The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 18 AUGUST, 2020

 NATIONAL

 

INTERNATIONAL

Self-reliance Modi mantra for nation! Make in India, Make for World to go hand in hand: PM

 Without naming either Pakistan or China, the Prime Minister asserted that India was fighting both terrorism and expansionism with determination and warned against provoking India. From the ramparts of the Red Fort, Prime Minister Narendra Modi on Saturday delivered a veiled warning to China and Pakistan against any misadventure at the borders, cast selfreliance as a necessary tool to spur growth and announced a raft of initiatives, including the national digital health mission and mass production of Covid-19 vaccine once necessary approvals are in place, to signal the country’s steely resolve to fight battles on multiple fronts. In his seventh straight independence day address, delivered at the toughest of the times under his leadership, Modi presented a broad outline of the Aatmanirbhar Bharat initiative and pitched for not just ‘Make in India’ but also ‘Make For the World’, with focus on exports. He called for trimming imports and moving up in the value chain to step up exports of finished products instead of mere raw materials. Elaborating on various reforms undertaken by his government, which resulted in attracting record foreign direct investments of $74 billion in FY20, Modi also pushed for further policy measures that would help realise the dream of ‘Shrestha Bharat’ (best India) in his 86-minute speech. But this economic and political prowess would have humanity at its core, Modi highlighted, possibly hinting at the contrast with China’s beligerent nationalism and clandestine economic policies. Amid clash with China on the borders, Modi lavished grand tribute on the soldiers for their sacrifice. “The world saw in Ladakh what our brave soldiers, the country can do for this resolve (to maintain our sovereignty). From the Red Fort, I salute all those brave soldiers who have staked their lives for the motherland,” he said. Without naming either Pakistan or China, the Prime Minister asserted that India was fighting both terrorism and expansionism with determination and warned against provoking India. “From LoC (Line of Control) to LAC (Line of Actual Control), anyone who casts an eye on the sovereignty of the country, the armed forces have responded in the language they understand,” he said, in the presence of a large number of dignitaries, including foreign diplomats. Hinting at bolstering cooperation with like-minded nations beyond the immediate neighbourhood, the Prime Minister said that today neighbours are not only those with whom India shares its geographical boundaries but also those with whom “our hearts meet”. Days after the ground-breaking ceremony for the Ram temple in Ayodhya, Modi said the centuries-old issue has been resolved peacefully. “The restraint and wise manner in which people of the country have behaved is unprecedented and will inspire us in the future,” he said. The Prime Minister also underscored his government’s commitment to holding assembly elections in Jammu and Kashmir after the ongoing delimitation exercise is over. He asserted that a new era of development has been ushered in the union territory after Article 370 was abolished a year ago. At a time of heightened battle against the pandemic, Modi also hailed ‘corona warriors’, including doctors, nurses, paramedical staff and sanitation workers, exuding confidence over the country’s decisive victory over the Covid-19 virus.

Source: Financial Express

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Govt extends anti-dumping duty for 3 months on caustic soda from China, Korea

New Delhi: India extended anti-dumping duty on imports of caustic soda from China and Korea till November 2020. The duty was extended after considering the recommendations of the commerce ministry's investigation arm Directorate General of Trade Remedies (DGTR) that had requested for extension of the existing anti-dumping duty on the chemical imported from China and Korea. "The anti-dumping duty imposed under this notification, with respect to People’s Republic of China and Korea RP, shall remain in force up to and inclusive of the 17th November, 2020, unless revoked, superseded or amended earlier," the Central Board of Indirect Taxes and Customs (CBIC) said in a notification on Monday. The duty was rst imposed in 2012 on a different set of countries to protect local industry from cheap foreign imports. The duty was then imposed on material coming from China and Korea in 2015 for a period of five years.

Source: Economic Times

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Covid-hit Indian economy may have shrunk 14-26% in Q1, say economists in ET poll

