Between 2001 and 2014, the sector witnessed a 9% CAGR. However, over the past 10 years, textile exports from India stagnated due to the expiry of the EU trade treaty, COVID and high channel inventories. Globally, the size of the textile trading industry is estimated at $800 billion, with India’s export contribution being around $35 billion. Recently, the government of India announced a road map for the industry to reach $100 bn by 2030, implying a 19% CAGR over the next six years. This would not only entail investments of close to Rs 200,000 crore, but also generate direct employment for 3 million people. Between 2001 and 2014, the sector witnessed a 9% CAGR. However, over the past 10 years, textile exports from India stagnated due to the expiry of the EU trade treaty, COVID and high channel inventories. While growth aspirations may look stretched, besides ‘China plus one’, two key catalysts – PLI and FTA with the EU/UK – could help India achieve its lost glory in textiles.
India emerging as a strong player: MNCs are now increasingly looking to diversify their supply lines away from China due to geopolitical tensions as well as high labour costs. This has led to a potential shift of exports from China towards other countries. Some of the biggest global brands have already begun reducing their exposure to China. We believe India’s competency across factor cost and a well-established textile ecosystem (across cotton segment) will allow it to benet from the ‘China plus one’ theme. Despite Bangladesh being a very strong player in garments trade due to FTAs and low labor costs, the recent political turmoil may force retailers to evaluate other options, with India once again emerging as a country of choice
Apparels and home textiles to lead the way: Within the textile sector, we remain most excited about garmenting and home textile space rather than the commodity-based weaving, spinning and yarn manufacturers who are prone to cyclicality. What excites us about garmenting is global retailers looking to diversify away from China and now Bangladesh as well, along with vendor consolidation. This means certain large garment manufacturers will get disproportionate share in contracts, with Indian companies being already strategically positioned with retailers. Moreover, technical textiles, used in human protection (for doctors, re ghters, Army), industrial belting, ropes etc, are growing at a fast pace owing to domestic demand and export opportunities.
Building blocks in place to create a strong garmenting industry: Garment is a labour-intensive industry and has been fragmented with no company with above $1.5 bn in revenue. To attract investments and generate employment, certain states are providing labour subsidies to companies and trying to provide a holistic ecosystem for manufacturers. We are also witnessing a trend towards consolidation, wherein larger manufacturers are acquiring good production facilities or companies with diverse client bases. Such M&As help companies offer a wider product boutique, cross-sell their offerings, negotiate better with customers and vendors and ultimately become a supplier to MNC retailers.
FTAs with UK and EU could be a game changer: Currently, India does not have FTAs with Europe and the UK. As a result, due to higher import duty, India’s share in readymade garments and home textiles has been negligible in these countries. With FTA negotiations in the nal round, opportunities emerge as a whole new market opens up for home textile and garment players. Similarly, the government’s focus on PLI schemes and incentivising the textile industry, creating an ecosystem for textiles, will help companies achieve the target set by the Centre
Financials to improve as opportunities galore: The combined EBITDA of the textile sector in India grew at a 9% CAGR over the past decade. With focus on manufacturing, especially on garments, home textiles and technical textiles, we believe the sector can grow faster. Over the next few years, we believe certain pockets in the textile sector will offer wealth creatin opportunities and prefer integrated companies or companies which are up in the value chain (garments, home textiles) vs pure yarn and fabric manufacturers.
Source: Financial Express
Data from the Ministry of Commerce and Industry indicates that Indian textile exports are beginning to revive in FY ’25, with demand from European markets significantly contributing to the increase in numbers.Exports to Europe totalled US $ 5.66 billion from April to October, up 6.39 per cent from US $ 5.32 billion during the same time period in FY ’24. Even if Indian textiles are becoming more popular in important European countries, the figures still fall short of the US $ 5.84 billion realised in FY ’23, according to data from the commerce ministry, underscoring recovery difficulties. Ready-made garments (RMGs) contributed US $ 3.18 billion, leading the jump, according to the ministry’s Niryat portal. Then came cotton yarn, textiles, makeup, and handloom goods, which totalled US $ 1.10 billion. During the first seven months of the current fiscal year, Germany, Italy, Sweden, Finland, Switzerland, Turkey, Latvia, Austria, Greece, the United Kingdom, the Czech Republic, Poland, and Slovenia all had a high demand for textiles. While Austria, Greece, and Slovenia saw fresh growth in FY ’24, Sweden, the Czech Republic, Bulgaria, Switzerland, Finland, the Netherlands, and Ireland remained important markets.
