The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 02 MAY, 2020

NATIONAL

INTERNATIONAL

Extension of Lockdown for a further period of Two Weeks with effect from May 4, 2020

After a comprehensive review, and in view of the Lockdown measures having led to significant gains in the COVID-19 situation in the country, Ministry of Home Affairs (MHA), Government of India (GoI) issued an Order under the Disaster Management Act, 2005, today, to further extend the Lockdown for a further period of 2 weeks with effect from May 4, 2020.   MHA also issued new guidelines to regulate different activities in this period, based on the risk profiling of the districts of the country into Red (hotspot), Green and Orange Zones. The guidelines have permitted considerable relaxations in the districts falling in the Green and Orange Zones. The criteria for identification of districts as Red, Green and Orange Zones have been spelt out in detail in the letter dated April 30, 2020, issued by Ministry of Health and Family Welfare (MoHFW), GoI.  The Green Zones will be districts with either zero confirmed cases till date; or, no confirmed case in the last 21 days.  The classification of districts as Red Zones will take into account the total number of active cases, doubling rate of confirmed cases, extent of testing and surveillance feedback from the districts. Those districts, which are neither defined as Red nor Green, shall be classified as Orange zones. The classification of districts into Red, Green and Orange Zones will be shared by MoHFW with the States and Union Territories (UTs) on a weekly basis, or earlier, as required. While States and UTs can include additional districts as Red and Orange Zones, they may not lower the classification of a district included by MoHFW in the list of Red or Orange Zones. A number of districts of the country have, within their boundaries, one or more Municipal Corporations (MCs).  It has been observed that due to higher population density within the MCs, and consequent greater inter-mixing of people, the incidence of COVID-19 within the boundary of the MC(s) is higher than in the rest of the district.  In the new guidelines, therefore, it has been provided that such districts will be classified into two Zones, i.e., one Zone for the area under the boundary of the MC(s); and, another for the area falling outside the boundary of the MC(s).  If the area outside the boundary of the MC(s) has reported no case for the last 21 days, it will be allowed to be classified as one stage lower than the overall classification of the district as either Red or Orange.  Hence, this area will be classified as Orange, in case the district is overall Red; or as Green, in case the district is overall Orange.  This classification will enable more economic and other activities in that area of the district, which is relatively less affected by the incidence of COVID-19, while also ensuring that due caution continues to be exercised so that these areas remain free from COVID-19 cases.  This dispensation has been made only in respect of districts having Municipal Corporation (s). The most sensitive areas of the country, from the spread of COVID-19 point of view, and falling within the Red and Orange Zones, are designated as Containment Zones.  These are areas where there is significant risk of spread of the infection.  The containment areas would be defined by respective District Administrations, taking into account the total number of active cases, their geographical spread, and the need to have well demarcated perimeters from the enforcement point of view.  The local authority shall ensure 100% coverage of Aarogya Setu app among the residents of the Containment Zone. Containment Zones would have intensified surveillance protocols, with contact tracing, house to house surveillance, home/ institutional quarantining of persons based on their risk assessment, and clinical management.  Strict perimeter control would need to be ensured, so that there is no movement of people in and out of these Zones, except for medical emergencies, and for maintaining supply of essential goods and services.  No other activity is permitted within the Containment Zones. Under the new guidelines, a limited number of activities will remain prohibited throughout the country, irrespective of the Zone.  These include travel by air, rail, metro and inter-State movement by road; running of schools, colleges, and other educational and training/ coaching institutions; hospitality services, including hotels and restaurants; places of large public gatherings, such as cinema halls, malls, gymnasiums, sports complexes etc;  social, political, cultural and other kinds of gatherings; and, religious places/ places of worship for public.  However, movement of persons by air, rail and road is allowed for select purposes, and for purposes as permitted by MHA. The new guidelines also prescribe certain measures for well being and safety of persons.  Hence, movement of individuals, for all non-essential activities, shall remain strictly prohibited between 7 pm to 7 am.  Local authorities shall issue orders under appropriate provisions of law, such as prohibitory orders [curfew] under Section 144 of CrPC, for this purpose, and ensure strict compliance.  In all zones, persons above 65 years of age, persons with co-morbidities, pregnant women, and children below the age of 10 years, shall stay at home, except for meeting essential requirements and for health purposes. Out-Patient Departments (OPDs) and Medical clinics shall be permitted to operate in Red, Orange and Green Zones, with social distancing norms and other safety precautions; however, these will not be permitted within the Containment Zones. In the Red Zones, outside the Containment Zones, certain activities are prohibited in addition to those prohibited throughout the country.  These are:  plying of cycle rickshaws and auto rickshaws; running of taxis and cab aggregators; intra-district and inter-district plying of buses; and, barber shops, spas and saloons. Certain other activities have been allowed in the Red Zones with restrictions. Movement of individuals and vehicles is allowed only for permitted activities, with a maximum of 2 persons (besides the driver) in four-wheeler vehicles, and with no pillion rider in the case of two-wheelers.  