In the challenging times when the entire world has been fighting with COVID-19 pandemic, there is yet another milestone policy initiative made by the Government of India in the MSME Segment under the magnificent leadership of Hon’ble Prime Minister Shri Narendra Modi. Appreciating highly about the initiatives on release of the Economic Package Aatma Nirbhar Bharat Abhiyaan worth Rs 20 lakh crore and launching of the CHAMPIONS portal by the MSME Ministry, Shri Ronak Rughani, Chairman SRTEPC congratulated Shri Narendra Modi, Hon’ble Prime Minister, Smt. Nirmala Sitharaman, Hon’ble Union Minister of Finance & Corporate Affairs and Shri Nitin Jairam Gadkari, Hon’ble Union Minister of Micro, Small, & Medium Enterprises and Smt. Smriti Zubin Irani, Hon’ble Textile Minister. Shri Ronak Rughani, Chairman SRTEPC mentioned that the CHAMPIONS portal will be instrumental to implement the Schemes that have been announced for the MSMEs in the Economic Package Aatma Nirbhar Bharat Abhiyaan. Shri Ronak Rughani also mentioned that an economic package of this magnitude is historic one to fulfil the expectations and aspirations of the MSME, village and cottage industry sector. The MSME sector is the backbone of the Indian economy. It churns out over 6000 products which are highly sought after across the global marketplaces. Shri Ronak Rughani, Chairman SRTEPC mentioned that the schemes in the economic package such as Rs. 3 lakh crore Emergency Working Capital Facility for Businesses, including MSMEs, Rs. 20,000 crore subordinate debt for stressed MSMEs, Rs. 50,000 crore equity infusion through MSME Fund of Funds, New Definition of MSME and other Measures for MSME, e-market linkage for MSMEs as a replacement for trade fairs and exhibitions, etc. will substantially improveconfidence of the MSME, village and cottage industry sector that contributes about 48 per cent in in total export from India and help them grow to new heights with the support of this package. Shri Ronak Rughani, Chairman SRTEPC mentioned that since more than 60 per cent of MMF textile manufacturers belong to the MSME segment, the CHAMPIONS portal initiative of the Government is a big positive initiative for the MMF textile segment as it is going to empower them immensely. Another plus point of the portal is that grievances registered by MSMEs either on the government’s Centralized Public Grievance Redress and Monitoring System (CPGRAMS) or any other portal of the MSME Ministry will be automatically pulled into the CHAMPIONS portal, Shri Ronak Rughani added. The CHAMPIONS portal is a grievance registration and management system for the MSME units to deal with issues relating to finance, raw materials, labour, regulatory permissions etc. particularly in view of the COVID-19 impact faced by small businesses. The portal – champions.gov.in – will allow MSME associations, units, employees, and aspiring entrepreneurs, etc. to register their complaints, suggestions or seek information about policy initiatives taken specially to the MSMEs. Since the CHAMPIONS portal is a technology packed management information system through ICT tools including telephone, internet, video conference, data analytics, machine learning, artificial intelligence enabled, etc., it will hugely help the India MSMEs segment to compete globally and establish their foothold across countries, Shri Ronak Rughani, Chairman SRTEPC stated. He also informed that this portal is the need of the hour to provide a handholding support to the MSME units who are grappling with challenges specially during this COVID – 19 pandemic. This portal will be an efficient mechanism for the units to have a real one-stop-shop solution with the MSME Ministry for solving their grievances, encouraging, supporting and helping. This portal will also facilitate Ease of Doing Business for the MSMEs Shri Ronak Rughani categorically stated.
Three basic objectives of the CHAMPIONS:
1. How to help the MSMEs in this difficult situation in terms of finance, raw materials, labour, permissions, etc.
2. How to help them capture new opportunities like manufacturing of medical accessories and products like PPEs, masks, etc.
3. How to identify the sparks, i.e., the bright MSMEs who can not only withstand but can also become national and international champions.
The details of the CHAMPIONS portal including the provision for Grievance Registration, Seek Guidance, etc are available in its dedicated website https://www.champions.gov.in
Source: Textile value chain
The Maharashtra government has decided to extend lockdown in the Mumbai metropolitan region, Pune metropolitan region and three other cities of Aurangabad, Malegaon and Solapur until May 31 In a major decision on Covid-19 lockdown, the Maharashtra government has decided to extend the lockdown in hotspot areas like Mumbai metropolitan region, Pune metropolitan region and three other cities of Aurangabad, Malegaon and Solapur until May 31. In a meeting with his senior cabinet ministers on Thursday, Chief Minister Uddhav Thackeray discussed extending the lockdown in Mumbai Metropolitan Region (MMR) and cities like Pune, Malegaon and Aurangabad till the month-end. Confirming the news, a senior minister who was present in the meeting said, “We discussed what relaxations can be given and what measures should be taken in red zones or hotspot areas such as Mumbai, Pune, Thane, Malegoan and Aurangabad. We all agreed to extend the lockdown in these areas till May 31, as saving the lives of the people is the priority.” According to a senior official, “The chief minister asked the state administration to submit a report on what activities can be allowed outside containment zones in cities that fall in the red zone.” In the rest of the state, the guidelines of the Centre will be implemented when they are announced before the lockdown 3.0 ends on May 17, the official said. COVID-19 lockdown was first implemented on March 24 and has been extended twice, on April 14 and May 4. On Tuesday, PM Narendra Modi had said that lockdown 4.0, which may follow post-May 17, will be different from the three phases implemented so far.
