Union Minister Smriti Irani on Sunday asked the textile industry to reorient itself and not depend on financial packages from the government as its finances are already under strain due to coronavirus pandemic. “Now, it is time for a new direction and new thinking. The industry has the capability. If they reorient themselves, they would not require to depend,” Irani said in an interaction with members of Merchants’ Chamber of Commerce and Industry through a webinar. She cited the example of making PPEs for doctors and other healthcare personnel in the last one-and-a-half months.
Textile company JCT group in Punjab had sought support to ferry the samples of PPEs to a laboratory in Aurangabad for testing during the lockdown and the government had helped the firm for this, she said. More such interventions were made, Irani said. She told the members of the city-based industry body that “money you expect is public money and now citizens demand details of each penny (spent)”. “The government’s job is making policy and providing support,” the textiles minister said. The government has been doing its best to support all, she said, adding that the Reserve Bank of India has already given relaxations and banks are supporting businesses to tide over the crisis. Irani said the textiles ministry is in discussion with the West Bengal government to work out a plan to help the jute industry. Farmers need 4,500 million tonne of certified jute seeds to improve quality of the golden fibre, and only a part of this is available now, she said. “The National Jute Board is looking at ways to improve the quality of jute. The industry has to route its profits towards modernisation to improve quality of jute,” she added.
Source: India.com
Feeling the heat due to losses incurred on account of Covid-19 lockdown, Ludhiana’s spinning industry, which wishes to resume production of yarn, is now demanding that the anti- dumping duty on the import of acrylic fibre should be withdrawn with immediate effect. Accusing a group of three India-based manufacturers of forming a cartel for lobbying against the withdrawal of duty, the spinners are demanding that it’s high time the Centre accepts their 25-year-old demand of doing away with anti-dumping duty and saving their industry. If this is not done then due to the ongoing economic crisis ensued by the lockdown there is no chance of survival of the spinning industry, which employs a huge workforce and produces raw material for the entire textile and garment industry. Speaking on the issue, Madan Mohan Vyas, chairman of Ludhiana Spinners Association (LSA), said “Over the past decades we have been striving hard to make our voice heard that the anti-dumping duty on the acrylic fibre should go. Our industry’s growth has been hampered and stopped for more than the last two decades due to the continued imposition of the anti-dumping duty on imported acrylic fibre from abroad.” He added, “Acrylic fibre is the basic raw material for making value added products like sweaters, shawls, etc. and continuation of the duty on this fibre will be double whammy for us, particularly in the times of this pandemic. Millions of units of spinning, textile and garment sector are of the view that in a recent petition filed for review of the anti-dumping duty the decision taken will be made purely on merit basis and duty will be totally waived.” Vyas further said, “However, three big wigs of the acrylic fibre industry for protecting their profits are putting lakhs of jobs and thousands of micro, small and medium enterprises (MSME) at stake and lobbying for continuation of the anti-dumping duty on the acrylic fibre. These three players wish to control the market by putting other spinners and hosiery industry at a disadvantage. It’s a matter of survival for these millions of units. Combined together, these fibre producers employ about 6,000 persons versus 45,000-50,000 employed by 50-60 spinning factories of Ludhiana on which the knitwears industry is fully dependant. Besides, nearly 10 lakh persons are employed by the knitwear industry. Why should the local spinners be forced to buy more expensive acrylic fibre and put thousands of knitwear producers at a disadvantage.” He said, “Moreover, when there is no anti-dumping duty on the finished products made of acrylic fibre, then why the duty on the acrylic fibre itself be imposed. Over the years Bangladesh has been supplying sweaters in India and the volume has been increasing and with the increasing import of sweaters and now combined effect of Covid-19, lakhs of units in Ludhiana will be at loss and their survival will be uncertain.” According to Ravindra Verma of Northern India Textile Mills Association (NITMA), “Not only the spinning industry, but the entire garment and textile industry too is against the anti-dumping duty on acrylic fibre. Time has come for us to make our voice heard and plead to the government to save the MSME sector and stop imposing the anti-dumping duty on basic raw materials. Rather high duties should be imposed on value added products down the value chain, such as sweaters, yarn, etc. to stop their imports and encourage Make in India vision. Ensuring raw material availability at competitive prices is very important for enhancing competitiveness of our labour intensive textiles industry, especially for the acrylic fibres segment.” “Government of India must provide a level playing field to the spinners and knitwear manufacturers in Ludhiana as users of this raw material have always been at the receiving end of these unwarranted duties, whereas the few Indian producers of acrylic fibres are enjoying a very strong financial situation. Therefore, the government should consider the urgency of this matter and waive anti-dumping duty on the import of acrylic fibre into India.”
Source: Times of India
PMO asks Ministries to suggest measures to support respective sectors
Exporters struggling to survive the disruptions caused by the Covid-19 pandemic may soon get some relief if an incentive package being worked out by the Commerce Ministry gets final approval. “There are hectic meetings going on in the Commerce Ministry to work out a suitable package to bail out exporters. It is likely to comprise higher incentives on existing schemes, extension of interest subsidy, amnesty on defaults and sops for farm goods sector,” an official aware of the development told BusinessLine. The Prime Minister’s Office has asked all Ministries and Departments to suggest measures to support their respective sectors in the current economic downturn. “The exporters’ package being put together by the Commerce Ministry will be examined by the Finance Ministry and the PMO before it is approved. As the government’s resources are constrained because of a dip in tax collections, all expenditure is being strictly monitored and approved at the highest level,” the official said. Exports witnessed a sharp dip of 34.57 per cent to $21.41 billion in March as orders started declining due to the global pandemic. The overall goods exports declined 4.78 per cent to $314 billion in 2019-20. In April-May, exporters fear the situation is likely to further deteriorate following the nation-wide lockdown and a large-scale cancellation of global orders. “Exporters from diverse sectors, be it textiles, garments, handicrafts, leather or engineering items, have been seeking relief, such as higher sops and easier credit, to help them survive the crisis,” the official added.