Industrial establishments in urban areas, viz., Special Economic Zones (SEZs), Export Oriented Units (EOUs), industrial estates and industrial townships with access control have been permitted. The other industrial activities permitted are manufacturing units of essential goods, including drugs, pharmaceuticals, medical devices, their raw material and intermediates; production units, which require continuous process, and their supply chain; manufacturing of IT hardware; jute industry with staggered shifts and social distancing; and, manufacturing units of packaging material.  Construction activities in urban areas have been limited to in-situ construction (where workers are available on site and no workers are required to be brought in from outside) and construction of renewable energy projects.  Shops in urban areas, for non-essential goods, are not allowed in malls, markets and market complexes.  However, all standalone (single) shops, neighborhood (colony) shops and shops in residential complexes are permitted to remain open in urban areas, without any distinction of essential and non-essential.  E-Commerce activities, in the Red Zones, are permitted only in respect of essential goods.  Private offices can operate with upto 33% strength as per requirement, with the remaining persons working from home.  All Government offices shall function with senior officers of the level of Deputy Secretary and above at full strength, and the remaining staff attending upto 33% as per requirement.  However, Defense and Security services, Health and Family Welfare, Police, Prisons, Home Guards, Civil Defence, Fire and Emergency Services, Disaster management and related services, National Informatics Centre (NIC), Customs, Food Corporation of India (FCI), National Cadet Corps (NCC), Nehru Yuvak Kendra (NYK) and Municipal services shall function without any restrictions; delivery of public services shall be ensured and necessary staff will be deployed for such purpose. A large number of other activities are allowed in the Red Zones. All industrial and construction activities in rural areas, including MNREGA works, food-processing units and brick-kilns are permitted; besides, in rural areas, without distinction to the nature of goods, all shops, except in shopping malls are permitted.  All agriculture activities, e.g., sowing, harvesting, procurement and marketing operations in the agricultural supply chain are permitted.  Animal husbandry activities are fully permitted, including inland and marine fisheries.  All plantation activities are allowed, including their processing and marketing.  All health services (including AYUSH) are to remain functional, including transport of medical personnel and patients through air ambulances.  A large part of the financial sector remains open, which includes banks, non-banking finance companies (NBFCs), insurance and capital market activities, and credit co-operative societies.  Operation of homes for children, senior citizens, destitutes, women and widows etc.; and operation of Anganwadis has also been permitted.  Public utilities, e.g., utilities in power, water, sanitation, waste management, telecommunications and internet will remain open, and courier and postal services will be allowed to operate. Most of the commercial and private establishments have been allowed in the Red Zones. These include print and electronic media, IT and IT enabled services, data and call centres, cold storage and warehousing services, private security and facility management services, and services provided by self-employed persons, except for barbers etc., as mentioned earlier. Manufacturing units of essential goods, including drugs, pharmaceuticals, medical devices, their raw material and intermediates; production units, which require continuous process, and their supply chain; Jute industry with staggered shifts and social distancing; and manufacturing of IT hardware and manufacturing units of packaging material will continue to be permitted. In the Orange Zones, in addition to activities permitted in Red Zone, taxis and cab aggregators will be permitted with 1 driver and 2 passengers only. Inter-district movement of individuals and vehicles will be allowed for permitted activities only. Four wheeler vehicles will have maximum two passengers besides the driver and pillion riding will be allowed on two-wheelers. In the Green Zones, all activities are permitted except the limited number of activities which are prohibited throughout the country, irrespective of the Zone. However buses can operate with upto 50% seating capacity and bus depots can operate with upto 50% capacity. All goods traffic is to be permitted.  No State/ UT shall stop the movement of cargo for cross land-border trade under Treaties with neighbouring countries. No separate pass of any sort is needed for such movement, which is essential for maintaining the supply chain of goods and services across the country during the lockdown period. All other activities will be permitted activities, which are not specifically prohibited, or which are permitted with restrictions in the various Zones, under these guidelines.  However, States/ UTs, based on their assessment of the situation, and with the primary objective of keeping the spread of COVID-19 in check, may allow only select activities from out of the permitted activities, with such restrictions as felt necessary. No separate/ fresh permissions will be required from authorities for activities already permitted to operate under the guidelines on Lockdown measures up to May 3, 2020. The Standard Operating Protocols (SOPs) issued by MHA will continue to operate such as transit arrangement for foreign national(s) in India; release of quarantine persons; movement of stranded labour within States/ UTs; sign-on and sign-off of Indian seafarers, movement of stranded migrant workers, pilgrims, tourists, students and other persons by road and rail. State/ UT Governments are mandated to strictly enforce the lockdown guidelines and they shall not dilute these guidelines issued under the Disaster Management Act, 2005, in any manner.

