The state government is set to accept some of the major recommendations proposed by the Suresh Halwankar committee in its report on the new textile policy of Maharashtra. The proposed draft policy is being studied by the experts and will be put up before the cabinet and then in the coming session of the legislature, said Minister of Textiles Chandrakant Dada Patil. He said that some of the committee's recommendations are "very good" and would be accommodated in the existing policy, which was put in place by the previous Congress-NCP government in 2012. Patil, however, didn't elaborate on the recommendations being positively considered.
The textile sector is the second-largest employer, after agriculture, in Maharashtra. At present, over 30 lakh people are directly employed and 2 crore are indirectly employed in the industry. The committee was constituted in November, soon after the government took oath, with an objective to review the existing textile policy. It recommended disinvestment of sick cooperative mills and suggested that permanently sick cooperative cotton mills be handed over to the private sector, which has created a lot of controversy in the cooperative sector.It also talks about development of five mega-textile hubs and attracting foreign direct investment in the textile industry. "Amravati must be developed as spinning, Nagpur as knitting, Solapur teri-towel and Ichalkaranji as suiting-shirting-denim mega composite textile hubs with complete facilities, along with common effluent treatment plant and water recycling plants in the vicinity, thus cutting down on cost and time of making garment from cotton drastically," states the report. The committee has hailed China's textile policy and suggested "Fibre to Fashion" approach to turn around the sector, which was once blooming in the state. It also seeks to reduce the power tariff for the sector, while encouraging setting up of more spinning and processing plants in the state. The draft policy will now go for cabinet approval.
Maharashtra is India's second-largest cotton producer. Over 38.7 hectares gives over 81 lakh bales. Of this, only 25 lakh bales are consumed by the spinning mills in state. The report says, "To utilise all cotton grown in state, over 50 lakh spindles are needed and investment of Rs50,000 crore. As the state earns over Rs1,000 crore revenue from selling yarn worth Rs40,000 crore, increasing spinning capacity will help generating more revenue."
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SOURCE: The DNA
Knitwear exporters in Tirupur are now seeing a great opportunity coming to them to penetrate the huge Russia apparel market following India’s decision to sign the Free Trade Agreement with Eurasian Economic Union (EEU). As a prelude to the FTA with the EEU (comprising Russia, Kazakhstan and Belarus), a joint statement had been signed between India and EEU at St. Petersburg in Russia few days back for establishment of a joint study group to work out the formalities including the finalisation of the sectors that would be part of the FTA. “We have already been representing to the authorities and made them convinced the need to have a FTA with Russia with textiles included in it, considering the immense market potential in that country,” T. R. Ramanathan, an industry consultant, told The Hindu . During 2013-14, Russia has imported apparel items worth $ 7.5 billion and of which, India’s share was only $ 268 million. “Once the FTA been signed, the exporters from clusters like Tirupur and its hinterland will be enthused to eye Russian market more because of the inherent incentives available in duty front under any free trade pact which makes the Indian products cost-competitive,” said R. Dhanapal, an exporter.
SOURCE: The Hindu
India has an advantage over other countries in fibre-dyed yarn and it can increase exports of this type of yarn, feels a top official of Rajasthan-based Banswara Syntex Ltd. Globally people are acknowledging India's potential in manufacturing fibre-dyed yarn. "India has an edge in this type of yarn. The demand for this type of yarn from India is becoming stronger," Ravi Toshniwal, MD of Banswara Syntex told Fibre2Fashion.com. According to him, "Fibre-dyed yarn is particular in its usage and characteristics. Its advantages include colour continuity and the true melange nature of colours that can be made." Manufacturing of fibre-dyed yarn is a very peculiar and cumbersome process, as it requires more lead time to make compared to a regular non-dyed, standard ecru yarn. It is because fibres need to be dyed before spinning in this process. Speaking about Banswara Syntex, Toshniwal said the company is a specialist in manufacturing blended PV lycra-based fibre-dyed yarns, for which there is demand in foreign markets. On export performance, Toshinwal said Banswara Syntex's exports amounted to Rs 476 crore in 2014-15. "We anticipate about 30-35 per cent growth during the current financial year 2015-16," he said.
