Prime Minister Shri Narendra Modi delivered the keynote address at the India Ideas Summit today. The Summit is being hosted by the US-India Business Council (USIBC). The theme for this year’s Summit is ‘Building a Better Future’. Prime Minister congratulated USIBC on its 45th anniversary this year. He thanked the USIBC leadership for their commitment to advancing India-US economic partnership.
Global economic resilience through stronger domestic economic capacities
Prime Minister talked about the need to place the poor and the vulnerable at the core of growth agenda. He underlined that ‘Ease of Living’ is as important as ‘Ease of Business’. He said that the pandemic has reminded us of the importance of resilience of the global economy against external shocks, which can be achieved by stronger domestic economic capacities. He emphasized that India is contributing towards a prosperous and resilient world through the clarion call of an ‘Aatmanirbhar Bharat’.
India offers a perfect combination of openness, opportunities and options
Prime Minister said that there is global optimism towards India because it offers a perfect combination of openness, opportunities and options. He noted that in the last six years, efforts have been undertaken to make our economy more open and reform oriented, adding that reforms have ensured competitiveness, enhanced transparency, expanded digitization, greater innovation and more policy stability. Citing a recent report, Prime Minister said that there are more rural internet users than urban internet users. Hailing India as a land of opportunities, he said there are about half a billion active internet users in the country now, while there are over half a billion more people who are being connected. He also mentioned opportunities in the frontier technologies of 5G, Big Data analytics, Quantum Computing, Block-chain and Internet of Things.
Extensive opportunities to invest across sectors
Prime Minister underlined that there are extensive opportunities to invest in a variety of sectors in India. He talked about the historic reforms recently undertaken in the agriculture sector and said that there are opportunities to invest in areas including agriculture inputs and machinery, agriculture supply chain, food processing sector, fisheries and organic produce. Noting that the healthcare sector in India is growing faster than 22% every year and the progress of Indian companies in production of medical technology, tele-medicine and diagnostics, he said that now is the best time to expand investment in Indian healthcare sector. Prime Minister listed several other sectors which offer tremendous opportunities to invest, viz. the energy sector; infrastructure creation including building houses, roads, highways and ports; civil aviation, wherein top private Indian airlines plan to include over a thousand new aircrafts over the coming decade, thus opening up opportunity for any investor who chooses to set up manufacturing facilities in India, and also through setting up of Maintenance Repair and Operations facilities. He mentioned that India is raising the FDI cap for investment in defence sector to 74%, two defence corridors have been established to encourage production of defense equipment and platforms, and added that special incentives are offered for private and foreign investors. He also mentioned pathbreaking reforms being undertaken in the space sector. Inviting investment in finance and insurance, Prime Minister said that India has raised the FDI cap for investment in insurance to 49% and 100% FDI is permitted for investment in insurance intermediaries. He noted that there are large untapped opportunities for increasing insurance cover in health, agriculture, business and life insurance.
Rising investments in India
Prime Minister talked about India’s rise in Ease of Doing Business rankings of the World Bank. He underlined that each year, India is reaching record highs in FDI, adding that FDI inflows in India in 2019-20 were 74 billion dollars, which is an increase of 20% over the previous year. He highlighted that even during the pandemic, India has attracted foreign investment of more than 20 billion dollars between April and July this year.
Best time to invest in India
Prime Minister said that India has what is needed to power the global economic recovery. He noted that India’s rise means a rise in trade opportunities with a nation that can be trusted, a rise in global integration with increasing openness, a rise in competitiveness with access to a market which offers scale, and a rise in returns on investment with theavailability of skilled human resources. Calling USA and India as natural partners, he said this partnership can play an important role in helping the world bounce back faster afterthe pandemic. Reaching out to the American investors, he said that there has never been a better time to invest in India.
Source : PIB
Discussions have begun at the highest level with nance minister Nirmala Sitharaman, commerce and industry minister Piyush Goyal and chairman of the Economic Advisory Council to Prime Minister (EAC-PM) Bibek Debroy leading the deliberations on a revamped strategy. The government is recalibrating its strategy on entering into free trade agreements (FTAs) in a bid to ensure that the treaties provide economic and strategic benets. Separately, the focus is on alliances with “peaceful” countries, especially those with which India does not have a signicant trade decit. Discussions have begun at the highest level with nance minister Nirmala Sitharaman, commerce and industry minister Piyush Goyal and chairman of the Economic Advisory Council to Prime Minister (EAC-PM) Bibek Debroy leading the deliberations on a revamped strategy. The three of them met on Monday, which coincided with external aairs minister S Jaishankar’s statement that FTAs haven’t helped India build capacity. “I think there are ways of engaging the world which do not necessarily have to be FTA-centric,” the minister said at an event. There is expected to be greater thrust to FTAs with Australia and the European Union, with the UK and the US among countries with which India will engage more aggressively, while recognising that there is no need to rush into a deal. Goyal has already indicated a keenness to rework the agreements with Asean and Japan, as imports are seen to have gained more than exports due to a sharp reduction in taris. At the same time, India was expected to benet more on the services front, with software professionals and nurses getting easy access to markets such as Japan, Singapore, South Korea and Malaysia. Of late, Singapore has been a miser in giving out fresh visas, citing domestic issues, while Japan has denied access to Indian nurses, pointing out a lack of language skills. What has also complicated matters is the presence of Chinese companies in Asean countries, which use the benefits of lower taris to route goods into India. In any case, the government suspects that some Chinese goods are merely repackaged in a few of the FTA countries and shipped to India without any value addition. The nance ministry also has concerns over loss of revenue due to the trade agreements. Besides, these countries have been reluctant to address India’s concerns, prompting the government to review the treaties amid suggestions that some of them should be terminated. Going forward, sources indicated, India will harden its stance and ensure that its companies are equal partners in the trade deals.
