India will pull out of a three-week lockdown in phases, Prime Minister Narendra Modi said on Thursday, as officials battle to contain the country’s biggest cluster of coronavirus infections in the capital, New Delhi. The shutdown, which has brought Asia’s third-largest economy to a shuddering halt, had been due to end on April 14. Modi ordered India’s 1.3 billion people indoors to avert a massive outbreak of coronavirus infections, but the world’s biggest shutdown has left millions without jobs and forced migrant workers to flee to their villages for food and shelter. He told state chief ministers that the shutdown had helped limit infections but that the situation remained far from satisfactory around the world and there could be a second wave. “Prime minister said that it is important to formulate a common exit strategy to ensure staggered re-emergence of the population once lockdown ends,” the government quoted him as saying in a video conference. India has had 2,069 confirmed infections, of whom 53 have died, low figures by comparison with the United States, China, Italy and Spain. But the big worry is the emergence of a cluster in Delhi because of a gathering held by a Muslim missionary group last month that has spawned dozens of cases across the country, officials said. Thousands of people visited the headquarters of the Tablighi Jamaat in a cramped corner of Delhi over several days in March, including delegates from Muslim-majority countries Indonesia, Malaysia and Bangladesh. About 9,000 people linked to the Tablighi have been tracked down including 1,300 foreigners and transferred to either quarantine centres or hospitals, a top official said. These people had either attended prayers and lectures at the Tablighi’s headquarters in the densely packed neighbourhood or came into contact with them later. “This has emerged as a critical node in our fight against the coronavirus,” the official leading the operation to trace potential virus carriers told Reuters. He spoke on condition of anonymity as he was not authorised to speak to the media. The Tablighi is one of the world’s largest proselytising groups, drawing followers from the South Asian Deobandi branch of Sunni Islam. Its leader, Maulana Saad Kandhalvi, issued an audio message to his followers asking them to cooperate with the government to fight the disease. “We have to take precautions, follow the guidance of the doctors and give full support to the government such as not crowding into places,” he said. “This is not against the principles of Islam.” Muslims make up about 14% of India’s 1.3 billion population, the largest Muslim minority in the world.Health experts have warned that the death toll could surge across South Asia, home to a fifth of the world’s population and with weak public health systems. Bangladesh, home to about 160 million people, has extended a lockdown that was initially intended to last 10 days by a week, so it will last till April 11, the Public Administration Ministry said in a statement. Pharmaceuticals and export-oriented factories such as the garments industry, which account for over 80 percent of overseas shipments, can keep running, the ministry said. “If the garment factory owners want, they can run their factories following proper health guidelines,” Commerce Minister Tipu Munshi said. The economic fallout of lockdowns is already starting to show. On Thursday, Moody’s Investor Service said it expects Pakistan’s GDP growth to fall from its earlier forecast 2.9% to 2.0-2.5% for fiscal 2020. “Consumption of services, which has underpinned growth in recent years, will be adversely affected by the movement restrictions,” a Moody’s Investors Service Credit Outlook article said. Sri Lanka’s central bank asked Sri Lankans overseas to deposit their foreign currency holdings in Sri Lankan banks to help the country tide over the economic pain. The island nation’s key export earners, including tourism, textiles and garments and worker remittances, have ground to a halt. Sri Lanka’s election commission on Thursday also asked the president to seek a Supreme Court ruling on a date for parliamentary elections, which were to be held on April 25 but were recently delayed. Following is data on the spread of the coronavirus in South Asia, according to government figures:
* Pakistan has registered 2,386 cases, including 32 deaths.
* India has registered 2,069 cases, including 53 deaths.
* Sri Lanka has registered 151 cases, including three deaths.
* Afghanistan has registered 259 cases, including four deaths.
* Bangladesh has registered 56 cases, including six deaths.
* Maldives has registered 31 cases and no deaths.
* Nepal has registered six cases and no deaths.
* Bhutan has registered five cases and no deaths
Source: Reuters
Minister of Shipping (I/C) Shri Mansukh Mandaviya today held a meeting through Video Conference with the stakeholders of Ports including Port users, Courier and Cargo Services, Representatives of the Custom Brokers Associations from the various parts of the country, Logistic service providers and others to assess the challenges and concerns caused due to COVID-19 and lockdown in the country on the Port Operations. The meeting was also attended by the Officers of the Ministry of Shipping and Chairpersons of all Major Ports. Shri Mansukh Mandaviya sought support of all the stakeholders in this unprecedented crisis. He called for collaborative efforts for converting this Crisis into Opportunity for the Ports and Port operation so that the supply chain of the country can run smoothly. Shri Mandaviya welcomed suggestions for the decongesting ports, management, welfare and safety of workers and other challenges faced by the ports and its stakeholders. Shri Mandaviya stressed upon the usage of state-of-the-art technology in the port operation and container management to manage the future challenges caused by COVID-19 pandemic. The representatives raised the concerns, ranging from high Port operation cost, stuck up cargo, port congestion, shortage of labourers, movement of workers and truck drivers, managing supply chain and other difficulties due to lockdown.
