Synopsis India, the world's sixth largest textile and apparel exporter, faces challenges in achieving its textile export goals. The government aims to achieve $600 billion in textile exports by 2047, but the sector faces challenges such as geo-political uncertainties, consumption shifts, and low overall growth. The textiles sector is also affected by the ongoing RussiaUkraine war, the Red Sea crisis, and the Israel-Hamas conflict. India is the world’s sixth largest textile and apparel exporter having an 11.4 per cent share in India’s overall exports. The government aims to achieve $600 billion of textile exports by 2047 from $44 billion in FY22. However, this one's a bumpy road for the Modi government. Will Budget 2024 be able to push the sector towards its goals? India also aims for the domestic market to grow to $1.8 trillion from $110 billion in 2022 owing to a rise in e-commerce and fast fashion. Furthermore, the domestic market is seen growing to $250 billion by 2030 and exports to $100 billion. Global exports of textiles and apparel has grown at a compound annual growth rate of 3.4 per cent in 2018- 2022 but India’s exports during this period have grown around 1 per cent only. Geo-political uncertainties, consumption shift to other essential and discretionary spends, adverse demographics, and low overall growth of this segment have led to this slow growth.
Textiles sector stained by a few key issues
The ongoing Russia-Ukraine war, the Red Sea crisis and the Israel-Hamas conflict, have lately made the international trade scenario much tougher for the Indian exporters. In a report published by CRISIL in February this year, it was noted that the textiles industry is unlikely to be significantly impacted by the Red Sea crisis. However, a prolonged crisis is likely to dent margins and stretch the working capital cycle, it had said.
It is worth to note that the higher freight cost due to the Houthi disruption maybe a hindrance for textile exporters with a lot of trade happening through the Suez Canal. The freight rates increased by nearly 40-50 per cent, as per a TOI report. Additionally, a global 'weak demand' in textiles is another worrisome factor for the industry. The May 2024 ITMF Global Textile Industry Survey (GTIS) revealed a continued stagnation in the textile business climate and that a weak demand remains the main concern since September 2022.
Inefficiency in PLI
The government, in 2021, had approved the Rs 10,683 crore PLI scheme for textiles for five years to promote the production of man-made fibre apparel, fabrics and products of technical textiles. Also Read: Sitharaman may focus on affordable housing in Union Budget, says former HDFC CEO Keki Mistry The scheme has two parts: Part-1 promotes a minimum investment of Rs 300 crore and minimum turnover of Rs 600 crore per company and the second part envisages a minimum investment of Rs 100 crore and minimum turnover of Rs.200 crore per company. "As per Quarterly Review Reports (QRRs) as on 30.09.2023, the eligible investment made under the Scheme was Rs 2,119 crore of 30 selected applicants, out of which 12 selected applicants started commercial production, turnover achieved was Rs 520 crore including export of Rs 81 crore and employment generated was 8,214," the government in December 2023. In a recent PLI review meeting, it was noted that the progress as part of the government's flagship scheme has been slower than anticipated in the textiles sector.
What the budget can do for the textiles sector with the forthcoming budget, the industry may expect the government to address certain key issues and provide measures from finance minister Nirmala Sitharaman. Primarily, Modi & Co can provide higher fund allocation to MSME which are 80 per cent of the textile market. Further, an extension of the PLI scheme for garments sector, which the government is already mulling, may take shape. Earlier on June 25, Textiles Minister Giriraj Singh said the government is now considering to extend the scheme to the garments sector with a view to boost domestic manufacturing and exports. Singh said that huge opportunities are there to increase exports and the industry should target $50 billion worth of shipments in the coming years. The ministry is also looking at reviving Scheme for Integrated Textile Parks (SITP), which aims to create new parks of international standards. Under the scheme 54 textile parks were sanctioned.
Source: The Economic Time
Steps to secure a ₹70-crore loan from the National Cooperative Development Corporation to improve efficiency of the textile sector are in the last phase, Minister for Industries P. Rajeeve has said. Replying to a calling attention motion by K.P.A. Majeed, MLA, in the Assembly on Friday on resolving the difficulties faced by Edarikode Textiles (spinning mill) and KEL (Kerala Electrical and Allied Engineering Co. Ltd.), the Minister said ₹10 crore had been approved for purchase of quality cotton through the Cotton Board. An amount of ₹9.5 crore had also been earmarked for the Cotton Board. This would enable purchase of quality cotton when prices are low and its storage to ensure availability of raw material. Two automatic cone winding machines had been imported at a cost of ₹5.4 crore in 2021- 22. This, along with availability of raw material through the Cotton Board, were aimed at making the functioning of the Edarikode mill effective.
