The Synthetic & Rayon Textiles Export Promotion Council

MARKET WATCH 29 SEPT, 2020

NATIONAL

INTERNATIONAL

PM Modi to hold virtual bilateral summit with Danish counterpart today

Prime Minister Narendra Modiand his Denmark counterpart Mette Frederiksen will be participating in a virtual bilateral summit on Monday. According to a statement issued by the Ministry of External Affairs, the virtual bilateral summit will give an opportunity to the two leaders to comprehensively review the broad framework of the bilateral relationship in the context of the time-tested friendly ties between the two countries and give broad political direction for a strengthened and deepened collaborative partnership on key issues of mutual interest. India and Denmark share 400 years of historical linkage and about 70 years of diplomatic relations. Denmark has been an important development partner, contributing to India's 'White Revolution' and growth of wind energy. Around 5,000 India (/topic/india)n professionals are working in major Danish companies and 20 India in IT companies which have been present in Denmark for decades, contributing Indian expertise in IT and Finance to the Danish economy and enhancing their products, services and competitiveness. Around 30,000 Indian IT professionals are developing the latest products and services in India for major Danish companies. Major Danish companies such as Grundfos, Danfoss, Vestas, LM Wind, Novozymes, Rockwool and Haldor Topsoe have set up factories and manufacturing facilities in India under the 'Make In India' scheme. They are being used as export hubs. India and Denmark are cooperating in fighting climate change by exporting wind turbines, enzymes, etc. Danish companies like Babcock and Wilcox have set up paddy the first waste-to-energy facilities in Punjab and Haryana to fight air pollution. Maersk transports 19 per cent of India's containers and one-third of its reefers, enabling the export of seafood, agricultural products and pharmaceuticals to the world. Maersk has invested in Pipavav and JNPT ports and employs around 11,000 seafarers, comprising the majority of its shipping crews, to run its ships worldwide. Danish companies such as Danfoss play an important role in increasing farmers' income by setting up cold storages, and has developed post-harvest technology for bananas. It also manufactures equipment for industrial cooling. Knud E. Hansen has designed stateof-the-art 500 pax and 1200 pax RORO ferries for Andaman and Nicobar Islands, which have been built by Cochin Shipyard. Mumbai Coastal highway is being built by L&T and designed by Danish company Ramboll. Danish companies RAMBOLL & COWI are doing engineering and design for the TransHarbour Sea-Link in Mumbai, which will link Mumbai with Navi Mumbai. The project is estimated to cost USD 2.5 billion. Union Ministry of Commerce and Industry signed a Memorandum of Understanding (MoU) in the field of Intellectual Property cooperation with Denmark's Danish Patent and Trademark Office, here on Saturday. The MoU aims at increasing IP co-operation between the two countries by way of exchange of best practices, experiences and knowledge on IP awareness among public, authorities, businesses and research and educational institutions of both countries.It also calls for collaboration in training programmes, exchange of experts, technical exchanges and outreach activities. The memorandum also focuses on the "exchange of information and best practices on processes for disposal of applications for patents, trademarks, industrial designs and Geographical Indications, as also the protection, enforcement and use of IP rights.

Source: ANI

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Clearing the air: No diversion of GST compensation cess funds, says finance ministry