 India’s economy may have contracted by as much as a fourth in the June quarter because of the Covid-19 pandemic and the lockdown that ensued, according to a poll of 11 economists conducted by ET. They warned that a recovery may take a while as the virus spreads and infection numbers rise, prompting further localised closures. Their contraction estimates ranged from 13.6% to 25.7% and are in line with those seen in other countries hit hard by the coronavirus. The official gross domestic product (GDP) numbers for the rst quarter will be released on August 31. The Indian economy grew 4.2% in FY20 and 3.1% in the quarter ended March 31, signaling that growth was already slowing before the pandemic took hold. June quarter growth in FY20 was 5.2%. Even at the lower end of the range, the contraction will be historic, experts said. India needs to gain control over the outbreak to ensure that economic recovery is sustained, said most of the economists polled by ET, warning that local lockdowns were hurting the nascent recovery. They called for more measures from the government to support growth. India’s nationwide lockdown began on March 25 There has been some recovery in the rst half of August from a tepid July. AFP COVID-19 CASES Conrmed Deaths India World and was eased in phases in May, leading to a revival in business activity in June. But July saw states being forced to implement shutdowns in containment zones amid fresh outbreaks, denting the uptick. “We need to have a structured approach to on-and-o lockdowns and have a comprehensive scal plan to help the states so that the states can get the desired confidence and mojo back! As of now, containing the virus in rural areas must be the top priority,” said Soumya Kanti Ghosh, group chief economic adviser, State Bank of India. He sees a 16.5% contraction in the June quarter but that’s an improvement over the previous estimate because of better than-expected corporate results. India has the highest number of fresh daily infections and is third highest in terms of cumulative cases in the world, behind the US and Brazil. “The rst quarter bore the most brunt of the stringent lockdown in response to the pandemic, which dealt a sudden stop to nearly three-fourths of the economy for at least two of the three months,” said Radhika Rao, India economist at DBS Bank, predicting a 16.6% contraction in the rst quarter. India Ratings sees a 13.6% contraction, the least in the poll. Chief economist DK Pant said no quarter in the scal year would see positive growth. Think tank National Council of Applied Economic Research (NCAER) forecast the steepest decline of 25.7%. With a similar outlook of no positive growth this year, Sonal Verma, Nomura’s chief economist for India and Asia excluding Japan, pegged the rst-quarter contraction at 15.2%. The pandemic is spreading at a much faster rate after the opening up of the economy, Ghosh said separately in an SBI Research note, adding that mortality rates may increase by 0.5-3.5%. Manufacturing and services bore the brunt of the pandemic in the quarter ended June. Government transfers, good monsoons and large procurement of foodgrains may help the farm sector grow. Industrial production shrank 35.9% in the quarter from a year ago compared with 3% growth in the corresponding period last year. Manufacturing shrank 40.7% in the quarter while some services were down 35%. “For Q1, we are looking at -21%, with industry declining 32%. The saving grace is agriculture, which we have taken at a 4% growth,” said HDFC Bank chief economist Abheek Barua. “Manufacturing was hit in April and May but recovered a little in June,” said Indranil Pan, chief economist at IDFC First Bank, pegging the quarterly contraction at 17%. “Certain services segments remain weak and will remain so going ahead.” SHAKY RECOVERY “Pent-up demand and inventory restocking buoyed sentiments and production levels soon after, helped by the gradual reopen,” said Rao. 8/18/2020 India GDP: Covid-hit Indian economy may have shrunk 14-26% in Q1, say economists in   High-frequency indicators such as the index of industrial production (IIP), fuel demand, mobility, and e-way bills improved on a monthly basis through the quarter but were still far below last year’s levels. That bounce may not be sustained as consumption and purchasing power will continue to remain stressed as the virus penetrates rural areas, economists warned. Despite sequential improvements, the lockdown continued to plague the economy, according to Madan Sabnavis, chief economist at CARE Ratings. “The fundamental problem remains that due to the lockdown, consumption is still down, jobs are not there and people do not have purchasing power,” he said. Goods and services tax (GST) collections, e-way bills, power consumption and purchasing managers’ indices have already shown moderation in July from June levels. The return to normalcy has been hamstrung by varying restrictions across districts as the pandemic evolves and broadens its reach, said Rao. Subdued consumption and investment levels will hold back a recovery in the second half of FY21, the economists said. “The deep contraction is reflective of the impact of the global recession and the nationwide lockdown that restricted economic activity,” said Vivek Kumar, senior economist, Yes Bank, who expects an 18.5% contraction in first-quarter growth. Barclays’ chief India economist Rahul Bajoria said there’s room for a small scale stimulus package to support demand as longer-term steps such as the agriculture infrastructure fund, several privatisation initiatives and healthcare infrastructure projects have little visibility. Another option would be tax breaks to increase disposable income. “Government can offer income tax concessions for the lower two slabs and reduce GST even on sin commodities to build demand,” said IDFC’s Pan. States should make clear the criteria by which localised shutdowns will be imposed to help with planning. “Authorities should dene a threshold of the number of cases beyond which a lockdown will be imposed,” said Sabnavis. “This will take care of some of the unpredictability in the current scenario and help businesses plan better.”

Source: Economic Times

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PM chairs meet to review preparations for master plan for multi-modal connectivity to economic zones

New Delhi: Prime Minister Narendra Modi on Monday chaired a meeting to review the preparations for the national master plan for providing multi-modal connectivity to various economic zones. The prime minister described it as an important endeavour that will boost productivity, infrastructure, economic progress and opportunities for youngsters. "Chaired a meeting to review the preparations for National Master Plan For Providing Multi Modal Connectivity To Various Economic Zones. This is an important endeavour, that will boost productivity, infrastructure, economic progress and opportunities for our youngsters," he tweeted. Finance Minister Nirmala Sitharaman, Railway, and Commerce and Industry Minister Piyush Goyal and Civil Aviation Minister Hardeep Singh Puri were among those who attended the meeting.

Source: Economic Times

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Don’t summon top executives initially, avoid excesses: GST Intelligence

Seeking to minimise inconveniences to top executives of firms, the Directorate General of GST Intelligence (DGGI) has issued broad guidelines to officers not to resort to excesses. Top management of big firms, including PSUs, must not be issued summons in the first instance during probe, it said. “As an enforcement agency, it is imperative for the DGGI to maintain a balance wherein investigations should proceed strictly, as per law, while simultaneously ensuring that no excesses are meted out to the taxpayers and their sensibilities are respected,” it said in a circular dated August 14. A summon for personal appearance should only be issued when specifically required and such summons should not be issued repeatedly. Officers should record comprehensive statements in the first instance itself, it said. “Senior management officials such as CEO, CFO, general managers of a large company or PSU should not generally be issued summons at the first instance unless the evidence suggests otherwise,” DGGI said. The officers have also been advised to be sensitive towards the assessee or party and special attention should be given to elderly, women and children present in the premises under search. “Children should be allowed to go to school, after examining their bags. A woman occupying any premises, to be searched, has the right to withdraw before the search party enters, if according to the customs she does not appear in public. If a person in the premises is not well, a medical practitioner may be called. Religious sentiments of the person under search should not hurt in any way,” the DGGI said.

