The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 05 JUNE, 2020

 

NATIONAL

INTERNATIONAL

Centre Releases Rs.36,400 Crore as GST Compensation to States

Taking stock of the current situation due to COVID-19 where State Governments need to undertake expenditure while their resources are adversely hit, the Central Government has released the GST Compensation of Rs.36,400 crore to the States/UTs with Legislature for the period from December, 2019 to February, 2020 today. The GST Compensation of Rs.1,15,096 crore for period April-November, 2019 had already been released by the Central Government to the States/ UTs with Legislature.

Source: PIB

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Government mulling making large firms disclose MSME dues: Nitin Gadkari

MSMEs are considered the backbone of the Indian economy, contributing the bulk of Indian employment, manufacturing and exports. Many such firms have been hit hard by the COVID-19 crisis. The government is mulling to make it mandatory for large companies to disclose their dues to the micro, small and medium enterprises to ensure that timely payments get made, Union Minister Nitin Gadkari said on Thursday. The MSME minister conceded that despite various interventions, including promising micro, small and medium firms that payments by the central government and its undertakings will be made within 45 days of delivery of goods or service, a satisfactory solution to the problem has been elusive. MSMEs are considered the backbone of the Indian economy, contributing the bulk of Indian employment, manufacturing and exports. Many such firms have been hit hard by the COVID-19 crisis. "We are thinking of various ways on how micro, small and medium (enterprises) can get their money. One attempt is to make the bigger company declare whether they have paid MSME or not and make the same binding for them. There is thought going on," Gadkari said during an interaction with the small businesses focused industry lobby IMC. Without elaborating on the details of the scheme being considered, Gadkari said the payment issue is "very serious" and added that non-payment leads to working capital becoming scarce for such businesses. Gadkari also said the time is not correct to introduce any "strong legislation" on this front as everybody is suffering in the current crisis, but assured stakeholders of coming out with some solution. Another scheme being considered is to partner with banks, wherein a bank pays the supplier in a specified time and starts collecting interest from the company which has received the goods or service, he said. Gadkari also said the government is looking at a specially created "MSME Stock Exchange", which will have such small businesses listed on it. The government will provide equity of 15 per cent to those businesses which list on the platform. The government will exit the investment by selling off its stake in two-three years and put the funds into other businesses in need of money, he said, adding that work to make a policy change is already underway. Gadkari said the government's investment decision will be based on parameters like the firm's credit rating, Goods and Services Tax being paid by the business, its bank transactions, employment potential, exports and production. Leading bourses already have dedicated SME platforms, where companies raising up to Rs 25 crore are listed.

Source: Economic Times

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Closure of US retail units a huge blow to Indian textiles exports: GHCL MD

In the textile business, about a fourth of our open orders globally have been cancelled, with most of the cancellations coming from the US.  The Covid-19 outbreak and the consequent lockdown may have erased a fifth of annual demand in the chemicals industry, says RS Jalan, MD at GHCL, a Rs 3,000-crore conglomerate with interests in chemicals, textiles and consumer products. In an interview to Banikinkar Pattanayak, Jalan says the closure of some 150 retail units in the US, the single-largest textiles and garments market, has also dealt a blow to Indian exporters. A fourth of GHCL’s textiles orders have been cancelled and another 35% of its open orders have either been pushed back or gone through a volume reduction. Edited excerpts:

 The novel coronavirus pandemic has wrought havoc on the chemicals industries? How has it affected GHCL?

With the announcement of the lockdown, all consuming industries, particularly glass and detergents, closed down across the country. With consumers shutting down and local authorities enforcing the lockdown, GHCL had to shut down operations. However, as we were carrying sufficient inventory at the plant as well as our various depots, we could give assurance to our customers that in the event of a phased resumption of operations, we could meet their requirements. We restarted our plant at the end of April at reduced levels, as demand for detergents was stabilising. However, the glass plants were not starting up as downstream industries, including construction, auto and liquor, had not opened up. In effect, we, as an industry, are estimating a demand erosion of about 20% on an annualised basis.

In the textile segment too, the effect on GHCL has been pretty much the same as it has been for the entire industry. We decided to close down our factories right after the Janta Curfew. Our home textiles plant got permission to operate partially in early May and we are currently confecting coveralls or body suits for doctors. Our weaving and processing operations have partially commenced too and we will ramp up production based on the directive from the government. On the exports front, almost all of the retail units in the US, which is our single largest market, have come to a grinding halt, with about 150 retailers shutting down stores across the country. This undoubtedly will have a huge impact on the inventory build-up in the country and will push back purchase decisions by several months.

Have we witnessed any cancellation/renegotiation of already-forged export contracts? If yes, what is the extent of cancellation/renegotiation? We are normally exporting to Bangladesh, Sri Lanka and Southeast Asian nations. These countries did not have a lockdown till mid-April and so port operations continued. We are able to meet our export orders in March. Now most of these markets are closed, so the processes are delayed and we are witnessing demand erosion there also. While there have been no re-negotiations, there have been some cancellations. Also there are indications that the marketers have softened and buyers are looking at lower pricing. In the textile business, about a fourth of our open orders globally have been cancelled, with most of the cancellations coming from the US. Another 35% of our open orders have either been pushed back or have encountered a reduction in volume.

