Think tank Global Trade Research Initiative (GTRI) has suggested suspension of quality control orders (QCO) on polyester and viscose staple fibre for a few years to allow domestic manufacturers to become competitive, expansion of products covered and criteria relaxation in the textile production linked incentive (PLI) scheme, overhaul of Directorate of Foreign Trade (DGFT) and Customs procedures, and addressing monopolistic practices of domestic suppliers, to boost India’s garment exports. Highlighting complex procedures, import restrictions and domestic vested interests are hindering the export growth of the Indian garment sector, it said that sourcing quality raw fabric, particularly synthetic fabric being the root causes of exporters’ problem. The report assumes significant in the wake of India losing to other countries even as garment and textile imports rise steadily. In 2023, China exported $114 billion worth of garments, followed by the EU with $94.4 billion, Vietnam with $81.6 billion, Bangladesh with $43.8 billion, and India with just $14.5 billion. “This shows India significantly trails behind,” said Ajay Srivastava, co-founder, GTRI. From 2013 to 2023, Bangladesh’s garment exports grew 69.6%, Vietnam’s 81.6%, but India’s outbound shipments rose 4.6%. As a result, India's global market share in garment trade has declined from 2015 to 2022. The share of knitted apparel dropped to 3.10% in 2022 from 3.85% in 2015, and the share of non-knitted apparel decreased to 3.7% from 4.6%. Srivastava said that QCOs have undermined the MMF supply chain’s competitiveness by limiting access to affordable and specialized raw materials. Moreover, the Bureau of Indian Standards is slow in registering foreign suppliers and this delay compels exporters to buy from domestic monopolies at higher prices. Unlike in Bangladesh and Vietnam, where exporters easily access quality imported fabrics, Indian exporters struggle daily, according to the report. “High import duties on fabrics, coupled with DGFT and Customs; intricate procedures, force exporters to meticulously account for every inch and type of fabric imported,” he said. Garment imports rose 47.9% between 2018 and 2023 while India’s textile imports increased 20.86% during the period. GTRI also said firms obtain advance authorisations from DGFT for importing duty-free inputs for export production, and the directorate currently requires that unutilised authorisations surrendered to them must be accompanied by a non-utilisation letter/certificate from Customs, which increases the transaction costs.
Source: Economic Times
Indian textile and garment companies, along with new-age startups, have a wide and diversified wish list for the upcoming Union Budget 2024-25. Finance Minister Nirmala Sitharaman will present the first budget of the Modi 3.0 government. The entire textile value chain is struggling to survive amid stagnant exports, sluggish domestic demand, an uneven tax structure, and rough government policies. They are demanding tax rebates and financial incentives for innovation in the textile sector, lower tax rates, and supportive policies. Siddharth Dungarwal, founder of textile startup Snitch, commented, “The budget 2024 is anticipated to be optimistic for India's retail apparel and fashion sector. The industry is hopeful to get policies that encourage innovation and sustainable practices. We are keeping an eye on how the government is going to further promote its Make in India keeping an eye on how the government is going to further promote its Make in India Initiatives while addressing opportunities and barriers for manufacturers looking to enter international markets.” He noted that there is a constant demand from the industry to simplify export procedures and provide export-oriented incentives. The industry also hopes for tax breaks or subsidies in the fiscal policy. “In addition, budgetary resources for workshops, R&D, training programs, and other educational collaborations should be allocated to address skill development initiatives in the apparel sector. We believe that tax incentives should be given to businesses that spend money on R&D and Skill Training. Simplifying regulatory procedures, creating technology infrastructure, skill promotion and other measures that can increase ease of business, especially for Startups in India could spur more innovation, growth, and sustainability in the retail apparel and fashion industry,” Dungarwal added. Ayush Tainwala, CEO, Bagzone Lifestyles Pvt Ltd told Fibre2Fashion “As we anticipate the upcoming annual budget announcement, our focus is on areas essential for sustainable growth in our industry. The policy regime should promote sustainable