Source : Business Standard

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Govt needs to replace handicrafts board with a smarter body, say artisans and industry insiders

The All India Handicrafts Board, set up in 1952, has been abolished but the need is to quickly replace it with a more dynamic and effective body that represents the artisan community and shows it the way forward, say industry insiders and craftspersons. The decision to scrap the handicrafts board, which had its last meeting in 2016, caps the slow decay of the institution set up five years after Independence with a mandate to preserve the country''s rich craft heritage.The advisory board, instituted by cultural activist Pupul Jayakar, was practically non-functional for most part of the last decade, a major reason why many seem to agree it needed to be disbanded. It was scrapped on August 3 by the Ministry of Textiles, which stated that the decision was in “consonance with the government of India vision of ‘minimum government and maximum governance’, a leaner government machinery and the need for systematic rationalisation of government bodies”. Hyderabad-based designer Bina K Rao, who was a member of the handicrafts board, expressed the hope that “something smarter” would come up in its place. The last meeting, she said, was held in 2016 and the situation wasn’t much better even before that. “Sometimes the meetings would happen once a year, or once in two years… The board should have been reconstituted in 2017 after the completion of the two-year term, but we never received any intimation,” Rao told PTI over phone.With all its flaws, the body provided “a window” for grassroots artisans and that has closed now so something must replace it, he said. The issues discussed when the board met ranged from subsidies on silk yarns to lack of enough marketing of handicrafts products. Rao was one of the 88 non-official members (small and medium scale artisans as well as handicrafts enterprises) on the board, which also comprised eight institutional members, including the director general of the National Institute of Fashion Technology (NIFT) and chairperson of the Carpet Export Promotion Council. Chaired by the Textiles minister, it also comprised 16 official members, including the development commissioner (Handicrafts), secretary, Micro Small & Medium Enterprises and senior director of the National Handicrafts & Handlooms Museum. Srinivas Pitchuka, a second generation manufacturer and exporter of ‘kalamkari’ and other block printed textiles in Pedana village of Andhra Pradesh, is hoping that any new body will have more representation from his community. The All India Handicrafts Board was inconsequential, he said.In the two years that he was a member (2013-15), no meetings were held and the problems of the artisan community in the area remained unaddressed. “I manufacture ‘kalamkari’ textiles and we use organic colours for dyeing and block printing, but there are people who use artificial colours and sell unauthentic products. This was an issue that I would have wanted to bring to the government’s notice. “Besides my business, our region is also quite well known for making ‘veenas’ (musical instrument). Sourcing wood for it is very difficult, but there is no one to help us out with these problems,” Pitchuka told PTI .Pitchuka believes the lack of “real artisans” on the board was the real problem. “How could these ‘netas’ understand the true value of art? Such bodies need to have real artisans who will understand the problems of the community in order to make a difference,” he said. The second largest livelihood sector in India, the textile handicrafts sector alone employs 68 lakh artisans. The handicrafts industry brought in Rs.36,798.20 crore through exports, according to the Ministry of Textiles’ annual report for 2018-19. The revenue also includes sales of carpets. About 60 per cent of the handicrafts products produced in the country are exported. Jaya Jaitly, handicrafts curator and founder of the Dastkari Haat Samiti (an NGO working with artisans to uphold craft traditions) said the board had been made gradually useless since the 1990s and is glad it has been abolished. “No point renovating a dead object. It is best to be rid of it and create something new, effective, dynamic in tune with an ‘aatmanirbhar’ Bharat on a clean slate, with inputs from truly experienced and knowledgeable persons rather than use it for the patronage of favourites,” she said. A senior official said an alternative to the board is yet to be announced but the government has taken the first step by strengthening Weaver Service Centres across the country in collaboration with NIFT. “With the help of NIFT, these centres will undergo facelifts and redesigning…a design component will be created in these centres. The first phase has already started in eight to nine centres, and eventually all 28 WSCs will be taken up,” he said. Besides the All India Handicrafts Board, the government last month also disbanded the Handloom, Powerloom as well as the Cotton Advisory Board. The official cited “decreasing relevance” as the reason behind the move. The handicrafts board, he added was established a really long time ago and used to meet once a year. “But because the department anyway has advisory bodies at several levels, the board’s relevance kept decreasing… The idea is to let professional bodies function professionally so the government has a minimum role.” The handicrafts board was not the only space where artisans could voice their concerns. “We have field offices at regional levels. Local artisans keep having interactions at those forums. We have 66 field offices all over India. There are also all the handicrafts corporations which have their own associations. Similarly, handloom corporations have their own associations, which are supported by the government in some way,” the official said. 

