The sharp decline has impacted entire value chain of cotton farmers, ginners, spilling mills, fabric makers and textile and apparel producers India's textiles and apparel exports declined by a staggering 73 per cent in April and May, due to closure of factories and problems in shipment of goods following the Covid-19- induced nationwide lockdown. Reduced demand from importing countries due to similar lockdown there exacerbated the troubles of the sector. Data compiled by the Union Ministry of Commerce and Industry showed India's total export of textiles and apparel at a mere $1.63 billion for April-May, compared to $6.07 billion in the corresponding period last year. While textiles exports slumped by 68 per cent to $991 million for the first two months of the current financial year, apparel shipment nosedived by 78 per cent to $643 million from $3,128 million and $2,938 million in the corresponding months last year. The sharp decline in India's textiles and apparel exports has impacted the entire value chain, including cotton farmers, ginners, spilling mills, fabric manufacturers along with textile and apparel producers. A number of them have incurred unrecoverable losses due to the slow offtake and high fixed cost of manufacturing of which a majority of mills would not be able to survive. "The 70-day nationwide lockdown, which started on March 25, brought all manufacturing units to a standstill. Transportation, shipment and cargo clearing activities also stopped during the lockdown period, resulting in cancellation of overseas orders. Hence, India's export of textiles and apparel was impacted severely," said S Rajgopal, Executive Director, Cotton Textile Export Promotion Council (Texprocil). India's export of cotton textiles and apparel decline by a mere 16.5 per cent to touch $9.42 billion for the period between April 2019 and February 2020 compared to $11.26 billion in the corresponding period last year. "Falling cotton textiles exports is a deep concern for Indian textile manufacturers. Consistent decline in exports has hit India's spinning mills hard," said K V Srinivasan, chairman, Texprocil. Srinivasan said India's shipment of textiles and apparel was impacted between March and May on account of the outbreak of Covid-19, leading to forced lockdowns in China and other top markets in the world. Buyers in the US and European Union, two leading export destinations, are cancelling orders and are increasingly invoking 'force majeure' clauses in their contracs to halt payments. Buyers of cotton yarn are insisting on a price cut of 15-20 per cent, adding to the problems of the cotton spinning sector. "Retail markets aren't open. Factories remained closed for two months, resulting in a complete washout of business in the April-June quarter. Units have started now but their operating capacity is very low. In such a scenario, they will first offload their inventory, focus on collection and then place fresh orders. Amid uncertainty, consumers are going to focus on discretionary purchase to save money for essentials and defer others. Factories are also facing labour shortage amid demand slowdown from both domestic and overseas markets," said R K Dalmia, President, Century Textile and Industries Ltd. India's exports of cotton yarn plunged by 65 per cent to $613 million for the period between April and May 2020 as against $1,729 million in the same period last year.
Source: Business Standard
India received USD 51 billion in foreign investment in 2019 and was the world's 9th largest recipient of foreign direct investments (FDI) in 2019, according to a report by the UN's trade body. The UN Conference on Trade and Development (UNCTAD) said in a report on Monday that a lower but positive economic growth in India in the postCOVID19 pandemic period and India's large market will continue to attract market seeking investments to the country. The World Investment Report 2020 by the UNCTAD said that India was the 9th largest recipient of FDI in 2019, with 51 billion dollars of inflows during the year, an increase from the 42 billion dollars of FDI received in 2018, when India ranked 12 among the top 20 host economies in the world. In the "developing Asia" region, India was among the top five host economies for FDI. The report said that global FDI flows are forecast to decrease by up to 40 per cent in 2020, from their 2019 value of USD 1.54 trillion. This would be for the first time since 2005 that global FDI falls below the USD 1 trillion mark. Foreign direct investment to developing economies in Asia, hit hard by the economic downturn caused by the coronavirus pandemic, are projected to decline by up to 45 per cent in 2020. In South Asia, FDI is also expected to contract sharply in 2020. "In India, the biggest FDI host in the subregion, with more than 70 per cent of inward stock, the number of greenfield investment announcements declined by four per cent in the first quarter, and Merger & Acquisitions contracted by 58. "However, the country's economy could prove the most resilient in the region. FDI to India has been on a longterm growth trend. Positive, albeit lower, economic growth in the post-pandemic period and India's large market will continue to attract market-seeking investments to the country," the report said. It added that the magnitude of the logistical challenges during both the lockdown and the recovery remain a big downside risk for FDI in the medium term for India. "The digital economy and real estate and property development, two industries that attracted growing FDI before the pandemic, could evolve in different directions," the report said adding that the digital economy will likely see continued investments, real estate and property development will face "significant pressures" from slowing demand and financing constraints. "India's most sought-after industries, which include professional services and the digital economy, could see a faster rebound as global venture capital firms and technology companies continue to show interest in India's market through acquisitions," the report said. The report noted that investors concluded deals worth over $650 million in the first quarter of 2020, mostly in the digital sector in India. Large deals in energy were also concluded, such as the acquisition by Total (France) of Adani Gas (India), valued at $800 million. FDI flows to South Asia increased by 10 per cent to USD 57 billion in 2019, the growth driven largely by a rise in investment in India, which further relaxed investment barriers in mid-2019 (including in retail, insurance and downstream coal processing). FDI to India, the largest South Asian recipient, increased 20 per cent to USD 51 billion, sustaining the country's upward FDI trend, the report said. Most of the investments were in the information and communication technology and the construction industry. ICT investments into India have evolved from information technology services for global companies to the rapidly growing local digital ecosystem, with many local and regional digital champions, particularly in e-commerce (such as Flipkart and Zomato), attracting international investment, the report said. A number of mega deals also contributed to M&A activity. These included investments in internet companies, which amounted to USD 2.7 billion,14 as well as the USD 7 billion acquisition of Essar Steel (India) by a Japanese-Indian joint venture. Outflows from South Asia grew 6 per cent, driven by investment from India. Yet they remained small, representing only one per cent of global outflows. Companies in India are the subregion's largest investors, with more than 90 per cent of outflows in 2019. Investments from India are expected to decline in 2020, with the largest MNEs revising their earnings down by 25 per cent in early 2020 due to the impact of the pandemic, it added. The report said that flows to developing Asia will be severely affected due to their vulnerability to supply chain disruptions, the weight of global value chains-intensive FDI in the region and global pressures to diversify production locations. In 2019, FDI flows to the region declined by 5 per cent, to USD 474 billion, despite gains in South- East Asia, China and India. The report stressed that global FDI flows will be under severe pressure this year as a result of the COVID-19 pandemic, dropping well below the trough reached during the global financial crisis and undoing the already lackluster growth in international investment over the past decade. Flows to developing countries will be hit especially hard, as exportoriented and commodity-linked investments are among the most seriously affected. "The outlook is highly uncertain. Prospects depend on the duration of the health crisis and on the effectiveness of policies mitigating the pandemic's economic effects," said UNCTAD Secretary-General Mukhisa Kituyi.
