INTERNATIONAL
Textile Raw Material Price 2017-01-10
|
Item |
Price |
Unit |
Fluctuation |
Date |
|
PSF |
1204.91 |
USD/Ton |
0% |
1/10/2017 |
|
VSF |
2388.17 |
USD/Ton |
0% |
1/10/2017 |
|
ASF |
1919.19 |
USD/Ton |
0% |
1/10/2017 |
|
Polyester POY |
1240.98 |
USD/Ton |
-1% |
1/10/2017 |
|
Nylon FDY |
3246.75 |
USD/Ton |
1% |
1/10/2017 |
|
40D Spandex |
4473.30 |
USD/Ton |
0% |
1/10/2017 |
|
Polyester DTY |
3463.20 |
USD/Ton |
1% |
1/10/2017 |
|
Nylon POY |
5474.74 |
USD/Ton |
0% |
1/10/2017 |
|
Acrylic Top 3D |
1486.29 |
USD/Ton |
-1% |
1/10/2017 |
|
Polyester FDY |
3059.16 |
USD/Ton |
2% |
1/10/2017 |
|
Nylon DTY |
2092.35 |
USD/Ton |
0% |
1/10/2017 |
|
Viscose Long Filament |
1616.16 |
USD/Ton |
-1% |
1/10/2017 |
|
30S Spun Rayon Yarn |
3044.73 |
USD/Ton |
0% |
1/10/2017 |
|
32S Polyester Yarn |
1815.29 |
USD/Ton |
0% |
1/10/2017 |
|
45S T/C Yarn |
2655.12 |
USD/Ton |
0% |
1/10/2017 |
|
40S Rayon Yarn |
1948.05 |
USD/Ton |
-1% |
1/10/2017 |
|
T/R Yarn 65/35 32S |
2222.22 |
USD/Ton |
0% |
1/10/2017 |
|
45S Polyester Yarn |
3174.60 |
USD/Ton |
0% |
1/10/2017 |
|
T/C Yarn 65/35 32S |
2279.94 |
USD/Ton |
0% |
1/10/2017 |
|
10S Denim Fabric |
1.32 |
USD/Meter |
0% |
1/10/2017 |
|
32S Twill Fabric |
0.82 |
USD/Meter |
0% |
1/10/2017 |
|
40S Combed Poplin |
1.15 |
USD/Meter |
0% |
1/10/2017 |
|
30S Rayon Fabric |
0.66 |
USD/Meter |
0% |
1/10/2017 |
|
45S T/C Fabric |
0.65 |
USD/Meter |
0% |
1/10/2017 |
Source: Global Textiles
Note: The above prices are Chinese Price (1 CNY = 0.1443 USD dtd. 10/1/2017)
The prices given above are as quoted from Global Textiles.com. SRTEPC is not responsible for the correctness of the same.
With an endeavour to train unskilled work force and help them earn more, the Khadi and Village Industries Commission (KVIC) has sent a proposal to the Central Government seeking inclusion of Khadi in MNREGA. Vinay Kumar Saxena, Chairman, KVIC, recently told media that the proposal has been sent to the Centre. He said proposal is sent not only to have more artisans under the scheme but also to make unskilled workers earn more through them. These artisans will train the 5.40 lakh unskilled workers before involving them in Khadi production, thus helping them raise their annual income from Rs 20,000 to Rs 73,000.
Talking to KNN, National President of the Textile Association (India) Arvind Sinha said the move will generate employment and enhance skill development amongst youth. He said the move will not only help the workers but in the long run will be very fruitful for the textile industry especially the micro, small and medium enterprises (MSMEs). It will also help enhancing technology in the related sectors, Sinha added.
National Rural Employment Guarantee Act 2005 (or, NREGA No 42) which was later renamed as the "Mahatma Gandhi National Rural Employment Guarantee Act" (or, MGNREGA), is an Indian labour law and social security measure that aims to guarantee the 'right to work'. It aims to enhance livelihood security in rural areas by providing at least 100 days of wage employment in a financial year to every household whose adult members volunteer to do unskilled manual work.
SOURCE: The KNN India
Ministries of environment and textiles will soon meet to find long-term as well as short-term solutions to the challenges being faced by domestic handicrafts exporters. A meeting to resolve the issues of Indian handicrafts exporters will soon be convened, Textiles Minister Smriti Irani has said.
Pointing out the wood industry and the woodcrafts sector need the support of Environment Ministry, Irani said: "My colleague in the Environment Ministry Anil Madhav Dave is extremely cognizant of the challenges faced and we will soon convene a meeting between the two ministries so that the issues with regard to the handicrafts exporters can be resolved". The meeting, she said, will also seek to find "short-term as well as long-term solutions" to the challenges being faced by the domestic handicrafts exporters in accessing world markets. The minister was addressing an export award function organised by Export Promotion Council for Handicrafts (EPCH) late last evening. 134 exporters (66 awards for 2013-14 and 68 awards for 2014-15) were awarded for outstanding performance in exports of handicrafts.
Irani urged the exporting community to come forward for the education of the children of the craftsmen. She further said that education of the children of the craftsmen should be fully sponsored through the industry participation.
EPHC Executive Director Rakesh Kumar said, the body has a target of educating about 10,000 children in the first phase as a social welfare measure. Irani also asked the EPCH to start an award for entrepreneurs who are in innovation and packaging, physically challenged entrepreneurs and best award for tribal handicrafts.
SOURCE: The Economic Times
Tirupur Exporters’ Association (TEA) has placed a number of measures before the Union textile ministry, including keeping the industry under lowest slab of GST, rebate on state levies, labour law reforms and setting up of knitwear board, among other things. At a meeting held with textile minister Smriti Irani in New Delhi, the association president Raja M Shanmugham said because of its MSME dominant nature and the slender margins in which the textile industry was operating, the entire textile sector may be placed in the lowest slab of the GST so that industry can absorb the levy without any significant impact on the business.
In his memo to the minister, he also said that there is a long pending problem whereby job workers are being denied the issue of EPCG licences for capital goods imports. Despite repeated representations and even after the issue of clarificatory circular way back in September 2016, this issue is still unresolved. There is an urgent need to resolve this issue so as to reinstate climate of investment in micro and small industries that has shelved investment plans for more than 18 months now, he said. The benefits announced in the special package in June 2016 including rebate on state levies, EPF benefits for new employment are yet to be passed on to the exporters.
Optional ESI/EPF contribution for employees below a certain threshold minimum wages as indicated in Para 61 and 62 of Budget Speech of 2015 that is yet to be implemented through an amendment in PF and ESI Acts may be expeditiously given effect, he pointed out in his memo. According to him, successful textile clusters may be empowered with adequate industry infrastructure facilities such as ‘World class design studio’, ‘research and development centre’ and ‘incubation centre for technical textiles’ so as to facilitate rapid growth of not only the existing textile verticals but also enable them foray into niche segments creating quantum growth opportunities to the industry. He further said that as a permanent solution to the problem of lack of interface between government and the industry, a focused and dedicated agency similar to ‘Silk Board’ or ‘Coir Board’ to be formed specifically for the knitwear sector which can serve as a catalyst for rapid growth of this industry segment. Textile industry contributes about 4% to the country’s GDP, 14% of the industrial production and 17% to export earnings.
SOURCE: The Financial Express
One of the boldest moves taken by the Government of India in the history of Indian economy was the pulling out of circulation, high value currency notes – Rs 1,000 and Rs 500 – with effect from November 8, 2016 midnight. While the policy has received mixed reactions from all sectors of retail, one segment which was affected badly – but bounced back with aplomb – was the garment business across value chains.
Experts unanimously feel that the decision will benefit the organized segment in the industry though many unorganized players and firms, working unethically, will face pressure to comply.
Demonetization and Its After Effects
Demonetization had a tremendous impact on disposable incomes and hence consumer spending waned, resulting in a dip in the domestic demand for apparels and other end-products of the textile industry in the immediate term. The resulting inventory accumulation has caused deferring of purchase from apparel manufacturers (focused on domestic market) in the near term, besides resulting in stretched payments. This further effected he cash flow of the textile industry and is likely to drive a constraint in the demand for the entire value-chain.
Managing Director, Creative Lifestyles and President, CMAI, Rahul Mehta says, “Most brands and retail outlets reported a 40 to 60 per cent drop in sales from the previous weeks. But after November 20, businesses started picking up. In the first week of December, the drop has come to -5 per cent. Most of the brands and retailers introduced various promotional schemes or attractive discounts to counter this demonetization effect. With this the immediate sales have picked up and things have quite stabilized now. However, neither the retailers nor brands can sustain this for a very long period. We definitely believe that the apparel sales will be impacted for the next three to six months by at least 10-20 per cent.”
International brands that form a large mix of the domestic apparel business in India are also feeling the heat. Commercial Director, Benetton, Sumeet Soni says, “The impact is at both ends — production and consumers. In production, as large part of the industry is still unorganized and lot of activities are subcontracted which are getting impacted due to cash crunch. It has also compelled consumers to pull the plug on spending. The way of doing business, largely cash dependent, has impacted the inflow of products. This in turn has delayed the Spring/Summer 2017 deliveries.”
Director, Turtle, Shitanshu Jhunjhunwala believes that plastic money and other modes of payment has still kept fashion retail alive and things will be back to normal very soon. “The Indian garment business relies on a lot of cash transactions and the demonetization has brought in a conservative spending sentiment, for which there might be a slight dip in the sales over the next one or two quarters. However, the impact should normalize in the long term and this move would be beneficial for the organized retail sector. The impact is felt more by the small traders and the unorganized retailing segment who rely more on cash trading and sales. Some sectors like jewellery and the luxury segment have been impacted more than mid-premium and mass segments and will no doubt take a longer period to revive. However, the use of plastic money and transactions through online payments will continue to increase consumer spend in the retail market,” he said.
Demonetization has definitely triggered a rapid growth in card transaction, as Chief Operating Officer, Spykar, Sanjay Vakharia says: “For the first few days, there was an impact on sales. If I speak on my brand’s perspective, it went out pretty well for us. Our debit and credit card transactions have increased a lot. I really do not see that our business has dropped dramatically. But the percentage of sales drop for an organized player like us in comparison to an unorganized one very different. However the situation is bound to improve very soon.”
A lot of organized players stood in support of the note ban since they felt that an overhaul of the complete cash economy was required before the GST comes into force. Director, Klix, Ankur Gadia says, “Demonetization was required; its a systematic approach by the Government. The honourable Prime Minister has also brought in GST which will be applicable soon. Once this happens, people who have organized business and do transactions on invoices, will definitely benefit from this step. The panic among every one of us is a short time affair and will definitely normalize within a few days. The business in the apparel sector has been hit by 30-35 per cent at the retail counter. This is obvious when demonetization has taken place, people will first spend on food and other utilities and then think about spending on garment. If we look at the ethnic sector, it has been hit badly as the news has come during the wedding season.”
The garment industry in India is versatile and has diverse players and will quickly absorb the move, Managing Director, Vitamins, Mansukh Nishar one of the leading players in the kidswear segment feels. He says, “It’s a short term problem. The drawing limit for withdrawal has hit the retail segment hard. Shops without credit card machines are suffering. India was used to almost 90 per cent cash for buying essentials, including clothes. I feel that the effects of demonetization will continue for another three months, indirectly effecting the upcoming summer 2017 season due to slow movement across retail channels. I also feel this move will motivate many unorganized players to shift to the organized sector.”
