India and Russia are exploring a dynamic rupee-rouble rate to overcome dollar trade barriers in the wake of US sanctions on Moscow, according to The Economic Times report. The development comes as Russia has accumulated a significant amount in rupees while trading with India since the outbreak of the Ukraine war in February 2022.
Currently, banks handling export-import payments or any capital flows between the two countries have to take the dollar route in converting the currencies. This means carrying out two, almost simultaneous, transactions – of rupee to US dollar, and dollars to rouble – in arriving at a rupee-rouble exchange rate. Additionally, India and Russia are also making attempts to put in place a payment confirmation mechanism. These moves will likely be discussed during a meeting of senior central bank officials and bankers in Moscow this week, sources told The Economic Times. RBI deputy governor T Rabi Sankar and top officials of some public sector banks are part of the team visiting Moscow for a meeting of the India-Russia Joint Business Council for banking and finance.
RBI reviews Russian rupee usage
This comes after the RBI took feedback from banks and financial institutions dealing with Russian funds registered in India. Earlier, Russian financial institutions sounded out the RBI on a mechanism to let them use rupees lying in special accounts in India for investment in stocks and securities in India. Notably, the accumulated rupee balance is lying in vostro accounts that Russian banks have with Indian banks. The accumulation of rupee in Moscow is an outcome of India paying in its local currency for Russian imports.
Rupee-Rouble trade: All eyes on RBI Previously, RBI had allowed the investment of the rupee surplus in vostro accounts in Indian treasury bills and government bonds. However, the rupee-rouble trade may further gather pace if RBI permits the transfer of rupees lying in the trade balance pool to the rupee accounts of Russian foreign portfolio investors. If RBI approval comes through, the fund could invest the amount in securities listed on Indian exchanges and transfer equivalent amounts in roubles to Russian companies that have exported to India but have not accepted payments in rupees.
Exploring non-dollar trade settlements Besides, an option like the India-UAE trade mechanism can also be explored. Under the India-UAE system, aimed at settlement of trades in non-dollar currencies, exporters and importers from both countries invoice trades and make payments in rupee or dirham while the central banks agree to accept the foreign currency for the domestic one. In an arrangement of this kind, the presence of the central banks, playing the role of a market-maker and accepting foreign currency lends a degree of comfort. The same could be replicated for India-Russia trade, especially for larger payments for the purchase of oil and other heavy imports.
Source: Business Standard
Textiles, fabrics, and apparel have been central to India’s identity. In ancient Greece and Babylon, the very word “cotton” was regarded as synonymous with the country’s name. The trade of Indian fabrics formed famed global routes. Yet today, Indian exports in this sector face challenges. World Trade Organization statistics report put India in sixth position in terms of the export of finished clothing. According to the report, India’s clothing exports in 2022 amounted to $18 billion, while in comparison, Bangladesh exported $45 billion worth of clothing. An even more worrying trend is that India’s share in world exports in clothing in 2022 was 3.1%, a rise of only 0.1% from 2000. At the same time, Bangladesh went from 2.6% to 7.9%. Currently, it is one of India’s other neighbour that dominates clothing exports. China, with a total of $182 billion exports in 2022, captures 31.7% of world exports in this sector. The aforementioned outlook paints a picture where alarm bells are ringing for India in clothing export (it can also be understood as readymade garments). However, India has some important competitive advantages. There is easy availability of raw material for apparel manufacturing. India produced 23.83% of the world’s cotton in 2022-23. And it consumes 22.4% of the world’s cotton. Additionally, India is the second largest producer of silk globally; and 95% of the world’s hand-woven fabrics are manufactured in India. The textiles and apparel industry directly employs 45 million people, and another 100 million in allied industries. However, are these advantages sufficient for India to increase its level of value addition in the textile sector? Apparel, which is the last stage of a textile value chain, is also the stage where maximum value addition happens. While India, with a $7,205 million trade balance, is a net exporter in textile products, its readymade garment (RMG) exports have been lowest in 2023-24 in comparison to the years following the pandemic. Cumulatively, India’s RMG exports for April-March 2023-24 were $14,536.2 million, showing a decline of 10.2% over April-March 2022-23, a decline of 9.3 % over April-March 2021-22, and a growth of 18.3% over April-March 2020-21, shows data compiled by the Apparel Export Promotion Council (AEPC). The figures are based on the Directorate General of Commercial Intelligence and Statistics and provisional data released on the Press Information Bureau by the ministry of commerce and industry on April 15. Further, in AEPC’s view, of the top 15 apparel products that are in high demand globally, only five are Indian exports, as against 11 by Bangladesh, 14 by Vietnam, and nine by Turkey. The biggest impediment to India’s apparel industry has been its poor economy of scale. The Economic Survey 2024 mentions that 80% of the textile and apparel producers are micro, small and medium enterprises, where the average scale of operations is relatively small. The manufacturing capacity is further marred by the fragmented nature of the apparel sector. While Maharashtra, Gujarat, and Tamil Nadu are important sources of raw materials for the industry, the spinning facilities are predominantly in the southern states. This leads to delays and higher transportation costs, thereby limiting efficient large-scale manufacturing and increasing the cost of production. The powerloom sector, which produces 60% of the fabric meant for export and 58.4% of the total cloth produced in the country, further contributes to the issue. In Tamil Nadu, for example, demands have