Source: Economic Times
Prime Minister Shri Narendra Modi today interacted with Chief Ministers via video conferencing to discuss the situation emerging post Unlock 1.0 and plan ahead for tackling the COVID-19 pandemic. This was the sixth such interaction of the Prime Minister with the Chief Ministers, the earlier ones had been held on 20th March, 2nd April, 11th April, 27th April, and 11th May.
Timely decisions to combat the virus
Prime Minister observed that timely decisions taken to combat the pandemic have been effective in containing its spread in the country. When we look back, people will remember that we have presented an example for cooperative federalism to the world, he said. We have tried to save each and every life, the Prime Minister said. He underlined that all modes of transport are now open, lakhs of migrant labourers have travelled back to their villages, thousands of Indians have returned from abroad, and even though India has a huge population, coronavirus has not assumed as life threatening a form as in the rest of the world. He said that health expert’s world over are praising the discipline shown by Indians, adding that the recovery rate in the country is now over 50%. He also noted that India is amongst the nations with the least deaths due to coronavirus. Prime Minister mentioned that a big lesson is that if we remain disciplined and follow all rules, coronavirus will cause least damage. He emphasized on the importance of usage of mask/ face cover, without which no one should venture out. This is not just important for the person concerned but also for his family and community. He also talked about following the mantra of ‘do gaz doori’, washing hands with soap and using sanitizer. He forewarned that any laxity in discipline will weaken our fight against the virus.
Green Shoots in Economy
Prime Minister noted that with the efforts of the past few week, green shoots in the economy are visible, including rise in power consumption which was earlier falling, fertilizer sale in May this year seeing a significant increase, a healthy increase in Kharif sowing in comparison to last year, production of two wheelers increasing, digital payment in retail reaching pre lockdown level, increase in toll collection in May and bouncing back of exports. These signals are encouraging us to forge ahead.
Benefits of Atmanirbhar Bharat Abhiyan
Prime Minister said there is significant importance of agriculture, horticulture, fisheries and MSMEs in the participating States, provisions for which have been made under Atmanirbhar Bharat Abhiyaan. Talking about the provisions to provide timely credit to MSMEs, he said that if quick disbursal of credit to industries is ensured through Bankers Committees, these industries will be able to start working quickly while also ensuring provision of employment opportunities. Smaller factories require guidance and handholding, he said. He mentioned the importance of working together on value chains to give fillip to trade and industry. Specific Economic Activity Points in the states should work 24 hours a day and loading and unloading should be quickened to give further boost to economic activity. Prime Minister mentioned the benefits set to accrue to farmers through reforms in the agriculture sector, including new avenues to sell produce, increase in income which in turn would increase demand in the economy. New opportunities for North-East and tribal regions in the areas of farming and horticulture are set to be created, with opening up of new markets for organic products, bamboo products and other tribal produce. The States will also benefit from a cluster based approach for local products, he said, adding that such products should be identified at each block and district level for better processing and more effective marketing. He emphasized on the need of working together to ensure that the announcements made under Atmanirbhar Bharat Abhiyaan fructify at the earliest.
Chief Ministers speak
Today’s interaction was the first part of the two day interaction, and witnessed participation of States and UTs including Punjab, Assam, Kerala, Uttarakhand, Jharkhand, Chhattisgarh, Tripura, Himachal Pradesh, Chandigarh, Goa, Manipur, Nagaland, Ladakh, Puducherry, Arunachal Pradesh, Meghalaya, Mizoram, Andaman & Nicobar Islands, Dadra Nagar Haveli & Daman Diu, Sikkim and Lakshadweep. The Chief Ministers thanked the Prime Minister for his leadership during such a challenging time and uniting the country to fight for the collective fight against the virus. They provided feedback about existing health infrastructure in their states and efforts for augmentation to tackle the impact of the virus. They mentioned about the awareness campaigns being run by them, help being provided to workers who have returned home, usage of Aarogya Setu app, and kickstarting of economic activities in the states.
Focus on both life and livelihood
Prime Minister thanked the Chief Ministers for their views. He underscored the importance of being focussed on both life and livelihood. He said that on the one hand, health infrastructure will need to be boosted with emphasis on testing and tracing, economic activity will also need to be increased. The decisions need to be taken keeping in view both current needs and future requirements. He asked the leaders to continuously keep driving in the fact that danger of the virus is not over yet, and the need to remain vigilant while opening up the economy. Home Minister Shri Amit Shah said that while we have so far fought a successful battle against the pandemic, the road ahead is long and suggestions given by the Prime Minister regarding use of mask/face cover, maintaining do gaz doori etc should be followed by all.