In FY ’24, Europe’s contribution to India’s textile exports was US $ 9.66 billion, or 28.08 per cent of the US $ 34.40 billion total. Compared to FY ’23, when Europe contributed US $ 10.48 billion, or 29.48 per cent of the US $ 35.55 billion total, this represented a decrease. Europe provided US $ 5.66 billion, or 27.34 per cent, of India’s US $ 20.70 billion in textile exports during FY ’25 (April–October). The India Brand Equity Foundation (IBEF), a division of the commerce ministry, projects that the Indian textile and apparel market will reach US $ 350 billion by 2030, growing at a 10 per cent CAGR. Furthermore, India is among the top five global exporters in a number of textile categories and is the third-largest exporter of clothing and textiles worldwide. By 2030, exports are predicted to surpass US $ 100 billion.
The textile and clothing sector accounts for 12 per cent of exports, 13 per cent of industrial production, and 2.3 per cent of the nation’s GDP. By the end of 2030, India’s textile sector is expected to have doubled its GDP contribution, from 2.3 per cent to roughly 5 per cent.
Source: Apparel Resource
Synopsis UK Prime Minister Keir Starmer announced the resumption of Free Trade Agreement negotiations with India in early 2024. The decision, following a meeting with Indian Prime Minister Narendra Modi, aims to bolster the countries' bilateral trade partnership, which is currently valued at approximately GBP 42 billion annually. London: The Free Trade Agreement negotiations with India -- expected to signicantly boost the estimated GBP 42-billion a year bilateral trade partnership -- will be relaunched early in the new year, Prime Minister Keir Starmer has informed the UK Parliament here. It came during his statement to update the House of Commons on Thursday about his G20 Summit visit to Brazil, where he said he had a "good discussion" with Prime Minister Narendra Modi among other world leaders. The meeting earlier this week had led to both countries agreeing to resume the election-stalled Free Trade Agreement (FTA) talks. "I had a good discussion with Prime Minister Modi about deepening our bilateral ties," Starmer told the members of Parliament. "We agreed to raise the ambition of our UK-India comprehensive strategic partnership, which covers security, defence, technology, climate, health and education, building on the unique bonds and cultural ties between our two countries. "Crucially, this work will start with trade and investment and I am pleased to say that we agreed to relaunch Free Trade Agreement negotiations early in the new year," he said. The talks had been paused in the 14th round as the general election cycles kicked in for both nations, with FTA negotiations that began under a Conservative Party government now being picked up by a Labour-led administration in charge in Britain. "Boosting economic growth is key to improving living standards for working people. A new trade deal with India will support jobs and prosperity in the UK - and represent a step forward in our mission to deliver growth and opportunity across our country," Starmer said in Rio de Janeiro, soon after his rst in-person meeting with Modi since taking charge at 10 Downing Street. According to the UK India Business Council (UKIBC), which has engaged with oicials across departments in both governments during the 13 rounds of negotiations, a substantial number of chapters have already been discussed for the FTA. Meanwhile, the UK's Department for Business and Trade (DBT) is set to unveil the government's new Trade Strategy aligned with its Industrial Strategy to help inform all future trade negotiations and achieve long-term sustainable, inclusive and resilient growth through trade. "India is the fth largest economy in the world and a vital trading partner for the UK. We believe there is a good deal to be done here that works for both nations," said Business and Trade Secretary Jonathan Reynolds. India and the UK have been negotiating the FTA since January 2022 and the Commerce and Industry Ministry in New Delhi has said that both sides would resume the discussions from the "progress achieved previously and seek to bridge the gaps for expeditiously closing the trade deal".
Source: Economic Times
The last quarter of each year is chock-full of festivals--which, traditionally, is when Indians shop for new clothes, spurred on by myriad sales and big discounts.
