• CCI AD FROM 5th April 2021




Export outlook might remain robust despite second coronavirus wave

Merchandise exports may not get deeply impacted over the next few months, despite a second wave of the pandemic causing localised lockdowns across the country.

According to preliminary data released by the ministry of commerce and industry, India’s merchandise exports nearly trebled in April to $30.21 billion as compared to last year. The growth was on account of a low-base effect due to a stringent nationwide lockdown in 2020. It was also supported by strong demand across sectors in the first month of the current fiscal year.

Experts believe the growth was also on the back of demand from western nations, where the impact of Covid-19 is waning. They said that the trend is likely to remain sustainable.

“Some developing countries have emerged out of Covid or at least the worst part of the pandemic is over for them. Therefore, demand has been increasing. As long as India is able to supply, there is no full lockdown, and there is more positive demand from western countries, there is going to be a pick up. Besides, (in April) a good part of exports may also be related to medicines and drugs, as well as that of refined petroleum products,” said DK Srivastava, chief policy advisor at EY.

“This trend will be sustainable, as long as there is no supply-side disruption due to Covid-19. As long as a full-fledged lockdown is not declared, supply-side will not be adversely affected,” added Srivastava.

Founder chairman of Trade Promotion Council of India Mohit Singla said healthy demand in labour-intensive sectors such as man-made yarns, ceramic and jute products in April shows that demand in the western markets is picking up.

India has been reporting over three lakh new infections for close to two weeks now. Several states such as Maharashtra, Delhi, UP and Jharkhand, among others, have imposed complete or localised lockdowns to stop the spread of the virus. While some nations have slowly started recovering from the disruption caused by the pandemic, the second wave is yet to hit its peak in India.

According to Japanese brokerage firm Nomura, while both exports and imports remained largely resilient, despite the second wave, imports may take a hit temporarily over the next two months.

“We expect the current strength in global growth to buoy exports, as the second wave of lockdown measures imposed by states largely allow manufacturing firms in export-oriented sectors and goods transport services to operate,” said a report released by Nomura.

However, it feels that import growth could be marginally impacted in May and June, with the economic impact from the second wave becoming more evident and domestic consumption retracting.

“Overall, we expect imports to marginally soften sequentially in the next two months, but then rebound after June as the lockdowns flatten the pandemic curve and as restrictions will likely be gradually relaxed in June,” the report said.

According to preliminary data, merchandise imports in April were $45.45 billion, up 165.99 per cent, driven by gold, metals, medical products and electronic goods. Trade deficit was $15.24 billion, up 120.34 per cent year-on-year. The deficit was $16.30 billion in April 2019.

Source: The Business Standard

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Barclays cuts India's FY22 GDP growth estimate to 10%

The global brokerage firm Barclays has cut India’s GDP growth estimate for fiscal 2021-22 to 10 per cent from 11 per cent earlier, owing to the slow pace of vaccinations and uncertainty in the number of people affected by COVID-19. It said that the localised lockdowns could cause economic losses to the tune of $38.4 billion, if they continue till June.

If the pandemic is not brought under control soon and restrictions continue till August, the GDP growth can decrease to 8.8 per cent, Barclays said in a recent report. The economy of India is expected to contract by 7.6 per cent in FY21 due to lockdowns affecting economic activities, jobs and demands.

"As India's second COVID-19 wave continues, there is growing uncertainty around the number of cases and fatalities. Slowing vaccinations are also hurting India's recovery prospects. We lower our FY 2021-22 GDP growth forecast by 1 per cent to 10 per cent to reflect this uncertainty," media reports quoted analysts at Barclays.

Barclays also said that India's vaccination programme has slowed, weighed down by rising supply constraints and logistical challenges and the move to liberalise vaccinations is not likely to have any short-term effects.

The RBI maintains that the Indian economy will grow at 10.5 per cent this fiscal.

Source: Fibre2Fashion News

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Garment hub Tirupur’s local sales pip exports

Cooped up Indians purchased more knitwear during last fiscal  which saw garment makers from Tirupur earn Rs 30,000 crore. And for the first time, domestic sales pipped exports which remained unchanged at Rs 25,000 crore in a truncated fiscal which saw lockdowns for nearly 2 months due to the Covid pandemic. Garment production increased 12%  by volume.

