Reserve Bank of India (RBI) Governor Shaktikanta Das on Friday announced a slew of measures to help country's exporters and importers amid a slump induced by the global coronavirus crisis. The announcements were part of the RBI's surprise decision to advance its monetary policy statement by at least 10 days. In his statement, Das said the monetary policy committee unanimously decided to slash the repo rate, with a 5:1 majority voting in favour of a 40-basis-point reduction to 4 per cent. The reverse repo rate was also brought down to 3.35 per cent. The central banks' stance on inflation and outlook on gross domestic product were also revealed on Firday. Taking cognizance of the slowdown in the midst of the Covid-19 pandemic, the RBI announced a few measures to help the export-import sector. Das said: "The deepening of the contraction in global activity and trade, accentuated by the rapid spread of Covid-19, has crippled external demand. In turn, this has impacted India’s exports and imports, both of which have contracted sharply in recent months. In view of the importance of exports and imports to the economy, certain measures are being taken to support the foreign trade sector".
Here are some decisions that should help the ailing foreign trade sector:
Export Credit
The RBI decided to increase the maximum permissible period of pre-shipment and post-shipment export credit sanctioned by banks from the existing one year to 15 months, for disbursements made up to July 31, 2020. This was done to help exporters support their production and realisation cycles. Simply put, any exporter who has taken credit from a bank can repay it in 15 months instead of one year. The additional three months will come as a relief to exporters as businesses have taken a serious hit due to Covid-19.
Liquidity for Exim Bank of India
The RBI extended a Rs 15,000-crore line of credit to the Exim Bank for a period of 90 days (with rollover up to one year) to enable it to avail of a US dollar swap facility. This means that the Exim Bank will have additional Rs 15,000 crore at its disposal to lend to businesses. As the name suggests, the Export-Import Bank lends money to the exporters and importers to promote international trade. With this extra liquidity, Exim Bank can lend more and businesses can seek funds to resume their work to emerge out of the crisis.
Extension of time for payment for Imports
Like exporters, the RBI has provided some relief to the importers as well. As the operating cycles have been disrupted for all busineess due to the coronavirus pandemic, the RBI has extended time period for completion of outward remittances against normal imports (i.e. excluding import of gold/diamonds and precious stones/jewellery) into India from six months to twelve months from the date of shipment for such imports made on or before July 31, 2020. Therefore, businesses will have extra six months to pay their outward remittances, thereby getting a breather to deal with the crisis and not stress their ledgers. In all, the Reserve Bank has given exporters and importers liquidity support and extra time to manage their dues, which was much needed at a time when the global economy is facing a crisis and uncertainity.
Source: Business Standard
The Reserve Bank on Friday announced a Rs 15,000-crore line of credit to the Export-Import Bank of India, to help the sagging foreign trade. The central bank said Export-Import Bank of India (EXIM Bank) depends on foreign currency borrowings for its operations and as a result of the COVID-19 pandemic, it is unable to raise the resources, due to which the facility is being extended. "It has been decided to extend a line of credit of Rs 15,000 crore to the EXIM Bank for a period of 90 days from the date of availment with rollover up to a maximum period of one year so as to enable it to avail a US dollar swap facility to meet its foreign exchange requirements," Reserve Bank of India Governor Shaktikanta Das said. He said the country's export-import trade has suffered because of external demand crippling owing to the pandemic and decline in import of essential goods and services. Among other measures, the Reserve Bank of India (RBI) has also decided to increase the maximum permissible period of pre-shipment and post-shipment export credit sanctioned by banks from the existing one year to 15 months, for disbursements made up to July 31, 2020, Das said. On the imports front, it has been decided to extend the time period for completion of remittances against normal imports into India (except in cases where amounts are withheld towards guarantee of performance) from six months to 12 months from the date of shipment for imports made on or before July 31, 2020, Das said. According to Das this will provide greater flexibility to importers in managing their operating cycles in a COVID-19 environment. As part of the developmental and regulatory policies, the RBI also announced help to Small Industries Development Bank of India (SIDBI) on the refinance front through the rollover of a three month, Rs 15,000-crore facility announced earlier. “In order to provide greater flexibility to SIDBI in its operations, it has been decided to roll over the facility at the end of the 90th day for another period of 90 days," Das said. For the financial markets, in view of the difficulties reported by the Foreign Portfolio Investors and custodians for adhering to the condition of investing at least 75 per cent of allotted limits are invested in three months, the RBI granted an additional three months to fulfil this requirement.
