The Central Board of Indirect Taxes and Customs (CBIC) has provided further relaxations in compliance for small taxpayers for the financial year ended March 2020, after. The requirement to file annual return in GSTR-9 by taxpayers having aggregate turnover up to Rs 2 crore has been made optional for financial year 2019-20.
Source: Economic Times
The Central Board of Direct Taxes (CBDT) on Monday reiterated tolerance range of 1-3% under transfer pricing rules for the current financial year even though experts said it was expected that the tax department would provide concession given the Covid-19 pandemic. India’s transfer pricing rules, which apply to the transaction among subsidiaries of multinational companies, set an acceptable tolerance range for the variation between arm’s length price and the transaction price, failing which the department adjusts the pricing leading to tax implication. CBDT kept tolerance range of 1% for wholesale trading and 3% for all other transactions undertaken during the financial year ending March 31, 2020. According to the notification, the transaction considered ‘wholesale trading’ would be those where the purchase cost of finished goods is at least 80% of the total cost of such trades. Further, the average monthly closing inventory of such goods must be 10% or less of sales on such trading activities. “The tolerance range as laid down appears to be a mechanical follow-through of the last year notification, without appreciating the business and commercial realities in Covid-19 times,” Amit Agarwal, partner at Nangia & Co LLP said.
Source: Financial Express
Billionaire Mukesh Ambani, chairman of Reliance Industries Ltd., said India must redefine its manufacturing sector to boost growth. “There is a need to rethink and redefine manufacturing in India. We need to strengthen our small and medium scale enterprises,” Ambani said at an online book launch on Monday evening, in response to a question on what can make Indian manufacturing more competitive. “There should be a focus on bricks as much as clicks.” The comments from Asia’s richest man come as Prime Minister Narendra Modi’s government is trying to revive an economy poised for a historic annual contraction, following a lockdown that decimated industries and destroyed millions of jobs.Reliance, which is pivoting from the energy operations Ambani inherited from his father toward retail and digital services, has announced investments worth more than $25 billion from foreign investors in recent months. Ambani has increasingly been looking to partner smaller businesses, start-ups and mom-and-pop stores to serve as the last mile support for Reliance’s e-commerce plans. When asked about the legacy he’d like to leave behind, Ambani outlined three areas -- making India a digital society in ways never imagined before, boosting India’s education system, and transformation of the energy sector to reduce dependency on fossil fuels.“If I can play my small part in achieving this, if I can create institutions to perpetuate and sustain these objectives, then I would have done my bit,” Ambani said.
Source: Business Standard
Finance minister Nirmala Sitharaman on Monday indicated that the government might unveil another round of economic stimulus at an appropriate time this fiscal. She also hinted that the strategic sectors identified for a near-comprehensive privatisation policy would be made public soon. “I have not closed the option to come out with another stimulus,” she said responding to a question at an event in Delhi. “Every time we have announced one, it’s been after a lot of consultations…then we sit and work it out within the ministry, with the PMO and then, take a final call,” the minister said. Batting for more fiscal spending, chief economic adviser Krishnamurthy V Subramanian last week said a boost to the infrastructure and employment-related programmes like the creation of an urban job guarantee programme would help pep-up consumption demand. The Covid-ravaged economy will likely shrink by a record 9.5% in the current fiscal, Subramanian said, as he agreed with the central bank’s latest assessment of the magnitude of growth slump. “We have only now started doing some kind of an assessment (on GDP) because we waited for the commencement of the second half (H2FY21), which is just started…..we will have to come up with a statement (on GDP growth/contraction for FY21),” Sitharaman said after she released “Portraits of Power” a book, authored by 15th Finance Commission chairman N K Singh. According to the privatisation policy announced by Sitharaman recently, at least one enterprise in a ‘strategic sector’ will remain in the public sector, but the private sector will also be allowed. To minimise wasteful administrative costs, the number of enterprises in strategic sectors will ordinarily be only one to four, others will be privatised or merged or brought under holding companies. While the Modi-government has already initiated strategic disinvestment, the new policy will give a comprehensive framework and provide the ground for a road-map of privatization for years to come. On October 12, Sitharaman sought to create additional demand of `1 lakh crore in the economy in the current financial year, through a clutch of steps that may involve less than `40,000 crore or a tenth of the amount to be saved via expenditure controls already announced, as a budgetary cost to the Centre. The stimuli announced earlier had an estimated budgetary cost of around `3 lakh crore. The spending curbs on departments for the April-December period is estimated to result in savings of nearly `4 lakh crore. Given that even the stimulus cost would actually be lower than the estimate and considering the possibility of an extension of spending curbs to Q4, the government still has considerable room for unveiling another round/s of stimulus, without altering the estimated budget size for the year or the enhanced gross borrowing limit of `12 lakh crore. With net tax revenues declining 30% on year in April-August (the budgeted growth was 21% in FY21 over the actual of FY20), some analysts see fiscal deficit even doubling from the budgeted target of `8 lakh crore. The April-August fiscal deficit already touched 109% of the full-year target.
