The nationwide lockdown is all set to be extended beyond May 3, at least until the middle of the month in the red zones of the country, as many states told Prime Minister Narendra Modi in a video-conference meeting on Monday that it’s not the time yet to lift the curbs.This means more activities may be allowed to resume in green zones of the country. Most Bharatiya Janata Party-ruled states support extending the lockdown, but will wait and abide by the Centre’s fresh guidelines. Telangana has already extended the lockdown until May 7, and will take a decision on further extension on May 5. Odisha, Meghalaya and some others support extending it by a month. Congress-led governments want the lockdown to be lifted in areas other than hotpots or containment zones.Delhi will take a call by April 30.Maharashtra will also decide by the end of the month, but will not lift the lockdown in urban centres like Mumbai and Pune, which are in red zones, while allowing economic activity in green zones. Mindful of the economic challenges, the government is preparing a detailed exit strategy that would give states more space in deciding their respective plans, sources said after the three-hour meeting. All CMs, except Kerala’s Pinarayi Vijayan, who sent his chief secretary, participated in the meeting. Nine CMs spoke while the rest sent in their suggestions. The PM indicated that Covid-19 is here for a long haul and that people need to learn to live with it. He said masks and face covers would become part of our lives in the days ahead and reiterated the mantra of ‘do gaz doori’ or social distancing. While hinting that the time hasn’t come to lift the lockdown, which had yielded positive results, Modi asked states to focus on converting the red zones into orange, and thereafter to green zones. He said, “and now we have to think of the way ahead”. The CMs spoke of the need to address economic challenges, while demanding a stimulus package and resolution of the stranded migrant issue. The PM said, “we have to give importance to the economy as well as continue the fight against Covid.” Himachal Pradesh CM Jai Ram Thakur said his state had favourable conditions to allow economic activity as it has not seen any new cases in the past five days. “We need to learn to live with it (coronavirus),” Thakur said. Odisha’s Naveen Patnaik suggested extending the lockdown by another month, a proposal which got support from Goa and Meghalaya. In a letter to Home Minister Amit Shah, Punjab CM Amarinder Singh asked for permission to open small businesses in areas except red zones. However, Jharkhand CM Hemant Soren said he would not implement central guidelines on reopening shops due to the sudden spurt in cases.West Bengal CM Mamata Banerjee said the central guidelines were at times contradictory and confusing. While Uttar Pradesh continued to get its migrants back, including 12,000 from Haryana on Monday, Bihar CM Nitish Kumar said it was not possible to bring back students until the Centre revises lockdown guidelines. Puducherry’s V Narayansamy said the PM did not respond to the demand for an economic package or on the issue of migrants. He, however, supported the view that lockdown should be extended. Rajasthan’s Ashok Gehlot said the PM lauded the extension of working hours of labourers, and that lockdown should be lifted from non-hotspot areas. He said people might die of hunger, if not coronavirus, if attention was not paid on economic revival. Gujarat’s Vijay Rupani apprised the PM of the steps taken in the state, including easing lockdown in a staggered manner, keeping small and medium vendors as well as labourers' well-being in mind.
Source: Business Standard
Opposition-ruled states including Punjab, Kerala and Delhi pitched for extension of goods and services tax compensation to the states for two years beyond 2022 to tide over the crunch they may face in the post-Covid-19 scenario. State finance ministers, during a video conference on Monday, also discussed issues arising out of the lockdown, including the urgent requirement of some form of aid for micro, small and medium enterprises, which have been affected the most, besides relief for the services sectors. “GST compensation, which is due to the states, should be given… the GST Council could also borrow and let the compensation continue for a year or two after 2022 also, which can be collected later,” Punjab finance minister Manpreet Badal told ET. He added that while this issue was to be raised at a separate GST Council meeting, it could not be done due to the lockdown. Kerala has already said it is undergoing a financial crisis and has pitched for additional funds from the Centre. West Bengal asked the Centre to transfer its pending dues immediately, stating that it had received only an inappreciable amount. It had also written to finance minister Nirmala Sitharaman asking for a corporate social responsibility tag for donations made to the chief minister’s relief fund. The states will individually reach out to the Centre and will also raise the issue of releasing GST compensation pending since December 2019. The Centre recently paid Rs 34,053 crore in pending GST compensation cess for October and November, in two tranches, with the second tranche released earlier this month.