Source: PIB

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Prime Minister holds a comprehensive meeting to discuss strategies on boosting investment in India

PM Shri Narendra Modi today held a comprehensive meeting to discuss strategies to attract more foreign investments into India as well as to promote local investments in order to give a boost to the economy against the backdrop of the COVID-19 Pandemic. It was discussed that a scheme should be developed to promote more plug and play infrastructure in the existing industrial lands/plots/estates in the country and provide necessary financing support. During the meeting, the PM directed that the action should be taken for a more proactive approach to handhold the investors, to look into their problems and help them in getting all the necessary Central and State clearances in a time bound manner. Various strategies to bring investments into India in a fast-track mode and to promote Indian domestic sectors were discussed. Detailed discussions were held on guiding states to evolve their strategies & be more proactive in attracting investments. It was also discussed that the reform initiatives undertaken by the various Ministries should continue unabated and action should be taken in a time bound manner to remove any obstacles which impede promotion of investment and industrial growth. The meeting was attended by the Finance Minister, the Home Minister, the Minister for Commerce & Industries, MoS (Finance) along with senior officials of the Government of India.

Source:  PIB

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India open to mutually benefitting alliance with interested nations: Goyal

 India is open to mutually benefitting collaborations with interested countries as far as the reciprocity in the deal is maintained, Commerce and Industry Minister Piyush Goyal has said, according to an official statement released on Friday. He said this while interacting with foreign missions here through video conference. The minister said India gives importance to "the fair dealing and the reciprocity" while signing any multilateral agreements. He said it was not there because of which India did not participate in the Regional Comprehensive Economic Partnership (RCEP). Goyal said this is the best time to connect digitally for the planning of a road map for bilateral or multilateral agreements.  The minister said the domestic pharma industry is playing important role in producing and delivering medicines not only to India but also for the rest of the world. "India is ensuring that no country will remain deprived of the essential medicines, especially underdeveloped countries," he said adding in the long term, "we have to make a quick road map for the sustainable trade of the pharmacy sector". Further, he said that during this crisis, the government is forming long-term strategies for the revival of the country's economy out of the crisis. He said this is the time to identify the true partner for our own countries to find collaborations in the future.

Source: Business Standard

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DPIIT Control Room playing a pivotal role in monitoring the issues of Industry and Trade, and solving the difficulties faced by various stakeholders during the lockdown period

Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, had set-up a Control Room w.e.f 26.3.2020 to monitor the issues of Industry and Trade and take up such matters with the concerned State Government, District and Police Authorities and other concerned agencies. The Control Room monitors the

a. issues of internal trade, manufacturing, delivery & logistics of essential commodities and

b. difficulties faced by various stakeholders during the lockdown period to resolve any supply chain issues.

Out of the total number of 1962 queries registered till 28th April 2020, 1739 have been resolved/settled. 223 are currently under resolution. Out of 1962 queries registered, more than 1000 queries were received from five States/UTs viz., Delhi, Maharashtra, Uttar Pradesh, Haryana and Gujarat. A dedicated team has been put in place to monitor and tracking the disposal of queries and to generate daily MIS reports for information of senior officers in the Department. The team also closely tracks the important queries by calling up the affected people and obtains their inputs while taking up the matter with the concerned agency. This also helps in making an assessment about the efficacy of various agencies involved in resolution of issues. This team of professionals helps senior officers to know the impact of their interventions and thus keeps everyone apprised of the status of resolution of grievances. The queries are being received in the control room through telephone calls as well as email. Any manufacturing, transporter, distributor, wholesaler or e-commerce companies facing ground level difficulties in transportation and distribution of goods or mobilization of resources can inform to the Department at the following telephone number/ email:-

Telephone: + 91 11 23062487

Email : controlroom-dpiit@gov.in

The telephone number is functional from 8 AM to 6 PM. The control room has been receiving queries regarding ground level difficulties as well as the procedural and policy issues being faced by the manufacturers, transporters, distributors, wholesalers and e-commerce companies. After registering the queries, the DPIIT control room staff forwards the same to the State level control rooms and the Chief Secretary of the State with the request to initiate necessary action and ensure that the required relief is provided to the querists at the earliest.  The queries received in the control room are forwarded to the senior officers of DPIIT who constantly monitor the issues and in case of an issue requiring urgent intervention, the same are also taken up with other officers of the State Government including the concerned District Magistrate or Police functionaries. All the senior officers of the DPIIT have been assigned specific States with which they continuously interact and urge upon the State functionaries to initiate action on pending issues. The State Government Departments such as Industry, Transport, Consumer Affairs and Food and public Distribution are also monitoring the resolution of such queries separately. Minister of Railways, Commerce and Industry Shri Piyush Goyal quite frequently takes stock of the nature of issues raised through the control room and has been urging all concerned to initiate action necessary to ensure supplies of essential goods to the common man in every part of the country. Dr. Guruprasad Mohapatra, Secretary DPIIT along with his senior colleagues also regularly reviews the status of pending issues in the States during his meetings held through video conferences. On 24th March, 2020, the Central Government had announced a nationwide lockdown, with a view to prevent the spread of the Covid-19 virus, while putting in place arrangements for ensuring that supplies of essential goods and services remain available to all citizens.

Source: PIB

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Industry asks govt to fine-tune reboot rules

Indian industry has sought fine-tuning of guidelines for restarting units and has demanded greater clarity on rules to ensure that business entities are not penalised. Many industries have said that micro, small and medium enterprise (MSME) units and startups may not be able to adhere to the condition that special transportation facilities will be arranged for workers coming from outside, without depending on the public transport system. The guidelines also stipulate that these vehicles should be allowed to work only with 30- 40% of passenger capacity. The Federation of Indian Chambers of Commerce and Industry (Ficci) has urged that workers residing within the proximity of the workplace could walk or commute by personal vehicle with strict adherence to maintaining of social distancing. And, hygiene en-route can be added to the standard operating procedure guidelines to enable units to restart their operations, without any additional burden, which they cannot shoulder. The Confederation of Indian Industry (CII) has urged that within red zones, there should be a clear demarcation of hotspots or containment zones, as defined by the ministry of home affairs, and economic activities outside these containment zones may be permitted. It has urged that the containment zones can be reassessed on a daily basis. It has also pointed out that for larger plants, it may not be feasible to shut down entire units on detection of a Covid-19-positive employee and has suggested changes in the guidelines, which can be easily adhered to. Similarly, the requirement of a one-hour gap between shifts is not possible in continuous process plants, where staggered change of shifts may be allowed. To address the concern of manufacturing with continuous processes/operations, Ficci has recommended workplaces/manufacturing units, which have continuous processes/operations, be excluded. CII has pointed out that inter-state movement limitations are creating shortages of inputs and problems in movement of goods to markets. “For exports to Bhutan, Bangladesh and Nepal, road transport may be allowed,” CII has demanded.