Dip in Footfalls and Sales Chart
From the long term perspective, demonetization of Rs 500 and Rs 1,000 notes is definitely a positive move by the Government, feel most apparel retailers. Director, Phoenix Marketcity, Pune, Rajiv Malla says, “The impact on the retail sector will be short termed due to sudden cash crunch and general public sentiments. Post the announcement, we have witnessed a decline of around 5 per cent in the footfall and close to 7-8 per cent impact on overall sales. However in the last few days, we have seen things getting back to normalcy with circulation of newer currency notes in the system. Also from the overall retail industry perspective, the impact will be less on the organized sector as compared to the unorganized retailing segment, as the former offers more payment options to consumers like e-wallet, cards and other digital payment modes. We anticipate the Indian retail industry to be robust and growth-oriented in the long run.”
Turtle initially registered a major dip around 30-40 per cent. But Jhunjhunwala takes on an optimistic approach and says, “With the winter season and marriage season in full swing, we see an increment in sales in our outlets. Our target consumer base is more comfortable in making payments via plastic money and e-wallets.”
Benetton, one of the most popular international brands in the country discloses the consumer behavioural shift witnessed among their consumers. Soni defines it as saying, “There are low walk-ins as the purchases are being restricted to bare necessity, there is a certain amount of consciousness on spending therefore the consumers are not buying additional units.”
Head Marketing, Pepe Jeans, Neha Shah adds, “The day after the announcement was made, a 49 per cent sales dip was reported. To reduce this number, we introduced an initiative wherein we offered an extra 5 per cent off on use of credit cards. This strategy helped us to narrow the dip to 25 per cent currently. We are anticipating the dismal sale environment to continue until February-March. In the long run, the move of demonetization coupled with GST will result in positive growth of the brand.”
Long Term Future of This Step
Mehta talks on some key insights on demonetization and its future for the garment industry as he says, “When we reduce the cash supply in the industry and the market, we have to understand the fact that ours is cash oriented economy. Apparel industry also largely is dictated by the cash transactions. So even in organized modern retail 40-50 per cent of the transactions were in cash and the balance was through electronic transactions like credit or debit cards. There was a certain element of discretionary spend in the garment industry which is likely to get impacted.”
Soni shares a complete understanding saying that the demonetization will have a short term impact and in the medium to long term, there could be positive impacts basis the following assumptions:
Lower interest on borrowing and lending due to additional/surplus funds being available with the banks:
1. Would increase the disposable income for large part of the population.
2. It would desist people from blocking funds in banks either in savings or fixed deposit accounts.
Relief in income tax, without impacting the overall collection to the kitty:
This move could bring more people under the ambit of income tax and with enough liquidity in the system, the government might give relief by way of increasing the slabs for income tax, thereby providing higher disposable income to the people.
This along with GST would lead to ease of business and thereby lead to growth and higher GDP.
Higher investment by the government would lead to growth of the economy:
As there would be enough liquidity in the system, the government would encourage both public and private partnership and spending in infrastructure and development which would lead to growth of the economy.
Conclusion
It so seems that although the demonetization policy did have an immediate impact in the garment industry and its value chains, it’s fairly clear that the impact will be short termed, at least for the organized sector, only triggered due to sudden cash crunch and general public sentiments. But, the impact has largely hit the small scale manufacturers who were producing for the majority of the population.
The organized ones are only hit with current season in flow and confusion about the upcoming season and its sales. Also, among the organized market itself, a few sectors like jewellery and the luxury segment have been impacted more than the mid-premium and mass segments and will no doubt take a longer period to revive.
The ethnic segment has also been hit badly as the news came just at the helm of the wedding season. Overall, the garment industry in India is versatile and has diverse players and will quickly absorb the move.
SOURCE: The India Retailing
The open-end spinning mills are fighting for survival. Numbering around 350 in Tamil Nadu and over 700 across the country, these units depend on the spinning mills for supply of cotton waste. Seeking immediate government intervention to bail out the sector, the Secretary of the Open End Spinning Mills Association (OSMA) G Arulmozhi told BusinessLine that around 40 per cent of the looms in and around Palladam, Somanur, Tiruchengode and Namakkal have halted production because of the unwarranted increase in export of Comber Noil. “If exports continue to surge, many more units will be compelled to down shutters, rendering hundreds jobless. The government should either ban export of Comber Noil or impose export duty at Rs. 15 a kg,” Arulmozhi said.
Raw material shortage
According to him, the annual availability of Comber Noil is around 25 lakh bales, but the domestic requirement is higher at 30 lakh bales. “Notwithstanding the demand-supply gap, an estimated 5 lakh bales are exported, leaving a short supply of 10 lakh bales a year,” he said. “The situation was different a decade back. Comber Noil was available in plenty before 2005. Since then, we have added 4 lakh rotors. And today, apart from the open-end units, currency paper printing mills also look to the spinning mills for supply of Comber Noil,” he said.
“Comber Noil is used in the making of value-added products such as sanitary napkins, diaper and high-value items. Instead of making this quality waste cotton available to the domestic sector, it is being exported to Europe. While China and Bangladesh have banned export of Comber Noil, we continue to export the same, which is upsetting the entire value chain,” Arulmozhi added.
Skewed pricing
On the rate front, he said, “When cotton was at its peak quoting Rs. 52000/ candy ( Rs. 145/ kg) four months back, Comber Noil was available at Rs. 60 /kg. Today, the price of cotton has fallen to Rs. 112/kg, but Comber Noil is quoting at Rs. 78/kg. This is not justifiable.”
SOURCE: The Hindu Business Line
Planet Textiles, the annual summit on environmental issues for the global textile sector will take place on Wednesday 24th May at the JW Marriott Hotel in Bangalore, India. This leading, independent, textile industry event, will once again be co-organised by MCL News & Media and the Sustainable Apparel Coalition with support from leading organisations such as long-time partner Messe Frankfurt. This year's high-level event will tackle the crucial issue of textile wastewater pollution, chemical management and natural resource conservation including both energy and water use. These significant issues are becoming even more critical to the growth of India's vast textile industry and remain under the microscope of apparel buyers that are considering sourcing from the region.
Planet Textiles 2017 will be part of a week-long series of events on textiles and sustainability in Bangalore including the Sustainable Apparel Coalition's annual member's meeting. As in 2016, the vast majority of attendees at the SAC members meeting are expected to attend the Planet Textiles Summit, so delegate places are expected to sell out once again. Last year the event took place in Copenhagen and attracted around 450 senior industry executives and speakers from brands such as VF Corporation, Nike, Marks & Spencer, Puma, Gap, Levi Strauss, along with many others. Due to the influential nature of Planet Textiles the event also draws interest from NGOs and policymakers. Last year senior representatives from the German, Danish, and Honduran Governments were present in Copenhagen, this included Juan Orlando Hernandez, the President of Honduras. To register your interest to either sponsor, attend or book an exhibition space at Planet Textiles 2017, send us an email us HERE with details of your interest and save the date in your calendar: 24th May 2017. Or simply reserve your place via the MCL website HERE. Further details will emerge on Ecotextile News in the coming weeks and on the Planet Textiles website, which will be updated shortly.
SOURCE: The EcoTextile
An International Seminar on Indian Textiles, from January 11 – 13, at Hotel Taj Krishna. On the first day of the seminar an exhibition-cum- sale of Indian Textiles produced by some master weavers and an exhibition-cum- sale of Books on Indian Textiles will start from 10:30 am and conclude on 5:30 pm. Art historianJagdish Mittal will deliver an illustrated lecture on “Textiles in the Jagdish and Kamla Mittal Museum of Indian Art”, an open for all event at Grand Ball Room from 6pm.
About textiles in the museum he says, “ I had done exctenisve research on textiles and my musueun also has huge collection of ancient textile which show case the rich tradition of Telangana and Andhra Pradesh. I thought I should do this event to promote and bring back this rich tradition.” As part of the lecture he will also speak about Telia Rumal, which originated from Chirala and is an art of Ikat tradition using natural vegetable dyes.
SOURCE: The Hans India
India-based denim producer Arvind has installed the nation’s first Monforts Eco Line for faster production, major savings in energy, and greater flexibility in design and innovation. The first Monforts Eco Line denim finishing range in India has been installed at the Ahmedabad mill of India’s largest producer of denim, Arvind Ltd. The installation has been made to increase production, reduce energy usage, and respond more quickly to customer requests for specified designs and finishes.
Monforts Area Sales Director for Southeast Asia, Hans Gerhard Wroblowski, said that Arvind’s early investment in this new technology gives the company at least a year lead ahead of the competition from other Indian mills. The Eco Line, which can handle fabric widths of 1800 millimeters and operate at high speeds of up to 80 meters/minute, is operating alongside four Montex foam finishing stenters, which are also able to handle this same width of material. Arvind is rated in the top three denim producers in the world, and sees further export potential. Aamir Akhtar, chief executive officer of Arvind Lifestyle Fabrics’ Denim division, said that in India the denim industry is growing at a compound annual growth rate of 13 to 15 percent.
Arvind’s own export-domestic output is around 50:50, but some of the domestic production is worked up into garments and exported, so distorting the figure: taking that factor into account, Akhtar believes that the export proportion is closer to 60 percent. Arvind had been founded in 1931 as a maker of traditional Indian clothing, but in 1984 modernised and brought denim into the domestic market, thus starting the jeans revolution in India. Today it retails its own brands like Flying Machine, Newport and Excalibur, and licensed international brands like Arrow, Lee, Wrangler and Tommy Hilfiger, through its nationwide retail network. Akhtar confirmed that Arvind stays ahead of its competition through a policy of design and innovation. “We have our own major R&D facility, and we eat, think, sleep, and breathe design. “For all this, we need the best in technology. Having been a Monforts user from the earliest days, we had no hesitation in investing in the new Eco Line. “Not only does this make us even more responsive to customer needs and demands, and more creative in our design and production, there is also the very great energy saving advantage and tight control over emissions.”
The Eco Line was manufactured in Monforts production facility ‘MONTEX’ in Austria and installed by Monforts’ representive in India, ATE Enterprises Private Ltd. C V Babu, ATE’s General Manager for Sales at the company’s Ahmedabad office, said “The Eco Line system reduces energy losses and energy use, increases thermal transfer and keeps the drying energy on the textile material longer, so that it can be used very efficiently. “As a result, energy savings of up to 50 % can be achieved. Exhaust air energy can also be reduced to a minimum, which has a positive effect on the emission load into the atmosphere,” he said. Arvind’s current annual denim capacity is 110 million meters, with prominent products including ring denim, indigo voiles, organic denim, bi-stretch denim and fair trade certified denim. This is apart from regular light, medium and heavyweight denims. They come in various shades of indigo, sulphur, yarn-dyes, in 100 percent cotton and various blends. “Denim is a great lifestyle product,” said Akhtar, who himself habitually wears denim to the office. “It is also tremendously versatile. We are very, very upbeat about our global future.”
SOURCE: The Textile World
Reliance Industries introduces “Recron3D Conjugate Fibres”, a superior, economical and first of its kind filling for Pillows & Quilts in India.“ Recron 3D Conjugate Fiber” is distinguished by its unique 3-dimensional spring- like crimps that give the fibre a distinctly superior resilience and high fill power as compared with other filling fibres.