The auditor further noted that “the amount by which the cess was short-credited was also retained in the Consolidated Fund of India and became available for use for purposes other than what was provided in the Act.” The finance ministry on Saturday asserted there was no ‘diversion’ from the GST compensation cess fund during FY18-FY19 as reported by sections of the media, adding, “even the Comptroller and Auditor General (CAG) hasn’t said so”. According to a ministry source, there was only temporary retention of the excess cess in the Consolidated Fund of India under Article 266 of the Constitution, pending reconciliation, which usually happens by the end of June in the subsequent financial year. The source pointed out that, “the amount collected under compensation cess fund have been regularly and fully distributed to states as per their dues and budgetary provisions and by the end of July 2020 everything has been accounted for and released”. The CAG in its audit report placed in Parliament recently highlighted ‘short-crediting’ of cess collections totalling Rs 47,272 crore to the GST Compensation Fund during FY18- FY19, and said this was in violation of the GST Compensation Cess Act, 2017. The auditor further noted that “the amount by which the cess was short-credited was also retained in the Consolidated Fund of India and became available for use for purposes other than what was provided in the Act.” Noting the finance ministry’s defence, presented to it in February 2000 that the proceeds of cess collected and not transferred to the designated public account would be transferred in subsequent year, the CAG said short crediting of cess collected during the year led to overstatement of revenue receipts and understatement of fiscal deficit for the year. “Further, any transfer in the subsequent year would become an appropriation from the resources of that year and would require parliamentary authorisation,” it noted. The CAG also took exception to the finance ministry transferring the cess proceeds to the compensation fund as ‘grant in aid’, rather than as ‘other fiscal services’, as the compensation is the state’s ‘right” not a ‘grant in aid’. For FY20, the central government released Rs 1,65,302 crore as GST compensation against a cess collection of Rs 95,444 crore. The finance ministry source noted that unutilised (excess) cess of Rs 47,271 crore (from FY18 and FY19) was also distributed to states during FY20. Also, as FE reported earlier, Rs 33,412 crore of unutilised I-GST collections for FY18 was also used to compensate the states in FY20.

Source: Financial Express

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India wants easy access for export

The Indian government has sought easy access for its ethnic wear products to Bangladesh saying that business opportunities in the industry had remained untapped between the two countries. The Indian textiles ministry recently proposed to Bangladesh to create a special provision for export of its ethnic wear products such as kurtas and kurtis, salwar suits, bottoms like churidaars, palazzos and leggings, sarees and blouse sets, skirts, sherwanis, jackets, kotis, indo-western dresses and gowns to Bangladesh for mutual benefits. Bangladesh and India have taken a move to sign a memorandum of understanding to enhance trade and economic relations in a balanced manner by expanding business and cooperation in the sphere of textiles, including cotton, jute, silk, handlooms, clothing and fashion industries and skills training institutions. In the draft memorandum, India proposed to collaborate in the ethnic wear industry for mutual benefits and to explore the global opportunities in this untapped segment. It also sought Bangladesh’s assistance to open retail stores to promote sales of ethnic wear. India made the proposal at a meeting held to scrutinise the draft memorandum at the textiles ministry in Bangladesh on September 23. Earlier, Clothing Manufacturers Association of India chief mentor Rahul Mehta, in a letter, requested the Indian textiles ministry to take an initiative so that their ethnic wear products could get easy access to Bangladesh with special tariff. Signing of the MoU with Bangladesh for the textile industry would indeed be an extremely important step to assist the domestic garment industry of India, he said in his letter. ‘Apart from concerns regarding unrestricted Imports of Garments from Bangladesh – which I am fully aware has severe constraints – this could be an excellent opportunity for us to push for lowering of tariffs for Imports of Indian Garments into Bangladesh,’ the letter said. The Clothing Manufacturers Association of India suggested that its government should include the issue of ethnic clothing in the memorandum as the items were not being manufactured in any significant quantity in Bangladesh, and at the same time had good demand locally.‘You will recall that keeping in mind Bangladesh’s concerns about protecting their Domestic Industry, we had suggested having a separate tariff for Ethnic Clothing, and possibly the need for creating a unique HS Code for this Category,’ Rahul said in his letter. Bangladesh Knitwear Manufacturers and Exporters Association first vice-president Mohammad Hatem said that they were examining the draft memorandum considering the mutual benefits for both countries. ‘Bangladesh’s textile sector would be benefited if we get technical support from India. But we do not agree with India’s proposal for easy access of its ethnic wear products to Bangladesh as a good number of local manufacturers are making the products,’ he said.