Source: Financial Express
India’s dominance in the centuries-old textile trade, for long the preserve of small cottage industries and village artisans, can be sustained by the efforts of emerging new talent in this space and the creativity of micro, small and medium enterprises (MSMEs) engaged in this sector. At a high-powered panel discussion organised by Network18 and Bandhan Bank, as part of a thought leadership platform called Sashakt India: Powering the MSME Engine, two icons from the textile industry discussed the sector’s role in reviving India’s economic growth and the opportunities it offered for export and trade. Speakers at this thought leadership included Lavanya Nalli, vice-chairperson, Nalli Sarees and N.K. Chaudhary, founder of Jaipur Rugs.
Weavers, not retailers
According to Nalli, her 95-year-old family business, Nalli Sarees, has its background in weaving and not trade or retail, making merchandise and business relationships the key to its success. She said principal macro-economic challenges like a scarcity mindset after the two World Wars, followed by low growth in the 1960s and 1970s and the flooding of Chinese silk and arrival of tested zari in the 1990s, were tided over by strong family leadership.
Innovation is the key
In what can be a template for MSMEs, Nalli believes every new innovative product or solution in an industry must be met squarely. ``You can either approach it as an opportunity and as a creative entrepreneur I can use it to elevate my art, or look upon it as a threat,” she pointed out. Chaudhary, who began life selling shoes and turned down an offer to work in a public sector bank because the entrepreneurial bug bit him, borrowed a small sum of money from his father and started making carpets at home.
Knowledge of the market
How did he realise there was a market for carpets? ``There was a huge demand for carpets at home and there were not too many weavers in India,” he explains. It helped that Mr. Chaudhary, who started as a contract manufacturer, had inside knowledge of the business. ``I loved weaving, so it was not a problem to find the right buyers. I could produce both large-scale quantity and quality,” he pointed out, adding that one of his daughters, Kavita, who studied at the Arts School Chicago, joined the business and offered designs that have elevated Jaipur Rugs to another level.
Consumers seek authenticity
Chaudhary observed that, globally, consumers seek authenticity and technology is the key. It is important that MSMEs connect with the different silos in the carpet industry, including the end consumer. ``It is also up to the MSMEs to help the 31.4 lakh artisan households upgrade,” he stated.