Source: Economic Times
Finance Minister Nirmala Sitharaman will hold a review meeting with CEOs of public sector banks (PSBs) on Friday to discuss various issues, including loan disbursement, as part of efforts to revive the economy reeling under the COVID-19 impact, sources said. The meeting, which was earlier scheduled for May 11, got deferred due to the stimulus package announcements, they added. The meeting assumes significance as the banking sector has to implement many schemes under the Rs 21 lakh crore economic package announced by the finance minister in five tranches last week. The Union Cabinet headed by Prime Minister Narendra Modi on Wednesday gave its nod for many of the schemes announced as part of 'Aatma Nirbhar Bharat Abhiyan' package to prop up the economy reeling under the COVID-19 crisis. The meeting, to be held via video-conferencing, will also take stock of interest rate transmission to borrowers by banks and progress on moratorium on loan repayments, the sources said. The RBI had on March 27 slashed the benchmark interest rate by a massive 75 basis points and also announced a three-month moratorium to be given by banks to provide relief to borrowers whose income has been hit due to the lockdown. At the Friday meeting, chief executives of public sector financial institutions will also be present as some of the schemes have to be implemented by them. The Union Cabinet headed by Prime Minister Narendra Modi on Wednesday approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through the Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector hit hard by the coronavirus crisis. Earlier this month, RBI Governor Shaktikanta Das held a meeting with heads of both public and private sector banks to take stock of the economic situation and review implementation of various measures announced by the central bank. The deployment of excessive funds by banks under the reverse repo route may also come up for discussion on Friday, sources said. Besides, progress under the targeted long-term repo operations (TLTRO) for the NBFC sector and microfinance institutions (MFIs), and sanctions under the COVID-19 emergency credit line will also be reviewed.
Source: Economic Times
Apart from the Centre and states which have raised their market borrowing plan for the current fiscal year amid a big revenue shortfall, the Goods and Services Tax (GST) Council may also take an unprecedented step by resolving to tap the market to bridge the shortfall in compensation cess collection and ensure that states’ guaranteed revenue growth of 14% year-on-year is protected Apart from the Centre and states, which have raised their market borrowing plans for the current fiscal amid huge revenue shortfall, the Goods and Services Tax (GST) Council may also take an unprecedented step by resolving to tap the market to bridge the shortfall in compensation cess collection and ensure that states’ guaranteed revenue growth of 14% year-on-year is protected, government sources said. Borrowed funds could be repaid by extending collection of cess, which is now limited to five years till 2022, to one or two subsequent years. The move is being contemplated after taking into consideration that raising tax rates by moving slabs to higher bracket to augment revenue might not be a feasible option at this juncture, given that all businesses have taken a hit due to the Covid-19 and an overall steep demand slump. Also, states may find it difficult to accept the idea of surrendering the guaranteed revenue growth and be content with available funds in the compensation cess kitty, sources said.
Source: Financial Express
The Centre has not imposed any restrictions on states for utilisation of additional borrowing of 2 per cent and they are free to spend as per their requirements, a senior Finance Ministry official has said. It is to be noted that the basic limit of 3 per cent remains unconditional, while only additional one per cent out of the two is linked to citizen centric reforms, the official said. Finance Minister Nirmala Sitharaman while announcing this on Sunday had said that an increase in borrowing limits will be subject to states taking citizen centric reforms, which are aimed at improving quality of service delivery to the public. In order to help states to enhance their resource base in times of the COVID-19 crisis, the central government allowed them to go in for additional borrowing of 2 per cent, over and above the regular limit of 3 per cent of the GSDP, subject to certain conditions. "…the basic limit of 3 per cent remains unconditional. Out of the additional borrowing of 2 per cent of GSDP, 0.50 per cent is untied and 1 per cent is subject to undertaking certain reforms by the state governments (0.25 per cent for each reform). Further, additional 0.50 per cent is allowed on undertaking at least any 3 suggested reforms," the official said. It may be noted that, while the eligibility for part of the additional borrowing is conditional, its utilisation is fully untied. The reforms suggested by the central government are citizen centric and aims at increasing the quality of service delivery to the public, the official added. These reforms are -- implementation of one nation one ration card system; district level and licensing reforms for ease of doing business; strengthening local bodies; and power sector reforms. The additional borrowing will provide states extra resources of Rs 4.28 lakh crore to deal with COVID-19 crisis. States' net borrowing ceiling for 2020-21 is Rs 6.41 lakh crore (3 per cent of gross state domestic product).
Source: Economic Times
New Delhi: Finance minister Nirmala Sitharaman has assured the industry that the government was aware of its problems amid the Covid-19 pandemic. “I want to make sure that there is an understanding in the industry that the government is not immune to your issues and is fully inclined to understanding all your problems," Sitharaman said at a web conference with members of industry chamber FICCI on Friday. The minister said that the clarion call to become self-reliant did not mean curbing imports or becoming protectionist, rather it meant to build on India's strengths to become part of the global supply chain. "Aatmanirbhar Bharat doesn’t mean we are curbing imports," Sitharaman said. "We have to build our strengths to become self-reliant but that does not mean we are becoming protectionist," she added. The government intends to make India an integral part of the global supply chain, even as foreign companies look for alternatives to China for setting up manufacturing bases. "We have to identify the advantages that we had and find new ones. Aatmanirbhar Bharat of PM means getting our strengths back and build new strengths," the minister added, quoting Prime Minister Narendra Modi. Exalting FICCI for working for the industry's cause and with the government, the minister stressed on the criticality of such bodies during unprecedented times like the Covid-19 pandemic.