The textile industry is a vital sector of the Indian economy, contributing 2.3 percent of the gross domestic product (GDP), 13 percent of industrial production and 12 percent of exports. But this also means that the quantities of textile waste generated and needed to be managed in the country is massive: Approximately 7.8 million tonnes or 8. percent of global textile waste, is accumulated in India every year. India is also among the top three countries in the world in textile waste generation. The answer, say experts, lies in shifting to a circular economy as compared to the traditional linear economy of making, selling and disposing goods. The circular model uses resources for as long as possible through processes such as reuse, recycle and up-cycle, thereby minimising pollution and waste. In India, textile recycling is not new. The country established its recycling industry in the 1990s and has a “stronghold” on mechanical recycling, according to a 2023 analysis by IDH and Sattva Consulting. Even so, 17 percent of textile waste ends up in landfills. “This [systematic recycling] has been more at the industrial level,” said Kanika Ahuja, director of Conserve India, an NGO that works on environmental conservation. According to a report by the Textile Committee, under the Ministry of Textiles, the industry is known globally as a polluter because of its greenhouse gas emissions, discharge of wastewater, dumping of used clothes, and the use of chemicals that are often carcinogenic. Greenhouse gas emissions by the global textile industry are greater than those from shipping and international air travel, combined, as IndiaSpend reported in December 2021. Further, the global fashion industry is also the second-biggest consumer of water, we had reported. It takes 3,781 litres of water--equivalent to the amount of water a person drinks over a period of three years--to make a pair of jeans, starting from the production of cotton to the retail delivery of the final product.
Textile waste is divided into three categories: pre-consumer waste, which is waste generated during the manufacturing process; post-consumer waste, which is used as clothing, bedding, towels, etc); and imported waste. The effective
management of such waste holds not only potential for environmental benefits but also for economic and social benefits.
IndiaSpend reached out to Rachna Shah, secretary, Ministry of Textiles, and Rohit Kansal, additional secretary in the ministry, to ask about government initiatives to manage textile waste and the measures taken to decentralise recycling, including at the policy level. We will update this story when we receive a response.
Initiatives across the country
Anshu Gupta is the founder of Goonj, an organisation working on the reuse and repurposing of textile waste. “In the last 10 years we have re-used more than 63 million kgs of textile waste,” Gupta told IndiaSpend. A primary focus of the organisation is to meet the clothing needs of those struck by climate disasters. Over time, Goonj has started re-purposing textile in other ways such as by making bags, mattresses and quilts, as well as sanitary napkins. Gupta calls textile a resource and said they work with “that which is considered waste by some”, thereby generating cloth-based employment for those involved in the process. In Gujarat’s Kachchh, a Circular Khadi project in a handloom cluster saw the upcycling of cotton and khadi waste into handspun yarn that can be used to make new products. This experiment did not just use the circular economy concept in the handloom textile sector, Ahuja explained, but also created a space within the process in which traditional artisans like spinners and weavers played a role. The project was a collaboration between Khadi London, Where Does it Come From (UK), Conserve India and Khamir, an NGO in Kachchh that works with craftspeople. In Delhi, a social enterprise called SilaiWali has upcycled 15 tonnes of textile waste in the last six years to make at least 250 types of products. “We upcycle apparel scraps to make different products--the signature one being our handmade doll,” Bishwadeep Moitra, co-founder of SilaiWali told IndiaSpend. The enterprise is recognised as a manufacturer of upcycled fabric by the Ministry of Textiles. SilaiWali began as an initiative by Moitra and his wife, Iris Strill, to empower women with a sustainable source of income, and started with 300 Afghan refugee women who were adept at stitching and embroidery. SilaiWali has since collaborated with luxury brands, both international and domestic, to sell products such as keychains, Christmas decorations and other home decor. They are now expanding work and are in the process of training women in West Bengal and Rajasthan. Zero Waste Ladakh is also guided by the same principle: generate income from textile waste and in doing so, sustain the environment. “Ladakh does not have textile industries but has a lot of tailors’ shops which generate large amounts of textile scrap,” Mipham Jigmet, co-founder of the enterprise said. Registered in 2021, Zero Waste Ladakh has trained women of self-help groups and upcycled more than 200 kg of textile waste to create products like bags, coasters, cushions and pouches. “These products are sold in the local market, fulfilling our aim of generating income from waste,” he added.
