Coronavirus lockdown: PM Modi could discuss issues related to migrant movement, losses faced by states and suggestions on second round of stimulus package to bring economy back on trackPrime Minister Narendra Modi will chair a crucial meet with chief ministers of all states and union territories via video-conferencing at 12 pm today. During the meeting, PM Modi will gather important inputs from various states to put out a comprehensive and holistic plan with regard to the exit strategy before the second phase of lockdown ends on Sunday (May 3). Notably, after Delhi expressed its willingness to extend the lockdown in the red zone areas, other states, including Maharashtra, Punjab and Odisha, have also agreed that, if needed, they were also ready to continue with the existing restrictions till May 16. States like Gujarat, Andhra Pradesh, Tamil Nadu, Haryana, Himachal Pradesh and Karnataka have said they would follow the Centre's guidelines, while Assam, Kerala and Bihar have said they would take the final call after Monday video conference with Prime Minister Modi. In the last meeting held earlier this month, the CMs of most states had appealed to PM Modi to extend the 21-day countrywide lockdown from April 14 amid mounting the novel coronavirus cases. The Prime Minister could also discuss issues related to migrant movement, losses faced by states and suggestions on the second round of stimulus package to bring the economy back on track after lockdown. Speculations are rife that the Centre may soon come up with another relief package similar to the one announced in March. The lockdown has caused huge problems for migrant labourers, who have been stuck in different states, most of them without work. Big states including Maharashtra, Delhi, UP and Gujarat are facing crisis as many labourers are waiting for the lockdown to end so they could go to their native places. Sale of liquor is another big issue facing the states right now. States' coffers are empty due to no liquor sale for over a month now, and many of them want to open liquor shops to collect some revenue in the wake of crisis. The recent guidelines issued by the Ministry of Home Affairs relaxed restrictions for various registered shops but no relaxation was granted to liquor shops. The PM-CM meet could finally take a decision on this too. Meanwhile, India reported a total of 1,975 cases of COVID-19 on April 26, which was the highest single-day spike in infection cases since India reported its first confirmed coronavirus case in Kerala on January 30 of this year. The total number of confirmed COVID-19 cases in India stand at 26,917 currently, according to Union Ministry's 5 pm update on Sunday. These cases include, 20,177 active cases, 5,913 cured/discharged, 1 migrated and 826 deaths.
Source: Business Today
India is considering a goods and services tax (GST) relief package to counter the impact of Covid-19 and help prop up the economy, said people with knowledge of the matter. The package being considered could include a six-month suspension of GST payments for the worst-hit sectors such as restaurants, aviation and hospitality as well as a lower rate for the real estate sector. Other proposals include a switch to a cash-based principle of levying tax from the current invoice-based system and providing GST relief on sales for which payment is not received due to the lockdown by treating those as bad debts. These measures are expected to ease the liquidity pressure on businesses that are strapped for cash, said the people cited above. A final decision on the proposals will be taken by the GST Council, which is the apex decision-making body for the tax. “There is a thinking that for these service sectors, the government should at least spare its dues,” a government official told ET. The government could also consider exempting them from other statutory charges for some time. Though there has been a demand for complete GST exemption, the government is veering around to the view that suspending the tax will work better, the official said. Exempting a sector from tax would mean breaking the credit chain, leading to further problems down the line. A cash-based system will mean businesses pay GST when they get the money and not when the invoice is raised, ensuring they don’t have to pay the tax out of their pocket and get squeezed on working capital. This is most relevant for services where payment is received with a lag after bills are raised. Most service providers are facing delays in payments from clients but are saddled with GST liabilities. Another option is exempting these from GST, treating them as bad debt. “The idea is to provide some help to businesses to sail through this crisis,” a second official said, adding that it is expected that states will back the move in view of the unprecedented economic situation. Tax experts said liquidity is among the immediate needs of industry. “At this time, industry needs more liquidity and hence deferment in payment of GST for next few months (without interest) should be considered,” said Pratik Jain, national leader, indirect tax, PwC. While providing selective exemption is an option, it often creates complications as input credit gets blocked, aside from coping with the rigours of anti- profiteering provisions, he said. “Since the point of taxation in GST is effectively the issue of invoice, the suppliers pay the GST to the government exchequer before they actually collect it from the customers,” said Bipin Sapra, partner, EY, backing a cash-based system.
Source: Economic Times
Faced with the challenge of data inadequacy caused by the Covid-19 pandemic and lockdown, India has approached multilateral agencies including the International Monetary Fund and World Bank to ascertain the practices elsewhere in the world to prepare economic indicators such as industrial production, retail inflation and economic growth. Experts said deficiencies in data collection could affect the accuracy and reliability of the indicators. Data inadequacy has become a global phenomenon in the wake of Covid-19 and the Ministry of Statistics and Programme Implementation (MoSPI) is collaborating with global institutions on data collection practices and to learn from the experiences of other countries facing the same issues. “It is largely the World Bank we are in talks with who in turn are connecting us with other countries and organisations,” said one official. Economists said the current situation was a threat to the accuracy and reliability of the indicators. They highlighted collecting data over April consumer price inflation (CPI) as one of the biggest immediate challenges for the National Statistical Office (NSO). “For CPI data, it is definitely going to be very challenging. Almost 50% of CPI is from food items,” said NR Bhanumurthy, a professor at the National Institute of Public Finance and Policy. The CPI is based on the prices collected from 1,114 markets in 310 towns and 1,181villages. The NSO is collecting data through telephonic surveys wherever shops are open and has also asked its officers and enumerators about prices so as to come out with data on essential products. However, experts said this could result in a smaller sample size. “The CPI data for last month was much lower that what it actually was. It showed inflation had come down, but they mentioned that for 25% of items they were not able to get price quotations. The conservative thing to do is say there is no change,” CARE Ratings chief economist Madan Sabnavis said. While releasing the retail inflation data for March, the NSO said it received about 66% of price quotations as data gathering was suspended from March 19 due to Covid-19, but added that this was within “acceptable limits”. Experts expect the March IIP data to be available at least till March 24 when the lockdown started, but the challenge will be the April data. As per Sabnavis, the March IIP data might still be higher due to a base effect, while mining would be in the negative zone in April due to its dependence on labour that faced lot of constraints. For IIP, the NSO uses secondary data received from 14 source agencies in various ministries and covers 407 item groups. “The source agencies are giving data but the effect of the lockdown will be visible in the data. The response rate has not been impacted much, especially in case of IIP,” said another official. Similarly, GDP data is compiled using regulatory filings of companies, among other sources. “The issue is that if companies cannot bring out their P&L data by June, can the GDP numbers for March be computed. So, either you assume there is no change in numbers or work on the basis of a smaller sample which is more likely,” Sabnavis said.