Recron 3D Conjugate fibres possess a hollowness of 20-25%, which is amongst the best globally. The pillows filled with Recron 3D Conjugate, because of the special crimp structure and high hollowness, exhibit better bulk and loft even with 15-20% less filling quantity as compared with other fibres, making them lighter and more resilient. The lesser fill quantity required makes Recron 3D Conjugate fibres a superior and economical alternative.
Launching the new product, Reliance Industries spokesperson said, “With the launch of Recron 3D Conjugate fibres we have added an extra comfort in the lives of our customers. We have received a tremendous response from this market and wanted to expand our portfolio and Recron 3D Conjugate,the new offering from us will provide a better grip and an enhanced experience to the users”. These fibres are made of high quality “virgin” raw materials and are milky white in colour, imparting the pillows an excellent aesthetic and shelf look. They are designed in a way that it can be easily opened on simple opening machines which are easily available in the country at affordable prices. Thus, the pillow manufacturers need not go for expensive opening machines to open this fibre.
Recron 3D Conjugate is not affected by moisture, fungus, mildew etc and can be stored at the bedding shop for a long time without fear of de-gradation, deterioration in quality etc. Pillows & Quilts made of Recron 3D Conjugate fibres are also durable and retain their superior attributes for long.
In addition to pillows, quilts etc., these fibres are one of the most preferred fibre for the upholstered furniture (sofas) made by the largest furniture manufacturers in the world. It is used for the back cushions, side arms and also as topping on the seat cushions. World over, it is very common to see upholstered furniture filled with 3D conjugate fibres. In developed countries like US, the usage of filling fibres is said to be much more in furniture as compared to bedding products. India is also catching up fast. Because of its superior attributes, Recron 3D Conjugate is today a preferred fibre, not only in India, but also in US and Europe and is considered one of the best fibres available for pillows, quilts and furniture applications.
Reliance, for the first time, introduced Indian consumers to the comfort of pillows, quilts, mattresses made of hollow polyester Fibrefill, when they launched “Recron Fibrefill” in the Indian market in 1997 with a unique technology from Du Pont, USA. With this, Indian consumers, who were mainly used to bedding products made of cotton and waste cotton could get the taste of the global comforts and a revolution started in the home textile market with gradual replacement of cotton and waste cotton with Recron Hollow Fibrefill. Today, “Recron Fibrefill” is the most preferred filling fibre and “Recron Certified” pillows are the largest selling pillow brand in the country.
SOURCE: The India Infoline
Welspun Group, India’s largest textile conglomerate, has initiated the country’s biggest digitisation drive involving 15,000 of its workers using the RBI’s Unified Payment Interface (UPI) to promote cashless economy. In a mass event, 500 workers of the firm installed the UPI app and will further be trained on using the application for online transactions. At the event held at the Anjar plant, and presided by Dr Kavita Gupta, IAS, textile commissioner, the Welspun team demonstrated the usage of the application in making purchases, transferring money, paying tuition fees and utility bills. Welspun will further initiate the rest of 14,500 workers to the digital application in the coming weeks.
Besides the UPI app, the three-day camp saw Welspun workers being made aware of other digital mode of payment systems such as Unstructured Supplementary Service Data (USSD), prepaid wallets, cards, Point of Sale (PoS) and Aadhar enabled payment transfer system among others. “We should at least make a beginning, once we start, we will move ahead with great ease. Twenty years ago, who would have thought that so many mobiles would be in our hands. Slowly we cultivated a habit and now we cannot do without a mobile. May be a cashless society will assume a similar form. But the sooner this happens, the better it will be,” said Gupta.
Following demonetisation, there has been a rise in digital payments across the country and both the volume and amount of money transacted through digital methods has increased, said the company in a statement. “Welspun Group’s digitisation drive comes in the backdrop of Prime Minister Narendra Modi’s two prestigious projects – Economy Digitisation and Vibrant Gujarat. The drive will bring around 15,000 Welspun workers into the fold of the cashless economy, empowering an equal number of families and opening up a future of digital lifestyle. It is an important start and we are thankful to the textile commissioner for her initiative and support,” said Rajesh Mandawewala, group managing director, Welspun Group.
SOURCE:Fibre2fashion
Prime Minister Narendra Modi on Tuesday inaugurated the 8th edition on Vibrant Gujarat Summit at Gujarat’s Gandhinagar. The Prime Minister unveiled the Coffee table book and policy document for the event. The inauguration ceremony saw addresses of various business leaders including Reliance Industries Chairman Mukesh Ambani, and Adani Group chairman Gautam Adani. While Ambani thanked Gujarat CM Vijay Rupani for taking forward Vibrant Gujarat’s legacy, Adani vowed to double Adani Group’s manufacturing by 2020. The inauguration ceremony also saw the presence of various head of states and representatives of world powers. Earlier in the day, PM Modi held talks with various dignitaries who have arrived in Gujarat for the summit. The PM held delegation level talks with leaders of Rawanda, Serbia, Japan and Denmark. The Prime Minister is expected to hold similar meetings with other heads of state.
SOURCE: The Financial Express
The Gujarat government on Tuesday entered into collaboration with heads of states and corporate leaders at the eighth edition of the Vibrant Gujarat investor summit, moving beyond investments and focusing into knowledge sharing. An MoU was signed between Japan Bank for International Cooperation (JBIC), Gujarat Industries and Mines Department (GIMD), Gujarat Industrial Development Corporation (GIDC), Toyota Tsusho Corporation (TTC) and Toyota Tsusho India Private Limited (TTIPL) to enhance Indo-Japan ties. The state government said other Japanese companies looking at collaboration or investing in Gujarat include The Bank of Tokyo-Mitsubishi UFJ, Ltd and Nihon Technology that is exploring setting up of training Centre for Japanese professionals in Gujarat.
The University of Wollongong will be signing an education MoU with Gujarat Technological University for skill development, agriculture and Smart Cities. Among the Australian companies, apart from the Westpac Bank that has shown keen interest in GIFT-City, OMC international has expressed in investing in the area of Ports Technology. Griffith University has indicated their support in partnering with Gujarat Forensic Science University, while Aurizon, Australia’s largest rail freight company, has expressed interest in services for DMIC. The Asian Infrastructure Investment Bank is keen on developing these mega projects.
Roquette Riddhi Siddhi, a 100% French Subsidiary owned by Roquette Group based at France, signed a MoU with the state government for their proposed Zero Liquid Discharge project. Kamaz Motors from Russia is planning to set up a facility in Gujarat, Dmitry Rogozin, Deputy Prime Minister of Russia is said to have conveyed to the state. Many Russian companies are exploring opportunities to invest in defence and aerospace as well, the state government said.
SOURCE: The Economic Times
Making a strong and impassioned case for reforms which have been initiated during his two-and-a- half years at the helm and those on the anvil, Prime Minister Narendra Modi on Tuesday used the platform provided by the Vibrant Gujarat Global Summit to sell India as the fastest growing major economy in the world to an audience comprising a galaxy of international and domestic leaders, heads of state and captains of industry.
In a 40-minute speech delivered partly in English and Hindi, the PM outlined his government’s development goals: “Our development needs are huge. Our development agenda is ambitious. We want to provide a roof over every head by 2022. We want to provide jobs to every hand. We want to provide energy that is cleaner. We want to build roads and railways faster. We want mineral exploration to become greener. We want to build urban amenities that are sturdier. We want quality of life to get better and better.”
The PM said India was being seen as “an engine of global growth, a bright spot with fastest growth among major economies”. In a veiled reference to the recent demonetisation move by his government, he said: “India is on the threshold of becoming the most digitised economy in the world.” Giving credit for this to the series of decisions taken by his government to shift from a relationship-based governance system to a system-based governance one and from an informal to a formal economy, Modi claimed that rationalising policies and procedures would make India the easiest place for doing business.
Stating that FDI in the last two fiscals was 60% higher than the previous two years, the PM revealed that India is a leading recipient of capital in the Asia Pacific region. “We are adopting and absorbing newer technologies to bring transparency and end discretion,” the PM said, adding that online processes brought speed and transparency. He kicked off the summit by promising to simplify procedures and create a business environment by rationalising policies.
Addressing the gathering, Modi said, “We are moving towards implementation of historic initiatives like GST, insolvency Act, company law tribunals and new IPR Acts which are already in place.” Calling India a ‘bright spot on the world economy’, Modi said: “Despite the global slowdown, we have registered growth. India’s contribution to global growth has been 12.5%.”
Suzuki Motor to start production from Gujarat plant next month
Japan’s Suzuki Motor Corporation on Tuesday said its new automotive plant in Gujarat will start production from next month. “Our new automotive plant in Gujarat will start production from next month,” Toshihiro Suzuki, president of Suzuki Motor, said at the Vibrant Gujarat Global Summit.
Will invest R1.25 lakh crore in Gujarat by March: Ambani
At the summit, Reliance Industries chairman and MD Mukesh Ambani said his will complete investment of R1.25 lakh crore in refinery and petrochemical expansion projects in Gujarat by March, exceeding commitments made by R10,000 crore.
Adani promises R49,000-crore investment in Gujarat over 5 yrs
Adani Group boss Gautam Adani announced investment of R49,000 crore in Gujarat for expansion of port capacity as well as foraying into water and cement businesses over next five years. Adani Group will set up a 10-million tonne cement clinker plant at an investment of R5,500 crore and another R2,000 crore in a desalination plant in Gujarat, he said at the summit.
Nano project led to Gujarat as car manufacturing hub: Tata
Tata Group patriarch Ratan Tata on Tuesday said setting up of the small car factory in Gujarat led to the state becoming a hub of car manufacturing in India. Calling himself ‘Gujarati’ while addressing the summit, Tata also said people abroad talk of the state and India in the same breath.
SOURCE: The Financial Express
India managed to cut the average number of procedures required to start a business from 29 two years ago, to about 12-14, but that didn’t help significantly improve its overall Ease of Doing Business ranking – in fact, as far as ease of “starting a business” was concerned, the country fell four places in the latest rankings. The Centre, as per a Business Standard report, moving to cut the average time spent in starting a business in Delhi and Mumbai from 26 days to four—by trimming the list of procedures further and tweaking the remainder for faster compliance—therefore is a commendable step. This will involve providing single-window clearance, widespread digitisation. Investors would surely make a beeline for India with this, one would think? Only, the ease of starting a business, while an essential lubricant, isn’t the fuel that fires the investor’s appetite.
Investors look at many factors, from the size of the market and the quality of the labour force, to flexible hiring policies, the time taken for resolution of disputes and the attitude of the taxman, among others. In the case of labour laws, for instance, while the government has tried to address the issue in the case of new textile units, few states have moved on making laws easier—Rajasthan and Madhya Pradesh are among the handful of states to have made closure of units easier. Though the new bankruptcy code has been brought into force, investors will wait to see its results—after all, when Sarfaesi was brought in, most felt that would ensure companies were wound up quickly. Little progress has been made on increasing commercial courts, and even the government will admit the progress on stopping harassment by the taxman is a work in progress—if the number of pending cases (over 6 lakh) isn’t bad enough, there are new taxes being talked of. A few weeks ago, the taxman issued a clarification that said investors in FII funds located overseas could be taxed in India even beyond the taxes paid by the fund while buying/selling shares here; a host of start-ups, similarly, are facing tax demands on the investments made in them on grounds the valuations were above fair-value and were therefore business income. While cutting the time required to start a firm is important, as is the time required to get an electricity connection—India’s ranking on this score has improved dramatically since the scoring is based on Delhi and Mumbai—it is the issues that firms have to deal with after they are registered that really need to be resolved.
