Outbreak of COVID -19 is causing significant economic turmoil across economies around the world. Across the globe, shops are closed, brands and retailers have an oversupply situation with whatever orders they have placed. They are with fear that they may not be able to sell it, so they are cancelling orders or delaying shipments of orders. There has been a sharp drop in domestic and external demand, reduction in trade, disruption in production, fall in consumer confidence, tightening of financial conditions, etc. Shri Ronak Rughani, Chairman, the Synthetic and Rayon Textiles Export Promotion Council (SRTEPC) representing the Manmade fibre textile fraternity congratulates and thanked the Government under the leadership of Honble Prime Minister Shri Narendra Modi for takingswift and front-footedactionstofight against the COVID-19 epidemic. Rughani also informed that the Rs 1.70 Lakh Crore relief package under Pradhan Mantri Garib Kalyan Yojana announced by the Ministry of Finance will be of substantial help for the poor to fight the battle against COVID-19. He further stated that in this nation-wide fighting, as a gesture of collective solidarity, the Manmade fibre textile fraternity and its groups contributed around Rs.1016 crores towards the PM CARES Fund and the CMs of various states besides providing hospital facilities, food, PPE, etc.
Source: Deshdoot Times
Finance Ministry has reportedly suggested the PMO to set up a dedicated fund for MSMEs to provide interest-free loans and capital support to identified industries. The next set of stimulus measures from the government will have a clear focus on concerns of Small and Medium Enterprises (SMEs) segments that have been hit hard due to Covid-19 outbreak and resultant nationwide lockdown. Sources in the government said that the Finance Ministry has suggested the PMO to set up a dedicated fund for micro, small and medium enterprises that could be used to provide both interest-free loans to identified industries as well as capital support required to bring enterprises back in business after the lockdown. The MSME fund may also be used to provide interest subvention on loans taken by the sector to reduce their burden and allow some of these labour-intensive segments to operate smoothly. One of the biggest challenge facing the MSMEs due to the lockdown is of eroding cash flow. Longer duration of lockdown will only add to their problems with few enterprises facing an imminent shutdown. Sources said that the size and funding of the proposed MSME fund is yet to be worked out pending approval from the PMO, but it would substantially big to accommodate large number of enterprise that operate in the segment. Other non-fiscal measures in the SME package may focus more on compliance related issues and easing some of the operational conditions including making norms for sourcing from the MSME segment stringent and increasing sourcing the limit of mandatory procurement from the sector. Also to ease the cash flow, the segments dues from state government and PSUs would be asked to be cleared within a specified period of time. Though the next set of package from the government to fight disruptions caused Covid-19 is expected to be much wider that would cover the concerns India Inc., particularly the worst-hit travel and tourism, hospitality and aviation sectors, sources said that government will adopt a phased approach to see that only such measures that immediately benefits a sector during the lockdown are announced first before looking at measures to bring the economy back on track after the lockdown. While talks with stakeholders have taken place in different sectors and needs of various has been analysed by the Finance Ministry, it is felt that MSME has been hit hard at different levels and needs support immediately. As part of the phased approach, the government is set open certain industries from April 20 while adhering to the social distancing norms. There is wide speculation about the next economic stimulus package that could be bigger than the Rs 1,70,000 crore worth of schemes announced by Finance Minister Nirmala Sitharaman last month focusing on providing food security to the poor and providing money in their hands to fight the Covid-19. "The Finance Ministry is regularly interacting with various economic ministries and getting inputs from them over measures that would be required to give stimulus to the economy in this difficult period. These could be further discussed to finalise a concrete plan once the situation of lockdown becomes a bit clearer. In a lockdown, many of the measures that the governments announced may not yield desired results," the officials quoted earlier said. There is also a suggestion to involve five to six big corporate houses in the production of key items of consumption for the masses so that the country did not face shortages once demand picked up. This could be done by providing direct linkages of farmers with corporate entities so that key food produce reaches the factories for processing and production. "While lockdown measures seem to be working in reducing the spread of the Covid-19 pandemic globally, the associated loss of income for a large section of the society in India could hurt consumer spends. There is a broad-based expectation from the Indian government to look at additional fiscal measures to counter the effect of the likely slowdown in the economy," Kotak institutional equities said in report on consumer spend. While announcing the last package, Sitharaman had indicated that concerns of India Inc. and SME segments and other segments of the economy impacted by the present lockdown may be looked at and government will come up with a plan later. "Our first priority is to reach food to the poor and reach money in their hand. We will think about other things later," Sitharaman had said then. There was meeting of officials early this month where the possibility of redesigning some welfare and other government schemes was discussed. The plan is to tailor-made schemes to suit the post-lockdown situation.
Source: The News Minute
New Delhi, Apr 14 (KNN) The Ministry of Textiles has said that the entities can exercise an option for getting the JIT recommended subsidy released prior to scrutiny of the JIT reports by respective authorities as per delegated powers, subject to submission of Bank Guarantee equivalent to recommended subsidy. The Ministry of Textiles had proposed easing out the norms under Amended Technology Upgradation Fund Scheme (TUFS) during post lockdown period of Covid-19 outbreak. In this regard, the Ministry issued an order notifying the modifications in the Revised Guidelines of ATUFS. The modification, the order said is that the Bank Guarantee should be equivalent to the amount of subsidy recommended by the JIT in its report. The Bank Guarantee should be valid for one year and extendable further, if required, the Textile Ministry's order. Subsequently, the Bank Guarantee will be forfeited to the extent of excess payment made along with the penal interest as applicable under the rules, in case eligible subsidy amount approved for release after scrutiny of JIT report by respective authority works out to be lower than the amount recommended by the JIT, the order added.