Source: Outlook India

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RBI transfers Rs 57,128 crore surplus to the government for the year 2019- 20

 The surplus transfer of Rs 57,128 crore for the accounting year 2019-20 compared with Rs 1.76 lakh crore transferred last year, which included Rs 1.23 lakh crore as dividend and Rs 52,637 crore excess provisions identified as per the revised Economic Capital Framework (ECF) The Reserve Bank of India has approved a dividend payout of Rs. 57,128 crores to the government for its scale year. It has decided to maintain a contingency risk buffer of 5.5 percent at the minimum threshold recommended by the Jalan committee to review RBI's capital framework. The central board approved the dividend at its 584th meeting through video conferencing to discuss the financial operations and the balance sheet for the financial year 2019-20 . "The Board approved the transfer of Rs 57128 crore as surplus to the central government for the accounting year 2019-20, while deciding to maintain the contingency risk buer at 5.5%" the RBI said in a release on Friday. The RBI surplus for FY'20 ending June 30, is about a third of Rs 1.76 lakh transferred in FY'19, but higher than Rs 50,000 crore transferred. The dividend amount that RBI would transfer to the government assumes significance in the wake of scale constraints due to the COVID pandemic which led to an expectation of higher transfer of surplus to the government. The decision to maintain contingency risk buer was in line with the recommendation of the Jalan committee which suggested that "it be maintained at a range of 5.5 per cent to 6.5 per cent of the RBI’s balance sheet which is above the available level of 2.4 per cent of balance sheet as on June 30, 2018" (vis-à-vis a target of 3.7 per cent of balance sheet). The Committee recognized that the RBI’s Contingency Risk Buer is the country’s savings for a ‘rainy day’ -a financial stability crisis which has been consciously maintained with RBI in view of its role as Lender of Last Resort. The RBI board discussed the continued global and domestic challenges and the monetary, regulatory and other measures taken by RBI to mitigate the economic impact of COVID19 pandemic The Board discussed various areas of operations of the Bank during the last year and approved the Annual Report and accounts of the of the Reserve Bank for the year 2019-20. Deputy Governors B.P. Kanungo, Mahesh Kumar Jain and Michael Debabrata Patra and other Directors of the Central Board – N. Chandrasekaran, Ashok Gulati, Manish Sabharwal, Prasanna Kumar Mohanty, Dilip S. Shanghvi, Satish K. Marathe, S Gurumurthy, Revathy Iyer and Prof. Sachin Chaturvedi attended the meeting. Tarun Bajaj, Secretary, Department of Economic Aairs and Debasish Panda, Secretary, Department of Financial Services also attended the meeting.

Source:   Economic Times

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‘Kerala could target $54.7 billion export revenue in five years’

 Export-Import Bank released a paper on six-pronged export strategy of the State With a favourable policy framework and concerted efforts to boost exports, Kerala could target to achieve $54.7 billion export revenues by 2024-25. A study by Export-Import Bank of India pointed out that the merchandise exports from the State stood at $9.8 billion in 2018-19. Although exports from the State have registered a robust growth recently, there remains an untapped export potential of nearly $6.7 billion. The bank organised an interactive webinar on the theme Potential for Enhancing Exports from Kerala to familiarise participants with the potential export opportunities as also to proffer key export strategies to realise its latent potential and achieve higher export growth trajectory. It also released a working paper titled Promoting Exports from Kerala: Insights and Policy Perspectives. The study was released by K Ellangovan, Principal Secretary, Department of Industries and Commerce and NORKA.

Export strategy

The study identifies a six-pronged export strategy built upon the essential dimensions of diversification of products and markets, infrastructure leverage and strengthening, capacity building, fiscal incentives, devising an export promotion campaign, and institutional streamlining. The study recommends diversification from traditional export items towards higher value-added products such as processed food, technical textiles, bulk drugs, and electronics and machinery. Highlighting the role of trade enabling infrastructure in export competitiveness, the study recommends inter alia adoption of a public-private partnership (PPP) model for strengthening the existing network of waterways, creation of a fund for development of export infrastructure in the non-major ports, increasing warehousing capacity in Alappuzha and Palakkad, leveraging Central government sponsored schemes for enhancing the cold chain network, utilising IT-enabled services to improve the reach and connectivity for agricultural produce etc. The government could also consider fiscal incentives such as capital subsidy or grants in priority sectors and reimbursement of electricity duty in key export-oriented sectors. As part of its export promotion campaign, the government could also consider setting up export awards, establishing a brand equity fund for branding and marketing of products from Kerala etc. David Rasquinha, Managing Director, Exim Bank, said that international trade is at the focal point of the narratives of Atmanirbhar Bharat, and there is a need to coalesce efforts at all levels of governance to prepare the domestic industry for achieving these objectives.

Source: The Hindu Business Line

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Global Textile Raw Material Price 18-08-2020

