NEW DELHI: Contracting for the second straight month, India's exports shrank by a record 60.28 per cent in April to $10.36 billion, mainly on account of the coronavirus lockdown, official data showed on Friday. To plunged by 58.65 per cent to $17.12 billion in April, leaving a trade deficit of $6.76 billion as against $15.33 billion in April 2019, according to the data by the commerce and industry ministry. This is the lowest trade deficit since May 2016, when it had stood at $6.27 billion. The country's exports had declined by 34.57 per cent in March 2020. "The decline in exports has been mainly due to the ongoing global slowdown, which got aggravated due to the current Covid-19 crisis. The latter resulted in large scale disruptions in supply chains and demand resulting in cancellation of orders," the ministry said in a statement. Barring iron ore and pharmaceuticals, all the remaining 28 key sectors registered negative growth in the month under review. Gems and jewellery shipments declined 98.74 per cent, followed by leather (- 93.28 per cent), petroleum products (- 66.22 per cent), engineering goods (- 64.76 per cent), and chemicals (- 42 per cent). Oil imports in April were $4.66 billion, which was 59.03 per cent lower as compared to the same month last year. All 30 key imports sectors like gold, silver, transport equipment, coal, fertiliser, machinery and machine tools posted negative growth during the month. Non-oil imports fell 58.5 per cent to $12.46 billion in April. Gold imports stood at $2.83 million, as against $4 billion in April 2019. The nationwide lockdown to contain the spread of the coronavirus outbreak began on March 25, shutting industrial units and restricting movement of goods. Commenting on the numbers, Federation of Indian Export Organisations (FIEO) said it is "highest-ever" decline in monthly exports, and demanded an incentive package from the government. FIEO President Sharad Kumar Saraf said the lockdowns around the world have not only pushed business sentiment to the lowest levels but also "We may expect revival in exports from the third quarter of the fiscal, depending on the condition evolving in the international market. "With major global players including the US, UK, Canada, Japan, Germany, France, Austria, Spain, and Bangladesh having provided bailout or financial packages to their industry to sail through these difficult times, it is also expected that the same would help in bringing good news for the overall international trade," Saraf said. He said with cancellation of 70-80 per cent of orders, job losses and rising NPAs among exporting units, the government should immediately implement the economic measures announced at the ground level for quick revival. Meanwhile, Finance Minister Nirmala Sitharaman on Friday announced measures to promote agri exports. Mohit Singla, chairman of Trade Promotion Council of India (TPCI), said the announcement would help India achieve its target of $100 billion agri exports. "The proposed amendment in essential commodity act is a welcome step in deregulating the agri sector which will save the farmers from artificial price management activities by different forces," Singla said. Since 2011-12, India's exports have been hovering around the $300 billion mark. During 2017-18, the overseas shipments grew by about 10 per cent to $303 billion and further to $330.08 billion in 2018-19 and $314.31 billion in 2019-20. The drop in exports is in sync with the projections of the World Trade Organisation (WTO), which has stated that world trade is expected to fall between 13 per cent and 32 per cent in 2020 due to the COVID-19 pandemic.
Source: Economic Times
The government has identified close to a dozen sectors, ranging from capital goods, defence, pharma and electronics to labour-intensive ones such as textiles and food where it is considering proposals for tax concessions. It is also pushing for land and procedural reforms to attract investment as part of a goal to be self-sufficient. Although the department for promotion of industry and internal trade (DPIIT) has proposed a tax holiday for sectors such as telecom, chemicals and capital goods, the finance ministry is not in a mood to waive taxes after it slashed corporation tax to 15% for new manufacturing entities as it is keen to avoid the “SEZ experiment”. This saw industries shift to the taxfree enclaves without generating fresh investment or jobs. The department has also proposed tax benefits for labour intensive sectors such as food processing and leather. Its other suggestions regarding creation of manufacturing clusters and new models for land leasing and “plug-and-play” facilities to enable businesses to simply invest and begin operations quickly have found favour with Prime Minister Narendra Modi. The efforts are part of the Make in India 2.0 initiative being piloted by the government after the first phase did not result in a significant jump in investments. With land cited as one of the key roadblocks by investors, the government is toying with multiple options, including channelising large tracts available with state agencies such as railways and ports. Besides land amortisation, which allows a fixed annual payback once operations commence, easy payment and leasing options are being discussed. The other thrust is on creating manufacturing clusters in states and reforming SEZs. The Centre is hoping that a series of steps to reform the clearance process such as simplified procedures and a single-window mechanism — a buzzword with all governments — will help speed up investment decisions and reduce have always complained about. The government is keen to tap parts of the global supply chain that may want to relocate from China, following the ongoing coronavirus pandemic and also due to rising wage costs. A part of the push also flows from the realisation to reduce dependence on China, as Covid-19 production disruptions across the border hit the supply chain for medicines and mobiles phones in India. The broad contours of the plan have been thrashed out with Modi himself holding consultations with key ministerial colleagues last month.
Source: Economic Times
NEW DELHI: The G-20 trade ministers on Thursday endorsed short term steps such as emergency trade measures designed to tackle COVID-19 including export restrictions on vital medical supplies and equipment and other essential goods and services so that do not create unnecessary barriers to trade or disruption to global supply chains, and are consistent with the global trade rules. In a statement issued after the virtual meeting of Trade and Investment Ministers of the G20, the grouping said it would “encourage our governments to establish voluntary guidelines that would allow, in the event of a global health crisis, essential cross-border travel, including essential business travel, on an exceptional basis, in accordance with national laws and regulations, and without undermining efforts to safeguard public health”. During the virtual meeting, commerce and industry minister Piyush Goyal asked the G20 members to first focus on immediate and concrete actions that can ease the distress being faced by people all over the world due to the Covid-19 pandemic. He strongly called for agreement to enable the use of TRIPs flexibilities to ensure access to essential medicines, treatments and vaccines at affordable prices and also asked them to agree to provide diagnostic and protective equipment, and healthcare professionals across borders where they are most needed. As a result of the pandemic, a large number of professionals, workers and students located overseas are facing difficulty in maintaining their visa status, Goyal suggested that countries must allow suitable accommodation in their visa status and take other necessary steps to address their distress. Goyal said that doing away with the policy instrument of export restrictions is not a panacea that will guarantee access to medical products and food for all. In fact, such a step is likely to lead to a flight of these critical products to the highest bidder, making them inaccessible to the resource-poor. “More effective and lasting way to ensure food security of the most vulnerable, would be by agreeing to eliminate the historic asymmetries in the Agreement on Agriculture, and delivering on the long-standing ministerial mandate to establish permanent, adequate and accessible disciplines on Public Stockholding for food security purposes by the 12th Ministerial Conference of the WTO,” Goyal was quoted in an official release. Underscoring the wide digital divide between developed and developing countries, the Minister stressed on the urgent need to build the digital skills and capacities of developing countries and LDCs, rather than rushing to make binding rules on digital trade and e-commerce, which will freeze the extremely non-level playing field against their interests, and deprive them of the opportunity to benefit from the immense potential in these areas.
Short-term collective actions
The G-20 trade ministers also said they would refrain from introducing export restrictions on agricultural products, including on products purchased for non-commercial humanitarian purposes, and avoid unnecessary food-stockpiling, without prejudice to domestic food security, consistent with national requirements. “Consider exempting humanitarian aid related to COVID-19 from any export restrictions on exports of essential medical supplies, medical equipment and personal protective equipment, consistent with national requirements,” the grouping said in the statement.
