The international trade among countries and economic growth are inseparable and intertwined with each other. Historically, the importance of trade can be traced back during the times of Han dynasty in China or the Roman empire which reaped significant gains in maintaining peaceful relations among nations, attaining higher efficiency in capacity building and promoting economic development (WTO). The global growth recovery is expected to be steady and resilient in the upcoming period amidst several risks emanating from rising geopolitical tensions in terms of wars between Russia-Ukraine in Eastern Europe and Hamas-Israel in the Persian Gulf region; tight monetary conditions as a response to elevated level of inflation; supply chain disruptions; rising public debt levels and extreme weather conditions among others. The World Economic Outlook (WEO) January Update 2024 released by the International Monetary Fund (IMF), estimated an encouraging trend in the real GDP growth to 3.1% in 2024 and 3.2% in 2025 from 3.1% in 2023. Similarly, the recently released Global Trade Outlook and Statistics (GTOS) April 2024 by the World Trade Organisation (WTO) predicted an increase in growth rate of world merchandise trade volume from -1.2% in 2023 to 2.6% and 3.3% in 2024 and 2025 respectively despite several impediments to the world trade. In this context, it is important to note that the volume of merchandise trade growth was more than twice of real GDP growth in the 1990s whereas in the early 2000s, the volume of trade growth was around 1.5 times the growth rate of real GDP. The growth in commerce and real GDP roughly recorded the same rate on an average notwithstanding several regional conflicts and economic challenges since the 2010s (GTOS, April 2004). This underscores the close association between the trade among countries and the economic growth. In the Indian context, as per the Second Advanced Estimate (SAE), released by the National Statistical Office (NSO) of MOSPI, GoI, the Indian economy is expected to post a robust economic growth. The annual growth rate of the GDP in real terms is estimated to increase from 7.0% in 2022-23 to 7.6% in 2023-24. Similarly, the quarterly growth rates are also estimated to be at 8.2% in Q1, 8.1% in Q2 and 8.4% in Q3 of 2023-24. However, it is to be noted that, in the upcoming period, due to several exogenous and endogenous factors, the growth momentum is expected to moderate. The resolution of the recently concluded monetary policy committee (MPC) meeting of Reserve Bank of India (RBI) on April 05, 2024 also projected a moderation in real GDP growth to 7.0% in 2024-25. The estimated GDP growth in 2023-24 is characterised by the double-digit growth in manufacturing sector (11.6% in Q3 on Y-o-Y basis) followed by the construction sector (9.5% in Q3 on Y-o-Y basis) from the supply side and robust growth in investment reflected in terms of rising Gross Fixed Capital Formation (GFCF) from 8.49% in Q1 to 11.63% in Q2 and 10.58% in Q3 of 2023-24 on the demand side. However, the growth in the consumption demand remained subdued which is reflected in terms of declining Private Final Consumption Expenditure (PFCE) to 3.51% in Q3 of 2023-24 as compared to 5.31% in Q1 of 2023-24. Additionally, despite the strong expected growth in the overall GDP, the share of PFCE as a percent of GDP declined from 61.3% in Q3 of 2022-23 to 58.6% in Q3 of 2023-24. A declining trend can also be observed in the agriculture sector which is expected to slow down from 5.2% in Q3 of 2022-23 to -0.8% in Q3 of 2023-24. Apart from that, the net exports (NX) which is the difference between the value of total exports and the value of total imports in traditional Keynesian sense is an important component of the demand side GDP growth in India, as exports have huge potential to create employment opportunities in the country and thereby supporting the objective of economic development. As per the SAE, a positive trend can be observed in the exports on Y-o-Y basis in 2023-24 however, imports remained at the elevated levels despite the softening of international energy prices yielding a marginal gain arising out of rise in exports. Besides, the share of exports in the real GDP declined from 23.3% in Q3 of 2022-23 to 22.2% in Q3 of 2023-24. On the other hand, there has been a steady rise in the share of imports in the GDP in 2023-24 as compared to the previous year. Similarly, across quarters of 2023-24, there has been a more than proportionate rise in the share of imports in the real GDP vis-à-vis the share of exports. This suggests a greater attention is needed to be paid for promoting exports and reducing import dependence in order to offset the ill effects of high levels of imports which will be manifested in terms of rising trade and current account deficit. Against this backdrop, it is essential to address the precarious conditions effectively and efficiently emerging out of certain parts of the world on which India is heavily dependent for its energy needs. The problems emanating from widening conflict in the middle east