Source: Economic Times

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RCEP urges India to return to negotiating table as Covid-19 wrecks economies

In a significant development the current members of Regional Comprehensive Economic Partnership (RCEP) in the backdrop of Covid that has wreaked havoc on economies has stated that it would welcome India’s return to the negotiating table for entering the trade bloc. “The 29th RCEP Trade Negotiating Committee Meeting was held via video conference on 20, 22 and 24 April attended by 15 RCEP Participating Countries (RPCs), that is, the Member States of the Association of Southeast Asian Nations (ASEAN), Australia, China, Japan, Korea, and New Zealand,” according to Joint Statement issued at the 29th Regional Comprehensive Economic Partnership Trade Negotiating Committee (RCEP). “The 15 RPCs reaffirmed their commitment to sign the RCEP agreement in 2020, stressing that as a region-wide free trade area, RCEP will provide a more stable and predictable economic environment to support the much-needed recovery of trade and investment in the region, which has been adversely affected by the COVID-19 pandemic. The 15 RPCs also agreed to step up cooperation and accelerate global efforts to enable a swift and resilient economic recorvery from the crisis brought about by the COVID-19,” according to the Joint Statement. “Against this backdrop, the 15 RPCs reaffirmed their commitment to continue working with India to address its outstanding issues, as instructed by RCEP Leaders at the 3rd RCEP Summit in November 2019. Recognizing India as a valuable original participant, the 15 RPCs would welcome India’s return to the RCEP negotiations,” the statement said.  It is not yet known how will the Indian government react to this offer. India pulled out of the RCEP in November 2019 after years of negotiations. India has a trade deficit with 11 out of the 15 RCEP countries. India decided to stay out of RCEP because concerns about getting swamped by imports under the agreement — putting its domestic industry and agriculture at risk were not assuaged. “The present form of the RCEP Agreement does not fully reflect the basic spirit and the agreed guiding principles of RCEP,” Prime Minister Narendra Modi said in his address at the RCEP summit in Bangkok last November.

Source:  Economic Times

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Shri Gadkari launches Bank of Schemes, Ideas, Innovation & Research Portal on MSMEs

Union Minister of Road transport & Highways and MSME Shri Nitin Gadkari today launched Bank of Schemes, Ideas, Innovation and Research portal (http://ideas.msme.gov.in/) on MSMEs through Video Conference from Nagpur in the presence of Shri Pratap Chandra Sarangi, MoS for MSME along with Secretary MSME Dr Arun Kumar Panda and DC, MSME Shri Ram Mohan Mishra and others senior officers. The Portal gives access to all Schemes of Union, State and UT Governments. It has the provision for uploading Ideas, Innovations & Researches in the sector. The portal has unique features of not only crowd sourcing of Ideas, but also evaluation and rating the ideas by crowd sourcing. It can also facilitate inflow of venture capital, foreign collaboration etc. Speaking about the importance of the portal, Shri Gadkari said that this portal will prove to be of great transformational significance to the MSMEs in particular and the economy in general. This is a very good beginning, Shri Gadkari added. He also suggested that category-wise classification and analysis of information and the achievements which may be published so that others learn/take lessons from successful experiences. Shri Gadkari advised that the portal should be handled by quality professionals to keep it updated on sustained basis. He stressed upin the need for conversion of knowledge into wealth. Shri Gadkari also said that there is a need for greater work on Research, Technology, Innovation which can bring down cost and improve quality. Shri Pratap Chandra Sarangi, MoS for MSME said, this portal will help the MSMEs in a big way through information sharing. He also said that this will help in the research activities like those in rural tribal knowledge, skills will get a chance for spreading their knowledge. Similarly it can assist the farmers in planning, production, storage and marketing of their produce. Users who have idea, innovation or Research with him/her can share it on this platform which will be reviewed by the concerned Officer and publish them for public view. Registered users can rate these ideas (Crowd sourcing) and venture capitalist can connect with user having idea, innovation and research. The online forms for Idea, innovation and research can be easily filled in 5-6 Minutes. Person can choose Areas (Credit/Finance, Human Capital Development, Technology, Infrastructure, Marketing, Policy, etc) Person can indicate his Sector (Rural Technology Innovation, Waste-to-Wealth, Agro-Processing, Manufacturing, Services, Khadi, Coir, etc). The portal has the facility to indicate the stage of Idea (Concept, Prototype or Commercialized) to make more user friendly. Papers and photo related to Idea and Video and Social Media links can also be uploaded.  The portal will benefit the potential entrepreneurs as One stop compendium of Ideas, innovation and research ready for commercialization. The Rating of Ideas can be seen publicly which will help in decision making. Venture capitalists can interact with Person and MSME having Idea or innovation. Similarly options are available for adding Banks, Government Labs, Incubators, Accelerators, Foreign collaboration in future.