To continue MEIS
While the Commerce Ministry has said that the popular Merchandise Export Incentive Scheme (MEIS) will continue at least till December and may get extended beyond, the exporters’ package could include higher incentive rates under the scheme. The government has a plan for phasing out the MEIS scheme as it is not compliant with WTO norms but it is holding on to it temporarily during the on-going crisis and a proposal to increase the incentive rates is being seriously looked at, the official said. Apart from examining the need to extend the interest subsidy scheme for exporters, called the ‘interest equalisation’ scheme, beyond March 31 and enhancing the rates, the Commerce Ministry is also considering an amnesty scheme for non-fulfilment of export obligation.
Amnesty scheme
“There is a big demand from exporters for an amnesty scheme as many beneficiaries of certain export promotion schemes have not been able to fulfil their export obligations due to fall in global demand,” the official said. Agriculture exports, which have witnessed a surge in demand during the pandemic, may also attract some incentives, he added.
Source: The Hindu Business Line
Telangana Industries Minister K.T.Rama Rao has urged the Centre to facilitate higher temporary credit facilities, up to 30% of current limits, to textile industry so that the units are able to meet obligations towards vendors and statutory payments. The government of India could consider funding this through a concessional line of credit so that the banks are adequately supported and the funds return to the government in due course, Mr. Rao said in a letter to Union Textiles Minister Smriti Zubin Irani. He also suggested to the Centre to consider a complete interest waiver or an interest subvention scheme of 2-3% on all loans, including working capital credit, availed by the units as done in the past under TUFS. A special moratorium of one year may also be considered, he said, adding that RBI may be requested to allow the banks not to downgrade loan accounts by giving a grace period of six months to one year. In a set of suggestions for the benefit of the handloom, textiles and apparel industry, Mr. Rao said among the short term policy support needed are one providing wage support of up to 50% of wages, contingent on continued employment of workforce. This can be extended for a period of up to six months, in the form of a long-term loan which the industry would need to repay in instalments after a stipulated period. A one-time extension of three months for deposit of statutory dues of PF and ESI can be provided to the industry. These measures will benefit the workers employed in the sector and provide a source of reassurance for their continued employment, he said. Among other suggestions, Mr. Rao sought to highlight the need to provide more incentives to exporters; extending the Rebate of State and Central Taxes and Levies (RoSCTL) scheme for apparel and made-ups segment to other segments like yarn and fabric; expediting GST refunds to the industry. He stressed the need to provide marketing support to the handloom sector, launch of an aggressive ‘Be Indian, Buy Indian’ initiative; provision of 50% yarn subsidy across the handloom industry as well as waiver of GST on handloom products for two years. He suggested replicating Telangana government’s measures to support handloom weavers at the national level, including the detailed census it undertook of handlooms across the State and geo-tagging of all handloom products so that benefits can be provided directly to the weavers concerned. He called for correcting the inverted duty structure under GST on man-made fibres and transferring subsidies directly to cotton farmers’ accounts through direct benefit transfer (DBT) instead of offering a minimum support price for their produce. This will avoid the distortion of prices of raw material which are inputs to the downstream spinning industry. Towards attracting investments, he wanted the Centre to launch the Mega Textile Park Policy, support industrial infrastructure creation at a rapid pace. To enable prospective FDI investors to look at India more favourably, he said it will be necessary to provide some form of support towards wage cost and power cost, which are two major factor costs for the industry.
Source: The Hindu
Hyderabad: State has sought 50% subsidy from the Centre on yarn for the textile industry in the state and also urged the GST council to consider waiving the tax on handloom products for two years to support the sector. Industries and MAUD minister KT Rama Rao requested Union textiles minister Smriti Irani to give as a short term measure, support of up to 50% of wages, contingent on continued employment of workforce for 6 months as long repayable in the long run. TNN
Source: Times of India
Chief Minister Shivraj Singh Chouhan has told the industry representatives that they are development partners of Madhya Pradesh. They should play an active role in the development and establishment of industries in the state. With their suggestions and cooperation, we have to create maximum employment opportunities by laying a network of industries in the state and strengthen the states economy once again. Chouhan was holding a discussion with industry representatives of the country and abroad at a meeting of high-level consultative committee set up to attract investment in Madhya Pradesh through video conference in Mantralaya on Sunday. Chief Secretary Iqbal Singh Bains, Principal Secretary Industries Rajesh Rajoura, Principal Secretary MSME Manu Srivastava etc. were present.Suzuki from Tokyo and Marc from Lapp India from Singapore took part in the video conference. They lauded the industry policy and reforms in labour laws in Madhya Pradesh and said that Madhya Pradesh has a good environment for investment.Possibilities for Textile park Rajendra Gupta of Trident told that there are immense possibilities for setting up a Textile park in Madhya Pradesh. Villagers and women will get special benefit from the Textile industry. Ravi Jhunjhunwala of HEG thanked the Chief Minister for his continuous dialogue with the industry representatives and said that earlier industries in the state did not get so much respect. He suggested that industries should be given rebate in the fixed charge of electricity. He emphasized on extending the period of repayment of loans given to industries from 9 to 12 months. Single Window System laudedOswal of Vardhaman Textiles suggested to reduce the electricity duty. He praised the reforms in labour laws and industry policy in the state. Vinod Agrawal of Volvo Eicher praised the single window system commissioned for different types of permissions. He said that industries can run only when the supply chain is restored. Anurag Shrivastava of Netlink said that many facilities are being provided for new industries in the state, these rebates and concessions should also be given to the industries under operation now. A Dedicated Desk should be formed to provide information about the governments industrial policies. Air cargo should be promoted and new Airlines must be invited.