Source: Economic Times
That apart, companies based in China, with a strong focus on exports, will be approached. Stepping up its game to attract investments from foreign companies, the Department Of Promotion Of Industry and Internal Trade (DPIIT) has drawn up a list of 13 mega clusters, where individual investment pitches could be made. These include the industry belts of Noida-Greater Noida, the Mumbai-Aurangabad cluster, Amritsar-Jalandhar-Ludhiana, NH 48 (Manesar-Neemrana), Lucknow-Kanpur, Haldia-Tajpur, Kandla-Mundra, Durg-Bhilai, Vadodara-Bharuch, Surat-Hazira-Vapi, Chennai-Sri City, Coimbatore-Salem-Tirupur and Kochi-Trivandrum. "Textiles, electronics & consumer appliances, capital goods, pharmaceuticals, medical devices, automobiles and components, footwear & leather products, chemicals & petrochemicals, food-processing, plastic products and telecom equipment are some of the sectors we are looking at. We will hand-hold the firms across their entire investment lifecycle if they set up factories in India," said Invest India MD & CEO Deepak Bagla. Invest India — an investment facilitation joint under DPIIT — along with professional services firm JLL, has come up with a guide detailing the unique proposition of each of these industrial hotspots. The handbook, which also elaborates on the two-tier tax incentive structure from the state and Central governments, will benefit the potential investors for grounding investments in India, Bagla added. Titled Great Places for Manufacturing in India, the guidebook illustrates India’s distinct advantages such as incentives for industries, young and growing workforce, host to global in-house centres (GICs) and global centre of excellence (GCoEs) for several manufacturing companies that provide for more robust R&D and nearly 22 million square feet of ready-built industrial space ready to be occupied in 6-8 weeks. About 1,000 global firms have been shortlisted by Invest India for investment pitches across the United States, Japan, Germany, Taiwan, France and Middle East. That apart, companies based in China, with a strong focus on exports, will be approached.
Source: The New Indian Express
NEW DELHI: Exporters sending their shipments to Thailand and Vietnam under a free trade agreement (FTA) will have to submit physical applications to avail the lower duty benefits. The government on Friday restored the procedure for issuance of physical copy of certificates of origin as exporters had expressed difficulties in obtaining preferential access in Thailand and Vietnam based on digitally signed electronic certificates. In April, the commerce and ministry had allowed exporters to obtain the Certificate of Origin (CoO) online as offices issuing these documents were closed on account of lockdown due to the Covid-19 pandemic. The certificate is important to claim duty concessions under FTAs. “The CoO applications under ASEAN-India FTA for exports to Thailand and Vietnam should now be submitted manually by the exporters to the offices of the designated issuing agencies i.e. EIA, MPEDA and Textile Committee Directorate General of Foreign Trade said in a trade notice. An exporter has to submit the certificate at the landing port of the importing country. “These countries had asked for reciprocity so that Indian customs can also accept their exporters’ digital certificates. However, since this facility is not available in India, the the government has had to roll back the online certificate facility,” said a trade expert, adding that China too has demanded reciprocity from India under the Asia-Pacific Trade Agreement. APTA (formerly known as the Bangkok Agreement) is the only operational trade pact linking India and China. South Korea, Bangladesh, Lao PDR and Sri Lanka are also APTA members. The e-platform will not accept CoO applications submitted for exports destined to Thailand and Vietnam, DGFT said. However, it shall continue to accept and process CoO applications for export to other countries under ASEAN-India FTA, it added. “These agencies (EIA, MPEDA and Textile Committee) will henceforth issue the Certificate of Origin in physical paper format as was being done before...for Thailand and Vietnam, till further notice,” DGFT said. The Association of Southeast Asian Nations (ASEAN)-India trade in goods agreement was signed on August 13, 2009, and became effective from January 1, 2010. Indonesia, Thailand, Singapore, Malaysia, Philippines, Vietnam, Cambodia, Brunei, Myanmar, and Laos are the member countries of Asean.
Source: Economic Times
Lê Hoàng Tài, deputy director of the Ministry of Industry and Trade's Vietnam Trade Promotion Agency (Vietrade) made the statement at an online meeting on trade promotion through the Vietnamese community in India on Wednesday, claiming Vietnam has a lot of potential to export goods to India. The agency and trade office of the Vietnamese embassy to India in collaboration with the Vietnamese community in India and Nepal and the Indian Importers Chambers of Commerce and Industry organised the online meeting.The seminar aimed to create a bridge with the Vietnamese community in India to exchange information with domestic businesses on trade prospects in India. Trade relations between Vietnam and India are complementary and many Vietnamese goods have export potential like agricultural products and processed foods, especially dragon fruit. Cashew, coffee, pepper, rubber and spices also have much potential in the Indian market. The governments of the two countries have realised there is a need to promote co-operation in developing value chains in the textiles, footwear, electronic equipment, machinery and mechanical products sectors. Tài said total import-export turnover between Vietnam and India increased by 2.06 times from US$5.43 billion to $11.21 billion from 2016 to 2019. Exports increased by 2.5 times from $2.69 billion to $6.67 billion, while imports increased by 1.65 times from $2.75 billion to $4.54 billion.