They also endorsed the idea to speed up and streamline customs procedures, in line with the WTO Trade Facilitation Agreement, encourage the use of electronic documentation and processes, reduce barriers, encourage governments to facilitate the resumption of essential cross- border travel, and expand production and trade in essential goods and services, including digital trade/e-commerce.
Source: Economic Times
Finance minister Nirmala Sitharaman rolled out the first instalment of the Rs 20 lakh crore economic stimulus announced by Prime Minister Narendra Modi, offering loan guarantees and funds to small businesses, non-bank lenders and power distribution companies. The Rs 5.94 lakh crore package seeks to ensure credit and liquidity for the sectors that are among the worst hit by the Covid-19 crisis. The bulk of the package is in the form of guarantees that require no immediate allocation from the budget, implying limited impact on the fiscal deficit and more room for support to other sectors. The direct immediate support from the budget — guarantees are contingent liabilities payable only on default — is less than Rs 50,000 crore. “Essentially, this is to spur growth to build a very self-reliant India and that’s why this initiative is called Atmanirbhar Bharat Abhiyan,” Sitharaman said on Wednesday, adding that the stimulus programme has been prepared after “wide and deep” consultations. Including the measures announced by the government and the Reserve Bank of India earlier, the latest measures add up to Rs 12.88 lakh crore, leaving a balance of Rs 7.12 lakh crore. Additional measures will be announced over the next few days and are likely to focus on labourers, farmers, the middle class and industry. “The policy bouquet unveiled by the government is well-structured, suitably targeted, within reasonable fiscal limits but still having the maximum impact,” said SBI chairman Rajnish Kumar. The package includes a government guarantee for Rs 3 lakh crore collateralfree loans to small businesses, a Rs 20,000 crore debt fund for the stressed ones and a Rs 50,000 crore fund to provide equity support. Nonbanking finance companies (NBFCs) will get a Rs 30,000 crore special liquidity fund and Rs 45,000 crore partial credit guarantee scheme that will apply to those rated AA and below and even unrated paper, enabling them to borrow more from the market. Power distribution companies will get Rs 90,000 crore liquidity against receivables from state-owned Power Finance Corp. and Rural Electrification Corp. allowing them to pay dues to power producers. The provident fund contribution has been cut to 10% for both employer and employees, adding up to Rs 6,750 crore in freed-up liquidity, from 12%. The government has also extended the 24% provident fund contribution scheme by another three months, providing Rs 2,500 crore support to 367,000 establishments and covering 7.2 million employees. The Rs 3 lakh crore loan guarantee scheme is open until October 31 and will benefit 4.5 million units, the finance minister said. Industry said the stimulus was well targeted. It will meet the immediate as well as longer-term requirements of sectors in distress, said Confederation of Indian Industry director general Chandrajit Banerjee. “The measures for NBFCs, HFCs (housing finance companies) and MFIs (microfinance institutions) inject direct liquidity to where it is required most, and will enable them to support their borrowers through a period of cash flow stress,” said N Venkatram, CEO Deloitte India.
NON-FUND MEASURES
The finance minister announced a change in the definition of MSMEs, raising the investment threshold and adding turnover as a criterion, which will allow them to grow in size without fear of losing incentives. To encourage the sourcing of local products, all government tenders up to Rs 200 crore will only be floated locally. “Changing definition of MSMEs will be a game changer and enable them to grow and expand. This should get the credit cycle moving and, hopefully the risk aversion of banks eliminated,” said NITI Aayog CEO Amitabh Kant. The “foundation has been laid for a new MSME sector at the core of our future self-reliant economy. Directing huge capital inflows into MSME is the first step”, minister for MSMEs Nitin Gadkari said in a tweet. The government has also allowed contractors for the railways, highways and other ministries an additional six months to complete projects or supply goods or services without any penalty. Bank guarantees offered by them will also be released to the extent of project completion to improve cash flow.
TAX RELIEF
In order to leave more cash in the hands of taxpayers, the rates of tax deduction at source (TDS) for nonsalaried specified payments made to residents and tax collection at source (TCS) for specified receipts will be reduced by 25%. Payments for contracts, professional fees, interest, rent, dividend, commission, brokerage, etc. will be eligible for this reduced rate of TDS, which will be applicable for the remaining part of FY21from May 14. TDS and TCS already paid will be restored when tax for the full year is computed. Further, the due date of all I-T returns for FY20 will be extended to November 30 from July 31and October 31. The tax audit deadline has also been extended by a month to October 31. Under the Vivad se Vishwas scheme, the deadline for making payments without additional charges will be extended to December 31.
Source: Economic Times
More than 50 per cent of the first quarter is lost from a production standpoint, but the company is hoping that it would be able to resume 100 per cent operations by June Getting adequate manpower to ramp up production to meet the demand is one of the major challenges the textile industry is facing, said Sivaramakrishnan Ganapathi, managing director of India’s largest apparel exporter, Gokaldas. More than 50 per cent of the first quarter is lost from a production standpoint, but the company is hoping that it would be able to resume 100 per cent operations by June. "The challenge started even before the nation-wide lockdown, as the textiles and apparels got impacted when coronavirus affected China, and the availability of a lot of raw ...
Source: Business Standard
Electrical equipment such as smartphones and computers are a key part of India’s import bill. Medical devices like ventilators also rely on imports of several crucial components like solenoid valves and pressure sensors.Prime Minister Narendra Modi Tuesday brought up the importance of local manufacturing and consumption of locally produced goods, stating that Indians needed to become “vocal for local”. He hinted that the government would need to undertake major reforms in order for the Indian industry to play a major role in the global supply chain. Yet, how self reliant are India’s industries currently and how soon can they step up?
What sectors heavily depend on imports right now and cannot immediately scale up production domestically?
Electrical equipment such as smartphones and computers are a key part of India’s import bill. The value addition in India’s electronics industry is limited to mostly assembly, while the country depends on imports to access most of the primary and critical components used to make them, including printed circuit boards (PCBs). For instance, around 88 per cent of the components used by the mobile handsets industry are imported from countries like China, according to the Confederation of Indian Industry. Over 60 per cent of the country’s medical devices are imported as well. Other products heavily imported into the country are cells and modules used by the country’s solar power industry.
What sectors partially depend on imports to make their finished products?
India’s pharmaceutical industry is capable of making finished formulations, and also has domestic manufacturers of several key ingredients used to make them. However, the industry also imports some key ingredients for antibiotics and vitamins currently not manufactured in India. The country is currently trying to encourage domestic firms to make these key ingredients, known as fermentation-based APIs. However, this may take a few years. India imported around Rs 249 billion worth of key ingredients, including fermentation-based ingredients, in FY19, and this accounted for approximately 40 per cent of the overall domestic consumption, according to CII. Medical devices like ventilators also rely on imports of several crucial components like solenoid valves and pressure sensors. Some auto manufacturers depend on imports for various components, while the country’s electric vehicles industry is dependent, “to a large extent” on Chinese imports for chemicals used to make cathodes and battery cells, it said. Local dyestuff units in India are also heavily dependent on imports of several raw materials, while specialty chemicals for textiles like denim are also imported, according to CII. For instance, when China initiated its lockdown of Wuhan earlier this year during the COVID-19 pandemic, nearly 20 per cent of India’s dyes and dyestuff industry production was hit due to a disruption in raw material.
Are there any sectors that are already self-reliant, have minimal dependence on imports or have the capacity to immediately scale up production here?