The whole process--of turning waste into a product of value--is, however, not simple. In the Kachchh experiment, Khamir, the NGO, collected the Khadi and cotton waste, and did the first level of sorting, while Conserve India did another round, followed by segregation and shredding. “It was not easy to spin this shredded fabric into yarn and the spinners had to tweak their traditional technique in order to do so,” Ashna Patel of Khadi London said. Although they were supported with training, Ghatit Laheru of Khamir added that this process showcased the skill and potential of traditional craftspeople like hand spinners and weavers, “and the role they can play in the waste management process”. “Kachchh has so much Batik, Bandhani, block printing fabric--the waste generated as well as the potential is huge,” he said.
The upcycle yarn being woven in Gujarat’s Kachchh.
One of the biggest challenges in this journey however, was to find a small-scale shredder which could be placed at the cluster level in order to decentralise the process, Patel said. Similar projects are planned with other natural fibres such as silk and indigenous wool. According to Vasant Saberwal of Centre for Pastoralism (CfP) which works with the civil society, government and the private sector to enhance pastoralist livelihood security, “80 percent of indigenous wool in India is discarded”. The reason, he explained, is that the weaving of textiles made of indigenous wool is labour- and time-intensive, which means they are priced higher than the ones made of acrylic. This, combined with a shift in consumer preferences in favour of 'modern' and soft garments has contributed to a decline in the sale of traditional woollen textiles, a 2022 report by CfP said. Indigenous wool is often coarse and this, according to the Wool Research Association under the Ministry of Textiles, is the reason why it is not favoured and hence discarded. However, it is this very coarseness that gives indigenous wool thermal insulation and acoustic properties, making it an ideal green building material. As compared to other commonly used insulation material like fibreglass and rock wool, sheep wool is eco-friendly and renewable; it reduces production costs and environmental pollution because it has “less embodied energy than other materials”. CfP, said Saberwal, is working with other organisations, innovators, architects and designers to use discarded indigenous wool as insulation material.
The upcycled fabric made from waste Khadi and Cotton on display in an exhibition in Delhi.
Lack of governmental policy a hindrance
Although efforts are being made by different organisations to manage textile waste, India does not have a government policy yet on textile waste management, like it does about plastic waste. Anil Gupta, member of the Central Pollution Control Board (CPCB) under the Ministry of Environment, Forest and Climate Change, reasoned that this was because textile waste can be recycled and is not necessarily a ‘waste’. In 2023, the Union government told Rajya Sabha that it is implementing a project called Enhancing Circularity and Sustainability in India, in collaboration with the United Nations Environment Programme. It has also approved three projects on textile waste recycling. “The government of India supports the concept of a circular economy whereby there is maximum utilisation of a product,” Anil Gupta told IndiaSpend. “Wealth should be generated from waste, and textiles, which some consider is something to be disposed of, can be made into usable products for others.” Ahuja added that synthetic textiles are a source of microplastics in the environment. The washing processes of synthetic textiles have been assessed as the main source of microplastic pollution in oceans. Fast fashion accounts for high levels of such releases because of a high share of first washes, as they are used only for a short time and tend to wear out quickly due to low quality. For the sake of the environment and to bridge societal inequities, Anshu Gupta of the NGO Goonj said the focus should therefore be on re-use of textiles. In February 2024, a tripartite memorandum of understanding was signed between the Textiles Committee (Ministry of Textiles), Government e Marketplace (Ministry of Commerce and Industry) and the Standing Conference of Public Enterprises (Department of Public Enterprises) for the promotion of upcycled products made from textile waste and scrap. As part of this, upcycled products are promoted in GeM outlet stores, and support will be given to those in the upcycling sector through advocacy and capacity building. Conserve India is also in talks with the Ministry of Textiles to reach out to more clusters to decentralise the textile waste management process, Ahuja said. Fashion designers, social media influencers and the media have a key role to play in dictating audience tastes and promoting what is ‘fashionable’. The UNEP and UN Climate Change have put together a Sustainable Fashion Communication Playbook that guides brand managers, marketers, social media influencers and others on how to redirect fashion communication. The points include how one can take action to counter misinformation and greenwashing, reduce messages perpetuating overconsumption, redirect aspirations towards a sustainable lifestyle, and empower consumers to demand greater action from businesses and policymakers--all of which, it is argued, is the path towards achieving the Sustainable Development Goals.