development and environmental conservation policies to ensure that incentives are placed on the firms that support green products, technologies as well as materials. Moreover, streamlined trade policies are crucial to fostering a competitive edge in the global market, requiring simplified export procedures and reduced tariffs on key imports.” “Specifically, we urge increased budgetary allocations towards Research and Development (R&D) in fashion technology, emphasizing innovations that reduce environmental impact. Additionally, support for small and medium enterprises (SMEs) within the fashion sector is essential, along with targeted training initiatives to enhance skill development in sustainable practices,” he commented. Tainwala added that a proactive budget that prioritises these initiatives will not only ensure immediate growth but also establish an adaptable foundation for long-term success. The budget must serve as a blueprint for enhancing the industry's sustainability, innovation, and global competitiveness in the years ahead Tushar Sethi, co-founder, Jisora told F2F, “Our brand Jisora, a premium clothing brand with expertise in cotton clothing is expecting several important things from the upcoming Budget 2024-25. Simplifying procedures and lowering export duties would ease the process of expanding into global markets. Providing financial assistance or tax incentives for sustainable practices would allow for increased investment in environmentally friendly materials without raising prices for customers.” It is essential to improve workforce skills and productivity in the textile industry by implementing structured training programmes and utilising new technologies and AI tools. Enhanced availability of credit with favourable conditions is crucial for expanding operations and upgrading machinery in SMEs. Furthermore, implementing tax relief initiatives for small and medium-sized enterprises (SMEs) can aid in controlling operational expenses and fostering innovation, he further said. “Investing in infrastructure could improve supply chain efficiency, while backing the local cotton industry would guarantee a consistent flow of top-notch raw materials. These actions would together help promote growth and sustainability in the cotton garment industry,” Sethi added. Ankit Bhuwalka, co-founder & business head, Scarlet Sage said, "As entrepreneurs, we eagerly await Budget 2024, hoping it will further boost India’s industrial growth. Through this fiscal budget, we hope the government will significantly aid the Indian textile and apparel industry by facilitating increased exports. Since 2018, the export volume of textiles and apparel has grown by only about 1 per cent. In 2021, though the government had approved a ₹10,683 crore PLI scheme for textiles to promote man-made fibre apparel, fabrics, and technical textiles, the implementation has been slow. Extending and better implementing this PLI scheme to the garments sector, which the government is considering, would be beneficial. The recent discussions about expanding the scheme to boost domestic manufacturing and exports are promising.” Apparel exporters seek various incentives in the Budget to enhance manufacturing. Tax incentives, uniform GST rates, and enhanced interest subsidies are key to boosting domestic manufacturing and exports. While the government emphasises ease of doing business, there is great potential for further improvement in compliance procedures for global e-commerce brands. Simplifying processes such as regularising inward remittances against exports with AD banks and DGFT would reduce the compliance burden on the MSME sector. Bhuwalka is optimistic that the upcoming budget will address these challenges, fostering a more efficient and supportive environment for e-commerce growth. Sharing her expectations for the upcoming Budget, Rachna Sarup, founder & CEO, B77 Tech styles told F2F, “The upcoming Budget 2024-25 presents a crucial opportunity for the government to address the environmental impact of the apparel industry, the second largest pollutant globally. I urge the finance minister to introduce incentives that encourage sustainable clothing production and consumption. Specifically, I expect: - Lower GST on raw materials used in sustainable clothing production - Higher incentives for manufacturers producing eco-friendly clothing - Most importantly, incentives for consumers to opt for sustainable clothing, such as tax benefits or discounts By introducing these measures, the budget can catalyse a significant shift towards sustainable fashion, reducing the industry's environmental footprint and promoting a more responsible and conscious consumer culture.”