risen to exempt the powerloom sector from a recent electricity tariff hike. According to data published on the National Import-Export for Yearly Analysis of Trade portal, Tamil Nadu exported 22.58% of textiles, the highest percentage for an Indian state. Yet, the textile industry is struggling in the state. According to the Tamil Nadu Federation of Powerlooms Association cited in an article in The Hindu last month, the economic burden of this hike can have a severe impact at a time when looms are being sold as scrap on account of lack of orders and weavers not being able to run them due to several other reasons. In addition, the Economic Survey 2024 highlighted technological obsolescence as one significant contributor to the problems in the textile and apparel industry. Lack of capacity is thus a serious issue. As India aspires to raise its garment exports to $40 billion by 2030, AEPC estimates suggest an additional 1,200 manufacturing units are needed. However, the current growth rate indicates that only around 200 new units are likely to be established by then. To some extent, geopolitical crises prevalent all over the world are also responsible for India’s falling textile exports. An FE article published last month mentioned that globally, freight charges have risen by 40-50%, contributing to increased cost of production. Furthermore, with importers in Europe and the US still not maintaining inventories, the manufacturers’ order book cycle has reduced to three months, compared to six months previously. Nevertheless, India needs to find stronger and deeper foundations to build its readymade garment manufacturing and export set-up for the future. Moving India’s global value chain integration toward higher value-generating downstream activities such as readymade garments (or clothing or apparel) and capacity creation is important. Investment in technology upgrade of weaving and processing segments is required. At the same time, improving the brand image of Indian apparel and garments is needed to increase the unit value realisation. India’s textiles have been unrivalled throughout history. Its diverse weather patterns, geographic regions, and cultures created unique fabrics and crafts like the golden silks of Assam, Banarasi silk of Varanasi, and pashmina of Kashmir. In contemporary times, as India’s garment and textile manufacturing has suffered, it is necessary to look at past errors and appreciate the reasons for the gaps in performance.
Source: Financial Express
Rate rationalisation, covering the future course for tax slabs and correction of inverted duty structure, under the Goods and Services Tax (GST) regime, notices being sent to companies for their overseas operations, and the recent debate over tax rate on insurance premium are likely to be discussed in the GST Council meeting to be held next month. In an official statement on Tuesday, the Council said the next meeting would be held on September 9. “The 54th Meeting of the GST Council will be held on 9th September, 2024 at New Delhi,” GST Council said in a post on social media platform X. Before the Council meet, officers from states and Centre will meet on September 8. “There is the unfinished agenda of rate rationalisation. A move towards it would require initial steps in the form of discussions within the ministerial committee. The committee would be asked to present the work done so far for a wide ranging discussion in the Council. It also needs to be looked into whether a timeline has to be fixed for the ministerial committee to submit its recommendations on rate rationalisation and changes in the slabs,” an official said. The Council is also expected to take up the notices being sent to companies, especially for their overseas operations even after having issued a clarificatory circular earlier. GST authorities had earlier this month made a partial reversal from their earlier position by withdrawing notice of Rs 3,898 crore to tech major Infosys out of the total tax demand of Rs 32,403 crore raised earlier in July-end for the five-year period starting 2017-18. In its previous meeting held in June, the GST Council, which had met for the first time since the formation of the new Union government, tweaked tax rates on some items, and took a series of steps to bring down litigation and ease compliance for taxpayers. The overall GST rate rationalisation and streamlining of the slab structure, which falls into four broad categories of 5 per cent, 12 per cent, 18 per cent and 28 per cent, has been a long pending issue. After the previous Council meeting on June 23, Sitharaman had said the next meeting of the GST Council the Group of Ministers (GoM) on rate rationalisation under Bihar Deputy Chief Minister Sumant Chaudhary, will give a presentation on the status of the work and aspects covered by the panel and work pending before the panel. “There will be a presentation by the GoM irrespective of whether the report is draft… and then Council will start the discussion on rate rationalisation in the next meeting,” Sitharaman had said. In September 2021, the GST Council had set up a GoM to examine rate rationalisation. The committee had submitted an interim report in June 2022. While there have been internal discussions about merger of slabs or creation of a new slab in between 12 per cent and 18 per cent, the concerns have centred around whether it would create any revenue losses for the states and the Centre. The concern of maintaining revenue neutrality has weighed on such discussions earlier. Revenue neutrality is seen as a crucial factor as a study by the RBI had earlier shown that while the Chief Economic Advisor’s report had pegged the revenue neutral rate at 15.3 per cent, the weighted average GST rate stood at 14.4 per cent in May 2017, and subsequently dropped to 11.6 per cent by September 2019. Rate rationalisation is a crucial step towards simplifying India’s GST regime, Saurabh Agarwal, Tax Partner, EY said. “To ensure the process is effective, it is imperative to consider the overall tax burden on end consumers when reassessing tax slabs. Prioritising sunrise sectors, such as new energy, is essential to drive down final product prices, including those in business-to-business transactions. Additionally, addressing classification ambiguities is vital during this exercise. Wide-ranging industry consultations before implementing new rates will help align stakeholder expectations and facilitate a smooth transition,” he said.