Orders received The Minister said that to improve the functioning of public sector units and make them profitable, business plans of all units, including KEL, for the current financial year were ready. Moreover, KEL was receiving orders from other States on rate contract basis. Steps were under way to make available the working capital required for meeting the orders from other financial institutions in a time-bound manner, the Minister said.
Source: The Hindu
The 53rd GST Council Meeting held on June 22 came out with a flurry of clarifications and recommendations on rates, amendments, exemptions, measures for facilitating the trade and measures relating to law and procedures. 27 in all — and if one included the subserial numbers, nearly 40. It was almost as if the Council was making up for lost time as the last Council meeting had been held in October 2023. What the plethora of recommendations triggered was in turn the Central Board of Indirect Taxes & Customs (CBIC) issuing a host of circulars — 26 in all on June 26, 2024. The circulars clarified issues ranging from fixing monetary limits for filing of appeals with exceptions to matters, about insurance companies, warranty, taxability of reimbursement of securities or shares given to an employee, payment towards allotment of spectrum, construction or maintenance of National Highway projects — in effect on matters on which action had been initiated by the enforcement officials or on which the industry was awaiting some clarity. Since these are clarifications, it would mean that this was always the official and legal view on the issue from the beginning. All the clarifications were trade-friendly, however, this would put at doubt notices if any issued by the Directorate General of GST Intelligence (DGGI). Adjudicating authorities would necessarily have to decide the notice in light of the clarifications. This should provide clarity and certainty to both the department and the industry. The other recommendations of the Council involving rates and amendments should be implemented through the Union Budget which is expected on July 23. Another news item which caught the eye was the report regarding the consolidated guidelines for conducting investigations issued earlier in the year (February 8, 2024) by the DGGI. Given the Council’s concerns about trade facilitation, these guidelines too could be read as an integral part of these recommendations. There are 18 guidelines issued on conducting investigations and enforcement. Instances where the written prior approval of the Principal Chief Commissioner is necessary have been mentioned. These include interpretation of law where the tax is being levied for the first time, summons being issued to big industrial houses or major multi-national corporations, sensitive matters of national implications and matters which the GST Council is already seized of. Field formations are expected to collect existing trade practice on an issue and study the matter before initiating an investigation and where more than one interpretation is possible the guidelines suggest that it is ‘desirable’ to make a self-contained reference; the 'endeavour' being to do so to the relevant policy wing of the CBIC ‘before concluding investigation’. The guidelines do not define big industrial houses, sensitive matters, or matters with national implications — having said that the intent behind the guideline is laudable since ultimately the aim should be to reduce litigation without compromising on acting against evaders. The CBIC and the DGGI headquarters should ensure that clarification if sought by the field formations is given without any loss of time in any case within a fortnight since enquiries ideally should not be kept on hold indefinitely. Then came the very perplexing report from various sources that the government has done away with publishing GST revenue data. So on July 1 when economists, trade and industry and everybody else interested in knowing GST's trajectory checked, the Press Information Bureau (PIB) website for the GST revenue for June month, all that was available was a detailed press note from the Ministry of Finance highlighting the benefits and importance of GST on GST day. (Incidentally, even this press note is no longer available as of today (July 7) on the PIB website). different revenue-neutral rate recommendations before the launch of the GST — ranging from 12% to 15% to 17%. Again, FFC points out that the current effective GST rate is about 11.6 % as against 14.4% in 2017. The government could do well to release the GST data as it used to on the first of every month pros and cons of the transformational tax reform deserve to be celebrated and discussed every month.