Source: New Age Business

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India, Denmark sign MoU on Intellectual Property cooperation

Department for Promotion of Industry and Internal Trade(DPIIT), Ministry of Commerce and Industry signed a Memorandum of Understanding (MoU) here today, in the field of Intellectual Property Cooperation with the Danish Patent and Trademark Office, Ministry of Industry, Business and Financial Affairs, Kingdom of Denmark. Dr. Guruprasad Mohapatra, Secretary, DPIIT and Mr. Freddy Svane, Ambassador of Denmark conducted a formal signing ceremony for the same. The Union Cabinet in its meeting dated 15.09.2020 gave the approval for signing the MoU with Denmark in the field of IP Cooperation. The MoU aims at increasing IP co-operation between the two countries by way of: a) Exchange of best practices, experiences and knowledge on IP awareness among public, authorities, businesses and research and educational institution of both countries. b) Collaboration in training programmes, exchange of experts, technical exchanges and outreach activities. c) Exchange of information and best practices on processes for disposal of applications for patents, trademarks, industrial designs and Geographical Indications, as also the protection, enforcement and use of IP rights. d) Cooperation in the development of automation and implementation of modernization projects, new documentation and information systems in IP and procedures for management of IP. e) Cooperation to understand how Traditional Knowledge is protected; including the use of traditional knowledge related databases and awareness raising of existing IP systems. The two sides will draw up Biennial Work Plan to implement the MoU which will include the detailed planning for carrying out of the co-operation activities, including the scope of action. This MoU will go a long way in fostering the cooperation between India and Denmark, and provide opportunities to both countries to learn from the experience of each other, especially in terms of best practices followed in the other country. It will be a landmark step forward in India’s journey towards becoming a major player in global innovation and further the objectives of National IPR Policy, 2016.

Source: PIB

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Industry confidence hit all-time low during April-June quarter: Care Ratings
 

The confidence of Indian industry hit an all time low during the April-June quarter according to the Care Ratings NSE 0.33 %’ Industry Confidence Index (CICI) released on Monday. The CICI hit a nine-quarter low of 58 out of 200, continuing a largely declining trend since its inception during the first quarter of FY19 when it recorded a score of 119.  The quarterly index evaluates 47 industries based on six parameters covering financial performance, credit worthiness and outlook. “Revenues growth, interest coverage ratio and MCR (Modified Credit Ratio) are among the 6 parameters that showed the highest signs of strain across industries,” the report said. The latest reading, calculated in comparison to last year’s levels, came after a previous low of 62 during the final quarter of the last fiscal. Grading responses as ‘improved’, ‘remained same’ and ‘worsened’, the CICI found 64% or 179 of the 282 responses received were in the worsened category. “Of the 47 industries, 39 industries witnessed a decline in revenue growth, 21 industries witnessed fall in operating margins, 25 witnessed adverse fluctuation in pricing, 29 industries witnessed fall in the modified credit ratio and 38 industries witnessed deterioration in interest coverage ratio, during Q1-FY21 when compared on a YoY basis, the report said.  While most industries reported worsening conditions under the various parameters, tractors, agrochemicals, fertilizers, drugs and pharmaceuticals showed an improvement in the first quarter of the fiscal, it said. Since the first quarter of FY19 fewer industries have reported an improvement in conditions which means an increasing number of industries have shown deterioration in performance across various parameters over the past few quarters, CARE Ratings said. A decline in the number of industries reporting no change in conditions since the last quarter of FY19 implied falling stability, the number of ‘worsened’ responses rose sharply since that fiscal indicating sluggish performance, it said. “We do expect GDP growth to turn positive in Q4 and this could be the turning point for CICI. Also, the level of negative growth in GDP is to be less severe in the next two quarters and these points too would need to be monitored closely,” it said.

