The central bank data shows Bangladesh’s import of RMG raw materials such as raw cotton, yarn, fabric and dyeing materials was US $ 7.92 billion in the first half of FY ’24. The BGMEA reports Bangladesh’s apparel exports are 71 per cent cotton-based. The country, however, meets 99 per cent of its cotton demand through imports. After Brazil, India is the second largest cotton supplier to Bangladesh and holds a 12 per cent market share, according to United States Department of Agriculture (USDA). In terms of MMF-based raw materials, 98 per cent of the country’s MMF demand is importdependent. Central bank data shows that the country’s synthetic yarn import valued at US $ 1.52 billion in the July-December period of FY ’24. Over a decade, Indian textile companies have made a substantial impact on Bangladesh’s textile industry by extending and maintaining their stronghold. With the growing demand for quality textiles and cost-effective production, Indian companies have emerged as key players in the country.
Indian textile companies possessing nearly a quarter of shares Bangladesh’s and India’s textile
industries have long entwined themselves. Given that both countries are adjacent to each other and have a common cultural background and history, it is not surprising that the textile industry has been vital for the growth of their economies. Lahoti Overseas Limited, a prominent textile company in India with a US $ 60 million turnover, produces 2000 tonnes of carts of yarn, fabrics and raw cotton annually, of which 20 per cent is imported into Bangladesh. Square Corporation, one of the biggest global suppliers of yarn, has been exporting more than 220 containers to around 20 countries for over three decades and has its own office in Dhaka. Subhajit Koley, the company’s Country Manager demonstrated,“Out of all the export areas in India, around 70 per cent of them involve exports to Bangladesh. The demand for cotton is highest there because local exporters can hardly procure it, so we have to import from all the major companies.” premium spandex manufacturer, having started with a 400-tonne monthly production capacity. Over the last decade, the company has grown fivefold to a 2000-tonne monthly capacity. According to Sandeep Tayal, Head of Export Sales, “Bangladesh is an important market for us.” Sandeep Tayal, Head of Export Sales, Indorama Rahul Singh, Head of Business Development at Indorama said, “As of right now, we are working with many reputed mills in Bangladesh and supplying regular spandex, , has everything it needs to prosper today.” Surge of new Indian textile companies The number of Indian businesses venturing into Bangladesh’s textile market has increased dramatically in recent years. These companies see a huge opportunity in the growing demand for textile products in both domestic and international markets. This year, Tirupati Balaji Exim (P) Ltd., an Indian company with a massive annual capacity for fibres (3650 metric tonnes) with approximately 2.5 million metres produced annually for fabrics, made its business debut in Bangladesh. Alpine Expo Tex (P) Ltd., with an annual turnover of roughly Rs.150 crore and offering woven fabrics, also anticipates new business coming up in Bangladesh. Bangladesh is now receiving recycled cotton exports from KS Spinning too, which has a capacity of 250 metric tonnes. Other companies aiming to thrive strongly in Bangladesh include Candour Textiles Pvt. Ltd., Kuku Fashion Pvt. Ltd., CTA Apparels and many more. Payment system poses a roadblock The problem of Letters of Credit (LC) is one of the main obstacles for Indian businesses in Bangladesh. In international trade, LCs are a common form of payment where a bank guarantees the buyer’s payment to the seller. It is supposed to be cleared that the payment to the seller must be made to them within three or four days of the items being received, which could take up to seven-ten days. But now it has allegedly been reported that payments are being made after 30-35 or even 40 days in certain circumstances. One of the prominent companies, Texperts has been exporting 100-145 containers of yarn and around 200-300 tonnes of fabric every month to Bangladesh for the last 20 years and has nearly 20 per cent – 30 per cent of import in Bangladesh. The Deputy General Manager of the company, Abhik Dutta emphasised, “The primary problems we are now dealing with are foreign exchange and banking payments; if they worsen, we would have a huge problem.” All the companies that deal with this issue, such as Goel Polyfab, which sells 12 lakh metres of fabric annually in Bangladesh, have the same concerns and obstacles to overcome. However, the Indian textile sector still believes Bangladesh holds a lot of promise, despite these challenges. The nation is a desirable place to invest because of its advantageous trade policies, stable political climate and strategic location.