region encompassing surrounding regional powers have a huge potential to worsen the critical situation of India’s external trade. The imminent threat will be manifested in terms of oil price shocks as a result of the highly volatile situation in the middle east region which is one of the largest sources of crude oil and other energy products for India. The crude oil prices have increased from around 75$ per barrel at the start of 2024 to around 92$ per barrel in mid-April 2024 as a result of the possibility of opening of another war front between Iran and Israel. Also, this region is particularly important in world trade as trade routes through the Red Sea and the Suez Canal handle around 15% and 12% of international trade respectively (GTOS, April 2004). In order to boost India’s exports, it is important to consider the elasticity of demand for its product abroad. There is a need to improve the quality and standard of domestic products in order to withstand the global competition. The availability of easy credit; ensuring effective marketing support for the products abroad; Production Linked Incentive (PLI) schemes in targeted sectors; signing new Free Trade Agreements (FTAs) ensuring favourable terms with various countries; negotiating effectively on the international trade platforms such as WTO and with various other trade blocs along with effective implementation of various measures announced in the new foreign trade policy will be helpful in augmenting Indian exports. Similarly, it is also important to find alternative cheap energy sources, reduce energy dependence on imported energy products and explore new indigenous resources of energy products so that India’s burgeoning import bill can be contained. This will further lead to reducing the strain on the trade deficit and consequently the current account deficit. The building up of crude oil strategic storage will certainly prove to be helpful in mitigating the risks arising out of supply chain disruptions and sudden rise in the oil prices. The international trade and commerce face several risks arising out of geo-political challenges, increasing protectionism, inimical trade environment and policy ambiguities among others. In these pressing times, India must ensure that the negative consequences arising out of these threats are minimised in order to achieve its ambitious trade objectives.
Source: Financial Express
Even though China’s imports from the world declined last fiscal, India managed to increase its exports to its northern neighbour by 8.07% on year in 2023-24 to $16.67 billion, according to the commerce ministry data. India’s imports from China recorded a moderate growth of 3.29% to $ 101.75 billion in the last financial year.In calendar year 2023, while China’s merchandise imports fell 5.5%, India’s exports to the country went up by 7.1% on year. China’s merchandise exports, too, contracted in 2023 in dollar terms, for the first time since 2016. The decline was .6%. China’s economy has been facing significant challenges in 2023 including declining property investment, accumulating debt risk and weak consumption growth. The biggest item of export to China in FY24 was iron ore and concentrates, cotton yarn, quartz, and unwrought aluminium. The biggest item of import from China in the fiscal was machinery of all kinds , which accounted for almost 50% of total imports. Other major items of imports from China were plastics and its articles, chemicals, steel and steel products and fertilisers.
Source : Financial Express
Surat: At least 50 textile businessmen were cheated of Rs six core by eight traders and brokers who purchased the greige fabric from them but did not make the payment. The economic offences cell of the crime branch has registered a case of cheating and criminal conspiracy against the eight accused named in the complaint. According to the case details, Ramnik Timbadiya (42), who owns a textile firm in the Sahara Darwaja area and deals in greige fabrics, was approached by a broker named Yash Bansal in Oct last year to buy fabric at good rates for some parties. He promised timely payment after taking the brokerage. Bansal introduced Timbadiya to Ashish Sureka and Surendra Poddar, the two traders who were doing business with their partners Sneha Sureka and Anju Kedia. Thereafter, Timbadiya sent Sureka textile goods for which he got payment for a couple of months. Timbadiya sent them goods worth Rs 18 lakh during Jan to Mar 2024. However, they failed to make payment in the pre-decided 40 days. On March 18, when Timbadiya went to the buyers’ shop, it was closed. He also checked their two warehouses in Raghukul Market which were also shut. When he checked with other traders, he came to know that Sureka and his partners had shut the shop and fled the city. He also learned that Surekha had cheated 50 traders including him of Rs. 5.90 crore. He lodged a complaint against Ashish Sureka, Sneha Sureka, Anju Kedia and Surendra Poddar who had purchased goods from him through brokers Parasmal Rathod, Sandip Bansal, Yash Bansal and Ajay Agarwal.