Source: Economic Times

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GDP contraction in Q2 likely to have slowed to 12%, recovery will be patchy, say economists

High Covid-19 cases and localised lockdowns to contain the spread are dampening demand, according to most of the respondents in an ET poll of 10 economists. India's economy may have contracted at a slower pace in the September quarter compared with the preceding three-month period, said economists surveyed by ET, pegging it a median 11.95%. They warned that the recovery will be patchy and uncertain though the worst may be over. They called for a strong scal package to boost demand and even suggested monetisation if the bond market could not support a borrowings-funded stimulus. High Covid-19 cases and localised lockdowns to contain the spread are dampening demand, according to most of the respondents in an ET poll of 10 economists. India's real gross domestic product (GDP) could have contracted 8-15.6% in the second quarter of FY21, they said. Nominal growth is seen shrinking around 7.5-9.5% in the quarter. "We can say the worst is behind us," said Kotak Mahindra Bank NSE 1.91 % economist Upasna Bhardwaj. "While there is a reasonable bounce back with consumer durables, electricity, trade and transport, and some subsectors of manufacturing doing well, the recovery will be patchy, uncertain and uneven." India's economy shrank 23.9% in the June quarter because of the Covid-19 pandemic and the lockdown that followed. Catch-up in industrial activity The contraction was the most among the big economies. The country is on course for the rst full-year contraction of GDP in over four decades in FY21 even though the economy may do better in the second half. "Stringency of the lockdown has eased since April-May. However, with over 90% of the infection case load built-up since late-June, the reopening process has been uneven, delaying a return to pre-pandemic levels," said Radhika Rao, economist, DBS Bank, pencilling in 13% contraction in the September quarter. Much like the April-June quarter, non-agricultural sectors are likely to drive contraction in the second quarter. However, a catch-up in industrial activity and partial restart in construction could see these sectors contracting less steeply than services. Agriculture had grown 3.4% in April-June against 39.3% and 50.3% contraction in manufacturing and construction, respectively. HDFC Bank expects GDP to contract 10% in Q2 on account of continued supply disruptions and a slowdown in the pace of recovery in July as states re-imposed lockdowns. India has surpassed Brazil to become the country with the second highest number of coronavirus cases after the US. The country's daily case count had crossed 97,800 on September 16, but has declined since. High-frequency indicators such as the index of industrial production (IIP), fuel demand, mobility, and e-way bills improved on a monthly basis but are still far below last year's levels. Passenger vehicle sales returned to positive territory in August after nine straight months of decline, rising 14.16%. "Manufacturing and some part of services have normalised faster than others. We expect an L-shaped recovery in the near term," said DK Joshi, chief economist at Crisil. He expects a contraction in the third quarter as well and the year ending with a small positive growth in the fourth quarter. Most economists called for measures to boost demand and lift employment though they did not expect a scal boost from the government. "We expect limited support from government capex spending given the stressed scal situation and muted private capex," said Sakshi Gupta, senior economist at HDFC Bank.

Source: Economic Times

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It's time for policymakers to boost regional cooperation

Going forward, a cross-border regional protocol would help strengthen the preparedness for future pandemics or similar disasters It is now almost nine months since China first reported a cluster of cases of unknown type of pneumonia. The disease, subsequently named SARS-CoV-2 (called Covid-19), has spread all over the world affecting over 32 million people and killing a little less than a million people so far. During this period, most countries, in varying degrees, imposed lockdowns and later relaxed them. Almost all governments took many initiatives to keep the goods moving. Professor Prabir De, head of ASEAN-India Centre (AIC) and Research and Information System for Developing Countries (RIS), New Delhi, ...

Source: Business Standard

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Rupee appreciates 6 paise to 73.55 against US dollar in early trade

The Indian rupee advanced 6 paise to 73.55 against the US dollar in opening trade on Monday tracking weak American currency and positive domestic equities. The local unit opened 3 paise lower at 73.64 at the interbank forex market, then gained ground and touched 73.55 against the greenback, up 6 paise over its previous close. On Friday, the rupee had staged a smart rebound and close at 73.61 against the US dollar. Forex traders said investors would look for cues from the first presidential debate between US President Donald Trump and Democratic candidate Joe Biden, set for Tuesday. "The market would look forward to how Biden stands up to Trump. President Trump would want to consolidate his Republican base, touching upon issues which resonate most with them," said Abhishek Goenka, Founder and CEO, IFA Global. Goenka further said that "today (Monday) is the September Currency derivatives expiry. We could see some selling at RBI fix. Month-end exporter selling could limit up side in USD-INR. It is likely to trade 73.50-73.85 range intraday." Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, fell 0.16 per cent to 94.48. On the domestic equity market front, the 30-share BSE benchmark Sensex was trading 343.64 points higher at 37,732.30 and the broader NSE Nifty rose 103.90 points to 11,154.15. Foreign institutional investors were net sellers in the capital market as they offloaded shares worth Rs 2,080.21 crore on a net basis on Friday, according to provisional exchange data. Brent crude futures, the global oil benchmark, fell 0.72 per cent to USD 41.62 per barrel.

