NATIONAL

• GST Council meet on compensation mechanism inconclusive for second time
• Fresh stimulus to push economic activity: Niti Aayog vice-chairman Rajiv Kumar
• India Inc welcomes govt stimulus to boost demand
• Need for convergence between self-reliance, globalisation: Ficci president
• Rupee edges 3 paise higher at 73.13 against US dollar in opening trade
• Industrial production declines 8% in August; retail inflation rises to 7.34% in September
• SGCCI demands more trains between Surat, Odisha
• COVID-19 Fallout: Surat's Textile Industry Continues To Incur Losses

INTERNATIONAL

• Global Textile Raw Material Price 13-10-2020
• Indian saree firm opens first UK store
• India’s campaign against CPEC
• Sustainability ranked fashion's second top priority
• ADB Revises Cambodia’s 2020 Economic Forecast Upward

GST Council meet on compensation mechanism inconclusive for second time

The GST Council meeting remained inconclusive for the second time on Monday after the Centre offered two options to states for compensating them for the loss of revenue under the indirect tax regime as there was no consensus on the issue. Finance Minister Nirmala Sitharaman appealed to the Council and the states to quickly decide on the states which want to borrow. "I appealed that we need to quickly give answers to states that want to borrow," the finance minister, who chaired the meeting, told reporters. Majority of states -- 21 of 30 -- had opted for the RBI window of Rs 1.1 trillion. "On the one hand, they (21 states) were repeatedly asking for fast disbursal of money due to the festive season and the impact of Coronavirus, on the other you had other states insisting on a consensus on the issue," the finance minister said. She said that while she respected unanimity, can the Council stop other states from doing what they want to do. "I put this before the Council. If states want to borrow to make up for the compensation shortfall, can the Council stop a member from doing that? On that point, we were not able to arrive at a consensus," she said. She emphasised that there was no dispute, but differences of opinion. However, Kerala Finance Minister Thomas Isaac, after the meeting, said, “Union FM’s announcement that she is going to permit 21 states to borrow according to Option 1 is illegal.” Isaac said that option 1 involved deferment of compensation payment beyond five years for which a Council decision was necessary in line with AG’s opinion. No such decision has been made in the Council, he said. Isaac further said that it was unfortunate that the Union finance minister did not propose a decision in the Council or even make a statement what she was going to do, but chose to make the announcement in the press conference. The finance minister explained to the states that the Centre cannot borrow at this point of time. It has already released its calendar and changes will jack up the yields of government bonds which are benchmarks for the borrowing by the states and even the private sector. "It is going to affect everyone’s borrowing. At a time when India is looking at more money to borrow and invest, can we afford that?" Sitharaman wondered. However, if the states are to borrow, it is not going to be that severe. It will also not be chaotic as every state need not rush to the market, she said. "We shall arrange and facilitate. It won't be that some states will end up paying high interest rates and others obtain at a reasonable rate. We will try to ensure that all states end up paying a reasonable rate," she said. States also asked the Centre as to why additional borrowing could not be undertaken beyond Rs 1.10 trillion. They also asked the Centre about Attorney General K K Venugopal's opinion on borrowing. M S Mani, partner, Deloitte India said, “Businesses would be keenly waiting to know the period and the terms on which the compensation cess would be extended as that would have a significant bearing on their business plans.”

Source: Business Standard

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Fresh stimulus to push economic activity: Niti Aayog vice-chairman Rajiv Kumar