Source: PIB

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Government charts plan to boost FDI flows

The government has begun consultations with stakeholders on ways to step up foreign investment into the country, with commerce and industry minister Piyush Goyal launching discussions with investment bankers, consulting agencies and law firms. While the ministry was already engaged in a dialogue with potential investors, the efforts had slowed down due to the coronavirus pandemic and have gained momentum over the last few days after Prime Minister Narendra Modi’s repeated calls to focus on domestic production. Besides, companies are also looking to diversify their production bases beyond China, which had become the mainstay for many global corporations. During his meeting with consulting and law firms, Goyal is learnt to have talked about getting investors to invest in the interior areas and moving beyond big towns and cities, sources told TOI. A source said the focus will be manifold. For instance, one approach will be to focus on areas where India has competitive strengths, such as textiles and auto parts, and scale them through more investments, especially from international companies, so that they can develop local facilities that meet international standards. The other approach is to look at products, where large imports are taking place, and try to substitute them through domestic production, something that the government has been trying to do but has seen little gains so far. This will mean greater attention to sectors such as electronics and defence, which are large items on India’s import bill. A list of so-called champion sectors has been prepared, which can be among the focus areas. A third strategy is to get Indian MSMEs to scale up and an attempt is being made to identify some of the areas, where it is possible to do so. But policy constraints such as investment caps are seen to be hobbling the plan. A source engaged with the deliberations, however, said these are initial consultations as companies are currently focused on battling the coronavirus pandemic, with many of them trying to resurrect their existing operations and also looking for liquidity. One of the concerns for the government is the inability of local industry to build Brand India, which is recognised worldwide. This is seen to be crucial to attract international investors.

Source: Economic Times

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Government may raise up to Rs 10,000 crore via tax-free bonds

The government is seeking to raise up to Rs 10,000 crore in its maiden tax-free bond issue to help bridge the fiscal gap, which is set to widen in the aftermath of Covid19-induced economic disruptions and low tax collections. The finance ministry has begun negotiations with bankers on a likely tax-free bond issue. The money may be raised in multiple instalments, people aware of the plan told ET. “We are in talks with bankers and other resources regarding the launch of such an issue,” said one of them. The government plans to raise temporary funds from the central bank through ways and means advances (WMA), a short-term borrowing window. However, this may not be sufficient to meet anticipated immediate expenses, said the people cited above. The structure of the issue and number of instalments are yet to be decided. The government may either sell the bonds in a direct public issue, or use a public sector company to raise the funds. State-run utilities and financiers such as REC, Power Finance Corp. (PFC) and NTPC sold tax-free bonds a few years ago. “The finance ministry, the Niti Aayog and the Prime Minister’s Office are involved in the discussions,” said an executive aware of the plans. Niti Aayog and government agencies didn’t respond to queries.

Investment Option for Retail Investors

If taxes were to be applied to a 10-year bond offering 5.5% tax free, the effective cost would be 7.7%, if the current rate of marginal tax were to apply to the investment. According to bankers, these bonds could also provide an investment option to retail savers, who now consider debt mutual fund schemes rather risky after Franklin Templeton decided to freeze six plans. If successful, this bond sale would be one of the first such issuances in which retail investors could also participate in a tax-free, sovereign instrument. The Centre normally raises money from the debt market, where the Reserve Bank of India (RBI) acts as its merchant banker, auctioning securities weekly. The government has set a target of borrowing a net Rs 5.11 lakh crore in FY21, versus Rs 4.74 lakh crore in the previous year. Gross borrowing is pegged at Rs 7.8 lakh crore, compared with Rs 7.1 lakh crore a year earlier. “Fiscal slippages are definitely on the anvil due to lower tax collection,” said Madan Sabnavis, chief economist at CARE Ratings. “Giving tax-free bonds will open the window for retail savers and corporations to invest. But raising money through G-Secs will flood the market and push up yields.” A nationwide lockdown means that a large part of the Rs 1 lakh crore of GST monthly collections would have slipped, according to CARE estimates. “Also, disinvestment cannot be realised,” said Sabnavis.

Source: Economic Times

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Govt to release due incentives to MSMEs

Amaravati: In a move aimed at reviving the economy post lockdown, the state government has decided to release all incentives due to MSMEs (micro, small and medium enterprises) of the last six years. Further, the government has also decided to waive power charges for MSMEs for three months— April, May and June. Major sectors like textile will benefit from this move. The decisions were taken at a high-level meeting chaired by chief minister YS Jaganmohan Reddy on Thursday. The CM directed officials to release the dues to MSMEs in two parts— in May and June. He further asked the industries department to extend financial assistance to MSMEs at a low rate of interest. The CM said that the government will take measures to help the textile sector after observing the Centre’s take on the sector. Industries and IT minister Mekapati Gautham Reddy said, “The CM has agree to completely waive off power charges of MSMEs for three months which accounts for Rs 188 crore.” Mekapati added that the decision will benefit 72,531 micro enterprises and 24,252 small industries. The industries minister further said that the TDP had not paid its dues to the MSME sector during its regime. The TDP has not cleared Rs 43 crore for 2014-15, Rs 70 crore for 2015-16, Rs 195 crore for 2016-17, Rs 207 crore for 2017-18 and Rs 313 crore for 2018-19, industries minister Mekapati Gautham Reddy said. The minister further said that the government will clear Rs 905 crore including Rs 77 crore for the 2019-20 financial year.