How has been the domestic demand for soda ash and sodium bicarbonate in the past one month? What are your revenue and profitability forecasts for 2020-21 vis-a-vis 2019-20? Demand was normal until the lockdown was announced. Thereafter there was a complete closure. We are witnessing some resumption in the detergent and pharma space. However, all other consuming industries — including glass and chemicals — remain closed. As of now, we are estimating a demand erosion of at least 20% and this will have a huge impact on our business. For the textiles business, we do not sell home textiles domestically, but based on various reports coming in, the domestic demand has clearly witnessed a serious setback.

What about the labourers, especially the migrant ones? Our workers are returning to the plant, in keeping with the permission granted to us to operate. However, there has been an exodus of migrant laborers to their hometowns, mainly in Uttar Pradesh and Bihar. We feel it will take a while for a bulk of these people to return to work. There is, hence, a strong likelihood of a labour shortage in the short term, once we fully resume functioning.

What about your liquidity issue and is the credit flow adequate? The situation at the moment is very volatile, creating uncertainty about the future outlook. However, at this point in time, we are not facing any liquidity issues and we are in the process of strengthening our cash flows with adequate measures to ensure adequate cash flows.

Source: Financial Express

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Finance Ministry puts a leash on expenses in times of Covid

The finance ministry has barred all ministries and departments from proposing new schemes in FY21, barring those announced under the Pradhan Mantri Garib Kalyan Yojana and the Atmanirbhar Bharat Abhiyan, to cope with spending needs due to the Covid-19 crisis amid an economic slump. Schemes already approved for this fiscal year have also been put on hold until the end of March 2021 as per the latest directive from Department of Expenditure in the finance ministry that ET has seen. “It may be appreciated that in the wake of Covid-19 pandemic, there is an unprecedented demand on public financial resources,” the directive said. “There’s a need to use resources prudently in accordance with emerging and changing priorities,” it said. The government’s tax revenues have fallen because of the lockdown imposed to curb the outbreak, putting further strain on the budget. This is the second such expenditure check due to the coronavirus outbreak after curbs on spending in the first quarter were announced on April 8. First-quarter spending by most ministries and departments was restricted to 15-20%. This was followed by a freeze on dearness allowance increases for government employees. The government has raised its borrowing target for the current year to Rs 12 lakh crore from Rs 7.8 lakh crore estimated in the budget. Additional spending on account of relief packages announced to counter the social and economic impact of the Covid-19 outbreak is pegged at 1% of GDP by experts. The latest move has come after the expenditure department continued to receive many new proposals for 'inprinciple' approval. The ministry has disallowed the release of additional funds through budgetary provisions by reappropriation to schemes that do not comply with the order. “This shows the fiscal constraint the government is facing,” said NR Bhanumurthy, professor at the National Institute of Public Finance and Policy. Revenues are going to fall sharply and, given the situation, this is one way of containing expenditure, Bhanumurthy said. “It means they are not going to spend on anything they passed in the FY21 budget announced in February,” he said. The fiscal deficit swelled to 4.6% of GDP in FY20, exceeding the 3.8% target. Experts project this year’s deficit will widen to 6-7% against a target of 3.5%. Economists have called for a re-evaluation of the budget numbers considering the drastic change in the situation between now and four months ago due to the coronavirus outbreak.

Source: Economic Times

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India, Australia upgrade ties, to renew talks on CECA

India and Australia can now share the benefits of scientific and medical research and development and open up a new phase of the Australia-India Strategic Research Fund to promote innovative solutions for responding to and treating Covid. India and Australia have decided to take their ties to the level of a comprehensive strategic partnership with nine key agreements, including deepening trade exchanges, diversifying energy cooperation to areas such as hydrogen and coal gasification and exploring the possibility of launching the RuPay Card in Australia. However, there has been no headway in the issue of market access in agriculture, with both sides sticking to a commitment to continue negotiations. The upgradation in the ties, announced at the first India-Australia Leaders’ Virtual Summit attended by Prime Minister Narendra Modi and Prime Minister of Australia Scott Morrison on Thursday, is significant as both the countries are looking at expanding trade and economic ties as well as collaboration on building a globally-coordinated response to Covid.  India and Australia can now share the benefits of scientific and medical research and development and open up a new phase of the Australia-India Strategic Research Fund to promote innovative solutions for responding to and treating Covid. On the trade and investment fronts, India and Australia have agreed to encourage expanded flows and re-engage on a bilateral comprehensive economic cooperation agreement, negotiations for which were launched in May 2011. Till date, they have had nine rounds of negotiations, with the last being in September 2015. Bilateral trade was at $20.92 in FY19, with Indian export of goods and services at $5.17 billion and import at $15.75 billion. Australia’s cumulative investment in India is about $10.74 billion, whereas India’s total investment in Australia is $10.45 billion. To diversify bilateral trade, India and Australia will explore how major industries of both the countries can integrate SME/MSMEs of the other country into their supply chains. To boost investment, both sides will work to resolve the issue of taxation of offshore income of Indian firms through the India-Australia Double Taxation Avoidance Agreement. Australian Pension Fund has already invested $1 billion in India’s National Investment and Infrastructure Fund. The countries will raise awareness among Australian investors and superannuation funds of opportunities in India’s infrastructure sector under the NIIF. While Australian businesses will be made aware of opportunities through Make in India and Smart Cities initiatives, Indian companies will seek investment opportunities in Australia. Advancements have also been made in the fields of agriculture and mining and processing of critical and strategic minerals.

