital cycle is the need of the hour,' CMAI added. The survey further indicates that there could be job losses upto 1 crore. 'The estimated drop in sales would mean that almost 50 lacs jobs in the Apparel Industry are at risk. With a global slow down, and the cascading effect on other sectors of the Textile Industry, almost 1 crores job may be lost in Textiles and Apparels alone,' survey added.vEventually, the clothing body, appealed to government to consider the following in order to deal with the current scenario.

(1) 50 percent Wage Subsidy up to Rs. 5,000/- per month for 5 months from March 2020 to July 2020

(2) PF and ESIC Contribution of Employer and Employee to be done by Government for 3 months (March to May 2020) for employee drawing wage not more than Rs. 15,000 with no cap on number of employees in the company.

(3) All Banks to offer Interest Subvention of 5% on total borrowings.

(4) 25 per cent additional Working Capital to be made available on a Mandatory Basis (not to the option of the Bank), subject to available Drawing Power on revised norms.

(5) While RBI has already allowed 3 months Moratorium on Terms Loans and Working Capital Loans, considering the long working capital cycle, this needs to be extended to 6 months. Further, Purchase Bills Discounting and Letter of Credits dues must also be given the 90 days Moratorium.

Source: Menafn

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Virus war and the textiles sector

Advanced textiles to apparel manufacturers are turning to their creative ways to support the fight against the invisible enemy. As the coronavirus is a novel strain, vaccines and medications are not yet readily available to treat the infected, good hygiene practices will play a greater part in preventing its transmission.

coronavirus-war-textiles-sector

The textiles sector has received greater attention from governments to work on a wartime footing and deliver important items such as face masks, nose shields, personnel protective equipment and wipes. Major manufacturers like Nike, Apple to small business entities like Chantilly-based First Line Technology, LLC have geared up their efforts to deliver preventive countermeasures. Creativity has become the name of the game. Apparel industries are repurposing their regular lines to create masks. Hanes Company has come-up with a 3-ply cotton structure that can be used as masks. 3M Company has doubled its global production of N-95 respirators to 1.1 billion, with a monthly production of 100 million. Covid-19, the disease due to the new coronavirus is highly transmittable and is spread by air droplets and through bodily fluids containing the virus. However, porous structures like textiles seem to be better to contain than hard surfaces. Experts say the virus can stay on the surface like textiles for 24-72 hours, but they get absorbed into the structure, which is important for containment. So single use-wipes and protective materials will be ideal, however, there is an acute shortage of these critical needs. Dry and wet wipes could help to decontaminate the surfaces. Dry wipes like FiberTectTM can play its part as a countermeasures tool. “It is widely used as the primary dry decontamination method in hospitals and ambulances,” said Corey Collins, a training specialist for First Line Technology, which markets FiberTectTM. “Hospitals use it in bulk and rolls, and ambulances use it in a kit called the FastGrab to do immediate decontamination of patients contaminated with a wide variety of substances,” Collins added. University laboratories are also contributing to the great cause and are using their 3-D printing capabilities and machine tool laboratories to develop face masks and face shields. Additionally, they are providing available supplies from their laboratories such as gloves and face masks to the front-line defenders. “For those who have PPE in a laboratory, specifically disposable gloves and N-95 face masks, we want to appeal for you to donate these materials to a campus-wide repository we can use to help resupply healthcare providers,” stated Joseph Heppert, Texas Tech University’s Vice President for Research and Innovation in an e-mail to TTU campus community. The textile sector needs to be collaborative at this critical juncture and use its ingenuity in coming up with supplies that are needed to save lives. Texsnips’ editor wishes safety and good health to all, as we collectively work to find immediate solutions to counter the virus pandemic. Our heartfelt thanks to all those who are at the front lines in saving lives.

Source: Textile Today

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Global Textile Raw Material Price 2020-04-01

