Madurai: With raw materials set to dry up if lockdown is extended, handloom weavers and textile owners are calling for financial support and benefits from the state and Centre to help them survive. Already suffering a decline over the years, many had to go for an alternative business like making dough and catering to survive. "Now we are in a situation where we fear we won’t be able to earn an income at all. The government is yet to provide any special allowance or monetary benefits exclusively for handloom weavers," said S Lakshmi, a weaver. Women weavers are used to turning to self-help groups for loans but now even such loans would not be affordable. Textile owners who are also facing the heat of lockdown are also seeking support from government. "From shortage of raw materials to dyeing units being shut, we are facing a double impact. Even the stock that has been kept ready cannot be sold. We can’t do anything but pray to God," said K T R Brahmam, a textile owner from Balarengapuram.
Source: Times of India
CHENNAI: Will industries in Tamil Nadu be allowed to reopen after April 15? Or, will they have to wait another 15 days? These questions are haunting private companies, management, and workers alike. Industry body CII has been pushing for a partial relaxation of the lockdown after April 15, so that export-oriented and critical sectors — including food processing and commercial vehicles manufacturers — can be allowed to operate. Industry bodies have approached both the Centre and State governments with this request. However, officials in the State have refused to give an answer, saying the ball is now in the Prime Minister’s court. Sources say the focus will be on extending the lockdown, but the government may consider certain relaxations as the coffers are running dry. The industries are mulling a staggered approach to restarting the businesses, says Hari Thiagarajan, Chairman of CII’s Tamil Nadu chapter. “There are many migrant workers stuck in factories and plants across the State. Their services could be utilised to ensure the maintenance of machineries. Maybe they could work in shifts, for 7-8 hours,” he says. BC Dutta, Convenor of the Ease of Doing Business Panel at the CII told Express that suggestions have been given to the Commerce Minister, to allow commercial vehicles and export sectors to operate. Automobile industry has suggested a partial lifting of the lockdown, such as allowing commercial vehicles (CV) to ply, and opening up automobile service stations catering to CVs.
Manpower challenge
Challenges lie in getting adequate manpower to reopen other industries, as there is still a clampdown on public and private transportation. “We may have to rely on workforce living within 2-3 km radius, and use latest testing kits to screen them. The focus needs to be more on safety or else the lockdown could be further extended,” says Thiagarajan. “On the one hand we want to restart the economy while on the other, we are worried about our workforce.” Thiagarajan says the small and micro enterprises are the worst hit due to lockdown. “The government should soon come out with a package for this sector.” He highlighted how the Bangladesh government has taken upon itself to pay the salaries of the textile manufacturing companies through soft loans which could be repaid after two years. “The Centre should take up such initiatives.”
More liquidity needed
“The State has not been able to get adequate funds from Centre to tide over the lockdown. While it demanded Rs 900 crore, it got just Rs 510 crore, that too to address the plight of migrant workers. The industry is yet to get any package.” With government staring at one of the worst economic crises, the RBI should be directed to pump in more liquidity, adds Thiagarajan. According to National Sample Survey Office’s Annual Survey of Industries (ASI), which covers all organised manufacturing establishments with power connection that employ at least 10 workers, there are 1,95,584 operational factories across India. Together, they engage 1.56 crore people and produce a total output worth Rs 80.72 lakh crore. Tamil Nadu has third-largest share in total factory output, contributing 10.7 per cent to the national output.
Source: Indian Express
Madurai: The lockdown would not have come at a worse time for the handloom weaving business which had been witnessing a gradual decline over the years in the district. With little yarn or ‘paavu’ left to weave and earn wages, when business would have usually peaked, the weavers are staring at losing even the little they earn. “We are thankful to have been able to continue working and get some income since the lockdown began. But if the lockdown is extended, we will be in deep trouble because the raw material (paavu) stock is fast running out,” said Raja G V, a weaver for over 30 years in Balarengapuram. Many weavers in the area, which is in the heart of the city, have their handloom machines inside their houses and the textile owners who provide raw materials are also relatively close by. However, the owners are as of now only providing paavu from the stock they had. Some of the handloom weavers hubs, mainly from the Saurashtra community, include Balarengapuram, Sakkimangalam, Vandiyur, Theppakulam and Kaithari Nagar, which has the largest number of weavers. “Some weavers are however unable to get the raw material because of transportation issues and places like Vandiyur are far from where textile owners are. In some areas, police are chasing weavers who try to set up their looms on the street,” said Srinivasan T, another weaver of over 40 years. The weavers are also unable to afford masks or gloves when working on the roadsides. They start early in the morning and try to wrap up by 10-11 am. The weavers already earn only a meagre income of Rs 6,000-8,000 a month depending on the type of paavu and product. It takes about 20-40 days depending on the speed of work to finish weaving saris out of one paavu. The raw materials have also become expensive. “Particular types of silk are hard to come by and its cost has doubled during the past few months. Already, the owners are splitting the paavu so as to keep us all busy equally and at a slower pace,” said Srinivasan. Textile owners meanwhile said they are trying their best to support the weaver community. "But, in reality, even we have been hit badly. Still, as far as possible, we try to pay money in advance for those in need. However, if lockdown is extended, we will not be able to procure raw materials at all and nothing will be in our hands," said Rajamurthy PK, owner of Jeyalakshmi Textiles.