With nearly six lakh workers, Tirupur exports knitwear to global giants. With Covid induced lockdowns during March  2020 and sputtering restart a couple of months later, export of garments took a beating. “Domestic market turned buoyant  as more Indians preferred leisure wear for their WFH, pushing the sales of T Shirts and track bottoms. On the exports front,  the demand for ‘knee drop’ T shirts for women sold like hot  cakes as more women combined WFH and home wear. “Knee drop was a big hit and sees continued traction among overseas buyers ,” said Raja M Shanmugam, president of Tirupur Exporters Association (TEA). For the domestic market, garment makers received a price mark-up. “We don’t know if there was an increase in tag price, but large garment brands increased procurement prices by 10 to 12% while we asked for a 15% increase to compensate for the unprecedented rise in yarn prices,” he said.

Remaining optimistic, TEA has projected for a 20% increase in both exports and domestic sales for the current fiscal.  “While second wave of the pandemic is worrying, going by the current orders, we may see a 20% growth this year,” Shanmugam added.

Source: The Times of India

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Prices of nylon chips, filament yarn expected to rise: TexPro

The prices of nylon chips (CFR SE Asia) and nylon filament yarn (FDY 70D/24F, FOB NE Asia) may increase in the coming months due to rising prices of benzene and caprolactam and a high demand from the downstream industry. The filament price dropped in April 2021 due to an unclear price trend of raw materials and restrained downstream procurement.

The market of nylon chips and nylon filament yarn was supported by higher prices of benzene and caprolactam along with increasing prices of crude oil in the first quarter of 2021. The USD caprolactam contracts also sustained the price rise. The players stocked up on chips and yarn before the Chinese New Year, expecting a rise in the demand after the Chinese holiday.

The price of nylon chips, CFR SE Asia, remained low at $1,769.52 per metric tonne in January 2021, but increased by 20.22 per cent to $2,127.39 per metric tonne in the first quarter over the price of January 2021. It is expected to rise at 33.03 per cent to reach $2,830 per metric tonne in June 2021 over the price of March 2021.

The price of nylon filament yarn, FDY 70D/24F, FOB NE Asia, was $2.35 per kg in January 2021. It significantly increased by 19.57 per cent to $2.81 per kg in March 2021, but dropped by 3.56 per cent in April 2021. It is anticipated to recover slightly and reach $2.73 per kg in June 2021, as per TexPro.

Source: Fibre2Fashion News

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RBI Governor LIVE: Shaktikanta Das rolls out stimulus measures amid 2nd Covid-19 wave; liquidity, credit, more

RBI Governor LIVE: RBI Governor Shaktikanta Das on Wednesday unveiled liquidity support measures amid rising Covid-19 cases in India. RBI Governor Shaktikanta Das said that the 2nd wave of COVID-19 in India has drastically altered the economic situation. Das added that RBI will continue to monitor emerging situation use all resources. India had flattened the inflation curve but the situation altered. He also added that the quarantine facility of the RBI continues to operate with more than 200 officers working away from their homes. He announced that the second purchase of G-SEC for Rs 35,000 crore under G-SAP 1.0 will be conducted on May 20, 2021. Among liquidity measures, he announced on-tap liquidity window of Rs 50,000 crore with tenure of up to 3 years at repo rate being opened till March 31, 2022. RBI also announced targeted long-term repo operation for small finance banks (SFBs) of up to Rs 10,000 crore. This will be used for lending of up to Rs 10 lakh per borrower. Das said that it is during the darkest moments that we must focus on the light. “We have lessons to draw from our experience of last year when as a nation we came together and overcame the once in a generation challenge imposed by the first wave of the pandemic,” Das said. “Our faith should be like an ever burning lamp which not only gives us light, but also illuminates the surroundings,” Das concluded.

Source: The Financial Express

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Apparel export gets $2.51 bn in April

Bangladesh’s readymade garments (RMG) export earnings fetched $2.51 billion in April 2021, while it was only $375 million in April last year.

Apparel export rose by 6.24% to $26 billion in the first 10 months of the current fiscal year, compared to the same period of the last fiscal year.

Knitwear products registered 15.34% growth to $13.99 billion, while woven garment export fell 2.71% to $12 billion, compared to the same period in FY20.

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) President Faruque Hassan said to a leading daily, “It is not a normal growth, but the bouncing back of apparel export has just begun.”

“We hope the export of apparels will boost by September this year, and it fully depends on the reopening of European markets, as many EU countries still remain under lockdown,” he added.

The BGMEA president also mentioned that the apparel export to the US was performing well, while the country’s overall apparel import came down compared to last year.

Globally, apparel consumption has declined by more than 10% over the last year due to the drastic fall in income during the Covid-19 pandemic, he added.