Source: Business Standard

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Global Textile Raw Material Price 29-09-2020

Item

Price

Unit

Fluctuation

Date

PSF

789.14

USD/Ton

0%

29-09-2020

VSF

1306.19

USD/Ton

0%

29-09-2020

ASF

1760.16

USD/Ton

0%

29-09-2020

Polyester    POY

745.13

USD/Ton

0.79%

29-09-2020

Nylon    FDY

1950.84

USD/Ton

0%

29-09-2020

40D    Spandex

4253.72

USD/Ton

0%

29-09-2020

Nylon    POY

894.75

USD/Ton

0%

29-09-2020

Acrylic    Top 3D

2200.20

USD/Ton

0%

29-09-2020

Polyester    FDY

5280.48

USD/Ton

0%

29-09-2020

Nylon    DTY

949.75

USD/Ton

0.39%

29-09-2020

Viscose    Long Filament

1818.83

USD/Ton

0%

29-09-2020

Polyester    DTY

1965.51

USD/Ton

3.08%

29-09-2020

30S    Spun Rayon Yarn

1789.50

USD/Ton

0%

29-09-2020

32S    Polyester Yarn

1378.79

USD/Ton

0%

29-09-2020

45S    T/C Yarn

2222.20

USD/Ton

0%

29-09-2020

40S    Rayon Yarn

1562.14

USD/Ton

0%

29-09-2020

T/R    Yarn 65/35 32S

2082.86

USD/Ton

0%

29-09-2020

45S    Polyester Yarn

1936.18

USD/Ton

0%

29-09-2020

T/C    Yarn 65/35 32S

1708.82

USD/Ton

0%

29-09-2020

10S    Denim Fabric

1.15

USD/Meter

0%

29-09-2020

32S Twill    Fabric

0.65

USD/Meter

0%

29-09-2020

40S    Combed Poplin

0.94

USD/Meter

0%

29-09-2020

30S    Rayon Fabric

0.48

USD/Meter

0%

29-09-2020

45S    T/C Fabric

0.66

USD/Meter

0%

29-09-2020

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14668 USD dtd. 29/09/2020). 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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Ethiopia: Corporation aims to gain $400M from export sector

The proliferation of industrial parks in different corners of the country has played a pivotal role in enhancing the export sector. The industrial parks have been producing competitive products and creating ample job opportunities. But there are logjams that hinder them from progressing further. Resisting COVID-19 pandemic calamities, Industrial Parks Development Corporation (IPDC) has planned to maintain 400 million USD from foreign trade in this fiscal year. Marketing and Communication Office Head at the Corporation, Derbie Debele says that IPDC is striving to accomplish the mission of being one of the best industrial parks in the world by 2025. ‘’IPDC has targeted to transform the industrial sector of the nation. It has been endeavoring to realize the goal through implementing plausible policy and strategy. This budget year, 36 domestic investors are set to involve in the parks. Consequently, 45,000 jobs would be created and 400 million USD would be generated from foreign trade as well,’’ he notes. As to him, completed parks would start operation fully and this would have huge significance in job creation and foreign currency earnings. ‘’The issue of industrialization will not be left for IPDC alone. Rather, all stakeholders should exert their maximum efforts to address challenges related with electricity, water, road and other infrastructures,’’ he says. Adding: ‘’Semera industrial park will see completion and start operation in this fiscal year. In addition to this, more than 31,000 homes will be built for employees .Homes are under construction in Bole Lemi 1 industrial park. This would motivate employees to enhance produce and productivity.’’ Derbie insists that IPDC would strive to create market linkage between local manufacturing enterprises and industrial parks. Peace and security would be prioritized to make sure investors would invest their capital without any concern and the corporation is working in collaboration with all concerned bodies as to the head. Mekelle Industrial Park is one of the major parks which started full operation. The park has shown encouraging development in garment and textile production. Hence, it has pressed ahead with its role in maximizing foreign currency earnings. Filimon Terefe, General Manager of Mekelle Industrial Park says that his park has been endeavoring to upgrade production and foreign currency through taking prevention measures on COVID-19 pandemic. He indicates that three textile and garment companies have joined the park three months ago and they have already started pre-production works. ‘’ The companies will have a capacity of producing 4 million USD worth textile and garment products and they will create job opportunities for 500 citizens. The companies are owned by two Chines and one Ethiopian investors. They would have massive role in improving the performance of the park,’’ he notes. He adds that Mekelle Industrial Park has been exporting its products to American and European markets and it has planned to expand market destinations. In the previous budget year, IPDC had gained 165 million USD from exporting industrial items to different countries of the world. The corporation’s aim to upgrade it gain to 400 million USD. This year would have massive contribution for industrial sector.