Source: Economic Times
India has drawn up a list of ten mega clusters across nine states as the most attractive destinations for companies to set shop based on sectoral requirements and tax incentives to promote the country as an alternative business continuity plan destination amid the ongoing Covid-19 pandemic. While the Noida-Greater Noida cluster is an electronics hub, Hyderabad is the largest export hub for pharma and vaccine, as per the analysis and these “have the potential of developing into the most fertile grounds for manufacturing rapid economic activity in the country.” Ahmedabad, Vadodara (Bharuch-Ankleshwar Cluster), Mumbai-Aurangabad, Pune, Bengaluru, Hyderabad, Chennai and Tirupati-Nellore are the other most attractive clusters for investors. This is part of the exercise that Invest India, the country’s national Investment Promotion and Facilitation Agency under the commerce and industry ministry, with professional services firm JLL undertook to create a guide for potential investors on how quickly they can invest in the country with low capex models to operate here. It highlighted India’s three distinct advantages-the recent reduction of corporate taxes for setting up of new industries, being host to Global In-house Centres and Global Centre of Excellence (GCo-Es) for several manufacturing companies, and the added attraction of a large domestic market. The idea is to market Brand India at a time when the country’s FDI inflows fell 1.44% on year to $10.67 billion in October-December FY20. These 10 mega clusters cover about a hundred popular industrial parks and house over 600 Indian and foreign multinational companies.
EASE OF DOING BUSINESS, COST SAVING
“India currently has an inventory of around 22 million square feet of ready built industrial space in eight top cities ready to be occupied in six to eight weeks,” Invest India and JLL said in their report on great places for manufacturing in India. Highlighting higher capex savings while operating in India, they said that rented factories for lease tenure of nine years and above can reduce the spend on land and building significantly, bringing down capital investment in the short term.
Source: Economic Times
Textiles and apparel units are reopening slowly in areas where they have received permissions, but the situation is not very encouraging. Companies like Century Textiles, Gokaldas Exports, Filatex and several medium and small units in Karnataka, Ludhiana and Tiruppur regions have started operations at 25 per cent capacity. R K Dalmia, president of Century Textiles and Industries, said, “While we have started operations at our plant, production of fabric or garments wouldn’t make any sense unless 90 per cent of both domestic and overseas markets open and consumer demand comes back.” “We are eyeing Diwali as the possible opportunity for restoration of textile consumer demand. Financial year 2020-21 could be a washout for textile players,” Dalmia said. Getting adequate manpower to ramp up production is one of the major challenges the industry is facing, said Sivaramakrishnan Ganapathi, managing director of India’s largest apparel exporter, Gokaldas Exports. “We are now struggling to serve the orders we have. We are struggling to get workers, as there is no public transportation. If we don’t serve orders, people may shift back to Indonesia or Vietnam, wherever there is capacity. We want to get back to normal production,” Ganapathi said. As of now, demand from export markets is higher than the capacities at which firms are operating. Gokaldas Exports expects to operate at 100 per cent capacity in June, if all goes well. The Clothing Manufacturers Association of India (CMAI) has said garment retailers and traders are currently not allowed to register micro, small and medium enterprises (MSMEs), but they need to be allowed to register and get the benefits offered to the sector. The survival of retailers is important to create demand. Further, many MSMEs are dependent on sub-contract orders from large manufactures, exporters, and retailers. The measures announced for the MSME sector in the Centre’s economic package, don’t cover retail trade. “Since the entire value chain is impacted, support package has to be made available to the entire textile and apparel value chain — from textile to retail — both MSMEs and large companies,” said the Association. Essentially the challenge is for whom and what do they produce, said Mehta. “Since retail has not yet opened up, there are no orders. Retail sales are expected to be at half for the next three months, hence with 40-50 per cent business, many factories will find it difficult to remain viable. There are about 75,000-80,000 units across the country,” he said.