Source: CNBC
The India-UK Free Trade Agreement (FTA) negotiations are expected to stay on track despite a change in government in the UK as there is “bipartisan” support for the deal in the country, official sources said. Trade experts, too, believe that the talks will remain largely on course although the new Labour government, could have a harder stand on some issues such as labour that may be settled through mutual compromises. “The interest in the UK in forging an FTA with India is across parties. The Labour Party’s wish to continue FTA negotiations with India has been made amply clear in its election manifesto,” an official tracking the matter told businessline. The UK’s Labour Party, led by Keir Starmer, has come back to power after 14 years of Conservative rule. Starmer, so far, has given indications that his party would not be against the proposed India-UK FTA that was initiated by former UK PM Boris Johnson and is in its crucial last lap. The trade pact is estimated to double bilateral trade to $100 by 2030. Apart from the election manifesto, Starmer expressed his support for the India-UK FTA in his address at the India Global Forum last year. “What my Labour government will seek with India is a relationship based on our shared values of democracy and aspiration. That will seek a free trade agreement (FTA). We share that ambition…but also a new strategic partnership for global security, climate security, economic security,” he said. High-profile deals The Labour government will have to complete high-profile deals like the one with India to ensure its credibility, said Biswajit Dhar, former Professor at JNU. “There will, of course, be some hard negotiations over Mode 4 (movement of workers), given Labour’s hard stand on immigration. At the end of the day, I expect that there will be some compromises on both sides that could see the deal through,” Dhar said. The Labour Party is expected to recognise the benefits of the India-UK FTA, as it opens access to a large and growing Indian market, said Ajay Srivastava from research body Global Trade and Research Initiative. “The India-UK FTA is nearly finalised, and with a few minor adjustments like curtailing number of visas for India professionals, the Labour Party may likely give its approval. This could set the stage for the agreement to be signed as early as October this year,” he said. The tricky areas in the negotiations include rules of origin, market access for vehicles (including EVs) and Scotch, easier work visas for Indian workers, liberalisation of financial services and tightening of intellectual property rights.
Source: Financial Express
A scientist from Hyderabad has spearheaded a groundbreaking development aimed at protecting farmers from harmful insecticides. Praveen Kumar Vemula, a researcher at the Institute for Stem Cell Science and Regenerative Medicine in Bengaluru, has led a team to create an innovative fabric designed for anti-insecticide suits and masks. This lifesaving fabric is expected to significantly reduce the health risks faced by those farmers who spray insecticides without protective gear. The research findings, titled “Oxime-functionalized anti-insecticide fabric reduces insecticide exposure through dermal and nasal routes, and prevents insecticideinduced neuromuscular dysfunction and mortality,” were published in Nature Communications. The study highlights the dangers of insecticide exposure through dermal and nasal routes, particularly for farmers who lack adequate protective gear. “Acetylcholinesterase plays a crucial role in controlling neuromuscular function. Organophosphate and carbamate insecticides inhibit acetylcholinesterase, leading to severe neuronal and cognitive dysfunction, breathing disorders, loss of endurance, and death. To address this issue, we developed an Oxime-fabric by covalently attaching silylpralidoxime to the cellulose of the fabric,” explained the researchers. The Oxime-fabric, when stitched into a bodysuit and facemask, efficiently deactivates insecticides upon contact, preventing exposure. This innovative fabric prevents insecticide-induced neuronal damage, neuromuscular dysfunction, and loss of endurance. Remarkably, tests showed a 100% survival rate in rats repeatedly exposed to organophosphate insecticide when using the Oxime-fabric, compared to no survival with direct insecticide application or use of normal fabric.
Source: Times of India
New Delhi will focus on ways to increase exports to reduce trade gap, say officials
India and Qatar are set to hold their first joint working group (JWG) meeting on trade issues this week to further push bilateral trade by identifying and removing tariff and non-tariff barriers, including regulatory hurdles, sources have said. The move follows Prime Minister Narendra Modi’s meeting with his Qatar counterpart Sheikh Mohammed bin Abdulrahman Al Thani in Doha in February this year where the two agreed to boost bilateral cooperation in sectors such as trade, investment, energy, finance and technology.
“India wants to use the JWG meeting, led by senior officials from both sides, to initiate measures that would increase the country’s exports to Qatar in order to lower the trade gap with the country. The Commerce Department recently took inputs from various industry sectors for the agenda to push for at the meeting,” a source tracking the matter told businessline.