Source: Economic Times
The Centre is examining a “significant number” of reforms along with staggered stimulus packages aimed at various stressed sectors of the economy as part of its strategy to combat the bruising impact of the Covid-19 pandemic. Sources said the government has started the process of identifying reforms which can be pushed through to make the economy more attractive and productive and help it overcome the impact of the pandemic in the “shortest possible time.” “The process of identifying reforms in various sectors has started. We are talking of significant reforms across sectors such as agriculture, manufacturing and services. We are also looking at expenditure rationalisation measures and how funds can be better utilised,” said an official. The reform measures along with possible stimulus packages were discussed at a meeting of top officials from across key economic ministries and the government’s economic think tank Niti Aayog. There is a view within a section of the government that this would be the right time to push through pending reforms as was done during the 1991 balance of payments crisis. The focus is on ensuring that the country emerges a manufacturing hub and the ‘Make in India’ initiative gets accelerated. Several incentives are being discussed to attract global companies to set up base in India as the world shifts its focus away from China to de-risk its economies and help build a separate supply chain. The agriculture sector has been identified as another crucial segment where pending reforms will be pushed through. “From marketing reforms, access to credit to using more technology, all options are being discussed and soon a comprehensive set of reforms will be announced,” said the official. Earlier this month, Prime minister Narendra Modi had asked various ministries to prepare a list of 10 major decisions and 10 major priority areas to work on once the lockdown ends. Several ministries have drawn up their plans and these will be examined and measures are expected to be announced soon. Regarding stimulus packages, there is a view within the government that it should not rush in with mega announcements as it is difficult to predict the “extent and duration of the pandemic.” But focussed measures at some of the stressed sectors are expected soon, the official said.
Source: Economic Times
The Central Board of Indirect Taxes (CBIC) has cleared over Rs 10,700 crore worth refunds in GST and customs duty between April 8-23. In the 'Special Refund and Drawback Disposal Drive', the CBIC officers have cleared over 1.07 lakh Goods and Services Tax and IGST refund claims worth Rs 9,818.12 crore. Over 1.86 lakh customs and duty drawback refund was processed totalling Rs 915.56 crore, the CBIC said in a tweet. "CBIC is committed to help GST Taxpayers/Exim Trade during #COVID19. Expeditious sanction of refunds during Special Refund Drive provide relief to trade, especially MSMEs," it said. The Finance Ministry had on April 8 said that to provide relief during COVID-19, it has been decided to issue all pending GST and custom refunds which would benefit around 1 lakh business entities, including MSME. The total refund granted will be approximately Rs 18,000 crore, it had said. The CBIC had earlier asked its field officers to avoid asking for physical submission of documents from entities who are claiming GST and customs refunds and instead use official email for all communication. The CBIC had said that the decision to process pending refund claims has been taken with a view to provide immediate relief to taxpayers in these difficult times even though the GST Law provides 15 days for issuing acknowledgement or deficiency memo and total 60 days for disposing off refund claims without any liability to pay interest.
Source: Economic Times
Crores of rupees have been stuck as these textile processors have supplied processed textile all across the country on credit and due to sudden lockdown purchasers are not able to pay them. Even though the Gujarat government has granted permission to recommence operations, the Ahmedabad-based Rs 25,000 crore textile processing industry will not be able to function as there is no demand (domestic and international) of processed textile in wake of Covid-19 pandemic.Till March 24, 2020, over 300 textile processing units situated in and around Ahmedabad used to process on an average nearly 1.5 crore metre cloths on daily basis. With announcement of nationwide lockdown, this highly labour intensive industry suddenly ceased. “It is not easy to resume work. Markets across the globe are almost closed. Even if some demand generates in near future, it would take at least a fortnight to make a textile processing unit to function normally. Migrant labourers have left for their native places and most of the local labourers residing in red zones declared by authorities. Hence, they wouldn’t be able to leave their areas till further orders,” says Nitin Thakker, president of Ahmedabad Textile Processors Association (ATPS) adding that in such situation it would be impossible to run a unit with immediate effect. Already owners of textile processing units are under severe pressure to pay their instalments of loans, salaries of their employees and contract labours and other fixed expenditures, said Thakker, who is also member of a committee formed by Union ministry of textile for the development of textile sector in the country. According to him, currently people’s priorities are food and medicine, textile and apparels would come later and hence there wouldn’t be any demand in near future. The highly labour intensive textile processing sector of Ahmedabad provides direct employment to nearly 1 lakh people and indirect employment to more than three lakh people. He further said that it would be extremely difficult to follow social distancing guidelines of government in the case of textile processing units as textile processing requires large number of labourers. Crores of rupees have been stuck as these textile processors have supplied processed textile all across the country on credit and due to sudden lockdown purchasers are not able to pay them. “We can’t blame on buyers as they haven’t been neither able to do value addition on processed textile or sell it to their buyers. Hence they don’t have money to pay us. Nobody knows when this vicious chain would end,” said an owner of a large textile processing units, whose Rs 75 crore have been stuck due to lockdown requesting anonymity.