Source Fibre2fashion
Synopsis Steps recommended by the think tank GTRI to boost trade between India and Russia include increasing exports, implementing local currency trading, and pursuing a free trade agreement with the Eurasian Economic Union. Despite a growing trade deficit, India benefits from favorable crude oil deals with Russia. The impact of the Ukraine war and US sanctions has reshaped the trade relationship, prompting a push for a bilateral trade target of USD 100 billion by 2030. Steps such as increasing exports, making local currency trading workable and a free trade agreement with the Eurasian Economic Union will help boost trade between India and Russia, think tank GTRI said on Thursday. India should not worry over the trade deficit, as it is getting crude petroleum oil at cheaper than market rates from Russia and it is also cutting India's overall oil import bill, the Global Trade Research Initiative (GTRI) said. Since the Ukraine war began in February 2022 and the US imposed sanctions on Russia, the trade relationship between India and Russia has shifted significantly. There has been a sharp increase in imports from Russia, resulting in a notable trade imbalance. Exports during the financial year 2020-21 and 2023-24 grew by 59 per cent, while imports surged by about 8,300 per cent, the report said, adding the trade deficit rose from USD 2.8 billion before the war in 2020-21 to USD 57.2 billion at present. You Might Also Like: India, Eurasian Economic Union bloc finalising broad contours, ToRs on proposed FTA: Official It said that the import surge is solely due to India's strategic procurement of crude oil from Russia influenced by favourable trade terms and Russia's need to find new markets amidst Western sanctions. During Prime Minister Narendra Modi's Russia visit on July 8-9, India and Russia have set an ambitious bilateral trade target of USD 100 billion by 2030. With current bilateral trade at USD 65.7 billion in 2023-24, the target seems achievable, GTRI Founder Ajay Srivastava said. In 2023-24, India's exports to Russia were 4.3 billion, while imports driven by crude oil stood at USD 61.4 billion. India exports a diverse range of products to Russia including smartphones, shrimp, medicine, meat, tiles, coffee, parts of airplanes and helicopters, chemicals, computers, and fruits. "India has competitive advantage in these products and hence the potential to export more to Russia. India should prepare a product-level strategy to promote exports," Srivastava said. On local currency trade, the report said that trade cannot be settled in rupee due to limited international use of the Indian rupee and Russia's reluctance to accumulate it beyond a limit After the Ukraine war, the US put sanctions on Russia, not allowing it to use SWIFT (Society for Worldwide Interbank Financial Telecommunication) pipeline for dollar transactions. The key question for India is finding the best way to pay Russia the amount equal to USD 60 billion in trade deficit. "Local currency trading would be the best solution. To facilitate this, India needs to establish a transparent and open currency exchange. This exchange would provide clear, market-determined exchange rates between local currencies like Indian rupee and other currencies such as the Russian rouble, Malaysian ringgit, Thai baht, or Chinese yuan," it said. It added that this would not only give banks a reliable reference for issuing letters of credit but also help businesses understand currency volatility better. "Countries with currency surpluses, like Russia with its Indian rupee surplus from oil exports to India, could exchange their surplus for other currencies more efficiently in such a multi-currency exchange platform," it said. It also suggested making the International North-South Transport Corridor (INSTC) functional. The INSTC is a 7,200-kilometer multi-modal route linking India with Iran, Azerbaijan, Russia, Central Asia, and Europe. "When functional, it would reduce transit time between India and western Russian ports from 45 to 25 days and cut freight costs by 30 per cent compared to the Suez Canal route. INSTC, despite these advantages, has limited use due to underinvestment in infrastructure," it said. The frequent loading and unloading of cargo along the INSTC and the involvement of sanctioned Iran also pose logistical challenges. Chabahar is a key part of this corridor. India is negotiating the 'India-Eurasian Economic Union (EAEU) Trade Agreement" with Russia, Kazakhstan, Kyrgyzstan, Armenia, and Belarus. Formal talks for the agreement have not yet started.