Source: Times of India
NEW DELHI: An empowered panel of Goods and Services Tax (GST) Council has recommended excluding businesses with sales up to ₹500 crore from the compulsory e-invoicing of GST, to be rolled out from 1 October, said an official. The threshold for mandatory e-invoicing -- a step to improve tax compliance --planned earlier was ₹100 crore. The GST implementation committee, that takes decisions on behalf of the Council when urgent steps are needed, has recommended on Wednesday that the indirect tax authority could go ahead with the 1 October deadline for rolling out e-invoicing but with a higher sales threshold, said Yogendra Garg, principal commissioner, GST policy, at the Central Board of Indirect Taxes and Customs (CBIC). “We will not do it for (businesses with) ₹100 crore sales but will start with ₹500 crore and as it stabilises, we will do it for (businesses with) 100 crore sales and more," said Garg. He was speaking at a virtual conference on ‘three years of GST’ which looked into whether further streamlining of the new indirect tax system is needed. Garg said that details of the changes will be notified in a week. E-invoicing or submission of sales invoice in a portal designated by GSTN, the company that process tax returns, will automate a lot of data entry work, reduce errors and mismatches, capture sales related details in the system instantaneously and improve compliance. This may also improve tax officials’ trust in the compliance of companies and reduce chances of audits or surveys. It would also help in auto-populating certain forms. The GST authorities planned e-invoicing only for business to business transactions. Raising the threshold will enable large corporations to go ahead with adopting this system, while giving more time to smaller ones. Garg said the focus of the authorities in the fourth year of GST, which was rolled out in July 2017, will be on easing the compliance burden. “The vision for the fourth year is (to see that) compliance burden becomes lower and compliance cost becomes lower. You will hear a lot of announcements towards that," said Garg. The new indirect tax system that subsumed several central and state taxes and dismantled state border check posts has simplified indirect taxation although its roll out witnessed a disruption. GST brought in simplicity by reducing the number of returns to be filed by businesses and made policy making more transparent, but from the point of view of businesses, it also led to litigation relating to input tax credits and anti-profiteering provisions, according to Pratik Jain, partner and leader of indirect tax at PwC India, who moderated the conference. “The time has come we made a white paper on what kind of GST India wants in three or five years from now," said Jain, adding that it could lay the roadmap for changes like bringing in jet fuel within GST. According to Jain, the tax credits in direct and indirect stream of taxation could also be linked as is the case in certain countries.
Source: Live Mint
GST rates can be reduced further once the tax base increases and everyone pays taxes properly, Finance Secretary Ajay Bhushan Pandey said on Thursday. "Once the tax base increases and if we are able to enforce our tax laws and everyone pays taxes properly, there will be definitely scope for further reduction of taxes," he said. Addressing a session on 'Digitisation in Governance' at CAPAM 2020, he said the ultimate aim should be to collect minimum taxes at minimum rates. "The government should collect taxes which are absolutely necessary and to that extent, we need to increase our tax base," he said. Pandey said the government is also working on reducing the number of forms under the GST. He said that there were 495 forms in the pre-GST era with 17 different taxes which were levied by various states. "After the introduction of GST, the number of forms has reduced to 17-18 and we want to further cut down the number of forms in GST," he added. He said that with IT-enabled platforms there is no inspector raj now and GST regime has become faceless. Elaborating on the new measures for income tax assessment, including the faceless assessment of taxpayers, he said that the government is working on promoting self-compliance. He added that the government is also working on providing tax profile of each taxpayer. "We have all the information and if it can be shared in a secure manner, protecting the privacy of the individual, this will also help in securing loans from banks. The entire digital exercise is being undertaken across various government departments. We are making all that information available and providing it to each taxpayer," Pandey said. He also said that all the information is getting integrated for the benefit of the citizens, including ease of doing business, ease of living and is enhancing capabilities. Stressing on the importance of digitisation, Pandey said that India is the only country to have Aadhaar, Aadhaar-enabled payment system, direct benefit transfer scheme and UPI payment scheme. "Use of digitisation in governance has improved our peed, effectiveness, efficiency and capabilities," he added. He noted that in the last three months, Aadhaar-enabled transaction have crossed Rs 50,000 crore and UPI transaction has taken over debit card transaction and cash withdrawals. Referring to the revenue trend, he said all figures are giving an encouraging signal that the economy is coming back on track sooner than what was being anticipated when the lockdown started.