FTA talks
The India-Qatar JWG meeting scheduled on July 10 is also significant as the Free Trade Agreement (FTA) talks between India and the Gulf Coordination Committee (GCC) countries — which includes Saudi Arabia, UAE, Qatar, Kuwait, Oman and Bahrain — are yet to gather steam. “As Qatar imposes an import duty of 5 per cent on most goods, ranging from textiles to food products, tariff reduction would help Indian exports be more competitive. While the India-GCC FTA could take time, New Delhi can try and convince Qatar to reduce import duties through bilateral discussions,” an industry representative said. There has been some increase in India’s exports to Qatar over the last decade, facilitated by the opening of direct shipping lines linking Indian ports with Qatar, but there is much scope for further growth, the source said. The increase in exports from India has been in the area of food products, vegetables, pharmaceuticals, steel products and construction materials. “The Indian industry has submitted inputs related to tariff barriers, non-tariff barriers, Customs-related problems, regulatory issues and logistics and infrastructure,” the source noted. Last month, Qatar and India held their first joint working group on investment in New Delhi to deepen economic ties with focus on sectors such as manufacturing, logistics, IT, health and education. Qatar’s key exports to India include LNG, LPG, chemicals and petrochemicals, fertilizers, plastics and aluminium articles. India’s key exports to Qatar include cereals, copper articles, iron and steel articles, vegetables, fruits, spices, and processed food products, electrical and other machinery, plastic products, construction materials, textiles and garments, chemicals, precious stones and rubber.
Source: The Hindu Business Line
In the recently-conducted UK elections, the Labour party, under the leadership of Keir Starmer, won the people’s mandate and ousted the Conservative party. Starmer had pledged to pursue a “new strategic partnership” with India, including a freetrade agreement (FTA), if elected to power. An FTA is anticipated to provide UK exporters a significant price advantage in the Indian market. The FTA negotiations, which began in January 2022, have reportedly closed up to 19 of the 26 proposed chapters in the FTA. The UK accounted for $9.3 billion worth of India's exports in the four quarters ended March 2019. This figure increased to $13 billion across the same period ending March 2024. Exports were $1.8 billion more than imports as of 2018-19. This increased to $4.5 billion in 2023-24. India remains the second largest source of foreign direct investment (FDI) to the UK after the US. As of June 20, the overseas direct investment (ODI) from India to the UK has touched $265 million in the financial year 2024-25(FY25). FDI (equity) flows into India from the UK have largely been stagnant in the last few years, shows data from the Department for Promotion of Industry and Internal Trade and Department of Economic Affairs. India overtook the UK to become the fifth-largest economy in the last quarter of 2021. India’s per capita gross domestic product (GDP) is $2,484.8 as of 2023 compared to the UK’s $48,866.6. In June, the Confederation of Indian Industry (CII) and the High Commission of India in the UK launched a report titled, ‘Indian assets: Charting the journeys of Indian companies in the UK.’ It highlighted the Indian states’ contribution to FDI in the UK. Most of the investing companies into the UK were from Maharashtra, followed by Karnataka and Delhi. Other states include Haryana, West Bengal, Gujarat and Kerala. According to the report, India became the top market for FDI into London, for the first time, in 2023. It accounted for nearly a third of the FDI into the city. Labour has pledged to reduce net migration and with policies outlined to achieve this goal. It expects to bring net migration down to a few hundred thousand per year, according to earlier news reports. This comes even as Indian immigration to the UK has been on the rise. It came in at 251,000 in 2023 compared to 72,000 in 2019, before Covid. The year 2023 was also the first time since the pandemic when the majority moved to work rather than study in the country.