Source: Financial Express

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India provides opportunity to nations looking to diversify supply chains from one country or region: Foreign Secretary

Foreign Secretary Harsh Vardhan Shringla without naming China, which has emerged as the manufacturing hub of the world, has suggested that countries ”will be looking for maximum diversification of their production and supply chains in the medium to long term, weaning away from extreme dependence on any one particular country or region.” He emphasised that this phenomenon provides India with an important opportunity to develop itself into a low-cost manufacturing hub which will position India as the preferred investment destination. Shringla further pointed out that over-reliance on a particular country or region for sourcing Indian imports, or as markets for Indian exports, requires a re-think. “In the changed times and in the event of disruptions in our supply chains, countries around the world will be looking for maximum diversification of their production and supply chains in the medium to long term, weaning away from extreme dependence on any one particular country or region,” Shringla suggested in a speech delivered to NASSCOM virtually on Wednesday. “This offers us with an important opportunity. Developing India into a low-cost manufacturing hub will help us position ourselves as the preferred investment destination,” he said and referred to India’s highly functioning democratic systems and high levels of transparency in governance which are important to build investor confidence. It is pertinent to point out here that China’s opaqueness has been often been questioned by governments and business groups from across the world. “Combined with the ease of doing business and easily accessible capital, India is a promising manufacturing destination. We have to bank on our strengths and plug in the gaps, wherever possible.” Pointing out that Indian industries and business chambers are an important part of economic diplomacy and global economic outreach, the Foreign Secretary noted, “Broadly, the Indian industry is expected to think of business and lifestyle models that were easily adaptable, ensuring that business and commerce can run smoothly, even in the times of a crisis.” “Companies and industries, across the world and even in India, are being pushed to ensure that their resilience capabilities are developed in order to face the repercussions of unexpected events and to maintain elasticity helping them to return to the original state of business quickly. This will require initiatives that restructure the internal working of the businesses and their wider networks.” Referring to anxiety among Indian citizens and industry about restrictions on H1B visa, Shringla said, “the Government of India has closely consulted all stakeholders and engaged with the US Government on this issue. Prime Minister had taken this up, along with the issue of the totalization agreement, during the visit of President Trump to India in February 2020.” “The onset of the COVID-19 pandemic in the U.S. and the attendant impact on the U.S. economy has led to a change in the situation. We need to adopt a realistic yet effective approach. Accordingly, our approach has been to work at the diplomatic level and deal with each specific issue one at a time. We were able to intervene early on in our lockdown with the US Government on the issue of temporary relief for H1B visa holders whose visas were expiring in this period, on a case-by-case basis.” “…High skilled Indian professionals working in the US through H1B and related non-immigrant visa regimes bridge the crucial skill gap and provide technological and competitive edge to the US companies. We have also highlighted that high-skilled Indian professionals are engaged in the fight against COVID across various fields including doctors, nurses, tech workers developing solutions for companies fighting the epidemic. We hope the review of non-immigration visa by the US Government will take into account the long term benefits of H1B visa for US competitiveness and not affect provision of essential services at this critical hour.” This month’s NFAP (National Foundation for American Policy) study has shown that the unemployment rate for workers employed in Computer Occupations was actually lower last month than it was in January 2020. Similarly, the CATO study’s results on H-1B employers paying the professionals about 20% higher than the average market wage have also been highlighted.

Source:  Economic Times

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Covid crisis: Uday Kotak says govt did well, now it’s India Inc’s turn to invest