Source: Indian Express
The Swiss company Benninger, renowned for its innovative textile machinery, has introduced its latest marvel, the Fabric Master, to the Indian market. This soft flow machine is already making waves globally, with installations in Europe, the USA, Peru, Central America and Bangladesh. Now, it is set to transform the Indian textile industry, with production taking place at Benninger’s High Tech Fabrication facility in Pune. The first Fabric Master in India has been operational for a year at Amarnath Dyeing And Bleaching Works Private Limited. The machine’s outstanding performance has led Amarnath to order a second unit, underscoring their complete satisfaction with its capabilities. This second machine is now ready to leave the Benninger Works in Pune, marking another milestone in the FabricMaster’s journey. “This innovative technology transforms our production capabilities, setting new benchmarks in the industry. Our new machines will help us reach our goal of becoming the leader in quality fabric processing while caring about ecology. The machines will help us do so by enhancing our efficiency, reducing waste, and minimizing our environmental impact. This investment not only underscores our commitment to excellence but also to sustainable practices that benefit both our customers and the planet,” said Sudarshan Chandak, director at Amarnath Dyeing And Bleaching Works Private Limited. Excellent dyeing performance The Fabric Master is designed to handle the most challenging dyeing tasks with ease. It excels in dyeing difficult Lycra blends of Cotton, Rayon, Nylon, and Modal fabrics in open width form, without any rope marks or edge curling. The Fabric Master ensures optimal dye penetration and color consistency achieving uniform fabric handling during the dyeing process. This is ensured thanks to the Fabric Master’s nozzle which can be precisely adjusted based on the weight of the fabric being dyed. Lightweight fabrics benefit from low liquor volume, while heavier fabrics are treated with increased flow. Furthermore, the internal fabric plaiter operates at varying speeds, accommodating different fabric types. Moreover, its automated add tank ensures accurate chemical addition simplifying chemical dosing and mixing. Key factors are minimal consumption of water, steam, chemicals and dyestuff, to ensure right-first-time results with lowest waste. The FabricMaster boasts an optimized chamber design, resulting in the lowest liquor ratio among water-driven piece dyeing machines. The carbon footprint of the Fabric Master is designed to be the future industry benchmark for sustainability. Why Fabric Master also stands out The Fabric Master’s self-cleaning lint filter keeps the system running smoothly to enhance productivity. It monitors lint accumulation and automatically cleans itself, minimizing downtime and maintenance hassles. Furthermore, the Fabric Master’s high-capacity heat exchanger accelerates heating gradients, reducing cycle times. After dyeing, unloading the fabric swiftly is crucial. The Fabric Master features a frequency controlled unloading winch, ensuring efficient fabric removal without compromising quality. The fabric lift from the chamber to the reel is less than half that of competitors’ machines, improving fabric transport. The Fabric Master is a testament to Benninger’s commitment to innovation and quality. As it continues to gain traction in the Indian market, it promises to revolutionize fabric dyeing processes, setting new standards for efficiency, quality and precision to textile dyeing processes.