Source : Money Control
Though the Union Government announced to frame a textile policy way back in 2016, its slow pace has started bothering local textile manufacturers and traders. The holy city was once compared to Manchester for its large scale production of textile. Piara Lal Seth, General Secretary of the Shawl Club of India, said the delay was costing small textile units heavily, which were already battered by demonetisation, GST and the Covid-19 pandemic. He said it was their long outstanding demand to the Central Government to frame a new textile policy. In a communique to the Union Government here on Monday, the Shawl Club of India demanded that the two components of the textile sector — organised and unorganised sector —be considered separately as the problems were very much different in each sector. The unorganised sector mostly comes under the MSME category and the New National Textile Policy should be framed to meet its requirements and redressal. The communique stated that the basic raw material for textile sector are polyester and woolen worsted yarn. Woolen yarn, which is also called greasy wool, is imported from Australia and other countries and polyester fiber yarn is monopolised by the Reliance. It said if both the raw materials are made available at the international price and particularly at the rate prevalent in China Market, the export of textile sector can increase manifolds. Free import of readymade textile, under SAARC from Bangladesh in particular, has crippled our domestic industry. So needed amendments are required, it stated. Export promotion bodies should organise international seminars, conferences during winter in the holy city, which boasts of international airport and the best of road and rail connectivity.
Source: Tribune India
Finance Minister Nirmala Sitharaman on Monday exhorted large central public sector enterprises (CPSEs) to achieve by December 75 per cent of their planned capital expenditure (capex) target for 2020-21, to support economic growth hit by the COVID-19 crisis. She held a virtual meeting with secretaries of coal and petroleum & natural gas, along with the chairman and managing directors (CMDs) of 14 CPSEs belonging to these ministries, an official statement said. This was the fourth in the ongoing series of meetings that the finance minister is having with various stakeholders to accelerate the economic growth amid the COVID-19 pandemic. While reviewing the performance of CPSEs, Sitharaman said capex by CPSEs is a critical driver of economic growth and needs to be scaled up for the financial year 2020-21 and 2021-22. The finance minister asked the concerned secretaries to closely monitor the performance of CPSEs in order to ensure the capital expenditure to the tune of 75 per cent of the capital outlay by the end of the third quarter of 2020-21 and make appropriate plan for it. She expounded that more co-ordinated efforts are required at the levels of secretary of concerned ministries and CMDs of CPSEs to achieve capex targets.
Source: Economic Times
Finance Minister Nirmala Sitharaman on Monday said the government has begun an exercise to assess the impact of the pandemic on the economy and likely contraction in GDP, even as she did not rule out the possibility of another stimulus to boost growth. "I have not closed the option for another stimulus ... Every time we have announced one, it has been after a lot of consideration... I have not closed the option to come up with one more stimulus," she said at the launch of a book -- Portraits of Power: Half a Century of Being at Ringside - by the 15th Finance Commission Chairman N K Singh. To a question on whether the Finance Ministry would come out with an assessment of economic contraction, Sitharaman said the ministry has started doing some assessment since the beginning of October and would soon come with a projection. "We have only now started doing some kind of an assessment. We waited for the commencement of the second half, which has just started. And we have got a lot of inputs which are very different from what we had in July. And ideally, it should be so. "Perhaps yes sometime we will have to come out with a statement. Whether I do it in public or do it in Parliament is one thing, but the Finance Ministry will have to make an assessment of what it is going to be," she said. The Reserve Bank of India has projected the Indian economy to contract 9.5 per cent in the current fiscal, while the International Monetary Fund (IMF) and World Bank estimates the contraction at 10.3 per cent and 9.6 per cent, respectively. Last week, Sitharaman had announced a payment of cash in lieu of LTC and Rs 10,000 festival advance to the government employees to stimulate consumer demand during the festive season and boost the economy. She 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. These two measures are "expected to create a consumer demand of about Rs 28,000 crore. 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. Sitharaman further said the ministry would soon approach the Cabinet on demarcating the strategic and non-strategic sectors. In May, the minister had announced that a new coherent Public Sector Enterprises Policy would be formulated to push reforms in central public sector enterprises (CPSEs). There will be a maximum of four public sector companies in strategic sectors, and state-owned firms in other segments will eventually be privatised. "Work is going on and I would like to see a realisation on that.. (it) is likely to come to the Cabinet," Sitharaman said. Speaking at the event, Reliance Industries Chairman Mukesh Ambani said India needs to rethink and reinvent manufacturing. "We need as much thinking about bricks as we have about clicks. We need to think in terms of an entire ecosystem that delivers the future industries and future services," Ambani said.