Source: Vietnam News
India has become the world's second largest manufacturer of personal protective equipment (PPE) body coveralls within a short time span of two months, the government said on Thursday. China is the world's leading producer of PPE body coveralls, crucial to safeguard against the COVID-19 pandemic. In a statement, the Ministry of Textiles said it has been taking several steps to ensure that both quality and quantity of PPE coveralls going up to the desired levels within a very short span of time of two months, "thereby catapulting India into the world's second largest manufacturer of body coveralls, next only to China". The ministry has taken steps to ensure that only certified players across the entire supply chain are allowed to supply body coveralls to governments, an official statement said. Besides, Textiles Committee, Mumbai too will now test and certify PPE body coveralls required for healthcare workers and other COVID-19 warriors. Ajit Chavan, secretary, Textiles Committee and Additional Textile Commissioner, Ministry of Textiles, explained how the committee rose up to the occasion to surmount the challenge of non-availability of reputed domestic manufacturers of PPE testing equipment. "We faced the humongous challenges of non-availability of domestic manufacturers of repute and incessant delay/long gestation period to import machine from China as also challenges of ever-increasing prices by the opportunist companies in China due to demand for such equipment the world over. We therefore decided to do it indigenously," he said. The secretary informed how the testing equipment will help the nation during the crisis: "With the acquisition of this equipment and with a concrete plan to add some more equipment as per need, we will be able to address not only the quantitative but also the qualitative requirements involved in the testing of body coveralls worn by the frontline health workers and other COVID-19 warriors". The Textiles Committee is a statutory body established in 1963 through an Act of Parliament and is under the administrative control of the Ministry of Textiles, Government of India. It was formed to ensure the quality of textiles and textile machinery both for internal consumption and export purpose. The committee is tasked with the functions of establishing laboratories for the testing of textiles and textile machinery and providing for their inspection and examination, besides other functions which flow from the main objective of ensuring quality of textiles products and textiles machinery.
Source: Live Mint
The widely popular Khadi face mask is set to go “global”. The Khadi and Village Industries Commission (KVIC) will now explore the possibility of exporting the Khadi cotton and silk face masks to foreign countries after the Ministry of Commerce and Industries lifted the ban on export of non-medical/ non-surgical masks of all types. A notification in this regard was issued on May 16, by the Directorate General of Foreign Trade (DGFT). The move comes days after the Prime Minister Shri Narendra Modi’s “Local to Global” call in wake of the “Aatmanirbhar Bharat Abhiyan”. Keeping in view the huge demand of face masks during the global Covid-19 pandemic, the KVIC has developed double layered and triple-layered Cotton as well as Silk face masks respectively, available in two colors for men and in multiple colors for women. The KVIC has so far received orders to supply 8 lakh masks and has already supplied more than 6 lakh masks during Lockdown period. KVIC received orders from the Rashtrapati Bhavan, Prime Minister’s Office, Central Government ministries, J&K government and orders through email from general public. Apart from sale, over 7.5 lakh Khadi masks have been distributed free to the District Authorities by Khadi Institutions across the country. The KVIC plans to supply khadi face masks in countries like Dubai, USA, Mauritius and several European and Middle East countries where Khadi’s popularity has significantly grown over the last few years. KVIC plans to sell Khadi masks in these countries through the Indian embassies. KVIC Chairman, Shri Vinai Kumar Saxena said the export of Khadi masks is an appropriate example of “Local to Global”. “The popularity of Khadi fabric and other Khadi products has grown significantly across the globe in recent years after the appeal by the Prime Minister. The export of Khadi masks will lead to spike in production and ultimately create large scale employment opportunity for artisans in India,” Saxena said. “Face Masks are the most critical tool to fight the Corona Pandemic. These masks prepared from Double Twisted khadi fabric not only meet the quality and scale of demand but are cost effective, breathable, washable, reusable and bio-degradable” Saxena added. KVIC is specifically using Double Twisted Khadi fabric for manufacturing of these masks as it helps retains moisture content inside, while providing an easy passage for the air to pass through. What makes these masks more special is the hand-spun and hand-woven cotton and Silk fabrics. Cotton acts as a mechanical barrier while Silk is an Electrostatic barrier.