Source: Menafn
Union Minister Nitin Gadkari on Monday said the government is committed to supporting micro, small and medium enterprises (MSMEs) facing difficulties amid the lockdown, and discussions are on towards financing 10 per cent of their working capital and introduction of a deferred payment plan for units in distress. "We will have to support industries facing difficulties, increase their working capital, we are already in talks for increasing it by 10 per cent, along with this deferred payment," said the minister via video-conferencing. He was addressing a conference on ''Post Covid Entrepreneurship Opportunities and Challenges''. Gadkari said the government was focused on how to save the sector and help those facing problems by increasing production, exports and enhancing job creation. "Our emphasis is towards job creation in rural, agricultural, tribal, with a focus on development of 115 aspirant districts across the country," said the minister for MSME and road transport and highways. Gadkari expressed confidence of the khadi and village industries achieving a total turnover of Rs 5 lakh crore in two years, from Rs 75,000 crore last year and Rs 1 lakh crore expected this year. He said the MSME and textiles ministries are together devising a Solar Cluster Scheme for Handloom whereby two solar charkhas each will be given to 10 lakh women, helping generate employment opportunities. "We are bringing a Solar Cluster Scheme for Handloom. I have spoken to Smriti Irani and we are devising a scheme together under which two solar charkhas each will be given to 10 lakh women," Gadkari said.
Source: Outlook India
A source said Prime Minister Narendra Modi had directed some ministries to come up with plans to open up some crucial industries as the livelihoods of the poor were being hit. India is planning to restart some manufacturing after April 15 to help offset the economic damage of a nationwide coronavirus lockdown, two government sources said, even as it weighs extending the lockdown. The 21-day lockdown of India's more than 1.3 billion people is due to end on Tuesday, but the government is widely expected to extend it until the end of the month, with the number of coronavirus cases rising to 9,152 and the domestic death toll reaching 308, on Monday. One of the sources said Prime Minister Narendra Modi had directed some ministries to come up with plans to open up some crucial industries as the livelihoods of the poor were being hit. The source said the government was considering allowing the resumption of some operations under guidelines that were being drawn up. The trade and industries ministry did not reply to an email seeking comment. The government's principal spokesman, K.S. Dhatwalia, declined to comment. The sources, who spoke to Reuters on Sunday, asked not to be identified as the plans are still under discussion. Separately, in a letter seen by Reuters, the industries ministry has recommended restarting some manufacturing in the autos, textiles, defence, electronics and other sectors. The ministry said in the letter, addressed to the home ministry, that this could be achieved via reduced shifts with lower staff numbers to ensure social distancing. "We believe some industries could be allowed with reasonable safeguards as long as social distancing norms are maintained," the second official, from the industries department, said. The home ministry and the Prime Minister's Office are likely to take a final call on the recommendations this week, the sources said. The sources also said that other ministries would soon submit plans on allowing partial resumptions in other sectors. India's economy, which was already growing at its slowest pace in six years before the onset of the coronavirus, is set to take a severe hit amid the lockdown, say economists, who warn that unemployment could rise to record levels. The lockdown resulted in many thousands of daily wage labourers losing their jobs in cities and leaving to return to their homes, raising the risk of spreading the coronavirus into the countryside.
Source: Reuters/ India Today
In a move that is set to benefit relief to the tourism, hospitality and entertainment sectors facing business loss due to the nationwide lockdown due to Covid 19, the Central Board of Indirect Taxes and Customs (CBIC) has allowed for claiming of refunds of goods and services tax (GST) paid on advances that entities got for events or bookings that have since been cancelled. “In case GST is paid by the supplier on advances received for a future event which got cancelled subsequently and for which invoice is issued before supply of service, the supplier is required to issue a “credit note,” the indirect tax Board said in a circular dated April 13. “In cases where there is no output liability against which a credit note can be adjusted, registered persons may proceed to file a claim under “Excess payment of tax, if any,” the circular added. Similar principle will also apply where goods have been returned to the supplier but GST has been paid on the sale to the government. Sector watchers said the move is set to benefit several companies across the board that have issued full refunds to consumers due to cancellations, either from the company side or the consumer side, to prevent the spread of Covid 19. “This is expected to benefit the tourism, hospitality and entertainment industry… Additional flow of funds to the industry would ease their liquidity position and also could be used to keep up the economic pace pushing across the number of jobs that are in the line of fire,” said Rajat Mohan, senior partner at AMRG Associates. While the clarification allows for adjustment with tax liabilities, experts added that the adjustment would be difficult in the near future due to a temporary breach of business continuity. The government is going all out to make sure that any sum of extra taxes stuck in government machinery should be reviewed, revalidated and cleared for benefit of trade and commerce, experts added, pointing to the other clarifications issued by the Board last week that extended compliance deadline to June 30, 2020. On Monday, the Board added that time limit for filing of letter of undertaking for exporters, for the year 2020-21, has also been extended to 30 June, 2020 and the exporters can now continue to export goods and/or services without payment of tax. This will benefit numerous small and medium-sized exporters. Further, government entities have also been given an extension for furnishing of return in FORM GSTR-7 along with the deposit of tax deducted till June 30, and full relief from interest has also been granted in case such tax is deposited by the extended deadline.