Source: Business Standard
AHMEDABAD: The reduction in area under cultivation is expected to bring down cotton production in Gujarat this year. The cotton output in the state is estimated to hover around 85-90 lakh bales (one bale equals to 170kg) in 2020-21as compared to 95 lakh bales in 2019-20. The cotton acreage in Gujarat dropped 15% to 23 lakh hectares in kharif season this year from nearly 27 lakh hectares last year, shows data compiled by the state agriculture department. “Cotton acreage has decline by around 4 lakh hectare. As a result, the output is likely dip to 90 lakh bales this season,” said Dilip Patel, president, All Gujarat Cotton Ginners’ Association. “Since there are no reports of major damage to the crop, there will be no drastic reduction in production in 2020-21,” Patel added. Nirav Patel, a cotton exporter and trader, also estimated 90 lakh bales of cotton production in the state. Gujarat’s cotton production also includes raw cotton. Gujarat ginners procure raw cotton from other states like Maharashtra and such raw cotton is then ginned and pressed within the state. Stating that Gujarat’s crop is expected at 85 lakh bales, a pan-India cotton trade body’s member said, “Gujarat’s cotton crop is now expected at 85 lakh bales as compared to 95 lakh bales due to low acreage. The flow of cotton from other states to Gujarat may also be low due to cotton procurement (by Cotton Corporation of India) at minimum support price (MSP).However, there are few who believe that Gujarat’s production may reach 95 lakh bales given the improvement in yield this year when compared with last year. Meanwhile, the price of benchmark Shankar-6 cotton variety has recently rallied to Rs 39,000 to Rs 40,000 per candy (one candy weighs around 356kg) mainly on the back of good demand from exporters and textile as well as spinning mills. “The prices had declined substantially after the outbreak of Covid-19 and the subsequent lockdown to control the spread of the pandemic. With improvement in demand, the prices have now recovered to reach their levels seen in February this year,” said Arun Dalal, an Ahmedabad-based cotton broker. The prices had dropped to Rs 32,000 per candy in April-June following the lockdown. Currently, around 22,000 bales are arriving in the local markets of Gujarat.
Source: Times of India
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
884.33 |
USD/Ton |
2.96% |
20-10-2020 |
|
VSF |
1546.08 |
USD/Ton |
0.49% |
20-10-2020 |
|
ASF |
1849.03 |
USD/Ton |
1.11% |
20-10-2020 |
|
Polyester POY |
814.12 |
USD/Ton |
0% |
20-10-2020 |
|
Nylon FDY |
2039.04 |
USD/Ton |
1.87% |
20-10-2020 |
|
40D Spandex |
4630.78 |
USD/Ton |
1.64% |
20-10-2020 |
|
Nylon POY |
2016.63 |
USD/Ton |
0% |
20-10-2020 |
|
Acrylic Top 3D |
970.97 |
USD/Ton |
0% |
20-10-2020 |
|
Polyester FDY |
2315.39 |
USD/Ton |
0.32% |
20-10-2020 |
|
Nylon DTY |
5377.68 |
USD/Ton |
0% |
20-10-2020 |
|
Viscose Long Filament |
1045.66 |
USD/Ton |
0% |
20-10-2020 |
|
Polyester DTY |
1912.06 |
USD/Ton |
0.79% |
20-10-2020 |
|
30S Spun Rayon Yarn |
2091.32 |
USD/Ton |
0% |
20-10-2020 |
|
32S Polyester Yarn |
1598.37 |
USD/Ton |
0% |
20-10-2020 |
|
45S T/C Yarn |
2449.83 |
USD/Ton |
0% |
20-10-2020 |
|
40S Rayon Yarn |
2240.70 |
USD/Ton |
5.63% |
20-10-2020 |
|
T/R Yarn 65/35 32S |
2001.69 |
USD/Ton |
0% |
20-10-2020 |
|
45S Polyester Yarn |
1792.56 |
USD/Ton |
3.45% |
20-10-2020 |
|
T/C Yarn 65/35 32S |
2285.51 |
USD/Ton |
2.68% |
20-10-2020 |
|
10S Denim Fabric |
1.20 |
USD/Meter |
0% |
20-10-2020 |
|
32S Twill Fabric |
0.69 |
USD/Meter |
0% |
20-10-2020 |
|
40S Combed Poplin |
0.99 |
USD/Meter |
0% |
20-10-2020 |
|
30S Rayon Fabric |
0.49 |
USD/Meter |