According to trade experts like JNU professor Biswajit Dhar, India is not as dependent on imports for some textile components like yarn. “Although the domestic industry argues that China is a major threat, if you look at the global scenario, India’s share in textiles has been going up,” he said. While technology transfer is required for more advanced and critical medical devices, the country does have the capacity to domestically make products like hot water bottles, mercury thermometers, hypodermic needles, wheelchairs and patient monitoring display units, according to some industry executives. “Many items, even what was made here in the past, are not made now by manufacturers as they prefer to import and market,” said Rajiv Nath, Forum Coordinator, Association of Indian Medical Devices Industry (AIMED).
What are the issues with scaling up production in import dependent sectors?
The manufacture of some of the key products that India imports such as semiconductors, displays and other very capital intensive electrical equipment may not be possible soon as manufacturing these requires large, stable sources of clean water and electricity. They also need a high degree of policy certainty as these require high upfront investments. Indian firms can however begin producing less sophisticated components if certain policy measures are taken. The Indian industry faces much higher costs in inputs such as electricity and much higher logistics costs than Chinese firms. Vinod Sharma, MD of Deki Electronics, said it costs Rs 4/kg for a shipment of cable to arrive at Mumbai from a city 300 km away from Shanghai but it costs around Rs 14/kg for that shipment to be transported from Mumbai to a factory in Noida. This is also true for fermentation based APIs, which Indian pharma executives claimed the country became less competitive in when China began receiving infrastructure and logistic support to produce and sell them at cheaper rates. What policy measure does industry need for greater local production? A key issue holding back manufacturing in the country and a lack of flexibility in labour laws, high costs and low availability of land and high cost of electricity. Some states including UP and Madhya Pradesh have relaxed some labour laws with Karnataka likely to follow suit. “You have to work on making the industry efficient first. For this you have to have policies to ensure (these industries) actually grow. You need an industrial policy, you need an innovation policy and you need to look at what the industries need in terms of making their infrastructure more efficient,” added JNU’s Dhar.
Source: Indian Express
As the deadly Coronavirus pandemic has taken the centre stage while threatening the textile industries across the world, the Indian textile industry, which is in turmoil, has a ray of hope as the companies across the world, having operations in China are mulling an exit from China, giving an opportunity to Indian industry. Speaking of the prospects to Indian textile industry, Nikhil Thukral, Director, Maharana of India, told ANI that the anti-China wave due to the pandemic has seen companies contemplating the move of exiting China, which is a good opportunity for the Indian market. "The Indian market is in bad condition but I think we have hope because a lot of people have faced problems due to China. An anti-China wave is also going on across the world. Some governments like Japan and the US in order to push their industry out of China, are making arrangements. I think India will be a good option. If that wave comes to India in the coming years, India will stand in a much better position," said Nikhil, who is engaged in manufacturing the personal protective equipment (PPE) kits for the frontline warriors fighting COVID-19 crisis. "The scenario has changed a lot. We have started developing these kits. My other friends in this industry are also doing the same in Noida. It's not about profit at this moment. It is about running our factory and more than that in the fight against COVID-19, we have now become a medium. We are also in this battle now, which is in itself a good thing," said Nikhil. While speaking over the current situation in Noida's Textile Industry, Lalit Thukral, president, Noida Apparel Exports Cluster (NAEC), said "We have over 3,000 units in Gautam Buddh Nagar, creating garments and exporting them. There are over 1000 garments exporters here. Due to COVID-19 crisis, the garment business has been hit adversely. It was our peak season for exporting garments. Our deliveries take place only for four months." "When China was hit by COVID-19, a lot of businesses diverted and came to India from there. So here everyone's capacity was full. They received double orders. We were working day and night. When the lockdown was imposed here, our work was also shut. So many buyers cancelled their orders due to which exporters have suffered a lot," he added. He said that Uttar Pradesh Chief Minister Yogi Adityanath permitted them to work on the garments on which they were already working and start shipping them. "Only 1.5 month is left for shipping and Noida is in the red zone. So, we did approach Chief Minister Yogi regarding this issue and told him that we will suffer a loss of around Rs 6-7 thousand crore if we do not export the garments in this period. We suggested him to allow work on the half-prepared garments and ship them, and he permitted us for the same. Garments worth Rs 1,500 crore to Rs 2,000 crore will be shipped this month" said Lalit. He said some of the brands had cancelled the orders adding that Union Textile Minister Smriti Irani has sent videos to the buyers stating that they can defer the payments and orders but not to cancel the orders as it is about 22 million people, who will be adversely affected. "Prime Minister Narendra Modi has said to go global from local and we will do it. We are developing PPE kits. Around 22,000 to 24,000 kits are being made every day in Noida. 25,000 kits will be made daily in the next 10 days. We will make one lakh piece kits every day in Noida in next one month. This is the city of apparel and we are with PM Modi. I am sure that the government will be asking us to export PPE kits within the next three to four months," said Lalit. The Indian Textiles might witness an upswing with the industry adapting to the changing requirements and undertaking the manufacturing of PPEs amid the crisis under the leadership of Union Textiles Minister Smriti Irani. Asia's leading pharmaceuticals manufacturer Biocon Limited's Chairperson Kiran Mazumdar Shaw praised Smriti Irani for her stellar leadership in the time of COVID crisis. India has now achieved an almost unrealistic goal of producing nearly three lakh PPE kits daily within three months after the coronavirus outbreak even as there was no domestic manufacturing of PPEs and almost all of them were imported until three months back. A PPE kit consists of a mask, eye shield, shoe cover, gown and gloves, which doctors and healthcare workers wear during the treatment of COVID-19 patients. Even Union Commerce and Industry Minister Piyush Goyal while addressing the G20 Virtual Trade and Investment Ministers Meeting, highlighted India's achievement in large scale manufacturing of PPEs. He said, "When the pandemic broke out, India barely produced a few thousand pieces of Personal Protective Equipment. We had never needed PPEs in large numbers ever before. When we realised that countries were not able to supply enough for our needs, our domestic manufacturers created and ramped up capacities. So much so, that we now produce nearly 300,000 PPEs every day."
Source: Republic World
Sources across ministries confirmed that Narendra Modi's call to "go vocal for local" will be achieved through a host of measures, running into the dozens, and will focus on long-term goals. Pushing more micro, small and medium enterprises (MSME) into the manufacturing sector, doubling down on a list of non-essential imports that can be quickly produced domestically and laying off the tariff button for now will likely be the government’s strategy to lower import dependence. Sources across ministries confirmed that Prime Minister Narendra Modi’s call to “go vocal for local” will be achieved through a host of measures, running into the dozens, and will focus on long-term goals. As part of the effort, the MSME and commerce ministries are discussing a ...
Source: Business Standard
Welcoming the RBI’s decision to extend the Interest Equalization Scheme (IES) on export credit by one year till March 31st, the Apparel Export Promotion Council (AEPC) said it will enable access to cheaper loans. “We welcome the RBI’s announcement in this hour of crisis. It will help the Apparel exporters gain access to cheaper loans,” AEPC Chairman Dr A Sakthivel said after the RBI extended the Interest Equalization Scheme on pre and post shipment rupee export credit by one year in a notification issued on Wednesday late evening. “With the current uncertainty of rupees exchange rate vis-à-vis other currencies, taking rupee loan on packing credit lowers down our interest burden and removes the need for taking a risk on foreign cover,” Dr Sakthivel said, adding that the Council had been demanding extension of the scheme to sail through the Covid-19 pandemic. In November 2018, the interest subsidy was increased to 5 per cent from 3 per cent with an aim to boost MSME sector exports. Later, the government included other merchant exporters too under the scheme and allowed them interest equalisation at the rate of 3 per cent on credit for export of certain products. “We wholeheartedly thank our Hon’ble Minister of Textiles, Minister of Commerce and Industry and Minister of Finance and specially the RBI Governor. This will help us a lot during this crisis,” Dr Sakthivel added. The apex banking body on Wednesday said a scheme providing interest subsidy for post and pre-shipment export credit has been extended by a year till March 31, 2021, a move which would provide relief to exporters. ''Government of India has approved the extension of Interest Equalisation Scheme for pre and post shipment Rupee export credit, with same scope and coverage, for one more year i.e. upto March 31, 2021," the RBI said in a notification. ''The extension shall take effect from April 1, 2020 and end on March 31, 2021, covering a period of one year,'' it added.