The MSME guarantee scheme, the CII President, said was likely to find its mark. “The Rs three lakh crore is likely to work and the money should be disbursed sooner than October,” Kotak said during a media interaction. CII president and banker Uday Kotak on Thursday said that while the downgrade of the Indian economy by Moody’s was a ‘warning shot’, the government had done well to spend to mitigate the stress in the economy and now it was the private sector’s turn to invest. Kotak exhorted India Inc to cash in on the rally in the stock markets to raise capital and not be too fussed about the price. However, he cautioned it would not be right to assume that the economy is fine simply because the markets were strong. “We need changes in govt policy and we also need to change,” the CII chief said. Kotak asked industry to invest, adding that without investments we could not create enough sustainable jobs. He recommended that builders clear their inventory at lower prices and move on. Kotak also defended Reserve Bank of India’s stance on interest waivers for loans under moratorium saying it could not be an ‘unequal game’ where depositors were paid interest by the banks but borrowers did not pay interest. Kotak was responding to a question on the ongoing case in the Supreme Court on waiver of interest during the moratorium period. “The depositor’s trust must be protected,” Kotak said. The new CII chief observed that loan growth was sluggish because customers that banks were willing to lend to were shy of borrowing and banks were hesitant to lend to borrowers with weak balance sheets. Observing that this is the first time we have seen reverse migration, the new CII president said industry must make it attractive for labour to come back. He said the ‘short-term orientation’ of some parts of industry towards labour needed to change and that they needed to be provided with social security. Given there is broadband connectivity in rural India, Kotak said it was possible to set up businesses in the hinterland now that there was also trained manpower. The MSME guarantee scheme, the CII President, said was likely to find its mark. “The Rs three lakh crore is likely to work and the money should be disbursed sooner than October,” Kotak said during a media interaction. T V Narendran, MD and CEO, Tata Steel observed there was a need to reimagine India from the healthcare point of view with sustainable and qualified manpower. The timeline for the private investments would depend on how the pandemic played out over the next few months. He said normalcy would return by the fourth quarter of current financial year, if the lockdowns were not extended. “Certainly in India we expect that by fourth quarter, things should start getting back to normal, he said. “Next year we may not be able to come back to pre-Covid levels, but we will certainly be back to positive growth and that should create positive sentiment,” he further said. Narendran also said that government is already spending on infrastructure which is a demand multiplier. Sanjiv Bajaj, chairman and managing director (MD), Bajaj Finserv, vice-president CII said that it was important to kick-start the economy in next few months.”We have seen that, if money is put too early in the hands of people where they are still not comfortable with their own safety and security, then that money gets saved rather than spent,” he said.

Source: Financial Express

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Covid-19 pandemic eats into consumer confidence, shows RBI survey

Consumer confidence collapsed in May, and the expectation for the next one year is that Indian households will remain pessimistic, the survey by the Reserve Bank of India (RBI) shows. “Consumer perception on the general economic situation, employment scenario and household income plunged deeper into contraction zone …; while expectation on general economic situation and employment scenario for the year ahead were also pessimistic,” the RBI Consumer Confidence Survey, released on the central bank’s website, showed. The RBI has not yet released the Industrial Outlook Survey, which had showed “stark pessimism” among manufacturing companies, which were expecting a deterioration in sentiment across sectors for the just concluded fourth quarter of the previous fiscal year, and the current first quarter of 2020-21. The survey was conducted in 13 major cities during May 5-17 through interviews on the phone because of the nationwide lockdown. A total of 5,300 households participated in it. The RBI said the current situation index (CSI) had touched a historic low and the future expectations index (FEI) for the year ahead also recorded a sharp fall, “entering the zone of pessimism”. Consumer spending remained intact, mostly due to relative inelasticity in essential spending. “Consumers, however, reported sharp cuts in discretionary spending and also do not expect much improvement in the coming year,” the RBI survey said. Households also expect a sharp rise in prices in the next three months as well as the next year to come, notwithstanding the RBI’s own expectation that inflation would taper off in the second half, which it used as a justification to cut rates on May 22. The Households’ Inflation Expectations Survey, conducted in 18 major cities, and based on responses from 5,761 urban households, shows that people expect a sharp rise in inflation. “Households’ median inflation perception and expectations increased sharply in May 2020 as compared with the March 2020 round of the survey,” the RBI said, adding three months and one year ahead median inflation expectations rose by 190 and 120 basis points, respectively, over the previous round. The households are now expecting increasing price pressure on food products; more households expect general prices and inflation to rise over three months as compared to previous round. However, the households expect prices of all product groups, especially the cost of housing, to ease over a year ahead. Real private final consumption expenditure (PFCE) is expected to decline by 0.5 per cent during 2020-21 but likely to record 6.9 per cent growth during 2021-22. Real gross fixed capital formation (GFCF) is likely to register negative growth of 6.4 per cent in 2020-21 but likely to grow by 5.6 per cent in 2021-22. “Forecasters have assigned the highest probability (86 per cent) to real GDP growth lying below 2.0 per cent in 2020-21,” the RBI said, adding, for 2021-22, highest probability (19 per cent) has been assigned to GDP growth lying between 6.0 and 6.4 per cent.

Professional forecasters

Even as the RBI did not give its own projections on inflation and growth, even as it said the economy will contract in the current fiscal year, a group of 22 professional forecasters indicated the real gross domestic product (GDP) growth rate could be a negative 1.5 per cent in 2020-21, but could rise to a positive 7.2 per cent in 2021-22. Real gross value added (GVA) growth could fall to a negative 1.7 per cent in 2020-21 and rise to 6.8 per cent in 2021-22.

Source:  Business Standard

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India-Bangladesh trade via road resumes at Mahadipur; plan may be replicated at other land ports in WB

Exports to Bangladesh, especially via road, have resumed from the Mahadipur land port, in Malda district of West Bengal. This followed a meeting of exporters and transport operators in the region with local authorities, urging them to resume the trade via road……..