Source: Financial Express
Support from the government would be crucial to revive the Indian textile and apparel industry during the current COVID-19 crisis and the post-lockdown phase, according to stakeholders. The industry, which mainly consists of micro, small and medium enterprises (MSMEs) faces working capital and other constraints due to unexpected order cancellations. In response to Fibre2Fashion's email for recommendations to government for steps to be taken to support the textile-garment industry, Vardhman Textiles general manager Mukesh Bansal said, "The industry is under tremendous pressure owing to two major issues—constraint of working capital, and burden of fixed cost during the lockdown period." The constraint of working capital is because payments are not being released by the brands, which are also facing working capital crunch. "To combat this, government can finance the industry for next 12-18 months via lower rate of interest and extra funds," suggested Bansal. Speaking about the burden of fixed cost, Bansal said, "the major fixed cost for industry during the lockdown is wages of labour. Government can support the industry in this by enabling the employers to pay wages to the labour via financial assistance." Government can provide financial assistance by bringing down borrowing cost from bank "down to 6 per cent from current level of 12 per cent," said Trigger Apparels Limited director-Marketing Rajagopalan. Besides adhoc limits, the government and the RBI should instruct the banks "to liberalise repayment of loans, interest rates and debts, etc," said Rajiv Dewan, president, Garment Exporters Association of Rajasthan (GEAR). According to Rajagopalan, the government can support the industry by making single GST slab of 5 per cent for all categories of products, removing income tax for the next 3 years, making all cash transactions legal with a 5 per cent cash tax on all such transactions, providing salary subsidy for lockdown period, making health and education free for all, and allowing industry to work in 3 shifts to boost employment. GEAR's Dewan has already written to Prime Minister Narendra Modi sharing four basic mantras to revive the industry without providing any subsidy or compensation. First, through its good offices the government should initiate discussion with the domestic branded retailers, chain stores & buyers to support the garment industry. Second, the government should immediately settle all claims pending and dues outstanding against government liabilities for GST / IGST / ROSL / MEIS / DBK and other schemes. And till the time all outstanding amount is released, adhoc limits to 90 per cent of value due against government receivables should be immediately made available with banks against simple application and statements of government dues. Third, the government should instruct banks / RBI to extend complete liberalisation to the garment industry, as timely bank support will enable the industry to sustain during present and future COVID-19 impact. Lastly, Dewan has suggested that the government give complete rebate on income tax for a period of three years, collect only 20 per cent in the fourth year, and gradually increase the collection percentage till the eighth year when it can collect 100 per cent income tax.
Source: Fibre2Fashion
Industry body Ficci has sought subsuming all levies like royalty and contributions to the District Mineral Foundation (DMF) into one tax like GST to reduce the tax burden on the mining industry. The industry body argued that the mining sector is going through atough time due to falling commodity prices and demand contraction. Underlining multiple challenges coupled with disruptions due to coronavirus lockdown, Ficci has also sought deferment of royalty and contributions to DMF and the National Mineral Exploration Trust (NMET) by six months. "Under such challenging times, when commodity prices are freely falling and demand is contracting, most of the miners are struggling to remain profitable or even survive," the industry body said. It recommended "subsuming of all levies like royalty, DMF, NMET, etc into one tax like GST". The DMF has been created in each district under the provisions of Mines and Minerals (Development and Regulation) (MMDR) Amendment Act, 2015 and falls under the purview of the Ministry of Mines. DMFs are funded by statutory contributions from holders of mining leases. The objective of NMET is to use the funds accrued to the Trust for the purposes of regional and detailed exploration in such manner prescribed by the Centre. Ficci added that the problem of high royalty is aggravated by imposition of DMF charge which is levied at 30 per cent of royalty (for leases granted before January 12, 2015 or 10 per cent for leases granted on or after January 12, 2015). Further, a contribution of two per cent of royalty to National Mineral Exploration Trust (NMET) is levied. With the mining sector grappling with challenges in view of the countrywide lockdown, Ficci urged the government for deferment of royalty, and payments to DMF and NMET by six months till the economic situation stabilises. The industry body also recommended smooth operations of ports and inter-state movement of raw material and goods for the mining sector which has been allowed to operate amidst the lockdown. The industry is facing difficulties in movement by roadways. Since subdued demand is a major area of concern for the minerals and metals sector, Ficci also requested the government to push the economy by announcing special packages for the sector. Since these sectors have significant multiplier effect on both GDP and industrial production, the fiscal stimulus would provide much needed relief to revive the growth in the sector, post lockdown. Stating that the sector has witnessed sudden production halt on account of COVID-19, it called for waiving minimum production requirement under mine development and production agreement for FY'20 and FY'21. While applauding the mines ministry for taking proactive initiatives to ensure continuity of operations, Ficci said that despite the directives, mineral production has been able to resume only partially in various districts, leading to drastic fall in production. To address the challenge of low production levels, it suggested that the government may provide exports incentives to the industry, similar to China, through initiatives like target plus scheme, wherein major exporters with minimum export turnover will be rewarded. Ficci also requested the government to facilitate the movement of migrant workers from their native places to plants by providing special sanitised wagons and financial support to the workers for commuting. The industry body has recommended that post the lockdown, it is imperative for the government to provide a level-playing field to domestic players. "As the sector is grappling with the challenges of no/limited production owing to lockdown of operations, the suggested policy interventions would help the industry to revive back soon once the situation improves, resulting in enhanced contribution to mineral production, employment opportunities and to overall economy as well as the GDP," the industry body said.