Source: India Times

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New FDI rules not for Taiwan inflows

Foreign direct investments from Taiwan are not covered under the latest policy changes that make prior government clearance mandatory for fund inflows from countries – including China – that share a land border with India. Investments from Taiwan will be treated as they were previously and are excluded from the latest changes, a senior government official told ET. The FDI policy was amended on April 18, requiring all investments from countries sharing a land border with India to get prior government approval, irrespective of the sectoral cap. The prior approval is needed even when FDI from these countries is routed via entities located in other places. The Department for Promotion of Industry and Internal Trade said the FDI policy review was aimed at “curbing opportunistic takeovers/acquisitions of Indian companies due to the current Covid-19 pandemic.” British bank HSBC, which was established in Hong Kong and has operations in mainland China, is said to have sought legal opinion on whether India’s directive on FDI covers Taiwan, ET reported on Thursday. China treats Taiwan as a breakaway province and not as an independent nation. India considers investments from Taiwan separately and they were never sent for security clearance.

Source: Economic Times

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Textile units in Coimbatore region get into non-woven fabric production

As the demand for personal protective gear and masks have shot up in the last one month with the spread of COVID-19, some textile units in the region have gone into production of fabrics that are used to stitch the coveralls. Of the 20 or so companies that produce the fabric that go into making of the coveralls, more than five are in Tamil Nadu, according to industry sources. According to Gopinath Bala, CEO and Technical Director at SVS Advanced Fabrics, the company was already into technical textiles, manufacturing biodegradable sign board fabrics and roofing fabrics. It has now invested and got into production of PPE fabrics. “We just launched production of three products - fabric for coveralls, cubicle partition fabrics that can be used in hospitals, coveralls with breathable fabric that the police and other healthcare workers on the field can use.” The demand for masks, coveralls, and related products will continue for some more time. Even after that, those making quality products will have a market as awareness about PPEs has increased. “There will be a good future for exports too,” he said. The fabric used has to be laminated to make it safe for use for frontline workers. Coimbatore-based Saastha Technical Textiles, started eight years ago, laminates nearly 10,000 metres of fabric a day. A PPE set used by a doctor consumes nearly 3.3 metres of fabric. If each doctor involved in treating COVID-19 patients use even one set a day, the demand for laminated non-woven fabric is huge. There are several enquiries from other countries too, says M. Raaja, its Managing Director, on the potential for the fabrics. Industry sources say that the demand for PPEs and healthcare related products will continue. The manufacturers source fabric from the northern States now. It is good to have the required eco-system within the State. The market has evolved with COVID-19. Entrepreneurs in other sectors are also looking at opportunities in masks and coveralls. So the demand for fabric will continue. The current demand may not continue in the domestic market after a couple of years. But use of masks will continue by the public for a longer time. Industries do not have to make huge investment to make the fabric. However, when export of PPEs is opened up, there will be huge opportunity for the manufacturers.

Source: The Hindu

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India could consider sanctions policy against rogue Pakistan: Think-tank study

Delhi could initiate a policy to impose sanctions on Pakistan with Islamabad continuing to pose a threat to India’s national security, foreign policy and economy and as part of the policy warn Chinese companies that has presence in both countries of adverse consequences suggests leading Indian think tank Gateway House (Mumbai-based). In a detailed and bold study 'Devising an Indian Policy on sanctions for Pakistan' made available to ET, Gateway House suggests India need to adopt a comprehensive regulatory framework on sanctions to sanction Pakistan which has been facing heat from G20 and FATF over last few years. The suggestions by the think-tank include “threat of sanctions” to foreign firms which are active both in India and Pakistan including Oppo, Morris Garages and Haier from China. Oppo has a significant market share in India and MG’s presence has increased within months of its launch. MG is planning to open a plant in Pakistan. Among its other suggestions the study has recommended imposing blanket bans on FDI and Overseas Direct Investment (ODI) to Pakistan under the Foreign Exchange Management Act (FEMA) and related regulations and make it mandatory for Indian companies to make a prior disclosure under the Companies Act, 2013 when an investment is proposed to be made in or with a Pakistan entity. With its focus on Neighbourhood First, Act East, multipolarity and regionalism, India is nurturing its friendships and can leverage this to create a network of influence that will support the implementation of an Indian sanctions regime against Pakistan, according to the study. “It is important to ensure that sanctions imposed, multilaterally or unilaterally, are in line with international humanitarian law. In the UN charter, Article 55(c) read with Article 56 clearly states the importance of following human-rights law. It is important to protect the economic, social and cultural rights of the affected sanctioned population. For this purpose, a monitoring and an evaluation process must be developed,” the Gateway House recommended. The study further calls for amending export laws to control re-export. “For example, when Sri Lanka imports electronic chips from India, it should not be allowed to re-export them to Pakistan. The U.S. has successfully enforced similar control on re-export of certain commodities under the Export Control Act.” If India decides to impose sanctions on Pakistan, it is important that it adopt a whole-of-government approach so that all government departments – including the National Security Council, Ministry of Home Affairs, Ministry of Defence, Ministry of External Affairs, Ministry of Commerce, Ministry of Textiles, and Ministry of Electronics and Information Technology – come together to ensure that the measures are well-phased and targeted, the study felt. India’s formal exports to Pakistan include textiles and chemicals. Trade between the two countries has been at a standstill since 9 August 2019, after India abrogated the special status granted to Jammu and Kashmir. Given the low volume of trade, India’s role in Pakistan’s economy is minimal and vice-versa. However, informal trade between India and Pakistan continues to thrive, with exports from India valued at over $4 billion. The main goods involved in the informal trade are jewellery, textiles, and electronics and the trade is routed through countries such as Dubai.