Challenges ahead
Units in Ludhiana, Tiruppur, Karnataka begin operations at lower capacity
Source: Business Standard
Finance Minister Nirmala Sitharaman on Sunday said GST compensation is due to all the states for the four-month period of December-March. "We are periodically talking about it. GST dues are very clearly explained in the GST Council. It is not for selective states... All states' GST dues which we recognise for December, January, February, March have not been paid," Sitharaman told reporters. Under GST law, states are guaranteed to be paid for any loss of revenue in the first five years of the GST implementation from July 1, 2017. The shortfall is calculated assuming a 14 per cent annual growth in GST collections by states over the base year of 2015-16. Under the GST structure, taxes are levied under 5, 12, 18 and 28 per cent slabs. On top of the highest tax slab, a cess is levied on luxury, sin and demerit goods and the proceeds from the same are used to compensate states for any revenue loss. There were no differences between the Centre and states with regard to compensation payment in 2017-18, 2018-19 and in the first four months (April-July) of the previous fiscal (2019-20). However, with revenue mop-up from compensation cess falling, the Centre held back fund transfer to states beginning August. Following this, states raised the issue with the Centre and in December 2019, Rs 35,298 crore was released as compensation for August-September, while Rs 34,053 crore was released in two instalments in February and April as compensation for October-November. The Centre has, so far, released over Rs 2.45 lakh crore as GST compensation to states since the implementation of the new indirect tax regime on July 1, 2017. During July 2017-March 2018, Rs 48,785 crore was released, while between April 2018-March 2019, Rs 81,141 crore was paid to states. For April-May and June-July last year, Rs 17,789 crore and Rs 27,956 crore were released. Further, Rs 35,298 crore was paid to states as compensation for August-September and Rs 34,053 crore for October-November 2019.
Source: Economic Times
India’s trade basket plummeted to a record low in April as countries sealed their borders to arrest the spread of the coronavirus pandemic. Merchandise exports plunged 60.3% and imports fell 58.7% resulting in a trade deficit of $6.8 billion, data released by the commerce ministry on Friday showed. The sharply weaker performance in April followed a 34.6% drop in India’s merchandise exports in March when imports declined 28.7%.A nearly two-month-long nationwide lockdown has hit India’s trade, which has been on a declining trend due to a slowing economy. The government has been easing some of the restrictions of the lockdown, which currently runs through Sunday. “Despite the graded relaxations in the current month, the levels of merchandise exports and imports are likely to remain subdued in May as well," said Aditi Nayar, vice- president at Icra Ratings. “However, a pause in remittances may prevent a current account surplus in Q1 FY2021." Of the 30 major exporting items, only iron ore (17.5%) and pharmaceuticals (0.25%) recorded positive growth in April. Among the major import items, all registered negative growth during the month. While the contraction in non-oil imports was broad-based, two-thirds of it was concentrated in items such as gold and precious stones, electronic goods, machinery and coal. The sharp 59.3% decline in non-oil exports was driven by engineering goods, gems and jewellery, and textiles. Considered the severest in the world, the lockdown has led to large-scale job losses and difficulties for migrant workers. India’s unemployment rate climbed to 27.1% in the week to 3 May before dropping to 23.97% in the following week, data from the Centre for Monitoring Indian Economy showed. Around 121.5 million people reported job losses in April, the survey said. The Asian Development Bank on Friday said GDP in South Asia will be lower by $142 billion to $218 billion (3.9-6%) in fiscal 2021, mainly reflecting strict coronavirus induced restrictions in countries such as Bangladesh, India and Pakistan. The World Trade Organization (WTO) has projected global merchandise trade to drop between 13% and 32% in 2020 due to the pandemic. “The wide range of possibilities for the predicted decline is explained by the unprecedented nature of this health crisis and the uncertainty around its precise economic impact. But World Trade Organization economists believe that the decline will likely exceed the trade slump brought on by the global financial crisis of 2008-09," it said in April.
Ravi Sehgal, chairman of the Engineering Export Promotion Council, said while global trade, especially of essentials such as food and medicines is resuming partially, it would be a long haul before normalcy returns. “Exporting units, especially in the engineering sectors, are largely micro, small and medium enterprises and they face an existential crisis," Sehgal said, adding that while the central government’s micro, small and medium enterprises package would provide liquidity infusion, “the units need straight forward fiscal support like waiving of electricity charges, water bills and wage support for survival." “Besides, all dues and refunds should be immediately released to enable exporters tide over this unprecedented crisis," Sehgal said.
Source: Live Mint
Principal Secretary, Industries & MSME and Textiles, Handlooms and Handicrafts Hemant Sharma has said the State Government is coming up with a new Industrial Policy-2020 in September this year. Sharma was speaking in a webinar on May 12 and said the Government is inviting suggestions from industry associations to formulate the Industrial Policy Resolution (IPR) 2020 in an effective manner. He assured that all stakeholders would be consulted before formulating an attractive industrial policy. Sharma said the Government is working progressively to contain the Covid-19 pandemic by promoting and making huge changes in health infrastructure of the State.
He informed that healthcare centres are being set up in rural and urban areas providing all important hygiene materials, PPEs and ventilators etc to health workers and hospitals.
Sharma said all necessary arrangements are made in the quarantine centres in rural and urban areas so that the disease cannot spread. Director of Industries Reghu G informed about the current industrial operating status and said that the issues faced by the industries should be conveyed to the Government directly or through associations or themselves. The e-conference was attended by more than 100 participants from food processing and allied sectors from different parts of the State.