Source: Business Standard
Consumer Affairs Ministry, DPIIT in talks on how packaging legislation under Consumer Protection Act will work for products sold online The Centre, which wants to make the country-of-origin declaration under the Consumer Protection Act mandatory for e-commerce players soon, has not yet fixed a deadline for it. This is because the Department for Promotion of Industry and Internal Trade (DPIIT) is still having parallel consultations with industry players, who are seeking more clarity on the issue. The DPIIT recently held a meeting with the Consumer Affairs Ministry on the Consumer Protection Act and the proposed legislation on packaging, to understand how the mandatory requirement for display of country of origin should be applied for goods sold online, an official told BusinessLine. “In the meetings the DPIIT has so far held with e-commerce companies, a number of issues were raised, including defining country of origin, which need to be ironed out. Discussions are on; it is a work in progress,” the official said. DPITT had earlier asked online players to start displaying the country of origin on new products listed on their websites by August 1, 2020, and then, in a month’s time or so, implement the mandate for existing items as well. E-commerce companies, however, did not agree to the deadline and wanted more time. The idea behind the government’s insistence on display of the country of origin is to give buyers the option of avoiding items from certain countries, for instance China, with which India is engaged in a border conflict. E-commerce players have asked DPIIT to give a clear definition of ‘country of origin’, and whether imported components, too, have to be accounted for, so that sellers can mention it correctly on the packaging. Challenge for small players Display of the country of origin for new products on sale is already mandatory for the Government e-Market (GeM) portal for procurement by Central and State bodies, and it has a provision for indication of percentage of local content in products. But many ecommerce companies say that this would be difficult for small sellers to follow. “Small sellers will find it difficult to get details such as whether a product was assembled in India and the proportion of imported components used in the product,” said an industry player. Another senior executive with an e-commerce company also pointed out that the Consumer Protection Act will make the country-of-origin declaration mandatory only for imported goods, but the DPIIT was insisting on tagging every good sold through their platforms without any formal directions. With millions of product listed by sellers on each e-commerce platform, displaying the country of origin for every listing is a challenge. Leading e-commerce companies have begun asking sellers to mandatorily provide information for new and existing listings, but the road ahead is not smooth. Ankur Pahwa, Partner and National Leader - E-commerce and Consumer Internet, EY India, said: “Many large companies have already begun the exercise, and will certainly help consumers make informed choice on their purchase. Ensuring compliance especially with respect to small ticket-items may be a challenge.”
Source: The Hindu Business Line
NEW DELHI: India is working on offering production linked incentives for up to five sectors to boost domestic manufacturing, a top finance ministry official said on Thursday, bolstering efforts to attract new investments in the coronavirus-stricken economy. Asia’s third-largest economy is expected to contract by as much as 10% in the current fiscal year beginning April, some private economists’ estimate, after the outbreak crippled business and consumer activity since late March, compared to government’s earlier target of about 6% growth. The government has announced a raft of measures including direct food subsidy to nearly 810 million people and credit guarantees of Rs 3 lakh crore ($40.17 billion) on loans to small businesses. Tarun Bajaj, economic affairs secretary at the ministry of finance, told a virtual conference that incentives would be offered to sectors to push manufacturing and help struggling industries. Bajaj didn’t specify the sectors that may be eligible for incentives. The government earlier announced production linked incentives for large scale electronic goods makers for five years, to attract investments in mobile phone manufacturing and electronic component units. Incentives have also been announced for pharmaceutical companies for production of bulk drugs and on medical devices. Speaking at a virtual conference organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) on Thursday, finance ministry official said the government was expecting a “V” shape economic recovery beginning next fiscal year. Reuters earlier reported that India is drawing up an incentive scheme for the autos sector aimed at doubling exports of vehicles and components in the next five years. Industry and government sources said sectors such as textile and food processing manufacturers could be offered production linked incentives. The latest data on 14-15 economic indicators including railway freight and tax collections showed a pick up in economic activities, Bajaj said, adding the government was open to borrow more from the market to meet spending targets for infrastructure projects.
Source : Times of India
Prime Minister Narendra Modi’s clarion call for an “Atmanirbhar Bharat” (selfreliant India) will now react in all proposals being sent to the Union Cabinet and Cabinet committees, in an……
Source: Economic Times
India has reportedly restricted countries which it shares land borders with, from bidding for public procurements projects without prior approval from competent authorities – blocking Chinese companies from the fray. The Centre has amended the General Financial Rules 2017 to enable the restrictions on grounds of national security, Mint reported. Further, the order exempts countries which India provides development assistance or line of credit, thus effectively tying up only China and Pakistan. The relaxation for COVID-19-related medical supplies has been implemented till December 31, it added. The move, so far, does not impact the private sector but includes all government and autonomous bodies, public sector banks and financial institutions, public-private-partnership (PPP) projects and central public sector enterprises (CPSEs). As per the order, India will allow participation in procurement bids for goods, services or works from the countries in question only if the bidder is registered with a registration committee which will be instituted by the Department for Promotion of Industry and Internal Trade (DPIIT); besides political and security clearance from the Ministry of Home Affairs and the Ministry of External Affairs. This will apply for all fresh tenders and for tenders already invited but where first stage evaluation of qualifications is not completed. If the first stage has been completed, tenders will have to be cancelled and re-done, the order states. The Centre has written to state governments asking them to invoke provisions of Article 257(1) of the Constitution to restrict Chinese participation in state projects as well. The new move comes after India banned 59 Chinese apps in the country, besides imposing 100 percent physical checks on all imports from the northern neighbour, and increasing scrutiny of Chinese investments in Indian firms by restricting foreign direct investment (FDI) from neighbouring countries without government approval. All this came after both country’s troops clashed at the Line of Actual Control (LAC) in Ladakh in June, which killed 20 Indian soldiers.