NEW DELHI: The fresh stimulus package announced by Finance Minister Nirmala Sitharaman to boost domestic demand will give a much-needed push to economic activity, Niti Aayog Vice-Chairman Rajiv Kumar said on Monday. Sitharaman announced a Rs 73,000 crore package, including advance payment of a part of wages to central government employees and cash in lieu of LTC, to stimulate consumer demand and investment in the economy damaged by the coronavirus pandemic. "As she had assured us, honorable FM Nirmala Sitharaman has announced a fresh stimulus package to boost domestic demand and thereby giving the needed push to economic activity. "The timing of the stimulus is perfect coming just ahead of the festival season when the green shoots of recovery are becoming stronger," Kumar said in a tweet. The multiplier effects of the package are expected to be multiples of the original amount, and higher economic activity would be sustained in the coming period, Kumar said. As much as Rs 11,575 crore would be paid as LTC allowance and advance to central government and PSU employees on the condition that they spend on non-essential goods before March 31, she said.  "The timing of the stimulus is perfect coming just ahead of the festival season when the green shoots of recovery are becoming stronger," Kumar said in a tweet.  The multiplier effects of the package are expected to be multiples of the original amount, and higher economic activity would be sustained in the coming period, Kumar said. As much as Rs 11,575 crore would be paid as LTC allowance and advance to central government and PSU employees on the condition that they spend on non-essential goods before March 31, she said. States would separately be eligible to get Rs 12,000 crore in 50-year interest-free loans for capital expenditure, while the Union government will spend an additional Rs 2,500 crore toward capital expenditure on roads, defence infrastructure, water supply and urban development. The government, which had in May announced a Rs 20 lakh crore 'Aatmanirbhar Bharat' stimulus package, is pushing ahead with a full opening to try to boost the economy ahead of the usually high-spending festival season. A tough lockdown imposed to stem the spread of coronavirus had resulted in the GDP contracting by a record 23.9 per cent during April-June. Analysts have predicted that the economy may be headed for its worst contraction this fiscal.

Source: Economic Times

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India Inc welcomes govt stimulus to boost demand

New Delhi: India Inc on Monday cheered Finance Minister Nirmala Sitharaman's announcement of payment of cash in lieu of LTC and Rs 10,000 festival advance to government employees, saying these measures will boost demand while instilling a "feel good" factor in the people and energize growth. CII Director General Chandrajit Banerjee said the finance minister's announcement on boosting demand through a two-pronged strategy will provide a huge impetus to spending, both by consumers and governments,which in turn will accelerate economic activity. "The measures will also be a significant feel good factor for the people who have been going though some tough and challenging times due to the pandemic," he added. Ficci President Sangita Reddy said, "Our government has delivered in a very innovative and fiscally prudent way to boost demand in the economy. The set of measures announced today for supporting consumption and investment demand would energize growth over the remaining part of the year." "The overall impact of these measures will be to the tune of Rs 1 lakh crore and this is sizable," she added.  Sanjay Aggarwal, President, PHD Chamber of Commerce and Industry, said calibrated and meaningful measures will have a multiplier effect on trade, industry and economy. The measures will stimulate consumer demand, boost capital expenditure and push the economic growth trajectory on pre-COVID levels in the coming quarters, he added. Gaurav Taneja, Partner and Leader, Government and Public Sector, EY India, said, "The finance minister's announcement today on the allocation of an additional Rs 25,000 crore for capital expenditure is a welcome move. "Expenditure on roads, defence, water supply, urban development and domestically produced capital equipment have a high multiplier effect and will lead to acceleration in employment. The two schemes, (LTC) Cash Voucher Scheme and Special Festival Advance Scheme, will sup Special Festival Advance Scheme, will support in the demand side creation," Taneja said. Alok Agrawal, Partner, Deloitte Haskins & Sells LLP, said private sector organisations can review their employee compensation structure to enable their employees to take advantage of the announcements. Sitharaman also announced additional capital spending and Rs 12,000 crore, 50-year interest-free loan to states to boost the economy that has been battered by the pandemic and the resulting lockdown. During a news conference, Sitharaman said the government will give its employees income-tax-exempt cash vouchers in lieu of their entitled travel allowances this year. This cash will have to be spent on buying goods that attract 12 per cent or more GST -- a condition which eliminates the possibility of the cash being spent on food items. Central public sector enterprises and banks will also follow the cue and give cash in place of leave travel concession (LTC) as travelling during the pandemic is near to impossible. Additionally, the government will as a one-time measure give Rs 10,000 salary loan to all its officers and employees as festival advance. These two measures are "expected to create a consumer demand of about Rs 28,000 crore", she said. The government, which had in May announced a Rs 20 lakh crore 'Aatmanirbhar Bharat' stimulus, is pushing ahead with a full opening to try to boost the economy ahead of the usually high-spending festival season.  A tough lockdown imposed to stem the spread of coronavirus had resulted in the economy contracting by a record 23.9 per cent during April-June. Together with the loan to states and additional capital spending, Sitharaman said "very rough estimate is that potential private sector spending through LTC tax benefit will be at least equal to the government employee-led demand of Rs 28,000 crore and the total additional demand estimated to exceed Rs 1 lakh crore". She further said that the measures by the government to stimulate demand must not burden the common citizen with future inflation and must not put government debt on an unsustainable path.