SOURCE: The Financial Express
The Union Budget is preceded with a number of expectations of various stakeholders. The expectations this year are even more given the temporary slowdown expected in the economy on account of demonetisation. The government’s stated policy objectives such as reducing the corporate tax rates, bringing in certainty in tax law and a non-adversarial tax regime further add to the expectations of the corporates.
Corporate tax rate
One of the most anticipated announcement in the upcoming budget is the reduction in corporate tax rate. In his previous budget speeches, the finance minister had clearly laid down the government’s vision to reduce corporate tax rates from 30% to 25% with a simultaneous and phased withdrawal of various direct tax exemptions. In this direction, a lower corporate tax rate of 25% was introduced for new manufacturing companies which are incorporated on or after March 1, 2016, provided they do not claim other exemptions in the 2016 budget. The corporate tax rate was also lowered to 29% for companies with turnover not exceeding R5 crore. However, the general corporate tax rate still remained same at 30%.
The finance minister may only bring down the corporate tax rate in the range of 27-28%, even though the expectation of India Inc. would be to see a further lowering of rates at the earliest possible. A lower tax rate would bring some cheer for India Inc as it would help neutralise any short term slack in growth due to demonetisation. A lower tax rate would also bridge the gap with the global norm for corporate tax rates in various countries and help make the domestic industry more competitive.
India Inc would also like to see a reduction in Minimum Alternate Tax rate from the current 18.5% even though presently no road map has been provided by the government for such a reduction.
Incentives to promote less cash/digital economy
The government is keen and determined to move the direction of the economy to a digital or less cash economy. The demonetisation drive resulted in people trying the electronic payment options. The Government looks resolute to leave a mark as it forges ahead with all measures necessary to achieve a more transparent and digital economy. A robust tax policy including tax incentives and exemptions to promote the cashless and electronic payments may prove to be a milestone in achieving this vision. The government has already proposed to reduce the deemed profit rate from 8% to 6%, with respect to total turnover or gross receipts received through banking channel or digital means for the current financial year. This tax relief applies to any individual, HUF (Hindu undivided family) or a partnership firm other than limited liability partnerships (LLP) carrying on any business other than transportation, agency, brokerage and commission and having a revenue of R2 crore or less. The necessary legislative amendment in this regard shall be carried out through the Finance Bill, 2017. On the same lines, some further incentives could be expected in the Budget to give an impetus to digital economy.
Expansion of equalisation levy
Considering the potential of new digital economy and the rapidly evolving nature of business operations, a new levy called “Equalisation Levy” was introduced with effect from 1 June 2016 @ 6 % of the amount of consideration for specified services received or receivable by a non-resident not having permanent establishment (‘PE’) in India, from a resident in India who carries out business or profession, or from a non-resident having permanent establishment in India. The aforesaid levy initially covered online advertisements and provision of digital advertising space or facilities.
The finance minister, in his 2016 budget speech, had stated that the Equalisation Levy was aimed at taxing Business to Business (B2B) e-commerce transactions. The Government may expand the scope of the so-called equalisation levy in the upcoming Budget, seeking to bring more digital economy transactions under the tax net. The ambit of equalisation levy on e-commerce transactions could be expanded to include transactions such as downloading of songs, movies and books, online consumption of news, software downloads and online sale of goods and services.
Deferral of PoEM
It is desired that the Place of Effective Management (PoEM) provisions in respect of the residency criteria of foreign companies should be deferred by at least one year. Ever since the PoEM provisions were introduced by Finance Act, 2015, there has not been much clarity relating to its applicability and criteria. The CBDT has also released draft guidelines for determination of POEM in December 2015, though the same has not been finalised so far. The Union Budget 2016 had extended the application of PoEM from April 1, 2017 onwards. In absence of any final guidelines yet, Budget 2017 may further defer the applicability of PoEM unless the government promptly issues the much delayed clarifications on PoEM.
Whereas the above are only few anticipated direct tax changes which the corporates expect from the upcoming budget, the wish list of India Inc. as well as the common man is as high as always in a budget season. The challenge for the government is to strike a balance between the expectations of taxpayers as well as achieving its fiscal targets. One certain thing which can be expected from the upcoming budget is that it is going to have a touch of prime minister’s vision of a digital economy, measures to promote it along with a stable and certain tax policy environment.
SOURCE: The Financial Express
Amid the chaos over economic growth post demonetisation Anand Mahindra, the executive chairman of Mahindra Group, said that the economy is returning back to normalcy much faster than expected and remained optimistic about the faster growth of the country. He was talking to ET NOW. The 61-year-old business tycoon also has high expectations from US President-elect Donald Trump. “Need to wait and watch Donald Trump’s economic policies,” he said. Donald Trump has been elected the US President and will assume the office from January 20. Before this, India had enjoyed a strong and favourable relationship with the US under the presidentship of Barack Obama.
As India is shifting to a cashless economy, the economic growth was expected to be slow and less than it was predicted before because of Narendra Modi-led government’s sudden recall of high denomination bank notes that hit certain cash-based segments of the economy due to the resultant cash crunch. That the government has brought the financial system back to normal has given Mahindra hope of country registering faster growth. He has also predicted that sectoral issues will be resolved soon.
Mahindra’s comments came at the time when the Centre is facing criticism from the Opposition for its demonetisation move, however, it is saying that the move will swing the fate of the country and black money holders and even terrorists will be hit by the move. The government has seized crore of rupees and a major chunk of new, old and counterfeit currency post demonetisation. On the streets, though the lines outside banks and ATMs are almost nill, but a limit over the withdrawal of money is still causing inconvenience to the people.
SOURCE: The Financial Express
The government’s demonetisation move will bring structural changes to the economy, says Arvind Panagariya, NITI Aayog Vice-Chairman. “It will lead to greater formalisation of the economy,” he adds.
In an interview with BusinessLine, Panagariya said: “In the longer term, this formalisation is an essential part of transformation into a modern economy. Pain was concentrated during the first two months. Benefits will accrue for a lot longer through improved efficiency and productivity. I also expect that the disrupted supply chains will recreate themselves in the coming days.” He said the objectives of demonetisation had been largely met. “The exercise has led to much of the black money returning to the banking system. The government will collect tax and penalty on this money. Some of the black money has not returned and that will be expunged. Fake currency in circulation prior to November 8, 2016, has also been destroyed.”
He said that there had been concern over the Prime Minister not doing enough to curb black money as promised in his party’s election manifesto. With demonetisation, he has cleared those concerns emphatically, said Panagariya.
SOURCE: The Hindu Business Line
The Centre could consider increasing the service tax rate in the coming Budget as a fallback option in case the rollout of the Goods and Services Tax (GST) is delayed beyond April 1. “There is some thinking of an increase in the service tax rate in case the GST is not implemented from April. A higher rate will help improve revenue and also bring it closer to the proposed standard rate under GST,” said a person familiar with the development. The official, however, said there is no concrete proposal on such a move at present.
Most services are likely to be taxed at a higher rate of 18 per cent under GST against the current rate of 15 per cent. This was part of the four-tier rate structure approved by the GST Council at its meeting on November 3. The other three rates proposed under GST are 5 per cent, 12 per cent and 28 per cent. The decision will however, be taken later in the month and closer to the presentation of the Union Budget on February 1. “It has to be closely examined at the highest level before it is announced. On the other hand, there is a case to be made that the indirect tax structure should not be tweaked for just a few months before the GST rollout,” he added, noting that taxpayers may not take it very favourably, especially after the impact of demonetisation.
Budget 2016-17 hiked the service tax rate to 15 per cent with the introduction of the Krishi Kalyan Cess at the rate of 0.5 per cent on all taxable services. Finance Ministry officials, however, stressed that efforts are still on to roll out GST from April 1, 2017. “It is a tight schedule, but it is still very much doable. Much will depend on the January 16 meeting of the GST Council,” said an official. States are, however, pushing for a mid-year rollout of GST — from June 1 or September 1.
Sources said a higher service tax rate would also help the Centre raise additional revenue. “For whatever part of the fiscal that the GST is not implemented, a higher service tax rate will increase tax collections while paving the way for GST,” said the source. Tax experts said such a move, while possible, would require the government to notify the increase in service tax rates immediately, like in the case of central excise and customs duty. “Since the rate of taxation of services under GST will be close to 18 per cent, there is a possibility of an increase in the service tax rate,” said Pratik Jain, Partner and Leader Indirect Tax, PwC India. At present, the service tax rate changes announced in the Budget come into effect from May or June, once the Finance Bill receives Presidential assent.
SOURCE: The Hindu Business Line
The World Bank has pared India’s growth forecast for FY17 to 7% from 7.6% estimated earlier, attributing it partly to demonetisation of high-value currency notes. India is still forecast to retain its position as the world’s fastest growing major economy ahead of China, which is forecast to grow 6.7% in 2016. “India’s slight growth slowdown from the preceding fiscal year reflects the shortterm impact of the unexpected exchange of most of the bank notes in circulation.
Ongoing weakness in private investment also weighed on activity,” the World Bank said in its flagship ‘Global Economic Prospects’ report released on Tuesday. World Bank in June 2016 forecast 7.6% growth for India for FY17, which it reiterated in October, a month before the government decided to cancel the legal tender of Rs 500 and Rs 1,000 notes. “Unexpected ‘demonetisation’— the phasing out of large-denomination currency notes which were subsequently replaced with new ones — weighed on growth in the third quarter of FY2017,” World Bank said. It expects the impact to spill over into the next quarter as well. “Weak industrial production and manufacturing and services purchasing managers’ indexes (PMI), further suggest a setback to activity in the fourth quarter of FY2017.” “In the short-term, ‘demonetisation’ could continue to disrupt business and household economic activities, weighing on growth,” the report said pointing out that 80% of transactions were in cash.
Demonetisation could also pose a risk to other reforms such as the goods and services tax and labour and land reforms. World Bank, however, said that over the medium term, demonetisation may lead to liquidity expansion in the banking system, helping lower lending rates and lift economic activity. India’s statistics office has forecast 7.1% growth for the current fiscal, down from 7.6% in the last fiscal, but this slowdown does not factor in the impact of demonetisation.
The Reserve Bank of India has cut its gross value added (GVA) forecast to 7.1% from 7.6% estimated earlier, attributing it largely to a poor second quarter. Indian economy expanded 7.2% in the first half of the current fiscal. Global growth is expected to slow down to its post 2008 crisis low of 2.3%, according to World Bank estimates. India is forecast to rebound in the next fiscal in line with a pickup in global growth pegged at 2.7% in 2017. “India is expected to regain its growth momentum to 7.6% in FY2018 as reforms loosen domestic supply bottlenecks and increase productivity,” the World Bank report said. Moderate inflation and pay commission increase will support real incomes and consumption.
“Private investment is expected to recover as firms and banks deleverage and the effects of important structural reforms such as the Goods and Services Tax and the Insolvency and Bankruptcy Code start being felt,” the report said. The report also said the global outlook is clouded by uncertainty about policy direction in major economies. “A protracted period of uncertainty could prolong the slow growth in investment that is holding back low, middle, and high income countries.”