Source: Economic Times
Bangladesh’s Supreme Court decision on Sunday to abolish most quotas for government jobs has raised hopes for an end to nationwide student protests that have disrupted business operations for Indian companies in the country. The violent unrest has claimed at least 114 lives and led to a curfew across Bangladesh. A number of Indian companies with factories in Bangladesh, including Emami and Indofil Industries, have been forced to halt operations due to the turmoil. Data from the High Commission of India in Bangladesh indicates that major Indian companies that have invested in the country include Marico, Emami, Dabur, Asian Paints, Pidilite, Godrej, Sun Pharma, Tata Motors, and Hero MotoCorp. Further escalation of the crisis could directly or indirectly affect these companies. Conversely, the unrest might benefit India’s textile sector, with companies in Tiruppur expecting a 10 per cent increase in orders due to the long-term impact on US and European brands' confidence in Bangladesh. The Bangladesh Supreme Court’s Appellate Division on Sunday overturned a lower court ruling, deciding that 93 per cent of government jobs should be filled based on merit, according to reports. Kolkata-based Emami, which has a manufacturing unit in Gazipur, Bangladesh, is among the affected businesses. Company director Prashant Goenka commented: “Our plant is currently shut due to the prevailing environment. Like every other business in Bangladesh right now, we are also impacted. We hope that normalcy returns soon.” Indofil Industries, which exports crop protection chemicals to Bangladesh, has also been hit — packaging at its factory near Dhaka has stopped. Consultant Jayanta Chakraborty stated, “The factory is now shut and we cannot pack our existing bulk into stock. Even the import of bulk has been impacted. If the situation persists, the crop in Bangladesh will be affected.” The country relies heavily on India and China for crop protection chemicals Two FMCG majors operating in Bangladesh, however, reported no interruptions so far but are monitoring the situation closely. An executive from one firm said: “Right now there has been no impact on our operations.
Source: Business Standard
It is not just a 100-day proposal to boost trade. The Department of Commerce is working on a five-year action plan to provide the building blocks for attaining the goal of $2 trillion exports of goods and services by 2030 which will build on the 100-day agenda road-map of the government and go beyond, sources said. “The focus areas for the five-year plan is likely to be expansion and diversification of products and markets, facilitating MSME export, growth of e-commerce, boost to the services sector, improvement of logistics and ease of doing business and bringing down transaction time and costs, among others,” an official tracking the matter told businessline. It will comprise various interventions that the government is planning over a longer term to ensure that India’s exports remain on a steady growth path with the final objective of attaining $1 trillion exports of goods and $1 trillion exports of services by 2030, they added. Increasing India’s meagre share in world trade is also one of the goals for the government. In 2023, the country’s share in global goods exports and imports stood at 1.8 per cent and 2.8 per cent respectively, per the WTO. The Commerce Department has carried out discussions with various stakeholders including export promotion and industry bodies and taken inputs for the plan. “The Department is giving final touches to the five-year action plan before it is put in the public domain,” the official said. Last fiscal, India’s exports were hit by slowdown in global demand as turmoil in the Middle East and Russia’s war on Ukraine continued to affect economies worldwide. India’s goods exports slipped 3 per cent to $ 437 billion in 2023-24 while service exports increased 4.9 per cent to $341.1 billion during the fiscal, per government data. In the current fiscal things appear more upbeat. Goods exports in the first quarter of 2024- 25 increased 5.84 per cent to $109.96 billion. This is in line with international organisations like WTO predicting steady growth in world trade in 2024. Growth challenge India’s export growth challenge lies in diversifying its markets as well as products. For over one and a half decades, the US and the UAE have remained the top export destinations with the two accounting for about 25 per cent export share in 2023-24. While exports to new markets like the Netherlands, Saudi Arabia, Brazil, and Indonesia have increased consistently over the recent years, there is scope for much more diversification, both in terms of products and destinations. “The Commerce Department wants to focus on increasing exports to markets such as Central Asia, Africa and Latin America. Exports could also go up considerably in countries and regions with which FTAs are being negotiated such as the EU, the UK and Oman,” industry sources said. While India’s top exports still remain traditional items like petroleum products, gems & jewellery, textiles, chemicals and pharmaceuticals, a breakthrough has been achieved in terms of increase in exports of telecom products, especially mobile phones. “There is opportunity in high-tech exports and that could be one of the thrust areas,” the official said.