Source: Economic Times
India has begun working on continuity plans and ways to kickstart the economy once the country emerges from the shadows of the Covid-19 pandemic. The textiles ministry has roped in the prestigious Indian Institutes of Technology (IIT) to address both immediate and medium term action plans for the industry in the post-Covid situation for the textiles industry. Textiles minister Smriti Zubin Irani has constituted five Technological Task Forces led by various IITs for the entire textiles value chain. IIT Madras would lead the group on Indigenous Machine Manufacturing and Machine Tools while the setting up of local labs and promoting local technology is to be coordinated by IIT Bombay. Textiles industry, the second largest employer after agriculture, is hit hard by the Covid-19 pandemic and the resultant nationwide lockdown and global restrictions. Government's action is crucial as the sector's share in India’s GDP and GDP of manufacturing sector are 2.2% and 12.22%, respectively and a large part of the value chain is informal. “The ministry is looking at big game changer ideas. Opinions are being taken and discussions are on for post-Covid-19 recovery. Intensive work is happening on that front,” said one official. The taskforces were setup after Irani held discussions with Principal Scientific Adviser, scientists, technologists and academicians on technological and manufacturing interventions in post Covid-19 situations in the textiles sector on Saturday. Another task force will work on raw materials and waste product utilisation technology in IIT Delhi while boosting textiles MSMEs and large data analytics for traditional sectors would be the responsibility of IIT Kharagpur. IIT Kanpur, on the other hand, would focus on reorienting technology for weavers and handicraft artisans. Similarly, IIT Bhubaneswar will take up pilot studies for post Covid-19 handloom and handicraft reorientation, data integration of artisans and weavers and technological interventions in Odisha. As per officials, another group of technical experts, led by IIT Kanpur, will conduct action plans covering various fibres for silk processing and industrial applications from waste silk material and IIT Kharagpur for jute diversification, jute cultivation productivity improvement, and industrial applications of jute including in geotextiles. For cotton cultivation productivity improvement and industrial and diversified applications of waste cotton, a group to be constituted by textiles secretary on the advice of Principal Scientific Adviser would be constituted.
Source: Economic Times
The world's biggest lockdown that shut a majority of the factories and businesses, suspended flights, stopped trains and restricted movement of vehicles and people,The world's biggest lockdown may have cost the Indian economy Rs 7-8 lakh crore during the 21-day period, analysts and industry bodies said. With the intent to contain the spread of COVID-19, Prime Minister Narendra Modi with effect from March 25 announced a nationwide complete lockdown that brought as much as 70 per cent of economic activity, investment, exports and discretionary consumption to a standstill. Only essential goods and services such as agriculture, mining, utility services, some financial and IT services and public services were allowed to operate. Stating that the pandemic came at the most inopportune time for India whose economy was showing signs of recovery after bold fiscal/monetary measures, Centrum Institutional Research said the country again stares at the possibility of low single-digit growth for FY2021 (April 2020 to March 2021). "Nationwide complete lockdown is likely to shave off at least Rs 7-8 trillion," it said. Acuite Ratings & Research Ltd earlier this month estimated that the lockdown will cost the Indian economy almost USD 4.64 billion (over Rs 35,000 crore) every day and the entire 21-day lockdown will result in a GDP loss of almost USD 98 billion (about Rs 7.5 lakh crore). The rapid spread of COVID-19 has not only disrupted the global economy but also triggered a partial shutdown in many parts of India from early March and an almost complete shutdown from March 25. "While the countrywide shutdown is scheduled to be lifted from April 15, 2020, the risks of prolonged disruption in economic activities exist depending on the intensity of the outbreak," the credit rating agency said. The sectors that are most severely impacted are transport, hotel, restaurant, and real estate activities. Prime Minister Modi is likely to detail the post-lockdown scenario in an address to the nation on Tuesday morning. All India Motor Transport Congress (AIMTC) secretary-general Naveen Gupta said the accumulated losses to truckers during the first 15 days of lockdown were about Rs 35,200 crore given an average Rs 2,200 loss to per truck per day. "More than 90 per cent of the about one crore trucks in the country are off roads during the lockdown as truckers with only essential commodities are on the move," he said. "Even if the lockdown is lifted, it will take at least 2 to 3 months for truckers to limp to some normal scale as we apprehend consumption of non-essential items to remain hit on the account of lack of purchasing power." AIMTC represents about 93 lakh transporters and truckers and is their umbrella body. National Real Estate Development Council - a body of realtors, puts the loss in the sector at Rs 1 lakh crore. "I am scared to estimate what the losses would be. I think, a potential loss of maybe Rs 1 lakh crore on a conservative basis on an all India basis. It is a conservative figure. I cannot think of the upper end of the figure... Based on thumb rule, at least Rs 1 lakh crore," said its president Niranjan Hiranandani. The Confederation of All India Traders estimates that the losses incurred by the retail trade of the country in the second half of March due to the COVID-19 pandemic were a massive USD 30 billion. The Indian retail sector comprising 70 million small medium and big traders employing 45 crore people, does a monthly business of approximately USD 70 billion. A host of international agencies have cut India's economic growth estimate for FY21 on concerns about the fallout of COVID-19 outbreak. World Bank on Sunday said India's economy is expected to grow 1.5 per cent to 2.8 per cent in 2020-21 fiscal which started on April 1. This will be the slowest growth rate recorded since the economic reforms of 1991. Asian Development Bank (ADB) sees India's economic growth slipping to 4% in FY21, while S&P Global Ratings has further slashed its GDP growth forecast for the country to 3.5 per cent from a previous downgrade of 5.2 per cent. Fitch Ratings puts its estimate for India growth at 2 per cent while India Ratings & Research has revised its FY21 forecast to 3.6 per cent from 5.5 per cent earlier. Moody's Investors Service has slashed its estimate of India's GDP growth during the 2020 calendar year to 2.5 per cent, from an earlier estimate of 5.3 per cent and said the coronavirus pandemic will cause unprecedented shock to the global economy. Acuite Ratings believes there is a risk of a contraction of April-June (2020-21 fiscal) GDP to the extent of 5-6 per cent, with Q2 (JulySeptember) also likely to post modest growth in a best-case scenario. It expects the overall GDP growth for 2020-21 to be in the band of 2-3 per cent which takes into account a significant economic revival in the second half of the financial year. "We have cut our GDP estimates for FY21 from 5.2 per cent to 3.1 per cent and believe that too will be back-ended," Centrum Institutional Research.