SOURCE: The Economic Times
In a chat with ET Now, Indranil Sengupta, BofA-ML, says every month of dislocation due to demonetisation impacts GDP by between 0.2% and 0.3% of GDP.
Edited excerpts:
How are you mapping all that talk about the growth trend from here on after what the CSO indicated in terms of a setback that growth is likely to see in FY17?
We are already looking at 6.9% this year and 7.3% next year. We believe there is further downside to the CSO’s numbers if you go by our own numbers. Every month of dislocation due to demonetisation impacts GDP by between 0.2% and 0.3% of GDP.
Do you think in the current environment where we are looking at positioning towards tightening of monetary policy globally, starting with US, what happens India? Any plan of a push by the Indian central bank to give a leg up to growth via cutting rates may come under bit of a cloud. The central bank may not be able to cut rates as much as anticipated earlier?
Most certainly not. The US is going from 0.5% to may be 1% one quarter. We are at six quarters. So there is a huge elbow room for the Indian central bank, the RBI, to cut rates. That is number one.
Number two, when you cut rates, you strengthen the currency by attracting FII equity flows because in India, the FII equity portfolio is almost five to six times that of the bond market portfolio. From that perspective as well, we do not see any constraint for the RBI to cut rates. Given that inflation remains benign, we are looking at 25 bps cuts by the RBI in February and April as several high frequency indicators suggest that there are downside risks to growth. The CSO itself suggests there are downside risks to growth. So from that perspective, we think that the RBI will cut rates both in February and in April.
Wanted to just talk a little bit about expectations from the budget because a lot of corporates that we have been talking with at least a few months ago were acknowledging the fact that the on ground situation had not dramatically altered and very interesting there was Twitter poll by the finance ministry inviting suggestions on which sector needs most focus and it was agri sector that got the number one preference followed by manufacturing and even infrastructure. What exactly would be your wish list from the budget and which sector would you hope gets the most preference?
We are looking at fiscal deficit of 3.5% of GDP translating into net borrowing of around Rs 5000 billion in central government paper. That is number one. We think that demonetisation will net about Rs 1500 billion to the government inclusive of special RBI dividend. All put together, I think the government will probably focus on rural spend but they will also have to pay the pay commission as part of the arrears for allowances. They will also have to recapitalise PSU banks. So these will be the three focus areas for the government in the budget.
What did you make of the tax mop-up details that came out yesterday. So you think that the government has in a meaningful manner been able to assuage concerns about the impact of demonetisation? Do you think the signal has been sent out that on the fiscal side the government is trying to balance things out?
We think that the government should be able to meet its 3.5% of GDP target for this year and N K Singh committee will probably recommend a higher band. We also expect a 3.5% fiscal deficit target next year. The fiscal deficit is not a concern either which way at this point given that it is fairly low.
What would be a concern for you right now? There are downside risks to growth but for the world watching India and when we talk to a lot of foreign investors, they are saying that as long as 7% is maintained on the growth frontline, your projection is a little lower than that. When compared to the rest of the world, things are still looking okay what is your top concern stepping into the budget and post that in terms of what policy can do to support growth? We have not quite seen the kind of pick up in investments that one was expected to this year?
My concern remains what for the last three years, with extremely high real lending rates. GDP growth may be 7% in the new series but it is probably somewhere around 4% to 4.5% in the old series. We think that the big principal measure for recovery that the government and the RBI need to take is to bring down lending rates
A step has been taken with the reductions in the MCLR but that is only the beginning.What is required is a fall in the effective lending rate, not just the marginal one which is why we think there will be a mix of RBI rate cuts and RBI OMO to coax down lending rates. Until that happens, year after year we will keep on waiting for the capex cycle to revive which will never happen.
The rupee is sitting at 68 but still on a relative basis, looking far more resilient than other emerging market currencies despite the dollar’s unprecedented move. What is the call on the rupee right now and from a near term perspective?
Typically the rupee appreciates a bit into March because of strong seasonality. Thereafter, given that we expect the dollar to go to 102 a euro, the rupee will probably end 2017 at around 70. But right now the rupee is going to ride a strong seasonality in February and March.
SOURCE: The Economic Times
International rating agency Moody’s Investors Service has maintained a positive outlook on India and said that beyond the shortterm negative impact on growth, demonetisation has the potential to raise government revenues and provide some fiscal space to support growth if required. “We maintained a positive outlook on India’s (Baa3 positive) rating in November 2016 based on our expectation that economic and institutional reforms will support continued robust growth,” the New York City headquartered agency said in its latest report on Asia-Pacific. It said measures including relaxation of foreign investment restrictions, passage of the Goods and Services Tax, and advancement of a workable bankruptcy code have potential to stimulate private sector investment, which could lead to stable, balanced growth and gradually lower the government’s debt burden. The agency said the ongoing implementation of reforms is likely to boost medium-term growth.
The comment was part of wider Asia-Pacific review published in the report ‘Sovereigns — Asia Pacific: 2017 Outlook — Stable Outlook Balances External, Political Risks Against Economic, Institutional Reforms’. The report said that in the context of downside risks to the global growth outlook and the possibility of faster increases in US interest rates than investors currently assume, capital inflows to emerging markets could taper abruptly.
SOURCE: The Economic Times
The rupee opened nearly 5 paise down at 68.23 against dollar on account of buying in American currency by bank and importers ahead of a news conference by the US President-elect Donald Trump in which he is expected to spell out more about his plans for the economy. Meanwhile, domestic equity markets opened in the green following mixed global cues. The BSE Sensex opened 78.88 points, or 0.29 per cent, up at 26,978.44, while NSE Nifty opened 39.20 points, or 0.47 per cent, up at 8,327.80.
The local currency on Tuesday wiped off most of its early strong gains but eventually managed to end higher by three paise at 68.18 against the US dollar. According to ICICIdirect.com, the rupee pared gains after a strong opening as domestic factors continue to weigh on rupee. Outflow redemptions, rise in crude oil prices and news of lower expectation of GDP data is weighing on the rupee in the near term.
Foreign institutional investors (FIIs) remained net seller in domestic equity markets on Tuesday as they offloaded shares worth of Rs 385.42 crore with gross purchases and gross sales of Rs 2,202.68 crore and Rs 2,588.10 crore, respectively. On the further movement of local unit, Angel Broking in a report said, “Any positive tone in Trump’s speech will weaken the currencies of emerging market currencies including the Indian rupee owing to foreign outflows.” Government bonds were little changed on Tuesday after a fresh supply of state government debt weighed on investor appetite. The benchmark 6.97% 2026 bond yield remained unchanged at 6.40 per cent on January 10.
SOURCE: The Economic Times
Importers and overseas currency borrowers are usually reluctant to hedge their US dollar exposure as they try to benefit from exchange rate movement to their advantage but with the US dollar strengthening and a collapse in the forward premium which makes hedging cheaper, there is a surge in covering USD positions. The move reinforces the fact that rupee is likely to turn volatile, and some analysts see it reaching Rs 70-72 to the USD. “Many importers are now rushing for currency hedges taking advantage of lower costs as they expect the rupee to turn volatile in future,“ said Keta Kurkute, VP, Mecklai Financial, a FX advisory firm. “The currency market has been lacklustre in the past 2-3 weeks but this has not made importers complacent with global and domestic events that will soon trigger ripples in the placid water.“
Hedging costs have come off across the board. Importers are mostly covering their positions in 1-3 month contracts, dealers said. In the past two months, the premium has fallen to 4.3% from 6.2% for one-year forward contracts. Even for 1-2 -month contracts, forward premia are trading in between 3.50% and 4.50% in the last three weeks, tempting importers to hedge dollar commitments. The dollar-rupee 30-day contract was at 5.87% on December 21, and has now dropped to 4.61%, dealers said.
Donald Trump, the new US Republican president-elect will assume charge on January 20, a move, which is set to see some policy changes impacting outsourcing business. Last week, shares of Indian information technology companies plunged after a bill backing key changes to the H-1B programme was reintroduced in the US Congress by two lawmakers who claim it will help crack down on abuse of the work visa.The visa allows skilled workers from countries including India to fill hi-tech jobs in the US. “The rupee has been fairly overvalued, which only points to further erosion of the local unit's value to the dollar,“ said Anindya Banerjee, currency analyst, Kotak Securities. Securities. “Importers are also wary of this and trying to cover their posi tions at a lower cost. Volatility is expected to rise ahead of US President Trump formally taking charge.“
Last October, the dollar-rupee volatility index hit a more than 8 and half-year low in October amid Reserve Bank of India's tight interventions to check the rupee's intraday day volatility. The index dropped to as low as 3.50%, the lowest level since January 2008, according to the Bloomberg Implied Volatility Index. It now quotes 5.77% till press time increasing the chances intra-day sharp swings.
SOURCE: The Economic Times
Ahead of a key meeting in Davos in a week’s time, India on Tuesday stated that ways for easier trade in services and the ongoing Doha Round issues would be high up on its priority for negotiations at the World Trade Organization (WTO) as it prepares for the ministerial meeting in Argentina later this year. Even as commerce and industry minister Nirmala Sitharaman reiterated India’s stand on food security issues, she stated that new issues such as e-commerce and government procurement would be included in the WTO's agenda only after all countries reach a consensus. “New issues or any issue will come in the agenda only after consensus emerges… I do not think there is a consensus. Discussions are on but it is not in the agenda,” she said after chairing a review meeting on WTO and the path ahead which was attended by Indian negotiators from Geneva and different ministries including finance, home, animal husbandry and food.
India and the US would meet on the sidelines of World Economic Forum meeting in Davos. WTO Director General Roberto Azevedo too is expected to be there. Ministers of Canada and European Union too would meet Sitharaman in Davos. The WTO's top decision making body is also scheduled its meeting in December in Argentina. At the last ministerial in Nairobi, developed countries were successful in clinching the deal away from India by allowing new issues to be taken up in the WTO’s mandate. Developed countries including the US have been pushing for cooperation, information exchange and capacity building for small and medium enterprises and fisheries also.
On its part, the government is discussing the new issues with industry and studying all the papers submitted by other members in the WTO. On the issue of Trade Facilitation Agreement (TFA) in services on which India has submitted a paper, the minister said the ministry has sought its legal vetting. India is pitching for this agreement as the services sector contribute about 60 per cent in the GDP and 28 per cent in the total employment. The note aims at reducing transaction costs by doing away with unnecessary regulatory and administrative burden on trade in services. In its note, India has proposed for simplification of procedures and clarity in work permits and visas for smooth movement of professionals.
SOURCE: The Economic Times
With the European Union delaying its response to India’s request for a renegotiation of the Bilateral Investment Promotion and Protection Agreements (BIPA) its member-nations had entered into with New Delhi earlier, uncertainties loom over protection to fresh investments made by companies in each other’s territories after April 1. India has made it clear that all such bilateral investment agreements with other nations modelled after the earlier text will become null and void on April 1, 2017 and that both existing and fresh pacts have to be based on the new model text approved by the Cabinet, commerce and industry minister Nirmala Sitharaman said on Tuesday.
According to Sitharaman, India had informed the EU a year in advance about the expiry of the old pacts by the end of March 2017, and the need for re-negotiating the investment agreements on the basis of the model investment text approved by its Cabinet in December 2015. Still, India is yet to get a date from the EU for starting the renegotiation process, she said. Under the European Commission (EC) framework of law, the EU members have delegated their power to the EC in Brussels to negotiate on trade or investments on their behalf.