Source: Money Control
NEW DELHI: The government has so far identified 20 sectors where India can meet domestic demand as well as become a global supplier, Commerce and Industry Minister Piyush Goyal said on Thursday. He said industry body Ficci and other associations are working with the government in this regard. "We have identified first 12 sectors and now 8 more, so we have 20 sectors in which Ficci and other associations are very much part of our engagement, where we have identified sectors where India can not only meet own domestic needs but also become globally competitive and become global leader supplying to the world," he said in a Ficci webinar. These sectors include food processing, organic farming, agro chemicals, electronics, industrial machinery, furniture, leather, auto parts and textiles, among others. He also highlighted that despite having skilled carpenters and artisans, India continues to import furniture. "Can we not prepare India to become the factory of the world for furniture, can we not build to scale at competitive prices so that the world looks at India, to source from India," he added. Further talking about yoga, the minister said yoga holds huge potential for industry and young entrepreneurs as the world is excited about it. "But did India really grab the opportunity that the Prime Minister (Narendra Modi) opened up for India. Did we set up 100,000 yoga centres all over the world, did any entrepreneur amongst you or startups thought in terms of the possibilities that yoga offers by planning to train maybe 100,000 or 500,000 yoga teachers who would find an opportunity across the globe," Goyal noted. He said one has to take a person in yoga room for four sessions only and for the fifth session, the person will come "running and then for the rest of his life, he would want to be a yoga participant, that is the power of yoga".Cure is not only about medicine or about visiting hospital or a doctor for treatment, the huge possibilities of yoga as a preventive medication are known to many but have not been captured as an opportunity. "I do not know whether all of us have failed the nation and the people of India, where despite the Prime Minister with his vision of opening up door, opening up opportunities, for all of us, (we) have not seized the moment," the minister asked. He added that post-Covid-19, people may not like to visit a medical practitioner for common cold and illnesses, "so why not look at preventive methods". "I do not think all is lost, I still think that if some innovative youngsters plan to take it to the rest of the world, India can become a power house providing this technology and it's a scientific technology. Every aspect of yoga, every 'aasan' teaches you something new," Goyal said.Disruption need not always be technological as it not only comes out of computer screens, he said adding "disruption can come out of a variety of ways. It is for us to see whether we are willing to engage, whether we are willing to offer to the rest of the world India's traditional strengths".
Source: Business Standard
Govt had earlier criticised free trade deals for boosting cheap imports into the country. Experts have urged the government to take a consistent stand on Free Trade Agreements (FTAs), saying it needs to exercise caution on the proposed pact with the US. This is with respect to existing FTAs having been termed “hasty and inherently unequal” by the government. India has pushed to ink a limited trade pact with the US, along with the possibility of an FTA later. However, officials say talks will pick up only after the US presidential elections. Talks had progressed after India pulled out of the Regional Comprehensive Economic Partnership (RCEP) in November ...
Source: Business Standard
States need greater fiscal space to meet their expenditure obligations, 15th Finance Commission chairman said on Wednesday, pushing for a relaxation in the norms governing the finances of..
Source: Economic Times
Unlike demonetisation, which was the fallout of an economic policy decision, excess liquidity this time is a creation of the central bank. It may stay for the next six months, an expert said. The Reserve Bank of India’s eorts to keep a lid on borrowing costs in Asia’s thirdlargest economy created more than Rs 8 lakh crore ($108 billion) of excess cash in the banking system. Sponging away the extra money isn’t going to be easy. A largely benign outlook for ination amid a slump in demand, slowdown in credit growth, a sharply positive balance of payments and lessons from the RBI’s own cash-tightening three years ago suggest that this amount of cash -- which exceeds the level seen after a surprise cash ban in late 2016 -- will be the new normal for the next few months. “I don’t think this liquidity is moving away in a hurry,” said Ritesh Bhusari, deputy general manager for treasury at South Indian Bank. “Unlike demonetisation, which was the fallout of an economic policy decision, excess liquidity this time is a creation of the central bank. It may stay for the next six months.” The liquidity measures taken by the RBI since February aggregate to Rs 9.57 lakh crore, or about 4.7% of gross domestic product. That pushed up the excess cash banks park with the authority to more than Rs 8 lakh crore in May
Liquidity Glut
The central bank’s management of the liquidity glut came into focus this month when Governor Shaktikanta Das for the rst time spoke about the need for a careful strategy to exit from the extraordinary monetary stimulus. To be sure, he made it clear that it was not imminent. The situation has drawn parallels to late 2016 when Prime Minister Narendra Modi’s shock high-value cash ban led to a surge in deposits with banks. As liquidity rose in 2017, the RBI began open-market sale of bonds, mopping up about Rs 90,000 crore. This time around, the authority needs the excess liquidity to induce banks to absorb the government’s blowout bond supply. Bloomberg Economics expects a record $95 billion surplus on the balance of payments in scal 2021. That would largely be met by forex purchases to prevent rupee from gaining further. Net FX purchases of $80 billion in scal 2021 would lead to a 6 trillion-rupee liquidity injection into the system, which has already been running a record surplus since the start of the scal year, according to Abhishek Gupta, India economist at Bloomberg.