As a result apparel prices also significantly declined although the cost of production has increased owing to the high prices of raw materials and freight charges, said the BGMEA president.

In some cases, apparel makers are continuing production even at lower production cost with the hope that the business will bounce back in the coming days, said Faruque Hassan.

Asif Ibrahim, a Director of the Bangladesh Garment Manufacturers and Exporters Association, said to a leading daily that although the increase in April seems higher, the growth in apparel exports is only 2.76%.

Ibrahim said, since the implementation of the revised minimum wage, 13 factories have been closed and another 70 factories will face the same fate.

Ibrahim added, “At the same time, orders have been diverted to Vietnam, Cambodia, and Pakistan because of their competitive currency advantage.”

Source: Textile Today

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Several Key Sectors Stare at Export Impact

India’s exports could take a knock in the months ahead as international buyers have started looking elsewhere for supplies amid uncertainty over delivery commitments as the pandemic rages.

Textiles, garments, automobiles and steel are expected to be the most impacted, exporters said, even as demand recovers in the UK and the US,

Supply-chain disruptions, raw material shortages, Covid-19 cases in factories and diversion of industry oxygen for medical use have disrupted production across industries.

“People are scared to buy from India and uncertain if we can deliver the orders,” said Sharad Kumar Saraf, President of the Federation of Indian Export Organisations.  “If cases continue to increase like this, with workers and staff getting infected, we might see an impact.”

Steel, one of India’s major exports, is likely to take a sharp hit. With the country facing an unprecedented oxygen crises amid the second wave of the Covid-19 pandemic, oxygen produced by steel plants has been diverted for medical use and this has impacted production.

The steel sector has been supplying over 3,000 tonnes of oxygen daily for medical use as of late April.

“Since India produces custom products, we don’t expect orders to go to other countries. However, may steel plants are now supplying medical oxygen and their existing stocks of steel will get depleted soon.” Said Ravi Sehgal, MD of Kolkata-based engineering firm Carnation Industries Ltd. “We might see an impact on exports in June.”

However, in the garments sector, some EU customers are shifting their orders to Pakistan, citing potential worker issues and deliveries in India, according to an exporter.

Saraf said the EU has controlled the pandemic and demand is picking up there but orders of made-up articles are going to Pakistan and a downward trend in exports of these products could start soon.

Source: The Economic Times

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China top destination for Indian cotton yarns with 92% Y-o-Y surge in Feb. ’21

India’s cotton yarn export valued US $ 266.70 million in Feb. ’21 as against US $ 260.60 million in Feb. ’20.

The top two export destinations were China and Bangladesh. While China increased yarn sourcing from India, Bangladesh noted a steep decline in the second month of 2021.

The exports to China grew massively by 92.07 per cent to US $ 81.28 million in Feb. ’21, as against US $ 42.32 million in Feb. ’20.

In case of Bangladesh, the shipment valued US $ 59.94 million in Feb. ’21, with a decline of 18.80 per cent on yearly note.

See below table to find out how India’s cotton yarn fared in its top 10 export destinations –

Value-wise Cotton Yarn Exports from India to Top 10 Destinations:


Feb. ’20

Feb. ’21

% Change








(-) 18.80









South Korea







(-) 49.82





Sri Lanka



(-) 3.84




(-) 51.39





 (Values in US $ million)

Source: Apparel Resources

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Apparel makers demand duty-free import of all kinds of raw materials

The county’s apparel and textile makers have urged the government to allow duty-free import of all raw materials, including different types of fibres for the clothing sector.

Three trade bodies of the export-oriented garments and textile sector also requested the government to set 3 per cent value-added tax for all types of yarns and to reduce the import duty on the spares parts of capital machinery to 1 per cent in the next budget for the financial year 2021-22.

Bangladesh Textile Mills Association, Bangladesh Garment Manufacturers and Exporters Association and Bangladesh Knitwear Manufacturers and Exporters Association on Sunday made the demands in a letter to finance minister AHM Mustafa Kamal.

Demanding equal 3 per cent rate for the VAT on all kinds of yarns, the trade bodies said that the government should allow duty-free import of all types of fibres as different types of fibres with cotton are used in the primary textile sector to produce yarns.

Along wing cotton, viscose staple fibre, polyester staple fibre, tencel, modal, spandex, and pineapple fibres are used in the spinning mills as raw materials but the duty-free import is applicable only to cotton fibre, the letter said.

It also said that many other new variant of fibres would also be used in the coming days due to the buyers’ requirements and the government should extend duty-free import facility for all types of fibres.