USING PROXIES, GOING DIGITAL
On the issue of using proxies to release high frequency data, experts said the main challenge would be in assessing the extent of the impact in various sectors. They suggested various measures like extrapolation, interpolation, proxy data and providing ranges for estimates.
Source: Economic Times
Some plan to operate at 50% capacity, due to huge inventory piled up with distributors and retailers before the lockdown. Already impacted by a lockdown-induced shortage of labour, the textile industry is now facing prospects of an increase of as much as 25 per cent in manufacturing costs. This is also because functioning units have to comply with statutory norms on sanitisation and social distancing on the shopfloor to prevent spread of coronavirus. “Even if the lockdown period ends and factories open, we will have to increase compliance on social distancing and sanitisation to improve cleanliness across the value chain. This is set to increase our cost of production by at least 25 per cent, which we will pass on to consumers,” said Ujwal Lahoti, Owner, Lahoti Overeseas. The nationwide lockdown started initially for three weeks beginning March 25, but was later extended till May 3. Textile units are planning to start production with 50 per cent of their installed capacity post May 3, due to huge inventory piled up with distributors and retailers before the lockdown. With uncertainty remaining over opening up of retail markets simultaneously, textile manufacturers are planning to start their factories in phased manner. “There is ample stock available with distributors and retailers. Hence, we will start production slowly. It will not be difficult in Gujarat and some other regions with low Covid-19 cases but, certainly will be tough otherwise. Initially, we are looking to start at 50 per cent operating capacity,” K V Srinivasan, Chairman of Cotton Textiles Export Promotion Council (Texprocil).“Overseas buyers are cancelling orders on a large scale and re-negotiating terms of business including product pricing. Buyers aren't even releasing payments to exporters against shipments done made. Exporters are under severe financial pressure with many finding it extremely difficult to manage salaries and wages, and other fixed cost to run the factory,” said Srinivasan. Exporters are therefore hoping to get a financial package from the government and interest-free working capital loans to sustain textile shipment from India. R K Dalmia, President, Century Textiles, however, believes that textile units have already started approaching local authorities seeking permission to run the factory with internal workforce initially. “But, the labour-intensive textile industry will certainly be impacted immensely due to unavailability of skilled and unskilled migrant workers who have moved back to their native places,” said Dalmia. Meanwhile, both cotton and man-made fibre (MMF) prices have declined sharply due to global trade restrictions and fall in crude oil prices. This is likely to benefit textile players at large. But, the top and bottom lines of textile players are expected to remain in the negative in the June quarter, with marginal recovery in Q2, due to lean demand during the monsoon, and further growth thereafter.
Source: Business Standard
American companies should focus on prioritising India as a destination for investment, Suresh Prabhu says, at a webinar organised by Forbes India and the Indo-American Chamber of Commerce (IACC). The India-US relationship, despite going through difficulties initially, is at its strongest point now with India’s pharmaceutical industry supplying medicines to the US during the [Covid-19] pandemic, Suresh Prabhu, former union minister, said. He was speaking at a webinar on 'Indo-US Trade Cooperation post-COVID-19' organised by Forbes India and the Indo-American Chamber of Commerce (IACC). Apart from Prabhu, the webinar was attended by Retired Lieutenant General Syed Ata Hasnain, Chancellor, Central University of Kashmir; Dr Ajit Ranade, President and Chief Economist, Aditya Birla Group; and Naushad Panjwani, Regional President, IACC West India Council. The discussion was moderated by Brian Carvalho, editor, Forbes India. “Focusing on the current scenario relating to trade, India has a surplus situation [with the US],” the former union minister added. He said, there will be a slowdown in the procurement of aircraft from the US, considering the pandemic, as many airlines will likely trim their fleet size. India also procures defence equipment from the US and has recently started buying oil too. “Indian students studying in the US are also an investment amounting to more than $20 billion. This is a service export,” Prabhu added. "To have India as a strategic partner will help the US in a significant way...Despite the current turbulence, Indo-US relationship is expected to strengthen," Prabhu said. There is a lot of potential that can be harvested under the leadership of Prime Minister Narendra Modi and US President Donald Trump, he stated. Aditya Birla Group's Ajit Ranade said that Facebook's nearly $6 billion investment in Reliance Jio shows the confidence for FDI in India, in spite of the turbulent financial markets. A NASSCOM study shows that for every one job that is outsourced by the US to India, about two jobs are created there. “The biggest IT
Source: Forbes India
To bounce back from the pandemic quickly, India needs a stimulus package of at least 5% of GDP that focuses on broad-based development in laggard eastern states. In the classic Walt Disney Productions, Winnie the Pooh, there is a character by the name of Tigger. One of his most famous and oft-repeated quotes is “Life is not about how fast you run or how high you climb, but how well you bounce”. In the context of today’s economy, which is literally under seize due to the novel coronavirus, it is not about how big your GDP is, or how fast you have been growing; the real challenge is how best, and how quickly, you can bounce back to your normal growth of 7-8% per annum. The IMF’s projections for GDP growth for this year seem to be either in negative or below 2% for almost all major G-20 countries. Within Brics countries, India may do a little better, but still below 2%. This is under an optimistic scenario, and many experts claim that India may also go into negative GDP growth this year, if it does not reboot the economy properly and in time. The central government, and the Reserve Bank of India (RBI) are doing the heavy weightlifting, trying to remove all roadblocks so that factories and farms can resume operations, albeit in a regulated manner, ensuring the virus is contained. The focus is largely on the supply side, i.e., how to ease restrictions, and how to increase liquidity in the system for resuming production. My humble assessment is that this may not take us far enough as the real problem is collapse in demand. And, that demand may not pick up easily as the virus is likely to stay with us for quite some time, and we may again have lockdowns as and when the viral infection surges. This will surely limit our travels and shopping for non-essentials. However, there is one demand that can easily revive, and that is food. The NSSO survey of consumption expenditures for 2011-12 revealed that in an average Indian household, about 45% of the expenditure is on food, and almost 60% of the expenditure of the poor is on food. We do not have information about consumption patterns in 2020, but my guess is that an average Indian will still be spending about 35-40% of their expenditure on food; for the poor, this expenditure would be about 50%. And, herein lies the scope to reboot the economy. We have seen the problems of migrant labourers during the lockdown. They were literally knocked down. The sudden announcement of nationwide lockdown on the night of March 24 gave them no time to go back to their families. They lost their jobs, their incomes, and having spent whatever little savings they had; they were reduced to an almost beggar-like situation, looking at anyone who can feed them. The governments, despite their best efforts, have not been able to redress their problem of hunger. Even civil society could not fully bridge the gap. There is a breach of trust between the state and the migrant labourers which will come out glaringly once the lockdown is lifted. Most of them are likely to rush back to their families in villages, as if they are freed from jail. And ,it will take quite a long time for them to reconcile and come back to cities, if they do it at all. So, the farms and factories, especially MSMEs, in the relatively developed states of western, southern, and north-western India are likely to face labour shortages for many months, maybe years to come. This will lead to more mechanisation of farms and factories in these states. In Punjab, for example, most of the wheat harvesting is already done by harvest combines, and now, even the planting of paddy will be rapidly mechanised. But, eastern Uttar Pradesh, Bihar, Jharkhand, West Bengal, and Odisha, from where much of the migrant labour goes to other parts of India, will face a double challenge. In these states, agriculture, with tiny farm holdings, was already saddled with large labour force, engaging almost 45 to 55% of their total labour force. Non-farm income from wages and salaries, through migrant labour, was one important source of their income. This is now severely hit. In all probability, these staes’ overall per capita incomes in rural areas may shrink, at least in the short run, raising issues of swelling poverty, hunger, and malnutrition. In such a situation, how does one reboot the economy and also take care of a worsening situation on the hunger and malnutrition front?