Source: Times Of India
New Delhi: More than 15 million jobs could be lost in India’s export sector due to half of all orders getting cancelled and units unable to repay loans due to the Covid-19 pandemic and the ensuing lockdown, the apex body of exporters said on Friday. The cancellations and postponement of shipments have eroded packing credits and impacted exporters’ fund-liquidity position as cash flows have completely dried up. “With cancellation of over 50% of orders and gloomy forecast for the future, we expect 15 million job losses in exports and rising NPAs (nonperforming assets) amongst exporting units, hitting the economy very badly,” said Sharad Kumar Saraf, president, Federation of Indian Export Organisations (FIEO). Most of the retrenchment will be in labour-intensive sectors such as leather, gems and jewellery, handicrafts and textiles. The apparel exports sector estimates 2.5-3 million job losses because of order cancellations and buyers not clearing dues. “We expect around 2.5-3 million jobs both direct and indirect to get lost because of order cancellations and buyers not clearing our dues,” said Apparel Export Promotion Council (AEPC) chairman A Sakthivel. The apparel sector employs about 12.9 million people and around 70% of apparel units are MSMEs.
Source: Economic Times
Noida: With businesses affected by the lockdown, factories manufacturing garments in Gautam Budh Nagar and Ghaziabad have taken to producing safety kits, masks and gloves in keeping with the rising demand for medical equipment. Officials said 33 factories had already opened in nine districts of the state in the past one week. They have been manufacturing PPE kits, masks, gloves, ventilators and other medical equipment. According to officials, 21 of the 33 factories are from NCR alone. “More than 30 factories have started in nine districts of UP, with Noida and Ghaziabad accounting for most of the units. We are gradually giving permission to more factories that can supply medical equipment and have the necessary quality certification. Units that can supply medical gear are being made functional on priority basis,” said Alok Kumar, principal secretary, infrastructure and industrial development. Already the apparel and textile hub of the state, these factories had been staring at losses in the wake of the shutdown so far. With more such factories being allowed to produce PPE kits, officials predict that GB Nagar alone will produce 1 lakh safety kits and about 5 lakh two-ply and three-ply masks daily within a week. “There are several textile manufacturers in Noida and Greater Noida who have the capacity and knowledge to produce PPE kits. About 10 such apparel companies have already been given permission and applications for others are being checked. We are helping the industries with logistics, like getting their passes issues and helping ease intercity or interstate transport of their products and raw materials,” said Narendra Bhooshan, nodal officer for Noida’s Covid-19 response. Apart from masks and gloves, these factories will manufacture gowns, headgear, PPE kits, sanitisers, body suits, shoe covers, face shield, ECG electrodes and other devices. Anil Singh, general manager of the district industries centre, said, “There are already 10 factories that are producing PPE kits in GB Nagar, employing over 1,000 people. More companies are asking for permission. Within a week, we should be making one lakh PPE kits only within the district. There are over 25 companies making over 5 lakh masks every day. We also have one company for manufacturing N95 masks and 10 others making sanitisers.” There are 3,000 apparel manufacturers in GB Nagar that employ about 10 lakh people. Experts believe that if their applications are processed faster, the units could fulfil much of the country’s demand for masks and PPE kits. “Once the permissions come through, the apparel cluster in Noida itself can fulfil the demand for PPE kits from across the country,” said Lalit Thukral, president of the Noida Apparel Export Cluster.