Item

Price

Unit

Fluctuation

Date

PSF

796.21

USD/Ton

-0.09%

18-08-2020

VSF

1209.08

USD/Ton

0.36%

18-08-2020

ASF

1701.94

USD/Ton

0%

18-08-2020

Polyester    POY

760.90

USD/Ton

-0.75%

18-08-2020

Nylon    FDY

1916.66

USD/Ton

0%

18-08-2020

40D    Spandex

4006.26

USD/Ton

0%

18-08-2020

Nylon    POY

5187.96

USD/Ton

0%

18-08-2020

Acrylic    Top 3D

965.54

USD/Ton

0%

18-08-2020

Polyester    FDY

1815.79

USD/Ton

0%

18-08-2020

Nylon    DTY

1873.43

USD/Ton

0%

18-08-2020

Viscose    Long Filament

936.72

USD/Ton

0%

18-08-2020

Polyester    DTY

2176.06

USD/Ton

0%

18-08-2020

30S    Spun Rayon Yarn

1663.03

USD/Ton

0%

18-08-2020

32S    Polyester Yarn

1347.43

USD/Ton

0%

18-08-2020

45S    T/C Yarn

2168.86

USD/Ton

0%

18-08-2020

40S    Rayon Yarn

1844.61

USD/Ton

0%

18-08-2020

T/R    Yarn 65/35 32S

1671.68

USD/Ton

0%

18-08-2020

45S    Polyester Yarn

1513.16

USD/Ton

0%

18-08-2020

T/C    Yarn 65/35 32S

2046.36

USD/Ton

0%

18-08-2020

10S    Denim Fabric

1.14

USD/Meter

0%

18-08-2020

32S    Twill Fabric

0.64

USD/Meter

0%

18-08-2020

40S    Combed Poplin

0.93

USD/Meter

0%

18-08-2020

30S    Rayon Fabric

0.47

USD/Meter

0%

18-08-2020

45S    T/C Fabric

0.65

USD/Meter

0%

18-08-2020

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14411 USD dtd. 18/08/2020). The prices given above are as quoted from Global Textiles.com.  SRTEPC is not responsible for the correctness of the same.

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Pakistan to establish markets at joint borders with Iran

 As Pakistani media reported on Sunday, the official added that "The development of similar markets on the border with Iran is also on the agenda of the Islamabad government." His remarks have been made on the verge of the ninth round of Iran-Pakistan joint trade committee meeting, which is to be held in the near future. Lamenting about the US sanctions imposed on Iran, Dawood said that the sanctions have slowed that mutual free trade between the two sides. “... sanctions on Iran are an obstacle to the promotion of trade relations,” he said and added no headway is being made on the independent trade agreement with Iran due to sanctions, Pakistani Dunyanews reported. In a bid to strengthen bilateral relations and expand cooperation in the fields of trade and commerce, Iran and Pakistan have recently decided to hold new round of meetings of the Joint Trade Committee and the Joint Economic Commission. On July 6, 2019, heading a high-ranking delegation, the former Iranian Minister of Industry, Mines and Trade Reza Rahmani paid a visit to Pakistan to attend the 8th IranPakistan Joint Trade Committee meeting and to explore avenues of economic cooperation with Pakistani officials. At the time, the two sides signed a memorandum of understanding (MOU) for strengthening bilateral trade and economic ties and vowed to remove potential barriers in the way of mutual trade. The MOU was signed by Reza Rahmani and Abdul Razak Dawood on the sidelines of the Joint Trade Committee meeting in Islamabad. In November 2019, Observer of Pakistan’s Balochistan province Reza Baloch said that the government of Pakistan decided to launch four border marketplaces in a border shared with Iran for doing trade and business transactions as well as improving livelihood of frontiersmen.

Source:  Mehr News Agency

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Bangladesh: Skills development in RMG sector

Building on the foundation of low wage rate, our RMG sector has been labeled by foreign buyers as a low cost hub for high volume product sourcing. This is quite ironical that we are proudly selling ourselves as the cheapest human resource to ensure our growth driver RMG to stay competitive in the global market. Barely, we are thinking of the changes this sector will encounter after the much-talked graduation to a developing economy. Most importantly, the cultural-shock in RMG sector involving this paradigm shift will demand proper preparedness and if not doing so, the worst hit will be faced by our 4 million workforce in this sector largely due to low productivity coupled with lack of skills development schemes.

RMG Ecosystem At Regional Peers Bangladesh: Largely due to its low wage rates, lower cost of utilities and preferential trade agreement with EU, Bangladesh excels at supplying large quantities of apparel at low costs. Our specialisation ranges mostly in low-value and value for money price segment. However, Bangladesh has had issues on compliances and on time delivery. Vietnam: Due to high foreign investments (predominantly from China) and joint ventures which bring along technical know-how and expertise, Vietnam has grown its apparel exports significantly. Moreover, these factors coupled with supportive government policies have provided added advantage for the growth of textile ecosystem and infrastructure in the country and making it globally more competitive compared to other sourcing destinations. Sri Lanka: Despite higher living wages, Sri Lanka has emerged as a large player in global apparel market owing to its product portfolio, which largely accounts for higher-value, niche products. It has a large skilled workforce, which allows it to produce specialised products. Sri Lankan factories have been focusing on sustainability and compliance for a long time. While, these initiatives have helped create better value to the customers, it has also resulted in optimising the costs of manufacturing. India: India's status as an apparel sourcing destination owes to its strengths namely, abundant supply of raw material, vertically integrated supply chain, expertise in value added apparel manufacturing, availability of skilled manpower and well-established relationship with key global buyers. India, in contrast to most of the other Asian peers - has the advantage of a very rich heritage of Textiles.