A special investment package, a la USA’s Marshall Plan in 1948, for the eastern belt of India to build better infrastructure, agri-markets and godowns, rural housing and primary health centres, schooling, skilling will go a long way to revive the economy, and augment incomes of returned migrant labourers in these states. Rising incomes will generate more demand for food as well as manufactured products, giving a fillip to growth engines of agriculture as well as the MSME sector. Building better supply chains for food, directly from farm to fork, led by the private sector will not only augment export competitiveness of agriculture but also ensure a higher share of farmers in consumers’ rupee. This broad-based development in the hitherto laggard region of India will lay down the foundation for the long-term, demand-driven growth of industry in India. The all India relief package of Rs 1.7 lakh crore, announced by the central government earlier, which is about 0.8% of GDP, is too puny to reboot the economy. If India has to bounce back quickly, it needs a much bigger relief-cum-stimulus package, certainly not below 5% of GDP. And, it should focus more on the eastern belt, where the issue is one of survival. Else, I am afraid, all indicators of poverty, hunger, malnutrition, infant mortality, and well-being may suffer. India may get derailed from its course of attaining the Sustainable Development Goals by 2030.
Source: Financial Express
Small Industries Development Bank of India (SIDBI) has decided to lend money to Micro, Small, Medium Enterprises (MSME) which has been involved in producing the essential goods in the corona war. SIDBI is lending loan of 50 lakh to 1 crore rupees at an interest rate of just 5%. There will be no need to give any guarantee or mortgage for the MSME to avail of the loan. SIDBI is not charging any processing fees for this loan and no additional charges will be levied even on pre-payment. This information was given by senior officials of the SIDBI in the e-pathshala conference organized by CIMSME. This loan is available to all MSMEs providing services connected with the production of essential commodities. These products include such items as masks, sanitizers, gloves, medicines, food items, etc. SIDBI General Manager Vivek Kumar Malhotra said that during the fight against Coronavirus, loans are being given to MSMEs under two types of schemes. Loans up to 50 lakh rupees are available under the first scheme called Safe, then under Safe Plus, MSMEs can take loans up to 1 crore. Only 5 percent interest will have to be paid on the loan taken under both schemes. The loan will have to be applied online and the loan will be approved in just 48 hours. Necessary investigation procedures will also be completed electronically before lending. Funds to the tune of Rs 100 crore have been placed under both schemes. Anand Prakash Srivastava, the second general manager of SIDBI, who attended the e-school organized by the chamber, said that MSMEs already availing loans can also avail the scheme, which has no connection with SIDBI till now. He said that the only condition for taking a loan under this scheme is to have cash profit in the balance sheet of that MSME. Those who are old customers of SIDBI, their balance sheet should be in the cash profit last year and the two-year cash profit should appear in the balance sheet of MSME, which was first associated with SIDBI. Mukesh Mohan Gupta, President of CIMSME, said that about 200 MSMEs participated in the e-Pathshala organized on Friday and showed keen interest in this scheme of SIDBI.
Source: Inventiva
HYDERABAD: The covid-19 pandemic has hit the industrial sector across India, but Telangana IT minister K.T. Rama Rao feels there could be a silver lining in the crisis. KTR, as he is known in political circles, said if electronics and textile companies move away from China in the coming months, the Telangana government could work internally to draw potential investors to the state. Edited excerpts of an interview:
Do you think some manufacturing companies will move away from China, once the crisis eases?
I think the dependence on China is something that every manufacturing company is definitely reviewing and revisiting. For instance, we saw what the Japanese and Korean premiers have said with respect to their companies moving away from China. So in light of all that what we should, as a country, be thinking is that in any adversity there are opportunities. The silver lining in this crisis is that it will throw up potential opportunities for India to grab. For instance, textile as a sector is heavily focussed and concentrated in China. Likewise a lot of electronic manufacturing happens in China and a lot of it will move away. So India has a brilliant opportunity to seize. Likewise, for the life sciences industry. Fortunately for us, in all these three sectors, Telangana is poised very well.
Have any companies enquired about setting up shop in Telangana?
Anybody who is looking at India, will look at more progressive states like us. We are working internally and engaging with potential investors. There are investors from China, (South) Korea and other parts of the world who have invested in Telangana, so we are reaching out to others through them.
How do you think covid-19 is going to impact the industrial sector?
The biggest challenge will be to instil confidence in the workforce. Operating at full capacity in the short-term will be a challenge, but operating at an optimal capacity and eventually ramping up should be the goal. You have to work in shifts, as against what you are used to. Lot of changes have to be made. Sanitation, sanitizers and personal hygiene will become a topic of extreme importance. You will have to have paramedical staff on call at least, so that if someone falls sick they can be immediately shifted. So unless we do all this nobody will be comfortable to return to work. How all this is feasible, we have to start thinking about. We also have to see what other countries bounced back and are coping.
Have there been requests from the industry bigwigs to ease the lockdown?