Source:  The Hindu Business Line

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Implementation of paperless process for grant of Industrial Entrepreneur Memorandum(IEM)

Applications for IEM/IL under I(D&R) Act, 1951 are currently accepted through the IEM portal at https://services.dipp.gov.in. Through this portal, applications for acknowledgement of IEM – Part A (for establishment of business) and IEM – Part B (upon commencement of commercial production) are filed online by entrepreneurs of prescribed industrial undertakings.TheAcknowledgement Certificate of the IEM is issued physically on paper and scanned copy is uploaded on the portal. Applications for any Amendments to the IEMs are, however,filed manually and Acknowledgment Certificates are issued physically on paper with scanned copy uploaded on the portal. The Acknowledgment Certificates are thereafter emailed to the applicants. With a view to enhance transparency and ease of doing business, the Department for Promotion of Industry and Internal trade (DPIIT) has enhanced the IEM portal. The enhanced portal offers online filing of applications for IEM – Part A, Part B and also for Amendments.All applications shall be processed in paperless mode and Acknowledgment Certificates with QR Code shall be issued electronically. The applicants shall also be notified vide email and SMS instantaneously upon approval. Concerned state government shall also be notified by email simultaneously. Henceforth, no application for IEM – Part A, IEM – Part B and Amendment to IEM already issued shall be filed physically. No physical certificates shall be issued. The electronic certificates issued may be verified online with the assigned QR code.

Source: PIB

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Gaurang Shah launches estore for handwoven weaves

Textiles and Indian heritage fashion innovator Gaurang Shah has launched his estore. The e-commerce initiative is part of the award-winning designer's strategy to fuel his brand growth and tap e-consumers yearning his signature handwoven weaves from places where he doesn’t have an offline store presence. The estore will also support weaver sustenance. The online store shop.gaurang.co, which also backs a community of his 800+ workers and several hundreds of artisans, will feature a range of classic, versatile, and statement pieces—all handwoven which until today was only available for purchase in the brand's popular 6 Indian and 2 international brick-and-mortar stores. “This initiative expands the brand-consumer outreach and aims to provide real-time access to own latest hand-woven arrivals. This also serves our greater purpose to support the ecosystem and sustenance of weavers using the power of e-commerce,” said Shah in a press release. “I wanted our online store to amplify the voice of India’s jamdani craftsmanship plus fortify our efforts to further encourage, promote and preserve our weaving heritage. Online shopping will also enable an increase in consumer desire for Indian fashion, build its inventive appeal, and the power of wearing heritage clothing as self-expression," added Shah who is known for his exquisite handcrafted jamdani masterpieces and signature sarees. Shoppers will get access to the finest, inventive fabric fusions, motifs, colour, and textures in different sizes like the in-store range created in the looms of Shah’s 800+ growing weaver community. The designer collection line infuses yarns like khadi, muga silk, tussar silk, organza, and silk. Separately, to promote new talents, Shah has now launched an in-store pop-up initiative for upcoming designers to promote their work through a series of pop-up shows. The in-store pop-up show will debut its first event in Hyderabad on June 10 for 3 days wherein he will showcase 100 exclusive works of four textile designers: Ujjawal Dubey, Anjul Bhandari, Mayyur R Girotra and Sakshi Mehra.

Source: Fibre2Fashion

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India appoints Brajendra Navnit as Ambassador to WTO

India has appointed Brajendra Navnit, a 1999 IAS officer of Tamil Nadu cadre as its Ambassador to the World Trade Organization (WTO). The Appointments Committee of the Cabinet approved his appointment for a period of three years from the date of assumption of charge. Navnit has succeeded JS Deepak, a 1982 batch IAS officer of Uttar Pradesh cadre, whose tenure as India’s Ambassador to the global trade watchdog ended on May 31. His appointment comes at a time when the world is grappling with the Covid-19 pandemic and global trade is forecast to plummet to historic lows. WTO has projected the decline in world trade to exceed the trade slump brought by the global financial crisis of 2008-09 with merchandise trade expected to decline 13-32% in 2020 due to the Covid-19 pandemic. WTO director general Roberto Azevêdo has decided to step down effective August 31, earlier than planned. Besides, the multilateral trade watchdog’s key function of dispute settlement has been crippled with the US having blocked the appointment of judges. The government also appointed Rajeev Topno as senior advisor to the ED, World Bank, Washington DC, USA. Topno is a 1996 batch IAS officer of Gujarat cadre.

Source:  Economic Times

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Double whammy for service companies: Required to pay GST on defaults, bad debts