Analysts said while existing investors will enjoy protection for an additional 10-15 years even after the expiry of the agreement due to a sunset clause attached to these pacts (for instance, the agreement with the Netherlands extends protection to investments made before the date of termination for 15 years more), fresh investments from April this year will not have such protection until the two sides renegotiate the pacts. Last year, EU had expressed concern on the fate of investment treaties between some of its members and India after the finance ministry had written to various countries, seeking a review of all such pacts within a year using the new investment text.
India had signed a total of 83 bilateral investment treaties (BITs) since 1994, including those with some of the EU members. Separately, India also recently revised its Double Taxation Avoidance Agreement (DTAA) with Singapore, having tweaked its tax treaties with Mauritius and Cyprus earlier last year. These revisions are mainly aimed at curbing misuse of the provision for avoiding double taxation.
The modified treaties with Mauritius, Singapore and Cyprus confer New Delhi the right to tax capital gains and thwarts round tripping by Indian investors. EU nations like Germany, France and the Netherlands are among the top ten foreign direct investment sources for India since April 2000, while the UK – which has decided to exit the EU – is the third-largest source. Analysts have said India can have a separate pact with the UK now that the latter has decided to pull out of the Union.
New issues at WTO only after consensus
After meeting officials to review the country’s strategy for the WTO, Sitharaman said India wants new issues such as e-commerce and government procurement be incorporated in the WTO’s agenda only after member-countries gather a consensus on them. When told that developed nations, including the US, are pitching for the inclusion of such new issues at the WTO, the minister said no consensus has emerged so far on them.
“New issues have to come in agenda only after consensus emerges on those. I do not think there is a consensus. Discussions are on but it is not in the agenda,” she said. Key WTO members, including India, the US and some others, would meet on the sidelines of the World Economic Forum meeting in Davos later this month. The next WTO ministerial is also scheduled to take place in Argentina in December. The minister ssaid that her ministry has already worked on the text of a trade facilitation agreement on services at the WTO and has also taken a legal vetting. “We will certainly want to put TFA in services for discussion. We would take it up as an agenda as we approached the ministerial meeting.”
SOURCE: The Financial Express
India is unlikely to amend its tax treaty with the Netherlands as it did with Mauritius, Singapore and Cyprus and this could shape the investment strategy of foreign portfolio investors (FPI) and private equity (PE) funds investing in India, said three people in the know. “There were talks to amend the tax treaty between India and Netherlands for last two years. Recently, we were told that as the Netherlands is not used for tax planning, (therefore) the current treaty can prevail,” one of the persons quoted above told ET.
Senior officials from Netherlands also confirmed the development. The officials were talking on the sidelines of Vibrant Gujarat, the annual investment jamboree of the state government. FPIs will see their returns from India getting impacted as a result of the amended Singapore, Mauritius and Cyprus tax treaties, and are already looking to shift their base to European jurisdictions like France, Spain and the Netherlands. Industry trackers say status quo ante in the India Netherlands treaty could mean many FPIs could prefer the Dutch route. Dutch officials insisted that investors rooting their investment through the country are not doing it as a tax planning exercise. “There is a 25% tax on book profit and on interest,” said an official.
However, industry trackers said there could still be some benefits for the FPIs and PE investors to shift their base to Netherlands. FPIs are exempt from capital gains tax in Netherlands as the local tax is levied only on business income and not on capital gains subject to fulfilment of certain conditions. “There could however be a 15% withholding tax when the Dutch FPI pays income to its investors, which is reduced under Dutch tax treaties so there is no complete pass-through like Mauritius. Nevertheless, some FPIs could consider moving to the Netherlands and a certainty around tax treaty could mean that some of them may take this step in the near future,” said Rajesh H Gandhi, partner, Deloitte Haskins & Sells.
Additionally, experts say there are even caveats in the 25% tax in Netherlands. “While there is about 25% tax on income in the Netherlands, it is on net income and not on gross income. This could mean that any investor investing in India from the Netherlands could deduct the expenses and interest payouts and then pay taxes on the net income, in that situation the effective tax on total returns from India for investors will be less than 25%,” said Punit Shah, partner, Dhruva Advisors.
The Netherlands has Qualifying Investment company regime, under which the tax on such company could be zero, say experts. While moving to Netherlands could benefit FPIs and PE funds, some benefits could also benefit strategic investors. “If a non-resident investor is selling shares of an Indian company to another non-resident, there is no capital gains tax in India. Similarly, if less than 10% shares of an Indian company are sold to an Indian resident; then also, there is no capital gains tax in India. Hence this treaty works well for investors based out of Netherlands to achieve tax efficiency in India,” said Sanjay Sanghvi, tax partner, Khaitan & Co, a leading taxation law firm.
Industry experts point out that shifting to Netherlands may just be a temporary fix for the next two years or so. The government may be looking at adopting a common tax agreement which could lead to uniform tax regulations for all investors irrespective of which destination they come from. This multilateral agreement under the base erosion and profit sharing (BEPS) framework could solve a lot of confusion around tax treaties and tax arbitrage issues for India, experts said.
SOURCE: The Economic Times
Seeking closer ties with India, China today suggested a bilateral "Friendship and Cooperation Treaty" along with a Free Trade Agreement to comprehensively boost relations between the two Asian giants who are locked in a long-standing border dispute. Luo Zhaohui, China's Ambassador to India, while mooting the "Friendship and Cooperation Treaty" and FTA proposals, termed differences between New Delhi and Beijing over certain issues as matters "within a family", and sounded optimistic about the future of bilateral ties.
Describing the twin proposals as "ambitious", Luo said the time is ripe for the two countries to reap some "early harvest" benefits in resolving their decades-old vexed border issue. The envoy maintained India and China should join hands in the latter's 'One Belt One Road' initiative aimed at building super-modern economic and infrastructural connectivities in South Asia. India's 'Act East' policy would get a fillip if New Delhi joined the ambitious initiative, the diplomat added.
Luo was speaking at a function organised by the Observer Research Foundation (ORF) Mumbai at the newly established Ji Xianlin Centre for India-China Studies at the University of Mumbai in suburban Kalina. On his first official visit to Mumbai, Ambassador Luo said, "India is my second home. I joined foreign service because of my affection for India." "Beyond connectivity projects, our two countries should also cooperate to promote cultural exchanges, cooperation in education, and people-to-people contacts under the One Belt One Road framework." Luo described the current differences between India and China on certain issues as matters "within a family", adding, "Even members of a family have some differences sometimes. I am very optimistic about the future of our relations." Sudheendra Kulkarni, Chairman, ORF Mumbai, said India- China relations should be guided by their profound civilisational wisdom. "India, China and Pakistan should forge a friendly relationship, and resolve differences peacefully, which is critical for changing the destiny of South Asia," Kulkarni said.
SOURCE: The Economic Times
Britain should prioritise free trade agreements with key Commonwealth nations like India following Brexit, says a new report released. The report by the UK's Free Enterprise Group suggests a five-step plan for the UK as it gets ready to leave the EU, which begins with striking pacts with the Commonwealth's open economies of Australia, Canada, Singapore and New Zealand to secure Free Trade Agreements (FTAs) in time for Brexit. As a second step, the UK should pursue an FTA with India. "The UK's largest Commonwealth export destination [India] is a prize worth pursuing. Significant time should be invested by the UK into a trade-only deal. However, this will take time. Australia, Canada and New Zealand are all in the process of FTAs with India that have already taken five to six years," the report notes.
'Reconnecting with the Commonwealth: The UK's free trade opportunities' co-authored by Conservative party MP James Cleverly and Tim Hewish, executive director of Commonwealth Exchange, highlights the importance of shared language, common law tradition, diaspora networks, and historic cultural links with countries like India as a key to forming new ties following Britain's exit from the 28-member economic bloc.
"The best way to ensure that free trade has few losers, even in the short term, is to begin with much freer trade between likeminded countries with comparable standards of living. Free trade agreements with economically advanced Commonwealth countries are the obvious place for Britain to start," says former Australian Prime Minister Tony Abbott in his foreword to the report. "The government must a publish a plan to utilise the 'Commonwealth Advantage' and build our trade links with the Commonwealth. A market of 2.3 billion people and some of the fastest growing economies in the world is too big an opportunity to ignore," adds Cleverly. The report says the UK is the largest EU goods export destination for numerous Commonwealth countries such as India, Australia, Canada, New Zealand and South Africa. It is also the second largest for Bangladesh, Kenya, and Papua New Guinea, providing a strong motive for Commonwealth countries to form trade deals with the UK.
SOURCE: The Economic Times
It would be "naive" for India to "tilt" towards the US in the "trade war" between Beijing and Washington under Donald Trump's administration, a state-run Chinese daily warned today amid concerns that expansion of manufacturing sector in India could dent Chinese exports. "It would be naive for India to assume that its economy will boom if it draws closer to the upcoming Trump administration amid a pending trade war between Beijing and Washington," an article in Global Times said. "Overestimating US-India economic ties may mislead India and send it down the wrong path for economic development. New Delhi needs to be realistic in terms of growth," it said. "Instead of tilting toward the US, it should focus on developing its manufacturing industry and integrating itself into the global supply chain to expand exports to narrow its trade deficits with major trading partners and create jobs to generate growth," it said.
The article hit out at the weekend Assocham India report stating that India is likely to be harmed by a trade war between China and the US and New Delhi must be proactive to ensure that it is "on the right side of the upcoming US administration; or else the impact could be on the Indian services exports to the American firms". "Assocham's message that cautions being dragged into a US-China trade war seems to suggest that New Delhi should lean toward Washington to avoid being implicated and be ready to reap economic gains from a growing alliance with the US. "While this observation appears to be pragmatic, it is also near sighted and may risk distracting India from a better path for economic growth," it said. "The weight of economic ties between China and the US is heavier than those between India and the US. Bilateral trade between China and the US reached USD 558 billion in 2015 while trade between India and US was about USD 109 billion. "It would be self-deceptive to believe that the US needs India more than it does China," it said.
The article argued that the problem with the Indian economy is that its manufacturing industry is less competitive than China's, which means India imports more than it exports. "China's exports to India reached USD 58.24 billion in 2015 while imports from India hit USD 13.38 billion, resulting is a trade deficit with China of USD 44.86 billion," it said. India officially put its trade deficit with China in 2015 at USD 51 billion. This year it was expected to grow as Indian exports have reportedly fallen further. "Further, India runs trade deficits with most of its top trade partners. To bridge these trade deficits, India needs to develop its manufacturing industry and produce more manufactured goods," it said. "Only by integrating itself into the global supply chain can India boost exports and drive growth. To achieve that, the best way is to work with a manufacturing powerhouse like China and develop its manufacturing capacity to become an integral part of the Asian supply chain. This would allow India to attract more foreign investment and open further to the outside world," it said. "With a large working-age population, many of whom are employed in unorganised sectors, India has a greater need to develop its manufacturing industry to tap the potential of its demographic dividend and lift a vast number of people out of poverty just as China did and still is doing," it said. "India needs to realise that there is no short cut when it comes to economic development. Failing to realise this, India risks setting its economy on a dead-end route," the article warned.