Source: Apparel Resource
Minister of state for environment Sanjay Sharma announced in the state assembly on Friday that a four-member committee would be formed to tackle pollution caused by industrial units, especially textile industries and process houses, in Bhilwara district. “The committee will be led by the district collector of Bhilwara. It will include key officials such as the regional officer of the district pollution control board, an officer from the district industry centre, and an officer from the agriculture department. The committee will also seek suggestions from public representatives on pollution prevention strategies and make decisions based on their recommendations,” said Sharma in his reply to a query from Mandal MLA Udai Lal Bhadana during Question Hour. Bhadana had asked about steps the govt was taking to tackle pollutants from textile mills affecting agricultural land in the region. Sharma assured that the govt would enforce strict measures against industrial units that fail to comply with the committee’s guidelines. He stressed that the state pollution control board has granted production consent to textile industries with the condition of zero liquid discharge to mitigate environmental impact.
Source: Times of India
Revenue Secretary Sanjay Malhotra on Saturday said the government remains committed to fairness, simplicity and equity in the tax system. He said the government's ongoing efforts are to simplify tax laws, improve tax compliance, and support economic growth through prudent fiscal policies and the Union budget was in that direction. Union Finance Minister Nirmala Sitharaman had said a comprehensive review would be done on direct taxes over the next six months aiming at making direct taxes simpler to reduce disputes. "Tax growth had reached 14 per cent, outpacing GDP growth due to better compliance and collection efficiency," Malhotra said in a post-budget interactive session with stakeholders. He commended both tax administrators and taxpayers for their efforts and asked for continued cooperation to further enhance tax compliance and administration. Malhotra assured taxpayers that the government aims to simplify and make it easier to understand and make the process as hassle-free as possible. He emphasized that the administration seeks to build trust with taxpayers and aims to minimise harassment and inconvenience for honest taxpayers. "For those found dishonest, the law would be applied rigorously," he said. While explaining the removal of indexation for long-term capital gains, Malhotra stated that it should not hurt the masses as the capital gains tax was increased marginally for the "high-income group" only. The revenue secretary also touched on the broader economic goals reflected in the budget, focusing on growth, employment, and development across various sectors. He underscored the importance of fiscally responsible spending to avoid burdening future generations. Malhotra also addressed specific sectors, such as the leather, textile, diamond, and marine sectors, which have seen reductions in customs duties to enhance competitiveness. He highlighted the government's support for industries through measures like the removal of angel tax and reduction of corporate tax rates of foreign companies to attract both domestic and international investment.
Source: Business Standard
After nearly finalising a pact, the proposed free-trade agreement (FTA) between India and Oman has hit a speed breaker, amid differences over market access for petrochemical products, people aware of the matter said. The main area of contention has been the pressure on Delhi to give greater market access for polyethylene and polypropylene intermediates used to manufacture plastics, medical devices, electronics and automobile components. These petrochemical products attract 7.5 per cent import duty in India. Both sides had almost concluded the trade agreement and the process of legal scrubbing of text of the proposed FTA had also started in February.