Source: KNN India
India has taken a formal stand at the World Trade Organisation in favour of postponing all negotiations, including the talks on curbing fisheries subsidies, till the Covid-19 pandemic is under control. This has found support from many developing countries and Least Developed Countries (LDCs), an official has said. New Delhi has argued that while several poorer countries did not have the resources to participate in digital meetings during the crisis, there are others facing livelihood challenges who may change their negotiating positions that would get reflected only when the crisis has run its course. “India got the support from almost all developing countries, including the African Group and the ACP and the LDCs following its proposal at the informal virtual meeting of the Heads of Delegation that the negotiations need to be suspended. No negotiations are now being held virtually. Some members may raise the issue again at the virtual General Council meeting on May 15, but we are prepared with our arguments,” an official told BusinessLine. Following the Heads of Delegation meeting, the WTO is now looking at a year-end deadline for completion of the negotiations on curbing harmful fisheries subsidies that was supposed to be concluded at the meeting of WTO Trade Minister’s in June 2020. The WTO Ministerial meet has also been deferred because of the on-going pandemic. India said that it can agree to the conduct of informal meetings and exchange of views without formal decision-making, through virtual means, so that it remains engaged on important issues. “However, let us be very clear that informal virtual meetings cannot translate into discussions on substantive negotiating issues that have implications on members’ policy,” according to India’s statement at the meeting. The country is also open to considering regular committees seeking online written submissions, but only on non-negotiating agenda items. The timelines for submitting written responses need to be pragmatic and flexible, it added. It is not feasible to conduct negotiations on substantive issues through virtual meetings or written procedures as the lockdowns and social distancing norms imposed across most capitals make it challenging to receive substantive inputs from all relevant stakeholders, the statement noted. Also with WTO negotiations low on priority for many countries battling the current crisis, the ability to negotiate is further constrained. Since the economic hardship and threat to food and livelihood security due to the Covid-19 pandemic may lead several WTO members to re-assess their negotiating positions across different areas of the WTO’s work, to carry on with negotiations in a business as usual format does not make sense, it said.
Source: The Hindu Business Line
India should attract manufacturing of high value as well as high technology products moving out of other countries, NITI Aayog CEO Amitabh Kant said at a webinar organised by Bennett University on Thursday. This may be the decade when India starts expressing its technological might, he said. “As and when investments move out of other countries we should be willing to attract,” Kant said, addressing the closing session of the webinar on the economy and Covid-19 entitled ‘Jaan Bhi, Jahan Bhi’. The webinar was organised by the management school of Bennett University, which is part of The Times of India Group that publishes ET. Kant spoke on technology as a disruptor, fight against Covid-19 and post Covid-19 economy, citing the Aarogya Setu app as an example of how technology can help in combating the pandemic. He said there will be disruption in electrical mobility, advanced chemical battery manufacturing, genomics, 5G and Industry 4.0. “All these will be the new areas of growth… We need to get into sunrise areas of industry because that is where the value is,” he said. He said the government is looking at schemes for several sectors such as automobiles, auto components, network products, food processing, advanced chemical cell battery and solar PV manufacturing to attract investments. Product-linked incentives have already been rolled out for mobile manufacturing, making active pharmaceutical ingredients (APIs) in India and domestic manufacturing of medical devices. Kant said a crisis like Covid-19 needs to be tackled through three interconnected levers – frontline health workers, infrastructure, and medical facilities and technologies. India has taken early lead in use of technology to fight the pandemic, he said. He said India will play a major role in the fight against Covid-19, mentioning rapid advances made in the past two months and the Aarogya Setu app that combined technology and data science to gain information edge against the pandemic. “Whole range of technological evolution from PPEs (personal protective equipment), masks, testing to vaccine development,” Kant said, mentioning about 30 attempts in India to develop a vaccine. The NITI Aayog CEO said the Aarogya Setu team has accurately forecast more than 650 hotspots at sub post office level in addition to 300 emerging hotspots which could have been missed otherwise. “This impact at scale of identifying hotspots early and providing the symptomatic channel to reach the government instantly is the key to flattening the curve and breaking the chain of infection,” said Kant. Aarogya Setu has a comprehensive Bluetooth approach to contact tracing by integrating with the Indian Council of Medical Research database to APIs. It gets real time testing alerts on Covid-19 positive cases from across India. Through the 13,000 Aarogya Setu users who have tested positive so far, the Bluetooth-based interaction data has led to more than 150,000 people being assessed and alerted, said Kant. Kant said machine learning and internet of things allow India to rethink the future of its healthcare by making cloud hospitals a reality for remote consultations and diagnosis.
Source: Economic Times
The covid-19 crisis has hit the Indian economy at a time when growth is at its lowest in a decade, investments are shrinking, and a consumption recovery is sputtering. The covid-19 pandemic has rewritten the way the world operates in a matter of weeks. The rapid spread of the virus has brought the world to a standstill: streets are empty, offices have shut down and people are locked inside their homes. The health crisis is taking its toll on the global economy and has triggered an unprecedented crisis in the textiles and apparel industry. From global store closures to fashion show cancellations, covid-19 is disrupting the industry. The virus is having dire repercussions for Indian manufacturers—supply chain disruptions, declining exports and uncertainty in orders.
Textiles Industry Faces Hurdles
Retail doors closing globally instilling uncertainty in future demand
With the increasing coronavirus scare across the globe, retail stores are shutting down to contain the spread. Brands are facing a slowdown in their sales and preparing themselves for potential revenue losses. The virus has spread rapidly in the EU and US, the two major markets for apparel, and led to a significant reduction in demand. The EU textiles and apparel industry is expecting more than a 50 per cent drop in sales and production this year. In the US, apparel stores have already seen a decline of 10 per cent in sales in February–March since the onset of the outbreak.
With uncertainty on the duration of the pandemic, a prolonged impact on global apparel demand is expected. A large number of buyers have cancelled running orders and frozen future buying as well. Buyers typically start shipping in goods for the holiday season from Asia as early as in June. However, with the emerging health crisis and a period of uncertainty ahead, the covid-19-induced economic slowdown could end up hitting holiday sales, when many retailers make the bulk of their profits. Indian manufacturers stare at losses with the country’s lockdown Production in the Indian textiles and apparel factories came to a halt following the nationwide lockdown. However, for Indian factories, trouble began in February with supply shortages from virus-hit China’s textiles sector. Nevertheless, just as China restarted production—raising hopes of garment manufacturers of getting operations back on track—demand collapsed as lockdowns around the globe forced retailers to shut their doors. The textiles industry has been hit hard with brands holding payments and cancelling all orders. The domestic market was probably the last oasis, but with the shutdown of all stores, manufacturers are left with no option. It is expected that this disruption will reduce market demand by around 15–20 per cent, resulting in largescale losses in production and jobs.