SOURCE: Fibre2fashion
Finance minister Arun Jaitley who is on a visit to the US, has said that economic reforms in the legislative pipeline can push India's growth rate above the current range of 7 to 7.5 per cent. India's economy, Asia's third largest, is expected to grow 7.5 per cent this year, according to the latest World Bank forecast, which would make it the world's fastest growing economy. The government forecasts growth of 8.1-8.5 per cent while the central bank has a 7.6 per cent gross domestic product growth target. "Neither the government, nor the people, nor the industry whose representatives, some of whom are here, nobody is very excited about a 7-7.5 per cent growth rate in India," Jaitley said during a discussion with Timothy Geithner, president of investment firm Warburg Pincus and a former US Treasury Secretary, the media has reported. "Because a series of reform fixes which are in the pipeline and are to be implemented, we have now identified all the problem areas, and I think one by one as we go resolving most of them, hopefully we should reach what our destination targets are," he said. Jaitley took questions about the Indian government’s ability to push through and more importantly implement economic reforms to speed up infrastructure spending and streamline tax policies. He acknowledged the bottlenecks in both areas but said the government was making progress.
Prime Minister Narendra Modi has pledged to overhaul the tax regime. However the pro-business government was caught flat-footed in a row with foreign portfolio investors over demands they pay the minimum alternate tax, for which they had not previously been liable. Jaitley has said previously he hoped that the Rajya Sabha would "soon" pass an enabling amendment that would make it possible to implement on time a new goods and services tax (GST) that would unify India into a common market. The bill on the GST has been referred to a committee for discussion and Jaitley said there is a current majority among the committee in favour of the legislation. Jaitley said he was focussed on implementing the tax measure by April 1, 2016, the start of the new fiscal year. "This reference to the committee has actually shortened the window of time available to me. I now have to run faster to in order to catch up. If nothing unusual happens, hopefully I make it. So I am conscious of the time constraint," he said.
SOURCE: Fibre2fashion
India will sign a free trade agreement with Eurasian Economic Union (EEU or EAEU) to boost trade and economic ties with the region, according to media reports. "We are definitely signing this agreement", Amit Telang, first secretary of India's embassy in Russia told a news agency in Moscow. The agreement will be signed at the St Petersburg International Economic Forum (SPIEF-2015). EEU is an international organisation for regional economic integration. The member states of the union, which started operation on January 1 are Russia, Belarus, Kazakhstan and Armenia. The EEU, with a GDP of $2.2 trillion last year, is aimed at economic development of the member states by coordinating their economic policy and guaranteeing free movement of goods, services, capital and workforce. The union had an industrial production $1.3 trillion last year. Apart from India, Iran, Egypt and Israel are also negotiating the possibility of forming free trade zone agreements with the EEU. On May 29 Vietnam became the first country to sign a free trade agreement with the EEU. Russian Prime Minister Dmitry Medvedev then said that around 40 countries were holding talks on some kind of agreement with the union. Meanwhile, India has said it is keen to invest in Russia's coal and hydrocarbon projects. At a regular summit in autumn this year, India will make specific proposals on bilateral cooperation in these sectors, Indian Ambassador to Russia Pundi Srinivasan Raghavan said at a roundtable discussion of SPIEF-2015.
SOURCE: Fibre2fashion
Industry body CII today signed a pact with its Russian counterpart to strengthen bilateral economic cooperation between the countries. The MoU was signed during the St Petersburg International Economic Forum. A CII CEOs delegation led by its President Sumit Mazumder is in Russia accompanying Commerce and Industry Minister Nirmala Sitharaman. The chamber also said that during their interaction with Sitharaman, industry leaders raised the issue of possibility of Rupee-Rouble trade, financing for oil trade and barter trade in commodities. The Commerce Minister highlighted the efforts being taken by the government to address these issues with the Russian government, it said. She was of the view that Indian companies should focus on specific business issues and share it with the government and embassy, so that an appropriate platform can be created to address and resolve those matters, it added.
SOURCE: The Economic Times
Global investors may have reduced their exposure to emerging market equities but India still continues to be the most favoured country, says a report. According to global financial major Bank of America Merrill Lynch, global investors have reduced their exposure to emerging market equities amid weak earnings prospects, weak Chinese economic growth and a strong dollar. India topped the global emerging market investors’ country preference chart followed by China and Poland in the second and third place, respectively. Asia Pacific investors have increased their allocations to India and Taiwan in June. Meanwhile, as per latest data from depositories, Foreign investors pulled out more than Rs 3,300 crore from Indian stock markets so far this month, mainly on account of better returns from Asian peers, concerns over a slow revival in corporate earnings and continued worries over taxation issues. “Despite having lost 14 per cent (in USD terms) since January highs, India continues to be the most favoured country for GEM (Global Emerging Market) investors,” BofA-ML said in a research report. Other countries in the list included, Turkey, Indonesia, Mexico, Korea, Thailand and South Africa. The BSE’s benchmark 30-share sensitive index closed 0.74 per cent or 200.34 points higher at 27,316.17 points on June 19. So far this calender year (since January 1) the index has lost 191.37 points or 0.69 per cent.