Source: The Pioneer
Over three consecutive days of interaction with the country's financial media, FM Nirmala Sitharaman provided the break-up of PM Modi's Rs 20 lakh crore Covid stimulus for India. At as much as 10% of GDP, the package did not appear to leave any major sphere untouched as Modi brought out the fiscal artillery to complement RBI's monetary ballast spread over the past few weeks, putting India firmly in the league of biggies that have gone all out against the virus. In his speech, Modi said his package would focus on land, labour, liquidity and laws, and would deal with such sectors as cottage industries, MSMEs, the working class, middle class and industry. He also talked of focusing on empowering the poor, labourers and migrant workers, both in the organised and unorganised sectors. Dubbed Atmanirbhar Bharat Abhiyaan, this mother-of-all-incentives puts bold reforms at the heart of Modi's stated plan to make India self-reliant so that any other crisis that may emerge in future could be efficiently tackled. Below we collate all the details that emerged in three tranches over the past three days.
FIRST TRANCHE
(New definition: Micro units with investment till Rs 1 cr, turnover up to Rs 5 crore. Small units with investment till Rs 10 cr, turnover up to Rs 50 cr. Medium units with investment till Rs 20 cr, turnover up to Rs 100 crore).
SECOND TRANCHE
Day 2 put the focus on migrant workers, small farmers and the poor, in the manner shown below:
Free food for migrants
For those migrants who don't have NFSA cards or state cards, 5 Kgs of wheat or rice per person and one kg channa per family per month for next two months to be provided and
it will reach through the state governments. This will entail Rs 3,500 crore and is likely to benefit around 8 crore migrants.
One Nation, One Ration Card
National Portability Ration Cards can be used in any ration shops that will be applicable across the country. By August 2020, 67 cr beneficiaries in 23 states or 83% of all PDS beneficiaries will get covered. By March 2021, 100 per cent will be covered.
Rental accomodation
Under PM Awas Yojaana, scheme for rental housing for migrant workers. Under the scheme incentives will be offered to private manufacturing units and industrial units to develop affordable housing, converting govt funded houses into affordable renting accommodations for migrant workers. Shall be done on PPP on concessionaire basis. State government agencies will also be incentivised to develop affordable housing.
MUDRA Shishu loan
Those who have availed loans up to Rs 50,000, an interest subvention of 2% for next 12 months after the moratorium period extended by RBI ends. Three crore people will get benefit of Rs 1500 crore.
Street Vendor
Special scheme for street vendors to avail Rs 5,000 crore loan facility. Will be given Rs 10,000 of working capital.
Affordable Housing
Credit-linked subsidy scheme for middle income households in the income group Rs 6-18 Lakh extended to March 2021. The CLSS scheme was operationalised from May 2017 and extended up to March, 2020. Now, it has been extended till March 2021. This will lead to investments of Rs 70,000 crore in housing and kick-start sectors like steel, cement and create jobs.
For Tribals
Rs 6,000 crore worth of proposals have come from states under CAMPA funds. Tribal people will get employment in forest management, wildlife protection/management and other forest related activities.
For Small/Marginal Farmers
THIRD TRANCHE
Day 3 included steps for framers, and such sectors as food processing and allied activities. For Upgrading Infrastructure
Agriculture Marketing Reforms
Source: Economic Times
This takes the total commitment from the World Bank towards emergency Covid-19 response in India to $2 billion. The World Bank on Friday announced $1 billion in social sector funding for India. The money will go towards mitigating the economic and humanitarian crisis being faced by unorganised workers and migrant labourers impacted by the Covid-19 pandemic. This takes the total commitment from the World Bank towards emergency Covid-19 response in India to $2 billion. A $1-billion support was announced last month to support India’s health sector. The new support will be funded in two phases — an immediate allocation of $750 million for the financial year 2021 (FY21) and a $250-million second tranche that will be made available for FY22, the multilateral agency said. The first phase of the operation will be implemented through the Pradhan Mantri Garib Kalyan Yojana. It is expected to immediately help scale up cash transfers and food benefits using a core set of pre-existing national platforms and programmes such as the public distribution system and direct benefit transfer. In the second phase, the programme will deepen the social protection package, in which additional cash and in-kind benefits based on local needs will be extended through states and portable social protection delivery systems. “The response to the Covid-19 pandemic has required governments to introduce social distancing and lockdowns in unprecedented ways — especially in the informal sector. India has not been an exception to this trend,” said Junaid Ahmad, World Bank Country Director in India, in a webinar. Of the $1-billion commitment, $550 million will be financed by a credit from the International Development Association (IDA) — the World Bank’s concessionary lending arm and $200 million will be a loan from the International Bank for Reconstruction and Development (IBRD), with a final maturity of 18.5 years including a grace period of five years. The remaining $250 million will be made available after June 30, 2020, and would be on standard IBRD terms. The programme will be implemented by the finance ministry.