Source: Geeska Afrika

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Sri Lankan President urges local industries to commence production of high quality textiles

Sri Lankan President Gotabaya Rajapaksa today emphasized that it is imperative for local industries to commence the production of standard and high quality textiles immediately. President Rajapaksa explored the possibility of assigning the larger percentage of supply of school and security forces uniform material to local industrialists following an inspection visit to textile mills in the Dankotuwa Industrial Zone today (September 28). The President accompanied by the Minister of Industries Wimal Weerawansa visited the Dankotuwa Textile Mill, Dankotuwa, Vanguard Industrial (Pvt) Ltd, Kandana and Creative Textile Mill (Pvt) Ltd, Wattala today. Numerous garment industrialists conveyed that following the uniform coupon system, they had to shut down a number of their production facilities which were built at a capital expenditure. A large number of employees were laid off as well. President first visited the Creative Textile Mill (Pvt) ltd in the Dankotuwa Industrial Zone. The company which was an investment of Rs 2 billion remains shut down since 2015. Despite its discontinued production and income, the proprietor had to pay an interest of Rs 8 million to banks annually. Creative Textile Mill has been importing threads from India, Pakistan and China to produce clothing material and managed to employ 500 people. The production capacity of the facility is expected to be increased to 100,000 meters per day while demand for annual school uniform estimated at 11 million meters. President Rajapaksa encouraged the managerial level staff to recommence their apparel production and requested them to figure out a plan for the self-employed entrepreneurs to contribute to the demand for the school uniforms. “We can reduce the import cost by 68% if we can boost the local textile production”, President pointed out. It was also revealed that with the purchase of local garments, Ministry of Education could save up to Rs 80 million annually. The President also drew attention to the issues raised by the local political authority and the people regarding the Industrial Estate of Dankotuwa. Vanguard Industries (Pvt) Ltd, Kapuwatta, Kadana, which supplied 40% of the school uniform requirement before 2015, is now engaged in producing bed sheets and towels. President Rajapaksa, who observed the overall production process of the company, encouraged the management to increase the capacity to meet the demand for fabrics in the local market. The management stated that their establishment has the capacity to supply 30% of the school uniform material requirement. President Rajapaksa also inspected Creative Textile Mill pvt Ltd, Wattala, a branch of Dankotuwa Textile Mill (pvt) ltd. Fabrics for the uniforms of the tri-forces are manufactured there. The Company employs over 1500 people. One of the primary functions of the company is to dye fabrics as required by the security forces. The Management told the President that imported fabrics are not tested and that there is a high cost involved in testing local fabric products. They pointed out that laundry detergents are not properly regulated and as a result of this a significant amount of damage can happen to the color of the fabric. The President urged them to take advantage of the assistance provided by the government to local industrialists and strive hard to win both local and foreign markets. President Rajapaksa inspected the production of the National and Buddhist flags in the company and instructed the owners to increase the production to meet the local demand accordingly.