Source: Business Standard
India is seeking customs duty concession on a number of goods including cars, commercial vehicles and machinery from Sri Lanka under a comprehensive free trade agreement (FTA), talks for which are underway, an official said. India has also sought easier visa norms to further facilitate entry of professionals from here, the official said. The 14th round of talks between senior officials of India and Sri Lanka was concluded recently in Colombo. Issues which came up for the talks included rules of origin, goods, services, and technical barriers for trade. On the other hand, Sri Lanka has sought removal of a quota on apparel exports to India. The island nation is also asking for duty concessions on tea and certain agricultural commodities. The official said that as elections are announced in Sri Lanka, the next round of negotiations between the two countries will be held after that. The two nations have already implemented a free trade agreement in goods and now they are negotiating to expand the pact by including more goods and services. The India-Sri Lanka Free Trade Agreement (ISFTA) came into force in March 2000. It enhanced economic relations between the two countries by reducing tariffs on a wide range of goods. Since the original ISFTA focused solely on goods, both countries have been negotiating for several years to expand it into a Comprehensive Economic Partnership Agreement (CEPA), which would include services, investment, and other areas of economic cooperation. Under the current FTA, India allowed limited imports of garments from Sri Lanka at a 50 per cent tariff (or customs duty) concession for up to 8 million pieces annually, with a requirement that 6 million of these pieces use Indian fabric. Additionally, India offered a 50 per cent tariff concession on up to 15 million kg of tea from Sri Lanka each year. Think tank Global Trade Research Initiative (GTRI) said that Sri Lanka may be seeking removal of the quota on garments, especially considering that India has allowed duty-free imports of garments from Bangladesh under the South Asia Free Trade Agreement (SAFTA) for Least Developed Countries (LDCs). "However agreeing to this request may not be easy for India as allowing duty free imports has led to a significant increase in garment imports from Bangladesh, growing from USD 144.25 million in FY'2014 to USD 739.06 million in FY'2024, a cumulative growth of 412.34 per cent," GTRI Founder Ajay Srivastava said. Sri Lanka has placed items like automobiles and electrical goods on its negative list, restricting their import. Since the implementation of the ISFTA, trade between the two countries has experienced fair growth. India's exports to Sri Lanka increased from USD 499.3 million in FY'2000 to USD 4.17 billion in 2023-24, a cumulative growth of 735.2 per cent. Meanwhile, imports grew from USD 44.3 million to USD 1.4 billion over the same period. In the last fiscal, India's key exports to Sri Lanka included petroleum products (USD 704 million), cotton (USD 260 million), pharmaceuticals (USD 255 million), refined sugar (USD 206 million), fabric (USD 223 million), machinery (USD 171 million), pepper (USD 90.9 million), car and motorcycle parts (USD 79.3 million), onions (USD 63.4 million), and pulses (USD 32 million). Notably, India's exports to Sri Lanka fell from USD 5.1 billion in FY'2023 to USD 4.17 billion in FY'2024, primarily due to a significant reduction in petroleum product exports, which declined from USD 1.78 billion to USD 704 million, GTRI said. India's major imports from Sri Lanka in FY 2024 were coffee (USD 103.7 million), garments (USD 55.65 million), animal feed (USD 72.2 million), areca nut (USD 65.5million), light pepper (USD 44.4 million), rough diamonds (USD 26.9 million), and rubber (USD 26.7 million). A Sakthivel, Apparel Export Promotion Council Southern Region in-charge, said that India should not extend concessions for garments to Sri Lanka, as the domestic industry could be impacted because of that. "We too make those garments and I think India should not give more concessions," Sakthivel said.
Source: Business Standard
Ahead of the goods and services tax rate rationalisation exercise, the Central Board of Indirect Taxes and Customs has initiated a process of overhauling the existing product classification under the indirect taxes regime to further simplify it and remove ambiguity. ADVERTISEMENT The move is to reduce piling tax disputes and litigation the industry faced due to ambiguity in product classification. The board has asked the fitment committee under the GST council to undertake a comprehensive report examination of classification of goods focussing on products with similar composition but placed in different categories and under different tax rates. The committee is expected to present its report in the next GST council meeting likely in August last week, ET has learnt. Though the process may take longer time "This is going to be a comprehensive and complete overhauling exercise before we look at rate slabs," a senior official told ET adding that no rate rationalisation is possible until classification related ambiguities are fixed, a challenge faced by the earlier group of ministers on rate rationalisation. This is a significant step as the GST tax slab is determined on the basis of product classification, and GST rate reform may not be feasible without rationalising the complex existing classification system, which is based on harmonised system of nomenclature (HSN) codes containing 21 sections with 1,244 headings Citing an example, the official said that flavoured milk attracts 5% tax if classified as milk, but 12% if classified as a beverage. The official added that there are at least 60-70 items, and 18-20 services where minor tweaks in the composition or condition change the tax slab, raising unforeseen tax demand from the industry that is further complicated by multiple rulings by various courts. Experts said the classification ambiguity is posing great tax uncertainty and challenges for the industry and resolving classification issues remains crucial before rationalising GST and determining the correct rates for goods. "The complexity of GST classification remains a significant challenge for both businesses and tax authorities and the current GST system, with its multiple tax rates and frequent updates, often causing confusion and disputes about the correct GST application," Saurabh Agarwal, Partner, EY, told ET. He added that different GST rates for similar products, like roti (5%) versus paratha (18%) and raw meat (5%) versus prepared meat (12%), highlight these challenges. Therefore, the government should focus on resolving these classification issues as a step before rate rationalization, as the existing classification disputes may persist even after the rates are adjusted," Agarwal added. At present the GST structure has four tax slabs - 5%, 12%, 18%, and 28%. The Centre is looking at the feasibility of a three-rate structure, indicated by the CBIC chairman Sanjay Kumar Agarwal in his post budget interview to ET last week. The GST council will start the discussions on the rate rationalization in its upcoming meeting under the newly reconstituted GoM headed by Bihar minister Samrat Chaudhary.