Earlier review of preparations
Prime Minister had held a detailed meeting with senior ministers and officials on 13th June to review India’s response to Covid-19 pandemic. The meeting had reviewed the national level status and preparation in the context of the pandemic. It was observed that out of the total cases two-thirds are in 5 states with an overwhelming proportion of cases in big cities. In view of the challenges being faced, particularly by the large cities, it was discussed to augment testing as well as the number of beds and services to effectively handle the peak surge of daily cases. Prime Minister had taken cognizance of the recommendations of the Empowered Group on city- and district-wise requirements of hospital beds/isolation beds which will be required and instructed Health Ministry officials to undertake emergency planning in consultation with the States/UTs. He had also advised the Ministry to ensure suitable preparations in view of the start of the Monsoon season.
Source : PIB
Reserve Bank of India (RBI) central board director S Gurumurthy said that growth stimulus for the economy has to come from internal demand while supply side measures such as pushing bank loans may have limitations at this juncture. He said that he expects another fiscal package towards the end of the second quarter when the spread of Coronvirus may subside and that would help demand creation. "For that, the government needs to monetise deficits", he said, in order to create room for fiscal package as its finances are already strained. "Banks cannot drive growth. Banks can only prevent it from falling further. The growth stimulus has to come from internal demand and that will happen when the final fiscal package is announced," Gurumurthy said Tuesday. In a video call with businessmen, organised by Bharat Chamber of Commerce, Gurumurthy said that the Rs 20 lakh crore financial package announced by the government might not be final because the Covid situation is still an ongoing problem and it would be difficult to access the extent of financial impact now. Economic forecasters have predicted Indian economy to contract by 4 to 6.8 per cent in FY21, the first time in four decades. Gurumurthy however expressed hopes that the economy would rebound faster than any other nations, and that would be visible from the first quarter of next fiscal. Till now, both the fiscal and monetary authorities are following accommodative policies to boost credit growth. Banks are flushed with liquidity and cost of fund has been reduced to encourage entrepreneurship. Gurumurthy said that the economy would reinvent itself with more weightage on the health and allied sectors while the consumption pattern would change to a neccessitydriven one from as aspiration-led one. He also said that a change in the global economy is also on order with it shifting from multilatersim to unilaterism.
Source: Economic Times
It may not be politically palatable, but officials are pushing for quickly reworking GST slabs, along with a rise in levies, while correcting the inverted duty structure on garments, footwear and fertilisers to ensure that states and the Centre earn more revenue amid signs of higher economic activity. On Friday, several state finance ministers had blocked a move to increase GST on garments and footwear as part of the proposal to correct the inverted duty structure — where the finished product has lower levies than inputs — on the grounds that this was "not the right time" when businesses are demanding a stimulus. At the same time, they are insisting that the Centre ensure that not just their revenue but even growth in collections is protected through compensation, for which they are pushing the GST council to borrow from the market. Officials at the Centre and states, and even some state FMs, are skeptical. First, the RBI needs to agree to the move and then the modalities have to be worked out — who will guarantee it, how will it impact the fiscal deficit of the Centre and states, and the repayment mechanism and schedule. Instead, officials at the Centre suggested that the current crisis gave the council an opportunity to go for the long-pending "rationalisation" of levies. "If you earn higher revenue, the need for compensation comes down. The other option is to raise the compensation cess or bring more items in its ambit," a senior officer said. The proposal, which was flagged during a GST council meeting last winter, entailed raising the rates across slabs, although it was then argued that the burden on the consumer will not be proportionate, given that the credit for tax on inputs will partly blunt the impact. Officials had suggested raising the levy on the 5% slab to 7-8% and even doing away with the 12% slab to move over 200 items in the 18% bracket, which could have generated additional revenue of Rs 1 lakh crore. States had sent the issue back, arguing that it required a deeper study, with the GST council secretariat asked to come back with a detailed analysis. "The issue needs to be explained. After all, states and the Centre did increase VAT on fuel and consumers are paying for it for it. Similarly, a 1-2 percentage point increase will not pinch them," said an officer. So far, even the proposal to correct the inverted duty structure had not found favour. At Friday’s meeting, the GST council secretariat sought to push for discussion on the inverted duty structure for fertilisers, footwear, fabrics, renewable energy devices, tractors and pharma products, only to be spurned by the states.