Source: Times Of India
There is a risk of a contraction of India’s gross domestic product (GDP) to the extent of 5-6 per cent in the first quarter of fiscal 2020-21, with the second also likely to post a modest growth in a best case scenario, according to projections by Acuité Ratings, which expects the overall GDP growth for this fiscal to be in the band of 2-3 per cent. This takes into account a significant economic revival in the second half of this fiscal. The economy is expected to lose around $4.64 billion every day during the lockdown and almost around $100 billion during the 21-day mandatory lockdown period. The heavily affected services are transport, hotel and restaurants, and real estate that account for around 22 per cent in gross value added (GVA). The rating agency is expecting around 50 per cent loss in these sectors in the first quarter of this fiscal. Agricultural sector that accounts for 15 per cent of GVA will be relatively less affected as crop harvesting and food distribution activities will continue; however, livestock and fishery segments will witness a mute demand and lower the sector’s average 3.5-4 per cent growth, the company said in a press release.Even if the pan India shutdown is lifted by the middle of April, the disruption in economic activities is likely to continue well through the first quarter. The impact of the lockdown is also fairly severe on industrial activity, which is set to witness significant contraction except in the pharmaceutical, gas and electricity and medical devices. The only sector that is expected to be relatively least impacted on a relative basis is the agricultural sector and allied activities. This sector that accounts for 15 per cent of GVA is expected to see continuing activity with respect to crop harvesting, warehousing and distribution even in the lockdown period although the lockdown and the lack of availability of labour may have some impact. The rating agency believes it would take at least two to three months to restore the industry supply chain completely in the domestic market even if the lockdown is limited to 21 days.
Source: Fibre2fashion
On March 24, 2020, Cambodia’s Ministry of Economy and Finance issued Prakas No. 319 MoEF.Br.K on Tax Measures to Mitigate the Effect of Challenges on Textile and Garment Enterprises. This prakas provides income tax exemptions to factories and enterprises in the textile, garment, footwear, bag, handbag, and hat sectors that are affected by the partial suspension of the European Union’s Everything but Arms (EBA) preferential tariff scheme. Companies will receive an income tax exemption for the 2020 tax year based on how the partial suspension of EBA has affected their business. The formula for determining the level of the effect is set out below:
In order to qualify for the above income tax exemptions, companies must submit documentary evidence to quantify the effect of the partial EBA suspension to the General Department of Taxation when submitting their annual income tax returns.
Source: Lexology
ISLAMABAD: Prime Minister Imran Khan's adviser on commerce, textiles, industries, and investment, Abdul Razak Dawood, said Friday the ministry of commerce had released the Drawback of Local Taxes and Levies (DLTL) refunds worth Rs20.5 billion for the textile sector and Rs0.828 billion for the non-textile one."I am pleased to announce that DLTL refunds of Rs. 20.5 billion for Textiles& Rs. 0.828 billion for non Textile sector have been released by the Ministry of Commerce," he said on Twitter, adding that he hoped the business community would "use this liquidity to look after their workers during these challenging times". According to a commerce ministry press release, it was decided that officials would regularly interact their counterparts at the Federation of Pakistan Chambers of Commerce & Industry (FPCCI) and other similar chambers to proactively engage and resolve problems during the coronavirus crisis. Four meetings in this regard have already been held — on March 31 and April 1, 2, and 8. Two were chaired by Dawood while the other two by Commerce Secretary Sardar Ahmad Nawaz Sukhera. The Engineering Development Board (EDB) chairperson and the FPCCI president, as well as those from Karachi, Lahore, Gujranwala, Faisalabad, and Islamabad chambers of commerce, were engaged with the commerce ministry in this regard.
Source: PK News
KARACHI: Sindh Minister for Industries and Commerce Jam Ikramullah Dharejo on Friday said the Sindh government might allow certain export and textile industries to start working under standard operating procedures (SOPs) so they could meet export orders. The decision would be taken in view of the difficulties of the industrialists, the minister for industries and commerce and cooperative department and anti-corruption said while talking to a group of journalists. He said the Sindh government had not imposed the lockdown happily, and they understood the problems that people were facing because of the situation. The lockdown could not be lifted or erased at once. “It will be done in phases,” he explained. Dharejo said that lockdown was to be imposed earlier, but the indifferent attitude of the federal government caused an unusual delay, which increased the spread of the novel coronavirus in the country. “Unfortunately, in his speeches Prime Minister Imran Khan opposed implementation of lockdown and his attitude created a lot of problems not only for Sindh government, but it also developed a lethargic attitude among people towards the lockdown.” He requested the people to keep social distance as social distancing was the only solution to protect from coronavirus. “Distribution of money through Ehsaas Program may cause spread of coronavirus as hundreds of women and children are gathered in small places without following the policy of social distancing,” he concluded.