Source: Economic Times
Member of Parliament (Rajya Sabha) S. Selvaganabathy has requested the Central Government to establish a textile park in Puducherry. In a release, he said he has brought to the notice of Rajya Sabha the necessity of establishing the park in Puducherry. Attention of the Parliament was drawn to the once flourishing textile industry in the Union Territory. Around 8,000 people used to work in the textile mills here, he said. Mr Selvaganabathy said the land available with the three defunct textile mills was sufficient for setting up the park. The Centre was requested to include UT under the Pradhan Mantri Mega Integrated Textile Region and Apparel Park scheme for establishing the textile park. The setting up of the park would help in providing job to hundreds of people, the MP said. The Centre was also requested to set up a Sainik School in UT. The Puducherry government would assist in providing land and infrastructure for the school. The Union Government should start a residential Sainik School in Puducherry, he demanded.
Source: The Hindu
New Delhi [India], August 4 (ANI): The Textile Ministry is organising a fortnight-long exhibition called “VIRAASAT,” to celebrate the 10th National Handloom Day, which commenced at Handloom Haat in Janpath on Saturday. The National Handloom Development Corporation Ltd (NHDC), an arm of the Textiles Ministry is organising this handloom expo, the ministry said in a release on Sunday. Handloom products drawn from some of the exotic locations of India were on display and sale at the exhibition, the release added. During the event, several activities will be organised at the Handloom Haat like 75 stalls for handloom weavers and artisans to directly retail the products, a Curated theme display of exquisite handloom of India, Workshops on natural dyes, Kasturi cotton, design and exports, Live loom demonstration, Folk dances of India, Delicious regional cuisines etc. Prime Minister during Mann ki Baat (112th episode) appreciated that the work of handloom artisans is spread across every corner of the country and the way handloom products have made their place in the hearts of people is very successful, tremendous, and also urged to upload photos with local products on social media with the hashtag ‘#MyProductMyPride’. In 2015, the Government of India decided to commemorate the 7th of August every year as National Handloom Day. The first National Handloom Day was held on 7th August 2015 by PM Modi in Chennai. On this day, the handloom weaving community is honoured and the contribution of this sector in the socio-economic development of this country is highlighted. The Indian handloom sector employs 35 lakh persons directly or indirectly which is next only to the agricultural sector in the country, as per the Textile Ministry. The government of India has launched various schemes for Handloom for branding highquality products with zero defects and zero effect on the environment to encourage and give a distinct identity to the products, apart from highlighting the uniqueness of the products. The Ministry said that it is encouraging all the exhibitors at the exhibition to display their exquisite products and thus aim to improve the market for Handloom products and earnings of the handloom community. The uniqueness of products such as Banarasi, Jamdani, Baluchari, Madhubani, Kosa, Ikkat, Patola, Tussar Silk, Maheshwari, Moirang Phee, Baluchari, Phulkari, Laheriya, Khandua and Tangaliya to name a few attracts customers across the globe with exclusives weaves, designs, and traditional motifs.