Source: Business Standard
In a major relief for the industry and GST taxpayers in the country, the government has decided to send any GST demand notices to the taxpayers, only once there is approval from the North Block. According to official sources, "The Directorate General of GST Intelligence (DGGI) can not send any tax demand notices where it is an interpretation or a classification matter, without the approval of the policy wing under the Central Board of Indirect Taxes and Customs (CBIC)." DGGI is the central intelligence agency of CBIC, which keeps a close vigil on tax dues, tax unpaid, tax evasion and misreporting of taxes, under the GST regime. The investigative arm was often accused of sending notices to taxpayers, and industry, where the industry held a different view and the intelligence arm held a different assessment of taxes, leading to stuck payments, delays in taxes and piling up of cases. Sources told CNBC-TV18, "The move is aimed at reducing litigation, deploying the intelligence resources in the right direction and where they are needed the most, thus bringing in ease of living and ease of doing business under the GST regime." "Through this, the DGGI resources will be used more efficiently and will lead to meaningful conclusions to cases and demand notices," the sources said. Sources added, "The DGGI will continue to conduct investigations, checking tax leakages and, as and when it detects an evasion, it will inform CBIC ... It will be then upon CBIC on whether it wants to announce corrective clarifications to avoid discrepancies and loopholes in the law." According to Anita Rastogi from Price Waterhouse & Co LLP, “interpretation" under the GST regime has been a core area of concern and has led to massive investigations and proposed tax demands. Taking approval from the finance ministry before sending tax notices will ensure that the interpretation that the tax policy wing of the finance ministry had considered would be a guiding factor for all notices, Rastogi said. Apart from this, the recent 53rd GST Council meeting has approved a series of clarifications, which has given a breather to several sectors including foreign shipping lines, MNCs, foreign airlines, start-ups, etc, operating in the country, which were embroiled with a series of DGGI notices. Sources said, "The recent notifications have put to rest notices sent to several sectors, making them null and void, putting them to rest on 'as is, where is, basis." For instance, foreign shipping lines were facing notices worth about ₹1 lakh crore, foreign airlines were facing notices worth ₹15,000 crore and MNCs were contesting about 300 notices worth ₹4000 crore, the sources said. "All these cases will now be concluded in the favour of the industry based on these clarifications approved by the GST council," they added. This, Rastogi said, was yet another matter foreign airlines and shipping airlines were facing. She said there were challenges related to the interpretation of whether there is an import of service by their Indian branch offices. "This is again an interpretation which needs to be done coupled with the fact that common trade practice will be accepted by the government as a particular section is being proposed to be inserted in the legislation," Rastogi said. "The government is likely to consider ways to waive tax demands raised on foreign shipping and airlines on account of deemed import of services. These demands stem from 'reverse charge' rules, where their overseas headquarters' expenses are taxed in India," said Saurabh Agarwal, Tax Partner, EY, explaining, "A new Section 11A, proposed for the GST Act, could provide the solution ... (granting) the government power to waive taxes due to common business practices. However, even with Section 11A, the GST Council would still need to recommend its use in this case. Finally, a notification could be issued after a recommendation to officially remove the tax liability." Several cases pertaining to the issuing of ESOPs, corporate guarantees, etc, will also get settled, the sources said. Rajat Mohan of Moore Singhi, a tax advisory firm says, "The Directorate General of GST Intelligence (DGGI) has gained a reputation as the most formidable authority within the GST framework, often perceived as the 'bad boys' of the tax department. The prospect of restricting their ability to issue frivolous notices, especially on interpretative matters, is indeed a welcome development. Requiring DGGI notices to be approved by the GST Policy Wing would ensure a more consistent and fair approach, providing much-needed relief to taxpayers. This change would significantly enhance the ease of doing business in India. While some may argue that it could limit the government's ability to recover substantial revenues, this move is essential for creating a more predictable and taxpayerfriendly environment."
Source: CNBC TV
JAKARTA - Small and medium industry players (IKM) as well as textile and textile products (TPT) workers urged the Ministry of Finance (Kemenkeu) and the Directorate General of Customs and Excise to be responsible for flooding in illegal Chinese products due to the import mafia. Chairman of the Working Convection Entrepreneurs Association (IPKB) Nandi Herdiaman said that the Director General of Customs and Excise Askolani and the Minister of Finance (Menkeu) Sri Mulyani was the party that must be responsible for the current condition of IKM and the national TPT industry. Customs and Excise so far is considered to allow the smuggling of illegal imported clothes through a number of modes. "Askolani seemed to allow smuggling through wholesale import modes, the escape of HS and under-invoiting was carried out by the ranks around him," Nandi said in a written statement, Saturday, July 6. In addition, Nandi also accused Minister of Finance Sri Mulyani of allowing Customs and Excise to be a hotbed for the import mafia conspiracy. IKMs and TPT workers also urged law enforcement officials to take action against those involved in illegal imports.