SKILLS DEVELOPMENT IN RMG SECTOR: Competitiveness in the global apparel trade is primarily challenged by lack of scale in garment manufacturing due to workers skillset. Then comes seasonality (manufacture only certain product categories), inadequate capability in the synthetic value chain, limited number of preferential trade agreements etc. Coming to Bangladesh, our garment export industry is seasonality driven, leading to full capacities for season-specific production and evidently, competing nations have different skill regime to suit their local, cultural and commercial factors. Bangladesh is no exception in this case. The workers in garment industry are generally classified as unskilled, semi-skilled, skilled and highly-skilled. Usually skilled and highly skilled workforce at a factory floor performs critical operations such as collar attachment, sleeve placket attachment etc., which require certain set of expertise and know-how. Without the right set of skills, these operations cannot be performed and if performed wrongly, it would result in rejections and wastages. Without the requisite workforce to perform these operations, factories would face delivery delays, quality issues and bottlenecks at production floor. So it is of utmost importance for factories to have workers across different skill levels right from unskilled to highly skilled level to ensure smooth operations, quality and timely delivery. Studies found that each country has developed certain skill levels to match the product categories they manufacture. The clients place orders for certain product categories with these countries to match the existing skill levels of the workforce in these countries. India owing to its relatively higher skill levels, caters to value added products which are low to medium quality with certain level of value addition. In case of Bangladesh and Vietnam, the skill levels have been developed over the last 1-2 decades and these countries predominantly cater to basic products.

THE CASE OF BANGLADESH: Bangladesh has a multi-pronged skill building approach involving various government agencies, private institutions and industry. Some of the key initiatives are Centre of Excellence for Bangladesh Apparel Industries (CEBAI), Bangladesh Skills for Employment and Productivity (B-SEP) etc. The skills development system in Bangladesh can be classified into five main segments: * Public (Delivered to various degrees by numerous ministries) * Private (Receive a government subsidy e.g. grant) * Private (Commercial training institutions including madrashas) * Non-government and Not-for profit institutions Industry-based / Brands (institutions managed by industry and training delivered in the workplace, including apprenticeships) However, stakeholders are putting their concerns regarding the much talked shortage of about 1.47 lakh skilled manpower from floor to the executive level. This, eventually, compels the factory owners to engage expatriate employees in different positions such as CEO, CFO, general manager, senior manager, head of dyeing, head of washing, and head of quality assurance. Moreover, industry insiders predict that universities, technical institutions can provide textile and garments-related education to around 25,000 to 30,000 people, which is way too inadequate considering the requirement of the industry. Another concern blown by industry leaders that the RMG sector will need eight hundred thousand specialised employees by 2021 will be very difficult for factory owners to source locally. Moreover, they suggest that the sector will need 1.89 lakh graduates and textile experts for top positions by 2021 while Bangladesh will be able to produce around 40,000 by the time.

AREAS NEEDING SPECIAL FOCUS IN THE CONTEXT OF BANGLADESH Entry-level skills: These should continue in the current form of existing guidelines of Integrated Skills Development Scheme. Up-skilling: Up-skilling is extremely important to drive productivity. Only entry-level training is not sufficient to build productivity and efficiency. Existing workforce need to work at a better skill level with operational capability across different operations at production floor to contribute to overall productivity in the factories. Training of Middle Management: Middle management i.e. supervisors, section in charges, quality controllers, industrial engineers etc. are the backbone of any garment factory and need to be trained on best practices, by allocating at least 2 hours on a daily basis. Vocational Education: Vocational training should be given high priority and should be accepted as a university degree/diploma for apparel manufacturing. To combat the aforesaid challenges of our growth driver, there's no best alternative than re-skilling the whole sector starting from human resources to machine resources. As a whole, preparing updated curriculum, conducting need-based research, establishing teachers training centres and knowledge sharing platforms, capacity development of mid-level managers, making bridge between industry and academia and adopting paradigm shift in policy crafting are the building blocks to embrace upcoming changes and shifts.

Source:   Financial Express

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Vietnam: Garment exporters hope for a rebound