Source: PIB
The Nikkei India Manufacturing Purchasing Managers' Index (PMI) stood at 51.8 in March, after February's 54.5 - much below the eight-year high of 55.3 in January. Growth in the manufacturing sector fell to a four-month low in March, with export orders crashing and domestic demand rising marginally, said a monthly survey released on Wednesday. The Nikkei India Manufacturing Purchasing Managers’ Index (PMI) stood at 51.8 in March, after February’s 54.5 — much below the eight-year high of 55.3 in January. In PMI parlance, a figure above 50 means expansion, while a score below that denotes contraction. The beleaguered sector had last contracted in October, when the index fell to a two-year low of 50.6. However, official data shows contraction has remained entrenched in the sector. Experts say the 21-day lockdown and its impact on business could be a storm too strong for the sector to weather in April. India’s overall industrial production rose 2 per cent in January. However, some economists see an increase in core sector output as a sign of comeback in terms of factory output. Core sector industries expanded 5.5 per cent in February, up from 1.4 per cent in January. However, this was before the lockdown started. According to the PMI, manufacturing production in March increased at a much more subtle pace than February, as companies struggled to manage the fallout of order cancellations and unfavourable market conditions. “The Indian manufacturing sector remained relatively sheltered from the negative impact of the global coronavirus outbreak in March. However, there were pockets of disruption and a clear onset of fear among firms,” said Pollyanna de Lima, principal economist at IHS Markit. The data for March showed that exports contributed to the expansion in total sales. However, new orders rose at a much lower pace, given the logistical challenges global procurers had to deal with. However, foreign orders expanded for the 29th month in a row, according to the survey. As of end-2019, manufacturers started catering to overseas demand again, to make up for the lax domestic demand. However, subdued sentiment because of the virus outbreak has restricted hiring. Hiring growth has been weakest in the last four months. In November, the survey had noted massive lay-offs. Signs of supply-side disruption also crept into the manufacturing sector in March, with vendor performance deteriorating for the first time since October. Anecdotal evidence pointed to the delays being caused by shortages at some suppliers. However, the overall lengthening in average lead time was marginal. While average cost burdens increased for the fifth straight month, inflation was moderate — one that was negligible by historical standards. Input goods like chemicals, food, metals, paper, plastics and textiles — mostly from China — continued to get costlier as Chinese factories started reopening only towards the end of March. On the other hand, charge inflation continued to rise, but also moderated as compared to February. Higher output prices have been a trend in the manufacturing PMI survey for over a year, it noted. Business sentiment remained under pressure, due to uncertainty over recovery in domestic demand. Positivity hit its joint-weakest level since the PMI series’ inception in April 2012 (alongside April 2015), Markit Economics believes. It has warned of grave times ahead. “Should the trajectory of injections continue in the same vein, the Indian manufacturing sector can expect a much sharper negative impact in the coming months,” said Lima, author of the report.
Source: Business Standard
Exporters have sought that they be allowed to restart operations with 50% staff, in order to help pay wages, prevent migrant labourers from returning to their hometowns and stop loss of market share to China. The petition to the government by exporters’ associations comes amid a 21-day nationwide lockdown. “Exporting units should be allowed to start operations with 50% labour force as it will help in paying wages, maintain social distance at their residence and above all, prevent loss of market to China,” said Ajay Sahai, director-general of the Federation of Indian Export Organisation. FIEO has asked the government to declare the complete supply chain, including labour required for loading, transport of goods, courier services and port facilities, as essential service. Manufacturer-exporters have sought permission to start manufacturing and fabrication work after completion of the lockdown period. Exporters have seen order cancellations of as much as 30% from buyers. They fear cancellations could increase if they are unable to fulfil existing orders. They have said that customs at major ports are not functioning normally despite instructions from the Centre. “Even entry of exports has been closed at major ports. As a result, export goods that have already entered the ports are incurring detention charges 24x7,” said T Rajkumar, chairman of the Confederation of Indian Textile Industry in a letter to commerce and industry minister Piyush Goyal. The apex body of textile exporters has sought smooth movement of ready cum in-transit consignments to the ports for shipment through amendments in the provisions regulating movement of goods vehicles. It has also requested that port authorities should have necessary support systems to handle the cargo. The country’s outbound shipments have also been hit because international courier services are not functioning due to the lockdown. Indian banks have to send export documents to foreign banks, but courier companies are not taking the documents due to which importers are unable to get the consignments released and make payments. “For MSMEs from across handicrafts sector, we propose exemption from caution listing of exporters by RBI to be extended and collateral free lending up to Rs 2 crore may be implemented,” said the Export Promotion Council for Handicrafts in its presentation to Goyal, adding that the collateral requirement should be capped at 35-40% for lending beyond Rs 2 crore.