Telangana can’t think in isolation and we have to see what the rest of the world is doing. We have continued our lockdown till 7 May, and did not provide any relaxations as such, but many of our neighbouring states did. So it becomes difficult for our industry also to become competitive. Some sections of the industry reached out and appealed to us, but we told them this is a pandemic and that as a government our priority is to keep our people safe.
What do you think the Centre needs to do on its part to boost the economy?
The government of India needs to seize the opportunity and create a positive spin on the whole situation. It needs to start engaging with various industry bodies and missions in various important manufacturing countries, to start engaging in activity which will lure investments to us. Secondly, why is state after state asking to include MNREGA with agriculture? There is renewed focus on pharma and vaccines now. India’s capabilities have been proven. Even president (Donald) Trump standing in the White House and asking (Narendra) Modi to send hydroxychloroquine, is where Hyderabad gets a resounding endorsement. So a project like pharma city assumes national importance. This is the silver line I have been harping on.
Source: Live Mint
The survey indicates that permits for enterprises, passes for workers and supply chain movement are the key hurdles for industry in exit from lockdown. Supply chain movement, permits for enterprises and passes for workers are the key hurdles for industry to restart operations, industry body CII said in a survey. Confederation of Indian Industry (CII) based its views on findings of a nation-wide survey conducted by it on 180 companies. The survey indicates that permits for enterprises, passes for workers and supply chain movement are the key hurdles for industry in exit from lockdown. “For facilitating restart of economic activities, CII has suggested that in non-containment zones, businesses should be allowed to function without requirement of permits and only through intimation to local authorities. Moreover, workers can be permitted to commute on the basis of a letter issued by the employer organisation, with the facility to travel on their own vehicles,” said the industry body’s Director General Chandrajit Banerjee. The survey was conducted to determine the effectiveness of the exit from lockdown in specified zones and sectors, and elicited responses from across the country, covering many sectors and enterprises of all sizes. A majority of respondents stated that guidelines issued by the Ministry of Home Affairs on 15 and 16 April on operational zones in rural and urban areas are clearly communicated by state governments. For sectors allowed to function, 46 per cent of the surveyed enterprises said that permits are either not provided or are delayed. However, over two-fifths of respondents received permits smoothly. CII recommended that approvals of applications must have clear mandated deadlines with a provision for automatic permits after the specified time. Regarding movement of workers, as many as 42 per cent of respondents in the survey stated that passes for employees are delayed or not available. Similarly, two-thirds of those surveyed pointed out that transportation of employees between the workplace and home is an issue. As a result, the employee strength of 58 per cent of enterprises was below 25 per cent, with less than one-tenth respondents having an employment strength of more than half. This also indicated that social distancing norms are being followed, according to the survey. The movement of inputs and finished goods came up as another major hurdle. Only 15 per cent of the respondents answered that the movement is timely, while 39 per cent are experiencing delays and as many as 23 per cent stated that inputs are not available. While fear of coronavirus cases impacted the opening decision of only 4 per cent of respondents, as many as 39 per cent fear that positive cases could invite criminal allegations against the business. The clarification issued by the MHA that this would not be the case would go a long way to instil confidence and encourage more businesses to open up, CII said in the report.
Source: Telangana Today
The decline was led by container volumes which fell sharply by 12% y-o-y (in TEU terms; 9% y-o-y in tonnage terms). Compared to the sharp decline in EXIM trade, major port volumes declined by a modest 5% y-o-y in Mar’20. The decline was led by container volumes which fell sharply by 12% y-o-y (in TEU terms; 9% y-o-y in tonnage terms). Ex-containers, major ports’ volumes declined by 3.2% y-o-y in the month.
Source: Financial Express
Once the corona pandemic ends and the dust settles, the fashion supply chain is expected to change rapidly. The global industry is abuzz with discussions about inshoring and nearshoring and especially in the wake of the rising anti-Chinese sentiments, this presents lucrative opportunities for other countries, including India. The COVID-19 pandemic has elevated the need to change the procurement and sourcing template of the fashion industry. Ideally, brands and retailers place large orders and procure about six months’ out resulting in tied up working capital and as is apparent now – too much inventory. The shift post the pandemic is expected to lean towards smaller orders that arrives on time thereby reducing inventory liabilities and allowing buyers to have a quicker read. “Businesses will have to stop chasing the cheapest needle and start looking at total margin. We will have to emphasize more on SKU and less on MOQ per SKU – so that we do not end up with heavy liability for products that tend to not work well. This will also bring a shift in the relationship with the vendor community, who will have to accommodate the change,” says Edward Hertzman, Founder and President, The Sourcing Journal, USA. Fashion buyers are expecting the pandemic to result in a big consolidation – both on the retail and the supply side. Unfortunately for the industry, there are chances that not all suppliers or retailers could make it to the other side. The epidemic has also taught the industry to consider the country specific risk factors of their partners. “Post the pandemic, the industry outlook on the risk factor, something that has been largely overlooked upon till now, will change dramatically. And finally, the savior will be technology – I am assured that the rate of adoption of technology will jump by manifolds because of the pandemic,” adds Arjun Puri, Director, CAS Group, Australia.
The Opportunity for India
As lockdown are lifted, businesses could prove to be difficult in the short term. Coming out of the shock will demand joint efforts from everyone in the supply chain – right from the customer, apparel manufacturers, employees, yarn and fabric mills to the government. “But every adversity carries with it the seed of an equivalent or greater benefit. With reduced expenses and overhead and agility we can definitely offset the effects of the crisis to a good extent. The anti-China sentiment presents India with a great opportunity considering India’s potential from farm to port. It is not possible, just look at how the whole PPE supply chain, which was nonexistent in India, was overhauled just within a month,” reflected Sailesh Goenka, Director, Texport Industries, India. China’s market share in the global fashion industry is around 176 billion accounting to roughly 38 percent of the global share, while India stands at a mere 4 percent. Hence, as the global demand takes a hit in the time to come, the primary focus of the nation should be to retain the existing market share for the short term. Goenka also believes that it will take joint efforts of the Ministry of Textiles, Apparel Export Promotion Council (AEPC), Confederation of Textile Industries and leading brands to work with Indian fabric mills to manufacture fall holiday fabric in India at the right price and quality. This would help the country in better utilization of it capacities across the supply chain and encouraging business.