Source: Times of India
In the post-COVID world, India and the US should take concerted and focused efforts to advance the remarkable business and people-to-people linkages between the two countries, according to New Delhi's top envoy here. Speaking on the occasion of the release of the report “Indian Roots, American Soil” by the Confederation of Indian Industry (CII) here on Monday, India's Ambassador to the US, Taranjit Singh Sandhu noted that the coronavirus pandemic has given both countries new opportunities to step up bilateral cooperation. "In the post-COVID world, we will need concerted and focused efforts to advance these remarkable business and people-to-people linkages between our two countries,” he said. “The current pandemic has presented us with new opportunities for cooperation and has made us recognise the need for collaborations more than ever before,” he said. Based on the survey of 155 Indian companies, the CII report highlights Indian investments across sectors and states in the US. With presence in diverse sectors, like IT, pharma, manufacturing, automotive, energy, defence etc, these companies have invested close to USD 22 billion in the US and employ around 125,000 people, he said. “It is indeed praiseworthy that besides bringing in FDI, our companies through their CSR initiatives have been giving back to the local communities in which they have been welcomed,” he said, adding that they are supporting students, particularly in STEM fields, by collaborating with the US educational institutions and are focusing upon upskilling and reskilling of workers to ensure career progression. Funding research and innovation activities in the US is another significant contribution that they have been making to strengthen and stimulate the US knowledge economy, he said. Sandhu said it is important to recognise the salient role that respective private sectors have been playing in combating the current pandemic. Indian tech companies in the US and their offices across the world have been providing behind the scene support to healthcare workers and life sciences companies. In the background, dedicated teams of technology professionals are coding, developing solutions, building the customer interface and ensuring their scalability, he said. Similarly, the American companies in India have been supporting Governmental efforts to provide relief to farmers and small businesses. Indian pharma companies, which are world leaders in affordable low-cost medicines and vaccines, are also collaborating with them in vaccine development, therapeutics and diagnostics, he said. Noting that the US has traditionally been an important investment destination for Indian companies, he said the favourable business environment offered by various states in the US as well as policies attracting Indian skilled professionals have ensured the steady flow of Indian FDI into the US. At the same time, nearly every big American company has a presence in India. In fact, the two-way investment between India and the US has reached USD 60 billion in 2018. The US also continues to be an important education destination for Indian students. Currently, there are almost 200,000 Indian students studying in the US, of which many of them study STEM degrees and ensure that the US remains competitive in the global tech economy. In terms of tuition alone, it is estimated that students contribute more than USD 5 billion to the US economy. Besides adding to the innovation and competitive edge of the US tech companies, Indian high skilled professionals are also contributing in critical sectors such as health and Information Technology that provide valuable support to companies in the medical and financial services. “We believe that the young people and skilled professionals of our two countries are the driving force behind further strengthening of our ties,” he added. “India also takes immense pride in the contribution of doctors, scientists, academicians of Indian-origin, who came to the United States in the pursuit of academic excellence and have distinguished themselves in diverse fields. In fact, CEOs of some of the leading technology companies in the US were born and raised in India,” he said. Observing that trade and investment remain an important dimension of our strategic partnership, he said bilateral trade stood at USD 150 billion in 2019. “While this is impressive, the real potential for our bilateral trade is yet to be reached,” he said. India's huge domestic market, high skilled workforce, existing advantages in digital services along with its competitive tax regime and low labour costs make it an attractive investment destination. India is also the seventh largest R&D spender in the world, with USD 48.1 billion R&D spending constituting 2.7 per cent of the global share. India's food processing, renewable energy, ESDM, Pharma, oil & natural gas and retail sectors present immense investment opportunity. “Critical reforms have been introduced recently by the Government of India to promote business and attract investment. The reforms include supply chain reforms for agriculture, rational tax system, simple and clear laws, capable human resource and a strong financial system. These are long pending reform measures in critical sectors. The idea is to transform the crisis into an opportunity,” Sandhu said.
Source: Economic Times
With financial distress piling up each passing day and demand outlook hardly cheering, textile units in Jagatpura have written to RIICO for converting the product-specific industrial cluster into a multi-products zone. Textile units in the Apparel Park Mahal Yojna said, “Huge amount of finished goods and under process shipments have already been cancelled by top brand retailers in the country. Many of the buyers have started asking for large, unsustainable discounts. As we foresee no revival of the textile business in the near to medium term, we request you to covert this park into general category which will legally allow us to explore new business opportunities for our survival.” All 133 units were working in almost full capacity employing more than 15,000 workers before the outbreak of Covid-19 pandemic. As exports have been sluggish for the past few years, most of the units were catering to domestic MNCs like Reliance, Max Life Styles, Westside, Big Bazaar, Anita Dongre and many more smaller brands and wholesalers. Hero Ravjani, general secretary of Apparel Park Manufacturers Association (APMA), said, “Most of the orders are either cancelled or put on hold. Units are running under 20% capacity as tailors from Bihar and Uttar Pradesh have left for their respective states. Job losses, erosion in purchasing power due to reduced incomes and absence of manpower in a labour-intensive sector like garments have clouded the outlook. That’s why many entrepreneurs are looking at diversifying from garments manufacturing to other businesses where they can have quick revival.” He said that either RIICO or the state government has not availed any central grant or subsidy for the project. That’s why the conversion into a general category will not be difficult. “Because of the slump, both state and the Centre are losing revenues. By starting other industrial activities, revenues will slowly start flowing. While planning new businesses, entrepreneurs will keep in mind the kind of labour available in the state. What we have proposed would be a win-win situation for both the stakeholders,” added Ravjani. Even though RIICO invited applications for the apparel park in 2003 offering rates of Rs 400 per sqmtr, the project finally saw light of the day in 2015. While land disputes between RIICO and JDA delayed the project, the 133 applicant had to pursue the case all these years.
Source: Times of India
India continues to remain ranked 43rd on an annual World Competitiveness Index compiled by Institute for Management Development (IMD) with some traditional weaknesses like poor infrastructure and insufficient education investment keeping its ranking low, the international business school said on Tuesday. Singapore has retained its top position on the 63-nation list. Denmark has moved up to the second position (from 8th last year), Switzerland has gained one place to rank 3rd, the Netherlands has retained its 4th place and Hong Kong has slipped to the fifth place (from 2nd in 2019). The US has moved down to 10th place (from 3rd last year), while China has also slipped from 14th to 20th place. Among the BRICS nations, India is ranked second after China, followed by Russia (50th), Brazil (56th) and South Africa (59th). India was ranked 41st on the IMD World Competitiveness Ranking, being produced by the business school based in Switzerland and Singapore every year since 1989, but had slipped to 45th in 2017 before improving to 44th in 2018 and then to 43rd in 2019. While its overall position has remained unchanged in the 2020 list, it has recorded improvements in areas like long-term employment growth, current account balance, high-tech exports, foreign currency reserves, public expenditure on education, political stability and overall productivity, the IMD said. However, it has moved down in areas like exchange rate stability, real GDP growth, competition legislation and taxes. Arturo Bris, Head of Competitiveness Center at IMD Business School, said India continues to struggle on the list and the recent country rating downgrade by Moody's reflects the uncertainties regarding the economy's future. "In our ranking this year, we again emphasize the traditional weaknesses of India -- poor infrastructure, an important deficit in education investment, and a health system that does not reach everybody. For India to follow the path of China, it must stress its intangible infrastructure," Bris said. "In a less global world, with China, USA, and Europe looking inwards, currencies like the rupee (and the Brazilian real for instance) are going to suffer and display high volatilities. "Moody's has threatened the country with a downgrade to junk and that would put India in a terrible position to attract foreign capital. So the urgency for the government should be to fix the short-term problems—and this requires improving the credibility of the government itself," Bris added. With the exception of Singapore, the Philippines, Taiwan and the Korean Republic, most Asian economies dropped in rankings this year, the IMD said. The reason for the Asian economies' less stellar performance as a region, this year is partly the result of the trade frictions between China and the US, particularly because these economies are highly dependent on trade with China. About Singapore, which moved to the top rank last year, the IMD said its position is largely driven by the relative ease of setting up business, availability of skilled labour and its cutting-edge technological infrastructure. The IMD said the impact of COVID-19 on the competitiveness ranking has partially been captured by executives' opinions about the effectiveness of the different health systems. In the ASEAN countries included in the survey, only Singapore and Thailand have a positive performance in the effectiveness of the health infrastructure.