Source: Economic Times
The rapid spread of the Covid-19 pandemic across countries, including India, has not spared India’s apparel sector either, adding to the woes of the players who have already experienced a rather challenging fiscal 2020. Amid a subdued demand scenario in the domestic as well as the international markets, intensifying competition and lags witnessed in the clearance of export incentives, most players across the sector are expected to close FY20 with muted sales growth and moderation in profitability and liquidity. ICRA expects revenues of the Indian apparel players to fall by at least 10%-15% across the sector in FY21, following the Covid-19 impact on operations. Commenting on this, Mr. Jayanta Roy, Senior Vice-President and Group Head, Corporate Sector Ratings, ICRA, said: “With the 21-day domestic lockdown announced by the Government of India from March 25, 2020 onwards to combat the spread of the virus, domestic apparel sales have come to a complete halt. Further, seven of India’s top apparel export destinations, which account for nearly half of India’s total apparel exports, are among the worst affected regions globally. With most of these regions resorting to lockdowns and social distancing, export demand for apparels has also fallen significantly.” There are reports of international buyers deferring shipments and cancelling orders, till further notice. As a result, the domestic apparel sector is witnessing significant turbulence and the ongoing Spring-Summer Season 2020 is likely to suffer a major setback. On the supply side as well, social distancing and lockdowns have disrupted production in recent weeks, given the non-essential and labourintensive nature of operations. This apart, logistical issues are now affecting shipment of material ready for dispatch. Although companies are likely to undertake some cost rationalisation measures such as employee base optimisation, pay cuts, promotional budget cuts and rental renegotiations, ICRA expects high operating leverage, discounted sales to clear inventory backlog and bad debts to result in a shrinkage of their profit margins. ICRA also expects an increase in the receivable turnover period as well as inventory pile-ups because of market lockdowns. Additionally, order cancellations and a prolonged impact of Covid-19 beyond the running season could result in inventory obsolescence, necessitating write-offs and discounted sales. Most of the work-in-process and finished goods inventories with the domestic players at present would be for the Spring-Summer Season 2020. While the companies are negotiating with the customers on a likely delivery schedule and not all orders are likely to get affected, the extent of the impact will depend on the developments on the Covid-19 front, and its economic impact on the companies across regions. Having said that, these factors are likely to add to the liquidity pressures for companies in the near term. As a result, the cushion in drawing power and working capital limits is going to be crucial. Because of the liquidity pressures in the near term, apparel entities are expected to rely on increased borrowings to tide over immediate liquidity pressures. Together with pressure on revenues and profits, these are likely to translate into moderation in debt coverage metrics. In this context, RBI announced a relief package on March 27, 2020 to ensure continuity of viable businesses. Besides others, these included allowing lenders to extend three-month moratorium on payment of term loan instalments and interest on working capital to entities, and recalculate drawing power by reducing the margins and/or by reassessing the working capital cycle. “With respect to liquidity, ICRA notes that the RBI’s announcements dated March 27, 2020, are likely to provide some much-needed cushion to the companies. These steps will also give some time to companies to plan and react to the recent developments as well as recover from the immediate impact. However, ICRA expects the immediate impact of Covid-19 to be Negative on the sector. The timing and extent of the recovery are uncertain as of now and will remain a key monitorable for the sector,” Mr Roy added. The immediate impact aside, even after the spread of the virus is contained, ICRA expects a prolonged impact on the sector, with recovery likely to be gradual over several months. On the demand side, consumer skepticism to visit crowded places initially could keep footfalls subdued in offline retail, even after the lockdown ends. Also, overall pressure on corporate performance, which could trigger further job losses and pay cuts across sectors, as well as the overall stress in the economy are likely to affect buying power, which would affect discretionary consumer spending in the near term, resulting in the deferment of purchases, thus affecting demand for the segment. Similar to the consumer-side concerns, worker skepticism to return to jobs could play out on the supply side. Moreover, disintegration of labour, particularly the unskilled and contractual labour, who have started moving from production hubs to their hometowns and villages, could result in a prolonged disruption on the supply side, even after the operations resume. This apart, liquidity issues at the manufacturer level are expected to affect their ability to ramp up production for the subsequent seasons. Further, for an effective pickup, the recovery has to be broad-based across countries, from the demand as well as the supply perspective, given the trade linkages. Having said that, ICRA expects the impact on credit profiles to vary across companies, depending on several factors such as balance sheet strength, liquidity and financial flexibility, which would warrant a case-by-case assessment. In this context, ICRA notes that operations of apparel entities are primarily working capital intensive and typically require low fixed capital investments. Accordingly, reliance of these entities on term borrowings is generally seen to be lower, which provides some cushion on their balance sheet to absorb the impact. “Notwithstanding the impact expected on the sector’s performance in the near term, ICRA expects limited reliance on term borrowings and RBI’s recent initiatives to cushion the impact on the sector.”, concluded Mr. Roy.