Source: Economic Times
Preliminary estimates by various industry bodies indicate that a large number of workers both in the informal and formal sectors will either lose their jobs or encounter a significant change in how jobs are done post-Covid-19. Adversely impacted sectors are tourism & hospitality, restaurants, organised retail, media & entertainment, logistics and real estate, among others. Workers in these sectors could seek redeployment into other sectors or alternative livelihood opportunities.The travel & tourism sector accounted for 12.2% of employment opportunities generated in the country in 2017. As per initial estimates by the Federation of Associations in Indian Tourism & Hospitality (FAITH), losses could be in the range of Rs 5 lakh crore. Given that 80% of travel & tourism industry is composed of SMEs, it is possible to have 25-75% employment churn in the short to medium term. The quantum of economic loss IT/ITeS and textiles/apparel, both labour-intensive and dependent on the global economy, is not clear yet. Reskilling: A huge section of informal and a small section of formal workforce shall seek redeployment into relatively resilient sectors of the economy. Reskilling of such workers can make the churn smoother and less disruptive for these vulnerable categories. Reskilling can be taken up in a phased manner by initially targeting a section of migrant workers who have returned to their source states and also those who were in sectors where jobs are not likely to come back soon due to social distancing. We could target at least 25% of the at-risk workforce, which is seeking redeployment and can be made relatively productive through reskilling. This vocational education and training (VET) intervention could be a seen as a livelihood continuity plan for a period not extending beyond a year since most of this workforce would hopefully get back to their first occupation/location once the situation improves in the medium term. This is assuming we do not have a seasonal recurrence of Covid-19 beyond a year.
Which sectors can take up more jobs?
As in the supply equation, the demand situation can be divided into three areas. First, domestic consumption-facing sectors including those in the gig economy could temporarily support lost livelihoods in the most impacted sectors. As healthcare resources are under stress in the management of Covid-19, there is a huge demand for not only related healthcare personnel, but also workers in general patient care, diagnostics, health-tech and counsellors. Also, e-commerce, telecom, financial services, etc, are relatively resilient sectors that can absorb manpower. Second, for reverse migrants who will not return in the short term, training can be provided for entrepreneurship, self-employment and for opportunities likely to come up due to economic revival and focused on rural economy (rural roads, houses and light manufacturing). Since agriculture remains the mainstay for rural India, a section of migrant labourers could be reskilled in high-value agriculture (horticulture, livestock, sericulture, aquaculture and plantations). Finally, for more advanced VET, courses relevant to Industry 4.0, automation and additive manufacturing may form a significant part of the reskilling exercise. Modalities of digital skilling: The entire skill value chain would require remodelling. Candidates have to be motivated to undergo remote counselling and a predominant digital delivery of learning. Since vocational training is more hands-on, technologies like AR/VR-powered simulating training has to be integrated with video-based teaching. Also, learning tools for feedback, self-monitoring, self-explanation have to be integrated in online training. Assessment has to transition from one event to a series of regular process-oriented measures after conceptual training. Trainer capacity has to be enhanced to provide more online training. Importantly, a mindset change at all levels of skill delivery, administration and governance has to be enabled. Even with the best of delivery mechanisms, teaching aspects of teamwork, workspace camaraderie and sharing of ideas and motivation in a digital-first environment will be a challenge. But this digital infrastructure for a time-bound reskilling effort can be seamlessly integrated into the long-term plan of ‘digital-first skilling’. This shall ensure continued progress towards blended learning and bringing the digital agenda forward by many years. A reskilling programme run in a mission mode will not only strengthen the vocational education ecosystem, but also improve its aspiration value and linkages with employment and livelihood. Basis its success, VET shall be seen as a gateway to securing livelihood in the Indian economy, a goal for which tireless efforts under Skill India have been channelised over the years.
Source: Financial Express
JULY-END used to be a hectic time for hosiery and textile industry in Punjab’s industrial hub Ludhiana. By this time, most industrialists would book their retail as well as wholesale orders and get cracking to complete them on time. But this year the industry is staring at massive losses due to almost 70 per cent drop in orders for winter wear in the wake of the coronavirus pandemic. Most factories are running at less than 50 per cent of their capacities, Ludhiana-based garment makers have revealed. “We used to work night shifts during this time of the year. Also, material in many markets like J&K, Himachal Pradesh used to be supplied by September itself. However, this year it is still a single shift with less than 50 per cent of our workforce. Our Rs 12,000-crore winter wear industry is struggling,” said Sudarshan Jain, owner of Sarjeevan Knitwears and president of Knitwear Apparel Manufacturers Association of Ludhiana (KAMAL). Industry here manufactures winter wear majorly during June, July and August. Jain added, “In May, we used to organise exhibitions in Ludhiana where retail order bookings used to happen. Retailers from across the country would come here and in June, wholesalers would book their orders. Their demand used to give us an idea as to which product will sell the most the coming