The changes were vetted by the Goods and Services Tax (GST) Council at its meeting last week The government has notified a host of procedural changes in the GST rules, including levy of interest for wrongful utilisation of ITC and turnover threshold for filing annual returns for the 2021-22 fiscal. The changes were vetted by the Goods and Services Tax (GST) Council at its meeting last week. With the amendments notified by the Central Board of Indirect Taxes and Customs (CBIC), businesses have also been allowed to make tax payments on the GSTN portal by using IMPS and UPI payment modes. Businesses with aggregate annual turnover of up to Rs 2 crore in the fiscal ended March 31, 2022, are exempt from filing annual returns for 2021-22, as per the amended rules. The amendment also clarified that interest on incorrect availment of input tax credit (ITC) would only apply in cases where such credit is utilised. The Finance Act had brought in a provision related to levying of interest on ITC wrongly availed and utilised. The provision would come into effect from July 5 and would apply retrospectively from July 1, 2017, -- the date of GST rollout. Deloitte India Partner, Leader Indirect Tax, Mahesh Jaising said the notification issued for retrospective amendment to Section 50(3), clarifying that interest on incorrect availment of credit would only apply in cases where such credit is utilised, is a welcome one. KPMG Tax Partner Abhishek Jain said the GST law has been suitably amended to say that interest shall be payable only in respect of the ITC availed and utilised. "This change is much appreciated, and puts a final close to this issue." The amendments also provide for automatic revocation of GST registrations cancelled once the return filing is regularised. "This will reduce the time and effort spent by taxpayers in getting registrations revoked even after regularisation of the return filings. It will reduce the interaction and improve the faceless compliances under GST, Jaising said. Jain said these changes in rules would also help the small players in undertaking compliances, and will lighten the burden for taxpayers with less than Rs 2 crore turnover to the extent of filing of annual returns under GST. AMRG & Associates Senior Partner Rajat Mohan said other important changes include extension of time-limit specified under Section 73 (determination of tax) under the GST Act for issuance of an order for FY 2017-18 to September 30, 2023. However, no extensions have been provided for any other financial year. "In relation to the delayed filing of refund applications during the COVID period (March 1, 2020 to February 28, 2022), suitable extension has been granted that will enable numerous exporters to encash the refunds stuck in litigation," Mohan said. Jain said that considering the COVID scenario of the last two years for India, the government has extended the limitation period under GST for issuance of notice to taxpayers who have not paid/ short paid the tax due. Similarly, relaxation in limitation is granted for filing refunds. "While the intention of the government is to curb revenue leakage, this change keeps the businesses exposed to departmental audits and assessments for some additional time. This being said, this change also ensures that genuine taxpayers are not denied their refund claims," Jain added. According to Mohan, the manner of calculation of interest on delayed payment of tax has been notified and that would help taxpayers in making precise calculation of the tax dues. As per the amended rules, every invoice issued by an MSME supplier will have a standard declaration printed on invoice regarding non-applicability of e-invoice. Also, cash ledger balance can be transferred from one GST registered entity to another under the same PAN
Source: Business Standard,.
The country's exports, now at around USD 400 billion, are expected to touch USD one trillion hopefully next year, and the government is negotiating with FTAs with a number of countries like the EU members and Canada, the official said. The government is working on to reduce compliance issues with a focus on ease of doing business and has introduced the Insolvency and Bankruptcy Code (IBC) keeping that in mind, the principal economic advisor with the Department for Promotion of Industry and Internal Trade, Rupa Dutta, said. Speaking at an event organised by MCCI here, Dutta said the government is taking steps for a prospective future and measures are needed to sustain the growth momentum as India is now the fastest growing economy in the world. India's "rank in ease of doing business according to World Bank report has improved from 142 in 2014 to 63 in 2022 and reduction in compliances is now a major focus. The IBC introduced by the government is comparable to OECD countries," she said.
Source: Economic Times
In a relief to businesses, the government has exempted small taxpayers (with turnover up to ₹2 crore) from filing annual returns for 2021-22, allowing a claim of refund on inputs used in the generation of electricity and extending the deadline to raise tax notice to taxpayers till September 2023. The amendment also allows for enabling automatic revocation of goods and services tax (GST) registrations cancelled once the return filing is regularised. The Centre also amended the formula for a refund of the inverted duty structure to give the benefit of input tax paid on services, a move which will help in improving the current cash flow issues for those products. As a relief measure for the Covid-hit period, the Centre has excluded the period from March 1, 2020, to February 28, 2022, from the computation of the period of limitation for claiming refunds. The CBIC on Wednesday notified many amendments to GST rules.