MUMBAI: As customer defaults mount due to the Covid-19 crisis, Indian services companies have been dealt a twin blow: Of unpaid bills, and Goods and Services Tax (GST) liabilities on those incidents on non-payment.  Under the current GST framework, there is no provision to allow adjustments of GST paid on supplies for which recoveries are not made. Companies have to pay GST when they raise the invoice or generate the bill, which often is at least a month or two before the customer pays the money. As companies struggle with cash flows, they have to pay GST out of their own pocket even when the customer has defaulted. So, companies are seeking relief.  “The absence of a provision for allowing adjustment of GST paid on supplies for which recoveries are not made (bad debts) is a double whammy for businesses,” said Abhishek Jain, Tax Partner, EY. “It leads to a loss on account of consideration for supply not being received, coupled with an outflow of GST from their own pocket. While this has been a concern for businesses historically, in the current economically depressed times, the government should consider relief on this aspect.”  Customer defaults have been on the rise due to the Covid-induced job losses, salary cuts, business closures, and a general breakdown in corporate payment cycles.  “Companies have to pay GST based on point of taxation and the tax payout precedes the receipt of consideration for the supply. Often, leads to a situation when the supplier ends up paying the tax for which consideration is either not received or received after significant delay, thereby causing great financial and working capital issues for several service sectors and MSMEs," said Abhishek A Rastogi, partner at Khaitan & Co.  Once a services company, such as a telecom or credit card company, raises the invoice, it has to pay GST to the government.  For instance, a telecom company generates a bill of Rs 1,000 to a consumer in the month of February, and levies Rs 180 as GST on that. The tax is paid in March by the company. However, if the consumer refuses to pay or delays the payment, the company is stuck with the outgo of Rs 180 in taxes and Rs 1,000 in unrealized revenue.

Source :  Economic Times

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Global Textile Raw Material Price 04-06-2020

Item

Price

Unit

Fluctuation

Date

PSF

810.33

USD/Ton

-0.35%

04-06-2020

VSF

1279.10

USD/Ton

0%

04-06-2020

ASF

1598.87

USD/Ton

0%

04-06-2020

Polyester    POY

766.05

USD/Ton

0.55%

04-06-2020

Nylon    FDY

1967.84

USD/Ton

0%

04-06-2020

40D    Spandex

3977.85

USD/Ton

0%

04-06-2020

Nylon    POY

5172.61

USD/Ton

0%

04-06-2020

Acrylic    Top 3D

997.98

USD/Ton

0%

04-06-2020

Polyester    FDY

1848.36

USD/Ton

0%

04-06-2020

Nylon    DTY

1771.06

USD/Ton

0%

04-06-2020

Viscose    Long Filament

969.86

USD/Ton

0%

04-06-2020

Polyester    DTY

2277.07

USD/Ton

0%

04-06-2020

30S    Spun Rayon Yarn

1728.89

USD/Ton

0%

04-06-2020

32S    Polyester Yarn

1391.54

USD/Ton

0%

04-06-2020

45S    T/C Yarn

2164.62

USD/Ton

0%

04-06-2020

40S    Rayon Yarn

1574.27

USD/Ton

0%

04-06-2020

T/R    Yarn 65/35 32S

2010.01

USD/Ton

0%

04-06-2020

45S    Polyester Yarn

1897.56

USD/Ton

0%

04-06-2020

T/C    Yarn 65/35 32S

1658.61

USD/Ton

0%

04-06-2020

10S    Denim Fabric

1.12

USD/Meter

0%

04-06-2020

32S    Twill Fabric

0.64

USD/Meter

0%

04-06-2020

40S    Combed Poplin

0.94

USD/Meter

0%

04-06-2020

30S    Rayon Fabric

0.48

USD/Meter

0%

04-06-2020

45S    T/C Fabric

0.64

USD/Meter

0%

04-06-2020

 

Source: Global Textiles

 

Note: The above prices are Chinese Price (1 CNY = 0.14056 USD dtd. 04/06/2020). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same

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An unbearable action,’ Bangladesh growth story may end as textile industry loses orders from European companies

Encouraged by above 8 percent growth, Bangladeshi foreign minister made some callous and unnecessary statements on the matter of the Citizenship Amendment Act in India and said that Bangladeshi people do not need to cross the border to get in India territory, as they have better quality of life Bangladesh. But, tables turned at odds with Bangladesh, as Coronavirus lockdown has completely devastated its textile industry, and export orders have been cancelled by European companies which were major customers. As per a report by Nikkei Asian Review, Japan’s premier financial newspaper, U.K.’s Edinburgh Woolen Mills Group, whose key brands include Peacocks, Jaeger, Bonmarche, and Austin Reed, has cancelled orders worth more than 30 million from nearly three dozen Bangladeshi factories. Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the body which represents the country’s textile factories, has threatened to blacklist Edinburg group, in a letter written to company owner- billionaire Philip Day. As the orders from European countries like the United Kingdom, Germany, Italy, Spain- the major importers of Bangladeshi garments, get cancelled, more than 1,000 factories have been shut down and 3 million workers are out job, with their families facing poverty. The Bangladesh government has adopted a two-pronged strategy to save the textile industry, with the first being renegotiation of trade deals and second being petitioning with international rights groups like International Labor Organization, Human Rights Watch, and the Worker Rights Consortium, and European Union trade committee. “Some deals are being renegotiated, while other buyers are promising to compensate” those that have lost business, Commerce Minister of Bangladesh, Munshi said. “We’re trying to resolve this issue with buyers’ representatives and the buyers themselves.” The overdependence on a single sector has cost heavily to the economy of Bangladesh, as with the collapse of the textile industry, millions of people in the densely populated country are facing famine. Orders worth more than 3 billion dollars have been cancelled and the country is facing foreign exchange shortage. Jafar Uddin, the commerce secretary, has written to Bernd Lange, chairman of the European Parliament’s international trade committee, asking to restore order from European brands. “Such unbearable and uncompassionate action by some European apparel businesses does not go with the idea of ethical and value-based trade,” Uddin said. After Uddin’s request, Swedish and Dutch governments have ensured that the companies from their country would restore orders, but these countries account for a very small part of total imports. The economies of major importer countries like UK, Germany, Italy, and Spain have collapsed. The demand for garments from Bangladesh has collapsed and the companies could not restore the orders even if they are willing to, and therefore there are no chances of revival of industry in the near term. Bangladesh has a world-renowned textile industry footprint. The current pandemic is threatening the very existence of this industry, and if the situation globally does not improve soon, the industry might never be able to resuscitate itself.