Source: Daily Pioneer
Major forex earning sectors cite lack of labour, funds and key supplies
Financial year 2020-21 is expected to begin on a somber note for India's exports, which are likely to continue sliding in April after a record fall in March. Lack of labour, liquidity and key raw materials dogged even the few industrial units that had managed to reopen once industry was partially allowed on April 20, exporters complain. In March, exports had contracted by 34.5 per cent - the steepest monthly fall in at least 25 years - as overseas demand remained lackluster due to the coronavirus pandemic. In the following month, a few export units such as those in the chemical and pharma sectors that were allowed to function had complained of logistics issues and port troubles. "Given that factories were shut nationwide for 20 days in April, as compared to only five days in March, there's no doubt that April will see a 40-50 per cent decline in exports," said Ajay Sahai, director general of the Federation of Indian Export Organisations (FIEO). With even processed petroleum exports also taking a beating since international prices nosedived, outbound trade will crash but a decline of more than 50 per cent will be a cause of worry, Sahai added.
Not running smoothly
In the crucial engineering goods sector, which accounts for one-fourth of India's $314 billion exports in 2019-20, a lack of labour has crippled the bicycle, fasteners and hand tools industries in Punjab while Gujarat based castings units have suffered from lack of raw materials, according to Ravi Sehgal, chairman of Engineering Export Promotion Council. "As we had feared, major chunks of our foreign market share in key export destinations like the United States and Europe are under pressure from competing nations. On the face of it, Mexico and Brazil are gaining on Indian exports in North America while products from Turkey and Egypt are creating pressure in European markets. But the real threat remains from Chinese suppliers who have now resumed production and are undercutting prices," Sehgal stressed. The sector had been badly hit by order cancellations but with European nations again opening up, a sudden demand in equipments for water, gas and power distribution is expected which may allow for some recovery of lost ground. The industry has informed the Commerce and Industry Ministry that it wants units to start soon as most of the April-October peak season has already been lost.
Hanging by a thread
With an even shorter business season, apparel and textile exports are witnessing significant turbulence. With major retailers like J Crew, Neimann Marcus and Aldo filing for bankruptcy in the United States, vast shipments ordered by a clutch of related brands for the ongoing Spring-Summer Season 2020 have languished in shut warehouses. "While the industry has now turned to pushing out more raw materials to Vietnam and Thailand. But on one hand, freighters have kept up charging extremely high costs of shipping. On the other, complete breakdown in movement across the overland crossing to Bangladesh has left more than 1000 tonnes of cargo stranded," said Siddhartha Rajagopal, Executive Director, at Cotton Textiles Export Promotion Council. Securing certificate of origin and digital signatures for documents have also become difficult, he added.Elsewhere, the Commerce Department has continued receiving pleas. The Apparel Export Promotion Council has requested the Department to push the issues of extension of packing credit and forward contract by 6 months without penal interest and waiver of penalty imposed on forward covers by some banks, with the Finance Ministry. Meanwhile, the Confederation of Indian Textiles Industry has suggested all raw materials, dyes and chemicals, intermediaries, spares, and accessories be exempted from anti-dumping duty and basic customs duty to reduce costs.
Bitter pills
Hoping to secure a breather in April, pharmaceutical exports have come up against a string of restrictions on export of active pharmaceutical ingredient (API) even as the sector recovered from the lack of bulk drugs, imported from China. While in April, Europe sought about 1,000 tonne of the active pharmaceutical ingredient (API) for paracetamol -- used commonly to treat body pain and fever -- from India, the shipment of these were held up by slow movement at ports. The gap in production due to the absence of bulk drugs also shook the sector. "Having seen the the good pace of export trend in first three quarters and price stabilisation in the United States, it was estimated that FY2020 exports would reach $22 billion," said Pharmexcil Director General Uday Bhaskar. Exporter's bodies have now asked the government to let industrial units reopen fully even in the high-risk red zones, stating that losses are rising rapidly. "We understand it may be difficult to keep business running, since the red zones are where the corporate offices, server systems and distribution points are based," said a senior government official.