Source: Economic Times

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Global Textile Raw Material Price 30-03-2020

Item

Price

Unit

Fluctuation

Date

PSF

792.58

USD/Ton

0%

30-04-2020

VSF

1257.39

USD/Ton

-2.20%

30-04-2020

ASF

1585.87

USD/Ton

0%

30-04-2020

Polyester    POY

683.09

USD/Ton

0.73%

30-04-2020

Nylon    FDY

1822.51

USD/Ton

0%

30-04-2020

40D    Spandex

4026.48

USD/Ton

0%

30-04-2020

Nylon    POY

939.51

USD/Ton

0%

30-04-2020

Acrylic    Top 3D

1751.87

USD/Ton

0%

30-04-2020

Polyester    FDY

1766.00

USD/Ton

0%

30-04-2020

Nylon    DTY

875.94

USD/Ton

0%

30-04-2020

Viscose    Long Filament

2147.46

USD/Ton

-0.65%

30-04-2020

Polyester    DTY

5199.10

USD/Ton

0%

30-04-2020

30S    Spun Rayon Yarn

1751.87

USD/Ton

-0.16%

30-04-2020

32S    Polyester Yarn

1349.22

USD/Ton

-2.05%

30-04-2020

45S    T/C Yarn

2154.52

USD/Ton

-0.33%

30-04-2020

40S    Rayon Yarn

1935.54

USD/Ton

-0.72%

30-04-2020

T/R    Yarn 65/35 32S

1737.74

USD/Ton

0%

30-04-2020

45S    Polyester Yarn

1582.34

USD/Ton

0%

30-04-2020

T/C    Yarn 65/35 32S

2034.43

USD/Ton

0%

30-04-2020

10S    Denim Fabric

1.13

USD/Meter

-0.37%

30-04-2020

32S    Twill Fabric

0.65

USD/Meter

0%

30-04-2020

40S    Combed Poplin

0.94

USD/Meter

0%

30-04-2020

30S    Rayon Fabric

0.49

USD/Meter

-0.29%

30-04-2020

45S    T/C Fabric

0.64

USD/Meter

0%

30-04-2020

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14128 USD dtd. 30/03/2020). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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70% of textile companies could go out of business because of COVID-19: Association

As COVID-19 continues to batter the Indonesian economy, 70 percent of textile and textile product (TPT) companies face permanent closure as a result of plunging domestic and export demand, an industry group has warned. At the moment, 80 percent of textile companies have halted operations temporarily while facing cashflow issues, so financial support from the government is urgently required according to the Indonesian Filament and Fiber Producers Association (APSyFI). We have cashflow difficulties because even though we have no income, we still have to pay penalties to the state electricity and gas companies while also paying our workers’ social security fees,” APSyFI secretary general Redma Gita Warawasta said in a press release on Wednesday. The association warned that massive business closures could cause a spike in unemployment, as around 1.8 million TPT industry workers are already furloughed or laid off because of the pandemic. According to the Industry Ministry’s latest estimate, the TPT industry employs around 135,000 workers annually, making up 22.5 percent of the total 600,000 workers in the industrial sector. Redma said APSyFI and the Indonesian Textile Association (API) had conveyed their request for relaxation policies from the government but without any significant development. One of the associations’ requests includes penalty fee waivers from state electricity company PLN and state gas company PT PGN for textile companies with electricity and gas consumption below the minimum threshold. “Our request for penalty fee waivers is reasonable because the government has declared [COVID-19 pandemic] a national disaster. But in reality, neither PLN nor PGN regard the pandemic as a national disaster and they are still imposing penalty fees,” the APSyFI statement reads. The association also complained about the financial sector not providing credit relaxations to textile companies, even though the Financial Services Authority (OJK) has issued regulation No.11/2020 on credit restructuring for companies impacted by the pandemic. “There could be a spike in nonperforming loans from the TPT industry if the situation continues,” Redma said.

Source: The Jakarta Post

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China starts major trial of state-run digital currency