Source: Economic Times
Sahai said a few markets in Africa, including Ethiopia and Egypt, have started allowing imports only on the basis of letters of credit, as they seek to know in advance the potential forex outgo. This move typically limits imports. Fears of economic recession in key markets such as the US and the EU, persistent supplychain woes and a recent drop in fresh orders have threatened to derail India’s dream run in the export sector, one of the bright spots in the economy in the aftermath of the Covid pandemic, according to exporters and senior industry executives. Importantly, some countries in Africa have started to cut down on imports of discretionary imports to conserve their forex reserves at a time when the US interest rate hike has spurred a capital flight from developing economies, they added. On top of these, crisis-ridden Nepal and Sri Lanka have restricted imports to a bare minimum. These, too, could potentially put a leash on India’s export momentum, said the exporters. The US and the EU together accounted for 33% (or $141 billion) of India’s exports in FY22. Similarly, exports to Nepal and Sri Lanka were to the tune of $15.4 billion last fiscal and shipments to Egypt and Ethiopia stood at $4.4 billion. Exporters that FE spoke to said outbound shipments will still rise, although the pace of growth will likely decelerate to 10-15% in FY23 from 45% in the previous year (albeit on a contracted base), unless the Ukraine war de-escalates swiftly. Exports had hit a record $422 billion in FY22, far exceeding the earlier peak of $330 billion, on the back of an industrial resurgence in advanced economies, which is now faltering. Curbs or outright ban on a number of items, including steel, iron ore, petroleum products and wheat, will also impinge on export prospects. Sectors ranging from textiles, gems & jewellery and transport equipment to plastics to rubber products are facing a slowdown in export orders, said the exporters. Ajay Sahai, director general and chief executive of apex exporters’ body FIEO, said: “With major economies facing recession, demand will take a hit and it’s bound to impact new orders. In some segments, such as steel and cotton yarn, demand has already come down. Unless the geo-political situation improves drastically, we may not see major improvement in export growth, especially on a high base.” Sahai said a few markets in Africa, including Ethiopia and Egypt, have started allowing imports only on the basis of letters of credit, as they seek to know in advance the potential forex outgo. This move typically limits imports. Importantly, growth in core exports (excluding petroleum and gems and jewellery) slowed down to 4% in June from 8.6% in May and 19.9% in April. Meanwhile, the surge in imports, witnessed since the second quarter of FY22, is expected to continue unabated, as a global price rise in commodities ranging from crude oil to coal and fertiliser, has substantially inflated the import bill likely causing trade deficit to soar past last year’s record $191 billion in FY23. Already, trade deficit in the first quarter of FY23 touched a fresh peak of $70.3 billion. The World Trade Organization in April slashed its merchandise trade volume growth forecast for 2022 to 3% from its previous prediction of 4.7%. It also expects only 3.4% growth in 2023. There are apprehensions that that global trade body may further trim its forecasts. This will impact India’s export prospects as well. Raja Shanmugham, president of the Tirupur Exporters Association that represents the country’s largest garment cluster, said the flow of orders from the US and the EU has already started waning. “For the buyers in the US, the fear is mostly around high inflation. In the EU, apart from the recession, the fears of low gas supply, among others (a fallout of the Ukraine war), are contributing to the fall in orders.” There is silver lining as well for some sectors, said the exporters. Ravi Sehgal, former chairman of the engineering exporters’ body EEPC India, said, “Engineering exports are facing some issues now. However, demand is likely to pick up in another two months or so, as the US has started implementing a huge number of infrastructure projects, which will revive demand for engineering goods. So, the engineering goods sector is expected to do better than some others.” Moreover, sectors, such as pharmaceuticals and food and agriculture, are typically more insulated than others in times of recession, said the exporters. R Uday Bhaskar, director general at the Pharmaceutical Export Promotion Council, said recession fears may not impact pharma exports. “These are not like any other products where recession will pull down demand. Pharmaceutical exports jumped about 18%, the highest growth in nine years, in FY21 (when most countries witnessed contraction or sharp slowdown in growth) due to the pandemic.” “This fiscal, we were expecting the exports to go up to about $28 billion from $24.5 billion last fiscal and we will meet the target,” Bhaskar added.