SOURCE: The Economic Times
Pakistan's government on Tuesday announced a raft of tax cuts and incentives aimed at reviving the struggling textiles industry, state-run media said. Textiles make up more than half of Pakistan's exports, but it has lost ground to South Asian neighbours in recent years, hurt by chronic energy shortages and underinvestment in machinery. Prime Minister Nawaz Sharif announced a package of incentives worth 180 billion rupees ($1.72 billion) after a meeting with top exporters, state-run Radio Pakistan said. It quoted Finance Minister Ishaq Dar as saying the customs duty and sales tax on import of cotton had been abolished, with a sales tax on imports of textile machinery scrapped.
Falling exports have become a major concern for the government at a time when remittances from abroad are also falling, potentially putting pressure on the currency. Improved security across Pakistan is also more likely to attract foreign customers and investors to the textiles industry, officials say.
SOURCE: The Reuters
Sri Lanka will soon receive Generalised Scheme of Preferences Plus (GSP+) status of the European Union, marking a significant turning point for the country’s industrial and export sectors, President Maithripala Sirisena has said. The GSP+ trade concessions are linked to the country’s compliance with human rights and labour rights conventions. “Our agreements with the countries, businessmen, investors and international organisations are very open. The current government is honestly committed to the development of the country,” Sirisena said at a ceremony to open the newly built bridge in Halloluwa, Dodanwala, Kandy. He added that during the last two years the present government was able to build friendship with all the countries in the world, eliminating many hindrances which halted the forward drive of the country.
Sri Lanka lost the GSP Plus status in 2010 due to the United Nations Human Rights Council (UNHRC) alleging violations of human rights during the civil war. Subsequently, when the EU evaluated Sri Lanka in 2014 it found that the country was not adhering to 3 of the 27 international covenants that a country must abide to qualify for the consideration of GSP Plus. However, last year, the European Council said it welcomed the significant advances made by Sri Lanka since the presidential elections held in January 2015 to restore democratic governance, initiate a process of national reconciliation and re-engage with the international community and the United Nations system. Apparel account for 46 per cent of Sri Lanka’s exports to the EU. So, soon after Sirisena’s announcement, stocks of two leading garment companies, MGT Knitting Mills and Teejay Lanka, became active on the Colombo Stock Exchange (CSE).
SOURCE: Fibre2fashion
Bangladesh textile seminar that will kick off from February 16 will focus on sustainability in the textile industry. The two-day programme will analyse the Bangladesh textile industry to undertake various corporate social responsibilities. The summit is a platform to connect with textile industry peers, existing customers and potential clients. The conference aims at analysing the Bangladesh textile industry in order to get a better understanding of its textile market and avoid the risks while finding opportunities. The summit is also platform for international buyers to learn the latest sourcing strategies and trends in Bangladesh textile industry, and for suppliers it is a way to find the solution to the problems they face while investing in factories. Meanwhile, it is also an opportunity for exchanges, communication and mutual assistance.
Experts from various organisations including Bangladesh Garment Manufacturers and Exporters Association, Bangladesh Institute of Development Studies and Center for Policy Dialogue will be speaking at the programme. These speakers will focus on several issues such as latest development situation and prospects of the textile industry in Bangladesh, best solution for textile sustainability in Bangladesh and ethical sourcing, buyers’ practice to the suppliers’ corporate social responsibility audit in Bangladesh among others. The programme will also host a panel discussion on sustainable sourcing and developing trends in Bangladesh textile market.
SOURCE:Fibre2fashion
The Pakistan weavers association said suppliers of goods to textile exporters have been massively impacted due to indiscriminate policies of the government. It added that, while exporters were eligible to import yarn at zero per cent duty and do not need to pay income tax and sales tax, they were subjected to 15 per cent custom duty and income tax. Asif Siddiq, patron-in-chief of Pakistan Weaving Mills Association informed that due to shortage of cotton and yarn, the Pakistan weaving industry was dependent on imports of yarn from various countries and had to pay import duty on the same. “This has resulted in indirect exporters being thrown out of the market and so the government needs to immediately create an even playing field between direct and indirect exporters,” Siddiq observed. “He also added that the much awaited Textile Package to be announced by the government should include these demands,” Pakistan media reported.
SOURCE: Fibre2fashion
MCL News and Media has launched a new briefing, which provides in-depth, practical advice on the critical issue of due diligence in textile sourcing. The report, written by international textile consultant and Ecotextile News correspondent, Simon Ferrigno, explains the due diligence concept and discusses how it is much more than just compliance to third-party textile standards and basic risk management. For any retailer or brand that is not only concerned about mitigating risk, but is also looking to improve its impact on the environment and the lives of workers in its supply chain – this special briefing is a ‘must-read’ report for your business.
Spread over four parts, ‘Due Diligence in Textile Sourcing’ asks whether current due diligence initiatives are a sophisticated way for retailers and brands to cover their backs, or whether it is a valuable tool for companies and investors upstream to ensure they comply with certain legal and moral imperatives of sustainable development. The report also looks at how due diligence moves beyond the limitations of textile standards, which in the instance of cotton, can often ignore key questions outside their crop and immediate farm boundaries.
With the OECD recently presenting draft textiles guidelines for consultation, this briefing also uses the example of an ‘organic’ cotton farm project in the Lower Omo Valley, Ethiopia as a yard-stick for what might pass a due diligence test, which goes well beyond ordinary third-party certification. “Due diligence is often seen as an essential tool and process for companies to identify, assess, mitigate, prevent and account for how they address the actual and potential adverse impacts of their business activities,” says Simon Ferrigno. “However, this process not only concerns adverse impacts caused or contributed to by companies, but it also considers those potential and actual adverse impacts that are directly linked to their operations, products or services through a business relationship. “This is an important distinction because due diligence goes beyond direct relationships and in the case of the textile industry goes well beyond the Tier 1 level suppliers to retailers and brands. As such, the obligation is however on this final user to leverage others in the supply chain to action, to create improved transparency and understanding.”
A wider list of recommendations can be found at the end of this four-part briefing, which gives a thorough introduction about why due diligence is a must for apparel buying teams. It then drills down further to examine how a comprehensive due diligence programme by retailers and brands can impact on the environment, economy and society, and finally how it can dove-tail into policy and governance.
SOURCE:The Eco Textile
The Clean Clothes Campaign along with 26 labour rights groups has sent a joint letter to over 20 of the largest apparel brands and retailers that source from Bangladesh - including H&M, GAP, Inditex, Next and C&A – asking them to lobby the Bangladesh government to secure the release of detained labour leaders. Following wage protests last month in Dhaka, an estimated 2 - 3000 workers were fired and, claims the Clean Clothes Campaign, at least 13 union leaders and activists were detained or arrested. 11 are believed to still be in custody. The letter calls on the international apparel brands to "immediately contact the Bangladesh government and urge them to release the detained labour leaders, disclose the whereabouts of any labour leaders or advocates who are unaccounted for, drop unsubstantiated charges against these leaders, and cease all forms of harassment and intimidation against labour activists exercise of their fundamental rights of expression and association."
Last month, tens of thousands of garment workers in Ashulia, Bangladesh, held protests calling for a new minimum wage in the range of 15,000 to 16,000 taka (US$191-203) per month. The current wage is 5,300 taka (US$67). Said the Clean Clothes Campaign: "The government of Bangladesh has a long history of targeting independent union and worker centre advocates, including through arbitrary detention, physical and psychological abuse while in detention, and possibly even assassination.
"This new round of attacks against trade union organizations represents a clear step backwards for the Bangladesh garment industry. Even before this crackdown, both the International Labour Organisation (ILO) and the European Union had acknowledged the government's failure to protect the right to freedom of association for Bangladeshi workers and urged the government to take concrete steps to ensure its laws and practice are in line with international standards. If the brands sourcing from Bangladesh wish to see a more sustainable and safe garment industry, it is vital that they also demand that workers' fundamental rights are respected."
SOURCE: The EcoTextile
The Heimtextil exhibition in Frankfurt starts today with a large increase in the number of exhibitors and all indications suggesting that the new furnishing season will be a good one. The exhibition has seen not only a growth in its exhibition space, but also in the number of home textile exhibitors. Heimtextil is by far the largest event of its kind in the world. Pakistan will have 219 exhibitors, out of which 55 exhibitors are participating under the Trade Development Authority of Pakistan. This will make Pakistan the 4th largest country at the show behind Germany, China and India. The Pakistani Ambassador to Germany Jauhar Saleem will also be visiting the show.
With regards to home textiles, consisting of bed sheets, towels and kitchen linen, Pakistan has a very strong position in the textile market. The biggest country with regards to home textiles in the exhibition is Pakistan. Premium exhibitors like Gul Ahmed, Kamal, Sapphire are participating in the exhibition. This year, the number of exhibitors from European countries has increased. Another highlight of the show is the attendance of delegations of students from Asian Institute of Fashion Design and Textile Institute of Pakistan.
Over 2000 trade visitors from Pakistan are attending Heimtextil Frankfurt 2017. Klaus Gunether, a textile buyer who has been visiting Pakistan since the 70's, expressed very positive views about Pakistan to media. He said, "Pakistan has a unique place in the heart of textile buyers. We know the entrepreneurs are very pro-active and reliable.” Gunether said that him and his associates were satisfied with their dealings with Pakistani businessmen and were happy that Pakistani companies have introduced new trends in 2017.
SOURCE: The Daily Times
Swiss textiles standard Oeko-Tex has announced a raft of changes to its Made in Green, MySTeP, STeP and Standard 100 certifications. The company announced the changes in the year it celebrates its 25th anniversary. Oeko-Tex has established a new price strategy for the Made in Green product label. The new pricing offers label issuers the option to use smaller packets of labels, or even a single label for their product to be labelled with Made in Green by Oeko-Tex. After three years on the market, Oeko-Tex has revised the STeP by Oeko-Tex limit value tables in Annex G1 and G2 of the standard document. "These revisions have been influenced by ongoing changes in the global environment, input from customers and current regulatory developments," said a note from Oeko-Tex. A new chapter has also been added in Annex D: 'Hazardous Processes That Should Be Avoided'. These processes to be avoided include the use of potentially hazardous surfactants, sodium hypochlorite (as a bleaching agent) and defoamers that are potentially damaging to the environment.
The new regulations for Standard 100 by Oeko-Tex will come into force on 1 April 2017 following a three-month transition period. At the parameter 'per- and polyfluorinated compounds', a large number of substances have been added or listed explicitly by name in product class I (items for babies and small children) and provided with limit values. "As a result, in product class I, the use of per- and polyfluorinated compounds is severely restricted and nearly eliminated," said Oeko-Tex. A large number of substances is also included in the list of regulated softeners (phthalates) in all of the product classes. The three organic tin compounds dipropyltin (DPT), monophenyltin (MPhT) and tetraethyltin (TeET), are now regulated with limit values in all product classes. In addition, the use of the blue colourant 'Navy Blue' is also now explicitly prohibited for product certification according to Standard 100 by Oeko-Tex.
Oeko-Tex will inform stakeholders about the new regulations regarding product certification in line with Standard 100 via a webinar on 25 January 2017 at 6:00 p.m. CET/12:00 Noon EST. Participation is free of charge and people can register online at www.oeko-tex.com/std100-criteria-2017.