Source: Economic Times

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Need for convergence between self-reliance, globalisation: Ficci president

There is a need for convergence between self-reliance and globalisation, Ficci President Sangita Reddy said. The Indian industry would achieve faster growth and development under the present leadership, she said at the inaugural session of'LEADS 2020', a four-day event host by the industry chamber. There is a need for convergence between self-reliance and globalisation, while sustainability and diversity would remain as cornerstones of future growth, she said. Speaking on re-imagining the world post-COVID-19, Reddy said, "I would like to assure our global partners that we are fully committed to ensuring a robust and resurgent future for our 'Bharat'." Ficci Senior Vice President Uday Shankar said increasing reliance on artificial intelligence and machine learning is the need of the hour. "these will be a gateway for enhanced customer loyalty, as well as business sustainability," he added. Now governments and industry around the world have realised that business excellence, adaptability to change, gender diversity and sustainability would be key drivers for decision making towards building a resilient and smart economic framework, Shankar noted. Ahmad Abdulrahman Albanna, Ambassador of the United Arab Emirates to India, said, "The pandemic is a watershed moment for the global socio-economic order." "Going forward, the two defining factors that will shape how this crisis affects us are collective leadership and coordinated actions," he added. The COVID-19 pandemic would require significant innovation, out-of-the-box thinking and a massive cooperative effort to achieve stable and sustainable equilibrium between economic growth and social well-being, he emphasised. Andre Aranha Correa do Lago, Ambassador of Brazil to India, said it has never been more important for like-minded nations to strengthen their international relationships and ensure mutual trust and mutual benefits. Barry O'Farrell AO, High Commissioner of Australia to India, emphasised that both countries need to work together to keep the markets open and enhance the resilience of diversifying supply chains.

Source: Business Standard

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Rupee edges 3 paise higher at 73.13 against US dollar in opening trade

The Indian rupee traded with moderate gains of 3 paise at 73.13 against the US dollar in the opening session on Monday, tracking softer crude oil prices and sustained buying in domestic equities. The domestic unit started off the session on a strong note at 73.10, up 6 paise, but ceded some ground as trade progressed and quoted 73.13 a dollar at 1020 hours. The domestic currency had settled 8 paise higher at 73.16 a dollar on Friday after the Reserve Bank kept key interest rates unchanged while retaining an accommodative stance. On a weekly basis, however, the domestic currency had lost 3 paise to the US dollar. Global crude oil benchmark Brent was trading 0.84 per cent lower at 42.46 a barrel. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, gained 0.02 per cent to 93.07. On the domestic equity market front, the BSE Sensex was trading 246.06 points up at 40,755.55; and the NSE Nifty was 58 points higher at 11,972. Foreign investors had offloaded Indian equities worth a net Rs 39.39 crore on Friday, exchange data showed.

Source: Business Standard

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Industrial production declines 8% in August; retail inflation rises to 7.34% in September

Industrial production declined by 8 per cent in August, mainly due to lower output of manufacturing, mining and power generation sectors, official data showed on Monday. According to the Index of Industrial Production (IIP) data, manufacturing sector production registered a decline of 8.6 per cent, while the output of mining and power segments fell 9.8 per cent and 1.8 per cent, respectively. Retail inflation rose to 7.34 per cent in September, mainly on account of higher food prices, according to government data. The inflation based on the Consumer Price Index (CPI) stood at 6.69 per cent in August. It was 3.99 per cent in September last year.