Source:  TFI Post

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Byborre raises €3.2 million for on-demand textile platform

Byborre has raised € 3.2 million in a series A funding round led by Shift Invest (Vandebron, The Renewal Workshop, Protix), along with existing investor the Amsterdam Climate & Energy Fund (Vandebron, Aectual) and existing angel investors. Byborre is an Amsterdam based textile studio working on aesthetics, functionality, technology, and material research. The funding will be used to accelerate Byborre’s on-demand textile platform (Textile Development Kit, or TDK) and expand its global on-demand production network. Industry leading suppliers like Gore-Tex, Woolmark, Santoni, and Mayer & Cie., have already partnered with Byborre, while brands using the Byborre platform include Adidas, BMW, Rapha, Descente, Kapital, Natuzzi, Bedwin & The Heartbreakers, Mini, and many more, according to a press release by the company. The textile industry is the second most polluting industry in the world, generating large landfills, responsible for 10 per cent of the global CO2 emission and for 20 per cent of the water waste. The industry is known for inefficient production processes, high energy demand and many unnecessary transports (goods and people). Byborre challenges this status quo and made it its mission to create conscious creators and allow them to be ‘part of something bigger’. “We are in contact with textiles almost every minute of the day from the moment we are born, and therefor it's fascinating that this very traditional industry has not been disrupted and revolutionised for the last decades. We are thrilled to work with those who share our desire to question the status quo, hence why we’re reconsidering what it in fact means to collaborate with some of the world’s most respected creatives and brands, providing the tools to help them push their textiles into new forms and new meaning,” Borre Akkersdijk, co-founder and creative director at Byborre said. Byborre is committed to improve the entire textile creation cycle and production processes worldwide, inviting others to join them as they upturn the market and rethink tired habits and norms. Their methods have already spread far and wide beyond their studio, reshaping the way numerous brands think about the potential of responsible textile making and radically shifting what textiles mean for their collections,” Guus Verhees, managing partner at Shift Invest said.

Source: Fibre2Fashion

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Ireland named most likely EU country to recycle clothes

UK-based energy comparison company SaveOnEnergy has found that one positive aspect of the coronavirus pandemic is a consumer change in attitude towards old textiles and recycling clothes. In January of this year, the European countries contributing the most to textile waste were revealed, with Italy taking the lead, followed by Portugal and Austria. SaveOnEnergy is now reporting a surge of environmental consciousness, as people turn to recycling centers to dispose of unwanted items. The British cleaning service End of Tenancy Cleaning has recently relayed a 500 percent increase in Google searches related to recycling, including the question “when will recycling centers reopen”. Research commissioned by the energy company found that, in the last 30 days, 12,670 people in Ireland have been engaging in Google searches related to “clothes recycling”, making it the most recycling-minded country in the EU. Germany and the Netherlands also showed high results, with 9,390 and 6,840 recycling searches, respectively. The other side of the spectrum includes European countries who searched information on recycling clothes the least. The research showed that residents in Luxembourg, Slovenia and Slovakia did not seem to prioritize recycling, with only 330, 300 and 270 Google searches. SaveOnEnergy also found that shoes and jeans are the items that are recycled most frequently within the European countries included in the research. More specifically, shoes are the most recycled product in 70 percent of the 10 countries, including Ireland, the Netherlands and Spain, while jeans are most commonly recycled in 30 percent of the 10 countries, including Germany, France and Italy.

Source: Fashion United

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Fashion industry must move towards chemical circularity, says Laudes Foundation

The fashion industry needs to increase the recycling and reuse of chemicals used in textiles and move away from "single-use linear models", according to the Laudes Foundation. In a 25 May report, the Laudes Foundation – a philanthropic organisation headed by the Brenninkmeijer family enterprise, owners of the fashion business C&A – challenges whether current, single-use models for chemicals used in the conversion of fibres to finished textile products should be allowed to continue. It provides a "preliminary roadmap" for the industry to move towards chemical circularity. The report highlights the potential of chemical leasing – an approach where users only pay for the services rendered by the chemicals, for example, the volume of water treated, the number of product parts painted, or the lengths of pipes cleaned – and not for the volume of chemicals consumed. According to the United Nations Industrial Development Organization (Unido), chemical leasing aims to increase the efficient use of chemicals while reducing their risks and protecting human health. "The way in which chemicals are currently used and disposed of makes textiles the second most polluting industry in the world," the report says. Chemicals are used in yarn spinning, weaving, knitting and wet processing, such as dyeing, printing, finishing, laundry – and are typically used once. After use in a particular process, they are either passed along the supply chain or "removed and dumped into the environment," the report says.