Source: Business Standard
India’s foreign exchange reserves rose by $4.235 billion to $485.313 billion, just shy of the previous life-time high of $487 billion, in the week to May 8. India’s foreign exchange reserves rose by $4.235 billion to $485.313 billion, just shy of the previous life-time high of $487 billion, in the week to May 8. Since end-March, the forex reserves have risen $7.5 billion. The reserves had previously shrunk as the rupee remained volatile. However, the reserves have grown and are short of the life-time high of $487.24 billion recorded in the week to March 6. During the previous week, the reserves had risen by $1.622 billion. Compared to the year-ago period, the forex reserves have risen by $65.257 billion. Over the previous week, foreign currency assets (FCA), which form a key component of reserves, rose by $4.233 billion to $447.548 billion. Movement in the FCA, which are maintained in major currencies like the US dollar, euro, pound sterling and Japanese yen, occurs mainly on account of purchase or sale of foreign exchange by the RBI, income arising out of the deployment of foreign exchange reserves, external aid receipts of the government and revaluation of assets. Gold reserves rose by $13 million to $32.291 billion. Special drawing rights (SDR) from the International Monetary Fund (IMF) fell by $3 million to $1.423 billion. SDR is an international reserve asset created by the IMF and allocated to its members in proportion of their quota. The reserve position in the IMF fell by $8 million to $4.051 billion, according to RBI data.
Source: Financial Express
The government should monetise the fiscal deficit without thinking of it as a catastrophe, as there are financing options, Soumya Kanti Ghosh, group chief economic advisor of State Bank of India (SBI), and Abheek Barua, chief economist at HDFC Bank, suggested. The Rs 20 lakh crore stimulus package announced by the government will have a much more muted impact on the fiscal deficit than what the headline number suggests, and financing it will not be a problem, Ghosh and Barua pointed out. “A large part of this fiscal policy works on guarantees, not an immediate drag on fiscal resources,” Barua said, adding that deficit will not spin out of control. The two economists were speaking at a webinar session on ‘Demand Management Policies at the Time of Pandemic (Fiscal and Monetary Stimulus),’ organised by Bennett University, which is part of the Times of the India Group that also publishes The Economic Times. Ghosh said the government was taking a path of fiscal responsibility. “Our estimates show the direct fiscal impact of the two packages announced by the finance minister is not more than Rs 1.2 lakh crore, out of the Rs 16.45 lakh crore which has been announced,” he said. According to Ghosh, the pandemic was a classic case of a simultaneous demand and supply shock but advised that policy should focus on demand revival. He pegged the total cost of the pandemic at Rs 25 lakh crore and estimated that a fiscal package of Rs 10 lakh crore could revive the economy. Suggesting ways to finance such a stimulus, Ghosh said, “One option is sovereign perpetuity bonds (perpetual sovereign bonds). These have been used by the UK and the US in the 18th and 19th centuries in times of war and pandemic. The rationale of the bonds is that the principal amount will never have to be repaid.” Barua said the stimulus package was a curious combination of fiscal and monetary measures where guarantee by the government would induce supply of loans. “It sets off this virtuous cycle of liquidity easing, leading to a reduced level of insolvency and also a positive impact on the economy. And, I think this will be the cornerstone of the government's strategy going forward,” he said.
Source: Economic Times
There is very limited space for fiscal stimulus as the government's revised market borrowing of Rs 12 lakh crore, is expected to be used largely for meeting revenue shortfall, India Ratings & Research said on Friday. The government had budgeted Rs 7.8 lakh crore in gross market borrowing, in the current fiscal, but following COVID-19 disruptions, it had last week announced an additional borrowing of Rs 4.2 lakh crore, taking the total to Rs 12 lakh crore, primarily to meet the likely revenue shortfall. According to India Ratings chief economist Devendra Kumar Pant, the enhanced gross borrowings of Rs 12 lakh crore will largely take care of the revenue shortfall, leaving little space for fiscal stimulus, "unless the Centre sharply cuts the budgeted capex and reprioritises expenditure". "This leaves very limited fiscal space for the government as the revenue shortfall accounts for as much as 95.1 per cent of the increased borrowings, leaving as little as Rs 20,000 crore for the government to provide fiscal stimulus," India Ratings & Research said. Pant expects the gross and net tax revenue of the government to fall short of the budgeted estimate by Rs 4.32 lakh crore and Rs 2.52 lakh crore, respectively, notwithstanding the low crude prices and increased excise on petrol and diesel which alone is getting an additional Rs 1.6 lakh crore of additional revenue. Due to the lockdown-induced weak economic activities and the resultant impact on non-tax revenue, he expects dividend and profit and other non-tax revenue to decline by Rs 1.48 lakh crore from the FY21 budget estimate. "This means the government is staring at a revenue shortfall of Rs 4 lakh crore from the FY21 budget estimate," Pants said, and warned that the government is unlikely to meet even the revised revenue estimate of FY20 due to the country-wide lockdown. “This is too small an amount to make any difference to the sagging economic activity and demand. Clearly, the challenge is huge with hardly any fiscal space, despite an increase of gross borrowing by Rs 4.2 lakh crore," he said. Pant further said, "nonetheless, the onus is on the Centre to provide support to not only vulnerable sections of the society but also the states, because the actual battle against the pandemic and the associated expenditure is incurred by the states." Another worry is the steeply falling household financial savings amidst the tighter financial conditions, which began even before the pandemic lockdowns as the economy was staring at a mismatch between domestic savings and investments. Households contributes maximum to the gross value addition (44.3 per cent during FY12-FY19), savings (61.1 per cent) and fixed capital (39.2 per cent) in the economy. But the financial saving of households has been declining over the years and was 6.5 per cent of GDP in FY19 compared to 8.1 per cent in FY16. In FY19, this declined to Rs 12.3 lakh crore from Rs 13.2 lakh crore FY18. On the other hand, the Central and states' borrowings have been rising over the years. The net borrowings by the Centre, the states and the Central public sector undertakings (PSUs) jumped nearly threefold to Rs 18.89 lakh crore or 9.3 per cent of GDP in FY21 from Rs 6.19 lakh crore or 7.1 per cent in FY12, the report said.