Source: Economic Times
If the garment industry closes down, it would impact the entire value chain from fabric supply industry to brand to the zipper and label industry, he said. There could be as many as one crore job cuts in the textiles sector, which has been severely hit by the ongoing lockdown, if there is no support and revival package from the government, according to apparel industry body Clothing Manufacturers Association of India (CMAI). With around 80 per cent of the garment industry mostly micro, small and medium enterprises, CMAI, which has around 3,700 members employing over 7 lakh people, said most of its members do not have the kind of reserves to see them through 3-6 months of this magnitude. "We have estimated that if no assistance comes from the government, either in terms of wage subsidy or revival package, there could be loss of almost a crore of jobs in the entire textile chains," said CMAI Chief Mentor Rahul Mehta. He was speaking at a webinar on way forward for brick-and-mortar retail, hospitality and textile industries during and post COVID-19. Seeking a financial package from the government for the industry, Mehta said interventions like wage subsidies must be taken up, otherwise there would be huge job losses. If the garment industry closes down, it would impact the entire value chain from fabric supply industry to brand to the zipper and label industry, he said. "If you look at the entire textile industry, I see a job loss of one crore if nothing is done by the government," he added. He, however, appreciated efforts taken up by the textiles ministry such as asking all leading global companies not to cancel orders from the Indian exporters and such steps send positive vibes to manufacturers, particularly to the smaller ones. Mehta said CMAI has done a survey among its members and analysed around 1,500 responses. "The responses were quite frightening. Almost 20 per cent of them said that they were thinking of closing down the business after lockdown. At least 60 per cent of them anticipated a drop in revenue to the tune of 40 per cent, which is massive, if you look in terms of number of employment," he said. In China, after the opening of the market after the COVID-19 crisis, the apparel garment retailing has witnessed a 59 per cent decline though food and other businesses have revived and it's a serious challenge to face, Mehta added. Expressing similar view, the Retailers Association of India also said it has found similar trends in an internal survey, where 25 per cent of the participants have said that if they did not receive any support from the government, they may wind up. "Around 50 per cent of the small retailers have said that they may not be able to open the stores. If marginal and small businesses are shut down, it would have much bigger impact as the number of employees getting out would be higher," said RAI Chief Executive Officer Kumar Rajagopalan. It would have a multiplier effect and all the allied industry could also be impacted. The National Restaurant Association of India (NRAI) also said it has been "hit badly" by the coronavirus pandemic. "In our business, the proportion of fixed operating cost expenses are very high, which means when you have zero revenue, your losses are very high. We are fighting a battle for survival and we do not know how long its going to last and what is the ultimate image, how we would shape up in future," said NRAI President Anurag Katriar. It has asked the government to defer all statutory payments, so that its members could pay salaries and marginal suppliers. NRAI has also asked for support in terms of availability of capital when the industry resumes operation after the lockdown. Currently, India is going through an unprecedented complete lockdown of three weeks, ending Tuesday, to prevent the spread of coronavirus.
Source: The New Indian Express
The Asian Development Bank (ADB) has tripled the size of its response to the novel coronavirus disease (COVID-19) pandemic to $20 billion and approved measures to streamline its operations for quicker and more flexible delivery of assistance. Earlier on March 18, ADB had announced a $6.5 billion package as initial response to the crisis. ADB's $20 billion in resources is meant for helping the bank's developing member countries counter the severe macroeconomic and health impacts caused by Covid-19. The expanded package includes about $2.5 billion in concessional and grant resources. “This pandemic threatens to severely set back economic, social, and development gains in Asia and the Pacific, reverse progress on poverty reduction, and throw economies into recession,” said ADB president Masatsugu Asakawa. “Our expanded and comprehensive package of assistance, made possible with the strong support of our Board, will be delivered more quickly, flexibly, and forcefully to the governments and the private sector in our developing member countries to help them address the urgent challenges in tackling the pandemic and economic downturn.” ADB’s most recent assessment, released on April 3, estimates the global impact of the pandemic at between 2.3 per cent and 4.8 per cent of gross domestic product. Regional growth is forecast to decline from 5.2 per cent last year to 2.2 per cent in 2020. The new package includes the establishment of a Covid-19 Pandemic Response Option under ADB’s Countercyclical Support Facility. Up to $13 billion will be provided through this new option to help governments of developing member countries implement effective countercyclical expenditure programmes to mitigate impacts of the Covid-19 pandemic, with a particular focus on the poor and the vulnerable. Grant resources will continue to be deployed quickly for providing medical and personal protective equipment (PPE) and supplies from expanded procurement sources. Some $2 billion from the $20 billion package will be made available for the private sector. Loans and guarantees will be provided to financial institutions to rejuvenate trade and supply chains. Enhanced microfinance loan and guarantee support and a facility to help liquidity-starved small and medium-sized enterprises, including those run by female entrepreneurs, will be implemented alongside direct financing of companies responding to, or impacted by, Covid-19, the Manila-based bank said. The response package includes a number of adjustments to policies and business processes that will allow ADB to respond more rapidly and flexibly to the crisis. These include measures to streamline internal business processes, widen the eligibility and scope of various support facilities, and make the terms and conditions of lending more tailored. ADB will provide all support under the expanded package in close collaboration with international organizations, including the International Monetary Fund; World Bank Group; World Health Organization, UNICEF, and other UN agencies; and the broader global community.