Lockdown hits livelihood of workers
Temporary closure of factories amidst the lockdown in India has forced manufacturers to hold back wages to balance out their losses. In India, the textiles and apparel industry predominantly employs migrant workers from different states and a large workforce comes from nearby villages by availing of public transport. The lockdown has forced migrant workers to return to their native places and bringing these workers back to the factories when production commences will be a challenge.
Raw material prices decline
India’s cotton yarn exports, especially to China, have declined significantly in the past two months. This has led to the surplus cotton yarn being diverted to the domestic market. As a result, cotton yarn prices have witnessed a decline of 3–5 per cent during the past month. With reduced demand and falling oil prices, there has been an impact on polyester prices as well. A polyester price have reduced by more than 20 per cent due to reduced demand and has resulted in significant losses for fibre players.
China slowly getting back to business
After a two-month long production shutdown, Chinese textiles and apparel manufacturers are kickstarting operations. However, with the majority of the world still stuck on the virus curve leading to a damage in the global demand, manufacturers might find it difficult to fill their capacities due to unavailability of orders. Fashion brands sourcing from China for the autumn season usually place their orders during April with a delivery in May or June. With an uncertainty in the situation and the lockdown still ahead, buyers are hesitating to place any new orders and are in fact either cancelling or putting their existing orders on hold. Meanwhile, China has increased the production of medical textiles like masks and other personal protective equipment (PPE) to export to virus-hit countries.
Fashion events stalled
The coronavirus pandemic has put a halt to international travel, and this has immediately affected the annual fashion events including fashion shows, trade shows and conferences. These events draw huge crowds and allow buyers to see the latest fashion trends. Most of the lined-up fashion events of 2020 have been either postponed or cancelled. The postponing of these events may slow down new investments and affect the businesses of existing stakeholders.
Industry Seeks Relief to Mitigate Crisis
Amidst this pandemic, the textiles and apparel industry is in dire requirement of a relief package to survive the crisis. Exports as well as domestic sales have come to a grinding halt. At the current rate, markets are unlikely to return to their normal buoyancy for at least 10–12 months and payments are likely to be delayed by retailers, who are fighting their own battles for survival. Several measures can be taken up immediately with some modifications in existing schemes and can be implemented soon. Some of the relief measures that are expected by the industry include:
Clearing pending subsidies:
Fiscal support:
Others:
What Should the Industry Expect?
Since the pandemic is still in an expanding phase, the ultimate severity remains unknown. However, some foreseen changes will shape the industry once the coronavirus dust settles.
Bruised demand in domestic market and exports
The black swan event has affected the Indian textiles and apparel industry, in terms of both trade and domestic consumption. There is a steep reduction in demand owing to a sudden halt of global trade and domestic sales due to the closure of retail stores. The virus originated in China and later spread to the EU and US. These are huge markets for Indian textiles and apparel products and hence, the Indian textiles value chain is bound to face adverse repercussions of the pandemic. Buyers are expected to postpone orders in the coming six months and will initially demand smaller order quantities at very tight margins to recover from the reduced sales in the previous weeks. With malls and shopping centres closed and movement restricted, domestic sales have withered. Brands are looking at very low consumer sentiment and a steep decline in consumption in the coming year. Sales have taken a downturn by as much as 70 per cent since fears over the virus intensified. Even online purchases—otherwise growing prior to the outbreak—have declined by 15 per cent as consumers cut back on discretionary spending. Retailers and brands have already started halting production lines, delayed season releases and cut buying budgets to prepare for these eventualities. Opportunity for India as brands look to reduce dependency on China
China manufactures more than a third of textiles and apparel globally. China was the initial epicenter of the coronavirus outbreak and the production lockdown enforced in the country vastly disrupted the global textiles and apparel supply chain. Brands that sourced goods solely from China were in a fix and were forced to arrange for substitute vendors in other countries within a short timeframe. Some brands will adapt the strategy of diversification and reduce their dependency on China to prevent such a situation in the future. The move of shifting out of China was heightened due to an increase in manufacturing costs and tariff issues with the US. The supply chain gap developed due to this pandemic has added more weightage to this strategy. Brands will explore alternative options such as Bangladesh, India, Vietnam, Cambodia or any other Southeast Asian supplier. India can play its cards of competitive manufacturing costs and presence of complete supply chain to present itself as a credible alternative.
Increased focus on ecommerce sales and digitalisation of supply chain
Malls and retailers took the step to close their stores to contain the spread of covid-19. But the ecommerce channels of these stores are still operational in certain countries. Social distancing has highlighted the importance of online purchasing as a safe alternative to visiting physical stores. This shift could lead to a changed buying behaviour after the pandemic and has the potential to build longtime ecommerce customers. Brands and retailers are further driven to incorporate a digital strategy in their buying process. Online marketplaces like Joor are expected to become more popular as brands and retailers look to maximise digital options of showcasing their products and facilitating the buying and selling process. Even fashion shows are going digital to keep the industry connected. The Shanghai Fashion Week was streamed over Alibaba to refrain from making losses and many other designers are displaying their new collections through social channels and websites.
Emerging demand for medical textiles
Sales of medical textiles including surgical masks and protective clothing has jumped phenomenally. Countries across the globe are importing large quantities of such products to battle the infectious disease. The supply of these products is not able to keep up with the rising demand. The rapid spread of covid-19 has sensitised people towards hygiene and healthcare. The demand for medical protective gear such as masks, disposable gloves and hygiene products such as wipes is expected to surge and sustain even after the end of the coronavirus pandemic. This is a lucrative opportunity for the textiles industry in the near future.
How Can Indian Industry Recover?
The Indian textiles and apparel industry will need to gear itself to fight the economic consequences of covid-19. Manufacturers need to maximise their internal capabilities and focus on building their efficiencies. This will enable them to work with the anticipated shorter lead times and tight margins. India has the capacity and competence to gain share in its core cotton-based categories and women’s fashionwear categories with value addition (embroidery, schiffli, etc). It will be crucial to focus on manufacturing excellence and improve cost-competitiveness to ward off business risk from other manufacturing nations. Product diversification beyond cotton is also imperative for the industry. In medium to long-term, Indian apparel exporters need to invest and develop expertise in MMF garments including winterwear, outerwear and performance wear. Companies may also focus on planning for the winter or next spring summer season and target the channels of value retailing and ecommerce, which are expected to grow in the near future. Indian companies should also look out for new markets beyond the US and EU like Japan and South Korea and adopt digital methods of connecting with buyers. Companies could also explore emerging medical textiles (surgical gloves, masks, gowns, wipes, etc) and other textile items required for healthcare facilities like hospital bedsheets, mattresses, etc. With countries’ increased focus on healthcare, medical textiles is likely to see a surge in demand. This unforeseeable humanitarian and financial crisis has hit the Indian economy at a time when growth has slowed to its lowest in a decade, investments are shrinking and a consumption recovery is sputtering. While there is no denying that the virus needs to be contained, including a complete lockdown, the need to manage its economic aftermath is just as urgent. However, textiles and apparel companies need not lose hope and need to develop strategies to prepare themselves for when the markets open again, hopefully well in time before the festive season.