Source: Economic Times
Aviation: The ensuing cash flow disruption could possibly lead to breach of debt covenants if the outbreak escalates and results in a prolonged near-zero revenue situation
Shipping: Container terminals at the major ports in India have already reported a few blank sailings or cancellation of port calls. This could intensify in the coming weeks depending upon the level of outbreak in India’s major trading partner countries
Tourism: The travel bans in place translate to a foregone revenue of around US$ 5 bn for the industry from foreign tourists alone. The magnitude of the impact would be much larger when foregone revenue from domestic tourists is also accounted for
Retail: While textile, footwear, fashion accessories, furniture, and other household appliances will have revenue losses, food and other FMCG essential services segments will likely face a surge in sales driven by panic buying and hoarding
Livestock: Given that the average farm size in India is 8,000 birds with a 40-day production cycle, a typical poultry farmer would lose around Rs 10 lakh. Losses of this magnitude with no signs of price recovery are expected to drive many players out of business
MSMEs: Only 53% of large companies in India pay their suppliers on time. Slowdown may force large firms to scale down production. The ensuing cash flow disruptions will lead to delayed payments to MSMEs, triggering credit defaults and permanent business closures of highly leveraged MSMEs, and rendering many people jobless
Gems & jewellery: With the growing number of Covid-19 cases, revival of the sector does not appear imminent. Given that the gems & jewellery contribute to 12% of India’s merchandise exports, the impact of the slowdown in global demand is expected to pull down India’s overall exports very steeply
Electronic goods: High level of dependency on imports makes the sector highly vulnerable to foreign exchange risk coupled with fear of supply constraint. Of the total demand for electronics in India, about 50-60% of the products and 70-80% of the components are imported
Automotive: Normally, auto companies maintain a one-month or two-month inventory, however if the supply chain remains disrupted for next two months, the Indian auto industry may face significant revenue loss
Drugs & pharma: The impact of COVID-19 outbreak on the drugs and pharmaceuticals sector is expected to be moderate. The sector contributes to 1.2% of India’s gross value added and 7% of manufacturing value added
Textiles: The Covid impact on the textile sector is expected to be moderate in the coming weeks. However, if the outbreak remains prolonged then the impact is expected to be high
Source: Business Standard
The Department of Revenue and the handset industry, backed by the IT ministry, are at odds over the implementation of the much-touted Rs 41,000-crore production-linked incentive scheme to boost local manufacturing and exports. The revenue department wants a budgetary allocation of the incentive. But the industry fears that such a mechanism will delay payments, and instead is pushing for an ‘offset' mechanism, at least for the exports component. “The (outgoing) Merchandise Exports Incentive Scheme (MEIS) was a duty credit scrip. These scrips were automatically linked to exports, once exports were recognised the scrip was generated and credited to your account… smooth and instant,” said an executive of a global supply chain company, who didn’t wish to be named. But Wednesday’s notification of the PLI scheme, which will be applicable from August 1, puts in place a mechanism which essentially means a cash payment after verifying the documents, a mechanism the industry says could really delay or stall payments. In addition to the PLI scheme, the government on Wednesday also notified two other electronic manufacturing schemes worth a total of Rs 48,000 crore. The PLI scheme aims to make India an electronic manufacturing hub by extending a 4%-6% incentive on incremental sales on mobile phones and specified electronic components such as printed circuit boards, photopolymer films and assembly, testing, marking and packaging units, among others. While we are comfortable with the budgetary mechanism for domestic components, for exports, this case by case basis will be a very arduous procedure and our experience with M-SIPs has made us realize that it is better to get the instantly generated scrips instead of the government writing us cheques,” said Pankaj Mohindroo, chairman of India Cellular & Electronics Association (ICEA). The industry body represents a bulk of smartphone manufacturers in the country including Apple, Lava, Foxconn, Vivo and Oppo. The industry has flagged other pain points, including allowing only 40% of machinery shifted from other countries to India to be recognised to calculate the eligibility under the scheme. “Most of the additional investment into India will be relocation of factories from other countries… Hence, the entire value of the machinery should be considered while evaluating eligibility,” Mohindroo said. He added that the clause on empowered panel being vested with powers to unilaterally change the rules won’t infuse confidence among investors, who are looking to inject billions of dollars into India. “It is only fair that investors get to be consulted,” Mohindroo added.
Source: Economic Times
The Apparel Export Promotion Council (AEPC) on Wednesday asked the Prime Minister for immediate support from the government and said that in the absence of a stimulus package, the sector will not survive. "Unless the government immediately announces an economic package, with specific focus on the apparel export sector, given the fact that our products are 'perishable', our industry that employs 12.9 million workers, will die a slow death," it wrote in the letter to Prime Minister Narendra Modi. Elaborating the situation of the apparel exporters, AEPC Chairman A. Sakthivel said that overseas buyers and buying houses are either cancelling or postponing confirmed export orders and are also holding back or indefinitely deferring the payment for goods already shipped or ready-to-be-shipped and asking for hefty discounts. "Apparel industry is a seasonal industry and the products are similar to a 'perishable commodity' as they are a tailor-made, design-specific, fashion-specific export and any cancellation this year may be redundant and have little or no salvage value next year," he said. The cancellations, deferments and postponement of shipments have resulted in packing credits being eroded, and impacted the fund-liquidity position of the exporters, which is in a precarious condition, as the cash flows have completely stopped, he added. While applauding the decision of the government to lock down the country till April 14 in the larger public interest, Sakthivel highlighted the fact that the apparel industry is one of the largest employers engaging 12.9 million workers directly and is also one of the largest employers of women, who comprise 65 per cent of the workforce. About 70 per cent of the apparel units are in the MSME sector. It is imperative to note that the member-exporters strictly comply with national and international norms, and adhere to the highest levels of social responsibility, he stated. In the apparel sector, labour costs form the single largest component of product costs where workers' wages are in the range of 25-30 per cent of the product cost as opposed to the industry norm of 7-8 per cent. "Further, we operate under extremely competitive margins in the range of 3-4 per cent, and are completely dependent on export benefits granted by the government," AEPC Chairman said. "We pray and request for a 'unique financial stimulus package' specific for our apparel industry, as our situation is different from the requirement of the other textiles industries or any other industry per-se," he said.