0% |
20-10-2020 |
|
45S T/C Fabric |
0.67 |
USD/Meter |
0% |
20-10-2020 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.14938 USD dtd. 20/10/2020). The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
Foreign investors poured over $1 billion into Asian government and corporate bonds in September, more than doubling their investment in local currency debt from the previous month, attracted by higher yields and some signs of economic recovery. Asian local currency bonds received a combined total inflow of $1.26 billion last month, data from regional central banks and bond market associations in Indonesia, Malaysia, Thailand, South Korea and India showed. That was down from $2.13 billion in September 2019 but up from $489 million in August. Asian countries have had mixed success in containing the coronavirus outbreak and protecting their economies, but foreigners became net sellers of Asian equities in September on concerns about a virus resurgence, prompting them to sell $6.5 billion worth of regional equities. Bonds markets in places such as Thailand and India could therefore be benefiting from a portfolio rebalancing, analysts said. "The strong inflows into Thai debt in September could be due to some extent to portfolio rebalancing from equities to debt securities," said Duncan Tan, a strategist at DBS Bank, adding that Thai equities had seen "heavy outflows" in recent months. Foreigners purchased $807 million worth of Thai bonds last month, the highest in over a year, according to Thai bond market association data. Foreign investors meanwhile poured $538 million into Indian bonds in September, the first inflow in seven months. Tan said September inflows "could be a sign of foreign capital returning" to India. He said India's high-yielding government debt had become attractive for foreigners with the Reserve Bank of India reluctant to ease monetary policy further to avoid fuelling inflation. Malaysian bonds also received $132 million worth of foreign capital last month, but foreign investors sold Indonesian bonds on concerns over rising coronavirus infections. Khoon Goh, head of Asia Research at ANZ, said inflows to the region in general should resume once uncertainty around the highly-contested U.S. election in November is "out of the day" given the economic backdrop. "Asia's economic recovery is well underway. Monthly PMIs have gained further traction and exports are recovering well," he added.
Source: Business Today
Sri Lanka is a country known for its high-fashion intimate garment manufacturing but pandemic in 2020 has impacted the prices it is getting in shipment done to USA. In August ’20, Sri Lanka upped its exports by 4 per cent in volume terms and shipped 34.90 million SME of garments as compared to 33.56 million SME garments in the same month of 2019. However, the values of shipment fell 3.50 per cent to US $ 143.08 million from August ’19 that indicates the prices are reducing in orders placed by the US buyers in 2020. Unit prices were US $ 4.41 per SME in August ’19 which sharply declined to US $ 4.10 per SME in this year August. Even in cumulative period January-August ’20, Sri Lanka’s unit prices have shrunk to US $ 4.15 per SME from US $ 4.49 per SME a year earlier in the corresponding period. It’s worth mentioning here that Sri Lanka shipped US $ 945.47 million worth of garments to USA in first 8-month period of 2020, noting 22.91 per cent decline from a year earlier. The share of MMF apparels was US $ 522.16 million (down 14.53 per cent) in the total shipped values, while cotton apparel products contributed US $ 395.36 million (down 32.23 per cent) in January-August ’20 period.