Source: Economic Times
The ministry of corporate affairs (MCA) extended till September 30 the period during which companies are allowed to hold extraordinary general meetings (EGMs) through video conference or other audio visual means. The extension also applied to provisions for passing of resolutions through postal ballots alone without the need for conducting an EGM. On April 8, the MCA had relaxed the requirement of a physical meeting for EGMs under the Companies Act, in light of restrictions on travel due to Covid-19 and the lockdown, till June 30. The ministry received several stakeholder representations for extending the period of these provisions, the notification said. Since the April 8 notification, the nationwide lockdown was twice extended till May 31, following which varying degrees of lockdown measures and travel restrictions continued to remain in place at the district level during the ongoing Unlock 1.0. For passing of business resolutions in such non-physical EGMs, the MCA laid down a detailed procedure wherein voting could be done via e-voting facility or registered email with the results being posted on the company website or filed with the Registrar of Companies.
Source: Economic Times
For lead firms, cost of supply chain relocations from China, to more inefficient locations, would need to be compensated Covid-19 has highlighted dependencies of several countries on China in strategic industries like semiconductors, medical supplies, automobiles, chemicals, metals, textiles and machineries. The outbreak of the pandemic has disrupted supply chains for all these industries. The disruptions began with disturbances in sourcing from China that was the early epicentre of the pandemic. Over the weeks and months that followed, such disruptions, while gradually reducing, came to be accompanied by frustration and anger over China’s handling of information flow on the pandemic. Several countries, led by the US and including Japan, India, South Korea, Australia and Vietnam, have begun working on reconfiguring supply chains, for relocating large parts of these chains outside China. The countries engaged in such efforts are all part of the Indo-Pacific, more specifically the Free and Open Indo-Pacific (FOIP) strategy of the US, for balancing China’s influence. Can regional production networks be overhauled to produce Indo-Pacific supply chains? It’s an interesting possibility. The emergence of such chains would depend on how the Indo-Pacific addresses some key determinants behind supply chains. Business decisions on spatial fragmentation of supply chains are determined by relative cost efficiencies of various locations. China has strong proficiencies in assembling, be it smartphones, cars, electronic products, medical supplies and processed food items. Decision-making lead firms in various supply chains have invested in assembling operations in China due to the mainland’s abilities in mobilising custom-skilled workers for assembling products in large batches in short time. Parts and components that are assembled into final products flow into China from various countries in the region and the rest of the world. Several components are also sourced internally from within China. In this regard, China is distinct in its broad-based manufacturing capacities, a character common to a handful of other economies, such as Germany, South Korea, Japan and Mexico. Taiwan and Hong Kong have been instrumental in broad-basing China’s industrial capabilities. Together, the mainland, Hong Kong and Taiwan are an almost unbeatable combination, given the depth they offer in hosting various parts of different supply chains, within a common geography. Much of the prospects of supply chain relocation would depend on whether the synergies between the Chinese mainland, Hong Kong and Taiwan are obtainable elsewhere. While China’s political ties with both Hong Kong and Taiwan are currently turbulent, cultural affinity, common work practices and business principles, including the celebrated ‘Guanxi’, remain unchanged. Guanxi, or the principle of building informal relationships for conducting business, has been important in shaping regional supply chains, not just within the China-Hong Kong-Taiwan space, but also outside of it, to business ties with Japan, South Korea and several parts of Southeast Asia. Such practices are unlikely in locations where business is conducted in formal structured fashions, and judicial means, as opposed to dialogue and consultation, are accepted norms for settling business disputes. Pushing regional businesses out of such familiar cultural spaces would be a tough challenge for Indo-Pacific. Pursuit of self-reliance by minimising economic dependencies on China has been accentuated by the mounting strategic unease of almost all major Indo-Pacific countries with China. US-China trade and business hostilities have accelerated along with the growth in the Covid-19 pandemic. In parallel, China’s trade and political ties have become complicated with Australia. India, which has major outstanding issues with China, is now engaged in de-escalating the latest border standoff with its largest neighbour. The political and geostrategic discomfort with China is palpable among the Indo-Pacific and has added impetus to endeavours to shift supply chains. If security and geopolitics are the drivers of shifts, as opposed to cost efficiencies, businesses need to adjust to the perspective. For lead firms, cost of supply chain relocations from China, to more inefficient locations, would need to be compensated. They would expect incentives from host countries. During the Donald Trump presidency, some American businesses relocated to the US, not on efficiency grounds, but due to incentives. Businesses would expect sizeable incentives, including generous subsidies, for activating shifts. Indo-Pacific countries should be ready to offer good incentives, more so because China has already begun offering them to foreign businesses for retaining investments in the mainland. Indo-Pacific countries also need to note China’s importance not just as a sourcing and assembling hub, but also as major market for final demand. Post-Covid-19, supply chains would aim to become shorter and locate closer to final demand markets. China’s global significance as a final demand destination would continue to influence business decisions. Not many markets, be in Asia, Europe or elsewhere, would be able to absorb products as much as China, in the months following the recovery from Covid-19. The task of fruitful reorganisation of supply chains within the Indo-Pacific might become easier if Indo-Pacific countries, particularly those in Asia such as India, Australia, Japan and South Korea, agree on a few essential rules of the game. These include investment facilitating decisions like a multi-country alternative commercial arbitration framework; common tax rules, particularly on digital tax; and a set of incentives that businesses would be eligible for if they relocate supply chains and reposition them within the common group of countries. An Indo-Pacific trade agreement is too much to expect. But basic ground rules are not impossible to agree on. Otherwise, ‘snatching’ the chains from China might remain an elusive prospect. The author is a senior research fellow and research lead (Trade & Economics) at the Institute of South Asian Studies in the National University of Singapore.