Source: Colombo Page

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Bangladesh must be in the premier league of a new apparel industry

A new study by the International Labour Organisation (ILO) suggests that the impact of the coronavirus pandemic will be deep and long-lasting. The research argues that global garment supply chains will undergo profound changes as a result of the pandemic. They say the pandemic will speed up current trends which include an increased focus on technological advancement as well as greater supply chain agility. Their report also suggests that we could see a move towards a "two-tier supply chain," where large, cashrich suppliers race ahead with the use of advanced technologies, while the "race-to-thebottom" suppliers focus on cost-cutting simply in order to stay afloat. A key point made in the research is that global apparel supply chains will become polarised. The authors say there will likely be a deepening divide between large and professionalised and non-professionalised manufacturers, which will present the industry with two clearly defined diverging paths. On the one hand, some factories are likely to become professionalised and offer more technologically advanced production. As a result, these factories will be able to support increasing demands for transparency, flexibility and agility in production processes and enhanced social and environmental standards. This development will likely result in closer partnerships between some buyers and manufacturers and possibly in more balanced power dynamics. In other words, manufacturers like this will be better placed to negotiate with buyers. On the other hand, stretched margins will drive some factories and buyers to focus on solely cost advantage at the expense of other considerations. We know about these kinds of suppliers. They are stuck in a race to the bottom which is almost impossible to escape. Bangladesh, as the second largest garment manufacturing hub in the world, has a decision to make: which side of the fence is it going to be on? Will it be the professional, the leader, the high tech, high added value side? Or will it re-join the race to the bottom, forever fighting a battle against low wages and feeding off scraps from brands? The ILO study does suggest that this "two-tier" industry will be seen within countries. So that means that within Bangladesh, we might have laggards and leaders. While this may be the case, as a country, I believe we have to set out our stall now—our heads of industry have to work with the government to decide how they can ensure that we are all dining at the top table when it comes to apparel manufacture. By that I mean Bangladesh needs to prepare for the new normal by providing brands and retailers with a world class ready-made garment sector, producing high quality apparel in sustainable conditions—and paying a fair wage to workers. I truly believe the decisions our industry takes now will define us for the next two decades. Over the past two decades we have become synonymous with low cost clothing, thousands of manufacturers producing the same staple items. Thinking in terms of the ILO report above, we now have a chance to change that picture and reimagine our industry as a different animal entirely. Now is the time for our industry to double-down on its investment in technology and sustainability and for our government to ensure we have the right kind of graduates entering the sector—people who can lead us into a bold and bright future, the top-tier of apparel manufacturers globally. Is this too much to ask? The ILO report makes clear, in tomorrow's apparel supply chains we will be seeing a survival of the fittest. There will certainly be an industry cull, and our RMG sector will probably be smaller moving forward. How much smaller, nobody knows at this stage. But we sit amidst a period of great change and upheaval. Separate to Covid-19 is the steady unravelling of apparel and textile supply chains in China. The United States has just announced that it intends to ban the import of all cotton and apparel which has links with Xinjiang in North Western China due to concerns over forced and prison labour. It is impossible to overstate how huge this is, and it offers further evidence of the huge shifts we are seeing in the industry. Brands and retailers are looking for new sourcing partners, as many fear huge fines if their shipments are stopped at the US ports because they are found to contain produce from the vast cotton fields of Xinjiang. China has always been in the top tier of apparel manufacturer but there is a good chance that brands will be giving the country a wide berth beyond 2020. Bangladesh should take heed of the ILO's findings about a two-tier industry and decide what type of apparel production hub it wants to be. More than ever, it's time to think big.