According to BofA-ML, the views on the Chinese economy, to a large extent, define investor views on emerging market equities. Moreover, China growth prospects have come down sharply since April. “With the Shanghai Stock Exchange Composite Index up about 150 per cent in the last year with no sign of an earnings revival, 70 per cent of global investors believe China equities are in a bubble,” the report said. According to June’s BofA Merrill Lynch Fund Manager Survey, globally investors have moved out of equities into cash ahead of an expected US Fed rate hike. Investors have also shown concern about a Greek default and a possible bubble in Chinese equities as they have scaled back risk. “Higher cash levels show how caution is in the air, with 65 trading days until we expect the Fed to tighten,” BofA Merrill Lynch Global Research chief investment strategist Michael Hartnett said.
SOURCE: The Financial Express
Describing India as a bright spot in an otherwise troubled global economy, Finance Minister Arun Jaitley has said that the new Indian government offers a stable, predictable and transparent policy regime, making the country an attractive destination for investors. Having interacted with top American businesses and corporate leaders over the past five days in both New York and Washington, Jaitley yesterday told reporters the feedback he is receiving is that investors need a stable policy regime and the Indian government is committed to that. “In otherwise troubled time of the global economy, India clearly is a bright spot. As a bright spot, our growth rates are improving. Fiscal discipline is under control,” he said. “This year we are targeting eight percent growth, which in current global situation appears to be reasonably impressive. And that is what makes us an attractive destination,” he said. Jaitley, who met investors over the past few days in both New York and Washington, either on a one-to-one basis or collectively, said the meetings were an opportunity to explain to them what has happened in the past one year in terms of the reform programme and all that is in the pipeline. “The government is fairly determined to continue this process so that it can give further boost to our economy,” Jaitley said, adding that the meetings were also an opportunity to understand how investors view India. This would continue over the next three days, during the last leg of his visit to San Francisco, beginning today. “There has been several game changing steps which the government of India has taken in the last one year. We opened up, we made several structural changes, the recommendation of the finance commission which we are implementing has created a huge amount of decentralisation potential,” he said. “The taxation reforms which, we are taking in reducing direct tax rates to 25 per cent, and moving on to the goods and services tax (GST) regime, is probably one of the most important taxation reforms in recent history, subsidy rationalisation and using the DBT mechanism is extremely important, transparency in government’s functioning particularly in areas of natural resources has brought very important results,” the minister said.
Jaitley said: “It was important for us to explain to the general body of investors that we are clear about the right direction in which we are moving.” He said that the economy has achieved a macro-economic stability. “We consolidated fiscal discipline. The continuing reform programme has restored the credibility of the economy and obviously low oil prices has helped us,” the minister said. “And as interests rates come down, with inflation under control, reform programme implemented, infrastructure investment being improved, the goods and services tax looking more likely, hopefully we should reach this year’s target of growth (of eight per cent),” Jaitley said. He said: “I also carry back a message from the investors that the investors need a stable policy regime. Any form of unpredictability is never investment friendly. Therefore this interaction and outreach has been of immense utility.”
SOURCE: The Financial Express
Business leaders of India and Australia will discuss ways to increase trade and investment during the CEOs forum here this week. Australian Trade and Investment Minister Andrew Robb, who is here for a three-day visit, will also attend the Australia-India CEO Forum. The co-chairs of the forum are Rio Tinto CEO Sam Walsh and Adani Group Chairman Gautam Adani. Besides, Robb will discuss progress of the ongoing negotiations for the Comprehensive Economic Cooperation Agreement (CECA), which both sides aim to conclude this year. Both the countries have agreed to work towards concluding the CECA in 2015 to increase trade and investment, promote job growth and fuel prosperity for both our countries, the Australian High Commission said in a statement quoting Robb. "With Australia and India's top business leaders contributing to the Australia-India CEO Forum, we are committed to building and expanding our trade and investment relationship and together we will drive our future economic engagement," he said. India is Australia's 12th-largest trading partner and the bilateral trade between the countries stood at $13 billion in 2014-15.