Source: Economic Times

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SGCCI demands more trains between Surat, Odisha

Surat: Representatives of South Gujarat Chamber of Commerce and Industry (SGCCI) on Monday met chief minister Vijay Rupani and demanded more trains between Surat and Odisha to bring back workers of the textile industry.“The CM was receptive to our demands. We are going to organise a webinar next week where the CM will address industry leaders from across the South Gujarat. He will also listen to various issues faced by the industries,” said Dinesh Navdia, SGCCI president. Navadia added that the delegation also met energy minister Saurabh Patel and represented issues related to power before him. “In the month of November, a webinar has been organised in which energy minister will listen to various issues faced by industries in South Gujarat. Minister said that the state government will support an energy exhibition that is being organised by the industry body,” said Navadia.

Source: Times of India

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COVID-19 Fallout: Surat's Textile Industry Continues To Incur Losses

Surat (Gujarat) [India], October 13 (ANI): The textile industry in Gujarat's Surat continues to incur losses due to COVID-19, said an official from the Federation of Surat Textile Traders Association (FOSTA) on Monday. The textile industry in the city was preparing for the wedding season that begins in April, when it was hit by the outbreak of the COVID-19 and the imposition of lockdown which was imposed to curb the spread of the disease. Consequently, the industry incurred huge losses and is yet to get due payments. "In February-March, clothes worth Rs 10,000 crores were supplied across the country. We are yet to get the payment. Our business has been badly affected. At least Rs 9,500 crore is stuck. There is no possibility of the return of money as of now. It may come after Diwali," said Rangnath Sarda, Director, FOSTA. "We have been able to do only 35 per cent business in September. The wedding season is due in November. If we receive our payments we will be able to revive the business," he added. Bhairav Singh, a textile businessman, said that he is hoping for normal business after Diwali. "Due to COVID-19 pandemic our business was affected during the wedding season which is usually in February, March and April. 50 per cent of our business suffered this year in this season. We are yet to receive payments for the clothes which we sent in bulk to different states. We are hoping that business will return to normal after Diwali," Singh said. (ANI)

Source: Business World

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Global Textile Raw Material Price 13-10-2020

Source: Global Textiles

Note: The above prices are Chinese Price (1 CNY = 0.14880 USD dtd. 13/10/2020). 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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Indian saree firm opens first UK store

Indian luxury silk firm opens first UK store in London after receiving support from the UK’s Department for International Trade. Demand for sarees for wedding season and Covid-19 travel restrictions prompted the firm to fast track the project. Nalli Silks’ sarees have previously been gifted to King George V and Queen Elizabeth II. Indian luxury silk firm, Nalli Silks, has opened its first UK store in London with support from the UK’s Department for International Trade (DIT) to meet the demand ahead of the busy wedding and festive season later this year. The investment of approximately £300,000 will include a 2,500 square feet store in Wembley with up to 8 members of staff. The firm, which previously gifted sarees to King George V and Queen Elizabeth, is expected to open more stores in London and Birmingham to serve UK customers. With a presence in the US, Singapore and Canada, the firm began searching for opportunities to expand in the UK prior to the Covid-19 outbreak. DIT officials in Chennai and London have been working with Nalli over the past 18 months to help facilitate site visits in the UK, introductions to key accounting and tax services, and updates on Covid-19 related support measures – including the Retail Bounce back announced by Exports Minister Graham Stuart in September.