Source: Economic Times
Maharashtra will be embarking on roadshows abroad from November this year to attract investments into the state in the post-COVID 19 pandemic world, a senior official has said. The state, which claims to be among the most industrialised ones in the country, will be specifically targeting investments from global companies looking to relocate outside of China, Maharashtra''s Development Commissioner for Industries, Harshdeep Kamble said at a seminar at the World Trade Centre here. Maharashtra, which has ambitions to more than double the GSDP to USD 1 trillion by 2025, will be targeting to get companies from the automobiles, steel, textiles, agro processing and pharma sectors to invest in the state as part of the strategy, Kamble said, as per a press statement issued by the organisers of the event. “Government of Maharashtra is working on special package to attract MNCs looking to relocate from China.The state government will conduct roadshows and market the state in different countries by November 2020 to attract investment,” Kamble was quoted as saying. Kamble said Chinese auto major Great Wall Motors has decided to go ahead with its investment in an electric vehicle facility and battery production unit at Pune despite the COVID-19 pandemic. The official said as part of the incentives offered under the state''s industrial policy, a company can recover up to 100 per cent of their fixed investments. He said India will have to look at the manufacturing sector more seriously and exuded confidence that companies in the sector will choose his state to invest. Without specifying the dates, the press release quoted Kamble as saying that 6,500 units in Maharashtra have started operation in recent days and 4,000 units have applied for resuming operations. It can be noted that as part of the exit plan mooted by the Centre, industrial units in non-hotspot areas have been allowed to function from April 20.
Source: Business Standard
Citing the crisis faced by the textile industry in Surat, the South Gujarat Textile Processing Association has urged the central government to give concession on interest of loans during the lockdown period. Minister of State for Finance Anurag Thakur spoke to the association to know about the problems industry is facing. Former president of the association, Pramod Choudhary, said, “We have requested concession in the interest on loans during the lockdown period. The moratorium of loans and interest should be minimum 6 months to one year, according to the condition of the unit. There should be concession of 3 per cent in the rate of interest till the industry recovers. The refunds of GST and capital subsidy should be done at the earliest.” Adding that import duty on textile goods should be increased to promote Make in India, Choudhary said, “Loans to new projects must be given priority. The labour force in the industry are mostly migrants… so industries should be started even in the municipal limits where there are no coronavirus hotspots. Retail market should also be opened.”
Source: The Indian Express
Textile manufacturing firm Indocount Industries has announced that their manufacturing facilities at Kolhapur has received conditional permissions from the Kolhapur district authorities to restart partial manufacturing. Factories in the industrial estates of Aurangabad and Kolhapur are expected to reopen their factories with fewer workers, even as Pune and Mumbai region remain as hotspots with no clear signs of when the plants could re-start operations. Some steps being taken by industries in other industrial hubs of Maharashtra to resume manufacturing activities. Bajaj Auto has resumed partial operations at the Waluj plant in Aurangabad. Bajaj manufactures three-wheelers and their smaller motorcycle range, for both domestic and export markets at Waluj. Around 20-30% or workers living around the plant and Bajaj Nagar are returning to work. Bajaj Auto’s two main vendors, Endurance Technologies and Varroc Group, have said they are starting operations in Aurangabad. Greaves Cotton, the other large OEM in Aurangabad, has initiated steps to start operations and resume partial manufacturing operations in the Shendra MIDC, Aurangabad. Powertrain and electric mobility company, Greaves Cotton (Greaves) got approvals from the Maharashtra government to commence its operation at its plant. Varrroc said it was resuming operations at its manufacturing plants, mostly located in Aurangabad and it will be operating at 10-30% capacity. Varroc has also started operations at Pantnagar. Bajaj Auto’s vendor, Endurance, got approvals to resume working at Waluj in Aurangabad. Endurance counts almost every two-wheeler maker in the country as its customer and Bajaj Auto accounts for a large share of its business. Endurance has indicated that it would gradually ramp up to align with the off-take from its OEM customers. They are also resuming some operations at Pantnagar, too. Mukund Kulkarni, chairman of CII – Aurangabad, and director of Expert Global Solutions, said 1,700 units across three industrial estates — Waluj, Shendra and Paithan Road in Aurangabad — have got approval to resume operations and they have spent the last couple of days in housekeeping, restarting machines and maintenance. By another two days around 20-25% of the production of these units will start and those companies with export orders and firm orders have been given priority, Kulkarni said. “These units should be able to stabilise operations in a couple of days and material movement will start soon.” Sulajja Firodia Motwani, founder and CEO of Kinetic Green, said their manufacturing plant was in Ahmednagar and since this was not in the red zone, they were hoping to resume operation on May 4 and were awaiting clear guidelines. Textile manufacturing firm Indocount Industries has announced that their manufacturing facilities at Kolhapur has received conditional permissions from the Kolhapur district authorities to restart partial manufacturing operations of its plants. Partial manufacturing operations at the Indocount’s home textile as well as the spinning plant at Kolhapur have resumed on April 26 and April 27, respectively. Škoda Auto Volkswagen India (SAVIPL), the other major OEM operating out of Aurangabad, will not be starting this month but are planning to start operations by May 4. SAVIPL has assured employees that there would be no salary cuts or job losses in the company. Gurpratap Boparai, MD, SAVIPL, said employees were their biggest asset and they will first attempt the most difficult things and relook at structural and overhead costs.