Source: Financial Express
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
835.02 |
USD/Ton |
0% |
17-06-2020 |
|
VSF |
1242.30 |
USD/Ton |
0% |
17-06-2020 |
|
ASF |
1638.98 |
USD/Ton |
0% |
17-06-2020 |
|
Polyester POY |
790.55 |
USD/Ton |
-0.62% |
17-06-2020 |
|
Nylon FDY |
2046.97 |
USD/Ton |
0% |
17-06-2020 |
|
40D Spandex |
3995.11 |
USD/Ton |
0% |
17-06-2020 |
|
Nylon POY |
5195.06 |
USD/Ton |
0% |
17-06-2020 |
|
Acrylic Top 3D |
1023.48 |
USD/Ton |
0% |
17-06-2020 |
|
Polyester FDY |
1926.97 |
USD/Ton |
0% |
17-06-2020 |
|
Nylon DTY |
1778.74 |
USD/Ton |
0% |
17-06-2020 |
|
Viscose Long Filament |
995.25 |
USD/Ton |
0% |
17-06-2020 |
|
Polyester DTY |
2329.31 |
USD/Ton |
0% |
17-06-2020 |
|
30S Spun Rayon Yarn |
1729.33 |
USD/Ton |
-0.16% |
17-06-2020 |
|
32S Polyester Yarn |
1411.70 |
USD/Ton |
0% |
17-06-2020 |
|
45S T/C Yarn |
2181.08 |
USD/Ton |
0% |
17-06-2020 |
|
40S Rayon Yarn |
1905.80 |
USD/Ton |
0% |
17-06-2020 |
|
T/R Yarn 65/35 32S |
1665.81 |
USD/Ton |
0% |
17-06-2020 |
|
45S Polyester Yarn |
1595.22 |
USD/Ton |
0% |
17-06-2020 |
|
T/C Yarn 65/35 32S |
2018.73 |
USD/Ton |
0% |
17-06-2020 |
|
10S Denim Fabric |
1.12 |
USD/Meter |
0% |
17-06-2020 |
|
32S Twill Fabric |
0.64 |
USD/Meter |
0% |
17-06-2020 |
|
40S Combed Poplin |
0.93 |
USD/Meter |
0% |
17-06-2020 |
|
30S Rayon Fabric |
0.48 |
USD/Meter |
0% |
17-06-2020 |
|
45S T/C Fabric |
0.64 |
USD/Meter |
0% |
17-06-2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14117 USD dtd. 17/06/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Pakistan’s textile and clothing exports tumbled for the third consecutive month in May falling 36.5 per cent year-on-year to $751.128 million compared to $1.185 billion in the corresponding month of last year, data released by the Pakistan Bureau of Statistics (PBS) showed on Tuesday. Compared to 64.5pc decline in April, when textile and clothing exports fell to $403.834m year-on-year—the lowest level in almost 17 years, month-on-month proceeds in May fared better owing to a recovery in international orders. The easing of lockdown in the North American and European countries—top export destinations for Pakistani textile goods will help revive the sinking exports. The Covid-19 has collapsed the demand for country’s exports during the last four months. A significant decline was seen in trade shipments since Mar 15 — the date since coronavirus cases spiked in major export destinations especially in Europe and North America. However, exports on land routes were allowed in May to Iran and Afghanistan. It was only in February when the textile and clothing exports jumped nearly 17pc on a year-on-year basis. This growth was reported after a long time as the past few years had been marred by single-digit increases. Details showed ready-made garments exports dipped 46.28pc in value and drifted much lower in quantity by 68.16pc during May while those of knitwear dipped 33.93pc in value and 38.87pc in quantity, bed wear posted negative growth of 22.17pc in value and 29.28pc in quantity. Towel exports fell 42.59pc in value and 50.96pc in quantity, whereas those of cotton cloth dipped by 41.42pc in value and 55.56pc in quantity. However, exports are expected to revive in June as exporters have resumed production to honor international orders. Last week, the government lifted the ban on exports of seven products classified as personal protective equipment (PPE) in a bid to allow manufacturers to honor international orders. Exporters are already receiving inquiries about PPEs from foreign buyers as government allowed exports of disposable gowns, disposable gloves, face shields, biohazard bags, goggles, shoe covers and hand sanitisers with immediate effect. Previously, the government allowed exports of textile masks as well. Among primary commodities, cotton yarn exports dipped by 51.29pc while yarn other than cotton by 52.28pc, made-up articles — excluding towels — by 41.05pc, and raw cotton 100pc. Exports of tents, canvas and tarpaulin increased by a massive 112.35pc during the month under review. Between July-May FY20, textile and clothing exports declined 6.06pc to $11.567bn, from $12.313bn over the corresponding period last year. In rupee terms, the proceeds of the sector jumped 9.52pc.