The report recommends the industry works towards:

  • reducing net chemical consumption, in other words, the total amount of chemicals used; and
  • reducing chemical discharge to the environment.

To achieve this, there are two "complementary approaches" that can be applied:

  • using lower amounts of chemicals by reducing the amounts deliberately applied in processes; and
  • increasing the amounts of chemicals that are reused and recycled by applying nonlinear use models.

"Chemical leasing has been proposed as a potential solution to the problems caused by current chemical use models in the textile industry," the report says. However, the report adds that this approach is "part of the solution to this very complex business and not the solution".The report proposes the creation of a multi-stakeholder advisory group/board to oversee a policy and roadmap. "This could be the C&A Foundation (Laudes Foundation) itself, a multi-stakeholder member group such as the Zero Discharge of Hazardous Chemicals (ZDHC) foundation or Sustainable Apparel Coalition, an independent scheme such as Oekotex or Bluesign, or a certifying body such as the Textile Exchange," it says.

Source:  Chemical Watch

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New electronic fibers can be embedded in textiles as sensors

EPFL researchers from the Laboratory of Photonic Materials and Fiber Devices have developed a new technology that can be used to detect the movement of the body. The researchers say that the breakthrough could result in clothing or hospital bed sheets that can monitor breathing and other vital movements. The electronic fibers could also be used to allow robots to interact more safely and intuitively with humans. Researchers say that the soft transmission lines they’ve developed have opened the door to these possibilities. The sensors can track multiple kinds of fabric to deformation, such as stretch, pressure, and torque, all at the same time. The team says it’s very difficult for sensors to measure several stimulations simultaneously. The team incorporated concepts from reflectometry to create a soft fiber-shaped sensor that opens doors for smart textiles. The technology works similarly to radar according to the researchers but sends out electrical pulses instead of electromagnetic waves. The fibers operate like transmission lines, known from high-frequency communication. The system measures the time between when a signal is sent out and when it’s received. That difference can determine the exact location, type, and intensity of deformation. Researchers say that this particular kind of detection technology has never been used in structures combining extended mechanical flexibility and high electronic performance before. Those features are crucial to measuring the deformations. Creating the fibers is complicated and involves an optical fiber fabrication process applied to unusual materials, such as elastomers or liquid metals that serve as conductors. The team says the trick was to create transmission lines made entirely of soft materials using a simple method with the ability to be scaled up. The next step will be to make the technology more portable by reducing the footprint of the peripheral electronics.

Source: Slash Gear

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US Fed likely to keep near zero rates for a few years to boost economy

The US Federal Reserve is likely to provide more guidance at its policy meeting next week to signal intentions to keep interest rates near zero for a few years and help the economy get through the Covid-19 pandemic, according to economists. "One deliverable that we should be able to count on at the June meeting is the return of the Summary of Economic Projections (SEP)," Jay H. Bryson, acting chief economist at Wells Fargo Securities, said in a report. "We suspect that may open the door to implicit forward guidance, a tool heralded by policymakers before the current crisis as a primary mechanism for influencing policy," he said.  The Fed usually releases the quarterly SEP four times each year, which lays out Fed officials' expectations about growth, inflation, unemployment and short-term interest rates, reported China's Xinhua news agency. But the central bank didn't release the SEP in March as the evolving Covid-19 pandemic made it impossible for Fed officials to offer reliable economic forecasts. The upcoming Fed meeting on June 9-10 likely will include the first update to the SEP since December last year, according to Bryson. "Rather than provide explicit forward guidance, committee members could implicitly signal that the fed funds rate is unlikely to increase through at least 2022 through changes in the dot plot," Bryson said, referring to Fed officials' individual forecasts of the federal funds rate."While the market reaction from such a move would likely be relatively small given that this appears to be the market's base case scenario, it would at least reinforce the idea," he said. Roberto Perli, a former Fed staffer and now head of global policy research at Cornerstone Macro, also expected the SEP to show that Fed officials would not want to raise rates before 2022. Ryan Sweet, an economist with Moody's Analytics, believed that the central bank is leaning toward an outcome-based forward guidance, similar but not identical to that used in the last recession. The Fed cut interest rates to near zero at two unscheduled meetings in March and began purchasing massive quantities of US treasuries and agency mortgage-backed securities to repair financial markets. It also unveiled new lending programs to provide up to $2.3 trillion to support the economy in response to the pandemic. The Commerce Department reported last week that economic activity in the first quarter contracted at an annual rate of 5 per cent in a second estimate, 0.2 percentage point lower than the advance estimate. The fallout from the Covid-19 pandemic will shrink the size of the US economy by $7.9 trillion over the next decade, new projections released by the Congressional Budget Office on Monday revealed.

Source: Business Standard

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