Source: Apparel Resources
Thrift clothing or the concept of buying second-hand clothing truly embraces the idea of sustainability. So, with environmental concerns on a rise, are Indian consumers choosing thrift? What is the trend that a growing number of thrift brands noticing at the moment? 22 years old Pranali Borwankar started her thrift clothing venture in May 2020 during the pandemic after she saw that her wardrobe was overflowing with clothes that she no longer used. “It was a rough start initially. Many thrift stores have suppliers and connections with wholesalers that I don’t currently have, so getting things for my page was difficult. In order to diversify, I have recently started helping people clear out their closet by posting their things on my page for a small commission. People have started accepting thrifting more and more, and I hope it continues to grow this way,” Pranali mentions.
Mumbai Thrift
She entered the market with Thrift Mumbai only recently, but her outlook has always been in favour of thrifting and she personally has been wearing family hand-me-downs for years now! “Wastage is a huge problem. Why to throw away items that are in top condition when they can be loved again? Thrifting in India is gaining acceptance, as many influencers are promoting this movement too. Many items are vintage and have a history behind them, and I think it’s a wonderful thing to take them home,” she adds.Second-hand clothing is a fair choice today given the diminishing pocket size of most consumers, as they can buy clothing at a 50 per cent or lower price tag compared to the original price. According to the recent Resale Report by thredUP, the ‘largest online consignment and thrift store’ in the world, the second-hand market is set to hit $64Billion in the next 5 years, globally.
Growing by leaps and bounds
“I see a major shift in perspective when it comes to second-hand clothing and making sustainable choices. People are having second thoughts when it comes to shopping from a fast fashion brand that is constantly under scrutiny for its unethical practices and are looking for brands and thrift stores that offer a more circular fashion approach. I’ve already noticed bigger brands as well taking interest in the thrift aspect and that’s a sign there is a market for this category to grow 10 folds and beyond in the near future into a more organised sector like we see in countries like USA which offer options like Goodwill stores and platforms like Depop and Poshmark,” Sanjana, Founder, The Sustainable Curator, highlights while talking about how the country is looking at thrift.
The Sustainable Curator
The Sustainable Curator has been curating a unique collection of vintage and good quality thrifted articles that can be used in multiple ways and are still relevant today, while providing guilt-free packaging that is reusable and plastic-free to encourage people to make more conscious and sustainable choices.
Equating the challenges
“Today, there is increasing support for home-grown businesses, a search for low-cost resource-saving alternatives and the need for a simpler and healthier lifestyle. Rethought aims to support and give a voice to the roar of fantastic ideas and concepts that can help make a better, happier and safer world tomorrow. Outside India, there is no stigma attached to the concept of second-hand clothing; however, India still has a long way to go in terms of picking on the trend,” Adrija Halder, Founder of rethought, underlined when asked about the consumer response and market trends. rethought offers a platform to thrift brands and is one of the first in India to bring together a long list of thrift clothing brands under one roof. The brand focuses on thrift in two segments, one is the high street, easy on the pocket clothing, and the other is the designer and high-end vintage clothing. “We take a very small commission from the brands, and in turn, offer them a virtual shop front. On the other hand, the price tag on which we sell is highly affordable and that kind of makes it a win-win for both the seller and the buyer. We actually have a complete handbook and insist our sellers to abide by that when getting inducted with us,” Rohan Tuteja, Co-founder, ReThought, adds. ReThought is a unique platform and it brings together the thrifting culture closer to the consumer in just a click. Both the founders are keen on spreading the awareness of thrifting in India and want to make this a culture, a practice, and a conscious choice for the Indian audience.
Spotting the trend
“Pre-loved clothes come with their own wear and tear, which is why a basic QC, to start with, is a must. We do send all the clothes to the laundry or get some repairs done if necessary, before even putting out the clothes for selling. Sanitisation has always played a big role for second-hand clothing, and now owing to the pandemic, we have become more stringent. After everything, comes the pricing. We mainly decide the same keeping in mind the brand and the usage of the product,” Namrata Iyer, Founder, The Local Thrift, shares while talking about the essentials a brand has to follow when selling second-hand or vintage clothing.