Item

Price

Unit

Fluctuation

Date

PSF

782.61

USD/Ton

0%

01-04-2020

VSF

1286.01

USD/Ton

-0.33%

01-04-2020

ASF

1897.29

USD/Ton

0%

01-04-2020

Polyester    POY

669.80

USD/Ton

-3.75%

01-04-2020

Nylon    FDY

1833.13

USD/Ton

-0.76%

01-04-2020

40D    Spandex

4018.79

USD/Ton

0%

01-04-2020

Nylon    POY

817.86

USD/Ton

-5.69%

01-04-2020

Acrylic    Top 3D

2086.95

USD/Ton

-0.67%

01-04-2020

Polyester    FDY

5217.37

USD/Ton

0%

01-04-2020

Nylon    DTY

972.97

USD/Ton

-2.13%

01-04-2020

Viscose    Long Filament

1678.02

USD/Ton

-1.24%

01-04-2020

Polyester    DTY

2171.55

USD/Ton

0%

01-04-2020

30S    Spun Rayon Yarn

1889.53

USD/Ton

-0.37%

01-04-2020

32S Polyester    Yarn

1438.30

USD/Ton

-4.67%

01-04-2020

45S    T/C Yarn

2227.96

USD/Ton

-1.25%

01-04-2020

40S    Rayon Yarn

1621.62

USD/Ton

-1.71%

01-04-2020

T/R    Yarn 65/35 32S

2101.05

USD/Ton

-0.67%

01-04-2020

45S    Polyester Yarn

2044.65

USD/Ton

-0.68%

01-04-2020

T/C    Yarn 65/35 32S

1833.13

USD/Ton

-0.38%

01-04-2020

10S    Denim Fabric

1.20

USD/Meter

-0.47%

01-04-2020

32S    Twill Fabric

0.66

USD/Meter

-0.21%

01-04-2020

40S    Combed Poplin

0.94

USD/Meter

-0.15%

01-04-2020

30S    Rayon Fabric

0.51

USD/Meter

-0.28%

01-04-2020

45S    T/C Fabric

0.65

USD/Meter

-0.43%

01-04-2020

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14101USD dtd. 01/04/2020). 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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U.S. Retail Crisis Deepens as Hundreds of Thousands Lose Work

Macy’s and Gap said on Monday that they planned to furlough much of their work forces, a stark sign of how devastating the coronavirus will be for major retailers and their workers who sell clothing, accessories and other discretionary goods. Macy’s, which said the cuts would affect the “majority” of its 125,000 workers, lost most of its sales after the pandemic forced it to close stores. Gap, which also owns Old Navy and Banana Republic, said it would furlough nearly 80,000 store employees in the United States and Canada. The announcements followed similar actions by other name-brand chains with products considered nonessential. When a national emergency was declared earlier this month, a number of retailers announced stores would close but vowed to keep offering pay and benefits to employees for at least two weeks. As the odds of reopening stores quickly became increasingly unlikely, many extended workers’ pay into April. But now, it appears the money is drying up. A large part of the retail industry that is not involved in selling groceries, toilet paper or disinfectant simply has very little cash coming in. L Brands, which owns Victoria’s Secret and Bath & Body Works, said it would furlough most store staff and “those who are not currently working to support the online businesses or who cannot work from home” starting April 5. Nordstrom said last week that it would furlough “a portion of corporate employees” on April 5 for six weeks. Buzzy start-ups are also under pressure: Rent the Runway laid off its retail employees through a call via Zoom on Friday, while Everlane laid off or furloughed nearly 300 of its workers. The number of workers affected is significant. L Brands has 94,400 employees, according to the company’s most recent annual filing. Ascena Retail, which owns Ann Taylor and Lane Bryant, said on Monday that it was furloughing all its store employees and half its corporate workers, which amounts to about 90 percent of the company’s 43,000 employees. Kohl’s, which employed an average of 122,000 associates in 2019, said on Monday that it would furlough about 85,000 of them. Guitar Center also said that it was furloughing 9,000 store employees. “Analysts have feared that if these kinds of sales declines we’re seeing now persist, retailers are going to have to take very significant action, including the type of thing we’re seeing today just to make it through the situation,” Jay Sole, a retail analyst at UBS, said. “I think we’ll see a lot of retailers follow suit.” Many apparel and accessories retailers were already under pressure before the global pandemic. E-commerce has upended shopping habits and the gap between America’s most popular and least favored malls has continued to widen. Bankruptcies last year included big names like Forever 21, Barneys New York, Payless ShoeSource and Charlotte Russe. Chains like Pier 1 and Modell’s Sporting Goods filed for bankruptcy this year. “This only makes what is a tough situation even tougher,” Mr. Sole said, adding that labor costs are often a retailer’s biggest expense. Cutting largely part-time, nonunion workers may be the easiest cost-saving move for retailers. And by furloughing employees, instead of laying them off, the retailers could potentially speed up the return to business because, in theory, they would not have to hire a new staff. Of course, many workers, in need of jobs and unable to survive on unemployment benefits, will look to find other jobs over the next few months. As department stores and apparel sellers are shedding employees, retailers focused on food and households staples like Walmart, CVS, Kroger have said they plan to hire hundreds of thousands of additional workers to keep up with the demand for essential goods. “The strong retailers are getting stronger, and the least strong are going to lose,’’ said Craig Johnson, president of Customer Growth Partners, a retail research and consulting firm. But not every furloughed employee will be able to find a new position somewhere else, adding to the broader financial strain felt by many Americans.The cuts were not limited to store employees. Gap, for example, said that it planned to reduce the number of its corporate employees around the world.  Employees in jobs that support online sales, including call center positions and distribution center roles, were largely spared from the furloughs. A Kohl’s representative said that many of its locations would continue to ship products from stores and offer curbside pickup. Kohl’s noted it had provided two weeks of pay to store and store distribution center associates and said that it would “continue to provide existing health benefits to furloughed associates at this time, and those impacted may benefit from the recently passed coronavirus stimulus legislation.” Retailers stressed that they had already made other cost cuts before turning to their workers. Macy’s said it has decided to scale back to “the absolute minimum work force needed to maintain basic operations” after first taking actions including drawing down its credit line, suspending its dividend and halting capital spending. Furloughed staff receiving health benefits would retain coverage through May, the company said, adding that it would cover all of the premium costs. A representative for the union representing Macy’s workers in New York City said that relatively few workers nationally use the company’s health benefits because the plan is costly. L Brands, which is in the process of selling Victoria’s Secret in a deal that is expected to close in the second quarter, had previously suspended its dividend and drew $950 million from its revolving credit line. The layoffs and furlough announcements are likely to continue, as many retailers owe rent payments on Wednesday. Many companies are desperately trying to conserve cash as they max out their credit lines and encounter landlords who are taking a hard line on payments. Last week, Taubman, a large owner of shopping malls, sent a letter to its tenants saying that the company expected them to keep paying their rent amid the crisis. Taubman, which oversees well-known properties like the Mall at Short Hills in New Jersey, reminded its tenants that it also had obligations to meet, and was counting on the rent to pay lenders and utilities. “People are making choices and it is all tied to financial survival,” said Kenneth S. Lamy, founder and chief executive of the Lamy Group, a consultant to retail landlords. Venture-backed start-ups that have promised new retail models have not been immune to the challenges that the industryy is facing. Everlane, the apparel start-up known for its transparency regarding where and how its clothing is made, said on Friday that it laid off 222 employees who worked in customer experience and part-time in retail, and furloughed 68 full-time retail employees. It offered two weeks of severance. A representative for Rent the Runway did not specify how many employees were affected by its “retail role eliminations.” The start-up, which lists four stores on its website and a location at a West Elm store, said it was aiming for a seamless transition with “compensation, severance and continuation of health insurance coverage.”