Source: Financial Express
The RBI said Wednesday's measures were aimed at enhancing exchange inflows while ensuring overall macroeconomic and financial stability The Reserve Bank of India (RBI) on Thursday announced a series of measures to attract foreign flows in a bid to protect the local currency amid depleting foreign exchange reserves. India’s foreign exchange reserves have depleted by $38 billion to below $600 billion since the Russian invasion of Ukraine late February. While announcing the measures, the central bank said growth prospects for the Indian economy remained strong and resilient, and that despite headwinds from geopolitical developments, elevated crude oil prices, and tighter external financial conditions, highfrequency indicators pointed to an ongoing recovery in several sectors. “Reflecting these strong fundamentals, the Indian rupee has depreciated by 4.1 per cent against the US dollar during the current financial year so far (till July 5), which is modest relative to other EMEs (emerging market economies) and even major advanced economies (AEs),” the RBI said, adding that India’s foreign exchange reserves stood at $593.3 billion as on June 24, supplemented by a substantial stock of net forward assets. “The current account deficit (CAD) is modest. All capital flows barring portfolio investments remain stable and an adequate level of reserves provides a buffer against external shocks,” it said. Among steps taken to attract dollars, banks have been exempted from maintaining the cash reserve ratio (CRR) and statutory liquidity ratio (SLR) for incremental NRE (nonresidential external) and FCNR (B) (foreign currency non-residentbank) deposits with effect from the reporting fortnight beginning July 30. This relaxation will be available for deposits mobilised up to November 4, 2022. Banks also have been allowed to raise fresh FCNR (B) and NRE deposits without reference to the regulations on interest rates, with effect from July 7. This relaxation will be available for the period up to October 31, 2022. The central bank said it had been closely and continuously monitoring the liquidity conditions in the forex market and had stepped in as needed in all its segments to alleviate dollar tightness with the objective of ensuring orderly market functioning. Moreover, the RBI has relaxed FPI investment norms in government bonds. New bond issuances of 7-year and 14-year maturity would be made eligible for the Fully Accessible Route. The RBI also relaxed norms on residual maturity for FPI investments in government and corporate debt. On external commercial borrowing, the limit under the automatic route has been increased from $ 750 million to $ 1.5 billion. The all-in cost ceiling under the ECB framework has been raised by 100 basis points, subject to the borrower being of investment grade rating. The RBI said Wednesday’s measures were aimed at enhancing exchange inflows while ensuring overall macroeconomic and financial stability. “In order to further diversify and expand the sources of forex funding so as to mitigate volatility and dampen global spillovers, it has been decided to undertake measures to enhance forex inflows while ensuring overall macroeconomic and financial stability,” the RBI said. “Overall, a fairly comprehensive set of measures have been announced. They are trying to work on three channels – the banking deposit side, the ECB side, and the FPI debt side. The FDI regime in India is quite liberal already so there is not much to be done over there,” Barclays Managing Director and Chief Economist Rahul Bajoria told Business Standard. “From a fundamental standpoint, the rupee has a problem of mismatches in the current account and the capital account. The current account deficit is pretty sticky and it is likely to remain sticky over the course of the next 3 to 6 months, whereas capital flows have been negative. It looks like, as a result of this announcement, some of that gap will get breached.” Standard Chartered Bank’s foreign exchange team has a forecast of 79 per US dollar for the rupee by the end of September but sees a risk of the local currency overshooting over the near term, with a target of 80.50 per dollar, the bank’s Head of Economic Research South Asia, Anubhuti Sahay, said.
Pulling out all the stops
Measures announced by RBI
RBI on economy
• India’s growth prospects remain strong
• CAD is modest; capital flows barring portfolio investments remain stable
• Adequate level of reserves provides a buffer against external shocks
Source: Business Standard
Order books of Indian exporters have begun shrinking as inventories pile up in key export destinations on low demand. Order books have shrunk 15-20% for leather and footwear, while in yarn, volumes have witnessed a sharp 70% fall. High inflation in the US and the EU slowed take off for cotton yarn, ready-made garments, leather goods and handicrafts, impacting the pace of India's exports in June, which rose 16.8% on-year at $37.9 billion, slower than 20.5% in May. "The clients in the US are doing cautious buying as their budgets are tight due to high interest rates. While orders had increased last two years, we expect a 15-20% decline now," said Rafeeque Ahmed, chairman of Farida Group, one of India's largest shoe manufacturers and exporters, which is a vendor to overseas firms such as Adidas, Clarks, Marks & Spencer, Debenhams and Bally Shoes. Exports of yarn, fabric, madeups and handloom products have shrunk 22.54% in June. "Our cotton prices are higher than global prices and domestic demand has vanished because of stagflation. The order book for yarn is down 70-80% and for fabric 30-40% against a few months ago," said Sanjay Jain, chairman of ICC National Textile Committee. Slow retail sales in the US and the EU have delayed the orders for readymade garments while yarn exports have come to a standstill, exporters said. "Large retail chains are delaying their purchases because of which the orders that were to be picked up in April, have been postponed to October. Our MSMEs are bearing the brunt of this impact," said a Delhi-based exporter of readymade garments. Industry representatives said that the pressure on order books due to lower demand will also compress prices in the future. "Pent up demand led to high exports last year but that trend will be difficult to maintain unless the inventory liquidates. Buyers place their orders for September during this period but that volume has halved," said one representative. As per Rakesh Kumar, director general, Export Promotion Council for Handicrafts, overbuying has happened in the US and the EU because of clubbing of containers at the buyers' ports earlier this year. "There are excess quantities and orders are slow but we expect them to recover in the coming quarters. Demand from Eastern Europe, Latin America and Middle East is likely and the FTAs with the UAE and Australia will benefit us," Kumar said. While the impact on industrial exports is expected to come with a lag, EEPC India chairman Mahesh Desai said the negative spillover of the Russia-Ukraine war has reached engineering goods exports, which declined 1.57% year-on-year in June to $9.14 billion as compared to $9.29 billion in June 2021.