Source: Financial Express
Government-owned lenders such as State Bank of India and Punjab National Bank are working on plans to help exporters, who had hedged their foreign currency exposures with them but are unable to meet their obligations amid the Covid-19 outbreak and lockdown. They are considering giving short-term unsecured loans to exporters who had sold their anticipated dollar proceeds in the forward market, but haven’t received the revenue yet as their consignments are stuck, people familiar with the matter said. However, procedural hassles amid the lockdown, primarily in getting documents such as on the status of consignments, are delaying the process, they said. Exporters have made a pitch to the government to also allow them to rollover the forward contracts without any penalty or extra charge, the people said. The banks are open to this as well. “We have designed bespoke products that facilitate short-term loans to companies having overseas payables,” an SBI official said, speaking on the condition of anonymity as he is not authorised to talk to the media. “Based on past records and relationships, we are sanctioning working capital loans with maturities running into months,” he added. SBI didn’t respond to an email seeking comment. A top PNB official said his bank was also considering such a plan. “Exporters have little options but to seek short-term loans from their banks as goods are not reaching their overseas clients amid lockdowns and they are facing increased shortage of working capital to pay their wages and overheads,” said Abhishek Goenka, the founder of Mumbai-based advisory firm IFA Global.
Source: Economic Times
Getting big-ticket investments would be challenging; focus on investments that are modest in size and low in resource demands. India’s role post-Covid-19, particularly in the industrial sector, is a subject of great interest, hope and speculation to the rest of the world. Many believe India will emerge as one of the preferred centres for manufactured products vis-a-vis China, if not the foremost choice. This is a sensible and reasonable aspiration to have as a nation. But this is an outcome, not a strategy. The most appropriate strategy for India would be to assume greater self-control over its national value chain; embrace and enhance, what is often alluded to as the Nehruvian approach of ‘core self-sufficiency’, by augmenting domestic value addition in its manufacturing industry.
This discussion has two elements:
1. Manufacturing versus assembly;
2. Expanding domestic capacity and capability—augmenting current ones, and adding fresh (in a planned, focused and strategic manner).
In the last two decades, most Indian manufacturing has drifted away from its classical definition. Manufacturing is the process of converting the bounty of Mother Nature into a man-made product. Assembly is a subsequent step of putting together various manufactured elements and creating a new product that is closer to and more convenient for human use and consumption. For a variety of reasons, both good and bad, many if not the most recent success stories of Indian manufacturing have been more in the nature of assembly. In other words, large number of, and usually critical components and inputs of the value chain, are imported. Many experts suggest that, to be truly called a domestic manufacturer, local value-addition must be at least 50%.This definition (the right number may be debated, and may vary across sectors) must be clearly established, agreed upon and communicated to create a measurable strategic intent if India wants to achieve ‘core self-sufficiency’. If a milestone and roadmap is not built around a numerical target, and as part of national agenda, the aspiration to attain destiny control over the manufacturing value chain will remain a vague desire or a wish and not a plan. Today, we need a plan! The second part focuses more on strategic execution. The author’s case is that the right answer to this opportunity is a ‘string of pearls’ approach as opposed to a ‘mining for gold’ approach. Shorn of the metaphor, it is a ‘many medium and nuanced’ versus ‘few big’ choice.
Post Covid-19, getting big-ticket greenfield investments, domestic or foreign, would be challenging. Domestic investors have an issue of affordability; there are few local industrialists who have the ability to make large long-term investments and leverage themselves further. Suffice to say, conceptually domestic play is a part of the approach but there are issues; they should not be ignored but may not be the answer in the short term. On the other hand, getting overseas ‘big boys’ is an entirely different game—it involves global politics, competitive bidding, (in a post-Covid-19 world that will involve ‘home’ nations too), and grants of significant sops and concessions.In a democracy like India, choices exercised in favour of a few, besides being prohibitively expensive, are politically unwise, always likely to be construed as subjective and susceptible to protest, eventually making implementation bitter, unpleasant and frustrating. The whole ambience of ‘ease of doing’ business is compromised, consequently delaying rollout. The question of how many will India get and at what price, still remains? A ‘string of pearls’ approach is more nuanced, sharper and targeted—it involves carefully identifying a few priority or relatively capable industries (to begin with), mapping their value chains and attracting strategic medium-sized investments in those critical and high-value elements of the value chain; an exercise similar to analysing the Bill of Materials and Services, where there is total or substantial dependence on imports. These handpicked items to be focused upon, attracted and incentivised to establish manufacturing in India. These investments are likely to be modest in size and low in resource demands (smaller land parcels, attractive for states to also pitch in, etc), making it faster to operationalise. These will get seamlessly retrofitted into an existing value chain as market is assured. This initiative should also include augmenting the strength of existing players, in capacity, capability, technology, scale, etc. Such value-chain-linked projects are more viable and attractive for lenders, and eventually can be a source of exports to other nations. This approach has many collateral advantages and risk management dimensions.