Garment exporters are not worried over falling behind their peers in Vietnam in overseas sales. They hope exports will rebound by December, buoyed by demand in the Western world ahead of Christmas. They also dream of having an opportunity to have a bigger market share in the United States, as China, which dominates the US market, is having a trade war with it. As the coronavirus pandemic has upended the world economy, it affected the exports too. People stopped buying clothes after their income collapsed. Big fashion houses are yet to reopen. Only some online shops have opened their business. Under the present circumstances, there will be a downward trend in the garment exports in August and September. But exports will get a boost from Christmas sales in December. Vietnam exported about $30 billion of garment products between July and June, surpassing Bangladesh that shipped about $28 billion of clothes, according to the General Statistics Office of Vietnam and the Bangladesh Export Promotion Bureau. Vietnam, therefore, superseded Bangladesh as the second-largest garment exporter, a crown the South Asian country held for a long time. In Bangladesh, garments account for about 85 percent of its export proceeds. The fall of Bangladesh from the second position came as bad news to local manufacturers.  We are operating at 60-70 percent of our capacity at present. We are getting work orders, but not enough. Only the basic items are exported now. Big fashion houses haven't opened yet, said Anwarul-Alam-Chowdhury Parvez, former president of Bangladesh Garment Manufacturers and Exporters Association. Global exports have shrunk, but the coronavirus pandemic has hit the exports from China the most as clothing shipments declined at least 49 percent between January and June this year. For Bangladesh, the decrease was 18 percent. Vietnam, that superseded Bangladesh in garment exports, lost 11.7 percent of exports in the six months. We were not worried at all that Vietnam surpassed us in garment exports. It is not the absolute number of exports but the growth that matters. The question is, if we can reach our target or if we were making enough growth, Chowdhury said. As Bangladesh experienced continuous year-on-year growth, the export earnings reached $34.13 billion in fiscal 2018-19. It declined to $32.83 billion in fiscal 2019-20 due to the pandemic. œAll we need to do now is to tackle the challenges created by the pandemic. Then we may reap some good results from it. We need to use this opportunity and both the government and the private sector must start working on a long-term plan to ensure it, said Chowdhury, also president of Bangladesh Chamber of Industries. China has been engaged in a trade war with the US for quite a long time, which intensified during the coronavirus pandemic. If the US stops or reduces buying garment from China, Bangladesh may have a bigger market there, Chowdhury explained. This will be a golden chance™ for Bangladesh to grab a share of the Chinese garment market in the US, he said. China has been reducing its garment exports to the US gradually after the trade war began, but it nosedived after the coronavirus epidemic broke out in Wuhan in December, according to the US Department of Commerce Office of Textile and Apparel. Last year China exported readymade garment worth $24.88 billion to the US market and had a 9 percent reduction in export that time. The Chinese export decreased 36 percent in January this year due to the COVID-19 outbreak. China exported garments worth $3.89 billion to the US in the first four months of the current year, which is 46 percent less than the last year. Vietnam, on the other hand, exported garments worth $4.18 billion to the US in the first four months of the year. Though their exports declined 1.31 percent, Vietnam’s exports were $290 million more than that of China. Therefore, Vietnam tops the list of garment exporters to the US. As Vietnam topped the list surpassing China in exporting garments to the US, Bangladesh still holds the third spot on the list. While China and Vietnam lost their exports, Bangladesh had a slight increase in its shipments. Bangladesh exported readymade garments worth $2.07 billion to the US market in January-April, which is 2.13 percent higher than last years exports. Four reasons are there for Vietnam superseding us in garment exports. Firstly, our factories were closed in April due to the COVID-19 outbreak. They reopened on a limited scale in May and June. We were supposed to export garments worth $9 billion in those three months, when we could only export garments worth $3.5 billion, said Mohammed Hatem, vice president of Bangladesh Knitwear Manufacturers and Exporters Association. œVietnam, on the other hand, had no reported COVID-19 cases and could export garments worth $3 billion more than us in the three months and reached the second position surpassing us. Secondly, most of the investors in Vietnam are from China or Hong Kong. They have a better communication system. They can collect the raw materials from China in 3-4 days and can deliver the finished products soon to the buyers. Naturally, the buyers tend to buy more from them. Vietnam’s Free Trade Agreement with the US and other countries is the third reason behind their growth. Bangladesh failed to have an FTA.We need to pay 15 percent duty when we export garments to the US, while Vietnam pays only 5 percent. This is how we fell behind, Hatem said. œThe fourth and biggest reason is that the workers in Vietnam are far more skilled than ours, reducing their production cost. They have to pay lower utility bills too. They pay Tk 2.5 for each unit of electricity, while we pay Tk 8.5. Hatem also mentioned that industrial units in Vietnam enjoy uninterrupted power supply with no voltage fluctuations, while factories in Bangladesh sometimes struggle. But Hatem was optimistic about a rebound in exports. The factory owners had a boost when the government provided four months™ salary for the workers under its incentive package to cushion the effects of the pandemic on the economy. It ensured that the garment sector goes back to full production. The country could export garments worth $3.24 billion in July, which was better than in April, May and June. œIn August and September, however, the export won’t be as good as in July. It may drop to half of Julys exports. This is because the July export was based on the old orders placed in March, April and May, which the buyers had deferred earlier, Hatem said. Overall, the garment sector is going through a tough time, said Hatem. Bangladesh is having very few orders, and those are small orders with small prices. œIn some cases, we accept orders at a loss, he said. People lost their income to the COVID-19 pandemic, depressing the demand for garments, while the supply is still on the upward curve. Prices drop when demand decreases and supply increases, a condition that is now defining the global garment market. The situation will not remain the same though. Prices will go up when the demand increases after the situation goes back to normal. I hope we can do a better business during Christmas, Hatem said. Bangladesh will be able to gain back its second position in exporting garments if it can survive the challenge for a year, he said. Garment exports in Bangladesh nosedived to $360 million in April, which was 85.37 percent less than last year after the COVID-19 pandemic hit the country in March. The factories restarted in May after the lockdown was relaxed, but exports were far from normal. In July, the first month of the 2020-21 fiscal year, overall exports increased only 0.59 percent, but the garment exports fell 1.92 percent. Exports in July amid the pandemic were satisfactory, said Ahsan H Mansur, executive director of the Policy Research Institute. We must remember that our export income was going through a bad phase even before the pandemic had hit our economy. We were losing growth every month, he told bdnews24.com. There would be an 8-9 percent decrease in our garment export even without the pandemic. The COVID-19 pandemic pushed it to 18 percent. He suggested observing the global situation. œIn the past, we have seen many incidents that brought good luck to our readymade garment sector. Everyone predicted a disaster in the readymade garment sector in Bangladesh after the quota system was abolished in 2004. But it proved to be a boon instead. Bangladesh exported garments worth $34 billion that time, which was earlier $7 billion, he said.