SOURCE: The Economic Times
Finance Minister Arun Jaitley met top US officials here and raised India's concerns over key bilateral issues, including totalisation agreement and the proposed Bilateral Investment Treaty. In a series of meetings with US Treasury Secretary Jack Lew, Commerce Secretary Penny Pritzker and US Trade Representative Mike Froman, Jaitley discussed bilateral issues of mutual interests and concerns. "There has been a continuous dialogue (between the two governments in the last one year)," said the Finance Minister. Jaitley who is on a nine-day US tour and is currently is in Washington also flagged off some of the important issues for India, including the totalisation agreement. The totalisation agreement aims to protect interests of professionals of Indian-origin who contribute more than USD 1 billion each year to the US social security. "We had our own concerns with regard to the totalisation agreement so that our professionals could get the benefit which are otherwise being denied to them," Jaitley said. When asked about progress made on the totalisation agreement, Jaitley said bilateral issues can only be resolved by flagging them and by flagging them repeatedly. Jaitley also discussed issues of increased trade cooperation and preparation for the economic dialogue with them. "There is a much greater understanding on subjects of mutual interest," Jaitley said. They also discussed the progress made on the negotiations of the proposed Bilateral Investment Treaty (BIT) between the two countries. The proposed treaty, which New Delhi calls Bilateral Investment Protection and Promotion Agreement (BIPPA), seeks to protect investments between the two nations.
India has signed BIPPAs with over 80 countries. However, it has put a freeze on these agreements following a spate of suits from telecom companies. "There were references from the US side about their concerns with regard to intellectual property regulations in India," Jaitley said. Jaitley said insurance was not part of the bilateral agenda. It was an internal matter, although global investors had also flagged this issue. Responding to a question, Jaitley said there is a huge emphasis on skilling India and there is huge investment going into infrastructure creation. "In fact this year, I slowed down the fiscal consolidation by one year in order to spend more money in the infrastructure itself. The taxation regime is also being designed so as to help the manufacturing sector," he said. "And today power is in abundance. With these trends, I think, the manufacturing sector is showing signs of some revival," Jaitley said. Bilateral ,Investment, Treaty, totalisation , Arun Jaitley , US ,BIPPA
SOURCE: The Economic Times
The international crude oil price of Indian Basket as computed/published today by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 61.58 per barrel (bbl) on 19.06.2015. This was lower than the price of US$ 62.00 per bbl on previous publishing day of 19.06.2015.
In rupee terms, the price of Indian Basket decreased to Rs 3930.04 per bbl on 19.06.2015 as compared to Rs 3958.70 per bbl on 18.06.2015. Rupee closed stronger at Rs 63.82 per US$ on 19.06.2015 as against Rs 63.85 per US$ on 18.06.2015. The table below gives details in this regard:
|
Particulars |
Unit |
Price on June 19, 2015(Previous trading day i.e. 18.06.2015) |
Pricing Fortnight for 16.06.2015 (May 28 to June 11, 2015) |
|
Crude Oil (Indian Basket) |
($/bbl) |
61.58 (62.00) |
62.08 |
|
(Rs/bbl |
3930.04 (3958.70) |
3966.91 |
|
|
Exchange Rate |
(Rs/$) |
63.82 (63.85) |
63.90 |
SOURCE: PIB
Viet Nam is the second largest textile and garment exporter to South Korea, making up one-fourth of South Korea's garment market, after China. South Korea imported US$627.4 million (S$840 million) in textiles and garments from Viet Nam in the first four months of this year, according to the Viet Nam Textile and Apparel Association (Vitas). The turnover marks an increase of 8.25 per cent over the same period last year. The growth is part of a larger trend. After the ASEAN - Korea Free Trade Agreement (AKFTA), Viet Nam's textile and garment industry saw significant growth. In 2011, the sector's export turnover to South Korea was $900 million. A year later it increased to $1.1 billion and in 2013 it reached $1.6 billion. Last year's total of $2.4 billion was a staggering 27 per cent increase over that of 2013. The growth should only continue with the recently signed AKFTA. According to its open-access commitment, Vietnamese textile and garment products that satisfy certificate of origin norms will enjoy zero tariffs once the agreement takes effect from January 1, 2016. Currently, Vietnamese firms pay a tax of 8 to 13 per cent. The FTA would be a considerable opportunity for both countries' enterprises, said Vitas. South Korea is Viet Nam's fourth largest importer of textiles and garments, accounting for more than 10 per cent of the market's export turnover, according to the Ministry of Industry and Trade. It is forecast that textile and garment turnover in the South Korean market could reach $16.3 billion for 2015, increasing 11.6 per cent year-on-year. South Korea currently provides nearly 20 per cent of Viet Nam's textiles and with the large volume of ancillary materials it also exports.