Source: Business Standard
The government, today, raised the estimated gross market borrowing for FY 2020-21 to Rs 12 lakh crore from the budgeted Rs 7.8 lakh crore, to cushion the blow from the new coronavirus pandemic. The "revision in borrowings has been necessitated on account of the COVID-19 pandemic", the government and the Reserve Bank of India said in two separate releases. Together with the indicated increase in total borrowings for the year, a borrowing calendar for the remainder of the first half of the fiscal year has also been released. As per the revised calendar, the government will borrow Rs 6 lakh crore from the market via gilts through the remaining part of the first half of the year. The auction size for each weekly auction will go up to Rs 30,000 crore from the week of May 11. India has been in a lockdown for eight weeks, causing massive economic losses and prompting Moody's to forecast a 0% growth for the country this year. In March, Economic Affairs Secretary Atanu Chakraborty had said that the government was planning to borrow more aggressively than anticipated in the April-September period to mitigate the coronavirus outbreak. "Government shall do whatever is required to do for the resurgence and recovery of the industries. Our fund-raising resources not only from the markets but also from multilateral agencies are geared towards that," Chakraborty said. Finance Minister Nirmala Sitharaman in her Budget for 2020-21 had pegged gross borrowing in the new financial year at Rs 7.8 lakh crore, higher than Rs 7.1 lakh crore estimated for 2019-20. With the increase in the borrowing estimate, the government would have to revise upwards its fiscal deficit target from 3.5 per cent pegged for the current fiscal.
Source: Economic Times
Separately, in a report released on Friday, S&P said it expected the banking systems of Indonesia and India to be among the worst hit in the Asia-Pacific region. Moody’s Investors Service on Friday trimmed its FY21 growth projection sharply to 0% for India in the wake of the Covid-19 outbreak and warned of a possible rating downgrade for the country if fiscal metrics “weaken materially”. The global rating agency had in November 2019 revised down its outlook for India from stable to negative, although its sovereign rating of Baa2 is still a notch above those of S&P and Fitch, as these agencies have assigned the lowest investment grade to India, with a stable outlook. In its latest credit opinion, Moody’s said: “This would probably happen in the context of a prolonged or deep slowdown in growth, with only limited prospects that the government would be able to restore stronger output through economic and institutional reforms.” Moody’s warning follows a similar statement by Fitch and is expected to add to policy-makers’ unease, as they firm up a relief package to prop up the economy. Already, several analysts have warned of a negative growth for the entire fiscal, amid a nation-wide lockdown. Manufacturing and services activities have witnessed unprecedented contraction in April, as per the PMI survey. Unemployment rate surged to as much as 27.1% in the week through May 3, according to the Centre for Monitoring of Indian Economy. Moody’s, however, expects GDP growth to recover to 6.6% in FY22. Government finances in India are stressed, amid a big decline in revenue growth and rising expenditure obligations. Tax revenues of most state governments were less than a fourth of the estimated level in April. While the Centre’s tax revenue in FY21 is estimated by various agencies and experts to be Rs 3-5 lakh crore below the budgeted level, the Centre is trying to soften the blow to its finances by being wary of loosening its purse strings. Also, it is apparently attempting to shift the extra fiscal burden arising out of the Covid-19 pandemic to states and central public sector undertakings. While an additional fiscal burden of some Rs 75,000 crore has been committed by the Centre already, the expenditure curbs on various departments in June quarter would more than offset this outgo. Of course, more fiscal packages are likely to be announced by the Centre over the course of the pandemic and its immediate aftermath, although there is no clarity as yet on the size of such stimulus. Chief economic adviser Krishnamurthy Subramanian has recently indicated that borrowing of around $60 billion to fund the rising fiscal deficit could theoretically be through listing government bonds on the global bond indices. “About $4 trillion of money tracks these (global) bond indices. India is expected to get a weight of around 1.5-3%. Even if you take 1.5% that translates into $60 billion” he said. Moody’s said a marked and long-lasting weakening in the health of the financial sector of India would both “raise associated fiscal costs should the government need to support some financial institutions, and increase the risk that growth remained too low to prevent a rise in the debt burden”. Separately, in a report released on Friday, S&P said it expected the banking systems of Indonesia and India to be among the worst hit in the Asia-Pacific region. It said: “India’s complete lockdown, accompanied by forced closures of nonessential businesses and declining demand, are hurting the economy. We expect the sharp decline in India’s GDP growth in the current year to lead to a sharp rise in nonperforming assets.” Commenting on outlook, Moody’s said on Friday: “The negative outlook reflects increasing risks that economic growth will remain significantly lower than in the past. This is in light of the deep shock triggered by the coronavirus outbreak, and partly reflects lower government and policy effectiveness at addressing longstanding economic and institutional weaknesses, leading to a gradual rise in the debt burden from already high levels.” The rating agency, however, said India’s credit profile is supported by its large and diverse economy, and stable domestic financing base. “This is balanced against high government debt, weak social and physical infrastructure, and a fragile financial sector, which face further pressures amid the coronavirus outbreak. The shock will exacerbate an already material slowdown in economic growth, which has significantly reduced prospects for durable fiscal consolidation,” it added. Talking about the debt-to-GDP ratio following massive borrowing to fund productive spending, CEA Subramanian told India Today channel on Thursday that even if the country witnessed 4%-plus real GDP growth for 5-10 years from FY22, the debt levels would still come down. The important point in the debt sustainability issue is that the rate of borrowing will be far lower than our nominal GDP growth rates.