Source: SME Times
The Reserve Bank of India (RBI) has rejected requests for standstill in asset classification from banks, dashing the hopes of lenders as well as companies seeking to avoid the defaulter tag. The move is also likely to increase the burden of bad loans on the books of banks. In an email to the Indian Banks’ Association, the regulator has said that no question of forbearance arises as these companies have been under default even before March 1, 2020, after which the Covid-19 pandemic started spreading in the country. “If a borrower has been in default even before March 1, 2020, such a default cannot be said to be as a result of the economic fallout of the pandemic,” the regulator said. “The benefit of moratorium can be extended to such borrowers in respect of payments falling due during the March 1 to May 31, 2020 period. However, the payments overdue on or before February 29, 2020 will attract current IRAC (income recognition and asset classification) norms.” ET in its edition on April 1 had reported that Indian banks were seeking a freeze on recognition of bad loans as on February 29 to make the regulator’s loan moratorium rules more effective. Lenders also wanted borrowers who have not paid in the January-March period covered under this rule. They were also seeking cases being resolved under the inter-creditor agreement to get provisioning relaxation, to make their books of accounts at the end of March look kosher. RBI on March 27 delivered a three month moratorium on all term loans, including agri loans, retail and crop loans, credit cards and working capital payments. It gave banks a liberal hand in deciding the limits on working capital and ordered that no payment delay be considered a default and reported to credit information companies. Bankers wanted similar forbearance on companies who had missed payments before March 1, 2020 and whose loans would have been classified as NPA if they had not paid by March 31. They requested that non-payment by these companies should not be treated as default, but the regulator has dismissed the request. The central bank clarified that the intention of the March 27 circular was to reduce the burden of debt servicing on borrowers who otherwise have been servicing their accounts regularly, but would have defaulted on account of the temporary stress caused due to the nationwide lockdown. The rise in Covid-19 cases and the 21-day lockdown announced by the government are likely to cause large-scale disruptions to businesses. Full impact stemming from Covid-19 on growth and delinquencies would be visible from Q1FY21, experts said. As per RBI data for January, banks had an outstanding exposure of Rs 11 lakh crore to the MSME sector and Rs 7.37 lakh crore to the NBFC sector. Banks had also lent Rs 3.73 lakh crore to the manufacturing sector, Rs 2.27 lakh crore to the commercial real estate sector, Rs 1.41 lakh crore to the transport sector and over Rs 45,000 crore to the tourism and hotels segment. Ratings firm Crisil has reviewed ratings of 120 corporates - airlines, hotels, tourism, malls, organised brick & mortar retail, multiplexes, and restaurants.
Source: Economic Times
As the country''s industry takes a big hit due to the coronavirus outbreak, many companies from pharmaceuticals to textiles in Andhra Pradesh are operating at a lower capacity with safety measures and the government support, according to the state''s industries, commerce and IT minister. However, South Korean company Kia Motors (India) has voluntarily suspended its operation at the Anantpur plant in Andhra Pradesh even though the state government had not asked them to do so, the minister added. "We have officially not asked any industries to shut down in the state," Industries, Commerce and IT Minister Mekapati Goutham Reddy told PTI in a telephonic interview from his home district Nellore. Rather, the state government is "encouraging" the industries to continue operation by bringing down the number of work shifts and by strictly following social distancing and the safety protocols so as to avoid any infection, he said. "We are encouraging industries to please continue the production. You bring down the number of shifts. We have told them that if you have migrant labourers, we will take care of them and their essential requirements."Apart from the industries, manufacturing essential goods which the central government has been allowed to function during the ongoing COVID-19 lockdown, several other industries like pharma and textile/garments are functioning in the state, he added. Asked why the government was taking risk by allowing the industry to operate, Reddy said the state government has laid down safety norms for the industry to follow. Many industries are voluntarily doing it to protect their staff and business. "They have not fully shut the operations but they have brought down the capacity," he said and added that the industries have been told to sanitise the factory premise and maintain social distancing at work place.However, Kia Motors has suspended its operation voluntarily. "We have not asked them to shut," he said. On the state''s preparedness to fight the COVID-19 pandemic, the minister said the Andhra government has a capacity to handle up to 10,000 positive cases as of now. There are about 3,555 doctors/specialists and 5,612 paramedic and nurses in the state. There are 267 COVID-19 hospital facilities with ICU facilities, while 2,012 hospitals with non-ICU facilities. The state has 18,885 isolation rooms with toilets, while 1,867 halls for quarantine purposes, he added."Medical infrastructure is under tremendous stress. We have requested private hospitals to provide their doctors and nursing staff as the number of cases increase," Reddy said. The minister said the number of coronavirus positive cases is on the rise in the state after fresh cases were reported from those who had last month attended the Tablighi Jamaat congregation in New Delhi. There are about 132 positive cases in the state at present. About 130-odd people from the state had attended the congregation in New Delhi, he said. Sharing about his home district, Reddy said, "In Nellore, 34 people had attended the congregation in Delhi. These 34 people have come in contact with 400 people. The government has traced 103 people and the rest are hiding." The Nellore district has seen a significant jump in the number of cases as 17 were reported overnight. The district now has an overall 20 coronavirus positive cases.