Source: Economic Times
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
789.07 |
USD/Ton |
0% |
17-05-2020 |
|
VSF |
1238.86 |
USD/Ton |
0% |
17-05-2020 |
|
ASF |
1580.26 |
USD/Ton |
0% |
17-05-2020 |
|
Polyester POY |
732.06 |
USD/Ton |
0% |
17-05-2020 |
|
Nylon FDY |
1942.76 |
USD/Ton |
0% |
17-05-2020 |
|
40D Spandex |
4012.23 |
USD/Ton |
0% |
17-05-2020 |
|
Nylon POY |
1745.67 |
USD/Ton |
0% |
17-05-2020 |
|
Acrylic Top 3D |
922.11 |
USD/Ton |
0% |
17-05-2020 |
|
Polyester FDY |
2266.56 |
USD/Ton |
0% |
17-05-2020 |
|
Nylon DTY |
5180.70 |
USD/Ton |
0% |
17-05-2020 |
|
Viscose Long Filament |
964.34 |
USD/Ton |
0% |
17-05-2020 |
|
Polyester DTY |
1844.22 |
USD/Ton |
0% |
17-05-2020 |
|
30S Spun Rayon Yarn |
1731.59 |
USD/Ton |
0% |
17-05-2020 |
|
32S Polyester Yarn |
1358.53 |
USD/Ton |
0% |
17-05-2020 |
|
45S T/C Yarn |
2111.70 |
USD/Ton |
0% |
17-05-2020 |
|
40S Rayon Yarn |
1900.53 |
USD/Ton |
0% |
17-05-2020 |
|
T/R Yarn 65/35 32S |
1647.13 |
USD/Ton |
0% |
17-05-2020 |
|
45S Polyester Yarn |
1548.58 |
USD/Ton |
0% |
17-05-2020 |
|
T/C Yarn 65/35 32S |
2013.15 |
USD/Ton |
0% |
17-05-2020 |
|
10S Denim Fabric |
1.12 |
USD/Meter |
0% |
17-05-2020 |
|
32S Twill Fabric |
0.64 |
USD/Meter |
0% |
17-05-2020 |
|
40S Combed Poplin |
0.93 |
USD/Meter |
0% |
17-05-2020 |
|
30S Rayon Fabric |
0.48 |
USD/Meter |
0% |
17-05-2020 |
|
45S T/C Fabric |
0.64 |
USD/Meter |
0% |
17-05-2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14078 USD dtd. 17/05/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The Association of Southeast Asian Nations (ASEAN) became China’s largest trading partner in the first three months of 2020, surpassing both the EU and the United States.
During this period, ASEAN-China trade increased by 6 percent year-on-year to US$140 billion and accounting for 15 percent of China’s total trade volume. This comes as the country’s traditional, largest trading partner, the EU, has been on lockdown. China’s imports from Vietnam and Indonesia rose by 24 and 13 percent year-on-year, respectively, highlighting the increasingly integrated supply chains between the two regions. ASEAN had already become China’s second largest trading partner in 2019 with trade valued at US$644 billion, overtaking the US amid friction between the world’s largest economies. To offset the impact of the trade war, China looked to other regions to fill the gap, most notably ASEAN nations. Analysts, however, expect the EU to regain its top position as China’s largest trading partner as the virus fades considering some 20 percent of the bloc’s total imports come from China.
Electronics pushes ASEAN trade to the top
Electronics have been a major contributor to the Q1 numbers, with China importing US$14.9 billion worth of integrated circuits from ASEAN countries, up from 25 percent in the previous year. This includes chip capacitors, microprocessor chips, and analog-to-digital converters; China exported some US$6 billion worth of integrated circuits to ASEAN. With the increasing economic uncertainties caused by the US-China trade war, many Japanese and South Korean companies began transferring production to ASEAN, attracted by lower-wage structures as well as improving infrastructure and legal environment. These businesses have established integrated circuit factories in Malaysia, Vietnam, and Thailand, which in turn have been able to cater to the demand of the Chinese market. These new production hubs do not mean the entire industrial chain has shifted to ASEAN, rather they have become an extension of the industrial chain in China. Many of these factories still require raw materials, equipment, expertise, and technology from China, and many are also dependent on Chinese consumers as their primary markets.
Can ASEAN retain its position?