Continued Support from Buyers
As published earlier, the coronavirus pandemic is taking a major toll on the developing countries – while shipments worth US$ 3 billion are at stake for Indian apparel exporters, Bangladesh has sustained loss to the tune of more than US$ 3.11 billion. While the Bangladesh Garment Manufacturers and Exporters Association has extensively utilized social media to reach out to the global fashion community, India’s response has been rather passive. Dr. A Sakthivel, Chairman, AEPC, assured the panelists that organization has taken serious steps to safeguard the interests of suppliers in India. “We have requested the Hon’ble Minister of Textiles to appeal to the buyers to support their Indian partners by not canceling orders and payments. We have also reached out to most buyers – brands, retails and importers – to continue their support in this critical time and most of them have promised to honor the request. We have also reached out to leaders and organizations in Bangladesh and Sri Lanka in an attempt to reach a viable solution together. We are also in talks with the Ethical Trading Initiative and The International Labour Organization who have ensured us of their respective support in this humanitarian crisis,” he adds.
On Increasing Efficiency
Unlike Bangladesh and Vietnam, India has the distinct advantage of being a textile producer, with the fabric industry clocking US$ 16 billion in exports in the last fiscal. The fabric industry can now focus on working closely with the manufacturing industry to increase efficiency and overall exports. According to Sailesh Goenka, the entire value chain of the yarn and fabric industry should now focus on a long term approach. “We definitely need to have more meaningful relationships between apparel manufacturers and fabric mills. The mills need to be aligned to retailers’ and brands’ requirements as well. We also need to concentrate on building speed as well as ensure that transactional businesses are in place with partnerships – because, it is highly possible that we all would be compelled to work a lot more in debt in the near future,” he adds. The global economy will be under tremendous strain in the aftermath of the novel coronavirus epidemic. With job loss and pay cut on cards for millions across the world, the global discretionary spend will be heavily affected. While it hard to predict the gross impact it is fairly apparent by now that it is going to be significant. Going ahead, buyers will have many choices but it will be indispensable for suppliers to meet requirements and offer value – be it pricing, delivery speed or designs and innovation to turn this adversary into an opportunity.
Source: India Retailing
Mumbai: The rupee rose by 21 paise to close at 76.25 against the US dollar on Monday, tracking positive domestic equities and weakening of the American currency in the overseas market. Forex traders said the uptick in the currency counter was largely due to expectations of more stimulus measures from central banks to support their respective economies reeling under the COVID-19 pandemic. At the interbank foreign exchange, the rupee opened higher at 76.14 and touched an intra-day high of 76.05 in morning trade. The domestic unit, however, pared some initial gains and finally settled at 76.25, registering a rise of 21 paise over its previous close. On Friday, the local unit had settled at 76.46 against the US dollar. Equity benchmark Sensex settled 416 points or 1.33 per cent higher, led by gains in financial stocks as RBI's Rs 50,000-crore stimulus to mutual funds and positive cues from global markets buoyed investor sentiment. The NSE Nifty rose by 127.90 points, or 1.40 per cent. The US dollar weakened against major currencies in global trade with more countries announcing gradual lifting of lockdowns that have been imposed to contain coronavirus infection. The number of cases around the world linked to COVID-19 has crossed over 29.91 lakh. In India, over 27,800 cases have been reported so far. The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.42 per cent down at 99.96. Meanwhile, the Reserve Bank of India provided a Rs 50,000-crore shot in the arm to stressed mutual funds by unveiling a special liquidity facility for the sector, days after Franklin Templeton Mutual Fund decided to wind up six debt schemes. Meetings of major central banks this week raised hopes of more stimulus to counter the fallout from the coronovirus pandemic, traders said. "Later this week, the Federal Reserve and the European Central Bank meet is due hence the rupee will be in momentum the entire week," said Jateen Trivedi, Senior Research Analyst (Commodity & Currency) at LKP Securities. The Bank of Japan on Monday announced expanding its stimulus measures to support the economy hit by coronavirus outbreak. Forex traders, however, said Reserve Bank of India Governor Shaktikanta Das' comment on fiscal deficit weighed on the rupee sentiment. "Rupee opened higher against the US dollar but was weighed down after comments from the RBI governor. He mentioned in an interview that the government will probably miss its fiscal deficit target of 3.5 per cent of GDP in financial year 2021 owing to the COVID-19 pandemic," said Gaurang Somaiyaa, Forex & Bullion Analyst, Motilal Oswal Financial Services. Somaiyaa further said, "This week, on the domestic front, market participants will be keeping an eye on the fiscal deficit number and that could provide cues to the currency that has been trading in a narrow range". According to Devarsh Vakil, Head Advisory, HDFC Securities, RBI governor's comments "dampened the sentiment for rupee bulls". Vakil further noted that "the fall in rupee might be temporary as we will see dollar inflows of USD 5.7 billion from Facebook to buy a stake in Reliance Industries telecom unit". Meanwhile, foreign institutional investors remained net sellers in the capital market, as they sold equity shares worth Rs 207.29 crore on Friday, according to provisional exchange data. Brent crude futures fell 4.62 per cent to USD 20.45 per barrel due to oversupply concerns. The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 76.4173 and for rupee/euro at 82.2113. The reference rate for rupee/British pound was fixed at 94.2200 and for rupee/100 Japanese yen at 71.00.