Source: Fibre2Fashion
Niti Aayog CEO Amitabh Kant said government must identify five-six key sectors where we built up entire supply chain for manufacturing in India, including medical essentials, with massive disruptions in the global supply chain post the outbreak of COVID-19. “We have opened up mobile manufacturing and manufacturing of APIs in the country. In a similar way, we should look at five to six sectors for manufacturing in India,” Kant said, citing example of India’s inability to have full manufacturing capacity for key medical devices like ventilators and personal protective equipments. Kant laid out the roadmap for the Indian economy post the lockdown at a webinar with member VK Paul on COVID-19: India Fights Back – the Strategy and Way Forward. Admitting that there is a need to revive factories, Kant said it is important that workers resume work when industrial activities resume so as to bring the factories back in action. “Individual discipline will be the key to our success in controlling the spread of COVID-19. Companies have to be vigilant and forth coming to ensure, workers functions in multiple shifts, maintain social distance and observe high levels of hygiene at the workplace. Commenting on supply disruptions during the first phase of lockdown, Kant said, in the second phase the entire supply chain across sectors will be taken care of. “We will ensure that decisions at the highest level will be implemented to the best of our capability,” he said While commending the Rs 1.7 lakh crore welfare package for the weaker sections to help them tide over the economic crisis followed by series of relief measures by the Reserve Bank of India, finance ministry is taking several measures. “More packages will come in to address the need of MSMEs and big enterprises,” he added. Meanwhile, NITI Aayog member VK Paul said India should be prepared to handle 1,50,000 new cases per day, similar to what Italy experienced at its peak even as the country has not yet seen the ínterval’ of the movie. “Our disease is very limited compared to the size of our nation because we resorted to early and effective steps. However, this does not mean the situation will remain the same if we are not vigilant. According to Paul, India is at the early signs of problem as 300 districts in the country, with a susceptible population, is still not infected. Commenting on the impact of the lockdown Paul said, the purpose of the lockdown has been achieved to a great extent. “We have flattened the curve and changed the behaviour of society where social distancing has become a new norm,” he added. Stating that the challenge still persists when India lifts up the lockdown, Paul said we must ensure our behaviour is conducive to prevent the spread of virus. “Besides, the health system preparedness should kick in fully as the lockdown had given us opportunity to get our supplies and hospitals in order while our Surveillance system has to be resilient and responsive,” he added Backing the idea of opening up economic activity in a calibrated way to improve livelihood, Paul cautioned that a balance has to be created between losing minimum number of lives and productivity . Commenting on India’s lead efforts in creating diagnostic kits, working on developing vaccines and drugs against COVID-19, Paul said the ultimate was against Covid will be won by research and technology and India has the advantage in that,” he added.
Source: Economic Times
Vardhman Textiles has got permission from the concerned authorities in the States of Punjab for resumption of manufacturing operations of its Spinning Units situated at Malerkotla and Ludhiana subject to fulfillment of certain conditions. Similar permission has been received from authorities in Madhya Pradesh for resumption of operations of its Spinning Units situated at Mandideep and Satlapur. Further, the District Magistrate, Solan (Himachal Pradesh) has also given a general permission to the Textile Units, having in-campus worker colonies, to start operations subject to fulfillment of certain conditions. Accordingly, in compliance with the permission given by the concerned authorities, the Company has started partial operations in its Spinning Units situated in the States of Punjab, Himachal Pradesh and Madhya Pradesh.
Source: Business Standard
SRF rose 2.99% to Rs 3,335 after the company said that a few plants belonging to the essential goods value chain in the Dahej chemicals complex in Gujarat have resumed operations after permissions from local authorities. The company said its other plants will commence operations as and when permissions from local authorities are received. The management continues to monitor the situation closely and is taking appropriate actions as per directions from local, state government and central government authorities, SRF announced after market hours on Thursday, 9 April 2020. SRF's consolidated net profit soared 107% to Rs 342.99 crore in Q3 December 2019 (Q3 FY20) as against Rs 165.71 crore reported in Q3 December 2018 (Q3 FY19), primarily on account of lower tax expenses. Net sales rose 3.1% year-on-year (YoY) to Rs 1,807.45 crore in Q3 FY20. SRF is engaged in manufacturing of chemicals and polymers, technical textiles and packaging films. As of 31 December 2019, the company has applied for 190 patents, with 8 patents applied during this quarter. It has been granted sixty patents globally till date.