Source: Economic Times
Reliance Retail will be the official retailer for Gap in India, mixing exclusive stores and digital commerce platforms. Reliance Retail has entered into a franchise agreement with Gap Inc to bring the American fashion brand to India. Gap will return to India the second time after parting ways with Arvind Fashions in 2020. Reliance Retail will be the official retailer for the fashion house in India, mixing exclusive stores and digital commerce platforms. “The partnership is aimed at leveraging Gap’s position as a leading casual lifestyle brand, and Reliance Retail’s established competencies in operating robust omnichannel retail networks and scaling local manufacturing and driving sourcing efficiencies,” Reliance Retail said in a press release about the long-term agreement. “At Reliance Retail, we pride ourselves in bringing the latest and best to our customers and we are happy to announce the addition of iconic American brand, Gap to our fashion and lifestyle portfolio. We believe that Reliance and Gap complement each other in their vision to bring industry-leading fashion products and retail experiences to their consumers,” said Akhilesh Prasad, CEO, fashion & lifestyle at Reliance Retail said in the release. Adrienne Gernand, managing director of international, global licensing and wholesale at Gap Inc, said that the company looks forward to growing the Gap business across key international markets. “Partnering with regional experts, like Reliance Retail in India, allows us to deliver our relevant, purpose-driven brand to customers around the globe while continuing to diversify our business portfolio through our partner-based model,” said Gernand. Reliance Retail is a subsidiary of Reliance Retail Ventures (RRVL), which is the holding company of all retail companies under the Reliance group. RRVL reported a consolidated turnover of Rs 199,704 crore and a net profit of Rs 7,055 crore for FY22. Gap first came to India in 2014 through a franchisee agreement with Arvind Fashions and exited six years later. Second Coming •Founded in San Francisco in 1969, Gap is considered as an authority on modern American style •Gap’s previous attempt to woo Indian customers turned sour after it terminated a deal with an Arvind Fashions unit in 2020 •For Gap, whose brands include Old Navy and Banana Republic, the partnership with Reliance comes as clothing retailers struggle with weak demand in the face of surging inflation •For Reliance, the deal comes days after announcing a plan to open outlets of popular British sandwich and coffee chain Pret A Manger in India •Reliance has hundreds of retail stores spanning electronics, groceries and fashion in India, and is also expanding into e-commerce
Source: Business Standard
"The pandemic pushed new-to-online shoppers and existing shoppers to increase their online purchasing, as physical shopping channels closed or became difficult to access," BCG India managing director and senior partner Nimisha Jain said in a statement. Online retail spending in India is expected to grow nearly sixfold to USD 300 billion by 2030 with expansion in the number of digitally-influenced shoppers and online shoppers, a Boston Consulting Group report said on Wednesday. According to the report, the number of digitally-influenced shoppers has grown rapidly in recent years, reaching 280 million from 260 million and online shoppers have grown to 230 million from 210 million in 2021. BCG expects these numbers to increase by 2.5 times over the next decade, accompanied by nearly sixfold growth in online retail spending. We expect online shoppers to nearly triple over the next decade and online retail spending to grow nearly sixfold to reach USD 300 Bn by 2030. COVID has further accelerated online shopper and spend growth by 3-4 Years. "The pandemic pushed new-to-online shoppers and existing shoppers to increase their online purchasing, as physical shopping channels closed or became difficult to access," BCG India managing director and senior partner Nimisha Jain said in a statement. Digitally-influenced retail spend to surpass USD 1.5 trillion by 2030 accounting for about 80 per cent of total retail spends, according to the BCG report. With one of the world's lowest data and smartphone costs, growing internet penetration, and a proliferation of new online shopping channels, India is experiencing a dramatic rise in e-commerce and digitally influenced spending as India becomes the second largest digital economy by number of internet users, the report said. BCG claims that the findings were corroborated and substantiated by real-time transaction data gathered and analyzed on the purchase transactions of over 8 lakh consumers comprising about 2 lakh e-shoppers, along with multiple industry reports and expert interviews. The survey was conducted with over 10,000 Indian consumers, across more than 40 metro to tier 4 cities and 50 rural towns and villages, and was overseen by BCG's Center for Customer Insight, according to the report. While mobiles, electronics and travel once dominated the online retail space, categories such as online food orders, FMCG, and beauty and personal care (BPC) items have seen sales grow by three to five times in recent years and expected to be the fastest growing sectors too, along with fashion, the report said.