SOURCE: The Asia One Business
All Pakistan Bedsheet and Upholstry Manufacturers Association (APBUMA) have stressed the need for implementing new five-year textile policy in true letter and in spirit to attract the foreign traders as well as investors. Addressing a post-budget consultative meeting of member here on Thursday, APBUMA Chairman Khawaja Jalaluddin Roomi said that it was a good and positive step to allocate Rs 1248 billion for energy projects and he also hailed the government's decision to establish Export Development Fund for export-oriented industry. without addressing the major issues like energy constraints, dearth of value addition, high cost of doing business, lack of funds, and over-burdening of taxes and levies, efforts to boost textile exports would remain fruitless, he added. Jalaluddin Roomi said that the textile industry was largely confronted by these problems for the last many years and added that cost of doing business in the country had escalated enormously due to intermittent raise in the prices of raw material and inputs.He said that blockade of huge funds in refunds regimes had created a severe liquidity crunch. Energy constraints have halted the industrial wheel and high production cost had disrupted the competitive edge of textile exports at international market, he said. He said that GSP plus trade incentives, no doubt had opened a big window of opportunity for Pakistan to not only push up its textile exports to the world but also produce a trade surplus to help the government overcome its trade deficit. But the challenges faced by this sector are hindering the export growth.
Syed Muhammad Aasim Shah said that it was a bad omen to increase the sales tax from 2 to three percent similarly 3 % tax on Yarn and fabric was not acceptable because it would create hindrances for manufacturing sector. Terming the previous textile policy unsuccessful, the Ex- Chairman said that key initiatives of the textile policy (2009-14) could not be completed as the government discharged only Rs 26.75 billion against the commitment of Rs 188 billion. Due to inadequate funds, many schemes including Textile Investment Support Fund, drawback of local taxes and levies, refund of past R&D claims remained in doldrums. Moreover, ambitious export target was fixed without giving due thought sluggish industrial and trade business environment and other problems which remained unachieved, he added. He said that textile policy also guaranteed to dispense regular supply of gas and power to the textile industry; however, it has failed to provide this as large number of textile units have shut operations due to energy constraints, resulting in huge loss to the industry, he added. Mueed A Khawaja President of Tax Bar Association briefed the member that Now CNIC number would be treated as national tax number and it would be mandatory for all businessmen to file their wealth tax statements. He further said that all non-registered companies would have to pay double tax than registered companies.
SOURCE: The Business Recorder
Legislators of the Senate expressed serious reservations over 14% decline in textile exports this year and said such a situation predicts that the government would not be able to take full advantages of the generalised system of preferences (GSP +) granted to Pakistan. Senator Mohsin Aziz on Friday chaired the first meeting of Senate Standing Committee on Textile in the Parliament House. The committee was informed that the textile exports during last nine months registered $1.37 billion with 14% decline in overall textile related products export. The senators termed non-existence of a fulltime minister of textile, responsible for decrease in textile exports. They recommended the government to appoint a fulltime minister for the textile sector as the development of whole economy depends on it. Members of the committee said that GSP+ facility would not give any incentive to Pakistan if the textile sector could not perform well. Non-provision of gas and power load shedding, especially in Punjab, was responsible for decrease in textile related products and its exports, they said.
Briefing the committee about the ministry and its attached department, Ministry of Textile Secretary Aamir Marwat said that Rs15 million were collected annually in textile cess, however, efforts are made to increase the collection. Committee Chairman Mohsin Aziz expressed concerns that despite assurance from the government to double textile export, it failed to do so and in presence of GSP+ facility, the textile export declined. “Such a situation is of concern for the policymakers of the country and if the situation remains the same, there is a possibility that the government may waste the facility of GSP+. The committee also expressed apprehensions over provision of power and gas along with its cost and also the decreasing value of Pak rupee against US dollar and said all these factors have had a bad impact on Pakistan economy.
Senator Hari Ram informed the committee that India provided subsidy on textile and wheat production, but in case of Pakistan, the situation is totally opposite. “India increased its textile production three times during last 13 years, however, in Pakistan the increase in cotton production is very nominal,” he added. Textile secretary told the committee that since 2005, the government spent Rs 3.6 billion on Karachi Textile City but only acquired land and nothing else. He also told the senators that K-electric wants to establish coal based power generation plant and acquired 200 acres of land out of total 1250 acres for Karachi Textile City. The committee chairman suggested that the government must provide more incentives to Karachi, Faisalabad and Lahore textile cities and encourage small-scale capitalists to invest there. The chairman also suggested for enhancement in textile sowing areas and maintaining stability in textile products. About Faisalabad Textile University, the committee ordered that machineries in the university should be upgraded so that the engineers may get their education on modern machineries. The committee directed to provide details over the Pakistan Central Cotton Committee (PCCC) Multan and Pakistan Cotton Standard Institute in their next meeting.