When the pandemic resides, the EU is expected to regain its position as China’s largest trading partner. Yet, as China slowly returns to pre-COVID-19 production levels, the country’s demand for mining products will benefit major producers in ASEAN, such as Indonesia, Malaysia, Myanmar, and Laos. Other sectors set to benefit from the resumption of China’s manufacturing are the region’s semiconductor and electronics industries, spurred by the development of 5G technology and the textiles and garment industry. In the post-pandemic period, there will be efforts for greater regional trade integration among the ASEAN+3 (ASEAN+ China, Japan, and South Korea) economies, particularly as a counterweight against the rise of protectionism policies, and make these economies more resilient to volatility shocks. This will be further supported by the finalization of the Regional Comprehensive Economic Partnership (RCEP) free trade agreement (FTA) later in 2020. The proposed FTA will link the ASEAN members and China, Japan, South Korea, Australia, and New Zealand (India withdrew from the agreement), in what is expected to be the world’s largest FTA, encompassing 3.4 billion people and one-third of global GDP. Increasing market access, reduction in tariffs, and the opportunity to facilitate small and medium-sized businesses (SMEs) in ASEAN to integrate regional supply chains will make products from ASEAN more competitive and position the bloc as a key player of global growth, after the pandemic.
Source: Asean Briefing
A high-level meeting between the United Kingdom and the European Union (EU) is likely in late June to unlock the next round of discussions on a UK-EU free trade agreement (FTA), according to the UK Fashion and Textile Association. The UK government has said initial discussions on FTAs with Australia, New Zealand and Turkey will start by the middle of June. At the UK-EU meeting, neither side is expected to ask for an extension to the transition period, and therefore, the possibility of the United Kingdom leaving the EU’s Customs Union on December 31 this year without a deal is still quite a possibility, UKFT said in an update. The third round of meetings recently concluded. The start of talks with Turkey is especially important for the clothing and textile sector as Turkey provides close to £2 billion of duty-free fashion and textiles to the United Kingdom every year. UKFT has been lobbying the government over the importance of maintaining duty free access to Turkey since 2016 and will ensure the sectors demands are regularly fed into the UK’s negotiating team, it said. Official discussions with the United States on an FTA also started this month. However, negotiations are expected to take a considerable time and differences over rules of origin for fashion and textile products is expected to be a particular source of contention, the association noted. Following a consultation earlier in the year, the UK government is set to publish the new UK external tariff regime next month. The tariff regime will apply to all goods coming into the United Kingdom from countries with which the country does not have trade agreements. UKFT submitted very detailed information to the government on the proposed regime including the absolute need for the new tariff schedule to provide support to UK manufactures. Details on the tariff regime will be published by UKFT as soon as they become available. Japan is the United Kingdom’s third most important market for fashion and textiles and UKFT has been consistently lobbying the government to deliver an FTA with Japan. The UK government will begin negotiations on a UK-Japan FTA next week.
Source: Fibre2Fashion
In an interview with Fox Business News, Trump said taxation was an incentive for companies to return manufacturing bases to the US. US President Donald Trump has threatened to slap new taxes on American companies to dissuade them from moving their manufacturing bases from China to countries like India and Ireland, instead of their own, amid the Covid-19 pandemic. In an interview with Fox Business News, Trump said taxation was an incentive for companies to return manufacturing bases to the US. “Apple said now they’re going to go to India. They’re going to do some production in India away from China,” he was asked. “If they do, you know, we gave Apple a little bit of a break because they’re competing with a company that was a part of a trade deal that we made. So it was a little bit unfair to Apple, but we’re not allowing this anymore,” Trump said. “You know if we wanted to put up our own border like other countries do to us, Apple would build 100 per cent of its products in the United States. That’s the way it would work.” According to reports, Apple is looking to shift a significant portion of its production to India from China. Supply lines of many tech companies manufacturing in China were disrupted after the deadly Covid-19 outbreak in the Chinese city of Wuhan. “These companies have to get on the ball because they’re going not only to China — you look at where they’re going — they’re going to India and they’re going to Ireland and they’re going all over the place, they make them,” Trump said. Asked whether he would consider giving companies tax breaks to return manufacturing operations to the US, Trump said he might tax them if they didn’t and suggested they had a duty to re-shore operations. “One incentive, frankly, is to charge tax for them when they make product outside. We don’t have to do much for them. They have to do for us,” Trump said. US officials say Trump’s administration is “turbocharging” efforts to push companies to move production away from China, partly as a way to punish Beijing for its early handling of the coronavirus outbreak.