Source: Financial Express
A panel led by Mahindra & Mahindra managing director Pawan K Goenka and comprising members from leading business groups, has begun identifying industries to propel India’s manufacturing in a post-pandemic world. The committee is expected to draw up strategies to boost industrial growth in at least 12 sectors, including steel, agro-chemicals, food processing, aluminium, electronics and textiles. The special panel, set up with support from the Department for Promotion of Industry and Internal Trade (DPIIT), comes as the government moves to put in place a single window for all business activity, in partnership with states. Prime Minister Narendra Modi had in his previous interaction with chief ministers emphasised that the crisis wrought by the Covid-19 outbreak should be used to push reforms that will make the country an attractive investment destination. “The panel will look at industries that aid domestic growth with a focus on exports to achieve world dominance. The panel is working with many ministries,” an official who did not want to be named, said. The panel’s constitution assumes significance in the wake of India’s industrial activity reeling under the ongoing nationwide lockdown to combat the spread of the pandemic. India’s eight infrastructure sectors contracted the steepest in nearly eight years in March after touching an 11-month high in February. Independent economists expect industrial production for March to contract by 15-40%. Various industry chambers will draw up strategies for at least three sectors each and submit the reports, especially as countries seek to replace China-made products with those from other sources. The CII will submit a report on agro-chemicals, steel, food processing and aluminium, while the Federation of Indian Chambers of Commerce and Industry would work on textiles, electronics and furniture. The exercise is meant to reshuffle the ways of doing business for both domestic and international companies so that fresh investments come to India, the official said.
Source: Economic Times
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
804.93 |
USD/Ton |
0.98% |
10-05-2020 |
|
VSF |
1232.48 |
USD/Ton |
0.23% |
10-05-2020 |
|
ASF |
1586.54 |
USD/Ton |
0% |
10-05-2020 |
|
Polyester POY |
763.24 |
USD/Ton |
-0.28% |
10-05-2020 |
|
Nylon FDY |
1893.96 |
USD/Ton |
0.75% |
10-05-2020 |
|
40D Spandex |
4028.19 |
USD/Ton |
0% |
10-05-2020 |
|
Nylon POY |
989.38 |
USD/Ton |
0% |
10-05-2020 |
|
Acrylic Top 3D |
1752.62 |
USD/Ton |
0% |
10-05-2020 |
|
Polyester FDY |
1752.62 |
USD/Ton |
0% |
10-05-2020 |
|
Nylon DTY |
939.91 |
USD/Ton |
0% |
10-05-2020 |
|
Viscose Long Filament |
2176.64 |
USD/Ton |
0% |
10-05-2020 |
|
Polyester DTY |
5201.31 |
USD/Ton |
0% |
10-05-2020 |
|
30S Spun Rayon Yarn |
1738.48 |
USD/Ton |
-0.40% |
10-05-2020 |
|
32S Polyester Yarn |
1356.86 |
USD/Ton |
0% |
10-05-2020 |
|
45S T/C Yarn |
2155.44 |
USD/Ton |
0% |
10-05-2020 |
|
40S Rayon Yarn |
1908.09 |
USD/Ton |
0% |
10-05-2020 |
|
T/R Yarn 65/35 32S |
1653.68 |
USD/Ton |
0% |
10-05-2020 |
|
45S Polyester Yarn |
1554.74 |
USD/Ton |
0% |
10-05-2020 |
|
T/C Yarn 65/35 32S |
2021.16 |
USD/Ton |
0% |
10-05-2020 |
|
10S Denim Fabric |
1.13 |
USD/Meter |
-0.13% |
10-05-2020 |
|
32S Twill Fabric |
0.64 |
USD/Meter |
-0.22% |
10-05-2020 |
|
40S Combed Poplin |
0.93 |
USD/Meter |
0% |
10-05-2020 |
|
30S Rayon Fabric |
0.49 |
USD/Meter |
0% |
10-05-2020 |
|
45S T/C Fabric |
0.64 |
USD/Meter |
0% |
10-05-2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14134USD dtd. 10/05/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Myan Mode, a garment factory on the outskirts of Yangon, Myanmar, produces men’s jackets, women’s blazers and coats for Western fashion companies like Mango and Zara. Since the start of the coronavirus pandemic, it has seen a decrease in orders from international retailers. That was why it let go almost half of its 1,274 workers in late March, the factory’s managing director said in response to protesters who arrived at the factory’s doors to denounce the dismissals. Three fired sewing operators, however, said the factory was taking an opportunity to punish workers engaged in union activity. In an interview, the operators — Maung Moe, Ye Yint and Ohnmar Myint — said that of the 571 who had been dismissed, 520 had belonged to the factory’s union, one of 20 that make up the Federation of Garment Workers Myanmar. About 700 workers who did not belong to the union kept their jobs, they said. Myan Mode’s South Korean-based owner did not respond to requests for comment, and did not provide details about the firings. Mr. Moe, 27, was the factory union’s president and had organized several strikes. Mr. Yint, 30, was the union’s secretary, while Ms. Myint, 34, had been a union member since its founding in June 2018. “The bosses used Covid as an opportunity to get rid of us because they hated our union,” Mr. Moe said. He said he and other union members had been in discussions with the factory managers before the firings, demanding personal protective equipment and that workers be farther apart on the factory floor. “They thought we caused them constant headaches by fighting for our rights and those of our fellow workers.” Union-busting — practices undertaken to prevent or disrupt the formation of trade unions or attempts to expand membership — has been serious problem across the fashion supply chain for decades. But with the global spread of Covid-19 placing fresh pressures on the industry, it is a particular issue in South Asia, where about 40 million garment workers have long grappled with poor working conditions and wages. “Union-busting is not a Covid-specific issue for the garment industry — it happens all the time,” said Luke Smitham of the sustainability consultancy Kumi Consulting. Zara’s parent company, Inditex, which is supplied by Myan Mode, said its code of conduct for manufacturers expressly prohibited any discrimination