Source: The Daily Star

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G20 Leaders' Summit will be held virtually on November 21-22 amid Covid

This year's G20 leaders’ summit under the theme of "Realising opportunities of the 21st century for all" will be held in an online format amid the coronavirus pandemic This year's G20 leaders summit under the theme of "Realising opportunities of the 21st century for all" will be held in an online format amid the coronavirus pandemic, the G20 Saudi Secretariat said in a statement. The summit will be chaired by Saudi Arabian King Salman bin Abdulaziz Al Saud. "The 2020 G20 Leaders' Summit will be held virtually on November 21-22 and will be chaired by His Majesty King Salman bin Abdulaziz Al Saud," the statement says. According to the release, the summit will focus on protecting lives and restoring growth, by addressing vulnerabilities uncovered during the pandemic and will also focus on fostering international action to realise opportunities of the 21st century for all. "The G20 Presidency will build on the success of the extraordinary virtual G20 Leaders' Summit held in March, and on the outcomes of over 100 virtual working groups and ministerial meetings," as per the statement.

Source: Business Standard

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EVFTA tariff incentives for Vietnam very attractive: VCCI

 The EU's tariff incentives in EVFTA are the highest ever a partner has offered Vietnam at the time the deal comes into effect, says a VCCI director. Nguyen Thu Trang, director of the Vietnam Chamber of Commerce and Industry's (VCCI) centre for WTO and economic integration, added: "EU tariff commitments to Vietnam under the EU-Vietnam Free Trade Agreement (EVFTA) are more attractive than those under the CPTPP." "The EU is offering Vietnam a great opportunity," she told an EVFTA seminar Thursday. Originally a 12-member agreement, the Trans-Pacific Partnership (TPP) was thrown into limbo when U.S. President Donald Trump withdrew his country from the deal in January 2017. The remaining 11 countries renegotiated parts of the TPP and in March 2018 signed the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Trang said she chose the CPTPP for reference as most of the 11 partners in this agreement had signed with Vietnam another FTA. The level of commitment in these individual FTAs is lower than that of the CPTPP. Under EVFTA, effective from August 1 this year, the EU eliminated 85.5 percent of tariff lines for Vietnam immediately after the agreement came into force, while CPTPP partners committed to abolish 78-95 percent of import taxes. Trang said the EU incentives looked modest compared to the CPTPP, but that "it is not actually the case." "The reason is many members of the CPTPP like Singapore have fulfilled commitments to erase many tariff lines for Vietnam under previous trade agreements within the ASEAN bloc so their number of removed tariffs under the CPTPP is high." Under the roadmap, the EU will eliminate the remaining tariffs in 3-7 years. By 2027, almost all Vietnamese products exported to the EU would enjoy zero percent tax, except for a small group of "sensitive" goods. For CPTPP, the tax reduction roadmap would take 5-10 years. In terms of each commodity, the EU has also created many advantages for Vietnam, with 100 percent elimination of tariff lines on vegetables and fruits, coffee and honey exports, for instance. Meanwhile, CPTPP partners need 3-5 years to eliminate tariffs on processed and canned vegetables and fruits, Mexico needs 5-10 years for coffee, and Japan needs seven years for honey.  For textiles and footwear, the EU abolished 42.5 percent of tariff lines when the agreement took effect, with the rest taking 3-7 years. "This figure may be a bit stricter if you look at Singapore's commitment to eliminate all taxes, and Australia, Canada or Chile with 80 percent or more under CPTPP. As explained above, the numbers do not reveal the entire picture," Trang said. The EU is currently allowing Vietnam to enjoy a general system of preference (GSP), a kind of most-favored nation regime that reduces or exempts import duties on goods. Textiles, garments and footwear are products enjoying GSP with an average preferential tax rate of 3-4 percent. Vietnam will still enjoy GSP in the first two years of EVFTA enforcement. Tariffs in the third year are in line with the EVFTA but in all cases would not be higher than the GSP levels applied by August 1, 2020. By 2025, the value of Vietnam's rice exported to the EU is expected to grow 65 percent, textiles increase by 67 percent, garments rise by 81 percent, and leather and footwear by 99 percent. For pork, beverages and tobacco, the figures are expected to be lower, at 4-5 percent, respectively, according to the Ministry of Planning and Investment.

Source:   V N Express

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