Source: Agencies
The name Brebes lately often becomes a byword, besides being a new location for the relocation of the PT Shyang Yao Fung factory, one of the factories that produces well-known brands whose buyers include Adidas, who moved from Tangerang. Brebes is also predicted to become a new location for the relocation of US-owned multinational factories in China that will be moved to Indonesia. This began when the Coordinating Minister for Maritime and Investment Luhut Binsar Pandjaitan talked about the 'secret' conversation between President Jokowi and US President Donald Trump. Jokowi spoke with President of the United States (US) Donald Trump, about discussing investment opportunities in the pharmaceutical sector in Indonesia, because 90% of pharmaceutical raw materials must be imported. "President Jokowi is talking with President Trump, now President Trump is with Indonesia. Because he is fighting with China, he wants to relocate his industry (in China), I am asked by the president to talk to President Trump's aides later," Luhut said, yesterday (10/5). Luhut did not explain when the conversation was. However, the communication between the two leaders known to the public was revealed when Trump in his tweet on his personal Twitter account @realDonaldTrump, on Friday (04/24/2020), revealed the issue of ventilator requests from President Jokowi. Luhut said the government was preparing 4,000 hectares of land in Central Java. The land was specifically provided for special economic zones for the pharmaceutical industry. "Now we are working on it. While we are discussing with the Governor of Central Java, for now we will start. Actually, it has been done before, but it stopped, well, so if you say that this [road] is not all road industry, now for example the APD industry is now domestically 1.5 million production per month, "Luhut said. Luhut's statement about an industrial area of 4,000 hectares is conical in an industrial area in Brebes, because the Industrial Estate in Kendal has an area of only 2,200 hectares. Spokesperson for the Coordinating Ministry of Maritime Affairs, Jodi Mahardi, when asked for an explanation from CNBC Indonesia, still needed time to explain the plan, he still needed to coordinate with several parties. Minister of Industry Agus Gumiwang has previously prepared 27 new industrial estates to be built in 2020-2024. One of the areas to be developed by an industrial estate is Brebes, Central Java. Brebes is famous for its onions and salted eggs. "Of the 27 regions, there are only 2 on the island of Java. One in Brebes and one in Madura. The rest, or 25 others are directed in industrial areas outside Java," Agus said. The Brebes Regency Government has a plan to develop the Brebes Industrial Estate (KIB) covering an area of 3,976 hectares and for the Brebes Industrial Designation Area (KPIB) covering a total area of 5,070 hectares. This industrial area will stretch from the districts of Losari, Tanjung to Bulakamba. In the official records of the Brebes Regency Government, 39 companies operating in various business sectors have registered as occupants of the Brebes Industrial Estate until November 2019. As many as 24 investors have established factories in Brebes Regency, the rest are still in the process of licensing as many as 12 companies until the end of 2019.
Source: CNBC Indonesia
In spite of much talk about countries thinking of moving out of China, and not putting all the eggs in one basket, 25 per cent of global sourcing will still stay with China, experts said at a virtual panel discussion. There may be some negative sentiments against China for the next 5-6 months, but ultimately retailers will go back to China for sourcing. The trade war was already brewing before COVID-19 pandemic struck. Over the last two years, most sourcing directors had made strategic plans to step-by-step cut down on sourcing from China. "Their goal was to bring down China sourcing to 20-25 per cent, and many of them have actually implemented that. I personally don’t see China going lower than that. So, 25 per cent of global sourcing will still stay with China, but whatever has been thrown out has become good opportunity for other countries," Asmara Group CEO Venki Nagan said during the panel discussion on 'Buying agents and buying in the new global order', guest anchored by Fibre2Fashion Consulting Editor Richa Bansal. China has a comparative advantage which is not going to disappear, as no other country has that kind of infrastructure which it built in the last 50 years, said Atul Nagi, VP-International Sales, Carpet Crafts LLC, Dubai. "China is intertwined in our daily living today. The price points that we live in and the price points that we expect, taking China out of the equation is not going to happen." Echoing a similar opinion, Jyoti Saikia, CEO, Triburg, said: "Thinking about whether we can take away business from China is not of any value. China is here to stay. China provides certain benefits which nobody can take away from them." If we look at what has happened to China in the last 2 months, the factories there have been up and running since the middle of February while the entire world is under lockdown. "India and emerging countries have lost big chunks of GDP in months whereas China’s trade has been up, all the metrics are up for them. They have a head start in terms of capacity, infrastructure, costing, innovation, efficiency and productivity. So, China is here to stay." Anika Passi, country manager, TW House Sourcing Pvt Ltd, said during the panel discussion organised by Buying Agents Association. Sanjeev Jain, President & CEO, TQM Global Buying, too agreed that China is always going to be there, and any set back would only be temporary. "All the retailers sitting out in Europe and US – they cannot depend on smaller countries because they are still not geared up to supply them in those capabilities that they are looking for. They have huge demands, which other countries are still not having capacities to fulfill. From the perspective of apparels and textiles, China has developed so many types of blends and fabrics which we do not even have in India. Using those blends, they are able to get into the price economy. China is very good in polyesters. So ultimately when it comes to price or capacity, it is going to be China. May be for the next 5-6 months there is going to be some negative sentiments against China, but ultimately retailers are going to go back to China." Elangovan, textile expert and chairman of Tiruppur-based Association of Buying Agents for Textiles (ABAT) said, "India lacks the ecosystem to replace China. India has been never been a candidate to replace China and it is not going to happen in the next 50 years."
Source: Fibre2Fashion