Source: Economic Times
The PM GatiShakti is already beginning to fast-track a number of infrastructure projects across the country with some states beginning to use it for better implementation of social sector projects. Commerce and Industry Minister, Shri Piyush Goyal, chaired a review meeting of the PM GatiShakti here today. The meeting deliberated the progress achieved so far and saw participation of various senior officials from M/o Railways, MoRTH, MoPSW, D/o Food & PDS, M/o Coal, M/o Steel, D/o Fertilizers, DoT, M/o Rural Development, and BISAG-N( Bhaskaracharya National Institute for Space Applications and Geo-informatics). The meeting reviewed the status of the National Master Plan since its launch on October 13, 2021 and discussed plans for faster integration of data into the portal. With over 900 data layers updated by Central Ministries and 316 essential layers by States/UTs, the meeting took note of various Ministries/Departments using the same to share their proposed projects after having been mapped and aligned digitally. Speaking on the occasion, Shri Piyush Goyal said that under the PM GatiShakti’s transformative approach, the government is committed to resolve user issues by overcoming various departmental silos. He added that its role through the National Master Plan and the Institutional Framework is essential to lay down the stepping stones to India’s multimodal infrastructure network The meeting also acknowledged the progress made on state-level institutional arrangements. The Secretary, Shri Anurag Jain, DPIIT informed that along with a functioning Empowered Group of Secretaries in 32 States/UTs, 29 among them have also been able to formulate their Network Planning Group and Technical Support Unit. The Special Secretary, Amrit Lal Meena, DPIIT, also highlighted the role that the National Master Plan has been playing in inter-ministerial planning and coordination. He shared that, with portals for Central and State Ministries now fully functional, all essential data layers have been uploaded to enable infrastructure Ministries/Departments extensively utilise the National Master Plan for all pending and future projects. He highlighted the case of the Taranga hill- Ambaji-Abu Road Broad Gauge New Railway Line which had stalled its pre-alignment for nearly 6 months due to the lack of khasra data, field survey on forest and wildlife sanctuary and no visibility of intersection with mining areas. It was completed in just 7 days using the National Master Plan. Senior official representing the MoRTH also shared that the pre-alignment of 5 Greenfield Corridors were fast-tracked using the National Master Plan. The meeting deliberated over releasing the National Master Plan in public domain. Senior officials informed that guidelines for the release are already underway. The meeting particularly emphasised the role that the National Master Plan could play in decisionmaking for the social sector. The Special Secretary, informed that few States/UTs have already been doing the same. As an approach towards integrated planning and coordination, the meeting applauded the recently operationalized GatiShakti Sanchar portal by the DoT. Since its launch, the portal has been able to reduce pendency, thus leading to faster implementation of projects. Senior officials from the M/o Steel also shared the launch of a mobile app under the National Master Plan for geotagging infrastructure and resolving geolocation availability issues.
Source : PIB
Vietnam Briefing explores the implementation of the Uyghur Forced Labor Prevention Act and its impact on Vietnam companies exporting products to the US. The evidence suggests that Vietnamese firms will need to wean themselves off raw materials produced in China’s Xinjiang in order to ensure long-term access to the US market. US Customs and Border Protection (CBP) started enforcing the Uyghur Forced Labor Prevention Act (UFLPA). The act was passed in December 2021 and prohibits the importation of goods wholly or in part mined, produced, or manufactured in the Xinjiang Uyghur Autonomous Region (XUAR) of China. As its name suggests, the act was introduced in response to the alleged practice of forced labor in Xinjiang. The province is home to millions of Uyghurs – a Turkic group who predominantly follow Islam. In addition, the US, along with its Western partners, contend that Uyghur peoples are being transported from their home province and forced to work against their will elsewhere in China. Vietnamese companies have been identified as intermediaries using raw materials sourced in the XUAR. The continued use of these materials will result in these companies losing access to the US market. Cotton, tomatoes, and silica-based products produced, even in part, in the XUAR were already subject to US import bans. However, UFLPA puts the onus on the importer to prove that the goods being imported did not benefit, at any point, from forced labor in the XUAR or are linked to a blacklisted entity.
What is the Uyghur Forced Labor Prevention Act? The Uyghur Forced Labor Prevention Act establishes a “rebuttable presumption” that goods mined, produced, or manufactured wholly or in part in the XUAR, or by certain identified entities, are made using forced labor. As a result, these goods can no longer be imported into the US. The act contains a de minimis exception, which means that if any part of the good, no matter how small, is produced in the XUAR or by identified entities, the final product will be subject to the rebuttable presumption. The UFLPA reinforces Section 307 of the Tariff Act of 1930, which prohibits the importation of all “goods, wares, articles, and merchandise mined, produced, or manufactured wholly or in part in any foreign country by convict labor or/and forced labor or/and indentured labor under penal sanctions.” However, importers can still import goods mined, produced, or manufactured wholly or in part in the XUAR, if they meet certain criteria. The UFLPA requires that importers show “a high burden of proof” in order to demonstrate that no part of the goods they wish to import were produced using forced labor. On June 17, 2022, the inter-agency Forced Labor Enforcement Task Force (FLETF) published its enforcement strategy under the UFLPA to support implementation and guide importers. What will be the impact of UFLPA on global supply