Source: Fibre2Fashion
Kerala Chief Minister Pinarayi Vijayan has demanded a special package for small scale industries and entrepreneurs. He said the financial package announced by the Union Finance Minister does not address the demands of the small scale entrepreneurs. Addressing the media, the Chief Minister said, “The small scale entrepreneurs had raised two demands. One, give a one-year moratorium on existing loans and avoid interest during this period. Two, sanction new loans. In the central package announced yesterday, only the second demand was considered and that too, at the mercy of the banks. Waiver of interest has not been considered during the moratorium period. The announced package only has nominal spending from the Union government's budget and this has to change. Banks are refusing to sanction loans during this difficult time.” The CM added that the State Government will try to bring together the banks and industries to make effective interventions that will benefit the entire economy. The fixed charge of electricity has now been postponed but the State would need the help of the central government to write off the charges. In addition to that, workers in the small scale sector need to be given financial aid. If the State has to get central assistance to pay PF, the clause that stipulates the salary requirement of below Rs 15,000 must be removed. States have to bear the brunt of the Rs 90,000 crore subsidy granted to power companies. But the state government is yet to receive any financial assistance. The Kerala Government hopes there will be a change in the approach in the coming days. “The Union Finance Minister should discuss these issues with the State Finance Ministers and come up with a clear strategy to help the states continue their healthcare and social security activities. This is even more necessary at this point when the State’s revenues are at minimum and expenses have doubled. Compared to the March 19-April 19th period, Kerala has a revenue loss of Rs 6,451 crores”, Vijayan added.
Special Trains
The Chief Minister said he has brought to the notice of the Union Railway Minister, Piyush Goyal about the issues regarding the special trains announced by the railways to Kerala. “Those who book through the IRCTC website can travel and these train to Kerala have stoppages at various places. This undermines the measures taken by the state government to prevent the spread of the disease as we do not know the passenger details. I have asked the Railway Minister to allow the online booking of train tickets to Kerala only for those who register on the government’s Covid Jagratha portal. I have also asked the Railway Minister to run special non-stop trains from other places to Kerala so that people stranded there due to lockdown can return to Kerala. This should in addition to the trains being announced and run by Railways now”, he added.
Source: Economic Times
Jaipur: Covid-19 pandemic has taken a heavy toll on the country’s readymade garment exports in April — shrinking 90% to Rs 963 crore compared to Rs 9,786 crore in the same period last year. The sharp drop comes after a 30% decline in exports in the month of March compared to the same period last year. While for the full 2019-20, the garment exports have declined by 3% to Rs 1.09 lakh crore in the country. Rajasthan has a share of about 3% and engages about 3 lakh people directly in the sector having 1,200 units spread across the state. “The industry is in deep trouble, threatening the survival of many exporters. The government needs to address issues like cash flow, ease of doing business and providing financial incentives comprehensively. Many neighbouring states have also brought in labour reformss to help their industry which can be looked at in Rajasthan as well,” said Rajiv Dewan, president of Garment Exporters Association (GEAR). The difficult time has also thrown up some opportunities, but it requires policy change which will help the industry find some relief. GEAR has written to textile minister Smriti Irani requesting her to allow exports of non-surgical masks (decorative fabric mask) to enable the exporters resume their manufacturing and export activities. “We have been getting export inquiries from many parts of the world for supply of non-surgical masks made out of various types of fabrics. The permission to export them as fashion accessories will be of immense support. The permission will help the garment manufacturer to consume their huge stock of fabrics held by them due to cancelled export orders. The mask exports will also open avenues for an alternative income and generate employment,” said Aseem Singla, general secretary of GEAR. Export of masks was banned in February this year as the government thought that India would require vast amount of masks for its public. Singla also drew attention to the exporters not getting the 10% additional credit limit allowed by RBI earlier. He said that only 40% of the exporters could avail the facility as banks denied the additional credit. “The banks said that because some units have the gold expo card facility, they cannot avail the 10% additional credit limit. We are in need of additional funds as working capital to undertake our business operations which have been seriously impacted by lockdown,” added Singla.
Source: Times of India
These include salesmen, hamalies, transporters, angadia, agents and tailors. They operate from malls, shops, houses and footpath sales. The Telangana State Federation of Textile Associations said that about five lakh people have been impacted in the State due to the lockdown. These include salesmen, hamalies, transporters, angadia, agents and tailors. They operate from malls, shops, houses and footpath sales. In all about 30,000 textile trades provide five lakh jobs, said association president Ammanabolu Prakash. In a letter addressed to the PMO, Finance Minister, Textiles Minister and Niti Aayog, he said the textile trading community has been left disappointed as the financial package announced has not spelt out any specific measures for the segment. The loss in the past three months in Telangana alone could be to an extent of Rs 3,000 crore and this included wages, rent, bank interest, municipal tax and trade. He said the textile industry is labour-intensive as it involves many steps- cotton to yarn, yarn to grey cloth, chemical to dye, dye to process and process to fabric. The labour plays a key role in moving the same from manufacturers to traders to shops to customers. The lockdown has crippled the economy and living conditions of textile traders. He said that medium and small traders should be provided financial assistance for three months based on the income tax returns filed by them. He said interest should be waived for three months while the EMIs should be deferred for six months. There is a need for the Government to come up with a National Rent Act specifying the average rent per sq ft for rural and urban areas till normalcy is restored, a release said.
Source: Telangana Today
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
789.13 |
USD/Ton |
-0.53% |
16-05-2020 |
|
VSF |
1238.95 |
USD/Ton |
0% |
16-05-2020 |
|
ASF |
1580.37 |
USD/Ton |
0% |
16-05-2020 |
|
Polyester POY |
732.11 |
USD/Ton |
0.58% |
16-05-2020 |
|
Nylon FDY |
1942.90 |
USD/Ton |
0% |
16-05-2020 |
|
40D Spandex |
4012.52 |
USD/Ton |
0% |
16-05-2020 |
|
Nylon POY |
922.17 |
USD/Ton |
0% |
16-05-2020 |
|
Acrylic Top 3D |
2266.72 |
USD/Ton |
0% |
16-05-2020 |
|
Polyester FDY |
5181.07 |
USD/Ton |
0% |
16-05-2020 |
|
Nylon DTY |
964.41 |
USD/Ton |
0% |
16-05-2020 |
|
Viscose Long Filament |
1844.35 |
USD/Ton |
0% |
16-05-2020 |
|
Polyester DTY |
1745.80 |
USD/Ton |
0% |
16-05-2020 |
|
30S Spun Rayon Yarn |
1731.72 |
USD/Ton |
0% |
16-05-2020 |
|
32S Polyester Yarn |
1358.62 |
USD/Ton |
0% |
16-05-2020 |
|
45S T/C Yarn |
2111.85 |
USD/Ton |
0% |
16-05-2020 |
|
40S Rayon Yarn |
1548.69 |
USD/Ton |
0% |
16-05-2020 |
|
T/R Yarn 65/35 32S |
2013.30 |
USD/Ton |
0% |
16-05-2020 |
|
45S Polyester Yarn |
1900.67 |
USD/Ton |
0% |
16-05-2020 |
|
T/C Yarn 65/35 32S |
1647.24 |
USD/Ton |
0% |
16-05-2020 |
|
10S Denim Fabric |
1.12 |
USD/Meter |
0% |
16-05-2020 |
|
32S Twill Fabric |
0.64 |
USD/Meter |
0% |
16-05-2020 |
|
40S Combed Poplin |
0.93 |
USD/Meter |
0% |
16-05-2020 |
|
30S Rayon Fabric |
0.48 |
USD/Meter |
0% |
16-05-2020 |
|
45S T/C Fabric |
0.64 |
USD/Meter |
0% |
16-05-2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14079 USD dtd. 16/05/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
LONDON: Oil prices touched a one and a half month high on Friday amid signs demand for crude was picking up, with China reporting increased refinery runs and rounding out a week of bullish news on the supply front. West Texas Intermediate (WTI) oil was up 65 cents, or 2.36 per cent, at $28.21 a barrel at 0938 GMT, after reaching $28.75, its highest level since early April. WTI jumped 9 per cent in the previous session. Brent crude was up 81 cents, or 2.6 per cent at $31.94 a barrel, after touching $32.50 the highest level since April 13. Brent rose nearly 7 per cent on Thursday. Both contracts are on track for a third consecutive week of gains. "Further signs of demand recovery together with deepening production cuts from OPEC+ as well as shut-ins and natural declines by non-OPEC+ is helping oil prices to recover," Bjarne Schieldrop, chief SEB commodities analyst, said. Amid supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and other major producers, bright spots are also emerging on the demand side. Data released on Friday showed China's daily crude oil use rebounded in April as refineries ramped up operations. The market mood remains less than euphoric, though, with the coronavirus pandemic far from over and new clusters emerging in some countries where lockdowns have been eased. "Oil prices have been up significantly since yesterday thanks to a better assessment of the situation by the International Energy Agency (IEA)," Commerzbank said in a note. The IEA expects global crude inventories to fall by about 5.5 million barrels per day (bpd) in the second half of this year. It also expects oil demand this year to fall by 8.6 million bpd, which is a smaller decline in 2020 - by 690,000 bpd - than it forecast last month. It expects non-OPEC supply to fall by 3.2 million bpd. Barclays raised its forecasts for Brent and WTI by $5-$6 a barrel for 2020 and by $16 a barrel for 2021. It now sees Brent prices averaging $37 a barrel and WTI at $33 this year. For 2021, the bank expects Brent and WTI prices to average $53 and $50 per barrel, respectively. "The sheer size and speed of the disruption and associated inventory overhang will take time to get fully absorbed, in our view," Barclays analyst Amarpreet Singh said in a note. Meanwhile US crude inventories fell unexpectedly for the first time since January, the Energy Information Administration said on Wednesday. On the production side, record cuts of nearly 10 million bpd by OPEC and associated producers - collectively known as OPEC+ - have kicked in for May and June, with producers Saudi Arabia, Kuwait, and the UAE pledging to cut beyond their commitments.