Source: The Print
Country's apparel and textile manufacturers have decided to keep their production units closed until further instruction amid growing unrest across the country that left scores of people dead on Sunday. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the apex body of the readymade garment sector, on Sunday requested all its members to keep their units shut due to the emerging situation. Meanwhile, the member mills of the Bangladesh Textile Mills Association (BTMA) will also remain closed during the three-day general holidays beginning today (Monday). The trade body announced the closure following a fire set at one of its member mills in Gazipur on Sunday. "In view of the deteriorated law and order situation in the country and the government's declaration of general holiday on August 5-7, all the BTMA member mills will remain closed during this period," BTMA Secretary General Zakir said in a text message. The decision on opening of the mills will be taken based on the situation and further government declaration, he added. A spinning mill named Outpace Spinning in Gazipur was burnt as outsiders set fire on Sunday noon, a BTMA official said, adding there were other incidents in some mills. In Narayanganj, production in most ready-made garment factories remained suspended on Sunday amid the ongoing unrest. According to factory owners, workers entered their respective workplaces on Sunday morning and started production, but some outsiders provoked them to leave the factories. As a result, workers of Eurotex Knitwear Ltd. and IFS Texwear Pvt Ltd. left their workplaces and took to the streets. Following them, workers of several other factories located at Narayanganj BSCIC and Fatullah came out, prompting other factory owners to declare a holiday to protect their establishments, said Bangladesh Knitwear Manufacturers and Exporters Association (BKMEA) Vice President Fazle Shamim Ehsan. Talking to the FE, Abdullah Hil Rakib, BGMEA vice-president, said production in some factories in Gazipur came to a halt as the workers left their workplaces after 3:00 pm. Scores of people were killed in clashes among protesters, members of law-enforcement agencies and members of front organisations of the ruling party across the country. Mr Rakib, however, said they would try to keep operations on Monday like that of what they tried during the last holidays by using workers' identity cards as curfew passes. He also confirmed a few incidents of bringing workers out of the factories and said that most factories in Gazipur were in operation on Sunday. However, they will try to hold a meeting with the government to seek permission for operating the units during the curfew and general holidays, he added.
Source: Financial Express
Italy, a hub for many of the world's luxury manufacturers, is already significantly affected by the economic downturn. The slowdown that began at the end of 2023 in the textile and apparel sector has continued and intensified. By mid-2024, 75% of companies saw their revenue decrease, with a quarter of them experiencing declines of nearly 20% or more. This grim picture is painted by the research office of Sistema Moda Italia, the employer's federation for the Italian fashion industry. Economic instability, inflation, high interest rates, and rising energy costs have led to reduced consumer purchasing power, further undermined by geopolitical tensions. This challenging environment is a major concern for the Italian fashion industry, as highlighted by SMI’s survey. Only 17% of the entrepreneurs surveyed reported an increase in their revenue in the first six months of the year. SMI thus estimates an average sales decrease of 5.8% compared to the same period in 2023. Industry players do not anticipate an improvement in the second half of the year. In fact, while 48% believe market conditions will stabilize, 33% expect further deterioration, and only 19% foresee any improvement. The survey, conducted in early July across various regions, primarily among small and medium-sized enterprises (SMEs), reveals that only 19% of companies expect their sales to increase for the rest of the year. Meanwhile, 61% anticipate a slowdown, and 20% believe their sales will remain stable. SMI predicts that the first nine months of 2024 will close with a 6.2% decrease in revenue for the textile and clothing sector. For the entire year, expectations remain bleak, with 64% of entrepreneurs predicting they will end 2024 below 2023 levels, and only 11% hoping for an improvement. The majority of operators, 70%, do not expect recovery until early 2025.
A call for the urgent adoption of a strategic plan
While employment levels in the sector, which employs nearly 300,000 people, remain relatively stable according to 54% of entrepreneurs (with an increase noted by 26% of respondents), 20% report a reduction in staff. Regarding social safety nets, 26% of those surveyed admit to having used them in the second quarter. When utilized, technical unemployment often affected a large portion of the workforce, ranging from 60% to over 80%. This trend is expected to intensify, with one in three companies (33%) planning to use social safety nets in the third quarter.
"The historic period we are experiencing presents increasing challenges for the textile and fashion industry: it is necessary to invigorate the entire production chain through targeted measures, strengthening strategic relationships with Europe and key markets," stated Sergio Tamborini, president of SMI, in a press release. He calls for "the urgent adoption of a strategic plan to preserve creative capital, human capital, and industrial technological capabilities."
The entire Italian fashion system, including leather goods and accessories, surpassed 110 billion euros in revenue in 2023, up 5% from 2022. The textile-clothing sector alone reached 64 billion euros, with 70% generated from exports, and men's fashion nearly 12 billion euros. "If we close 2024 with the same values as in 2023, we can consider ourselves fortunate," Sergio Tamborini confided in a recent interview.
Source: Fashion Network