chains? The act is likely to have a considerable impact on several industries, notably the textiles industry and specifically those believed to be using Xinjiang-sourced materials in their production. Countries and companies which continue to allow Xinjiang-sourced materials into their supply chains will no longer be able to access the lucrative US market. Vietnam is heavily dependent on raw materials from China, particularly in the textiles industry. And it has been reported that Vietnamese producers have been “laundering” cotton from the autonomous territory. Cotton is a major export of the XUAR, reaching markets around the world. Xinjiang cotton accounts for 84 percent of China’s exports of the product. According to the New York Times, unprocessed cotton is exported to 14 countries, including Vietnam, Thailand, India, Pakistan, and Bangladesh. Meanwhile, yarn is exported to 190 countries. The fashion industry has been told that it must wean itself off Xinjiang cotton. The UFLPA also extends to entities that are not necessarily active in the XUAR. This includes several Chinese firms noted in a 2020 report by the Australian Strategic Policy Institute (ASPI). The document identified 83 foreign and Chinese companies that allegedly, directly or indirectly, benefit from the use of Uyghur workers outside Xinjiang through potentially abusive labor transfer programs. The report suggests that Beijing has facilitated the mass transfer of Uyghur from Xinjiang to factories across the country. At this moment in time, the entities list is pretty sparse and only includes companies that had already been blacklisted by the US. Notably, no downstream solar cell or solar module producers have been added to the UFLPA Entity List, although several Chinese polysilicon firms are listed. Which industries will be directly or indirectly affected? The XUAR has prominent sectors in electronics manufacturing, textile and apparel manufacturing, rare earth mining, agricultural production, and plastics production. However, the FLETF strategy identifies four high-priority sectors for enforcement of UFLPA: • Cotton; • Tomatoes and tomato-based products; • Silica-based products (including polysilicon); and • Apparel. It is worth noting that these XUAR sectors were already subject to import prohibitions due to forced labor allegations. The US had already banned the import of XUAR tomatoes and tomato products along with cotton. The silica product ban will likely hurt solar product imports, although, in 2021, US President Joe Biden said that it won’t impact the US’s green agenda. However, the cotton and textiles sectors are among the most prominent and probably most impacted by the UFLPA. Cotton cultivation and processing is a major industry in the province. A 2018 report noted that Beijing planned on doubling the XUAR’s manufacturing with apparel and textiles forming a key element of that project. How will the UFLPA impact Vietnam’s exports? The act threatens to cut Vietnamese producers off from the US market unless they are capable of proving that Xinjiang cotton, or other products, are not used in the production of their goods. According to the Alliance for Vietnam’s Democracy, six out of 53 international intermediary manufacturers that have purchased unfinished cotton goods from five leading Chinese manufacturers sourcing Xinjiang cotton, are from Vietnam. The five aforementioned Chinese companies export a significant amount of cotton to Vietnam for intermediary manufacturing. One of the companies, Huafu, has production bases in the Xinjiang Uyghur Autonomous Region and Vietnam. Two other Chinese firms on the list, Luthai Textile Co. and Texhong Textile Group, have also established production bases in Vietnam. The Alliance for Vietnam’s Democracy highlighted that “several well-known international brands are supplied by those Vietnamese intermediaries and are thus at high risk of having Xinjiang cotton in their supply chains.” As such, these international brands will be under pressure to either change their intermediaries or force these companies to review their supplier contracts and remove Xinjiang cotton from their supply chains. The Alliance for Vietnam’s Democracy, citing UN Comtrade data, suggested that more than half of China’s exports of cotton semi-finished products are destined for countries within Asia. Vietnam, it claims, is the second most popular destination on the continent. Due to Vietnam’s exposure to Xinjiang-produced cotton and blacklisted companies, it may be the case that rebuttable presumption is extended to large proportions of the country’s textiles industry. In fact, in order to comply with the act, the Alliance for Vietnam’s Democracy urges that “the presumption should also be extended to cotton fabric imported from Vietnam, which, in turn, is importing cotton and other predecessors of finished apparel from Xinjiang.” How can companies in Vietnam comply with the UFLPA? The CBP is urging importers to be proactive and closely review their supply chains to ensure any goods or materials are not sourced from the XUAR in violation of the act. Companies importing goods, mined, produced, or manufactured wholly or in part in the XUAR, into the US will need to prove that forced labor has not been used in the supply chain. Should they fail to prove otherwise, these goods will be confiscated by the CBP. “This elevated standard will require the importer to not only use due diligence in evaluation of its supply chain but also to respond completely and substantively to CBP requests for information regarding entries it may review,” a letter to importers reads. While specifications vary depending on the goods in question, CBP has recommended the supply chain documentation that may be necessary to overcome the UFLPA’s rebuttable presumption. The documents are as follows: 1. Supply chain overview; 2. Flow chart for procurement and production processes; 3. Maps for product origin and production; and 4. A list of all entities involved in each step of the production processes. By undertaking these steps, importers may be able to prove that their products are not made, in full or in part, by forced labor in the XUAR. While the CBP insists that importers must demonstrate they have complied with the guidance on due diligence, the body admits that effective diligence may not always be possible in the XUAR.