Source: Energy World
Zaber and Zubair Fabrics Limited, the largest textile manufacturer in the country, on Thursday claimed that they invented a new fabric ‘Corona Block Fabric’ with the help of biocidal and virucidal treatment, which could kill coronavirus within 120 seconds with the precision of 99.9 per cent. Z&Z, a concern of the country’s leading garment exporter Noman Group, made the claim at a press conference on the introduction of the fabric in the capital. Senior officials of the company said that the fabric was invented with the help of some chemical ingredients which were registered under the United States toxic substance control act and Environmental Protection Agency. Anol Rayhan, brand manager of Z&Z, said that the treatment of the fabric had been tested and validated under the test norm ISO 18184 and had regulatory coverage. He said that they made the product with the support of its two Swiss partners and all the long-time global partners (buyers) of Z&Z were excited with the innovation as the world might have to exist with the pandemic for long. ‘We have started sending the fabric to our buyers in the US and European Union from the first week of this month and received responses from more than 100 buyers as of today.’ he said. Anol said that the local consumers would be able to buy the product from Blue Jens, an online shop of the company, from the next month and the prices would be 20 per cent higher than the normal products. Raashid Asraf Khan, chief marketing officer of Zaber & Zubair, said that the fabric was virus and bacteria protected, wash durable, soft and breathable in 100 per cent cotton and blends, and safe for skin.
‘For the PPE fabrics, it is solvent and fluid repellent in 100 per cent polyester composition, has high tensile and tear strength and is wash durable up to 20 washes,’ he said.
Source: New Age Business
The textile, construction and financial sectors are at high risk and the pharmaceutical and power sectors at low risk of the coronavirus pandemic fallout, according to a research conducted by EBL Securities, a brokerage firm. EBL Securities on Wednesday released the report of the research on the impact of coronavirus on major sectors in the country. According to the report, banks would struggle to manage their profits due to lower net interest margin. Besides, banks’ operating income may show a remarkable downfall amid its increased safety measures and incentives for the employees in the wake of coronavirus. The amount of non-performing loans may rise across almost all sectors, including corporate, retail, and small and medium enterprise. The BB’s recent measures including slashing cash reserve requirement by 150 basis points and lowering repo rate by 75 basis points would increase liquidity and lending capacities of banks. But both deposit withdrawal pressure and fund requirements for facilitating credit under various schemes may offset the benefits received under these measures. Like banks, financial market existence of non-bank financial institutions would also be affected by issues including deposit withdrawal, squeezed interest margin, hike in NPL, and lower operating income. Besides, a halt in economic activities runs the risk of customers defaulting on their leases, which may require provisioning, the report said. The NBFIs with brokerage operations incur losses from commission earnings. The ongoing lockdown dragged down the sales of houses, plots and apartments thus the demand for housing schemes have also decreased. The textile sector had already shown negative growth of 5.71 per cent in the first half of this fiscal year. To make the situation worse, around 1,150 factories reported that they had lost $3.18 billion in cancelled or postponed orders due to the global pandemic, affecting a staggering 2.28 million workers. According to the research report, many textile factories might be closed and many employees would face layoffs in the aftermath of the pandemic. The textile sector feared around Tk 17,000 crore in losses during Pahela Baishakh and Eid-ul-Fitr. The circumstances likely to deteriorate further as the lockdowns in developed countries continue, and economic contraction and job losses accelerate. The non-life insurance sector is likely to be affected severely because of having direct correlation to import that is expected to decline. The number of voice calls dropped by around 20 per cent during the lockdown period and as 70 per cent of the sector’s revenue comes from voice traffic, telecom companies may suffer if the lockdown period further elongates, the report said. The construction sector is expected to bear a heavy toll because of the pandemic. The daily sales of cement, for instance, have dropped by nearly 80 per cent during the nationwide shutdown. Import of raw materials has also come to a complete halt. As the GDP growth, ADP implementation and remittance inflow are expected to fall considerably in the coming days, construction activity would remain considerably low for at least 6-12 months. Power generation falls under the emergency services during the pandemic period. So, the operation of power generation companies remained as usual. The sector will be affected by reduced demand from the industrial sector due to shutdown of business activities. However, increased power demand from household might have offset reduced demand from the industrial sector. Meanwhile, private power generation companies get capacity payment. So, earnings of the listed power generation companies are not likely to be affected significantly. Increased health care expenditures, consumption and health awareness among mass people during COVID-19 kept pharmaceutical companies in the comparatively safe corner. But import dependence for raw materials may disrupt pharmaceutical production if the crisis lingers, and the industry will plunge into a crisis, the research paper said. Sales of household products like toilet cleaners and hand wash and demand for mosquito pesticides would increase. With existing growth in animal rearing activities demand for animal drug products too remain unaffected, the report said.