SOURCE: The Daily Times
The trade balance between Egypt and other African countries has decreased duringthe first quarter of the current year. The decrease is due to the political tensions and difficulties in transport because of higher freight rates, according toformer head of the Textile Export Council Magdi Tolba. Tolba said that Egyptian exports of textiles and clothing in Africa are not large, having reached less than 5% of the total Egyptian clothing exports. “The unification of the three African trade blocs in one agreement is an important step to open a new Egyptian market on a continent that trusts in the Egyptian product,” added Tolba. “Africa has changed a lot and important markets have emerged in East and West Africa.” He noted that most Egyptian textile exports for Europe and USA, however, do not exceed 0.5% to 1%, explaining that Africa is a good market and there is an opportunity to open new markets in Africa to compensate for the decrease in exports to Europe. He pointed out that increasing Egyptian exports in Africa requires reforms and procedures to be implemented under the supervision of the Ministry of Industry and Foreign Trade. The most important of those is the removal of transport obstacles and ensuring risks of transferring exports are limited, as well as contributions by the state in holding exhibitions in African countries.
Tolba suggested that the Egyptian small textile factories could be an important player in the African export market, because Egyptian products are great competitors. Sherif El-Gabaly, President of the Chamber of Chemical Industries at the Federation of Egyptian Industries (FEI), said the tripartite agreement between Egypt and Africa’s largest blocs is just a draft. The agreement has been signed with initials, it is practically non-existent, but for now the Common Market for Eastern and Southern Africa (COMESA) exists. El-Gabaly added that the agreement needs three years of implementation at least, although the COMESA existed for several years. “However, there are problems to be focused on to increase and revive trade movement between Egypt and Africa and solve transport and shipping problems,” El-Gabaly said. “In addition, the current situation is not significantly favourable to activate and increase exports movement. Egypt also suffers from a crisis in hard currency, which negatively affected the exports and imports movement in recent weeks.”
Libya and Sudan are the largest importers from Egypt within the framework of the COMESA agreement. Sudan acquires 50% and Libya 24% of total exports. Meanwhile, Kenya, Ethiopia, Uganda and Eritrea are the most important Egyptian export markets from the Border States, according to data from the Ministry of Industry. Kenya and Zambia are the most important exporters to Egypt with each making 28%-35% of the total Egyptian imports. Libya, Sudan and Ethiopia are the countries Egypt imports most from. Total Egyptian exports to COMESA countries during the first quarter of this year amounted to EGP 401m, and Egyptian imports from COMESA countries amounted to $98m. Comoros, Eritrea, Rwanda and Seychelles, did not export to Egypt during the first quarter of the year. Egypt launched tripartite free trade area (FTA) agreement between the main three economic blocs in Africa to facilitate trade between the member states.
SOURCE: The Daily News Egypt
Cheap imported fabrics, power cuts and a rise in production costs are making it difficult to for Nigerian textile traders in the country's northern city of Kano to compete. Many traders have closed shop," Nura Maliya, local textile trader, told Al Jazeera. "I am about to follow if things don't improve soon. Supply lines are drying up as distributors insist you pay upfront before they deliver. It's useless coming to the market. And I am afraid many lives are being destroyed." Although several factories have benefited from a $500m government intervention to revive the country's textile industry, manufacturers say that monetary support alone will not fix the problem. "It's not only the financing that we need," said Saidu Dattijo Adahama of Adahama Textiles. "The electricity supply is still below 20 per cent. Second, the business environment is not really sufficient enough for "made in Nigeria" products to compete with the Chinese imports. You cannot compete with the Chinese without protection." Since manufacturers cannot produce enough material, this means that textile traders down the line must rely on imports, much of which is smuggled. At the same time, importers have tightened the supply chain, insisting on upfront payment since the local currency, the naira, was devalued. In the face of stiff Asian competition, manufacturers are asking for government protection. Traders, on the other hand, want a quick propping up of the local currency to make imports affordable. Until such interventions happen, more traders and manufacturers will be at the mercy of Asian suppliers.
SOURCE: The Yahoo News