—Medium-sized enterprises generate more employment per unit of investment, a crucial factor for India post-Covid-19;
—Land requirements are easier; it is a challenge in India to get large contiguous land parcels;
—Such enterprises can be spread throughout the country, decongesting cities, widening distribution of economic prosperity, thereby encouraging and enabling a dispersed growth of services and social sectors;
—Multiplier impact of common elements in value chain across industries, if chosen and planned well;
—Mitigating the risk (at a country level) that India may face of its IT sector possibly suffering the consequences of a similar global action of reducing dependency concentration. In summary, India needs to articulate a measurable roadmap to increase its current domestic value addition by at least 500-600bps in the next five years. A large part of this has to come from a ‘string of pearls’, i.e. need-driven, technology-based medium enterprises interwoven with existing domestic manufacturing value chains, and not just from a few large greenfield projects. If the ultimate outcome is to become a preferred global source of choice, the plan has to be a part of a well thought out strategy and not influenced solely by political and ideological rhetoric. The author, a former corporate executive, is president, the Council of EU Chambers of Commerce in India
Source: Financial Express
Large manufacturing plants that have fallen silent due to the lockdown risk losing their insurance cover if the Covid-19 induced restrictions get extended beyond May 3. Risk managers are in a panic as insurers have reminded them of a clause whereby the cover ceases if plants are unoccupied for over a month and said that they will give a one-time dispensation and allow coverage until May 3. Normally, if a unit is left unoccupied for a month, the insurance company has the right to reassess the risk. If companies insist on examining every fire policy in force after May 3, there would be uncertainty over coverage if the lockdown extends beyond that date. The ‘unoccupied premises’ clause is present in every fire insurance policy. This clause is aimed at ensuring that companies do not leave plants unattended, thereby increasing the risk of loss. However, it did not envisage a lockdown situation. The General Insurance Council on Tuesday clarified, “We do understand that in the current crisis, it might not have been possible for some policyholders to send communication to insurance companies for the continuation of coverage and obtain endorsements. Therefore, it has been decided that a one-time relaxation is given to all policyholders whose property is unoccupied on or after March 25, 2020 till May 3, 2020. Properties of such policyholders shall be deemed to be covered subject to the policy being in force.” Insurance CEOs contacted by TOI did not want to comment as they were awaiting directions form industry regulator Irdai. They pointed out that the policy terms and conditions were approved by the regulator and could not be changed by companies. In a letter to Irdai, Insurance Brokers Association of India president Sanjay Kedia said, “The current period of lockdown should not constitute either unoccupancy or cessation of work or any material change in the risk, which hampers the continuity of cover.” While the council’s clarification gives companies time until May 3, there is still some confusion. The clarification applies only to fire insurance policy, while the clause is present in other package policies as well. Another cause of concern is that insurers have told companies that cover will cease if there is a change in the use of premises. Many companies engaged in the Covid fight have shifted use, with Alcobev companies manufacturing hand sanitisers, textile companies making masks and others making ventilators.
Source: Times of India
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
792.08 |
USD/Ton |
0% |
29-04-2020 |
|
VSF |
1284.83 |
USD/Ton |
-0.11% |
29-04-2020 |
|
ASF |
1584.86 |
USD/Ton |
0% |
29-04-2020 |
|
Polyester POY |
677.71 |
USD/Ton |
1.69% |
29-04-2020 |
|
Nylon FDY |
1821.35 |
USD/Ton |
-1.53% |
29-04-2020 |
|
40D Spandex |
4023.92 |
USD/Ton |
0% |
29-04-2020 |
|
Nylon POY |
938.91 |
USD/Ton |
0.76% |
29-04-2020 |
|
Acrylic Top 3D |
1750.76 |
USD/Ton |
-3.12% |
29-04-2020 |
|
Polyester FDY |
1764.88 |
USD/Ton |
0% |
29-04-2020 |
|
Nylon DTY |
875.38 |
USD/Ton |
3.33% |
29-04-2020 |
|
Viscose Long Filament |
2160.21 |
USD/Ton |
-1.92% |
29-04-2020 |
|
Polyester DTY |
5195.79 |
USD/Ton |
0% |
29-04-2020 |
|
30S Spun Rayon Yarn |
1753.58 |
USD/Ton |
-0.64% |
29-04-2020 |
|
32S Polyester Yarn |
1376.60 |
USD/Ton |
0% |
29-04-2020 |
|
45S T/C Yarn |
2160.21 |
USD/Ton |
-0.33% |
29-04-2020 |
|
40S Rayon Yarn |