"Including, logistics companies partnering with Customs and Excise whose goods are always on the green line," he said. Trade Minister Zulhas was asked to be more active in confiscating various illegal imported goods that were traded online and offline. In fact, they also urged President Joko Widodo (Jokowi) to immediately intervene to resolve the problems of the national TPT industry and illegal imports. Previously, the national textile and textile product (TPT) industry contracted in June 2024. Secretary of the Directorate General of Chemical, Pharmaceutical and Textile Industries (IKFT) of the Ministry of Industry (Kemenperin) Kris Sasono Ngudi Wibowo said, one of the main causes in the TPT industry is the rise of imported textile products which are often in the form of illegal goods. The flood of imported products is considered to be increasingly occurring since the Minister of Trade 8/2024 which relaxed import activities took effect. As a result, the textile industry became the only sub-sector to experience contraction based on the Industrial Trust Index (IKI) from the Ministry of Industry in June 2024. "Of the 23 sub-sectors photographed through this industrial confidence index (IKI) survey, one of them is contraction. The contraction is in the Directorate General of IKFT, especially in KBLI 13, namely the textile industry," Kris said as quoted on Friday, June 28.
Source: Voi.id
Zoir Mirzayev, the mayor of the Tashkent region, visited the construction site of a textile-industrial park in the Yukorichirchik district on July 4, as reported by the press service of the regional khokimiyat (city administration). The visit was also attended by the head of the regional department of the Chamber of Commerce and Industry, along with several other key officials. The Textile Industry Park, situated in the Nurli Zamin mahalla, spans over 69 hectares. This ambitious project, with an estimated total cost of $350mn, comprises 23 lots and is expected to significantly contribute to the regional economy.
Construction of the textile-industrial park began in February 2023, and the project is scheduled for completion and launch in the fourth quarter of 2025. The khokimiyat’s press service highlighted that the park is expected to generate over 2,000 new jobs, providing a substantial boost to local employment and economic activity.
This development is part of a broader initiative to advance the textile and knitting industry in Uzbekistan. On May 1, President Shavkat Mirziyoyev signed a decree approving new measures for the sector’s development. The decree mandates the creation of centers for designers, fashion designers, and marketers of textile products in Tashkent and three other regions, aiming to foster innovation and skill development in the industry.
Additionally, the decree calls for the construction of a wholesale market and a center for light industry products in New Tashkent. This center will also house imported materials necessary for textile production. To facilitate this, a 30-hectare plot of land has been allocated for the project. This initiative is expected to streamline the supply chain and enhance the availability of high-quality materials for local manufacturers.
The development of the Textile Industry Park in Yukorichirchik and the associated initiatives in New Tashkent reflect Uzbekistan's commitment to modernizing its textile industry. These projects are designed to enhance the sector's competitiveness, create job opportunities, and contribute to the country’s economic growth.
Source: Daryo.uz
Liansheng, Chairman of China CTEXIC Corporation visits the Executive Office of Bangladesh Export Processing Zones Authority (BEPZA) Dhaka on Sunday, says a press release. Welcoming the delegation, BEPZA Executive Chairman Major General Abul Kalam Mohammad Ziaur Rahman, BSP, ndc, psc briefed them on the inception and operation of EPZs in the country. He said, BEPZA started its journey 43 years ago and has been contributing tremendously to the socio-economic development of the country. The Executive Chairman said Bangladesh is moving forward to be a middle-income country by 2031 and developed nation by 2041. Foreign Direct Investment (FDI), in manufacturing sector, is one of the major tools to achieve the vision, he added. "Our manufacturing sector is largely dominated by RMG sector due to abundant of low-cost workforce but we are encouraging investment from diversified sectors like Electronics and Electrical equipments, Vehicle parts, IT products, Machinery Parts etc.", BEPZA Executive Chairman said. He urged the Chinese delegation to invest in these diversified sectors apart from the apparel and textile. Huang Liansheng thanks BEPZA and express hope to foster collaboration with BEPZA and explore possible avenues of enhancing investment in textile and apparel industry. Member (Investment Promotion) of BEPZA Md. Ashraful Kabir said, BEPZA is the pioneer Investment Promotion Agency of Bangladesh. The authority has been facilitating to the investors of EPZs for 44 year with professionalism, sincerity and dedication. He called upon the investors to consider investing in EPZs and BEPZA EZ as their next investment destination. Executive Director (Investment Promotion- Addl. Charge) Fazlul Haque Mazumder briefed the delegation on the overall activities of BEPZA including operating procedures, facilities, incentives etc. through PowerPoint presentation.
Source: Observerbd.com