Source: PIB
The government has notified amendments to General Financial Rules (GFR) to ensure that goods and services valued less than Rs 200 crore are being procured from domestic firms, a move which will benefit MSMEs. "Govt has notified the amendments to the General Financial Rules 2017 to ensure that henceforth global tenders will be disallowed in government procurement up to Rs 200 crore, as announced in the Aatmanirbhar Bharat Package. A big boost to domestic suppliers, especially MSMEs,” the Office of Finance Minister Nirmala Sitharaman said in a tweet. Sitharaman had last week announced an economic support package for micro, small and medium enterprises (MSMEs), which includes disallowing global tender for government procurement up to Rs 200 crore. Amending the GFR, the Department of Expenditure under Ministry of Finance said, "No Global Tender Enquiry (GTE), however, shall be invited for tenders up to Rs 200 crore or such limit as may be prescribed by the Department of Expenditure from time to time." "Provided that for tenders below such limit, in exceptional cases where the Ministry or Department feels that there are special reasons for GTE, it may record its detailed justification and seek prior approval for relaxation to the rule from competent authority specified by the Department of Expenditure”. The MSME package announced last week comprised Rs 3 lakh crore of collateral-free loans, which would benefit about 45 lakh small businesses. Another two lakh such businesses would benefit from a Rs 20,000 crore subordinate debt for stressed or loan defaulting MSMEs, she said, adding a fund of funds for MSMEs is also being created, which will infuse Rs 50,000 crore equity in units that have growth potential. Also the definition of MSMEs has been changed from a pure investment-based one to that provides for higher investments and turnover for companies to remain as small businesses, and avail financial and other incentives. Besides, an estimated Rs 1 lakh crore in dues to MSMEs by government and central PSUs will be released within 45 days. Small and mid-sized businesses in India account for about a third of gross domestic product and employ more than 11 crore people and the package announced on Wednesday is aimed at helping them overcome coronavirus disruptions.
Source: Economic Times
The government will have provide massive publicity for the logo which would help the producers launch their product in a wider market. Also, there’s a need to strengthen ‘producer associations’. In the address to the nation on May 12, 2020, Prime Minister Narendra Modi emphasised the need for being more vocal about local products to revive the economy that is hit badly by the ongoing health pandemic. Local products strengthen rural-urban linkages and promote much needed non-farm employment. While a variety of strategies are required for promoting the local products from every region, there are about 361 products (foreign plus Indian) recognised for their uniqueness and registered with the Geographical Indications (GI) registry.
Source: The Hindu Business Line
Sidharth Nath Singh, Minister MSME, Investment & Export Minister, Government of Uttar Pradesh speaks about the revival path for Uttar Pradesh post-COVID-19 Uttar Pradesh, which contributes to almost 8 per cent of the country’s GDP and in terms of the workforce it contributes to the rest of the country is even larger. On India Revival Mission series, Sidharth Nath Singh, Minister MSME, Investment & Export Minister, Government of Uttar Pradesh speaks about important issues like how Uttar Pradesh is dealing with the influx of migrants, how does it plan to bring the state back on the revival path. Speaking of the migrant workers who have been returning to the state and how the state plans to support them in terms of jobs and newer prospects, he said: "Well, we always wanted to establish industry and we never got a chance. Now that we are getting the chance we are creating opportunities for them. And UP because we are getting a skill that is human capital and based on that we are creating avenues for manufacturing to happen in Uttar Pradesh. And UP has always been a consumer state. Now, we are going to be a manufacturing state. UP will be a hub for many activities like textiles, MSME, pharma." He further added that "everything is planned and all the labourers that are coming... we are sitting here and waiting to get their experience and that capital." On changing labour laws in the state, Singh said that "changing UP labour laws have been in demand for a long time." He further added that this is not something that has come up because of COVID and while moving forward we must remember the economy is going through a destructive time, so, need to plan things differently.
Source: ET Now
Bengaluru: Amid the COVID-19 lockdown, the Karnataka government on Friday issued a notification allowing factories to extend working hours up to 10 hours a day and 60 hours a week till August 21. The extension of work hours is from the current eight hours a day and 48 hours a week. "In exercise of powers conferred under Section 5 of Factories Act, 1948 (Act No.63 of 1948), the Government of Karnataka is pleased to order that all the factories registered under Factories Act, 1948 shall be exempted from the provisions of Section 51 (weekly hours) and Section 54 (daily hours), and with effect from 22-05-2020 to 21-8-2020," the notification said. It, however, has laid certain conditions, under which, no adult worker shall be allowed or required to work in a factory for more than ten hours in any day and sixty hours in any week. Provisions of Section 59 regarding overtime wages shall continue to be applicable without any change, it said. Several states have already extended working hours aimed at helping industries. The move by the Karnataka government to extend working hours has come amid speculations that it was mulling over amending some labour laws aimed benefiting industries whose operations have taken a hit because of COVID-19 lockdown. According to reports, the government is considering amending the Industrial Disputes Act and the Contract Labour Act. Also, deliberations were taking place regarding increasing overtime in factories from 75 hours per quarter to 100 hours.