Source: Textile Magazine
The Indian textile and knitted fabric industry is facing a “bit of uncertainty” amid the ongoing political developments in the neighbouring country of Bangladesh, Finance Minister Nirmala Sitharaman said on Saturday, August 10. “I have held discussions on our textile garment investments in Bangladesh, many of which are from Tamil Nadu. The investments went there in good faith and they did well having gone there; exports from Bangladesh have also increased,” Sitharaman said at the media briefing held after the Central Board of Directors of the Reserve Bank of India (RBI). Amid the student protests and ongoing political turmoil in Bangladesh, Sheikh Hasina resigned as the Prime Minister and fled the country last week. Soon after Parliament was dissolved leading to the formation of an interim government backed by the Bangladesh army. Nobel laureate Muhammad Yunus took oath on Thursday as the head of the interim government. Bangladesh is facing its worst political crisis since its 53 years of independence. The country is an important partner for India’s textile industry. It serves as a crucial market for Indian textile exports and a significant manufacturing base for garments that are exported globally.
Significance of India-Bangladesh Trade:
India is a significant exporter of cotton and synthetic fibers to Bangladesh, serving as a crucial raw material supplier for the country’s textile industry. Ready-made garments represent more than 85 per cent of Bangladesh’s merchandise exports and over 70 per cent of its total exports. In trade, Bangladesh is India’s biggest partner in the subcontinent, and India is Bangladesh’s second biggest partner in Asia after China. Their total bilateral trade amounted to $13 billion in the financial year 2023-24, according to the Commerce Ministry. Bangladesh has witnessed rapid growth in its exports of readymade garments and textile products, making it the second-largest exporter of such products in the world after China. In 2022, Bangladesh’s textile exports were worth $45 billion which is more than double that of China. Shares of Indian manufacturers including Gokaldas Exports, Vardhman Textiles, Sangam India and GHCL Textiles have declined up to 6 per cent in the last one month as of August 13, 2024.
How the Bangladesh Political Crisis will impact Indian textile market:
The spinning sector is expected to face short-term issues as Bangladesh is a major buyer of Indian cotton yarn and fabrics. Apparel imports from Bangladesh have already reduced in the past few months, and a further decline in imports is anticipated. Consequently, delays in the delivery of goods for India’s upcoming festival season will help Indian manufacturers to get more orders from domestic retailers. According to experts, the Bangladesh crisis will affect the Indian textile industry in the short term. However, some companies from the textile and spinning industries are expected to benefit from the crisis.
Indian companies with manufacturing operations in the crisis-hit country will face challenges in maintaining their production flow, leading to delays and potential shortages in the market. This disruption could affect the availability of products and might force companies to seek alternatives, investment services provider ICICI Direct said in a report. “While we are concerned about the impact on the supply chain and the potential delays and disruptions it might cause, we are hopeful that the situation will improve soon,” Chandrima Chatterjee, Secretary General, Confederation of Indian Textile Industry (CITI) was quoted as saying by ICICI Direct. In 2022, China and Hong Kong were the largest exporters of textile and apparel products, constituting around 34.4 per cent of global exports. Bangladesh was the second largest exporter of textile and apparel products, as per CITI report. Neeraj Jain, joint managing director at Vardhman Textiles Ltd said Bangladesh is the biggest customer for yarn exports as of now. With around 25 per cent to 30 per cent of exports going to Bangladesh, any disruption over there will create issues here as well. “However, this situation is relatively minor and has not yet impacted demand. But unless it is resolved or it continues for a long period, then there could be a concern. But as of now, there doesn’t seem to be an issue,” Jain told analysts during the earnings call.
Blessing in disguise to Indian textile manufactures:
Industry experts anticipate that India could gain an additional $300-400 million in business per month if 10-11 per cent of Bangladesh’s export orders are moved to Indian textile hubs like Tiruppur. Bangladesh’s monthly apparel exports are valued between $3.5-3.8 billion. The country has a significant market share in the European Union, the United Kingdom, and the United States. On the other hand, India’s current monthly exports range from $1.3-1.5 billion. “Indian textile industry will certainly stand to benefit since importers from Bangladesh will look for opportunities in countries like India. Indian textile hub Tirupur can benefit from this crisis,” Dr VK Vijayakumar, chief investment strategist at Geojit Financial Services said. Sharad Chandra Shukla, director at Mehta Equities Ltd says as China was having a difference of opinion with the Western world, the China +1 strategy emerged. This helped Bangladesh, India and a few other countries in South East Asia. However, Bangladesh had an advantage due to cheap labour costs and also lower logistic costs due to the nearness to ports. Around 25 per cent of the manufacturing units in Bangladesh are owned by Indian companies like Shahi Exports, House of Pearl Fashions, and Gokaldas Images. With the ongoing crises in Bangladesh, the companies might shift their base back to India. According to central bank data, Bangladesh imported RMG raw materials worth $7.92 billion in the first half of fiscal year 2024. According to Shukla, it is an opportunity for all textile exporting countries in South East Asia but it will depend on the efficiency of the manufacturing units as India has its own set of problems like outdated labour laws and higher logistic costs due to poor infrastructure.