The textile sector leaders in their letter demanded 1 per cent import duty on the spare parts which are used in spinning, fabric manufacturing and dyeing, printing and finishing mills.

The letter said that although the government allowed garment and textile sector to import capital machinery at 1 per cent duty but the import duty up to 104 per cent was imposed on the spares of the machinery.

Due to the high import duty on spare parts, garment and textile sector is losing its competitiveness, and the government shout allow the import at 1 per cent duty, the letter reads.

Source: The NewAge Business

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FOB China, CIF Turkey flax yarn prices expected to rise

The prices of 30s flax yarn, FOB China and CIF Turkey, are expected to increase in the coming months due to a high demand for China’s apparel and home textiles in the UK and the US. However, the prices of 30s flax yarn, FOB Italy, are expected to decrease as the demand falls in the wake of the second and third wave of the pandemic in most European states.

 The pandemic helped accelerate the demand for home linens in the US and the UK as consumers are more focused on fresh bed linens in home, hotels and motel due to the spread of pandemic. China and Turkey increased their export of these materials to destinations such as the US and the UK.

The FOB (Freight on Board) China price of 30s flax yarn was $8.99 per kg in January 2021, which increased by 1.67 per cent to reach $9.14 per kg in March 2021. It is anticipated to increase by 5.78 per cent to $9.67 per kg in September 2021 over the price of March 2021.

The FOB Italy price of 30s flax yarn was $14.26 per kg in January 2021. It dropped by 4.28 per cent to $13.65 per kg in March 2021 and is anticipated to further decline considerably by 12.98 per cent to $11.88 per kg in September 2021 over the price of March 2021.

 As for the CIF (cost, insurance & freight) Turkey price of 30s flax yarn, it was $8.62 per kg in January 2021, which increased by 1.97 per cent to $8.79 per kg in March 2021. It is expected to move up to $9.38 per kg in September 2021, a rise of 6.73 per cent over the price of March 2021 due to a rising export demand of apparels and home textiles from Turkey.

Source: Fibre2Fashion News

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Johnson; UK PM announces £1bn worth of trade, investment

India and the UK on Tuesday unveiled an ambitious 10-year ‘Comprehensive Roadmap 2030’ to further deepen and broadbase bilateral ties between the two nations in a virtual summit between Prime Minister Narendra Modi and his British counterpart Boris Johnson. The roadmap envisages a new Enhanced Trade Partnership for re-energised trade, investment and technological collaboration paving the way for a future UK-India Free Trade Agreement.

In a bid to boost bilateral trade and investment and unlock the potential for the relationship from the private sectors of both countries, India and UK launched an Enhanced Trade Partnership (ETP) to pave the way for negotiating a comprehensive Free Trade Agreement.

India and the UK will work towards finalising the pre-negotiation phase for FTA by the end of 2021. This will resolve market access issues, boost exports and strengthen the trade partnership across a comprehensive range of areas. India and Britain would start negotiations ‘in the autumn’, following the announcement of a preliminary ‘Enhanced Trade Partnership’ deal.

An important part of the ETP is the £1 billion in new UK-India trade and investment, including in vital and growing sectors such as health and technology which sets the ambition to double the value of UK-India trade by 2030.

According to the roadmap, India and the UK will move towards removing barriers to trade through a balanced and beneficial market access package under the ETP, including on agriculture, healthcare, education, healthcare and social security among others.

At the same time, there will be room for continued cooperation under the Joint Working Group on Trade towards reducing/removing market access barriers faced by Indian businesses in the UK and UK businesses in India.

The roadmap promises the early conclusion of a new and refreshed UK-India ‘Ease of Doing Business MoU’ through which the two countries will share experience on regulatory reform, tax administration, and trade facilitation and standards. As part of the ETP, UK companies will be encouraged to invest in India’s manufacturing sector taking advantage of the Production Linked Incentive Scheme, including in electronics, telecommunication equipment, automotive and pharmaceuticals manufacturing. Indian companies would be encouraged to raise finance in the London market, including through listings and bond issuance, drawing on the success of the masala bond market.

There is also an agreement to implement the new annual India-UK Financial Markets Dialogue to share expertise, experiences and deepen collaboration between our financial sectors by July 2021 and deepen cooperation on infrastructure through the new UK-India Partnership on Infrastructure Financing and Policy, to support India’s ambitious plans for delivering inclusive, resilient and sustainable infrastructure under the National Infrastructure Pipeline.

Source: The Financial Express

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