Source: Economic Times
The global trade of sewing thread of synthetic staple fibres have shown a substantial decline in 2019. Total trade declined 5.16 per cent from $1,066.37 million in 2017 to $1,011.39 million in 2019, according to data from TexPro. The total trade of sewing thread of synthetic staple fibres has declined by 9.37 per cent in 2019 over the previous year. The trade is further anticipated to fall to $943.09 million in 2022 with a rate of 6.75 per cent from 2019, according to Fibre2Fashion's market analysis tool TexPro. The global export of sewing thread of synthetic staple fibres was $664.93 million in 2017, which slightly grew 0.11 per cent to $665.68 million in 2019. Total exports fell 6.34 per cent in 2019 over the previous year and is expected to increase slightly to $666.82 million in 2022 with a rate of 0.17 per cent from 2019. The global import value of sewing thread of synthetic staple fibres was $401.44 million in 2017, which decreased 13.88 per cent to $345.71 million in 2019. Total imports declined 14.69 per cent in 2019 over the previous year and is expected to plunge further to $276.28 million in 2022 with a rate of 20.08 per cent from 2019. China ($421.58 million) and Hong Kong ($53.51 million) were the key exporters of sewing thread of synthetic staple fibres across the globe in 2019, together comprising 71.37 per cent of total export. These were followed by Germany ($19.20 million), South Korea ($18.90 million) and the US ($16.21 million). From 2016 to 2019, the most notable rate of growth in terms of export value, amongst the main exporting countries, was attained by China (1.97 per cent). Hong Kong ($47.17 million), Turkey ($45.23 million), Italy ($15.48 million), Indonesia ($14.37 million) and Germany ($13.06 million) were the key importers of sewing thread of synthetic staple fibres across the globe in 2019, together comprising 39.14 per cent of total import. These were followed by Russia ($12.03 million), Morocco ($12.00 million) and Japan ($11.95 million).
Source: Fibre2Fashion
The global body's goods trade barometer (GTB) on Wednesday hinted at further weakening of trade volumes in H2CY20. Global merchandise trade volumes are expected to nosedive in the first half of 2020, as the earlier trade slump was made worse by the ongoing crisis, the World Trade Organization (WTO) has said. The global body’s goods trade barometer (GTB) on Wednesday hinted at further weakening of trade volumes in H2CY20. WTO trade statistics show that the volume of world merchandise trade shrank by 0.1 per cent in 2019, marking the first annual decline since 2009. This was markedly worse in late 2019. “The seasonally-adjusted volume of world merchandise trade in Q4 was down 1 per cent year-on-year, and 1.2 per cent compared to the previous quarter. Growth was held back by persistent trade tensions and by slowing economic activity in major economies,” the WTO said. Uncertain business conditions, fuelled by protectionism, further reduced export orders in key sectors. India’s exports contracted by a record 60.28 per cent in April to $10.36 billion, shrinking for the second straight month, as the lockdown took its toll on trade. The rate of fall in outbound trade was the most since at least April 1, 1995, as manufacturing units remained shut for the first 20 days owing to the nationwide curbs, and faced major logistics and supply-side hurdles later on.
Source: Business Standard
Textile enterprises have demanded that the government reopen all the textile industries along with the restoration of the zero-rated sales tax status as textile exports have been severely affected. In April 2020, textile exports declined 65% to $404 million against exports of $1,138.35 million in the same month of the previous year. “This should set off alarm bells for the official quarters concerned,” remarked All Pakistan Textile Mills Association (Aptma) Punjab Zone Chairman Adil Bashir. In the wake of a heavy fall in exports as well as domestic sales of textile products, Bashir demanded the restoration of the zero-rated status for the five major export-oriented sectors in order to give a boost to the textile industry in its endeavours to increase local production and exports, and save millions of jobs. He urged the government to take serious measures to overcome the liquidity issues of the textile industry. Sales of all major textile categories plummeted in April, with garments being the most affected. Cumulatively, textile exports dropped 3% year-on-year in the first 10 months of the current fiscal year to $10.82 billion, said JS Research analyst Ahmed Lakhani. Some improvement is expected in May as shipping delays have been reduced. Moreover, buying countries were also gradually easing the lockdown, which should support demand recovery, he added. In the prevailing situation, it is pertinent to see what special incentives can be offered to the export-oriented sectors. On the other hand, “the risk remains that despite the incentives, a potentially severe second and third wave of Covid-19 can neutralise any impact from the government incentives,” commented the analyst. The Aptma chairman said the trend of exports in April 2020 was very frightening as Pakistan’s annual shipments to EU countries and the US, exceeding $10 billion, were fraught with risks due to delay and cancellation of export orders after the coronavirus lockdown and liquidation or closure of many retail chains. Pakistan Cloth Merchants Association Secretary-General Arif Ismail urged the Sindh government to allow all textile and allied industries to resume operations and comply with the prescribed SOPs. The Aptma chairman stressed that the textile industry was the backbone of the country with more than 60% of total exports and the largest employer with widespread employment for professionals, skilled and unskilled workers. He said the zero-rated regime was introduced in 2005-06 with declared objectives of eliminating cash liquidity issues, wiping out refunds of billions of rupees stuck for long, avoiding unproductive waste of man-hours in chasing tax refunds and eliminating the additional cost borne on the filing and follow-up of refund claims. Bashir stated that 17% of sales tax was imposed on the textile industry with effect from July 2019 with lofty claims of the Federal Board of Revenue (FBR) of processing refund claims within 72 hours through the newly developed FASTER software system. FASTER still lacks basic provisions like Section 8B, eight-digit HS code, etc, which hampers the system. He raised eyebrows over the working of FASTER system and stated that due to inherent weaknesses in the system a large number of taxpayers had not been able to even file Annex-H.