Source: The Dawn
Urging leaders of Chinese businesses engaged in garment, textiles, fibre, engine components and automobile tyres in Vietnam to expand investment in the country, the latter’s Prime Minister Nguyen Xuan Phuc recently said he will continue to facilitate entry and exit of foreign experts, business managers, investors and skilled workers, including those from China. While hosting a reception for these business leaders in Hanoi recently, he said Vietnam will create optimal conditions for Chinese businesses. Phuc said he had earlier held telephonic conversations with his Chinese counterpart Li Keqiang to discuss ways to step up cooperation and share experiences in combating COVID-19. Vietnam had also donated medical supplies to China, he was quoted as saying by a Vietnamese newspaper report. China is currently Vietnam's largest importer and second biggest exporter. In return, Vietnam is the top ASEAN trade partner of China, with bilateral trade reaching $120 billion last year. China has invested in nearly 3,000 projects worth nearly $21 billion in Vietnam so far, and this amount of capital is equivalent to 5.5 per cent of the total foreign investment registered in the country. As a result, China now ranks seventh among 136 countries and territories investing in Vietnam. A number of Chinese enterprises are operating profitably in various sectors in Vietnam, the prime minister said, applauding many businesses’ decision not to lay off workers despite difficulties caused by the pandemic.
Source: Fibre2Fashion
The World Trade Organization (WTO) Secretariat published an information note that examines the effect of the COVID-19 pandemic on least developed countries’ (LDC) participation in global trade. The note highlights a “significant decline in export earnings” among LDCs since the outbreak of COVID-19, and calls for supporting LDCs’ participation in global trade through providing debt relief and strengthening social sectors. The note titled, ‘The COVID-10 Pandemic and Trade-related Developments in LDCs,’ finds that decreasing demand in key markets, declining commodity prices, and declining remittances have contributed to a decline in export earnings for LDCs. LDCs’ dependence on a limited range of products exported to few markets has compounded economic challenges, particularly in the textile and clothing product markets and countries dependent on tourism revenue. As an example, the number of tourists visiting Tanzania’s Serengeti fell from 6,000 per day to 24 following COVID-19. Overall, the note states, the 2020 downturn in trade is “likely to be even more severe for LDCs” than at the global level. The note warns that the pandemic has the potential to reverse LDCs’ development gains. There are currently 47 LDCs, 36 of which are WTO members and 12 of which are at different stages of the graduation process. The note finds, however, that the pandemic has the potential to negatively affect countries prospects for graduation. Angola and Vanuatu, which are scheduled to graduate, and Bangladesh, which is on the path to graduate in the next few years, have experienced “massive falls” in their export earnings and decreased remittances, which are likely to negatively impact their graduation prospects in the near term. LDCs are addressing the COVID-19 pandemic through various measures such as providing stimulus packages to export-oriented sectors, strengthening health care systems, and providing liquidity support to small and medium-sized enterprises (SMEs). For example, Myanmar established a COVID-19 fund worth over USD 70 million to provide loans at one percent interest rate to SMEs, Lesotho has exempted businesses from a variety of taxes, including value-added tax (VAT), and Rwanda has expedited VAT refunds to SMEs. The WTO LDCs group has also called on other WTO members to refrain from imposing restrictions on medical goods and food and from imposing export prohibitions. Some LDCs have decreased duties on medical goods to provide them at more affordable prices for their citizens. The note summarizes international responses and support for LDCs, including emergency funding to fight the pandemic from international financial institutions (IFIs). The publication concludes that maintaining support measures for LDCs, including providing social safety nets for the most vulnerable and redoubling coordination efforts, is critical to economic recovery.
Source: IISD
Sports company, Puma, has announced that it is exploring sustainable alternatives for making and dyeing textiles in its latest biodesign project, which features a biodegradable lifestyle and performance collection. Collection, named “Design to Fade”, has been made in collaboration with Dutch project Living Colour and Swedish design studio Streamateria. Some of the products in the collection are dyed using bacteria, while others are made of degradable materials, which are made in closed loops and can be manufactured locally and at short notice. “Our times require us to rethink not only what to create but also how we create,” Romain Girard, senior head of innovation at Puma, said in a press release. With Design to Fade, we are working on a future, which focuses on sustainable production methods and recyclable materials.” “Design to Fade” is Puma’s third biodesign project since 2016, in which the company is presenting new ways to reduce the environmental impact of fashion and sportswear. Though none of these projects have yet reached a commercial stage, they are an important step towards making Puma more sustainable in the future. Dutch design project Living Colour uses bacteria to dye textiles. The bacteria are fed with a nutrient which makes them produce a pigment, which can then be used to dye almost any kind of fibre. Swedish design studio Streamateria makes fabrics in closed material loops, which become a source of raw material after they have been worn. This is made possible through a circular production chain with zero tolerance to waste. Streamateria materials are constructed out of a printed mesh-structure, which is coated with a bioplastic, creating a textile-like garment.