Source: Vietnam Briefing
Country’s textiles on Wednesday demanded immediate resumption of gas supply to save around 300 hundred units from closure as industry export losses have hit a whopping $1 billion because of the energy crisis. “The supply of energy at a regionally competitive tariff led to a 26 percent increase in textile exports during FY2022,” said Abdul Rahim Nasir, Chairman All Pakistan Textile Mills Association (Aptma), addressing a presser. Nasir was flanked by Aptma North Zone Chairman Hamid Zaman, Senior Vice Chairman Kamran Arshad and Secretary General Raza Baqir. The Aptma chairman said the textile exports jumped by 60 percent from $12.5 billion in 2020 to almost $20 billion in 2022 primarily because of the same. “The exponential growth in the textile sector has drawn an investment of over $5 billion and the gave rise to 100 new textile units that after commissioning will result in new exports over $500 million/month or $6 billion/annum,” he said. The gas supply to industry has been suspended since June 30, 2022, which has almost halted production in the entire value-added textile industry, causing a colossal loss to the economy. The large-scale closure of mills has caused massive layoffs, spreading economic chaos, Nasir said, adding, starving the country’s largest exporting sector of gas and power was hard to understand. Hamid Zaman, Chairman Aptma North Zone, said the textile sector had repeatedly delivered on its commitment to enhance exports and proved they were a viable and long term solution provider for the economic stability of the country. “Over 50 percent of the production will be lost this month with the very high risk of losing orders on a permanent basis and diversion of buyers from Pakistan to its competitors,” Zaman said. He said currently the textile industry was providing goods for the forthcoming Christmas and any delay in the deliveries was fraught with risks of losing export markets for an indefinite period with little chances for revival. “If this momentum is lost due to the energy supply and cost constraints, Pakistan will be forced to seek an additional $6 billion in loans from abroad, which under the current circumstances, might not even be possible,” he added. Therefore, he said, under this situation, the gas supply to the export-oriented industry must immediately be resumed.
Source: The News
The United Nations' Sustainable Development Goal 12 of responsible manufacturing and consumption has become an increasingly significant subject within the 'slow fashion' movement. What is sustainable fashion? Sustainable fashion is a method of sourcing, producing, and designing clothing that maximises the benefits to the fashion industry and society as a whole while minimising the environmental impact. Textiles and clothing account for USD 2.4 trillion in global factory output. According to reports, it employs 300 million people globally across the value chain. It uses approximately 215 billion litres of water per year and suffers a material loss of 100 billion dollars per year due to under utilisation. Textiles contribute about 9% of microplastics lost to the ocean. Sustainable fashion, also known as slow fashion, is a method of producing garments that considers all elements of the supply chain and seeks to respect people, the environment, and animals in the process. Fast fashion is the absolute opposite of sustainable way. This implies that, rather than the wasteful 'take-make-buy-discard' loop of in bulk, disposable clothing from brands and retailers that prioritise profit over people and the environment, the sustainable solution aims to reduce impact on the environment and, in some cases, regenerate it. With the fashion business accounting for approximately 2-10% of global carbon emissions, integrating sustainability can also mean creating significant progress toward decarbonization and meeting global climate goals. Sustainable vs Ethical fashion In ideology, the 2 concepts overlap, yet each of them have slightly distinct concerns, both of which are equally important to the future of fashion. Sustainable fashion refers to designers and brands who create clothing using organic, natural, biodegradable materials, reprocessed clothing or repurposed fabric, non-toxic dyes, and other However, ethical fashion refers to the goods that integrate the aforementioned points as well as the social aspect of fashion. For instance, equal wages and decent working environment for garment workers are factors that sustainable fashion does not always consider. Vegan or cruelty-free fashion should not be confused with ‘sustainable' fashion. While avoiding leather, fur, cashmere, wool, silk, snakeskin, and feathers is much more ethical, it does not ensure a brand's environmental authentication – for instance, many vegan alternatives available to leather and wool are made out of plastic. environmentally friendly materials. A brief history of sustainable fashion The origin story of the sustainable fashion movement occurred concurrently with environmental social movements over the last 30-40 years. The fast fashion crisis is considered a fairly modern issue – clothing was appreciated in a significantly different manner in the first half of the twentieth century, with relatively increased prices, a make-do-and-mend mentality, a shorter trend cycle, and a mostly local made-to-measure shopping concept. With accelerated globalisation, technical advances, as well as the explosion of fashion as an entertainment business in the 1960s, demand for mass-produced, cheap, trend-driven clothing skyrocketed, and while clothing companies lined their pockets and consumers indulged in the latest looks, little research was done on the serious consequences for the planet. Some observers say, despite some small 'eco' initiatives by a few brands in the 1990s, the clothing industry was already drowning in the sea by the time the UN defined the term 'sustainability' in 1987. Nike's sweatshop scandal in 1991 and the Rana Plaza disaster in 2013 drew considerable attention to the fashion industry's concerns. The Rana Plaza building in Dhaka, Bangladesh, which housed five textile mills, collapsed, killing at least 1,132 people and injuring over 2,500 others. It drew international and consumer attention to labour conditions and sustainable fashion.