Source: Times of India
Pearl Academy, in collaboration with the Central Board of Secondary Education (CBSE), hosted a one-day capacity-building training program for educators from CBSE-affiliated schools, in the field of Textile Design. Organised at Pearl Academy’s Rajouri Garden campus in Delhi, the program provided a comprehensive platform for 65 teachers from Delhi and Chandigarh to refine their skills. Participants were introduced to textile innovation adopted by some of the leading industry players such as Dupont and Lenzing Scholler in line with key sustainable practices. The sessions covered key areas, including the Basics of Fabric and Fibre Testing, Block and Screen Printing, Weaving Structure, and Innovation in Smart Textiles. Currently, only 42 government and government-aided schools in Delhi offer Textile Science, but this will soon transition to a more holistic program called Apparel Science. This transition aligns with sustainable practices by integrating textile science principles such as understanding fibres, dyeing techniques, and weaving methods into the existing curriculum.
Source : Free Press Journal
Synopsis The Reserve Bank of India (RBI) issues Master Direction to Asset Reconstruction Companies (ARCs), critical for resolving stressed financial assets and improving the health of the financial system. The directive outlines requirements for ARCs, including minimum net owned fund, registration, investment limitations, capital adequacy, leadership tenure, and reporting of irregularities The Reserve Bank of India (RBI) has issued Master Direction to the Asset Reconstruction Companies. An Asset Reconstruction Company (ARC) is a financial institution that buys the Non Performing Assets (NPA) or bad assets from banks and financial institutions so that the latter can clean up their balance sheets. "ARCs play a critical role in the resolution of stressed financial assets of banks and financial institutions, thereby enhancing the overall health of the financial system. To ensure prudent and efficient functioning of ARCs and to protect the interest of investors, Reserve Bank of India hereby issues the Master Direction - Reserve Bank of India (Asset Reconstruction companies) Directions, 2024" said a realese by the RBI. According to the directions, to commence the business of securitisation or asset reconstruction, an ARC is required to have a minimum net owned fund (NOF) of Rs 300 crore and thereafter, on an ongoing basis.
Source : The Economic Times
Synopsis McKinsey Global Institute predicts that emerging market economies like India and China will achieve faster productivity growth and living standards if they maintain a 6% annual growth rate. These economies contributed nearly half of the productivity gains between 1997 and 2022, helping lift nearly a billion people out of poverty. India, China and 28 other emerging market economies will catch up faster with the advanced economies in terms of productivity growth and living standards if they continue to witness around 6% level of productivity gains each year, McKinsey Global Institute said in a report released on Wednesday. It said India and China were responsible for nearly half the productivity gains witnessed between 1997 and 2022, which helped them lift nearly a billion people out of poverty. India's productivity growth rate of 5.6% per annum was outmatched only by China's, as the latter's GDP per worker increased to $21,800 per worker in 2022 from $6,200 in 1997, the report said. "India would need to keep up investments to urbanise effectively, build infrastructure, support service productivity and build higher-value manufacturing. For this, the right enablers need to be in place, from institutions that incentivise investment and innovation to education that allows workers to make the most of those investments," said Rajat Dhawan, managing partner, India, McKinsey & Company.