winter and what sort of fashion will be a hit. Based on that, we used to start our production.” But this year is different. “Buyers have placed just 30 per cent orders for winter wear this season as compared to last year,” Ludhiana-based garment maker Ajit Lakra said. Given that the pandemic is showing no signs of relenting, there is added uncertainty about demand for winter wear after September month. “If winter items are not sold at retail shops, there are chances that payments may get stuck… What will you do with just 30 per cent orders? How will you bear your fixed expenses like interest,” Lakra told PTI. Industry representatives further pointed out that fashion garments manufacturing units would bear the maximum brunt. Sudarshan Jai, owner of Sarjeevan Knitwears, who says that his unit is 90 per cent into fashion products for women like coats, tops, designer cardigans, jackets, has no orders in hand. He now plans to focus 90 per cent on basic items and 10 per cent on fashion garments to curtail the risk. According to him, “Nearly 95 per cent knitwear units attached with KAMAL work on designer winter wear items, and now many of them are focusing on basics like self-knitted sweaters for men and women. Simple jackets and coats, casual woollen kurtis, leggings as these items can be purchased by customers as per their need. Yes, designing is being done in kids’ clothes as people still love to spend money on their kids.” kash Bansal, Director of Rage Knit, said, “Our brand is popular because of our designs and we will keep that element alive. But it will be 50:50 designer and basic items which we will float in the market.” “People do not have money. They will spend only on essential items rather than purchasing non-essential fashion wear,” Knitwear Club president Vinod Thapar said. The garment manufacturing hub had already suffered a setback with buyers cancelling or putting on hold orders for summer wear because of Covid-19 pandemic, said manufacturers. Rage Knit’s Bansal explained, “As of now there is a liquidity crunch in the market. Many retailers have not yet released payments of last winter season. Normally, they would do it by March-end, but this time lockdown happened in March-end and hence many payments are stuck. It is not justified on retailers’ part to hold back payments of those products which they have already sold out last winter. So, it will be more a ‘house cleaning’ for us. We will be using in-house raw material to make whatever limited designs we can make for the coming winters. As of now, no order booking has happened, hence we will be making few items as per our experience of the market’s buying capacity.” Surinder Kumar Sharma of the Ludhiana Hosiery Garments Manufacturers and Traders Association said, ”Many old city markets like Purana Bazar, Gandhi Market, Kareempura, Sunder Nagar etc are old wholesale and retail markets. There are over 250 such shops where you have manufacturers as well as traders running the show. This summer was a total flop. Our markets cater to buyers from across the country and due to travel restrictions, it wasn’t that easy. Moreover, buying garments is not a priority right now. Our summer wear is still dumped inside our shops. So, manufacturing of winter wear will be just 25-30 per cent as per the projections created from the market this summer.” Sharma also said that government’s Sunday lockdown had hit their business. “Whatever little business used to happen on Sundays that too is finished. So it seems that 2020-21 will be a bad year for us.” Ludhiana has over 20,000 hosiery, textile and dyeing units spread in designated and non-designated areas. Vinod Thapar, chairman of Knitwear Club, said, “Ludhiana is a hub of hosiery, textile and knitwear garments. We do not have more than 50 per cent labour in our units right now. As per orders, we don’t even need them right now. Labour from Bihar is ready to come whenever units start working at full capacity.” Nearly 5.64 lakh persons had moved to their home states via Shramik Trains and buses from Punjab in May and June, but not more than 1.5 lakh have come back. “Workers are ready to come back. But our units are running as per market requirements …all those small units attached with big corporate houses only have 20-30 per cent work. Rest have zero orders. They are manufacturing as per their own estimation,” added Thapar. Ludhiana, one of the oldest textile clusters in the country, is famous for winter garments. The garments industry here is now seeking help from the government to extend moratorium on payment of loan installments. “The government will have to extend the moratorium for the industry for six months more. Otherwise majority of the units will turn NPAs (non-performing assets),” said Lakra, who is also the textile division head of the Federation of Industrial and Commercial Organisation (FICO).
Source: Indian Express
Officials of Directorate General of Goods and Services Tax Intelligence (DGGI), Surat, busted a racket which was allegedly involved in fraudulently availing GST credit. Officials said that as per the primary investigation, they have evaded tax amounting to around Rs 150 crore. According to DGGI officials, a transporter firm named Kanhaiya Cargo movers, which has its head office in Kolkata and branch office in Surat, was helping textile traders to avail GST credit fraudulently, on fake purchase of goods and fake return of their goods from Kolkata. The officials had found that the transporter prepares fake loading receipts and delivery challans. They were contacting each other through an agent, who charges 1.5-2 per cent of the amount as commission. The racket was unearthed after a raid on Tuesday at the office of the transport and an agent in Surat, where the officials recovered Rs 20 lakh in cash and found GST evasion to the tune of of Rs 60 lakh. DGGI officials further said that as many textile traders are also involved in this racket the exact amount of GST evasion is yet to be calculated. After primary investigations, the officials had found that through fake returns and fake purchase of goods they have evaded tax amounting to Rs 150 crore. The investigation is still in progress.