Another major challenge that Indian companies face in Bangladesh is the delay in payments to 30-35 days instead of the normal 7-10 days cycle. Delay in the issue of Letter of Credit (LC), poses a major roadblock for companies having substantial export volumes to Bangladesh. “Since its early days, we do not know how the Bangladesh crisis will unfold. If the new government succeeds in restoring law and order the situation will be back to normal,” Vijayakumar said. Former Bangladesh Bank governor Salehuddin Ahmed was given the charge of the Finance and Planning Ministries by interim leader Muhammad Yunus.
Ahmed said the government's priority is to restore the trust of common people in the banks while resuming the operations of the central bank. The country's economy has slowed down because of various reasons. The goal will be to revive the economy as quickly as possible. Once the economy comes to a standstill, it becomes quite difficult to restart it. We do not want it to come to a halt. The political turmoil in Bangladesh presents an opportunity for India’s textile and apparel industry. With the capacity to absorb additional orders and established trade relations, Indian companies can gain a major share of the diverted orders and strengthen their presence in the global market. However, challenges such as payment delays and lack of infrastructure should be addressed to fully capitalize on this opportunity.
Source: Out Look Business
A workshop focused on the adoption of green technology to enhance the competitiveness and sustainability of Micro, Small, and Medium Enterprises (MSMEs) was held at Madikonda Textile Park on Tuesday. The event was part of the SIDBI Cluster Intervention Programme (CIP) and brought together key stakeholders to address the challenges faced by MSMEs, particularly in the Power Loom Cluster in Warangal. Smriti Bajpai, Assistant General Manager of SIDBI, New Delhi, highlighted the importance of collaboration in fostering the growth of MSME clusters. She emphasized the need to strengthen the Business Development Service provider network and ecosystem, particularly in Warangal’s Power Loom Cluster. Smriti Bajpai reaffirmed SIDBI’s commitment to cluster development and stressed the necessity of close cooperation with key stakeholders to devise sustainable strategies tailored to the sector’s unique challenges. The workshop’s primary goal was to address the specific issues faced by MSMEs within clusters, focusing on capacity enhancement, energy efficiency, knowledge sharing, credit linkage and technology adoption. The Power Loom Cluster in Warangal was identified as a key area for intervention.
Prof. V. Padmanand, Partner at Grant Thornton Bharat LLP, outlined the program’s objectives and the planned interventions for the Power Loom Cluster. He detailed several best practices, including the establishment of a raw material bank, design development, skill training, LEAN practices, buyer-seller meets and the adoption of green technology. Leaders from the Kakatiya Textile Weavers Welfare Association, including President V. Sri Ramulu and Secretary D. Ranga Swamy, urged the guests present to support the weavers through power subsidies and other benefits. Warangal MP Kadiyam Kavya and Wardhannapet MLA K.R. Nagaraju assured the weavers that their concerns would be discussed in detail with the Chief Minister A. Revanth Reddy in a forthcoming meeting. The workshop was a collaborative effort between the Small Industries Development Bank of India (SIDBI), Grant Thornton Bharat LLP, and the Kakatiya Textile Weavers Association.