Source: News Laundry
India is on track to become the third-largest economy in the world, with a stable currency, substantial forex reserves, and preparedness to meet global challenges, commerce and industry minister Piyush Goyal said on Friday. “Today, India stands proud, resilient, and determined on the cusp of an extraordinary transformation. Under Prime Minister Narendra Modi, the nation is well on its way to becoming the third-largest economy in the world and is prepared to meet global challenges,” Goyal said at the eighth edition of the India Ideas Conclave. The Indian currency has held its position as one of the least volatile among major currencies, and the forex reserves stand at about $675 billion—among the five largest in the world, the minister said. India is committed to promoting sustainable trade practices and green technologies, ensuring that economic growth aligns with environmental responsibility. Advancing renewable energy targets, the country has already achieved 200 GW of the 500 GW target set for 2030, the minister added. He also emphasised that research and innovation remain key pillars in India’s journey towards Viksit Bharat and urged industries to leverage the fund. “To encourage private sector participation in deep tech and sunrise domains, the Government of India has announced a fund of Rs 1 trillion, which will provide long-term financing to promote innovation. I urge industries to leverage this fund to scale up innovation in critical areas, in a public-private mode, with academia partnerships,” he said.
Source: Business Standard
Central government-owned ports, also known as major ports, recorded a rare 3.2 per cent year on year (Y-o-Y) contraction in their cargo volumes during October, primarily due to a fall in crude oil and coal shipments, according to government data. Traffic handled at the 12 major ports decreased last month to 68.22 million metric tonnes (mmt). Approximately, a fourth of this cargo arrived through coastal shipping. Overseas cargo handled by these ports decreased by 5.5 per cent to 52.9 mmt in October, while domestic cargo shipped through coastal waters increased by 5.3 per cent on-year to 15.9 mmt. Crude Oil, which accounts for almost a fifth of the entire traffic, contracted in volumes by 8.8 per cent to 12.9 mmt, while overall volumes of petroleum products also fell, the data reveals. Coal, also among the largest revenue generators for ports, showed a Y-o-Y contraction of 13 per cent, led by a large fall in non-thermal coal cargo. October typically sees higher movement of goods due to increased consumer spending in the festival season. Container volumes at state-owned ports in October remained flat (-0.2 per cent). In contrast, India’s merchandise exports showed a 28-month fastest pace of growth at 17 per cent, primarily led by inventory build-up in the West as the Christmas and New Year season approaches. Additionally, privately-owned ports in the country recorded a 5.7 per cent growth in cargo volumes at 64.2 mmt with a 5 per cent growth in export-import (Exim) cargo. Handling of containers at private ports also increased by 21.5 per cent to 13.3 mmt, a sign that these ports gained more from the festival season rush. So far in 2024-25, India’s largest private port operator Adani Ports and Special Economic Zone handled 257.7 mmt of total cargo – a Y-o-Y growth of 8 per cent. This growth was supported by containers, up 19 per cent Y-o-Y, followed by liquids and gas (9 per cent), the company told exchanges earlier this month. The government collects data from its 12 major ports and 65 non-major (private/state government) ports under 10 State Maritime Boards and Directorates of Ports. Among these, Kolkata Port recorded a 25 per cent fall in cargo, with Visakhapatnam Port’s volumes down by 15.5 per cent in October. So far in FY25, traffic at major ports has increased by 3.9 per cent to 481 mmt.