Source: New York Times

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Pakistan: Trade officers to work on export order cancellations

Textile exporters are not impressed with the commerce ministry’s offer to use the offices of Pakistan’s trade officers posted in embassies to help dissuade foreign buyers from cancelling their orders. The offer was made by Commerce Secretary Ahmed Nawaz Sukhera in a tweet on Monday. In response to that, trade officers from Pakistani missions in New York and The Hague tweeted their phone numbers and email addresses, inviting exporters to get in touch. According to some associations of textile exporters, close to $1.3 billion worth of orders from foreign buyers have either been cancelled or postponed. They argue that governments of their competitor countries have issued appeals to these foreign buyers from the highest levels, such as the prime minister and feel that trade officers in the embassies wield little to no clout to be able to change the minds of giant corporations. Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Chief Coordinator Ijaz A Khokhar says the message needs to be sent from the highest level, perhaps even the prime minister. He said in India and Bangladesh appeals have been made to world buyers for not cancelling or deferring orders because it will affect the workers and would send more people below the poverty line. “The Indian textile minister posted a very strong message for the world buyers, such messages should go from our prime minister and commerce adviser,” commented Khokhar. Regaining these orders is not an easy job, he points out, and the office of a commercial councillor does not possess the requisite clout. Patron-in-Chief of Pakistan Textile Exporters Association Khurrum Mukhtar told Dawn that “there is no harm in making efforts in this regard”. Order deferment or cancellation is happening in those stores which have closed down their operations in the wake of coronavirus outbreak, Mukhtar said. They include retailers like Inditex group, JCPenney, Macys, H&M, Kohls, Bed bath and beyond, Nike, Peacock, American eagle and IKEA. In addition, buyers from the hoteling business have also deferred their imports from Pakistan. Airlines and the hotel industry are the prime victims of the coronavirus outbreak across the world.

Source: The Dawn

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S African textile workers to get full wages for lockdown

The Southern African Clothing & Textile Workers’ Union (SACTWU) recently concluded the country's 2nd national sectoral ‘COVID-19 Lockdown National Collective Agreement’. The agreement guarantees full wage payment to textile workers covered by the scope of the National Textile Bargaining Council (NTBC) during the ongoing COVID-19 lockdown period. SACTWU is affiliated to the Congress of South African Trade Unions These payments will be made up of a combination of workers' Unemployment Insurance Fund (UIF) amounts plus a cash contribution from textile employers.This agreement was also formally adopted by the council. SACTWU, which had signed a similar agreement for apparel industry workers recently, claimed it now achieved full wage protection coverage for about 79 per cent of all its members for the lockdown period. However, talks to conclude a similar agreement under the auspices of the Leather Bargaining Council collapsed as footwear and leather employers were not prepared to make a cash contribution to their workers' lost wages during this crisis, SACTWU said in a press release. Instead, footwear and leather employers have proposed that the burden must be further carried by workers, by reducing their annual leave and public holiday payment entitlements, or cajoling workers into such arrangements at plant level, it said. SACTWU has rejected their proposals.

Source: Fibre2Fashion

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