The Local Thrift
Sanjana adds here, “Pricing involves a lot of factors like the initial investment, plus the time and effort to sanitise, shoot and finally package and ship out an item. Another important aspect is the condition of the garment. If it has been refurbished in any way, then that becomes an additional cost and has to be factored into the price. A lot of people are new to the concept and are not aware of the amount of the care gone into preserving a vintage item in good condition and do question prices at times, but I am happy that more and more people are recognising and are appreciative of the quality of the clothes I sell.” When talking about reception, Namrata says that it is majorly the youth, teens, and the baby boomers who buy the most. Adrija also agrees, hinting that the acceptance towards thrifted clothing is more amongst the young audience and this gives them a chance to increase their wardrobe strength without having to spend a lot. The affordability factor for second-hand clothing, which allows one to buy brands on an economic tag, definitely adds up to the acceptance of this change. Apart from sanitisation, in terms of a major challenge, all of them mentioned that like every other business that depends on logistics, dispatching parcels was challenging during the lockdown. However, the progress that the new and the old brands alike has seen in terms of sales numbers within the shirt time that they have been in business definitely speaks volumes about this segment’s growth. “I started off with just garage sales that involved clothes I procured from my own wardrobe and contributions from my friends and family. However, the response I got was beyond expectations and then people started reaching out to me to support the thrift movement. I can see a very big shift in buying mentalities, and as per reports, this segment will achieve a voluminous growth by 2025. In India, the trend is spreading and it is upon us to take it forward with honesty,” Namrata thus analyses the ongoing market trends for thrift clothing.
Source: Apparel Resources
As far as India and Bangladesh are concerned, there was a clear and significant surge in their respective cotton apparel exports to USA both value-wise and volume-wise in August ’20 over July ’20, while Bangladesh noted a surge even on Y-o-Y basis. The other major cotton apparel shippers in this period were either down in their export or noted just a marginal surge.The cotton apparel industry has been extensively in news for the last one month since the US has banned its major cotton apparel import destination Xinjiang, an autonomous Chinese territory, which constitutes over 20 per cent of the world’s cotton and cotton apparel trade. The speculations and predictions are nFow being made that this ban will directly benefit India and Bangladesh and a significant shift from China to these countries can happen in months coming ahead. But before we talk about India and Bangladesh in their respective cotton apparel export to USA, let’s understand how cotton apparel import of USA is shaping up in 2020, a year which has already gone rogue for the worldwide apparel market.
Prices are becoming tighter and cotton apparels are no exception…
The total apparel import of USA was down by 29.52 per cent in Jan.-Aug. ’20 period to US $ 40.38 billion. The cotton-made apparels contributed US $ 18.77 billion in the total apparel import value of USA in the first 8-month period of 2020 as against US $ 26.79 billion in the corresponding period of 2019, which is a straight 18.13 per cent downfall from the same period of 2019. As S/S 21 season has started and exporters are expecting a major turnaround from September onwards, they faced severe challenges in terms of unit prices of shipped cotton apparels to USA till August ’20 as the unit prices were down by 5.50 per cent to US $ 3.26 per SME in Jan.-Aug. ’20 period as compared to US $ 3.45 per SME in the same period of 2019. June-August ’20 period became more crucial for exporters as the markets started reopening from June onwards and the order execution of cotton-made apparels indicates that the exporters reduced their unit prices even more to get orders from the US buyers in the severely hit economy. Majority of them have even decided to ship orders in much lower prices which were placed in pre-COVID time instead of seeing cancellations to survive. As a result, unit prices of cotton apparel imported by USA declined by 10 per cent to US $ 3.17 per SME in June-August ’20 quarter which valued US $ 3.32 per SME in January-May ’20 period with just 2.06 per cent Y-o-Y downfall. As far as India and Bangladesh are concerned, there was a clear and significant surge in their respective cotton apparel exports to USA both value-wise and volume-wise in August ’20 over July ’20, while Bangladesh noted a surge even on Y-o-Y basis. The other major cotton apparel shippers in this period were either down in their export or noted just a marginal surge and this further indicates that the apparel order situation is gradually reviving in India and Bangladesh as compared to other destinations. Here is the detailed analysis of USA apparel import and the performance of the major shippers during January-August ’20, June-August ’20 and August ’20 as compared to the same period of 2019. Amidst YTD loss of over 30 per cent, India intends to bounce back strongly as the monthly surge of 19 per cent in August gives hope to exporters. India noted a growth of 19 per cent in its cotton apparel shipment to USA in August ’20 over July ’20 to clock US $ 190.71 million, while India upped by 34.75 per cent (in August over July) in its quantity-wise export of cotton apparels. However, India was down by 14.05 per cent in August ’20 as compared to shipment done in August ’19. Quantity-wise, India tapped growth by 3.12 per cent in August ’20 over August ’19 and it’s evident that India’s unit prices are getting reduced. Though August ’20 brought some cheers, the last quarter (June-August) was impacted due to market uncertainties. Values of India’s cotton apparel shipment were down by 39.29 per cent from the same quarter of 2019, while volume was down by 30.55 per cent. Unit prices were US $ 3.30 per SME in June-August ’20 as compared to US $ 3.77 in the same period of the last year, noting 12.58 per cent yearly fall. As far as YTD figures are concerned, India was still down by 27.61 per cent in quantities and 30.79 per cent in values. Bangladesh becomes best performing nation with 15.85 per cent yearly growth in August ’20 over August ’19 in its cotton apparel shipment to USA. USA imported US $ 437.36 million worth of cotton-made garments from Bangladesh in August ’20 which is 15.87 per cent more from August ’19 value and 29.88 per cent better than the value it clocked in July ’20. No other major shipper was able to grow both on Y-o-Y basis and M-o-M basis in their cotton apparel shipment to USA. The growth in August resonates the improving order booking situation and its execution in Bangladesh which was down by 10.76 per cent till July ’20. In June-August ’20 quarter, Bangladesh still remained down by 19.16 per cent to clock US $ 1.17 billion in its cotton garment exports to USA. Volume-wise, the country plunged by 12.17 per cent on Y-o-Y basis in June-August ’20 period. However, the unit prices of Bangladesh didn’t fall (7.97 per cent) to the level of overall fall of the US in cotton apparel import (10 per cent) in June-August ’20 period which is a satisfactory sign for the Bangladeshi exporters. Xinjiang cotton ban imposed by USA may cause a major shift to Bangladesh and India. The ban announcement made by the US on 14 September, due to forced labour used in Xinjiang region, could trigger a material shift in cotton and cotton-made apparel industry from China to countries like India and Bangladesh. Amidst concerns on origination of coronavirus from China, there have already been reports of several international buyers looking at diversifying their sourcing base across countries. A major percentage of Xinjiang-produced cotton used to go to other apparel producing countries, including Bangladesh, and since the US has imposed a ban, apparel manufacturers in Bangladesh will certainly shift sourcing base, at least for the US orders. India is an obvious gainer here, as it is the world’s largest cotton producing country, supplying raw cotton and cotton fabrics the world over including Bangladeshi apparel manufacturers, while Bangladesh has the strength of producing garments at low prices despite the fact that the majority of cotton fabrics are imported. Not just raw cotton material, India is expected to get cotton apparel orders as well, according to various reports. Resonating the same, ICRA recently stated that some major Indian apparel exporters have either already started receiving increased order quantities or are in discussions with renowned international buyers, those who are eyeing India now for sourcing purpose. This shift is now expected to expedite after Xinjiang cotton ban, given its strong presence in the cotton-based apparels.
Source: Cotton apparel