Source: Business Standard
As the world grapples with the unprecedented challenge of Covid-19, business leaders and management thinkers are helping navigate the crisis and plan for the future. At a webinar by Harvard Business School (HBS) and Harvard Business Publishing, members of the HBS faculty and India Inc executives brainstormed on economic uncertainties resulting from the pandemic and the opportunities for countries like India. With Western countries, looking to diversify their manufacturing from China and Japan, earmarking $2.2 billion to help its companies shift production, India could be a fertile ground for these supplies, said Sanjiv Mehta, CMD, Hindustan Unilever (HUL). He said this could well be a moment for ‘Make in India’ to shine. “If you look at the history, the impetus given to Y2K converted a challenge into an opportunity. We could significantly build on the credibility of our IT industry and prove how resilient and strong we are,” Mehta said. The second opportunity is investing in our healthcare systems. “We can also undertake reforms. It could be India’s moment once we come out of the crisis,” added Mehta, who expects the government to move its focus to livelihood, along with saving lives and announce relief measures and an economic stimulus. Mehta was speaking on the theme at the webinar: ‘Going beyond the medical impact of Covid-19’. Ravi Venkatesan, former chairman of Microsoft India, who has created a social initiative called The Global Alliance for Mass Entrepreneurship that is building a $100-million-plus SME Stabilisation Fund, said although there are a lot of people with ideas and resources, they are disconnected and working in silos. “We need to act in cohesion and learn fast to make a difference. After this crisis, everyone needs to have an entrepreneur’s mindset. What’s needed is leadership that can come from anywhere and everywhere, and it does not come with a title,” he said. HBS professors Robert Kaplan, Herman Leonard, Amy Edmondson and Ananth Raman presented a framework for leaders to navigate a low-likelihood, high-consequence crisis: ‘What to do when no one knows what to do?’ Elaborating on why teaming matters, Edmondson used insights from a case study on the Chilean miners’ crisis and how it was a team effort and leadership that ensured they were rescued. The example highlights a challenging situation, which was equally unpredictable in its outcome as the current crisis that has brought the world together. “The 33 men knew what they were up against. They knew the odds of rescue were near zero, but they teamed up and somehow coped in a hopelessly difficult situation. Engineers showed up from various arenas to team up and innovate,” said Edmondson. Edmondson said what’s required from leaders today is to create conditions for people to innovate and come up with solutions and not micro-manage, which she said would be a big mistake. Edmondson said the world needs leadership everywhere as ideas can come from unknown sources. “Leaders should ensure they put in place psychological safety so that people know candour is welcome,” she said. Suneeta Reddy, MD, Apollo Hospitals, which is working to improve the capacity of ventilators and hospital beds, said keeping up motivation levels among staff would be essential so as to retain healthcare professionals as their requirement has only grown over the days. Leonard said it is crucial to create critical incident management teams, which include people who can oversee all aspects of the event, highlighting the importance of recruiting three groups: The people who know the firm, who have the expertise, and people who understand and represent the firm’s key values. While stressing that cash is king in uncertain times, Raman said organisations need to read signals and recognise quickly which fire is going to become huge. A ‘chief worry officer’ could be useful to plan response in unprecedented situations. “Like in today’s scenario, bottlenecks can keep shifting. The headquarter team needs to take corrective action. Different approaches may be required in different schemes,” said Raman. On supply chains, Raman said the real problem leaders would encounter is what supplies need to be made and what need not be prioritised. Establishing confidence in the supply chain, he said, would be vital for it to work. Amit Chandra of Bain Capital described his collaborative, multi-pronged approach of working with a state government to improve PPE supply chains, increase testing capacity, and ensure food security through a network of NGOs.
Source: Economic Times
If predicting the progress of covid-19 is difficult, predicting its impact on growth and employment is even more so. The state of the global economy, the course of the epidemic and the policy on lockdown (beyond 1 May) are all uncertain. Suffice it to say, out of four drivers of growth —consumption, investment, government expenditure and net exports—all but government expenditure have question marks. Purely as a back-of-the-envelope number, for the entire year, secondary sector contribution will probably shave off almost 2% from growth. For the tertiary sector, a corresponding number would be something like 1.75% and for the primary sector, something like 0.25%. So, with a range of 6-6.5% real growth pre-epidemic, real growth for 2020-21 is unlikely to be more than 2% or 2.5%. But even this is a shade optimistic. In decreasing order of magnitude, the sectors most affected are clearly: airlines and hotels; automobiles and ancillary industries; construction; textiles and garments; freight and logistics; oil and gas; metals and mining; power; consumer products and retail; chemicals; IT and related services; pharmaceuticals; telecom; and agriculture (including animal husbandry, horticulture). For textiles and garments, consumer products and retail, chemicals, IT and related services and telecom, one can hazard a guess that some kind of revival will occur in Q2 of 2020-21. For construction, oil and gas, power, pharmaceuticals and agriculture, the timeline will probably be Q3. For the remaining sectors, one is possibly looking at Q4. Outside agriculture, the impact of job losses is largely restricted to construction (of the order of 16 million); trade, hotels and restaurants (5 million); manufacturing (13 million); transportation (4 million); and mining (1 million). That’s around 39 million. In the event of India faring much worse, this number can increase to upwards of 60 million. What does one do? Here is a list of possible interventions, all in the nature of suggestions. In addition to direct transfers included in PM Garib Kalyan Yojana, consider direct income support for workers for three months. In urban India, there are an estimated 60 million contractual and permanent workers, though most work for MSMEs/SMEs and not for the corporate sector. Since most MSMEs/SMEs are not legally registered, some form of identification has to be based on GSTN (GST Network) numbers. Without identification of enterprises and workers, direct income transfers cannot work. There are an estimated 135 million informal sector workers. There are instances (more for rural) where mapping between Socio-Economic and Caste Census 2011 (SECC) and PMJDY/Aadhaar has been done. In such