Source: The Express Tribune
Bangladesh Garment Manufacturers & Exporters Association (BGMEA) and Bangladesh Knitwear Manufacturers & Exporters Association (BKMEA), two apex bodies of apparel and knitwear exporters, on 20 May vehemently condemned and protested frequent incidents of vandalism occurred at different garments factories in the name of movement for salary and bonus. “Image of the garment industry is being tarnished due to vandalism in the name of movement in big compliant factories alongside small and medium sized compliant ones. If this situation goes on unabated, new entrepreneurs won’t be created and investors will be discouraged,” said a joint press release issued by the both trade bodies. Leaders of the trade bodies are of the view that a vested quarter is engaged in creating anarchic situation in the industry by exploiting workers’ sentiment and said that infiltrators in the disguise of workers also joined the so-called movement. According to the media report, demanding salaries and festival bonus before Eid-Ul-Fitr (the biggest religious festival of the Muslims), a group of workers staged demonstration and carry out vandalism in a garments factory in the capital’s Khilkhet area in the morning on Tuesday (19 May). Managing Director of the ill-fated factory ‘Centex Textile And Apparels Ltd’ Md Jashim held outsiders responsible for the incident due to which properties worth TK one crore had been damaged. Similar incidents occurred in other RMG units leading the BGMEA and BKMEA leaders to feel worried. As the global COVID-19 pandemic rages on, many countries are in strict lockdown and fashion brands/retailers closed their shops, which led buyers and brands started to cancel their orders from Bangladeshi garment factories from the beginning of March. As per the latest data of BGMEA, 1150 garment factories lost more than 98 million pieces of garments order equivalent to US$3.18 billion. Sadly, some Western clothing brands that agreed not to cancel orders due to the coronavirus epidemic are demanding price cuts of up to 90%. Some of the manufacturers are forced to accept such conditions. Amid such situation, BGMEA and BKMEA find incidents of vandalism ‘irrational’ saying that most of the factories’ owners are trying heart and soul to pay workers’ salaries and bonus as per the decision taken by the owners, workers and the government’s representatives. Despite attempts to pay workers’ outstanding arrears, many factories are being vandalized, the trade bodies said. “It’s an ominous sign for the industry.” To exemplify the reason behind delay in paying workers’ salaries, BGMEA and BKMEA said manufacturers are yet to receive the Prime Minister-announced loans. Earlier, the premier announced TK 5000-crore package for export-oriented industry including Readymade garment (RMG) sector to tackle the Covid-19 crisis. The trade bodies demanded the government take effective steps to prevent anarchy in the RMG sector, bring those responsible under trial and mete out exemplary punishment to them. They also hoped that law enforcing agencies will take more stringent measures to stop untoward incidents in the RMG industry.