Source: Outlook
In a glimmer of hope for medical specialists, health workers, policemen and other allied workers who lack high-quality protective gear in their fight against Covid-19, the Punjab's textile industry has been able to develop personal protective equipment (PPE), especially hazmat (hazardous materials) suits, which are not only of high quality, but will cost just a fraction of the price of imported ones. So far, the Union government has placed an order for 15 lakh pieces of hazmat suits and PPE worth Rs 150 crore with three textile manufacturers of Punjab, including JCT Phagwara and Evershine Impex, Ludhiana. Samples of PPE fabric manufactured by another Ludhiana firm Navyug Laminates too have been approved by the authorized laboratory. A few Ludhiana firms have also come forward to develop ventilators and have already started work in this direction. Even as PPE or hazmat suits are not the traditional items manufactured by the industry, the textile manufacturers backed by Punjab government came up with samples of hazmat suits just in a span of 7-10 days. The government made arrangements to get these samples airlifted and be tested at a lab in Coimbatore where these passed the mandatory tests, including the crucial blood penetration test which ensures that there is no penetration of blood or other liquids into this suit. The entire project is being overseen by a team led by Punjab additional chief secretary Vini Mahajan. Besides coordinating with businessmen, Mahajan has tied up with different organisations and departments of Union government to address problems of businessmen and ensure fast delivery of the items. Mahajan said, "The textile sector of Punjab can easily produce protective gear, which is desperately needed all over the country and world. We had been interacting with textile industrialists, especially those dealing in technical textile, for the past few days to discuss the possibilities of making protective gear, hazmat suits and N95 masks." "The response was good from the businessmen and samples of Punjab manufacturers were transported to Delhi in a special vehicle after which these were airlifted to Coimbatore for testing at the South India Textile Research Association (SITRA). As of now, three companies have been cleared to manufacture PPE and have received large orders from central government organisations like HLL to the tunes of several hundred crores. An order of 10 lakh suits has been placed with JCT alone," she said. "Vardhman Ludhiana too has come up with PPE and their samples are being sent for testing too," Mahajan said. The additional chief secretary said, "Some industrialists have also manufactured N95 masks which are yet to pass the tests as some minor changes are required in the already developed samples here. As far as triple-layered masks are concerned, seven manufacturers from Punjab have already started production." We are getting a lot of support from the ministries of textile, health and civil aviation in this entire initiative. In addition to this, we are also trying to develop ventilators locally. We have already got interested industrialists in touch with the multi-specialty hospitals like Fortis and Max so that they can get all the technical help and develop ventilators at the earliest." Sources said two Ludhiana-based units have come forward and have already started work on developing an economical prototype of the ventilator. Vishal Aggarwal, proprietor, Evershine Impex India, said, "It was just a week prior to the lockdown that we started experimenting with the hazmat suit. With the help of the state government, we were able to develop a sample that was tested at Coimbatore. We have been able to manufacture the product worth Rs 3,000, which is one fifth of the cost of an imported product. We soon hope to dispatch the first lot from 2.50-lakh piece order received from the government.
Source: Times of India
Karur, which is one of the largest textile manufacturing and export hubs in the country, has come to the rescue of the doctors by producing PPE - garments worn by healthcare workers. With several concerns raised over the lack of safety gear for doctors treating COVID-19 patients across the State, Karur textile industries have been working full swing to manufacture personal protective equipment (PPE). With doctors working round the clock to treat COVID-19 patients, they have been hamstrung by the lack of PPE, especially with the lockdown making procurement difficult. Karur, which is one of the largest textile manufacturing and export hubs in the country, has come to the rescue of the doctors by producing PPE - garments worn by healthcare workers to prevent infection, virus and transmission of other kinds of viral diseases. As of now, three textile units in Karur have started manufacturing PPE to be supplied across the State. Nallamathu of Abinav Fabrics in Karur told TNIE, "We have been manufacturing medical clothing for hospitals, doctors, nurses and patients for the past 15 years. Currently, due to the COVID-19 outbreak, we have started manufacturing PPE for doctors and other healthcare workers treating coronavirus patients. Apart from us, two other firms are also manufacturing PPE in Karur now due to high demand. A total of 150 workers have been keeping their nose to the grindstone for the past few days for a cause." He added, "Right now, we are manufacturing about 1,000 PPE per day. The number would jump to around 3,000 per day as our workers and volunteers are willing to go the extra mile for the welfare of doctors. The PPE is made using non-woven materials, which are later given a waterproof coating. As the lockdown is in place, many of our raw material suppliers are unable to provide us the necessary items needed to manufacture PPE. The government must help us in getting us necessary materials, including zippers, Velcro, elastic and others to produce the protective gear." PPE manufactured here includes a coverall, cap and a pair of safety socks. So far, PPE has been sent to the Tiruchy Commissioner's office, Namakkal GH, Salem MCH, hospitals in Karur and numerous other places across the State. The industries are aiming to manufacture around one lakh PPE in about a month.