Source: The Economic Times
Synopsis with the Indian economy maintaining high growth, Japanese corporations are showing more interest regarding investment in India, according to Nomura. Manufacturing sectors have been the main driver of Japanese direct investment in India to date, with transport equipment accounting for 35.1% of direct investment in the country, machinery equipment for 10.5%, and chemicals and pharmaceutical for 6.5% as of end-2022. Mumbai: Japan, Asia’s second-biggest economy long hobbled by a shrinking home consumer base, is increasingly looking toward India for viable investment choices – both in physical and financial assets – as the world’s fastest-expanding country seeks to consolidate its lead at the top of the growth ladder, showed a Nomura.
Source: The Economic Times
Synopsis The Reserve Bank of India (RBI) issues Master Direction to Asset Reconstruction Companies (ARCs), critical for resolving stressed financial assets and improving the health of the financial system. The directive outlines requirements for ARCs, including minimum net owned fund, registration, investment limitations, capital adequacy, leadership tenure, and reporting of irregularities The Reserve Bank of India (RBI) has issued Master Direction to the Asset Reconstruction Companies. An Asset Reconstruction Company (ARC) is a financial institution that buys the Non Performing Assets (NPA) or bad assets from banks and financial institutions so that the latter can clean up their balance sheets. "ARCs play a critical role in the resolution of stressed financial assets of banks and financial institutions, thereby enhancing the overall health of the financial system. To ensure prudent and efficient functioning of ARCs and to protect the interest of investors, Reserve Bank of India hereby issues the Master Direction - Reserve Bank of India (Asset Reconstruction companies) Directions, 2024" said a realese by the RBI. According to the directions, to commence the business of securitisation or asset reconstruction, an ARC is required to have a minimum net owned fund (NOF) of Rs 300 crore and thereafter, on an ongoing basis.
Source : The Economic Times
The Indian rupee gained on Wednesday, aided by a recovery in risk appetite that helped lift Asian currencies, while dollar-rupee forward premiums also ticked higher. The rupee was at 83.27 against the US dollar as of 10:15 a.m. IST, its strongest level since April 10 and higher than its close of 83.3425 in the previous session. The dollar index declined on Tuesday and was last quoted at 105.6, while the Korean won and Indonesian rupiah rose by 0.4 per cent each to lead the gains among the rupee's Asian peers. US PMI data on Tuesday showed that business activity cooled to a four-month low in April due to weaker demand, which pulled the dollar down by nearly 0.4 per cent. The rupee is likely to head higher after risk assets saw a smart recovery in the past two days and is expected to hover in a range of 83.20 to 83.50 in the near term, said Dilip Parmar, a foreign exchange research analyst at HDFC Securities. Meanwhile, dollar-rupee forward premiums ticked higher, with the 1-year implied yield up 2 basis points at 1.68 per cent. "Weak data from the US typically spurs some paying interest but broadly, far forwards continue to be a receive on upticks," a foreign exchange trader at a state-run bank said. Investors now await the release of US GDP data on Thursday and personal consumption expenditure (PCE) inflation data on Friday for cues on the potential timeline of rate cuts by the US Federal Reserve. US GDP growth is expected to have slowed to 2.4 per cent in the January-March quarter, from 3.4 per cent in the previous quarter, while core PCE inflation likely held steady at 0.3 per cent month-on-month in March, according to Reuters' polls.
Source : Business Standard
In the bustling city of Tumkur in Karnataka, where the sounds of a vibrant textile industry once echoed through the streets, a sombre mood prevails in the air. Once adorned with flourishing cotton and silk mills, Tumkur today is at the crossroads, thanks to the fading textile industry. With the upcoming general elections, Tumkur's textile community waits in anticipation for a government that will rekindle the flames of its lost jewel. Tumkur's textiles sector is facing multiple challenges like labour shortage, falling exports and bureaucratic delays. Subsidies and approvals are slow, hindering growth. With entrepreneurs rallying for policy reforms, the industry seeks a revival amid the adversity. Hafeezur Rahman of Techmax Structurals, which builds infrastructure for the textiles industry, said labour shortage and surging export rates are hurting the garment industry. Cheaper labour in Bangladesh and China is also adversely impacting business in India. “There is no boom in the textiles industry now. If this particular segment is developed, the employment issue will be resolved, and foreign exchange will also be generated. The government should focus more on strengthening the micro, small and medium enterprises (MSME) sector than high-profile companies, as the former is the backbone of economic growth,” said Rahman.