Source: Economic Times
The coronavirus pandemic has severely impacted almost every country, and many of the world's leading politicians and scholars are now discussing world order after the crisis. The pandemic will indeed change many things, but for the international political and economic landscape, it will be more of a catalyst, accelerating or revealing political and economic processes that already existed but are not so apparent. On April 18, the Indian Department for Promotion of Industry and Internal Trade suddenly revised its foreign investment policy, making prior approval of the government mandatory for investment activities including mergers and acquisitions from countries that share a border with India. The revised investment rules are aimed at curbing "opportunistic takeovers/acquisitions" of Indian companies as a result of the COVID-19 pandemic. Since China is India's only land-bordering neighbor with significant investment in India, and the only country capable of investing in India in the context of the global spread of the virus, the intention of this policy is clear. The introduction of the policy reflects the development trend of India's domestic and foreign affairs. On the domestic front, it shows the growing power of right-leaning conservatism in Indian society. On the diplomatic front, this policy, like India's withdrawal from the Regional Comprehensive Economic Partnership negotiations, demonstrates its determination to reduce its economic dependence on China and realize the "Make in India" ambitions, taking opportunity of some Western countries, led by the US, shifting much of the industrial chain out of China. This is the third time India's attitude toward China has changed since the outbreak of the novel coronavirus. When the epidemic hit China, India cut off travel to and from China. Exports of masks and other medical protective equipment, even the cotton yarn used to make masks, were prohibited by India. Indian airlines suspended flights to China. In early February, Indian Prime Minister Narendra Modi sent a letter of condolence to Chinese President Xi Jinping when China launched a national mobilization to battle the virus. After that, India vigorously assisted China in its fight against the epidemic, and sent military aircraft to deliver medical supplies to Wuhan. After China successfully contained the epidemic, the outbreaks occurred one after another in European countries and the US, and India was unfortunately also affected by imported cases from Western countries. This phenomenon fully demonstrates that all people live a community with a shared future. It is supposed to be a time for all of humanity to join hands with governments and international organizations to fight the pandemic. But the US and some Western countries, due to lacking anti-virus measures, are trying to shift the blame and divert public attention, and even hoping to contain China. US politicians like US Secretary of State Mike Pompeo have blamed China and the World Health Organization (WHO) for the global spread of the virus, and have put forward various fallacies such as "China concealing data," "China should be held accountable," and "China should compensate." As these myths go viral in the West, we are finding no shortage of advocates in India. So far, the Indian government has not publicly blamed any country for the pandemic, but many former senior Indian officials have publicly blamed China for the global spread of the virus and the WHO needs to make major reforms. India's mainstream media are largely in line with the Indian government, but there is a strong bias in reporting and commentary. This phenomenon makes people like me, who have long been committed to the friendship and mutual understanding between the Chinese and Indian people, very sad. The most pressing challenge for India now is how to deal with the spread of COVID-19 at home. In this regard, it is of vital importance to enhance China-India cooperation and maintain the role and authority of the WHO. On April 14, Indian Ambassador to China Vikram Misri said at an online news conference that India has ordered 15 million sets of personal protective equipment and 1.5 million rapid testing kits from China to combat the novel coronavirus in India. All medical supplies were purchased at stable prices, sending a positive signal for the direction of India-China relations. The coronavirus is the common foe of China and India. Objecting to smearing, maintaining multilateralism and carrying out anti-virus cooperation is a choice as well as responsibility for China and India. As agreed by Xi and Modi in Chennai last October, this year's informal leaders' meeting will be held in China. As the first country to emerge from the pandemic, China should carry forward international humanitarian spirit and provide assistance to the Indian people within its capacity. India should abandon zero-sum mentality and engage in cooperation with China and uphold international justice. China still hopes that, after the pandemic, the two countries will continue the "Wuhan Spirit." The author is secretary-general of the Research Center for China-South Asia Cooperation at the Shanghai Institute for International Studies.
Source: Global Times
Thousands of readymade garment workers reached their work places in Dhaka, Gazipur, Narayanganj and Ashulia by local transports, ferries and even on foot to join work as the factories to resume operation from Sunday amid the nationwide shutdown. Though the government extended the general holiday till May 5, it allowed factories to reopen on a limited scale, spurring a huge influx of people into the COVID-19 hotspots including Dhaka, Narayanganj and Gazipur. The country’s garment manufacturers on Saturday said that they would start reopening their factories on a limited scale from Sunday and the production in knitting and dyeing units in Narayanganj and garment factories in Dhaka city would be started on the first day but at least 600 factories across the country started production on the day, some in full swing.Meanwhile, as uncertainty looms over jobs and wages, workers of apparel factories in Dhaka’s Ashulia and in Gazipur continued demonstrations for wages and reinstatement of laid off workers on the day. Earlier, thousands of apparel workers returned to Dhaka on April 4 to join work amid the shutdown, but the authorities decided not to resume productions in the wake of widespread criticisms. The experts are of the opinion that the COVID-19 quickly spread across the country during the shutdown as thousands of workers travelled to and from Dhaka and Narayanganj, where the first infections were detected on March 8. Trade union leaders alleged that although Bangladesh Garment Manufacturers and Exporters Association and Bangladesh Knitwear Manufacturers and Exporters Association said that the factory will reopen with only the workers who were living nearby, but the factory authorities asked many workers to join work over mobile phones though they were now in their village homes. They said that workers were in uncertainty over their jobs and payment of wages as they believed that they would not get the wage for April and the festival allowance if they remained absent. Apparel makers, however, said that few factories started operation with a limited number of workers and the workers who are in village now were asked not to join work. But some workers were likely to take the decision to reach workplaces out of job insecurity, they said. BGMEA official said that approximately 502 member factories of the trade body reopened on Sunday. The factories that resumed operation are — 25 in Dhaka metropolitan area, 18 in Narayanganj, 129 in Ashulia and Savar, 238 in Gazipur and 92 in Chattogram. According to the Industrial police data, there were a total of 3372 RMG and textile factories under the jurisdiction of six zones of the agency and 759 units of them were open on Sunday. Data showed that out of 759 factories, 473 were reopened on Sunday. Out of 473 units which reopened on Sunday, 332 are the members of BGMEA, 95 are registered with BKMEA and 46 are the members of Bangladesh Textile Mills Association.‘Although the BGMEA and BKMEA said that factories will be reopened with a limited number of workers who were living nearby the factories, hundreds of workers went back to their workplaces using local transports and other means of transport and even on foot at places from Netrakona, Sherpur and adjacent district from Saturday,’ Tofazzek Hossain, general secretary of Mymensingh district unit of Bangladesh Trade Union Sangha. He said that managers of many factories asked the workers to join work while many workers reached the factories as their wages of March remained due. Taslima Akhter, president of Bangladesh Garment Workers Solidarity, said that workers were confused over factory operation as many workers were asked to join on Sunday while trade bodies asked not to bring workers from outside Dhaka. New Age staff correspondent in Chattogram reported that hundreds of workers joined work at export-oriented factories in the morning amid the coronavirus pandemic. Chittagong Export Processing Zone general manager Khurshid Alam said that the garment owners opened their factories by ensuring health guidelines and protection of workers. Privately owned Korean EPZ general manager Mushfiqur Rahman said that they opened all their factories in full swing from Sunday as 93 percent workers of their factories live in nearby areas. Civil Surgeon Sheikh Fazle Rabbi said that the more people would gather the more it would increase the risk of spreading the virus. They must ensure cleanliness and social distancing in the factories. Mushtuq Husain, former principal scientific officer of IEDCR, told New Age that the instruction was to resume productions at factories in limited scale, but it seems that the owners have asked many workers to return and did not even think about how they would reach the workplaces amid the ongoing lockdown. ‘The factories must be operated following health and social distancing guidelines. If the owners fail to ensure the guidelines, I am afraid there the result would be disastrous,’ he added. Witnesses said that several thousand workers mostly of export-oriented garment units took to the streets in Dhaka’s Ashulia and Savar, in Gazipur and Narayanganj to press their demands despite rain. Industrial police officials said that so far 650 factories did not pay their workers for the previous month while 1,427 factories started production in the industrial areas including Ashulia, Savar, Gazipur, Ctg and Narayanganj. Police said that several hundred workers of Sigma Fashions Limited went to the factory gate and started demonstration protesting their termination. A number of fellow workers joined forces them demanding reinstatement of 709 workers who had been dismissed. The workers of Sky Lux Ltd and Tibbet Garment Ltd at Hemayetpur of Savar and Greenlife Clothing Ltd also demonstrated for wage. Bangladesh Institute of Planners in a statement expressed concerns over the decision of opening of the factories and said that it would increase the health risk for workers as well as the general people. New Age correspondent in Gazipur reported that the workers of RL Yearn Dying Ltd at Kaliakair started demonstration in the morning as the factory management did not pay them for March. The agitated workers blocked the nearby road until the factory management assured them of paying the wages by May 2. Gazipur industrial police inspector Rezaul Karim said that the workers of Nexus Fashion Ltd, Stylish Garment Ltd and Hesong BD also demonstrated for due wages.