Source: The Hindu
"A transition to a circular economy is crucial to address environmental impact and resource scarcity by enhancing recycling and sustainable practices in key industries like textiles, electronics, automobiles, and metals. The industrial development anchored on an inherently linear model based on “take- make- waste” approach has had a debilitating impact on the environment. Alarmingly, 2023 was the world’s warmest recorded year as per the National Oceanic Atmospheric Administration. Furthermore, in the last fifty years, the use of materials globally has almost quadrupled, outpacing population growth as per Circular Gap Report 2022. This calls for urgent global action to incorporate systemic changes in production and consumption models Circular economy (CE) provides solutions to transform the current linear economy into one where the life cycle of products is maximised, and waste is minimised. CE is a production and consumption model centered on sharing, leasing, reusing, repairing, refurbishing, and recycling materials and products for as long as possible. Issues in key industries Based on an analysis of four export intensive sectors -textiles and apparels; electronics; automobiles; and metals, it is observed that in all the sectors, the extraction processes for raw materials remains unsustainable. The share of these four industries stood at 8%, 5%, 2% and 8%, respectively in India’s total exports in FY 2023. According to the Water Footprint Network Research, in the textiles and apparel sector, India being the largest producer of cotton comes with the associated cost of strained groundwater reserves as producing 1 kg of cotton takes up to 22,500 litres of water, even higher than the global average of 10,000 litres. Similarly, the major use of virgin minerals and rare-earth elements in the electronics and automobiles sector, for many of which India is completely import dependent, raises concerns about the continuous supply of resources. ALSO READ DIVERSIFYING INDIA’S CRITICAL MINERAL SOURCING FOR A STABLE FUTURE The more sobering issue, however, is the underutilisation of the growing waste streams in these sectors. In the clothing and apparel sector, recycling is not keeping pace with the exploding consumption. According to Ellen Macarthur Foundation, less than 1% of material used to produce clothing is recycled into new garments, leading to loss of value in billions of dollars every year. In electronics, which is one of the world’s fastest growing waste streams, India ranked as the third largest e-waste generator in 2019, after China and the USA as per the Global E-Waste Monitor 2020 Report. India’s e-waste recycling rate reported by the Ministry of Environment, Forest and Climate Change was only 32.9% for FY 2022, pointing at the high underutilisation of waste. Similarly, India’s recycling ecosystem for end-of-life vehicles is still at a nascent stage and the recycling rates of metals are below the global benchmark recycling rates. It is clear that accelerating transition to CE is the need of the hour. The first step towards achieving a CE is to build a robust ecosystem for secondary raw materials (SRMs) in the country. SRMs are materials recycled from end-of-life products or waste that re-enter the manufacturing process as inputs and have the same functionality as virgin materials. Needless to stay, robust recycling systems are a prerequisite for ensuring availability of quality SRMs in the market. In India, although recycling clusters in the focus sectors i.e. textiles and apparels, automobiles, electronics, and metals are plenty, they are mostly. It is clear that accelerating transition to CE is the need of the hour. The first step towards achieving a CE is to build a robust ecosystem for secondary raw materials (SRMs) in the country. SRMs are materials recycled from end-of-life products or waste that re-enter the manufacturing process as inputs and have the same functionality as virgin materials. Needless to stay, robust recycling systems are a prerequisite for ensuring availability of quality SRMs in the market. In India, although recycling clusters in the focus sectors i.e. textiles and apparels, automobiles, electronics, and metals are plenty, they are mostly unorganised in nature, devoid of uniform standards, safe working environments and mostly focussed on domestic consumption only. Improvements at every stage are thus required.
Select solutions
To start with, the waste collection processes in all the sectors need to be standardised to minimise contamination. While such developments are already taking place in the automobile sector through the scrappage policy for End-of-Life Vehicles (ELVs) and in the electronics sector through the E-waste management rules 2022, the coverage currently remains very limited. To illustrate, there were a total of 569 dismantlers/recyclers authorised by the State Pollution Control Boards / Pollution Control Committees (PCCs), with a recycling capacity of 17.9 lakh metric tonnes per annum (MTPA) as on 08-06-2023 while the quantum of e-waste exceeded 30 lakh MTPA in 2019 itself. By providing adequate incentives to the stakeholders including waste generators, waste collectors and waste processors, the collection and recycling processes can be scaled up. Uniform rules also need to be implemented for other sectors like textiles. Further, for scaling up recycling, the role of the existing informal recycling clusters such as for textiles in Panipat and Tirupur and for automobiles in inter alia, Mayapuri , Meerut, Pudupet and Ukkadam, cannot be ignored. Although running for years, these clusters lack uniform standards, adequate technology, and safe working conditions. For example, in textiles, most recycling units in India are not able to produce high-quality recycled yarn due to technological limitations because of which they fetch low prices for their products and are mostly utilised in domestic market. The advanced recycling technologies remain inaccessible due to large investments required. To enable their formalisation, recycling parks with state-of-the-art common facilities need to be set up so that the small units may avail the facilities. Comprehensive trainings may also be provided to the recyclers regarding the best practices to be adopted with focus on building export capabilities parallelly.
Demand side
On the demand side, the manufacturing companies need to be nudged to increase the use of SRMs in production processes through lucrative financial schemes like offering annual corporate tax benefits to producers who exceed the stipulated minimum percentage use of SRMs in their inputs. Circular objectives and green public procurement criteria may also be incorporated in India’s trade agreements with partner countries. With the negotiations between India and the EU for an FTA going on, India has the opportunity to harmonise standards for waste recycling in cooperation with the EU which has been a pioneer in introducing circular economy related measures such as the Circular Action plan 2015 and 2020. It may be observed that the European Parliament has recently passed the European Commission’s (EC) proposal for introducing mandatory and uniform Extended Producer Responsibility (EPR) schemes for textiles in all EU Member States, under which producers will be responsible for the full lifecycle of textile, textile-related and footwear products. The EC envisages that by 2030, all textile products placed on the EU market be durable, repairable, and recyclable. In a similar vein, EC’s proposed critical raw materials act aims to strengthen all stages of the critical raw materials value chain by improving circularity and recycling. On similar lines, India needs to step up its transition towards a circular ecosystem and establish working groups for the same with other countries to ensure unhindered exports and cater to the growing demand of SRMs in the EU and elsewhere.