SOURCE: The EcoTextile
Xinjiang Uygur autonomous region, a major cotton production base in Northwest China, is aiming to create more than 100,000 new textile jobs in 2017, through intensive processing projects such as garment manufacturing. Yin Xiaodong, an official in the region's textile industry, said Monday that the number would account for two-thirds of planned new jobs in the region's industrial sector in 2017, or a quarter of all new jobs. A total of 112,300 workers were newly recruited in the textile sector in the region in 2016, which accounted for over 50 percent of new industrial employment in the region, Yin said.
According to figures released at the regional conference on economy and information technology last week, total investment in the textile sector reached nearly 65 billion yuan ($9.39 billion) in 2016. Annual cotton spinning capacity was 15 million spindles, up 150 percent year-on-year. Yin estimated investment in the industry in the past three years exceeded 90 billion yuan, equivalent to the total from 1978 to 2013. Xinjiang produces about 60 percent of China's raw cotton. The State Council issued a guideline in June 2015, which supported the textile and garment industry in Xinjiang and hoped to increase local employment and boost exports.
SOURCE: The China Daily
Clariant, world leader in specialty chemicals, has announced the release of ColorForward Interiors 2018, the fifth annual trend and colour forecasting guide for the fibre and textile market. Newmorrow, LongitudeLatitudeAttitude, Through the mirror and Nerdylicious trends reflect an over-arching feeling of sadness, fear and distrust of the conventional world. The Newmorrow trend theme reflects a sort of yin-yang mood among consumers. On the one hand, they believe the ‘system’ is rotten, unable to change economic and social conditions that have become intolerable. On the other hand, there is also a conviction that change is still possible. This colour palette includes a brownish green called Primordial Soup. It prompts references to sewage and death, but it also reminds of the verdant, rich biological goop that spawned life as we know it, says the company.
Dissatisfaction with conventional ways of living stands behind the LongitudeLatitudeAttitude trend. Its colours are Bohemian. They range from a purplish fuchsia, called Nomadness, a warm, almost-orange yellow named Kaleido tribe, and grey blue called Cirrus aviaticus after the contrails of jet planes against the otherwise cloudless sky. The trend theme named Through the Mirror attempts to capture a sense of ennui, of being adrift in a modern world while, at the same time, knowing that a spiritual reawakening is possible. The yoga practice of trataka inspires the pearl orange colour in this palette.
The Nerdylicious trend theme sees brainiacs finding acceptance as innovators in a complex world, with continuous curiosity and a passion for exploring new ideas and complex puzzles. Although the colours of Nerdylicious are soft and subdued, they are the brightest and most optimistic in the 2018 palette. All the colours are toned down and a little bit grey. At the same time, however, there is a sense of resolve, a determination to endure and a cautious optimism that people can make a difference and things will get better over time, so many of the colours are also warm, organic and hopeful. An international team of specialists from the Clariant ColorWorks design & technology centres look at the state of global societal attitudes and forecasts colours that can be expected to connect with consumers on an emotional level in the next few years. “For the first time, we are able to show people exactly what some of the 2018 colours look like in finished form. Fabric and carpet designers always use a combination of colours and so these samples provide a bridge between the colour world and the fibres world,” said Alessandro Pozzati, Clariant ColorWorks industrial designer. The ColorForward presentation kit includes 20 trend colours presented in the form of pompons made of polypropylene and polyamide fibres, ‘wrap cards’ with polyester fibre samples and carpet samples developed in partnership with Performance Yarn business of Radici Group.
SOURCE: Fibre2fashion
The 40th Texworld Paris show begins February 6-9, 2017 with 730 exhibitors, with this number showing an increase, particularly due to the return of previous exhibitors, who missed several recent shows. Turkey, with 87 exhibitors, remains the second most represented country after China, followed by South Korea with 71 exhibitors and India with 53 exhibitors. Taiwan with 26 and Pakistan with 19 bring up the rear of the top five exhibiting countries. In addition the 2017 edition will also see companies participating from new countries.
Elite, a segment dedicated to customised solutions will see 21 exhibitors, a majority of whom played a key role in setting up this zone, for specialist offers that are adapted for European markets. Texworld will also host the Frankfurt Style Award, an international fashion competition to promote young designers. There will also be a series of lectures discussing the latest developments in the sector, catwalk shows and the Trends Forum.
SOURCE: Fibre2fashion
Unifi, Inc., a multi-national manufacturing company that produces textured and processed yarns, is expanding its global footprint of Repreve recycled fibre by entering into Vietnam with support from Century Synthetic Fiber Corporation, a licensed manufacturer of Repreve. Century Corporation will manufacture and sell Repreve filament yarn within Vietnam. Unifi Textiles (Suzhou) Co., Ltd. (UTSC), Unifi’s subsidiary in China, will manage sales and distribution of Repreve filament yarn exported from Vietnam. This collaboration will open distribution channels for Repreve in a key apparel-producing region, helping to fulfil increasing demand and shorten lead times to the Company’s customer base. Headquartered in Ho Chi Minh City, Vietnam, Century Synthetic Fiber Corporation is one of the largest polyester yarn manufacturers in Vietnam. Century Corporation was established more than 15 years ago and continues to invest in its operations and expand capacity.
Tom Caudle, president of Unifi, Inc. said, “Vietnam has been a region of focus for brands and retailers over the past few years. The growth in the region cannot be ignored, with exports of approximately $27 billion of apparel and textiles in 2015, and expectations to grow to $30 billion in 2016. Within the past 18 months, we’ve grown distribution of Repreve to include Turkey, Taiwan, Sri Lanka and now, Vietnam.”
Jay Hertwig, vice president of global brand sales, marketing, and product development for Unifi said, “This is a strategic position in growing the global supply chain for Repreve and will allow us to expand into other Premium Value Added (PVA) products in the near future. A presence in Vietnam will enable Unifi to meet sourcing requests and increasing demand from our customers wherever they choose to do business.”
SOURCE: Fibre2fashion
Fashion trade show Avantex Paris which runs February 6-9, 2017, promises a wealth of new developments and insights for the future of fashion. The exhibition is divided in to various zones like Materials & Components; Garments & Accessories; Prototype Studio and Smart Retail and aims to provide a pioneering offer from raw material to sales for each segment. Start-ups from the La Fashiontech Association will unveil their products and fashion solutions, including Coloreel’s instantaneous dyeing machine for embroidery and Euveka, which will show a robotic mannequin for pattern-making.
Subsidiaries of the Techtera Network will be displaying their latest innovations in technical textiles, which will serve as basis for a fashion collection from Louis Gérin and Grégory Lamaud, art directors of the show. Green Defence, a group of Taiwanese chemists and Wolford from Austria will be showing their latest in biodegradable designs. Four European schools will also be presenting their perspective on the future of the clothing and materials industries.
SOURCE: Fibre2fashion
E-commerce giant Alibaba will help US small businesses sell products to China, the world’s largest consumer market, and Asia, especially Southeast Asia, through its platform. The company already enables approximately 10 million merchants, including US companies and farmers, to sell to over 450 million Chinese consumers on its online platform. After his meeting with US president-elect Donald Trump in New York, Alibaba executive chairman Jack Ma said, “We talked about supporting one million small businesses to sell on our platform to China and Asia, especially Southeast Asia, where we are pretty big.” After the 40-minute meeting, Trump said, “We had a great meeting…and (he’s) a great, great entrepreneur, one of the best in the world, and he loves this country, and he loves China.”
China is attractive for small US companies due to the country’s huge market, its rising consumption and an increasing fondness for American products among China’s young population. Ma said the two shared “ideas about how we can improve trade”. “I told him my ideas about how to improve trade, especially to improve small business, cross border trade.” “We specifically talked about ... supporting 1 million small businesses, especially in the Midwest of America. Small businesses on the platform selling products -- agriculture products and America services - to China and Asia,” he said.
SOURCE: Fibre2fashion
Oil edged up on Wednesday, lifted by reports of Saudi supply cuts to Asia, but prices were prevented from rising further over a lack of detail of these reductions and because of signs of rising supplies from other producers. Prices for Brent crude futures, the international benchmark for oil prices, were trading at $53.75 per barrel at 0316 GMT, up 11 cents from their last close. US West Texas Intermediate ( WTI) crude oil futures were at $50.97 a barrel, 15 cents above their last settlement.
Traders said that the price rises were a result of reports that Saudi Arabia, the world's top oil exporter, was telling some Asian customers that it will curb crude supplies slightly from contracted volumes in February, although Reuters was not able to confirm any details of the reductions. There were also doubts that the overall cuts would go deep enough to rebalance a market suffering from oversupply for the past two years. Both Brent and WTI futures are down around 6 percent since the start of the year. "Traders continued to fret about rising US supply and compliance by Opec to agreed-upon production cuts," ANZ bank said.
The US Energy Information Administration (EIA) said on Tuesday that American crude production in 2017 would rise by 110,000 barrels per day (bpd) to 9 million bpd. Another concern for traders were high US crude stockpiles, with the EIA scheduled to release its latest figures on Wednesday. "With inventories at the highest seasonal level in three decades, another increase in this week's report could see prices come under further pressure," ANZ said.
Outside the United States, there were lingering doubts over compliance with planned production cuts from members of the Organization of the Petroleum Exporting Countries (Opec). Opec's second-biggest producer Iraq plans to raise crude exports from its southern port of Basra to an all-time high in February, keeping shipments high even as Opec production cuts take effect this month.
Iraq State Oil Marketing Company (SOMO) plans to export 3.641 million bpd of crude in February, according to trade sources and preliminary loading schedules, potentially beating a record of 3.51 million bpd from December. Some cuts, however, are happening. In non-Opec member Russia, which also agreed to cut output, extreme cold as low as minus 60 degrees Celsius has helped to knock out production by around 100,000 bpd in the first few days of January, and many oil engineers expect more reductions as production facilities struggle to cope with the extreme conditions.
SOURCE: The Economic Times
Benzene prices soared across regions in December but showed moderation later amid weaker demand in China. In US, spot benzene moved up to 16-month highs due to rising Asian numbers, a strong derivative styrene market and low benzene fixtures to the US. In Europe, benzene spot moved up during the month. Asian marker, FOB Korea surged 18% in December and declined 5.9% YoY. US spot prices rose 16.7% while it fell 7.3% YoY as compared to previous year’s average. European spot was up 22.6% on the month while it fell 3.5% YoY.
Caprolactum prices continued to surge on the back of moderate demand and range‐bound benzene. Spot prices hit a 2-year high during the month on a CFR China and CFR Taiwan basis because of limited supply, feedstock benzene prices, higher domestic Chinese prices. Asian caprolactam spot prices in December were up 27.5% from last month while it declined 14.4% YoY.
Nylon chip prices in December skyrocket in line with surging caprolactum, given high crude oil and benzene values. Producers operated cautiously, leading to tight supply and low inventory. Converters trimmed operation and made rigid procurement. Coupled with healthy demand for engineering plastics/film grades, nylon chip market was bolstered a bit. Offers for Taiwan-origin chips were up 26.5% from last month. In China, bright conventional spinning nylon-6 chips were up 30.3% from November while semi-dull chips rose 30.1% on the month.
Nylon filament yarn prices soared in December given higher raw material cost which in turn eroded margins. Thus, suppliers trimmed run rates to below 70% with cautious mentality. Demand for warp‐knitting, weaving and AJ covering sectors witnessed smooth sales while circular‐knitting mills and lacing mills ran at lower rate. In China, semi-dull FDY70D/24F was up US cents 59 a kg from previous month while FDY40D were US cents 64 on the month.
SOURCE:Yarns&Fibers