Source: The News Nation

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Kenya lifts ban on import of secondhand textiles, shoes amid COVID-19 pandemic

Kenyan authorities on Sunday lifted a ban on the importation of second hand textiles and shoes with immediate effect. Bernard Njiraini, managing director, Kenya Bureau of Standards (KEBS), said that the resumption of imports comes after the development of protocols to enhance safety and protection of traders and consumers to avoid the spread of COVID-19. "The guidelines provide a framework for enforcing additional safety measures such as cleaning and fumigation of used textiles and shoes at the country of origin before baling and at the wholesale and retail stores including surrounding areas every day at closure of business," Njiriaini said in a statement. In late March, the standards body suspended the importation of used clothing after the World Health Organization declared COVID-19 a pandemic. "This precautionary measure was taken with the main objective of safeguarding handlers and users of used textiles and shoes from any risk of exposure to coronavirus as the world grappled with the fast-spreading pandemic," Njiraini added. He noted that the developed protocols require importers to register with KEBS and to identify the country of origin of all bales to ensure their traceability. KEBS noted that the safety guidelines are a culmination of several weeks of research and consultation between different government agencies.

Source: Xinhua

Lanka’s exports surpass USD1 bn mark

 V-shaped export recovery pattern continues in July Sri Lanka’s exports have surpassed the $ 1 billion mark in July after six months’ time period where a similar achievement was only recorded in January this year. Export Development Board (EDB) Chairman Prabhash Subhasinghe said, “We have witnessed a phenomenal increase in exports in July 2020 with a new record for the year. Sri Lanka’s strategic location, its reliable manufacturing and export base and proactive and rapid action by the Sri Lankan Government to control Covid 19 have fulfilled our global customer’s needs. This is the reason for our remarkable recovery in exports, compared to when the crisis hit us. However, we need to be cautiously optimistic as we move towards year end due to the possible resurgence of Covid 19 in the US and European markets.” As per the Customs statistics, earnings from merchandise exports recorded a double digit growth rate of 11.31% in July 2020 to US$ 1,090 million compared to July 2019. Moreover, earnings from merchandise exports in July 2020 increased by 20.3 % compared with the value recorded in June 2020. This strong performance is consistent with the gradual lifting of restrictions due to Covid 19 pandemic within the country and globally. Increases in exports were recorded as; Europe Region (21.17%), South Asia (11.47%) and Middle East (8.91%) in July 2020 compared to July 2019. Being the largest single export destination, the United States of America has absorbed US$ 256.09 million worth of exports in July 2020 recording a 5.67% increase in comparison to US$ 242.36 million absorbed in June 2020 to June 2019. The expansion was mainly due to higher demand for tea from Turkey and Russia. Earnings from all the major categories of Coconut based products increased in July 2020 compared with July 2019 and a notable performance in export of Coconut Oil, Cocopeat and Activated Carbon. In addition, export earnings from rubber and rubber finished products have increased by 8.78% yo-y to US$ 85.08 million in July 2020 with strong performance in exports of gaskets, washers, seals etc of hard rubber. Export earnings from spices and essential oils have increased significantly in July 2020 compared with June 2019 with significant increase in cinnamon (63.6%) & pepper (46.3%). Further export earnings from Spices and Essential Oils were increased by 30 % in July 2020 in comparison to June 2020. Meanwhile, export earnings from electrical & electronic products (-1.47%), seafood (-9.42%) recorded a decline during the month of July 2020 compared with July 2019. Earnings from exports of apparel & textiles and rubber & rubber-based products grew significantly during the month of July 2020 owing to higher demand for personal protective equipment (PPE). PPE related exports have recorded US$ 115.1 Mn in July 2020. Export earnings from Apparel & Textiles increased by16.16 % to US$ 467.04 Mn during the month of July 2020 compared with US$ 402.04 Mn recorded in June 2020. Total export earning for January to July 2020 was US$ 5,452.53 Mn compared to US $ 6,909.12 Mn recorded in a similar period of the previous year – a decline of 21.08 %. However the gap created due to covid in April 2020 is further decreased. Major Exports such as Apparel & Textiles (US$ 2403.70 Mn), Tea (US$ 702.59Mn) and Coconut & Coconut Based Products (US$ 356.39Mn) and Rubber & Rubber based products (US$ 434.25Mn) recorded a decrease of 25.49%, 11.76%, 18.88% and 3.77% respectively during Jan-July 2020. The export sectors that show a positive growth at disaggregate level includes export of Gaskets, Washers, Seals etc. of Hard Rubber, Coconut cream, Coconut Milk, Coconut Vinegar, Coconut Shell Charcoal, Mattress Fiber, Pineapples, Arecanuts, Tamarind, Ginger, Essential oils, lemons, Sweat Potatoes and Lentils etc. The top five export destinations during the period Jan-July 2020 were United States of America (US$ 1,403.54 Mn), United Kingdom (US$ 461.7 Mn) India (US$ 339.4 Mn), Germany (US$ 312.6 Mn) and Italy (US$ 233.5 Mn). In addition, Exports to EU Region recorded an increase of 21.67% to US$ 356.64 Mn in July 2020 compared with July 2019. Meanwhile, exports to the United Kingdom as the largest trading partner in the EU Region recorded an increase of 18.66 % to US$ 100.1 Mn in July 2020 compared with July 2019. Further, exports to Germany, Italy, Belgium, Netherlands, Canada, China, Japan and Turkey have also shown better performance during this period. The services exports estimated by EDB which includes ICT/BPM, Construction, Financial services, Transport & Logistics and Wellness Tourism show exports of US $ 2,044.6 Mn for the period.

Source: The Daily News

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