In conclusion
In all, CE cannot be strengthened in silos at the domestic level. International trade and global value chains play a key role in accelerating the transition and in building economies of scale in the sector. Besides, with countries increasingly imposing stricter Environmental, Social and Governance (ESG) regulations in their economic engagements with other countries, transition to circular practices becomes a necessity. It is thus an opportune time for India to establish robust recycling systems and emerge as a leading supplier of secondary raw materials.
Source: Financial Express
HÀ NỘI — Apparel and textile stocks experienced impressive performances in the last trading sessions, boosted by a positive outlook for the domestic garment industry amid crisis in Bangladesh. In just two days, shares of Sông Hồng Garment JSC (MSH) soared 7.9 per cent, TNG Investment and Trading JSC (TNG) rose 5.6 per cent, Binh Thanh Import - Export Production & Trade JSC (GIL) jumped 3.2 per cent, Thành Công Textile Garment Investment Trading JSC (TCM) climbed nearly 2 per cent and Vinatex (VGT) surged 5 per cent. The rally also spread to smaller-cap stocks, such as Việt Tiến Garment Corporation (VGG) increased 5 per cent, DamSan JSC (ADS) was up 7.3 per cent and GARCO 10 (M10) climbed 3.4 per cent. The recent political turmoil in Bangladesh has served as a catalyst for this group of stocks to surge in the past few trading sessions. Against a backdrop of escalating unrest, on August 5, the Bangladesh Garment Manufacturers and Exporters Association called for all factories in the country to cease operations until the situation stabilised. By August 7, these manufacturing units had resumed operations as the situation was brought under control. Bangladesh is currently the world's second-largest exporter of textiles and garments, trailing only behind China. In 2023, Bangladesh's textile and garment exports hit US$47 billion. Prominent fashion brands such as Zara, H&M, Uniqlo and Carrefour among others, count Bangladesh among their suppliers. Consequently, the adverse developments in Bangladesh are sparking global apprehension about potential disruptions in the supply chain, particularly during the critical phase of shipping Christmas merchandise and placing orders for the upcoming spring and summer seasons. The primary concern lied in the diminishing trust of international buyers in Bangladesh, SM Mannan Kochi, Chairman of the Bangladesh Garment Manufacturers and Exporters Association, told the Sourcing Journal. The erosion of trust was deemed invaluable as it would inevitably have enduring adverse effects on the country's most valuable industry, he added. Recognising Bangladesh as a formidable competitor, the Việt Nam Textile and Apparel Association (Vitas) foresees potential advantages for the country’s textile sector amid the challenges faced by Bangladesh. In the immediate term, Bangladesh's textile production capacity is set to decline amid the peak season, currently catering to winter production. This is likely to prompt many clients to divert their orders elsewhere, including Việt Nam, to offset the shortages. Waning customer confidence in Bangladesh's textile industry is expected, coupled with the looming pressure to raise wages for textile workers in the country, thereby diminishing Bangladesh's labour-cost advantage. According to Vitas, many textile export businesses in Bangladesh are currently facing a 25 - 40 per cent drop in orders, alongside declining export prices. This is driven by reduced global demand, with imports from western Europe and Russia notably decreasing. Some companies, previously exporting over $1 million monthly to Russia, now see their exports at zero.
The opportunities for Việt Nam’s apparel exports is bright.