cases, direct income support for targeted beneficiaries identified through SECC is an option to consider, for a limited duration of 3 or 6 months. Adjusting the scope of MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) to offer employment to returning migrants. Giving one month’s advance wages through authenticated MGNREGA accounts is also possible. There should be specific interventions for migrant workers, including tracking them, ensuring access to basic food, transport and healthcare and enabling them to access PM Garib Kalyan Yojana, even if not formally registered (if they are without Jan Dhan accounts, but have an Aadhaar card or Ayushman Bharat card or ration card). There should be identification, registration and formal linking of migrant workers, daily wage workers, construction workers, through e-platforms that link benefits. Accelerating infrastructure building in healthcare and Make in India sectors (including National Infrastructure Pipeline), through state agencies and the National Investment and Infrastructure Fund. Liquidity line from the Reserve Bank of India to banks/non-banks to help MSMEs, with credit backstop by government (can also be structured as support to large corporates who provide credit support to the supply chain). Credit guarantee fund to absorb likely non-performing loan slippage and credit costs in small business and MSME loans, despite liquidity infusion. For large corporates, debt restructuring by banks, easing procedural requirements to raise private or foreign equity capital, and a transparent troubled asset relief programme-type programme of government capital infusion for select distressed companies in key sectors (travel, logistics, auto, textiles, construction, power). This needs to be independent of government, with a new institution and an independent board. Capital strengthening for banks/NBFCs (rolling back regulatory capital constraints, easing capital raising procedures, TARP-type recap for stressed entities). Also, other liquidity measures such as payout of unpaid government dues, and steps to boost liquidity for banks, NBFCs and reforms in the bond market. Restore and rebuild a stronger primary healthcare system, with a strong community care component, providing a protective and secure environment for healthcare professionals. Expansion of health infrastructure as an employment multiplier for doctors, nurses and para-medical staff, ASHA workers and ICDS Anganwadi workers, technicians and related services, along with skill development support. A short-term contingency plan involving reorientation of existing industries/PSUs/ railways/defence units for production. This should be spliced with a medium-term plan for diversification and self-reliance. This is also an opportunity for India to occupy disrupted global supply chains. Bibek Debroy and Ratan Watal are chairman and member secretary, Economic Advisory Council to the Prime Minister (EAC-PM).
Source: Live Mint
With a substantial number of manufacturing units located in red and orange zones, India Inc expects that the central government will relax the rules in such zones and help them restart production. Red zones are districts where many Covid-19 cases have been detected — some of them have been declared hotspots — and no activity might be permitted there. Orange zones are those where there are fewer cases, but can be some activity. The central government is coming up with detail guidelines for opening up of manufacturing unit. Corporate houses want the governments to divide districts into smaller zones to identify low-risk areas where factories can start work, peg production capacity to the risk of Covid-19 in a zone, allow factories that do not come under the Essential Services Maintenance Act (ESMA) to operate in the orange zone, and broaden the definition of essential services. A top executive of the Society of Indian Automobile Manufacturers (SIAM) said not a single unit was located in the green zone (where there are no Covid-19 cases) according to estimates. He said the situation would be similar for the component industry too. So, if these zones are kept under a tight leash with limited or no economic activity, they won't be able to open units. Said R C Bhargava, chairman of Maruti Suzuki: "I expect that the government will divide the affected districts into smaller sub-zones and permit industry in those smaller divisions, where there is little risk. A district is a very big zone. The process has to be in stages." Automakers said the government needs to open up some key industries like auto, textiles and electronics and their vendors in the initital phase of opening up and then add in more sectors. The SIAM executive said: "It's not only the OEM (original equipment manufacturer) whose factory has to be opened in the zone, even component suppliers have to start production and some dealers have to open their shutters as we have to also sell our product. So it is a complex process.” So far, around 48 per cent of 727 districts in the country have reported Covid-19 cases. CEOs say various models have been looked at during interactions with the government. Says a CEO of a well-known tyre company: "One of the things that is being looked at is whether the capacity permitted at a factory should be pegged to which zone it is located in. For instance, it could be 50 per cent capacity in the green zone and 25 per cent in orange zone but nothing for the red zone to begin with." Tyre companies are hoping that the manufacture of tyres for tractors is included under the ESMA and that as they have continuous processing plants they should be treated on a par with sectors like steel and refineries. In Tamil Nadu, for instance, 17 of the 34 zones are classified as red. These include Chennai and Coimbatore (engineering hub), Tiruppur (knitwear hub), Erode (textile), and Tiruchirappalli (engineering) amongst others. The auto hubs of Sriperumbudur and Oragadam that house the big firms like Hyundai, Nissan, Renault, Ford, Royal Enfield and Yamaha are located in Kanchipuram district, which is an orange zone. A top official in the state government said they would decide on how to kick-start production activity in these zones after the central government comes out with its guidelines, expected to be Tiruppur textile manufacturers, despite being in the red zone have been pushing the government to open up factories at limited capacity. That is because they have to make samples for clients in the UK, the US and Europe in the coming weeks. Raja N Shanmugam, president of Tiruppur Exporters Association, when asked how they could open an industry hub in the red zone said: "If they don't reopen we will all die. Government is well aware of the seriousness of the issue."There are, of course, others like JSW that despite being under ESMA have virtually suspended production because of logistical challenges and lack of demand. However, they want to get going now, and the company is slowly mobilising around 7,500-8,000 third-party contract workers for its plant in Dolvi in Raigad district of Maharashtra. Arrangements are being made for them to stay in tents put up on the factory premises. It has also applied to the state government to provide bus service for those employees who might have to commute.