Source: New Age Business
Textile workers in Nakhon Pathom have petitioned the Labour Ministry to take action against their factory for allegedly failing to pay contributions to the Social Security Fund (SSF), making them ineligible for state financial help. Nakhon Luang Thungthao Nylon Co, aka Capital Rayon co, has allegedly not paid money into the SSF for seven months, from August last year to February this year, company’s worker union president Surin Pimpa claimed as she led group members to the Labour Protection and Welfare Department on Wednesday. At least 10 retired workers have seen their pension rights under the SSF suspended as the Social Security Office told them to “wait” for talks between officials and the company to settle the issue, retired worker Taengon Em-ot, 61, said. The company was also accused of delaying payment of mandatory compensation to the retirees and "did not pay wages on time or paid only half of the salaries". “Now both Thai and migrant workers are in trouble. We still have to pay rent and daily expenses,” Ms Surin, a retired worker, said. She said that besides the retirement compensation, the retiree group hoped to receive about 30,000 baht from their SSF contributions to the pension fund, which they need to survive. They have been unable to claim the money because the company apparently failed to make payments to the SSF. One migrant worker complained she was forced to borrow money to cover her expenses. Orders for some workers to take leave without pay and others to be furloughed in some factory sections during the Covid-19 pandemic have been also “orally issued without a written statement”, Ms Surin claimed. Labour Protection and Welfare Department chief Apinya Sujarittanan said an investigation into the SSF contributions and other financial issues was underway. The probe will also examine whether current workers are eligible to receive 62% of their daily wages from the SSF if they are furloughed as a result of Covid-19. If a firm adopts a work-without-pay policy, it is required to pay at least 75% of salaries, he said. According to Ms Surin, the company claimed it has no money to buy raw materials and has sold a lot of machines. However, the firm has not clearly announced whether it would shut down the business, she said.
Source: Bangkok Post
Covid 19 is threatening to unravel the international market for used clothing and textiles that has made such positive progress over the past few years. The major destinations for Europe’s used clothing in Africa, Pakistan and and India have all completely closed according to the UK’s Textile Recycling Association (TRA) – either through the direct banning of imports, lockdown measures or for other extraneous reasons. In the UK, there are currently no significant used textile sorting or warehousing operations taking place, with only limited servicing of collections, mainly of textile banks, which have continued to be use by the public during the lockdown, despite the majority of these being closed, according to Alan Wheeler, Director of the TRA. The situation is much the same across Europe. A number of operators have stated that abiding by the two-metre rule will be extremely difficult to uphold as we move out of lockdown,” Wheeler said. “There are now suggestions that it may be possible to still operate safely by instigating other methods, such as the wearing of PPE, staggering shifts, the use of screens etc., but whatever additional steps are put in place will come at a significant cost. “However, if there is no money coming in from the sale of goods because the export markets are closed, then textile collection and sorting businesses are likely to find the introduction of such measures unaffordable. Furthermore, if the issue of safe working practices can be overcome, it is unlikely we will be able to find sufficient storage that would be needed while the international markets remain closed.” In addition, the TRA predicts there will be an influx of used clothing donations once charity shops and recycling sites re-open. “During lockdown, many people will have sorted out their old clothing and have it waiting for the first opportunity to pass it on, Wheeler said. “Unless entire supply chain issues are managed, we are likely to see a lot of overflowing and a lack of capacity to service sites or charity shops. In addition, kerbside collections are likely to see an upsurge in use, but with nowhere to go.” Used clothing has traditionally had a decent economic value compared to most other recycling streams but according to Letsrecycle.com the mid-price value has dropped from £130 per ton in March to just £30 in April with a further fall now anticipated.
Markets
Pakistan is the single biggest market for UK exporters of used clothing and takes a greater percentage of lower value items because it has an established fibre recycling market. Just before the Covid 19 outbreak became a pandemic, however, the Pakistani authorities were compelled to impose a much tighter inspection regime on imports purporting to be of used clothing, which created a big backlog. This was due to some importers of used electrical goods using the used clothing/textiles import code as a means to paying reduced import duties. “Of course it is absolutely right that the Pakistani authorities should take what steps they feel necessary to stop the illegal import of waste electrical items, but we could really do with some help from the UK government in liaising with the Pakistani authorities to ensure that legal imports of used clothing and textiles are allowed through and are subject to proportionate and reasonable checks,” Wheeler said. Since the opening of free zones allowing the sorting and processing of second hand clothing in India, the country has become one of the largest importers in the world – so much so that the size of the factories means they source mainly from the USA because the volume from Europe has not been sufficient. India has imposed stringent lockdown measures who has greatly affected US exporters, who themselves are subject to varying levels of lockdown. With increased pressure being felt by the Americans to move their used textile products this is resulting in a downward pressure on price and could lead many graders traditionally supplied by the UK market to switch to US suppliers. Eastern Europe has meanwhile already started to switch its purchasing away from used clothing to end-of line-retail stock which is now in abundance and being sold off in job lots. The two biggest markets in Africa for UK used clothing are Kenya and Ghana. Kenya has banned imports of all used clothing until further notice, citing used clothing as a potential conduit through which the Covid 19 virus might be spread. The available evidence, however, suggests that the virus does not stay alive on porous materials such as textiles long enough to present a threat In Ghana the market has also come to a complete standstill due to lockdown restrictions. “These markets will need to be open as rapidly as possible and in a safe manner in order to ensure as much sustainability as possible in our supply chains,” Wheeler said.
Source: Fibre2Fashion
Pakistan’s textile and clothing exports declined by 64.5 per cent in April to $403.834 million year-on-year — the lowest level in almost 17 years — due to order cancellations and shipment delays amid pandemic-led global lockdowns, showed data released by the Pakistan Bureau of Statistics (PBS) on Wednesday. A significant decline was seen in trade shipments since Mar 15 — the date since coronavirus cases spiked in major export destinations especially in Europe and North America. Moreover, exports through the land routes were almost non-existent during the month as Iran, Afghanistan and Pakistan shut down their respective borders to contain the pandemic. Exports were expected to fall during the month of April as only a few buyers were honouring their import commitments with local manufacturers. It was only in February when the textile and clothing exports jumped nearly 17pc on a year-on-year basis. This growth was reported after a long time as the past few years had been marred by single-digit increases. Details showed exports of ready-made garments dipped by 73.44pc in value and drifted much lower in quantity by 78.94pc during April while those of knitwear dipped 61.75pc in value and 48.31pc in quantity, bed wear posted negative growth of 57.54pc in value and 57.37pc in quantity. Towel exports fell 74.07pc in value and 72.78pc in quantity, whereas those of cotton cloth dipped by 69.73pc in value and 78.06pc in quantity. Exporters are resuming production and seeking permission from provincial and federal governments to allow workers to reach factories. With these developments, exports are likely to revive partially in May. Among primary commodities, cotton yarn exports dipped by 63.29pc while yarn other than cotton by 70.19pc, made-up articles — excluding towels — by 63.56pc, and raw cotton 100pc. Exports of tents, canvas and tarpaulin increased by a massive 32.39pc during the month under review. Between July-April FY20, textile and clothing exports declined 2.79pc to $10.816 billion, from $11.127bn over the corresponding period last year. In rupee terms, the proceeds of the sector jumped 14.17pc. Non-Textile sector: Exports of non-textile products shrank more than 41pc year-on-year to $553.443m in April. In the pre-Covid-19 period, an upward trend was seen in the exports of non-textile products, largely driven by rupee depreciation. The data released by the PBS showed the food basket contracted 26pc in April from a year ago. Under this category, however, exports of rice witnessed an increase of 3.18pc, thanks to an increase in basmati exports which jumped 21.35pc in value and 33pc in quantity. Export of fish and fish products declined by 49.27pc while that of vegetables dipped by 51.80pc and fruits 19.62pc, respectively. No exports were recorded of wheat, sugar, and pulses following the imposition of a ban from the country in the month of April. The export of tobacco, spices, and meat products during the month under review declined by 36.06pc, 9.72pc and 11.29pc respectively. The leather exports also dipped by 70.53pc, driven mainly by declines in sales of leather garments, gloves, followed by other products. Contrary to these, exports of carpets and rugs decreased in value by 92.72pc and in quantity by 92.04pc during April from a year ago.
Source: The Dawn