Even though, Bangladesh textiles are highly appreciated thanks to their environmentally friendly characteristic, sustainability is merely one of the 12 factors constituting competitive prowess, alongside criteria such as production quality, timely delivery, pricing, customs advantages and political stability, Nguyễn Minh Hoàng, Head of Analysis at First Việt Nam Securities, told Việt Nam News, citing The 2022 report 'Textiles and Clothing in Asian Graduating LDCs - Challenges and Options' by the World Trade Organization (WTO). Việt Nam’s textile sector holds several unique advantages, including its strategic geographical location, extensive port infrastructure, and capacity to produce a wide array of high-value products, setting it apart from Bangladesh, which primarily focuses on basic T-shirt manufacturing, according to Hoàng. The country’s strength lies in its ability to rapidly diversify production thanks to investments in advanced machinery and skilled labour, a notable advantage over Bangladesh. Vietnamese textile enterprises poised for gains are those with the operational capacity to absorb newly redirected orders from the Bangladeshi market. On the stock market, the expected improvement in export orders would be momentum for the apparel and textile ticker symbols, Hoàng said, adding that the export-import stock group has seen moderate growth since the start of the year, suggesting they are reasonably valued and aligning with the profit recovery cycle amid the ongoing economic resurgence. Việt Nam’s textile export value has already seen a 3 per cent uptick in the first seven months of 2024. Across key markets, exports have displayed growth in the first half of 2024, with the US maintaining its position as a major market with an enhanced market share. — VNS
Source: Vietnam News
The Indonesian government has announced a three-year extension of safeguard tariffs on imports of textiles, carpets, and other fabric coverings to protect and enhance the competitiveness of the domestic textile industry. The extensions were outlined in two new Finance Minister Regulations, PMK No. 48/2024 for textiles and PMK No. 49/2024 for carpets and other fabric coverings. Local news outlet Jakarta Global said the tariffs come as the textile and textile product (TPT) sector continues to struggle with declining domestic and export demand, as well as increasing competition, particularly from Chinese imports. The site explained how the decision to extend the tariffs follows a concerning trend in the industry’s employment figures. The influx of textile imports, particularly from China, has triggered a drop-in employment, with the workforce declining from 3.98 million in 2023 to 3.87 million in 2024. Febrio Kacaribu, head of the fiscal policy agency at the Ministry of Finance, shared with the news site: “The government is closely monitoring this situation and providing solutions to support the long-term recovery of the TPT industry’s fundamentals.” This decline is part of a broader pattern of job losses in Indonesia, with the Manpower Ministry reporting 32,064 layoffs between January and June 2024, a 21.4% increase from the same period last year. Jakarta Global mentioned that the Indonesian Filament Yarn and Fiber Producers Association (Apsyfi) reported how around 30 textile factories shut down between January and May 2024, resulting in 10,800 layoffs. This figure is significantly higher than the 7,200 layoffs reported in 2023 in Bandung and Surakarta alone.
Source: Just Style
LAHORE: The textile industry in Pakistan is facing a severe crisis due to unfavourable weather conditions, decreased cotton cultivation, and low demand in local and international markets. According to Naseem Usman, Chairman of the Karachi Cotton Brokers Forum (KCBF), the country’s cotton production target will not be met this year. The crisis has resulted in around 30% of textile mills being closed, with many operating partially. To address the shortage, large textile mill groups are increasingly interested in importing cotton from foreign countries, where prices are suitable, quality is better, and payment terms are convenient. While, talking to Daily Business Recorder Naseem Usman said that agreements of import of approximately 1.5 million bales of cotton have been signed so far. The annual consumption of spinning mills is expected to be around 12.5 million bales, whereas the registered and unregistered cotton production in the country is expected to be around 8.5 million bales this year. In this way to meet the cotton requirements of the country’s mills, approximately 3.5 million bales of cotton will be imported from foreign countries. According to Naseem Usman the crisis in the textile sector is expected to continue until local cotton production improves and demand in local and international markets increases. Meanwhile Dr. Yusuf Zafar, Vice President of the Pakistan Central Cotton Committee (PCCC), has expressed serious concerns about the cotton statistics for this season. He identified insufficient research funding, lack of support prices for cotton, and artificial suppression of market prices as the primary causes of this decline, leading to substantial losses for farmers and a sharp reduction in cotton output. Dr. Yusuf Zafar emphasized that the decline in cotton production is a direct result of neglecting research and development, offering unfair prices to farmers, and monopolistic practices by middlemen. He warned that if these issues are not addressed urgently, farmers may abandon cotton cultivation altogether. To boost cotton production, Dr. Yusuf Zafar recommended reducing production costs for farmers and making cotton cultivation more profitable compared to other competing crops. He also noted that this season’s cotton production may decline further due to a smaller cultivation area, prolonged heatwaves, unexpected rains, and severe whitefly infestations. Pakistan’s cotton production is expected to fall to 6-7 million bales (each weighing 170 kg) this season, far below the textile industry’s demand of 16 million bales. This shortfall will necessitate the import of approximately 5-6 million bales. The cotton crop is under threat from climate change, pest infestations, and diseases. Dr Yusuf Zafar pointed out that insufficient funding for cotton research has hindered efforts to develop resilient cotton varieties and increase yields. He concluded by emphasizing that Pakistan can revive its cotton industry by ensuring fair prices for farmers and prioritizing research and development.
Source: B Recorder