govt efforts
It has been a consistent endeavour of the government to reduce costs and time taken for exports by reducing paperwork and facilitating online transactions, the official said, adding that this will be further enhanced, especially through specific zones like SEZs, ecommerce hubs and district export hubs, the official added Under the 100-day agenda road-map, the Commerce Department is hopeful of launching its Trade Connect’ e-platform to help exporters do business and get in touch with relevant stakeholders of international trade, finalising standard operating procedures for negotiating FTAs; introducing certain amendments in SEZ rules to make them more attractive, making e-commerce hubs operative and some other measures to boost exports.
Source: The Hindu Business Line
The renewed parameters of the India-UK free trade agreement negotiations are set to be defined this week as UK Foreign Secretary David Lammy is expected in India on Tuesday, the first high-profile visit under the newly elected Labour government in Britain. The free trade agreement (FTA) talks began in January 2022, under the then Conservative government, with a target to significantly boost the GBP 38.1 billion a year bilateral trading partnership but hit a block in the fourteenth round of negotiations to make way for general elections in both countries. A report in The Daily Telegraph' on Sunday quotes a New Delhi source to claim the Indian side would seek clarity on whether the Labour government intends to pick things up from where they were left off or start afresh in some way. India is keen to resume talks on a positive note, but the date needs clarity, the source told the newspaper. The trade deal was at the final stage in the previous government, and we want to see whether the Labour government wants to start from where we left it in March before the elections or start afresh from scratch. Our stance on visas for professionals remains unchanged. We are expecting a positive outcome under the Labour government, the source added. During his last major intervention on India-UK relations just days before Labour's landslide electoral victory earlier this month, Lammy told India Global Forum (IGF) in London that he intends to get the deal done as soon as possible. "My message to [Finance] Minister [Nirmala] Sitharaman and [Trade] Minister [Piyush] Goyal is that Labour is ready to go. Let's finally get our free trade deal done and move on, he said, lamenting former prime minister Boris Johnson's missed Diwali 2022 deadline. With Labour, the days of Boris Johnson reciting that old verse from Rudyard Kipling in Asia are over. If I recite a poem in India, it will be Tagore... because with a superpower like India, the areas of cooperation and the areas for learning are limitless, he said. On visas, which have been touted in the UK media as a major sticking point in the talks, High Commissioner Vikram Doraiswami clarified at the same summit that it is not the priority for India. He explained: What we're trying to do with this free trade agreement is to increase the depth or the extent of ambition, including in goods and services, that we'd like to offer to the UK." Visas are not the first priority for us in an FTA. We are not looking at the FTA as a means to bring people to the UK, that is not the objective," he said. "What we're looking for is whatever is reasonable within the broad framework of international trade and services under Mode 4 of GATS [General Agreement on Trade in Services of the World Trade Organisation] to be able to have persons travelled for intercompany transfers etc., he added. The Prime Minister Keir Starmer-led Labour Party manifesto pledged to seek a new strategic partnership with India, including a free trade agreement, as well as deepening cooperation in areas like security, education, technology and climate change. Lammy's expected visit to India next week, on his way to the 57th ASEAN Foreign Ministers' Meeting at Vientiane in Lao People's Democratic Republic, is expected to set the tone for how this pledge is to be realised.
Source: Business Standard
Indian garment players have huge potential to export their products to Japan and the domestic industry should take greater advantage of the FTA between the two countries, AEPC said on Sunday. The Apparel Export Promotion Council (AEPC) said to tap the growing potential, they are leading a delegation to participate in the India Tex Trend Fair (ITTF) in Tokyo. The three-day fair will begin from July 23 and over 200 exhibitors are participating. “Indian exhibitors from across the country will be displaying a diverse range of Indian RMG across various categories, including summer and winter collection,” it said. “With Indian apparel having duty-free access to Japan under Indo-Japan trade agreement as against 9 per cent duty for Turkey and 9.5 per cent for China, it makes business sense for Indian readymade garment manufacturers and exporters to participate in this fair and avail this unique opportunity,” AEPC Chairman Sudhir Sekhri said.