against worker representatives. The company said in an email that it was “actively following the situation” at Myan Mode, and would “try to achieve the best possible solution for workers.” Mango, which has started to reopen its stores in Europe, said in an emailed statement that it “understood the need to ensure that the human rights of factory workers are respected.” The company added that it was maintaining “a continuous” dialogue with suppliers. Roughly 2 percent of garment workers in Myanmar, where the minimum wage is roughly $3.50 a day, and 0.5 percent of garment workers in Bangladesh belong to a union, according to affiliate data estimates collected by the global trade union IndustriALL. While Cambodia’s work force is more unionized than others in the region — around 80 percent — the unions there are fragmented, meaning successful collective bargaining negotiations can be difficult. Tear gas, water cannons, police brutality and imprisonment were some of the tools used by the governments of Bangladesh, Cambodia, India and Myanmar to punish striking garment workers and union members last year, according to the International Trade Union Confederation, an umbrella group for unions around the world. It noted that many workers in those countries who tried to form a union were dismissed from jobs or blacklisted by factories. And the number of countries that exclude workers from the right to establish or join a trade union increased to 107 in 2019 from 92 in 2018. Andrew Tillett-Saks, a labor organizer in Yangon, said he had seen a surge in unionizing by garment workers in Myanmar over the last 18 months — and a reaction from factory owners. Before the pandemic, he said, some garment factories with fledgling unions were abruptly closing and firing union members, then reopening weeks later to supply the same brands under a slightly different name with a new group of nonunionized workers. Mr. Tillett-Saks said that much of the focus had been on whether brands would pay wages for workers during the pandemic, or for orders that had already been produced. But factory owners “taking this as an opportunity to break down labor movements in the supply chain could be an even bigger issue.” Some brands, like H&M, have tried to facilitate union activity in supplier factories by signing ACT, an agreement brokered by IndustriALL and designed to secure fair wages for workers through collective bargaining and building guarantees of labor rights into purchasing agreements. But there are still hurdles. Before the International Labor Organization, a U.N. agency, can take action, allegations of mistreatment must be sent in writing from a national or international trade union organization and then reviewed internally by the agency — a complicated process even before the pandemic. “We have heard allegations of anti-union discrimination in recent weeks,” said John Ritchotte, a specialist in social dialogue and labor administration in Asia for the International Labor Organization. “However, it is currently more difficult than usual for us to verify those allegations through our usual procedures because of travel restrictions and local lockdowns.”In the weeks since the Myan Mode layoffs, around 15,000 jobs in the textile industry have been lost and about 40 factories closed across Asia, said Khaing Zar Aung, president of Industrial Workers Federation of Myanmar. Mr. Moe said the fired Myan Mode workers had protested outside the factory for weeks, watching as daily wage workers entered and scores of exhausted former colleagues left at midnight after overtime shifts. Eventually, management offered severance but not re-employment to the 571 fired workers, plus 49 employees who had walked out in solidarity. All but 79 eventually took the severance pay. The Garment Manufacturers Association in Cambodia said about 60 percent of its factories — where union members have also been targeted — had been severely affected by canceled orders of ready-made garment exports because of the pandemic. On March 31, several dozen union workers at the Superl leatherwear factory on the outskirts of Phnom Penh — which produces handbags for brands like Michael Kors, Tory Burch and Kate Spade — were told they were being let go. One was a woman who was six months pregnant. Soy Sros, a factory shop steward and the local president of the Collective Union of Movement of Workers, wrote about the company’s actions on Facebook, stating it violated a March 6 appeal from the Cambodian government saying Covid should not be used as a chance to discriminate against union members. Twenty-four hours later, Ms. Sros was forced by factory management to take down her post and make a thumbprint on a warning letter accusing her of defamation. On April 2, she was removed from the factory floor by the police and charged with posting fake information on social media. She is now in jail. Superl, which is based in Hong Kong, did not respond to requests for comment, nor did Michael Kors and Tory Burch, which regularly place orders at the factory. Another customer, Tapestry, the owner of Kate Spade, declined to comment. In Myanmar, Mr. Moe, Mr. Yint and Ms. Myint all said they did not regret joining the union despite the difficulties they had faced. They said the loss of jobs was proof that worker representation was needed. “I worry for the future of garment workers here without representatives,” Ms. Myint said, referring to both the firings at Myan Mode and other factories across Asia. “But for now, I worry about providing for my family and getting food on the table.”Elizabeth Paton is a reporter for the Styles section, covering the fashion and luxury sectors in Europe.
Source: New York Times
Indonesia and Australia have agreed to implement the Indonesia-Australia Comprehensive Economic Partnership Agreement (IA-CEPA) on July 5, according to the Indonesian Trade Ministry.
Indonesia ratified the partnership agreement in late February.