Minister for Investment Gerry Grimstone said: I am delighted to welcome Nalli Silk to the vibrant cadre of many Indian companies present in the UK, which support jobs in this country across all sectors. As both the Indian and UK economies recover from the impact of Covid-19, increasing investment in each other’s markets is more important than ever. Brands like Nalli Silk are sterling examples of the opportunities available to Indian businesses if they wish to sell high-quality goods to a strong base of customers in the UK, including an Indian diaspora of 1.5 million people. I look forward to seeing their continued success, and supporting other businesses looking to the UK as their next market . Vice Chairman Ramnath Nalli said: Our South Asian customers living in the UK are some of our most vocal and passionate patrons. When our friendly skies were still friendly, almost every week we would greet a few UK customers at our flagship stores in India, requesting for a Nalli store nearby. Soon we started receiving social media requests from non-Indian brides asking advice on saris for their bridesmaids (or themselves) as more and more people go in for themed Indian weddings held in their own locales, or as a destination wedding. We’re very happy on this joyous occasion to finally be coming to the UK – London first, and then Birmingham soon after! We are bringing our very best, hand selected pieces just for this market and are excited to see the reception. Established in Chennai in 1928, Nalli is a textile brand steeped in tradition. When King George V visited India in 1911, the Indian state of Tamil Nadu gifted the king a hand-crafted Kanchipuram Silk Saree from the company as a souvenir. As this was the year of the King’s coronation, Nalli wove a rich silk saree with a special coronation-themed border to mark the occasion. Similarly, Queen Elizabeth II was gifted with a Nalli Silk saree by the state of Tamil Nadu for her coronation in 1954. This investment follows a number of positive DIT-supported Indian retail investments into the UK, including Dehli-based heritage occasion wear retailer Frontier Raas, and Mumbai-based luxury fashion house Purple Style Labs. Trade between the UK and India increased by 10% from the previous year, to £24 billion in 2019. At this year’s Joint Economic Trade Committee, the UK and India agreed to deliver an Enhanced Trade Partnership to deepen this important trade relationship.

Source: Gov UK

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India’s campaign against CPEC

China Pakistan Economic Corridor (CPEC) is the flagship project of Chinese President Xi Jinping’s Belt and Road Initiative (BRI), launched in the year 2013. With the emergence of China as a global economic superpower, trade through the Indian Ocean is set to rise significantly in the coming decades, especially through CPEC. China is working hard to operationalise the BRI, which aims at seeking regional and global connectivity through land and sea. The Indian Ocean has emerged as a centre for regional trade as around 90,000 vessels in the world’s commercial fleet transport 9.84 billion tons of cargo through the ocean besides 40pc of world’s oil supply also passes through the same waters. With 19.9pc of the global trade volume passing through the Indian Ocean, the total trade passing through the ocean is 70pc of the world trade in value. In this regard, the claim made by Indian naval chief Admiral Karambir Singh in January 2020 that CPEC impinges on India’s sovereignty is a blatant lie. The admiral parrotted the Indian stance that since CPEC passes through Gilgit-Baltistan, which at the time of Partition was partially aligned with Kashmir, therefore, it passes through the territory of a disputed area on which India claimed its sovereignty. Earlier, in July 2018, S Jaishankar, the Indian foreign secretary, told the Chinese officials in Beijing that CPEC allegedly violated Indian sovereignty because it runs through Azad Kashmir. China outright rejected the Indian stance. New Delhi also fears that once CPEC becomes operational, its influence in Central Asia and Afghanistan will diminish along with occupied Kashmir. There are also fears in India that CPEC is internationalising the Kashmir dispute on which India has gone on backfoot after strong international opposition to the annexation of the territory in 2019. It believes the building CPEC would put spotlight on the disputed region. The Indians are also under the impression that CPEC, once fully operational, would hurt India’s economic growth. This claim is also ludicrous as the Indian economy as compared to Pakistan is massive and will in no way be dented by the BRI project. The Indians are going all the way to oppose CPEC and hurt Pakistan’s economic progress. Their investment in Chahbahar in Iran was a step in that direction but the port has not taken off and in the near future does not hold any promise for Indian investment. According to reported figures, the CPEC project is US$54 billion economic corridor, including 11 billion investment on rail and road projects and 33 billion on power generation projects. India is also alarmed at the prospect of Pakistan emerging as an outsourcing destination. This will happen when new industrial towns will emerge along with the corridor where skilled workforce will be based, allowing the country to emerge as a center of contract-manufacturing-outsourcing. Indians claim it could hurt the Indian exports in textile and other sectors.  Kulbhushan Yadhav, an Indian saboteur and spy, was involved in masterminding terrorist activities in the country, especially in Balochistan and Karachi and against CPEC. He admitted that “…I have been directing various activities in Balochistan and Karachi at the behest of RAW and deteriorating law and order situation in Karachi. My purpose was to hold meetings with Baloch insurgents and carry out activities with their collaboration. These activities have been of criminal nature, leading to killing of or maiming of Pakistani citizens.” It has been proven that Yadhav and his network sponsored and directed a series of terrorist attacks, including IEDs and grenade assaults in Gwadar and Turbat, attack on the radar station and civilian boats at the Jiwani port, bombing of gas pipelines and electric pylons in Sibi and Sui areas in Balochistan, an IED explosion in Quetta in 2015, attacks on Hazaras in Quetta and Zaireen en route to and back from Iran.No matter what, CPEC will emerge successful with unwavering Chinese and Pakistani support.