Source: Indian Express
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Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
752.35 |
USD/Ton |
-1.13% |
24-07-2020 |
|
VSF |
1196.33 |
USD/Ton |
-0.83% |
24-07-2020 |
|
ASF |
1686.00 |
USD/Ton |
0% |
24-07-2020 |
|
Polyester POY |
704.52 |
USD/Ton |
0.20% |
24-07-2020 |
|
Nylon FDY |
1977.23 |
USD/Ton |
0% |
24-07-2020 |
|
40D Spandex |
3997.28 |
USD/Ton |
0% |
24-07-2020 |
|
Nylon POY |
5139.36 |
USD/Ton |
0% |
24-07-2020 |
|
Acrylic Top 3D |
920.80 |
USD/Ton |
0% |
24-07-2020 |
|
Polyester FDY |
1813.05 |
USD/Ton |
0% |
24-07-2020 |
|
Nylon DTY |
1855.88 |
USD/Ton |
0% |
24-07-2020 |
|
Viscose Long Filament |
885.11 |
USD/Ton |
0.81% |
24-07-2020 |
|
Polyester DTY |
2198.50 |
USD/Ton |
0% |
24-07-2020 |
|
30S Spun Rayon Yarn |
1698.84 |
USD/Ton |
-0.42% |
24-07-2020 |
|
32S Polyester Yarn |
1327.67 |
USD/Ton |
-0.53% |
24-07-2020 |
|
45S T/C Yarn |
2155.68 |
USD/Ton |
0% |
24-07-2020 |
|
40S Rayon Yarn |
1498.98 |
USD/Ton |
-0.94% |
24-07-2020 |
|
T/R Yarn 65/35 32S |
2027.19 |
USD/Ton |
0% |
24-07-2020 |
|
45S Polyester Yarn |
1855.88 |
USD/Ton |
-0.76% |
24-07-2020 |
|
T/C Yarn 65/35 32S |
1663.15 |
USD/Ton |
0% |
24-07-2020 |
|
10S Denim Fabric |
1.13 |
USD/Meter |
0% |
24-07-2020 |
|
32S Twill Fabric |
0.64 |
USD/Meter |
0% |
24-07-2020 |
|
40S Combed Poplin |
0.93 |
USD/Meter |
0% |
24-07-2020 |
|
30S Rayon Fabric |
0.48 |
USD/Meter |
-0.60% |
24-07-2020 |
|
45S T/C Fabric |
0.65 |
USD/Meter |
0% |
24-07-2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14276 USD dtd. 24/07/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
The country's six industrial zones witnessed more than 100 incidents of labour unrests last month mainly over non-payment of wages. Besides, workers of some 1,004 factories are yet to get the wages for the month of May until first half of this month (July). Of the 1,004 units, according to reports, 558 are non-RMG and 436 textiles and RMG factories. The remaining 10 factories are registered with the Bangladesh Export Processing Zones Authority (BEPZA). At least 134 out of 1,882 member factories of Bangladesh Garment Manufacturers and Exporters Association (BGMEA) did not pay wages for the month of May until last month. There are also some factories which received loans from the government-announced stimulus package to pay wages in April while in May they did not get the fund from the banks on various excuses. However, the BGMEA claimed that only 40 factories did not pay the wages for the month of May. Some 1,886 out of 1,926 member units of BGMEA already paid the wages for the month of May, it said. All said and done, the industrial sector is becoming vulnerable to labour unrest. Nonpayment of dues and festival allowance and workload are among other reasons that might fuel unrest. At least 790 factories that include textile and RMG across the country are vulnerable to labour unrest over payment of wages and festival allowance ahead of Eidul-Azha. Of the total 790 factories, some 382 are members of BGMEA. Some 92 are registered with BKMEA and 40 are affiliated with Bangladesh Textile Mills Association (BTMA). Thirty-two factories under the Bangladesh Export Processing Zones Authority (BEPZA) might face unrest over non-payment of wage and other allowances. The number of non-RMG factories is 244 and they all run the risk of witnessing labour unrest. The listed units are located in six Industrial Police (IP) zones in Ashulia, Gazipur, Chattogram, Narayanganj, Mymensingh and Khulna. The IP officials are now closely monitoring these factories and holding meetings with the factory managements for timely payment to avoid any untoward incidents. Concern and anxiety are mounting among the workers ahead of Eid. The workers are in dire straits and facing the risk of losing jobs amid the coronavirus pandemic. According to BGMEA, 177 factories have been identified that might struggle with payments due to lack of work order and financing. Meantime, different organisations recently urged the government to take proper measures to bring a peaceful and permanent solution to the labour unrest in the garment sector. They expressed concern over the incidents of killing and torturing, vandalism and setting fire on garment factories. Some union leaders claimed that a vested quarter is conspiring to create anarchy in the sector over the issue. Urging all workers to be alert against such activities, the labour leaders said creating an atmosphere of discussion could solve such anarchic situation in the industry. Analysts say urgent, peaceful and permanent solution of any kind of unrest is a must. They demanded effective measures so that such incident would not take place in the future. Condemning the incident, they say a vested quarter committed such incidents creating confusion among the workers. The fact remains that a good number of factories halted their production as they don't have work orders due to the ongoing coronavirus pandemic. Besides, factories mostly of small categories are not getting required support from the banks. In the circumstances, both the owners and the workers need to show restraint and respect for each other's causes. An atmosphere of mutual understanding should solve most of the problems in the industrial sector.