Source: New Bangladesh
Seven years ago, one of the worst industrial disasters in history — the collapse of an eight-story commercial building in Rana Plaza, Dhaka — demonstrated to the world the heavy price of producing cheap clothing to fuel the ‘fast fashion’ industry for consumers in the global North. The tragedy on April 24, 2013, killed 1129 and injured more than 2500 workers. In response, Western companies invested in two organisations: The Accord on Fire and Building Safety in Bangladesh, created by European businesses and The Alliance for Bangladesh Worker Safety, created by the North American retailers. The brands declared that it was no longer going to be business as usual and that they would strictly monitor and inspect a portion of Bangladesh’s factories. In the last seven years, the registered factories in Bangladesh have been required by the Alliance and Accord to comply with electrical, fire safety and structural standards. The factories covered by these monitoring agreements account for 27 percent of total factories, since Tier Two and Three subcontracting factories are not monitored by these organisations. By 2018, 16 percent of all Accord and Alliance-registered factories had successfully completed the entire remediation process. While the Accord spends US $ 11 million every year supporting the engineers and monitoring staff, the non-compliant factories did not receive any financial support to make the necessary improvements. Smaller and under-resourced factories were simply terminated when they were not able to comply. These agreements were successful in making a portion of Bangladesh’s factories structurally safer but there has not been much progress in several other key areas. The garment workers in Bangladesh still do not get paid a living wage, making it impossible to accumulate any savings. They face brutal crackdowns on their right to organise and bargain despite an initial increase in union registration after 2013. Brands adhering to the fast fashion business model continue to squeeze suppliers by setting unrealistic targets, continually demanding that they produce increased quantities faster and cheaper. Since the Rana Plaza disaster, lead times have declined by 8 percent, the prices paid to suppliers have declined by 13 percent and wages have dropped by 6 percent. The reality in 2020 is worse than business-as-usual in 2013. The emphasis on the physical building as the main culprit of the Rana Plaza disaster allowed for a narrow focus on improvements to infrastructure alone, while ignoring power inequalities between brands, suppliers and workers that have allowed this sector to flourish with low wages, poor working conditions and high profits. Today, the industry is facing devastating consequences as a result of the COVID-19 pandemic. 2.7 million workers have been fired or temporarily suspended. Most have been sent home without pay and more than half of the garment factories have had to shut their operations. By the middle of April, the buyers had already cancelled or postponed US $ 3.2 billion of garment orders from Bangladesh. During this time of global upheaval, brands have used their unequal power positions with suppliers to justify cancelling or postponing orders and refusing to pay for orders that suppliers have already produced and materials that have already been procured, despite having a contractual obligation to do so. Brands have benefited from cheap labour from Bangladesh for decades but do not feel obliged to take care of those at the bottom of their supply chains. As a result, tens of thousands of garment workers in Bangladesh may die, not from COVID-19 but from starvation. Brands have bought into the notion that the necessary improvements to factories are better handled by third party monitors, rather than by labour groups or workers themselves. This has been a way to justify crackdowns on workers organising — struggles are deemed disruptive and unproductive for the industry and the country’s economic growth. Unfortunately, little has changed in the last seven years to improve workers’ ability to bargain, negotiate and improve their conditions. When the garment workers in the Rana Plaza building noticed cracks early on, they were told to return to work in order to meet the demanding targets for that day. These workers — who were threatened with not receiving their wages or being fired if they left the building — were forced to return to a situation that eventually cost them their lives. Seven years later, the garment workers are still placed in the unenviable position of having to choose between their lives and maintaining their livelihoods. Many garment workers have been told to go back into their factories, even under a nationwide lockdown or otherwise lose their jobs. This is a choice no one should have to make. Unless there is meaningful change in the industry, there will be another disaster in the garment sector of unprecedented scale. Buildings that have been made safer over the last seven years may not collapse but if the current practices by those at the top of global supply chains continue, the entire industry might.n(Sanchita Banerjee Saxena is Executive Director of the Institute for South Asia Studies at the University of California, Berkeley and Director of the Subir and Malini Chowdhury Centre for Bangladesh Studies. She is editor of Labor, Global Supply Chains and the Garment Industry in South Asia: Bangladesh after Rana Plaza (Routledge, 2020) and author of Made in Bangladesh, Cambodia and Sri Lanka: The Labor Behind the Global Garments and Textiles Industries)
Source: Daily Mirror
Since the outbreak in China, which led to the closing of a large number of factories in the country in late January, not a single industrial sector in the rest of the world has been spared. The automotive, electronics and textile industries, among others, have suffered and continue to suffer colossal losses unheard of in peacetime. In the textile industry alone, the losses are estimated at several hundred billion dollars. Experts predict a 50 per cent drop in mobile phone sales in the first quarter of 2020. And automotive production has ceased with the closing of several manufacturing sites in Europe. While the global economic impact is difficult to quantify, the IMF already predicts that global growth in 2020 will be lower than that of 2019 without yet giving any figures. (The world economy grew by 2.9 per cent in 2019, and in January, the IMF was forecasting growth of 3.3 per cent for 2020.) More pessimistic, the OECD, in an interim report published in March 2020, estimates world growth will be between +1.5 per cent (worst case scenario) and +2.4 per cent. The shutdown in China has impacted nearly every other country in the world as China alone accounts for a third of world growth. Due to a cost-saving economic approach very widespread in western economies, China has become the world’s factory and produces today nearly 30 per cent of manufactured goods, 50 per cent of stainless steel and 80 per cent of printed circuit boards essential to smartphones and laptops. Europe's share in global value chains has shrunk in favour of China, which has won them a key role in the global supply chain. Germany, France, Italy, the UK are today extremely dependent on Chinese suppliers, whether it is for parts or raw materials, to the extent that in some strategic and vital sectors, they have completely lost their national sovereignty.