Source: Indian Express
Companies in all regions of the world suffered significant numbers of cancellations or postponements and on an average, current orders dropped by 8 per cent, according to a survey conducted by Zurich-based International Textile Manufacturers Federation (ITMF) among its members. The fall in orders ranges from 4 per cent in South America to 13.3 per cent in Africa. The results show that on an average, companies in all regions are expecting their turnovers in 2020 to be significantly lower than in 2019. On world average, the turnover in 2020 is expected to be -10.5 per cent lower than in 2019. While North America is expected to witness an average decline of 7.5 per cent, companies in Europe are expecting a drop of 17.5 per cent, according to an ITMF press release. The survey was conducted between March 13 and 25, Thirty four companies and two national textile associations participated in the survey. Two factors that played an important role in the survey are geography and time. Those companies and country organisations that had replied early (between March 13 and 16) and reported about additional orders were not directly or indirectly affected by the COVID-19 pandemic then. In the later replies (from March 17 onwards), answers across all regions more negative. It can be assumed that the fact that after March 16 more and more governments in Europe and North America introduced almost daily new regulations that were restricting public and business life, the survey found. The main challenges companies are facing include safety and health of the workers and staff; disrupted supply chains, especially in connection with supplies from China; lack or delay in supply in the apparel industry; lack of demand or the fear that demand will drop significantly; and lack of liquidity, the respondents said. Opportunities include streamlining internal processes during the crisis to make them emerge stronger and fresh scope arising out of producing fibres, yarns, fabrics and end-products with health care and protection function, the survey found. The results of the second survey from March 28 to April 3 on the impact of the pandemic on the global textile industry will be released on April 6.
Source: Fibre2Fashion
The COVID-19 pandemic that first emerged in the city of Wuhan in Hubei province, China, has severely affected local industries and livelihoods across the world. Some of the worst hit sectors include tourism and aviation as an estimated three billion people worldwide are under virus lockdowns. Other than that, to contain the deadly disease, travel curbs have also been implemented in numerous countries. Another industry in Southeast Asia that has recently felt the hit from the new coronavirus is the garment business. The textile and garment industries of Vietnam and Cambodia have been developing strongly in recent years and play a vital role in the economic growth of both countries. According to a 2018 report titled ‘Vietnam’s textile and garment industry: An overview’ published by the Czech Technical University in Prague, more than 1.6 million people are employed in the textile and garment industry in Vietnam. This accounts for more than 12 percent of the country’s industrial workforce and nearly five percent of Vietnam’s total labour force. Over in Cambodia, it was reported that more than half a million people are employed in the garment industry making it the biggest sector in the country. Media reports also state that the sector accounts for 16 percent of Cambodia’s gross domestic product (GDP) and 80 percent of its export earnings. Unfortunately, operations in numerous factories are now being suspended across top garment producers in Cambodia, Vietnam, Bangladesh, Myanmar and Indonesia. This is because of disrupted supply chains in China as the country is the main provider of raw materials for many clothing manufacturers. As China had imposed citywide lockdowns earlier this year, countries that are dependent on China for raw materials and supplies have faced challenges in operating some of their key industries. According to media reports, Cambodia is already feeling the pinch as the country’s garment sector relies on China for 60 percent of its raw materials. It was also reported that Cambodia’s authorities estimate that around 200 factories employing 160,000 workers might temporarily close their operations by the end of March if they run out of raw materials. Vietnam, which is one of the largest textile exporters in the world, saw its garment exports dip by 1.7 percent (US$4.5 billion) in January and February. In neighbouring Myanmar, it is said that China supplies up to about 90 percent of its raw materials. As of 1 April, Myanmar had officially reported 15 COVID-19 infections with one death. However, observers believe that the real figures could be much higher. The Myanmar Garment Manufacturers Association warned that if the crisis persists, around half of the country’s 500 factories could be shut. On 19 March, local media reported that at least 20 apparel factories in Myanmar had shuttered with 10,000 workers temporarily laid off. Jacob Clere from SMART Myanmar – an organisation which aims to improve labour rights in the textile and garment industry in the country – told the media that “the Myanmar government has focused on boosting local businesses who are struggling, which is good, but direct support programmes for workers to get through this period will also be needed.”