Source: Millennium post
NEW DELHI: Issues like complex procedures of DGFT and customs, import restrictions and domestic vested interests are holding up the export growth of the Indian garment sector, think tank Global Trade Research Initiative said on Sunday. At the root of the exporters’ problem is difficulty in obtaining quality raw fabric, particularly synthetic fabric, the GTRI said. “High import duties on fabrics, intricate procedures, force exporters to meticulously account for every inch and type of fabric imported,” GTRI founder Ajay Srivastava said.Agencies
VSEZ records 18% growth in exports in first quarter
Discover the latest update from Visakhapatnam Special Economic Zone (VSEZ) with exports reaching Rs.62,198 crore in the first quarter of the fiscal year 2024-25. Learn about the investment and employment opportunities created.
Rohit Purohit's monsoon fashion 'includes lighter fabrics, darker colours' Discover actor Rohit Purohit's monsoon fashion tips and on-screen romance secrets. Learn how he blends comfort and style while shooting in the rain. Read about the camaraderie with his co-stars and the magic of capturing natural moments on screen.
India's exports increase by 2.56% to $35.2 billion in June, imports reach $56.18 billion India's merchandise exports increase to $35.2 billion in June, while imports rise to $56.18 billion. Trade deficit stands at $20.98 billion. Commerce secretary projects total exports may exceed $800 billion for the fiscal year.
Source: Times of India
PANNALA – Sri Lankan textile manufacturer Hirdaramani Group will team up with China’s Hengda Textiles to build a new $33 million (LKR 10 billion) apparel production unit that features the latest in water conservation, waste generation and renewable energy technologies.
Hengda Garment Co Ltd is a branch of head office Zhejiang Hengin Group Co., in Ningbo city, Zhejiang Province and the new partnership will give the Chinese textile specialist exposure to the Sri Lankan garment sector in a bid to boost the country’s position as a ‘sustainable textile manufacturing hub’ as well as reducing the extensive outflow of foreign exchange for raw material imports.
Source: Eco Textiles
Producer prices of German industrial products were 1.6 per cent lower year on year (YoY) and up by 0.2 per cent month on month (MoM) in June this year, according to the Federal Statistical Office (Destatis).
In May, the YoY change rate was minus 2.2 per cent.
Lower energy prices continued to be the main reason for the YoY decline in June. Intermediate goods were also less expensive than in June last year, whereas higher prices had to be paid for consumer and capital goods.
Across all customer groups, gas prices declined by 14.8 per cent YoY in June and increased by 0.3 per cent MoM. Electricity cost 11 per cent less YoY and 0.4 per cent more MoM in the month across all consumer groups in Germany.
Excluding energy prices, producer prices were up by 0.3 per cent YoY and 0.1 per cent MoM in June.
Durable consumer goods were 0.7 per cent more expensive in June than a year earlier. Compared with May, the prices of durable consumer goods were up by 0.1 per cent in June this year.
Source: Fibre2fashion
China's electricity consumption expanded in a robust manner in June this year, according to data from the National Energy Administration, while the country’s gross domestic product (GDP) grew by 5 per cent year on year (YoY) to around 61.68 trillion yuan (~$8.65 trillion) in the first half (H1) this year, data from the National Bureau of Statistics showed. Power use climbed by 5.8 per cent YoY in the month to 820.5 billion kilowatt-hours (kWh). Power consumed by primary, secondary and tertiary industries went up by 5.4 per cent, 5.5 per cent and 7.6 per cent YoY respectively. Residential power use in the month rose by 5.2 per cent YoY to 116.6 billion kWh. In the first half (H1) this year, the country's power use climbed by 8.1 per cent YoY to nearly 4.66 trillion kWh. "Overall, the national economy has continued to improve in the first half in a stable manner," an NBS spokesperson said. The country's value-added industrial output expanded by 5.3 per cent YoY in June.
Source: Fibre2fashion