The disruption of global supply chains
The pharmaceutical industry is a widely discussed example. For several years now, Europe has offshored its pharmaceutical manufacturing. Today, 80 per cent of active ingredients are imported from China and India, including molecules for vital medication such as antibiotics, anti-cancer drugs and vaccines. Just thirty years ago, only 20 per cent of active ingredients were imported. European countries have also relied on China's industrial capacities to produce the protective masks that they are desperately lacking today at the expense of national production. Italy, France and Spain are currently in urgent need of surgical masks and respirators, but also goggles, ventilators, hand sanitiser and many other products they long ago stopped manufacturing, instead purchasing them from China. In just two months, the coronavirus pandemic has reshuffled the cards of globalisation. Therefore, when Chinese factories suddenly closed in January, it was evident that there would be a domino effect and thus a disruption in supply. Chinese exports crashed. Experts evaluated a 20 per cent drop in January and February. Within a few weeks, several European manufacturers ran out of components and parts needed for final product assembly and were forced to halt production. A large number of them were obligated to declare ‘force majeure’. The automotive sector has been particularly hard hit. A single car is made of around 20,000 parts that are, on average, manufactured in over 30 different countries, including China. To create a finished vehicle, a very complex sub-assembly process is required, a process which is fuelled by an equally complex parts supply chain. Additionally, the widespread practice of just-in-time (JIT) manufacturing means that stocks are limited. Car makers like Fiat, BMW and Jaguar Land Rover were therefore the first to suspend operations at their European facilities.
The pandemic forces Europe to rethink globalisation
Then, as the virus spread, global demand for medical products, such as hand sanitiser and protective masks, increased widely and rapidly. But the Chinese factories, where these products have been mass-produced for years, were closed. In several countries, the lack of medical equipment due to supply chain disruption has been fatal. Today, factories are progressively reopening in China but the global supply chain is still at risk. Border closings and lockdowns in various European countries, combined with the slowdown in air freight, are making product transportation a challenge. Furthermore, the health crisis is now worsening in the United States, which is putting the supply chain under additional stress. The disruption is now moving westward with European goods being difficult to deliver to the American continent. In just two months, the coronavirus pandemic has reshuffled the cards of globalisation. It has revealed the fragilities of our global production system, how dependent our economies have become on manufacturing chains scattered across the planet, how far a product must travel from, where it is made to where it is consumed and how – with any disruption to one part of the chain – fabrication grinds to a halt. The international division of labour, which ruled the world economy for decades, is no longer sustainable and has been exposed as a source of great insecurity.
Yet, the pandemic could be a positive turning point.
Europe needs nearshoring
It has brought nearshoring and the need to shorten supply chains to the forefront. Instead of making decisions based on cost optimisation, which has forced companies to offshore productions to low-wage countries, Europe should adopt a more balanced distribution of supply sources and develop means of production closer to consumers. This would limit supply risks and shortage in case of a crisis and, at the same time, save costs on logistics. It takes four weeks to ship products from China to Europe, so having productions closer would allow us to be more flexible and adapt to changing markets and events more efficiently. The pandemic is also a chance for Europe to win back its sovereignty over crucial industries such as medical and pharmaceutical manufacturing. European manufacturers also need to evaluate their risk exposure and diversify their supply chains. They can no longer source components from one single supplier in one single location. With the US-China trade war, companies have already started restructuring their supply chains outside of China. This move might accelerate after the end of the crisis. The pandemic is also a chance for Europe to win back its sovereignty over crucial industries such as medical and pharmaceutical manufacturing. In such an uncertain geopolitical environment, the need to secure essential supplies in order to reduce the European Union’s dependence on the rest of the world has never been more critical. French President Emmanuel Macron recently announced that he wanted France’s full and complete independence in the production of masks ‘by the end of the year’. This is the first step. But the EU must adopt a real supply chain strategy for medical products. That starts with the sourcing of raw materials and extends to manufacturing, assembling, packaging and distribution in production facilities on European soil. The European workforce is comparatively expensive, but a combined process of automated and manual work should enable companies to bring manufacturing back to Europe. In the electronics industry, robotisation can contribute to nearshoring since production lines are already completely robotised in China. Some European robotics manufacturers are already working on it.One thing is certain, the period ahead of us requires a transformation of the global supply chain model as globalization as we have known it is now over.
Source: IPS Journal
Beijing, April 27 (IANS) Profits of China''s leading industrial businesses dropped 36.7 per cent year-on-year in the first quarter of 2020 due to the impact of the coronavirus pandemic, official data revealed on Monday. The data released by the National Bureau of Statistics (NBS) revealed that the profits in the first quarter of the year were placed at 781.45 billion yuan ($110.43 billion), reports Efe news. The marker recorded a 38.3 per cent year-on-year fall in the months of January and February, while the slump in March stood at 34.9 per cent, according to NBS. Before the suspension of the activities due to the pandemic, the industrial profits had shown a 6.3 per cent year-on-year decline in December with a total drop of 3.3 per cent in 2019. Of the 41 sectors listed by the NBS, 39 recorded a slump in their profits in the first quarter of 2020 while the remaining experienced an increase. Likewise, the gains of state-run firms declined 45.5 per cent during this period, while that private entities slumped 29.5 per cent. Most affected firms included those of oil, coal and other fuel industries (-187 per cent), machine and equipment repair industries (-84.3 per cent), automation (-80.2 per cent), chemical industry (-56.5 per cent), textile (38.8 per cent), food manufacturing (27.4 per cent) and pharmaceutical industries (-15.7 per cent). At the other extreme, tobacco and agricultural and processed food industries recorded gains of 28.5 per cent and 11.2 per cent, respectively. NBS expert Zhang Weihua said that resumption in production was accelerating and corporate profits have been showing some positive changes given that 28 of the 41 companies analyzed in March showed improvement in their figures as compared to that of the first two Months of 2020. The data released on Monday is one of the economic indicators - along with international trade and production, among others - that show the significant impact of the pandemic on the figures of the Asian country.
Source: Outlook India