Source: Textile Today
Gap reached a deal early this year to more than triple the number of item-picking robots it uses to 106 by the fall. Apparel chain Gap Inc is speeding up its rollout of warehouse robots for assembling online orders so it can limit human contact during the coronavirus pandemic, the company told Reuters. Gap reached a deal early this year to more than triple the number of item-picking robots it uses to 106 by the fall. Then the pandemic struck North America, forcing the company to close all its stores in the region, including those of Banana Republic, Old Navy and other brands. Meanwhile, its warehouses faced more web orders and fewer staff to fulfill them because of social distancing rules Gap had put in place. "We could not get as many people in our distribution centers safely," said Kevin Kuntz, Gap's senior vice president of global logistics fulfillment. So he called up Kindred AI, the vendor that sells the machines, to ask: "Can you get them here earlier?" Sourcing parts in time for the eight-foot-tall robotic stations was not simple or cheap, said Kindred's Chief Operating Officer Marin Tchakarov. But the venture-backed startup was able to deploy 10 of them to Gap's warehouse near Nashville, Tennessee and 20 near Columbus, Ohio, with plans to finish the rollout to four of Gap's five U.S. facilities by July, months ahead of schedule, he said. Each machine handles work typically performed by four people, Kuntz said. Neither the deal to triple the number of robots, nor the expedited installations, have been previously reported. The news illustrates how the pandemic may speed up automation in the retail industry. Companies including Gap and Amazon.com Inc have long used such systems for a range of tasks, like moving items across warehouse floors. Various new technologies are capable of supplanting some cashier, box packing and item picking roles that employ millions of U.S. workers, and the pandemic is giving vendors a chance to make their case. The firm RightHand Robotics, for instance, has helped its customer Walmart Inc manage more online orders through greater use of its picking machines that had been deployed at several of the chain's facilities, a person familiar with the matter said. Walmart did not answer requests for comment. Vince Martinelli, RightHand's head of product and marketing, declined comment on the deployment but said as a general matter, "If you're going to have limited people in the building, the last thing you want them to do is a simple task that can be automated." Amazon is also relying more in the pandemic on automation for sorting items that warehouse workers have unpacked, sparing staff from having to walk by each other frequently as the more manual process once required, the company said. It is looking to roll out the technology more widely in its buildings. Kindred, RightHand and robotics firm Berkshire Grey told Reuters they are seeing a rise in inquiries from prospective retail clients, though travel restrictions and the need to limit human contact make new installations a challenge. The interest is no surprise: researchers from the Brookings Institution have said spurts of automation often follow economic shocks, a phenomenon they said could be replayed as retailers' sales plunge. "At these moments, employers shed less-skilled workers and replace them with technology and higher-skilled workers, which increases labor productivity as a recession tapers off," the think tank's March report said.
'THEY NEVER TAKE BREAKS'
Pressure to make distribution networks more efficient is likely to increase for retailers because of their financial woes during the pandemic. Gap last month said it faced a cash shortage, prompting it to borrow $2.25 billion. Three-quarters of its revenue its last fiscal year came from over 3,300 physical stores, most of which it has closed for weeks. While Gap has kept shops in China in business and has started the re-opening of 800 others this month, its e-commerce operation has been a lifeline for sales. Gap, based in San Francisco, did not disclose the financial terms of its deal with Kindred,or its base pay for staff. The company said it has around 6,500 warehouse employees, who are receiving higher wages because of the health crisis. It is limiting numbers in facilities because of U.S. health guidance. Kindred's "SORT" machines help Gap assemble multi-item purchases from customers. Goods from various online checkout carts fall down a chute and into a large basin that's part of one of the machines. A robotic arm above then picks each unit through suction and a physical grip, scans its bar code and places it in a bin in an adjacent cubby. Once all the items in a customer's order are in, a worker puts the bin on a conveyer for packing and delivery. Kindred, with headquarters in San Francisco, is one of several startups selling artificially intelligent robots that aim to grasp almost any item quickly and without breakage. Hundreds of thousands of U.S. retail workers perform this task, and Amazon Chief Executive Jeff Bezos has said the tech is years away from taking over that work. Still, retailers can use robots to pick narrower sets of products. Kindred's Tchakarov said, "Our robotics systems, they never get tired. They never take breaks." Kindred and Gap say they aim for the technology to complement workers, not replace them. At its warehouses, Gap is still scouting for new hires - and potentially new machines. "Should we do even more?" Kuntz asked. "How quickly can a Kindred build those machines?"
Source: Reuters
The drop in exports was the worst since the 2008 financial crisis, as export-dependent Japan struggles to juggle the health risks of Covid-19 with the dire need to keep the economy going. Recession-hit Japan’s exports plunged nearly 22% in April while imports fell 7%, the country’s worst drop in more than a decade as the coronavirus pandemic slammed global demand. The drop in exports was the worst since the 2008 financial crisis, as export-dependent Japan struggles to juggle the health risks of Covid-19 with the dire need to keep the economy going. For April, exports totaled 5.2 trillion yen ($48 billion), down from nearly 6.7 trillion yen the same month in 2019. Imports dropped to 6.1 trillion yen ($57 billion) from 6.6 trillion yen, the Finance Ministry reported Thursday. Like many other nations, Japan has asked people to work from home and maintain social distance to stop the virus from spreading. The government initiative was eased this month in regions with few or no new infections, though it remains in place for Tokyo and some other areas. By sector, exports of vehicles, machinery, chemicals and textiles fell most sharply. Imports edged down in iron and steel products, foods such as fish and cereal, and computer parts. Japan is in a technical recession after a contraction that began in the last quarter of last year deepened in the January-March quarter. Analysts say worse may be ahead, given the economic pain of the pandemic may be prolonged. Tourism and travel had dwindled. Restaurants are closed or resorting to takeouts, and those that stay open are seeing fewer customers. Even before, the world’s third-largest economy barely eked out growth over some periods. The recent trade conflict between China and the U.S. also hurt Japan.
Source: Hindustan Times