Source: Fibre2Fashion
Indonesia had recorded 39,294 cases of COVID-19, second only to Singapore in Southeast Asia. Indonesia’s death toll tops the region with 2198 lives lost. The government has drawn a lot of criticism for its slow response to the pandemic — from the lack of testing to ineffective physical distancing measures. The fear of the infection spreading has also shaped economic policies, including trade. In early March 2020, the Indonesian Bureau of Statistics reported that Indonesian exports of surgical masks were 75 times higher year-on-year, mostly to China, Singapore and Hong Kong. The news sparked controversy in Indonesia as the prices of face masks and antiseptics soared following hoarding and a general lack of supply. In response, on 17 March the government issued an export ban on 10 commodities, including antiseptics, personal protective equipment (PPE) and raw materials to make surgical masks. The ban was initially set to expire on 30 June. A week later, it was expanded to include ethyl alcohol, the raw material for antiseptics, totalling 14 tariff lines worth almost US$200 million in 2018. These measures were introduced to combat potential scarcity in Indonesia’s domestic markets. But they are problematic because they interfere with global value chains. One of the reasons behind Indonesia’s comparatively good PPE industry is its ability to import raw materials. In 2018 Indonesia imported more than US$892 million of polypropylene, one of the materials needed to produce PPE. By engaging in this value chain Indonesia has been able to export vast numbers of PPE. Export bans will not only block Indonesia’s potential for further growth but also negatively affect Indonesia’s trade partners’ capacity to produce raw materials. On 1 April, the export ban regulation was relaxed into export licensing. This was likely a result of a G20 meeting in late March, where members agreed to support trade and global supply chains. It is also possible that the change was because the Indonesian producers had commitments with their buyers. Other measures to ensure the availability of essential commodities needed to deal with COVID-19 also followed. Between late March and late April, the Indonesian government issued a series of tariff eliminations, special permits and import relaxations. Globalisation has always been marketed as a means to increase productivity. Comparative advantage leads countries to specialise in production, so international trade benefits all parties and boosts growth. Instead of preventing trade, Indonesia should promote it. Measures that make importing easier, such as import relaxation and tariff reduction, are appropriate. Pursuing further international collaboration, like the recent essential goods agreement between New Zealand and Singapore, could also help. The Indonesian government does not rely on export bans to increase capacity — instead it facilitates the importation of materials to produce COVID19 related goods. These measures support firms in expanding their production capacity, helping to combat scarcity. Other institutions such as the Investment Coordinating Board (BKPM) and the Ministry of Health have been pushing for regulatory relaxations to keep local production growing instead of solely relying on trade. But challenges remain. Relaxing standards for COVID-19 related goods increases the number of suppliers but it could lead to firms distributing low quality goods to consumers, as found in the Netherlands, Spain and Turkey. Capital constraints and technical challenges prevent many smaller textile firms from repurposing their production. Central and local governments are still struggling with red tape and uncoordinated procurement to distribute PPE across the region. Such poor coordination also adds confusion to firms’ production decisions, especially given the existence of export licensing. Information also needs to be transparent and accessible to everyone. The helicopter view of Indonesia’s central government needs to be supplemented by information from local government and volunteers in the field. Community initiatives are emerging in response to COVID-19, which the government can follow up. Understanding supply chains will help firms make decisions on technical requirements, production and potential capacity increases. The government can also help firms — especially smaller ones — to make the capital requirements for production more accessible. With better information on supply chains, the central government can engage in international collaboration. It can help secure more capital and inputs from abroad in exchange for outputs that Indonesian firms can supply competitively. Many of Indonesia’s important trading partners are seeing flatter COVID-19 curves — this makes international collaboration even more compelling for the Indonesian government. The COVID-19 outbreak presents challenges that cannot be tackled by just turning policy on and off. Introducing an export ban and scrapping import and regulatory restrictions will not solve the demand problem — international trade helps countries to consume more, not less. Turning inward will only reduce the whole pie. Arianto A Patunru is a member of the Indonesia Project and a fellow at the ArndtCorden Department of Economics, The Australian National University. Krisna Gupta is a PhD candidate at the Crawford School of Public Policy, The Australian National University.
Source: East Asia Forum
Meridian Specialty Yarn Group, a US-based leading specialty yarn and fibre wet processing operation company, is now offering polyester yarns processed with CiCLO technology, which allows polyester fibres to break down in landfills and ocean at rates comparable to a natural fibre like wool. The yarn is being processed at Valdese, North Carolina. MSYG is currently introducing yarns with CiCLO technology to hosiery markets, initially for performance and hiking socks. Yarns with CiCLO technology are also available to manufacturers of medical PPE for use making medical gowns, lab coats, medical setting curtains and other medical textiles typically made from polyester. Meridian’s new yarns with CiCLO technology can be treated with antimicrobials proven effective at reducing exposure to viral infections and have the same beauty, wear-ability, durability, functionality, and performance characteristics consumers expect from polyester. At the same time, when thrown away, CiCLO yarns reduce the persistence of synthetic textile accumulation in landfills and synthetic fibre fragments in the ocean. The facility, which opened in July 2019, is the most modern and up-to-date dye house in the US and equal to, or better than, any other yarn dyeing operation worldwide. The plant has been engineered to use dramatically less water and power than comparable textile operations and generates much less effluent as a by-product of the dyeing and drying process. “This represents a breakthrough for the performance apparel and hosiery industries, which have been looking for sustainable alternatives to traditional synthetic fabrics,” Tim Manson, president of MSYG, said in a press release. Fabrics made from yarns with CiCLO technology can be treated to have the same performance characteristics as the synthetic fibres and yarns now widely used in performance apparel, including outdoor hiking and running socks.” CiCLO technology is a product of Intrinsic Advanced Materials, which was formed to develop and commercialise innovative and sustainable solutions for the textile industry.
Source: Fibre2Fashion
An ambitious vision for man-made cellulosic fibres (MMCF), such as viscose, modal and lyocell, to create a more sustainable textile industry has been outlined in a new report from two international sustainability non-profits - Forum for the Future and Textile Exchange. Entitled 'MMCF 30: Envisioning the Future of Man-Made Cellulosic Fibres', it says these fibres have "huge untapped potential" for building resilience in the global textile industry.The report points out that MMCF is the second biggest cellulosic fibre group after cotton and says it could contribute to realising circular fashion, regenerating ecosystems, providing vital carbon sinks, and increasing community resilience and prosperity.
Source: Eco Textile