China will begin trialling payments in its new digital currency in four major cities from next week, according to domestic media. In recent months, China’s central bank has stepped up its development of the e-RMB, which is set to be the first digital currency operated by a major economy. It has reportedly begun trials in several cities, including Shenzhen, Suzhou, Chengdu, as well as a new area south of Beijing, Xiong’an, and areas that will host some of the events for the 2022 Beijing Winter Olympics. State-media outlet China Daily said it had been formally adopted into the cities’ monetary systems, with some government employees and public servants to receive their salaries in the digital currency from May. Sina News said the currency would be used to subsidise transport in Suzhou, but in Xiong’an the trial primarily focused on food and retail. A screenshot purported to be of the app required to store and use the digital currency has been circulating since mid-April. Some reports also claim businesses including McDonald’s and Starbucks have agreed to be part of the trial, however in a statement Starbucks told the Guardian it was not a participant. McDonald’s been contacted for comment. Digital payment platforms are already widespread in China, namely Alipay, owned by Alibaba’s Ant Financial, and WeChat Pay, owned by Tencent, but they do not replace existing currency. Xu Yuan, associate professor at Peking University’s national development research institute, told broadcaster CCTV that because cash transactions were offline and transaction data from existing payment platforms was scattered, the central bank was unable to monitor cash flow in real time. “Although there is little change from the perspective of user use, from the perspective of central bank supervision, future forms of finance, payment, business and social governance etc, this is the biggest thing ever.” On 17 April, the digital currency research institute at the People’s Bank of China, which is developing the system, said the research and development of a digital renminbi was  “advancing steadily” and top-level design, functional research and development, and debugging had largely been completed, according to a CCTV report. Progress on the digital currency was reportedly spurred on by Facebook’s announcement in June it intended to launch one itself. The sovereign digital currency, which will be pegged to the national currency, has been under development for some years but in August the bank said it was “almost ready”. However, the following month, the bank’s governor, Yi Gang, said there was no timetable for release. “A sovereign digital currency provides a functional alternative to the dollar settlement system and blunts the impact of any sanctions or threats of exclusion both at a country and company level,” last week’s China Daily report said. “It may also facilitate integration into globally traded currency markets with a reduced risk of politically inspired disruption.” A decline in cash usage is expected to continue amid the growing popularity of digital payment platforms and as people avoid physical contact during the coronavirus pandemic.

Source:  The Guardian

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Worldwide, current orders are down 41% on average: ITMF

Current orders have declined by 41 per cent worldwide, according to the third survey conducted by the International Textile Manufacturers Federation (ITMF) between April 16-28, 2020. In total 600 ITMF members and affiliated companies from around the world participated in the survey about the impact of the COVID-19 pandemic on the global textile value chain. Orders in East Asia dropped visibly less (i.e. 28 per cent) than in all the other regions (40 per cent and more). It can be assumed that this region, which was hit first by the Corona-crisis, is also recovering first from it. Especially China and Korea were able to contain the epidemic successfully. "In the last few weeks, most Chinese textile companies have ramped up production significantly. Likewise, off-line retail stores have reopened, and consumption is picking up again in East Asian countries. It remains to be seen what the consumption behaviour will be like in China, Korea and other places once shops are open again," ITMF said analysing the survey results. The survey found that worldwide, expected turnover in 2020 is down by 33 per cent on average compared to last year. Companies in Europe are expecting turnover in 2020 to be down by “only” 22 per cent, a figure significantly better than the 33 per cent decline reported in the second survey. Companies in East Asia are expecting turnover to be down by 26 per cent, which is close to what was reported in the second survey (24 per cent). Companies’ turnover expectations in South East Asia and South Asia on the other hand have deteriorated significantly. These regions were hit later by the Corona-pandemic and hence the full impact was felt with a delay. Compared to 2019, expected turnover for 2020 is down to -38 per cent in South East Asia and to -31 per cent in South Asia. Turnover expectations in Africa, South America and North America have not changed much since the second survey. Securing enough liquidity, supply chain disruption, and uncertainty are the major challenges facing the textile industry, the survey results show. As a result of the COVID-19 pandemic, companies are increasingly thinking about diversification, currently focusing on medical textiles; streamlining organisation and production processes; accelerating the reassessment of existing supply chains; and accelerating digitalisation and investing in sustainable production. The survey says that many companies receive little to no help, even if governments have support policies in place. Government support can comprise: loans with low interest rates and deferred repayment, delayed tax payments, delayed social security payments, short-work schemes, and reduction of power costs. "The biggest relief comes when retailers/brands discuss adaption to the unwinding crisis with their suppliers instead of cancelling orders unilaterally," the survey concludes.

Source: Fibre2Fashion

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Philippines: Garment industry seeks revival of domestic textile production

THE Philippines must revive its textile industry following global supply chain disruptions during the coronavirus disease 2019 (COVID-19) outbreak, which cut off the garment industry from imported raw material, Philexport textiles, yarn, and fabric trustee Robert M. Young said. “Right now, the Philippines is the only country without a textile industry,” he said in a webinar Wednesday, adding that lockdowns in China delayed textile imports for the garments industry. “If we had factories nearby, we could have been supplied from these textile companies.” The Philippines cannot continue to rely on imports, he said, and must attain some degree of self-reliance. Mr. Young said that after the crisis, garment retailers will be focused on selling their remaining inventory, adding that consumers will likely be more conservative in buying clothing. “The orders of the garment and apparel (from retailers) will be reduced by about 50%,” he said, adding that 50-70% of recent orders have been cancelled by buyers. To boost the industry, Mr. Young said Internet and manufacturing technology capabilities must be improved, noting that bad Internet connectivity created difficulties. “Most of the time, signals were dropped, especially in the provinces… the government should do something about the Internet speed because this is really vital,” he said, adding that factory machinery must be upgraded to improve efficiency. Mr. Young also said the Philippines should continue its negotiations for free trade agreements (FTA), especially with the US. “Selected goods such as garments, apparel, wearables can enter the USA tax-free, meaning we will have more business. Foreign buyers will be buying more from Manila because they will be paying zero tax,” he said.

Source: Business World

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