Cancelled orders
China’s central Hubei province has lifted some of its curbs after two months of lockdown as the country claimed it is slowly recovering from the pandemic. According to media reports, China’s supply chains are now starting to reopen, however, Southeast Asia’s garment industry now faces another problem. It was reported that global brands such as Primark, Marks & Spencer and Hennes & Mauritz (H&M) have cancelled or postponed on apparel orders due to low demand. This means that the garment and textile industry in Southeast Asia that manufactures products for these fashion brands will suffer bleaker consequences. According to media reports, the situation is so critical that countries like Cambodia and India have made direct appeals to fashion brands to avoid cancellations and to work out payment plans. It was reported that Vietnamese officials believe that exports to European markets could decrease by eight percent in the first and second quarters of 2020.Human Rights Watch (HRW) stated that some fashion brands and retailers have cancelled orders without assuming financial responsibility even when factories had completed their work. Activists are urging brands to take responsibility for the millions of workers in their supply chain.“While it is understandable that companies are focusing on the needs of their local staff, clothing retailers must accept that if they choose a business model that relies on the labour of millions of garment workers overseas, then these people are their workers as well,” said Scott Nova, executive director at the Worker Rights Consortium, an independent labour rights organisation to the media.
Source: The ASEAN Post
The Bangladesh Textile Mills Association on Thursday urged the government to provide support for the country’s textile mills which are now sitting on a stockpile of fabrics and yarns worth Tk 3,500 crore due to the impact of coronavirus outbreak in the country. The textile mills meet the domestic demand for clothes. BTMA president Mohammad Ali Khokon in a letter to the finance ministry demanded a bailout package including withdrawal of value-added tax on yarns and fabrics from March 20 to June 30 to protect the country’s spinning, weaving and dyeing and finishing mills from the negative impact of coronavirus outbreak. It also demanded interest waiver on term loans for six months and increasing the period of repayment to one year with a six-month moratorium facility. The BTMA demanded block account facility on utility bills for six months and interest-free payment facility of the amounts in next 12 months. The trade body proposed providing tax-free facility in importing all type of dyes and chemicals for the textile dyeing and finishing industry up to June 30. Mohammad Ali also demanded waiver of port demurrage and depot charges on imported raw materials up to June 30. In his letter, the BTMA president said that the export-oriented textile mills would be benefited from the bailout package worth Tk 5,000 crore announced by the prime minister but more than 250 spinning mills and 500 weaving mills, which meet the demand for clothes for 17 crore people, had been suffering from an acute shortage of liquidity as the business activities remained halted in the country due to the coronavirus outbreak. Without support from the government, the factories would not be able to pay wages to their workers as the general holidays has been extended to April 11 and the business activities would remain suspended during Bangla New Year Pahela Baishakh, he said. The market size of Pahela Baishakh textile and clothing products is about Tk 1,500 crore, the trade body said. According to the BTMA, livelihoods of more than 15 lakh people are dependent on the sector directly and indirectly. Meanwhile, the Bangladesh Garments Accessories and Packaging Manufacturers and Exporters Association has demanded a share from the prime minister-declared fund of Tk 5,000 crore for the export-oriented sectors to fight against the fallout of coronavirus outbreak. The financial crisis of readymade garment sector has equally affected the accessories and packaging sector and it would be quite impossible for the sector to pay the wages to the workers without financial assistance from the government, BGAPMEA president Md Abdul Kader Khan said in a press release issued on Thursday. ‘Accessories and packaging, like other export-oriented sectors, is one of the main export-oriented sectors and it is supporting the other export sectors to produce their finished products. Due to the coronavirus pandemic, we are equally financially affected,’ he said. Kader hoped that the government would recognise the importance of this sector and would assist by sharing the declared fund or by allocating a separate fund for this sector.
Source: New Age Business
The US administration’s reported plan to institute a 90-day deferral on most-favoured nation (MFN) tariffs that is being pushed by the importing and retailing industries would defer certain tariffs, including those on finished apparel products, but is an ill-advised policy that will hurt the US textile industry at the very time it is answering the call of the nation to produce medical supplies to battle the COVID-19 pandemic, according to the National Council of Textile Organisations (NCTO). NCTO urged the government to abandon any moves to defer tariffs on finished products. NCTO has been at the forefront of the efforts to deploy resources, converting production lines to manufacture urgently-needed medical supplies like face masks and their textile components to address the critical need for personal protective equipment (PPE) and other medical and sanitation supplies in the fight against the novel coronavirus. “These unnecessary tariff concessions would benefit importers and retailers at the direct expense of manufacturers on the front lines of the COVID-19 response and send a demoralising message,” NCTO president and chief executive officer Kim Glas said a statement. Tariff deferrals would severely exacerbate ramifications for the U.S. economy, manufacturers and workers and open the floodgates for imports, he said. If the US government makes tariff concessions during this crisis, it will invite a virtual tsunami of imports, further devastating domestic manufacturing as it attempts to regain its footing, he added.
Source: Fibre2Fashion
All Pakistan Textile Mills Association (Aptma) Punjab Chairman Adil Bashir has demanded that the central bank freeze the interest cost of loans in order to help industrial units survive in these difficult times. In a statement, Bashir urged the State Bank of Pakistan (SBP) to issue directives to banks for suspending the receipt of interest on long-term and working capital loans for a period of three months starting April 2020. “The Rs100-billion relief announced by the prime minister can be utilised to bear this cost,” he added. Furthermore, he asked the government to make arrangements for postponing the payment of all loan installments for a period of one year and come up with a clear standard operating procedure (SOP) for resuming industrial production and protection of jobs. He proposed the setting up of monitoring committees at the district and provincial levels to monitor production activities at textile mills.
Source: The Express Tribune