Source: PK News
In solidarity with Myanmar and the workers at risk in the garment sector, the European Union (EU) recently created a Myan Ku (Quick Assistance) Fund, an emergency cash fund of € 5 million that will disburse cash transfers through Wave Money directly to the workers to help them through this crisis. The fund will offer three different kinds of support. It will offer cash transfers of an expected average of 75,000 MMK monthly for one to three months for 30,000 to up to 80,000 workers in crisis who lost their jobs or face eviction from their homes. It will provide cash transfers of 125,000 MMK for workers whose contracts were illegally terminated and also transfer cash to workers in small and medium enterprises that agree to retain workers and continue cash or in-kind payments like accommodation and meals. SMART Textile & Garments, the EU’s longstanding flagship programme assisting garment manufacturers in Myanmar in improving production standards and social and environmental corporate responsibility, will manage the Myan Ku Fund, the EU said in a press release. SMART will work in close cooperation with local civil society organisations and trade unions in selecting recipients, and coordinate with its strong network of manufacturers and their associations, brands and government partners. The fund will initially be available from April to December 2020 and is financed through the EU’s Humanitarian Development Peace Nexus Response Mechanism (NRM) managed by UNOPS.
Source: Fibre2fashion
European Union (EU) finance ministers yesterday agreed on a bailout package worth half-a-trillion euros for COVID-19-hit members, but could not arrive at a consensus on the question of how to finance recovery in the bloc headed for a steep recession. French finance minister Bruno Le Maire termed the deal ‘the most important economic plan in EU history’. While Le Maire said the agreement paved the way for debt mutualisation, his Dutch counterpart Wopke Hoekstra said his country will remain opposed to Eurobonds and he thought the concept will not help Europa or the Netherlands in the long-term. Though Italy, France and Spain pushed strongly for using joint debt to finance recovery, which is a red line for Germany, the Netherlands, Finland and Austria, the deal did not mention it. It only defers to the bloc's 27 national leaders whether ‘innovative financial instruments" should be applied, implying the issue will be discussed further, according to global newswires. The agreement was arrived at after Germany and France put their feet down to end opposition from the Netherlands over attaching economic conditions to emergency credit for governments facing the impact of the pandemic, and assured Italy of a show of solidarity by the bloc. The agreement now awaits approval from the bloc's 27 national leaders in the coming days. The package would bring the EU's total fiscal response to the epidemic to €3.2 trillion euros ($3.5 trillion), the biggest in the world. A day earlier, Italian Prime Minister Giuseppe Conte warned that the EU's very existence would be under threat if it could not come together to combat the pandemic. A scheme to subsidise wages will receive €100 billion so that firms can cut working hours, not jobs. The European Investment Bank would step up lending to companies with €200 billion and the Euro Zone's European Stability Mechanism (ESM) bailout fund would make €240 billion of cheap credit available to governments.
Source: Fibre2fashion
The European Commission last month presented the European Green Deal , a road map for making the European Union (EU’s) economy sustainable by turning climate and environmental challenges into opportunities across all policy areas. The deal offers actions to boost the efficient use of resources by moving to a clean, circular economy and revert biodiversity loss and cut pollution. The deal covers all sectors of the economy, notably transport, energy, agriculture, buildings, and industries such as steel, cement, information and communication technology, textiles and chemicals and outlines investments needed and financing tools available, and explains how to ensure a just and inclusive transition, according to an official press release. To set into legislation the political ambition of being the world's first climate neutral continent by 2050, the European Commission will present within 100 days the first ‘European Climate Law'. It will also present the Biodiversity Strategy for 2030, the new Industrial Strategy and Circular Economy Action Plan, the Farm to Fork Strategy for sustainable food and proposals for pollution-free Europe. Work will immediately start for upping Europe's 2030 emissions targets, setting a realistic path to the 2050 goal, the press release said. Achieving the current 2030 climate and energy targets is estimated to require €260 billion of additional annual investment, representing about 1.5 per cent of 2018 gross domestic product (GDP). This investment will need the mobilisation of the public and private sectors. The Commission will present early this year a Sustainable Europe Investment Plan to help meet investment needs. At least 25 per cent of the EU's long-term budget should be dedicated to climate action, and the European Investment Bank, Europe's climate bank, will provide further support. For the private sector to contribute to financing the green transition, the Commission will present a Green Financing Strategy in 2020. In March 2020, the Commission will launch a ‘Climate Pact' to give citizens a voice and role in designing new actions, sharing information, launching grassroots activities and show-casing solutions that others can follow.
Source: Fibre2fashion