Source: Business Standard
The government has started internal discussions on ways to revitalise the manufacturing sector, with a new set of incentives, as the preparations for Budget FY26 is under way. While investments in a clutch of sectors are already being promoted via production-linked incentives, what is being looked at now is a broader scheme, where government assistance would be linked to employment generation and fresh investments, sources said. Over the last two decades and more, India has been taking several policy steps with a view to increasing the share of manufacturing in its gross domestic product (GDP) to 25%. However, the share of the sector in GDP hasn’t risen and been hovering around 16% since FY12. “The government will do something for the manufacturing sector. It may not be a production-linked (scheme), but one based on capital expenditure and employment creation,” an official said, adding that the discussions are at a preliminary stage and details would take time to work out. In recent months, the government has been nudging India Inc. to invest to expand its capacity to serve India’s growing needs by taking advantage of the government’s employment promotion schemes, PLIs and the cut in corporate tax rate announced in 2019. Three schemes for ‘Employment Linked Incentive’ were announced in Union Budget 2024-25 as part of the Prime Minister’s package of five schemes and initiatives to facilitate employment, skilling and other opportunities for 41 million youth over a 5-year period with an outlay of Rs 2 lakh crore. Since the Budget was delayed to July due to general elections, the schemes are yet to be rolled out. The government lost a little over Rs 1 trillion in 2020-21 in revenues on account of a cut in corporate taxes, and similar amounts in subsequent years. The pace of corporate tax revenue growth has slowed since the tax cut, without commensurate increase in corporate investments. In September 2019, the government announced a cut in base corporate tax for then-existing companies to 22% from 30%; and for new manufacturing firms, incorporated after October 1, 2019, to 15% from 25%. “Industry is now telling us that to step up investment in manufacturing, the government has to extend some more incentives,” another official said. Of India’s estimated workforce of nearly 565 million, just 11.4% are employed in manufacturing while more than 45% are employed in agriculture. To step up manufacturing, the government has launched PLI schemes in 2021 covering as many as 14 sectors with an outlay of Rs 1.95 lakh crore incentives earmarked. The scheme has generated a mixed outcome.
Source: Financial Express
Synopsis India and the Association of Southeast Asian Nations (ASEAN) have scheduled the next round of talks concerning their free trade agreement for February 2025 in Jakarta, Indonesia. The two trading partners aim to enhance trade and eliminate barriers by reviewing the existing agreement, AITIGA, which was signed in 2009. The next round of talks for the review meeting of the India-Asean free trade agreement in goods will be held in February next year, an oicial statement said on Saturday. The fourth round of the negotiations was concluded here this month. The review of AITIGA (Asean India Trade in Goods Agreement) will be a step forward in enhancing trade with the ASEAN region in a sustainable manner, the commerce ministry said. "The next meeting of the AITIGA Joint Committee is scheduled in February 2025 in Jakarta, Indonesia," it said. There are 8 Sub-Committees under the AITIGA Joint Committee to negotiate aspects related to market access, rules of origin, standards and technical regulations, customs procedures, economic and technical cooperation, trade remedies, and legal and institutional provisions. Asean as a group is one of the major trade partners of India with about 11 per cent share in India's global trade. The bilateral trade in 2023-24 was USD 121 billion and reached USD 73 billion during April-October this year with a 5.2 per cent growth. The AITIGA was signed in 2009. The review of the AITIGA was a long-standing demand of Indian businesses. India is asking for a review of the agreement to eliminate barriers and misuse of the trade pact. Asean members include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
Source: Economic Times
Synopsis Indian Commerce Secretary Sunil Barthwal visited Norway to expedite the implementation of a free trade agreement between India and the EFTA bloc. The agreement aims to boost Indian exports and attract signicant investments from EFTA countries, including Norway. Barthwal's discussions focused on trade, investment, and professional mobility between the two regions. Commerce Secretary Sunil Barthwal has visited Norway to discuss the possibility of an early implementation of a free trade agreement between India and the four-nation European bloc EFTA, an oicial statement said on Saturday. The agreement, oicially dubbed as Trade and Economic Partnership Agreement (TEPA), was inked in March. The implementation date has not yet been nalised. The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland. "The visit was aimed at furthering the objectives of and unlocking the large market in EFTA countries for Indian exports of goods and services and push for early implementation of USD 100 billion investment," the commerce ministry said Barthwal met Tomas Norvoll, State Secretary of the Ministry of Trade, Industry and Fisheries of Norway for discussions on promoting trade and investments, mobility for Indian professionals, re-energising existing institutional mechanisms and the next steps for the TEPA ratication. In a separate statement, the ministry said over the past decade, India's seafood exports have doubled to USD 7.3 billion in value and 17.81 lakh metric tonnes in volume terms. With 500 EU-approved rms, India's seafood processing capacity continues to expand, making the EU India's second-largest seafood market, with annual purchases of USD 0.95 billion. Additionally, India is the EU's second-largest shrimp supplier, holding an 8 per cent market share and contributing 12 per cent of the EU's squid imports.