Source: International News

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Sustainability ranked fashion's second top priority

MEMPHIS — Sustainability is ranked as the second most important strategic objective for businesses in the fashion and textiles industry, despite the economic impact of the COVID-19 pandemic, according to new research. The study, carried out jointly by the US Cotton Trust Protocol and the Economist Intelligence Unit (EIU), was based on a survey of 150 fashion and textiles executives across Europe and the US, and interviews with leading brands including Puma, H&M and Adidas. The authors of the new report, entitled ‘Is Sustainability in Fashion?’, say that it comes at a time when the industry finds itself at a crossroads - whether to continue to invest in sustainability, or row back in light of the pandemic.

Source: Eco Textile

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ADB Revises Cambodia’s 2020 Economic Forecast Upward

The Asian Development Bank (ADB) has revised its 2020 growth forecast for Cambodia upward, thanks to the country’s improved agricultural performance and an increase in volume in non-garment manufacturing exports such as bicycles and electronics. The Asian Development Outlook (ADO) 2020 Update, ADB’s annual flagship economic publication, forecasts a 4.0% contraction for Cambodia’s gross domestic product in 2020, compared to its June forecast of a 5.5% contractio “The coronavirus disease (COVID-19) pandemic is an unprecedented global challenge, but fortunately Cambodia has been spared a health crisis. We expect growth to rebound to 5.9% in 2021, boosted by supportive government policies, social assistance for the poor, and financing support for small and medium-sized enterprises,” said ADB Country Director for Cambodia SunniyaDurrani-Jamal. “These measures, along with much-needed structural reforms, will reduce the direct and indirect impacts of COVID-19 on families and businesses, and help Cambodia’s economy emerge stronger from the pandemic.” A sharp drop in orders from Europe and North America led to shutdowns in one-third of Cambodia’s garment, footwear, and travel goods factories during the first half of 2020. However, increased production of bicycles and electronics pushed up Cambodia’s non-garment manufacturing exports by 30.3% year-on-year in the first half of 2020. Total industrial output is projected to rise by 5.1% in 2020 if exports of garments, travel goods, and footwear continue to recover.  COVID-19 has had a severe impact on Cambodia’s tourism sector. A gradual reopening is expected in the second half of 2020, but services are forecasted to shrink by 15.1% in 2020. International visitor arrivals had fallen by 98.1% year-on-year in the second quarter, forcing 3,000 businesses to close and 45,000 workers to lose their jobs. Risks remain, such as a continued slowdown in the garment and construction industries, and poor harvests after low rainfall in June and July. Consumer demand may also continue to weaken amid the pandemic. ADB is supporting the Government of Cambodia’s response to the pandemic and has provided $250 million in concessional financing to strengthen health systems, expand social protection, and support economic recovery. Under ADB’s 2019–2023 country partnership strategy, ADB will provide $1.45 billion in loans, grants, and technical assistance to Cambodia to support agriculture and natural resources management; improved urban and rural living conditions; renewable energy infrastructure; and education and skills development. These initiatives aim to expand Cambodians’ access to public services and improve service quality, as well as improving the country’s business and investment environment. ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members—49 from the region.

Source: Textile Focus

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