“In a virtual meeting with my counterpart, [Australian Trade, Tourism and Investment] Minister Simon Birmingham, we agreed to implement the IA-CEPA as soon as possible because it is important for the two countries to help with post-COVID-19 recovery,” Trade Minister Agus Suparmanto said as quoted in a statement on Friday. Under the agreement, Indonesian exports to Australia will get zero tariffs. Likewise, most of Australia’s exports, including live male cattle, frozen beef, dairy products and sugar, may enter Indonesia without any duties. The Trade Ministry expects the export of some Indonesian products to Australia, such as automotive products, timber, textiles, electronics and communication tools, to increase despite recording a US$3.2 billion trade deficit last year. The pandemic, which has infected over 3.7 million people worldwide and at least 13,100 people in Indonesia, is slowing not only trade but also investment between countries. Foreign direct investment (FDI) to Indonesia declined 9.2 percent year-on-year to Rp 98 trillion ($6.5 billion) in the first quarter of the year, according to data released on April 20 by the Investment Coordinating Board (BKPM). Despite relying heavily on household spending to grow the economy, Indonesia seeks to attract more investment from Australia through the IA-CEPA, especially in the higher education, vocational education, healthcare, construction, energy, mining and tourism sectors. In the first quarter of the year, foreign investment from Australia reached $86 million with 321 projects, according to BKPM data. “We hope businesses, including small and medium enterprises, from both countries can reap the benefits from the IA-CEPA to spur trade and investment between the two countries,” Agus said. The ministry’s international trade cooperation director general, Imam Pambagyo, said Indonesia was preparing ministerial regulations on tariffs and the issuance of certificates of origin, in addition to providing state institutions with updates on the latest developments of the agreement.
Source: The Jakarta Post
The coronavirus pandemic has taken a toll on the entire world and is jeopardising the world economy in irreparable trajectories. Moreover, it is wreaking havoc on the biggest exporters of garments in the world. The global supply chain network pulled out a huge chunk of Asian natives from the vicious circle of poverty throughout these years. It enabled people to not just earn the daily bread but to enjoy a proper meal. The job of garment manufacturing was the sole source of income for multiple families residing in the region. However, the global apparel industry stands at stakes today. The pandemic which has disrupted the entire apparel and textile ecosystem has cast a dark shadow on the fashion world. The months-long lockdown and halt in business operations contribute to the current situation of the garment industry, pushing thousands of people into destitution. Two wide reasons are to be entirely blamed for the same. Firstly, as the disease broke out in the Chinese city of Wuhan, the export of textiles was severely disturbed as the country stopped its operations. China, which is the leading exporter of textiles with a value of $250 billion, stopped its supplies to the Asian countries, following the halt in production. Finally, when the Chinese were ready to resume export, the plunging demand and the preventive lockdowns in countries like the U.S and Europe lead to the longevity of the production halt.
DEVASTATING IMPACTS:
The situation is worsening day by day as apparel goes out of the customer’s shopping list because they focus more on buying staples in these testing times. The changing consumer buying patterns are going take an enormous dig at the Asian garment factories, especially the daily workers. Countries like Bangladesh, Vietnam, Myanmar, and Indonesia are to bear the maximum brunt. These countries rely heavily on apparel export, which accounts for 80-90% of their total export business. Bangladesh, which is the leading exporter to Europe, and the U.S is believed to lose $6 billion in apparel export revenue. Furthermore, only a handful of the big fashion brands, which these countries supply to, are coming forward to help them. The Vietnamese textile body believes that they could suffer losses as huge as $467 million, whereas, In Myanmar, it is all about survival now. With more than 20 factories paused and more suspensions expected, the country believes that the ones able to survive will only go further. Conditions in Bangladesh are even worse. More than $3 billion worth orders have been either scrapped or halted and more than 1 million workers have been fired or furloughed. Vietnam has a diversified export market, therefore, it still remains on the safer side. But, Bangladesh is predicted to come out as the worst-hit country with a predicted job loss of around 4-9%.
THE ROLE OF BIG BRANDS
The notorious fashion industry has always been in the limelight for their selfish business ways. The negligence towards the welfare of the small workers has been famous since the 2013 Dhaka’s Rana Plaza case. Since then, many brands have been trying to build up their reputations by bringing transparency in their operations. However, none of them could achieve wonders in the field. Even today many fashion brands are resorting to cheap negotiations with the already shattered Asian manufacturers. Cancellations of orders and appeal for discounts are the only kind of word that they are getting from buyers right now. Where some buyers are directly canceling orders that were placed with these countries, others are putting even more unreasonable demands in front of them. Suggesting discounts on advance as well as already delivered products and asking for 30-120 days extension on previously agreed payments, are some of the unjustifiable recommendations that they have for the struggling manufacturers. Although, brands like Adidas, H&M, and Zara are trying to find out solutions for their production partners. They have promised to pay in full for all orders, whether finished or still in production. On the other hand, ASOS, C&A, Edinburgh Woollen Mill, Gap, and Primark said that they had been compelled to pause or cancel some orders but are in contact with suppliers to mitigate the financial crisis. Many brands have triggered force majeure, indicating the urgent need for disposing off the liabilities due to the unprecedented situation. The Workers Right Consortium previously estimated orders worth over $US24 billion had been canceled but said this figure was now likely lower, given some brands had backtracked propelled by the criticisms. Garment orders are down nearly a third, the International Textile Manufacturers Federation said. In order to make the ends meet, laid-off workers would be forced to adopt exploitative alternatives, pushing their children to work in poor working environments. However, resuming the countries manufacturing business also comes with a huge cost. The disease is nowhere under control and to operate in such a situation implies a major threat to life. These Asian countries, which hare densely populated in smaller areas are prone to catch the deadly disease if they get back to work. Making it difficult to follow the social distancing and other safety norms. Hence, The pandemic is hitting the manufacturers from both the sides, leaving them handicapped.