Source: Indiatimes
In 2021, global shipments of spinning, texturing, weaving, knitting, and finishing machines increased sharply compared to 2020. The deliveries of new short-staple spindles, open-end rotors, and long-staple spindles rose by +110 per cent, +65 per cent and +44 per cent respectively, according to the International Textile Manufacturers Federation (ITMF). The number of shipped draw-texturing spindles surged by +177 per cent and deliveries of shuttle-less looms grew by +32 per cent. Shipments of large circular machines improved by +30 per cent and shipped flat knitting machines registered a 109 per cent growth. The sum of all deliveries in the finishing segment also rose by +52 per cent on an average. These are the main results of the 44th annual International Textile Machinery Shipment Statistics (ITMSS) just released by the International Textile Manufacturers Federation (ITMF). The report covers six segments of textile machinery, namely spinning, drawtexturing, weaving, large circular knitting, flat knitting, and finishing. The 2021 survey has been compiled in cooperation with more than 200 textile machinery manufacturers representing a comprehensive measure of world production. The total number of shipped short-staple spindles increased by about 4 million units in 2021 to a level of 7.61 million. Most of the new short-staple spindles (90 per cent) were shipped to Asia and Oceania, where delivery increased by +115 per cent. While levels stayed relatively small, Europe saw shipments increasing by +41 per cent (mainly in Turkey). The six largest investors in the short-staple segment were China, India, Pakistan, Turkey, Uzbekistan, and Bangladesh, ITMF said in a press release. About 695 thousand open-end rotors were shipped worldwide in 2021. This represents 273 thousand additional units compared to 2020. 83 per cent of global shipments went to Asia and Oceania where deliveries increased by +65 per cent to 580 thousand rotors. China, Turkey, and Pakistan were the world’s 3 largest investors in open-end rotors and saw investments surging by +56 per cent, +47 per cent and +146 per cent, respectively. Only deliveries to Uzbekistan, the 7th largest investor in 2021, decreased compared to 2020 (-14 per cent to 12’600 units). Global shipments of long-staple (wool) spindles increased from about 22 thousand in 2020 to nearly 31,600 in 2021 (+44 per cent). This effect was mainly driven by a rise in deliveries to Asia & Oceania with an increase in investment of +70 per cent. 68 per cent of total deliveries were shipped to Iran, , Italy, and Turkey. Global shipments of single heater draw-texturing spindles (mainly used for polyamide filaments) increased by +365 per cent from nearly 16,000 units in 2020 to 75,000 in 2021. With a share of 94 per cent, Asia and Oceania was the strongest destination for single heater draw-texturing spindles. China, Chinese Taipei, and Turkey were the main investors in this segment with a share of 90 per cent, 2.3 per cent, and 1,5 per cent of global deliveries, respectively. In the category of double heater draw-texturing spindles (mainly used for polyester filaments) global shipments increased by +167 per cent to a level of 870 thousand spindles. Asia’s share of worldwide shipments increased to 95 per cent. Thereby, China remained the largest investor accounting for 92 per cent of global shipments. In 2021, worldwide shipments of shuttle-less looms increased by +32 per cent to 148 thousand units. Shipments in the categories “air-jet”, “rapier and projectile”, and “waterjet” rose by +56 per cent to nearly 45,776 units, by +24 per cent to 26,897, and by +23 per cent to 75,797 units, respectively. The main destination for shuttleless looms in 2021 was Asia and Oceania with 95 per cent of all worldwide deliveries. 94 per cent, 84 per cent, 98 per cent of global air-jet, rapier/projectile, and water-jet looms were shipped to that region. The main investor was China in all three sub-categories. Deliveries of weaving machines to this country cover 73 per cent of total deliveries. Global shipments of large circular knitting machines grew by +29 per cent to 39,129 units in 2021. The region Asia & Oceania was the world’s leading investor in this category with 83 per cent of worldwide shipments. With 64 per cent of all deliveries (i.e., 21,833 units), China was the favoured destination. Turkey and India ranked second and third with 3,500 and 3,171 units, respectively. In 2021, the segment of electronic flat knitting machines increased by +109 per cent to around 95 thousand machines. Asia & Oceania was the main destination for these machines with a share of 91 per cent of world shipments. China remained the world’s largest investor with a 76 per cent share of total shipments and a +290 per cent increase in investments. Shipments to the country rose from about 17 thousand units in 2020 to 67.6 thousand units in 2021. In the “fabrics continuous” segment, shipments of relax dryers / tumblers grew by +183 per cent. All other subsegments rose by 33-88 per cent except dyeing lines which shrank (-16 per cent for CPB and -85 per cent for hotflue). Since 2019, ITMF estimates the number of shipped stenters non-reported by the survey participants to inform on the global market size for that category. The global shipments of stenters is expected to have increased by +78 per cent in 2021 to a total of 2,750 units. In the “fabrics discontinuous” segment, the number of jigger dyeing / beam dyeing shipped rose by +105 per cent to 1,081units. Deliveries in the categories “air jet dyeing” and “overflow dyeing” increased by +24 per cent in 2021 to 1,232 units and 1,647 units, respectively.
Source: Fibre2 Fashion