1948.42 |
USD/Ton |
-0.72% |
29-04-2020 |
|
T/R Yarn 65/35 32S |
1736.64 |
USD/Ton |
0% |
29-04-2020 |
|
45S Polyester Yarn |
1581.33 |
USD/Ton |
0% |
29-04-2020 |
|
T/C Yarn 65/35 32S |
2033.14 |
USD/Ton |
-0.69% |
29-04-2020 |
|
10S Denim Fabric |
1.13 |
USD/Meter |
-0.86% |
29-04-2020 |
|
32S Twill Fabric |
0.65 |
USD/Meter |
0% |
29-04-2020 |
|
40S Combed Poplin |
0.94 |
USD/Meter |
0% |
29-04-2020 |
|
30S Rayon Fabric |
0.49 |
USD/Meter |
-0.29% |
29-04-2020 |
|
45S T/C Fabric |
0.64 |
USD/Meter |
0% |
29-04-2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14119 USD dtd. 29/04/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Mexico City, Apr 28 (AP) Mexico''s government continued its tug of war with businesses on Monday, pledging to reopen factories vital to the U.S. economy while shaming others that refuse to close under lockdown measures decreed to fight the spread of the coronavirus. President Andrés Manuel López Obrador also said he didn''t like businessmen going out to seek loans from international lending agencies, further angering the business sector. Under U.S. pressure, Mexico pledged Friday to reopen automotive plants in a “gradual and cautious” process. On Monday, Labor Secretary Luisa Maria Alcalde praised some automakers for reducing or stopping nonessential parts of their operations. But Alcalde publicly shamed some textile and footwear firms, as well as a department store chain, for not obeying closure orders for nonessential businesses. In all, 18% of firms in Mexico are considered essential and are allowed to stay open. Alcalde said that of the remaining nonessential firms, 87% had closed and 13% had refused to do so. The U.S. government launched a campaign to get Mexico to reopen plants, suggesting the supply chain of the North American free trade zone could be permanently affected if they didn''t resume production. Mexico''s border assembly plants are key to the U.S. supply chain, including those of autos and defense contractors, and employees at some of the facilities have staged walkouts and protests because of fears over the coronavirus. Ellen Lord, U.S. undersecretary of defense for acquisition and sustainment, had voiced similar concerns Monday in Washington. “We are seeing impacts on the industrial base by several pockets of closure internationally. Particularly of note is Mexico, where we have a group of companies that are impacting many of our major primes,” she said. López Obrador appeared to oppose a $3 billion credit arrangement that a leading business association announced with an investment arm of the Inter-American Development Bank to supply loan-type products for small and medium firms in Mexico hit by the effects of the pandemic. The austerity-minded López Obrador had vowed not to acquire new debt, and said the loan arrangement would not be backed by public funds or government guarantees. He said he also didn''t like that business groups had arranged the deal behind his back. “I don''t very much like the way they reached an agreement and want to impose their plans on us,” the president said. “What are we (the government)? Flowerpots, just here for decoration?” “If it doesn''t cost the public anything, if it doesn''t come from government funds, go ahead,” he added, reminding Mexicans of the numerous past big-business bailouts that average Mexicans had to pay with their tax money. The leader of the Mexican Employers Federation, Gustavo de Hoyos, harshly criticized López Obrador''s attitude. “He neither helps nor lets others help,” De Hoyos said of Mexican firms suffering from a drop-off in activity. “But he does lie,” he wrote in his Twitter account, adding the credits “do not, as he said, involve public funds.” López Obrador has had a rocky relationship with business groups, which he has frequently accused of corruption and hogging power. The first member of his Cabinet to test positive for coronavirus was identified Monday as federal comptroller Irma Eréndira Sandoval, though her office said she was on “excellent” condition with no serious symptoms. Mexico has over 15,500 confirmed cases and has seen 1,434 deaths. (AP) RS RS
Source: Outlook India
The All Pakistan Textile Mills Association (APTMA) Punjab Chairman Adil Bashir has criticized the distribution companies (DISCOs) for charging General Sales Tax (GST) and Withholding tax (WHT) on notified industrial tariff instead of 7.5 cents/kWh to all consumers falling in five export sectors for the months of March and April. In a situation, he said, when Prime Minister Imran Khan is looking for the ways and means to support the export industry, the high handedness on the part of Discos is that the difference of GST & WHT on notified industrial tariff and 7.5 cents is being charged from 01-07-2019.