Source: Business Standard
The coronavirus outbreak is a human tragedy and an economic disaster, but some businesses could in the long term do quite well out of it. Take Britain’s textile industry. Throughout the 1990s, British textile companies lost a lot of business to China as clothing retailers and brands in the United Kingdom turned en masse to the Far East for cheaper production. But now the disruption in trade with China has made some of those retailers reconsider the wisdom of having long supply chains, and they’ve been turning back to British manufacturers. “We’ve been getting a lot of inquiries solely due to the fact that retailers and brands need to be spreading their risk and placing orders locally and making sure the shops aren’t empty,” said Bhavik Master, boss of Paul James Knitwear, a knitted apparel manufacturer in the city of Leicester in the English Midlands. Suddenly, security of supply — and not cost — is paramount. Although his factory is currently shuttered and his staff furloughed, Master expects a surge in firm orders as soon as the coronavirus crisis subsides. “I think we’ll be stepping up production by at least 20 to 30%,” he told Marketplace. Other textile companies in Leicester are also getting a boost from COVID-19, the disease caused by the new coronavirus. Alkesh Kapadia of Barcode Design, another local fashion manufacturer, said that he’d received a flood of orders from worried customers. “They are concerned about getting stuff from China,” he said. Manufacturers like Master and Kapadia have their own supply chain worries. Many of their raw materials come from abroad and from countries that have been hard hit by the coronavirus. Italy, for example, is a major supplier of yarn. But Kate Hills of Make It British, a manufacturing advocacy group, said that British clothing retailers and brands are now focused on sourcing their fabrics domestically “so that in future the whole garment can be made in the U.K.” When the disease finally recedes, won’t all these supply chain anxieties subside, too? Hills thinks not. “I think the coronavirus is going to change the clothing industry’s mindset,” she said. “The industry will ask, ‘Do you want all your products made somewhere like China, or should you spread your risk and start making at least a percentage of your products much closer to homer, in the U.K.?’” One of the biggest economic casualties of the crisis could be the international supply chain, and that, Hills believes, will help Britain’s textile manufacturers.
Source: Market Place
Industry bodies in six countries have urged global brands, retailers and traders to consider the potential impact on workers and small businesses while taking purchase decisions. Nine business associations of STAR Network (Sustainable Textile of Asian Region) from six exporting countries called on their global partners to honour contracts terms. A joint statement was recently issued by Bangladesh Garment Manufacturers and Exporters Association (BGMEA), Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA), China National Textile and Apparel Council (CNTAC), Garment Manufacturers Association in Cambodia (GMAC), Myanmar Garment Manufacturers Association (MGMA), Pakistan Hosiery Manufacturers and Exporters Association (PHMA), Pakistan Textile Exporters Association (PTEA), Towel Manufacturers Association of Pakistan (TMA) and Vietnam Textile and Garment Association (VITAS). They called for taking delivery or shipment, and proceeding with payment as agreed upon for goods already produced and currently in production with materials ready, and not cancelling orders that are already in production, according to newspaper reports in Bangladesh. Responsible purchasing practices of brand companies, retailers and traders of the global textile and apparel supply chains will bring enormous impacts on the fundamental rights of millions of workers and the livelihood of their families in the supplier end, the statement read. The organisations said it is time for global businesses to uphold and honour their commitment to labour rights, social responsibility and sustainable supply chains. They called for putting no responsibility on suppliers for delay of delivery or shipment and for claiming no compensation for such delays and no further improper pressure on suppliers by additional costs, rushing orders or unnecessary visits and audits. The organisations sought all efforts and engage with local stakeholders for a better understanding of the local situation and contexts. They underscored the need for dialogue and collaborative settlement to ensure mutually acceptable solutions to disputes.
Source: Fibre2Fashion
Designers in Vietnam are creating hand-embroidered and stylish face masks, hoping to convince people to don protective gear in the fight against coronavirus. Wearing a face mask in public is mandatory in Vietnam and authorities are fining anyone who flouts the rules. But foreigners and tourists, in particular, have been spotted out and about unmasked. Do Quyen Hoa, a fashion designer in Hanoi hopes her eye-catching creations embroidered with flowers, insects and animals will help people think differently about wearing protection. "Some foreigners are still very doubtful about wearing face masks because they think only people who have diseases wear them."So I want these beautiful patterns to change their mind," she said of her hand-made pieces, which take three days to make. "I want the facemask to be not just a mask, it can be a fashion item for men and women," Hoa told AFP. Hoa's cotton masks cost $21 (€19) each -- significantly more than an average Vietnamese could afford -- but she already received 200 orders in March. For Nguyen My Tra, a journalist who has always had an interest in textiles, making her own silk masks using traditional patterns has become a family affair. Her daughter, eight-year-old Nguyen Tra My, who dreams of becoming a fashion designer, helps her with sewing while her son cuts the cloth. Both have been off school since the coronavirus outbreak began in January. "When the three of us work together to make masks, it connects us and makes us love each other more," Tra said, "and people who were given these masks told me that they feel happy, instead of being worried."
Source: Euronews
China has pledged continued support to aid its foreign trade firms and minimise the impact of COVID-19 on the sector. The country's imports and exports improved in March and resumption of work and production in foreign trade firms has also been advancing in an orderly manner, commerce ministry spokesperson Gao Feng recently said in a virtual press conference. More than 76 per cent of key firms in the sector have recovered over 70 per cent of their production capacity so far, he informed. However, part of China's foreign trade enterprises, especially those in the textile industry, had to postpone or cancel orders as the virus spread around the world and weighed in on the global economy and international trade, Gao noted. He highlighted collaboration among governments, companies and business organisations to cope with the lack of production materials faced by foreign trade firms due to disrupted global industrial and supply chains.China will strengthen macro-economic policy coordination with relevant countries and regions to facilitate customs clearance and logistics of important raw materials while encouraging foreign trade firms to avert risks by exploring new business opportunities and increasing spending on innovation. Gao also said that the ministry will join hands with other related parties to ensure an open, stable and safe global supply chain.
Source: Fibre2Fashion