Source: Economic Times
Synopsis India and the Association of Southeast Asian Nations (ASEAN) have scheduled the next round of talks concerning their free trade agreement for February 2025 in Jakarta, Indonesia. The two trading partners aim to enhance trade and eliminate barriers by reviewing the existing agreement, AITIGA, which was signed in 2009. The next round of talks for the review meeting of the India-Asean free trade agreement in goods will be held in February next year, an oicial statement said on Saturday. The fourth round of the negotiations was concluded here this month. The review of AITIGA (Asean India Trade in Goods Agreement) will be a step forward in enhancing trade with the ASEAN region in a sustainable manner, the commerce ministry said. "The next meeting of the AITIGA Joint Committee is scheduled in February 2025 in Jakarta, Indonesia," it said. There are 8 Sub-Committees under the AITIGA Joint Committee to negotiate aspects related to market access, rules of origin, standards and technical regulations, customs procedures, economic and technical cooperation, trade remedies, and legal and institutional provisions. Asean as a group is one of the major trade partners of India with about 11 per cent share in India's global trade. The bilateral trade in 2023-24 was USD 121 billion and reached USD 73 billion during April-October this year with a 5.2 per cent growth. The AITIGA was signed in 2009. The review of the AITIGA was a long-standing demand of Indian businesses. India is asking for a review of the agreement to eliminate barriers and misuse of the trade pact. Asean members include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam.
Source: Economic Times
TEMPO.CO, Jakarta - Chair of the Indonesian Fiber and Filament Yarn Producers Association (APSyFI), Redma Gita Wirawasta, pointed out that the upcoming increase in Value Added Tax (VAT) from 11% to 12% will result in additional costs for producers, and that will be passed on to consumers. “This additional cost will strain our already tight cash flow,” Redma told Tempo on Sunday, November 24, 2024. He explained that previously, producers were required to pay an 11% VAT on raw material purchases. With the VAT increase, this cost will rise to 12% starting from January 1, 2025. Subsequently, these additional costs will be incorporated into the final product price, ultimately borne by consumers. “Consumers will pay a 12% VAT on the final product, while businesses will remit the difference between the input and output VAT to the government,” Redma said. The association, he claimed, has discussed the matter with the Indonesian Textile Consumers Foundation (YKTI) and concluded that this additional burden will indeed be passed on to the end consumers. Ardiman Pribadi, Executive Director of the Indonesian Textile Consumers Foundation (YKTI), explained that with the previous 11% VAT, the effective tax burden on consumers was already 19.8% due to cascading effects throughout the supply chain.“If the VAT is raised to 12%, the consumer burden will rise to 21.6% of the actual price of the goods,” Ardiman said in a written statement on Sunday, November 24, 2024. Amid the declining purchasing power of the public, Ardiman expressed concerns that this VAT hike will further decrease textile consumption among the community. He believed this could have unintended consequences, as it may hinder the government's goal of increasing state revenue.
Instead of raising taxes, Ardiman suggested that the government should prioritize efforts to combat illegal imports. Based on the trade map data for the past five years, the state lost about Rp46 trillion annually due to unrecorded textile imports. The value of goods entering without customs duties, VAT, and Income Tax reached US$7.2 billion or around Rp106 trillion. “If illegal imports are eradicated, state revenue from the textile and textile product (TPT) industry could increase by Rp9 trillion per year without raising the VAT,” Ardiman said.
Source: Tempo.com
Stakeholders have shared insights into how the Federal Government can nurture the growth of Nigeria’s furniture and textile industry, saying both industries have potential to contribute significantly to the Gross Domestic Product (GDP), employment and export. While calling for innovation, policy, and collaboration in these vital industries, major players seek effective policy-making to drive growth in the sectors. Daniel Deji Ayodele, founder of Mindshift Empowerment and Employment Initiative (MEEI), speaking on the ‘Role of Policy, Innovation, Standards, and Etiquette in Boosting Nigeria’s Furniture and Textile Sectors’ at the 4th International Furniture, Home Textile, and Household Exhibition tagged Nigeria DecorExpo 2024, said that the sector is “not just integral parts of our economy; they also reflect our culture, creativity, and capabilities.” According to Ayodele, “The furniture industry has seen local artisans produce unique, culturally relevant pieces that reflect the rich heritage of our nation. Additionally, the textile sector boasts a vibrant history, from traditional weaving to contemporary fashion design. However, to truly elevate these industries, we need cohesive policies that foster development, incentivise innovation, and reinforce standards while embracing proper business etiquettes.
Source: Business Day