ROAD AHEAD
The garment export business constitutes a large portion of the GDP of the respective Asian countries. Therefore, a decline in the business will automatically lead to a drop in the GDP. Vietnam’s baseline 2020 growth is predicted to dip from 7% to 4.9%, Myanmar’s to shrink from 6.3% to 3%, and Indonesia’s to fall from 5% to 2%. To save the country from the unfortunate economic crises. The government of these countries is taking significant measures. Bangladesh’s Prime Minister Sheikh Hasina recently announced a $588 million stimulus package for the $40 billion export sector, of which garments account for 84 percent. She also advised companies to put the money towards paying workers. In Cambodia, the government has announced tax holidays for struggling factories and proposed a 60% wage subsidy scheme for furloughed workers, with 20% paid by the government and 40% by factories. Although, these measures are not sufficient to save the drowning industry. The experts suggest that stimulus packages from developed economies to protect their apparel industry should also be geared towards cushioning the developing countries. However, this does not solve all the problems. The surge in the raw material prices, shortage of laborers, and lack of production capacity are some of the additional challenges that lie ahead of the industry. Fearing the disappearance of the apparel and the textile industry, many experts believe that additional preventive measures should be taken in the wake of the situation. In order to let the big retail brands stay afloat in the economy, it is important to support the roots.
Source: India City Blog
The coronavirus pandemic has ravaged the Italian landscape; the toll on human life has been devastating, and the trauma cannot simply go away. Italy is home to countless fashion brands; it also has a history—of time and again rising from the ruins. The lockdown there has not been lifted yet, and the number of casualties is still not on a decline. Yet, the fashion industry is determined to bounce back stronger. The pandemic paralysed the fashion industry across sectors and geographies. Though it is too early to quantify the losses, Gianfranco Di Natale, general director of Sistema Moda Italia (SMI), the industry trade group representing Italy’s textiles and apparel firms, points out, “The Italian production system, in particular textiles and clothing, historically rests on industrial districts, which are highly specialised concentrations throughout the Italian territory.” According to him, all these areas would be severely affected and in particular the cities of Biella, Como, Varese, Prato and Bergamo. The whole footwear supply chain had to shut down, and so the entire country has been affected by the stoppage. “Unlike other companies in the textiles sector who were granted an exemption in order to convert some of their production lines, we have been at a total standstill,” rues Siro Badon, president of Assocalzaturifici, the national association representing industrial shoemakers in Italy. The fashion sector could be among the first to be re-opened after the lockdown ends, and it is not going to be an easy task. It would need coordination, and it would need a well laid-out roadmap.
Source: Fibre2Fashion
Mineral product shipments tumbled 63.2%, while exports of textiles fell 37.4% following the postponement and cancelation of sports events. The nation’s exports last month shrank 1.3 percent year-on-year to US$25.24 billion, the lowest since May 2017, as poor shipments of raw materials — due in part to price routs — more than eclipsed robust shipments of electronic components, the Ministry of Finance said yesterday. The retreat could worsen to between 4 percent and 6 percent this month as most global nonessential businesses are closed to help contain the COVID-19 pandemic, stalling trade activity, the ministry said. “Taiwan may feel a sharper pinch from the COVID-19 pandemic going forward, with downside risks looming larger than upside surprises,” Department of Statistics Director-General Beatrice Tsai told a media briefing in Taipei. Mineral product shipments tumbled 63.2 percent, the worst decline in history, as unprecedented shutdowns in Europe, the US and parts of Asia saw demand slump, Tsai said. Exports of textile products fell 37.4 percent following the postponement and cancelation of sports events worldwide, including the Tokyo Summer Olympics originally scheduled for July, she said. Taichung-based Pou Chen Corp , the world’s largest maker of sports shoes, apparel and accessories for Nike Inc, Adidas AG, Puma AG, New Balance Inc and Timberland Co, has instituted pay cuts and furloughs for its Taiwanese employees from June 1 to cope with sluggish demand. Shipments of transportation equipment, such as bicycles, fell 21.4 percent as demand dwindled due to people working and attending classes from home, as well as national lockdowns, Tsai said. Exports to Europe contracted 20.1 percent, while those to ASEAN markets subsided 12.2 percent, a ministry report said. China appeared to be on course for a recovery with exports increasing 44.4 percent to US$11.2 billion, a 14 percent year-on-year rise, the report said. Exports to Japan gained 17.5 percent, while those to the US inched up 1.5 percent, thanks to increased demand for electronic components, which rose 24.3 percent to US$10.08 billion, it said. “Semiconductors, passive components and memory devices experienced a boom on the back of 5G deployment and the stay-at-home economy,” Tsai said. The outlook for the electronic components sector looks healthy this quarter, but there is concern over a possible supply glut in the second half of the year if the pandemic persists beyond next month, she said, citing major technology firms. Imports fell 0.5 percent to US$22.97 billion, giving the nation a trade surplus of US$2.27 billion, the ministry said. Imports of capital equipment increased 16.5 percent, reflecting plans by local companies to upgrade their equipment and expand, it said. In the first four months of the year, exports rose 2.4 percent to US$103.92 billion, while imports increased 2.7 percent to US$92.14 billion, it added.
Source: Taipei Times