Rahman added that simply earmarking money by the government would not bring in change. According to him, the government should work on “quality, modernisation, and training” for the industry. He said, “The government should take initiatives to build a separate special economic zone (SEZ) for the textile industry.” Ronald, business head of MAF Clothing, said water scarcity is hampering dyeing and washing operations while land scarcity is hurting growth. He called for “strong wage incentives through the central government” as it is a critical factor in attracting and retaining skilled labour within the industry. Tumkur-based industry consultant Prabhu SR said the previous government announced about 70-80 per cent subsidies for SC/ST candidates in the garment industry. However, funds have not been received yet.
Source : Business Standard
Kenyan President William Ruto recently announced a Ksh1.4-billion ($11-million) partnership between his country and the United States to boost textile exports.
He was speaking in Machakos county at the commissioning of a new factory, Nexgen Packaging Kenya, in the Export Processing Zone in Athi River, Nairobi. The investment would expand the nation's fashion industry, grow its apparel manufacturing base, and introduce new vertical integration capabilities to the textile sector, the president was cited as saying by a domestic media report. “This partnership embodies the future of Kenya, a future built on solid investments, with skilled labour, efficient technology, quality manufacturing, and strong linkages with global markets,” Ruto said. The government has raised acreage under cotton from 44,000 acres last year to 104,000 acres this year as part of efforts to increase domestic fabric production, he added.
Source: Fibre2fashion
A polyester recycling plant which supplies raw material from garments back into the fashion and textiles industries has begun operations in Kettering. The joint venture between Salvation Army Trading Company and Project Plan B, known as Project Re:claim, is the first commercial-scale, post-consumer polyester recycling plant of its kind. Many garments and other textile products are not designed with ‘end of life’ in mind and most cannot be recycled, adding to the textile waste problem. Project Re:claim aims to open up opportunities for textiles to be designed for purpose, without any compromise to fashion, performance or the environment. As part of the venture, Salvation Army Trading Company Ltd (SATCoL) has set up the new technology at one of their processing centres. Tim Cross, chief executive of Project Plan B, said: “In the UK alone, 300,000 tonnes of textile items are discarded into household waste, including polyester. Up until now, polyester that had no useful life left would have been disposed of. "With this project, we can now save that waste and return it to supply chains. It’s a carbon saving, planet saving solution, and it plays a significant role in helping our collective journey to Net Zero.” The machine was installed in January this year and is now fully operational, with polyester pellets being produced from the polyester waste. The plant is on track to recycle about 2,500 tonnes of unwanted polyester this year, with a further 5,000 tonnes in year two, and creates polyester pellets which can be spun into yarn for use in textiles along with other industrial applications. The pellets are then expected to be integrated into the manufacturing processes of new products later this year. Majonne Frost, head of environment and sustainability at SATCoL, said: “This partnership brings together the large-scale collection and processing capabilities of The Salvation Army, with the cutting-edge technology developed by Project Plan B and PURE LOOP. Together we are working together to bring new solutions and services, at scale, that will help create a textile circular economy.”
Source : Telegrph
Arab Finance: Chairman of the General Authority for Investment and Free Zones (GAFI) Hossam Heiba has met with representatives of 20 Chinese firms and consortia to mull boosting cooperation in textiles and ready-made garment industries, as per a statement.During the meeting, a Chinese consortium expressed its interest in establishing an integrated textile manufacturing city in Egypt with $300 million worth of investments. For his part, Heiba stressed the Egyptian government’s interest in luring further Chinese investments to Egypt, especially in the textile industry.
Source : Zawya