Source: Return
U.S. President Donald Trump will meet with American textile industry representatives on Monday as clothiers seek to shift their production lines to face masks and other critical items amid the coronavirus outbreak, the White House said. White House trade adviser Peter Navarro, in an interview on Fox News, said the Republican president would meet with the National Council of Textile Organizations, whose members include companies such as HanesBrands Inc, Under Armour Inc and Bershire Hathaway Co’s Fruit of the Loom. DuPont unit DuPont Protection Technologies, Cargill Cotton and privately held companies such as Jockey International Inc and the Lycra Co are also council members. Such companies are aiming “to repurpose their factories from making things like T-shirts into gowns and masks and things like cotton swabs” used for coronavirus testing, much like General Motors has moved to use its auto factories to make ventilators for patients with difficulty breathing, Navarro said. Trump is scheduled to meet with “industry representatives” at 2 p.m.(1800 GMT), according to a schedule released by the White House. A severe lack of U.S. medical supplies has hampered healthcare workers on the front lines treating coronavirus patients, leaving hospitals and states scrambling for protective gear. The Centers for Disease Control and Prevention has also urged Americans to wear masks to help prevent the spread of the disease, but it has encouraged using homemade and other varieties to keep medical-grade ones available for first responders and healthcare workers. Navarro also said the administration is focusing on protocols to keep U.S. factories in general open during the outbreak, including screening workers for potential cases. “We’re trying to figure out the best protocols to keep our factories going,” he said. “We’re going to have to use appropriate protocols, different social distancing. You’re going to have to reconfigure factories. You’re going to have to use things like thermoscanners to check (for) fever as they come in.”
Source: Home Textiles Today
A group of organisations working on responsible business conduct in the garment industry has urged governments and multilateral institutions for action to protect garment workers and offered guidance on how brands can respect the rights and livelihoods of workers during the COVID-19 crisis. Factories must ensure timely payment of salaries to workers, it said. The organisations include the Solidaridad network, the Sustainable Trade Initiative, the Partnership for Sustainable Textiles, the Ethical Trading Initiative, Ethical Trade Norway and the Fair Labour Association. The group called upon brands, retailers, suppliers, governments, trade unions, industry associations, civil society and multilateral organisations to work together to enable factories to maintain employment relationships and make changes in the workplace in order to protect the health of garment workers, according to a press release issued by one of the participating organisations. The group looks forward to the results of the dialogue among global social partners that will likely set out priorities and commitments for joint industry action to respond to the pandemic. It plans to align each other and other key stakeholders to implement the priorities.
Source: Fibre2Fashion
In the last few years, the companies around the world which have made China their factory have either shifted out of the country or mulling over the idea. Given the rising cost of labour and the increasingly interventionist approach of the government after Xi Jinping came to power, moving out is the best option for the companies. The outbreak of Coronavirus from China will only accelerate the flight of the companies to India and Southeast Asian nations like Vietnam. The Indian government was hoping that these companies will ultimately shift to India, given the young demographics and cheap labour. But, as per a study by Nomura Group on 56 companies shifting production out of China, only three of these relocated to India while 26 went to Vietnam, 11 to Taiwan, and eight to Thailand. Southeast Asian countries and the tiny island of Taiwan are winning at welcoming the flight of companies from China, while India, with a young population and cheap labour, is losing the game.Most of these companies are shifting to Vietnam, a Communist country to the South of China with a long sea coast facing the busy South China Sea. There are many factors which help the country with a population of around 10 crores in attracting new companies. It has geographical and cultural proximity with the Communist giant, and even the political system is similar- a single-party Communist state. The companies prefer autocratic Communist countries as there is no bureaucratic lethargy and democratic red tape in these countries. Vietnam also started liberalizing its economy in the 1990s, just like India, and since then, the country has grown at an average rate of above 6-7 per cent, very similar to India. In the last three decades, it had not overtaken India in terms of average economic growth but in the last few years, the tiny country is suddenly leapfrogging, thanks to its geographical proximity with China. But there are many other things which Vietnam did right, like minimizing red tape, investment in infrastructure, education, and health. The country started economic liberalization in 1986- exactly a decade after China- and since then invested heavily in primary education. An average Vietnamese is more skilled than average Indian, thanks to the skill-based education system. The country has less volatile currency and has been competing closely with India in the World Bank’s Ease of Doing Business rankings. And therefore, given all these advantages, the companies rather prefer to move Vietnam than India. The primary advantage of the tiny country is its geographical, cultural, and political proximity with China and its system. But, if India is willing to compete, the Modi government must focus on land, labour, capital, and judicial reforms. The companies moving to Vietnam know that they will find a conducive environment like China in the country, given the authoritarian nature of the political system. In Vietnam, the court and the executive are not equal but under the legislative, which is filled with only single party members. Therefore, once the legislative clears a project, there are no additional hurdles. On the other hand, in India, even after a project is cleared by the government, the companies have to deal with the farmers for factory land, lethargic and corrupt bureaucracy, local mafia, mafia-like NGOs, local trade unions, the government’s obsolete labour laws- which Modi government is trying to reform, to successive court cases and petitions by activists like Prashant Bhushan, and various regulatory bodies, and whatnot. If the Modi government does not want to lose a golden opportunity like this once again then it must fast track the land, labour, capital, and judicial reforms from the war room to make sure that the companies fleeing China move to India, not Vietnam.
Source: B recorder