Source: The Financial Express
The Central Bank of Nigeria (CBN) has announced N50 billion special mechanism funds to revive the ailing textiles industry. The funds to be administered by the Bank of industry (BoI) at 4.5 per cent interest rate will use any of the CBN-approved non-interest financing instruments for refinancing of projects, long- term financing for acquisition of plant and machinery and working capital for the beneficiaries. A statement containing the guidelines for the revival pill, tagged “Central Bank of Nigeria Non-Interest Guidelines for Intervention in the Textile Sector”, was released yesterday. It was signed by CBN Director, Financial Policy and Regulation Department, Kelvin Amugo. The apex bank said the funds would be used to resuscitate the ailing textile sector, restructure facilities and provide further facilities for textile firms with genuine need for intervention. According to the apex bank, the seed fund, which is a one-off intervention, will terminate by December 31, 2025 with the maximum financial amount pegged at N2 billion for a single obligor for new facilities and N1 billion for refinancing. The regulator said the plan to turnaround the textile sector was perfected at the August 7 meeting between the CBN Governor, Godwin Emefiele and textile mill owners. The resolutions reached at the meeting were that the textile mills articulate the status of their BoI Cotton Textile and Garment (CTG) Loans, stating their outstanding balances, tenure, interest rate, interest payment and the assistance being sought from CBN. The CBN listed activities to be covered under the Intervention as operations in the CTG value chain include cotton ginning (lint production), spinning (yarn production), textile mills, integrated garment factories (for military, para-military and schools and other uniformed institutions). The eligibility criteria for participation in the scheme indicated that any textile company with an existing facility in the books of BoI under the CTG scheme, any textile company with existing facilities in Deposit Money Banks/Non Interest Financial Institutions (NIFIs), textile companies that are not participating under the Small and Medium Enterprises/Restructuring/Refinancing Fund (RRF) are qualifies while projects financed before June 2009 (inception of the BoI CTG Loan) shall not be eligible to participate. It said emphasis would be on facilities that are indicating weakness arising from tenor, structure as well as facing cash flow difficulties. Further modalities for the facility showed that the fund will be administered at an all-in rate of return of 4.5 per cent per year payable quarterly.
Source: Economic Confidential
A government taskforce and proposed factory licensing scheme are unlikely to prevent labour abuses in Britain’s garment industry without the involvement of trade unions and community groups to help workers, several advocates in the city of Leicester said. The textile sector in Leicester, central England, has been in the spotlight this month after media reports that suppliers to brands such as Boohoo and Quiz were paying workers as little as 3 pounds ($3.80) an hour – less than half the minimum wage. The two companies vowed to investigate and take action but have faced criticism for cutting or suspending ties with suppliers rather than helping them to improve labour conditions. Home secretary Priti Patel last week said a cross-government taskforce “will be on the ground” soon in Leicester, while the retail sector’s lobby group on Monday called for factories to be licensed to tackle issues including low pay and forced labour. But such a top-down approach will do little to reassure workers or address their inability to join trade unions, demand better conditions, or report abuses without fear of being fired or deported, said local campaigners and community organisers. “We need a community development approach, to work door-to-door … for people to be able to organise, get support within the community and have a decent standard of living,” said Mark Mizzen of the Leicester Unemployed Workers Centre, a charity. Yet organising is difficult as employers do not have to allow access to unions and most suppliers in the city have a small number of workers on a casual basis, activists said. Industry experts say labour exploitation in Leicester – home to about 1,500 textile factories and 10,000 garment workers – has long gone unaddressed despite various exposes in recent years and a parliamentary probe into the matter in 2019. LICENSING SCHEME Garment workers in the city – many of whom come from South Asia – are unlikely to speak out, often because they lack the right to work or live in Britain or cannot afford to lose their jobs no matter how low-paid or exploitative, campaigners said. “More and more garment workers are falling into in-work poverty,” Mizzen, whose group provides workers in Leicester with advice about state welfare, told the Thomson Reuters Foundation. Charities said the criminalisation of undocumented migrant workers should be repealed and called for the reporting of workplace exploitation to be kept separate from immigration enforcement, as well as a local helpline dedicated for workers in Leicester. Britain’s anti-slavery tsar Sara Thornton said this month that whistleblowers needed “security and support” to speak out. A group of lawmakers, investors and brands, including Boohoo, have urged the government to set up a statutory licensing scheme to prevent rogue businesses from accessing the market and undercutting legitimate fashion manufacturing firms. “While there is no silver bullet, licensing is a critical step toward resolving (labour exploitation),” said Helen Dickinson, chief executive of the British Retail Consortium. But trade union GMB said the scheme would be ineffective without the involvement of unions and that brands should only give contracts to suppliers that agree to collective bargaining. “If (the licensing scheme) is just a tick-box exercise, and based on audits, bad employers will cover abuses up, find a loophole and get around it,” said GMB officer Colin Whyatt. Unions and activists have called for laws requiring retailers to publish details of their suppliers and audits, and making them responsible for any abuses in their supply chains. LOCAL OUTREACH LACKING Leicester community groups met with several retailers in October 2019 to discuss a plan to hire two local representatives to contact garment workers and run support services, show minutes of a meeting seen by the Thomson Reuters Foundation. Despite getting the green light from brands for the project, the promised funding never materialised, local organisers said. Nigel Venes of the Ethical Trading Initiative (ETI), a group of unions, firms and charities that was present at the meeting, said several brands were committed to raising standards in Leicester but warned that a more holistic approach was needed. “This saga has exposed the futility of audits, lack of government inspections and limited power of regulatory bodies,” said Venes, ETI’s strategic lead for apparel and textiles. An employer in Britain can expect to a face minimum wage inspection every 500 years, while only 15 have been prosecuted for underpayment since 2007, according to government reports. Authorities this month said they had found no evidence of modern slavery in initial visits to factories in Leicester. Priya Thamotheram, head of the Highfields Centre and an advocate for local garment workers, said community-led outreach backed by funding and building trust in trade unions were vital to encourage workers to raise abuses and push for better terms. One former garment worker in Leicester said he left the industry last year after seven years due to falling wages, and described a culture of secrecy and fear at local factories. “Nobody comes to factories to ask workers about what they do, about how the bosses treat you,” said Abdul, who chose not to disclose his name or country of origin for fear of reprisals. “Someone should come and check … and consult with workers from time to time.”
Source: Thomson Reuters Foundation
