Synopsis The government announced that no individual has a legal right to demand reasons for their suggestions not being included in the Foreign Trade Policy. The Directorate General of Foreign Trade stated that the government may consult stakeholders but is not obligated to incorporate or explain the exclusion of their feedback. The government on Thursday said no person has any legal right to seek reasons for their suggestions, views, or feedback not being included in the Foreign Trade Policy (FTP). The Directorate General of Foreign Trade (DGFT) in a notification also said that the government may seek views of the industry stakeholders for the FTP but it reserves the right to suo moto formulate, amend or incorporate any specific provisions in the policy, without seeking views, suggestions, comments, or feedback from stakeholders. Amending a provision of the policy, the DGFT added two paragraphs to introduce trade facilitation measures with an option available to the central government for consultation with relevant stakeholders such as exporters/importers/industry experts to seek their views on best endeavour basis. "Nothing shall confer any legal right whatsoever on any person to seek reasons for his views, comments, opinions or feedback, not being incorporated in the Foreign Trade Policy," the notification added. It added that the central government is not obliged to provide reasons to stakeholders such as importers and exporters for not including their views, suggestions, comments, or feedback on the formulation or amendment of the FTP.
Source: Economic Times
Synopsis India is progressing rapidly towards implementing the FTA with the EFTA bloc, aiming for enactment by late 2025. The agreement promises $100 billion investment over 15 years, creating 1 million jobs in India. Notable concessions include reduced duties on Swiss watches and chocolates. Ongoing FTA talks with the UK and EU are also in focus. The implementation process of free trade agreement (FTA) between India and the four-nation European bloc EFTA is progressing fast and is expected to come into force before the end of this year, Commerce and Industry Minister Piyush Goyal said. The two sides signed the Trade and Economic Partnership Agreement (TEPA) on March 10, 2024. Under the pact, India has received an investment commitment of USD 100 billion in 15 years from the grouping while allowing several products such as Swiss watches, chocolates and cut and polished diamonds at lower or zero duties. The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland. "Yes, EFTA is progressing very fast," Goyal told PTI when asked if the agreement would come into effect this year. The minister said the Swiss Council of States has approved the agreement and now will go to their National Council for approval. "So this overwhelming support in political circles in Switzerland for the TEPA with EFTA is truly a sign of the times to come... and in their statement also, it shows that that it has cleared an important hurdle and they are hoping to bring in entry to force by autumn of 2025, before the end of calendar year 2025," Goyal said. The bloc committed an investment of USD 100 billion -- USD 50 billion within 10 years after the implementation of the agreement and another USD 50 billion in the next five years -- which would facilitate the creation of 1 million direct jobs in India. This is a first-of-its-kind pledge agreed upon in any of the trade deals signed by India so far. The commitment is the key substance of the TEPA (Trade and Economic Partnership Agreement), which took almost 16 years to conclude, for India in return for opening its markets for several products coming from the EFTA nations. There is a provision in the agreement that if the proposed investments would not come because of some reasons, India can suspend duty concessions to the four countries. Domestic customers will get access to high-quality Swiss products such as watches, chocolates, biscuits, and clocks at lower prices as India will phase out customs duties under the trade pact on these goods over 10 years. It is taking time to implement the agreement due to an elaborate ratification process of these pacts in different countries. In India, such agreements are approved by the union Cabinet, in EFTA countries, they need approval from their parliament. On the progress of FTA negotiations with other countries, Goyal said he has held meetings with the new UK trade minister on the proposed pact. India and the UK are expected to hold the next round of talks for a proposed FTA later this month to resolve the pending issues and close the negotiations. The talks for the proposed FTA began in January 2022. The 14th round of talks stalled as the two nations stepped into their general election cycles. With the European Union (EU) also, the minister has held discussions with European Commissioner for Trade Maros Sefcovic. "We have agreed to meet soon again in the next couple of months to take the talks forward," he added. He added that India will never compromise its national interest in these agreements. "Unless the agreement is equitable, fair and balanced, India will not agree to any irrational terms," he noted.
Source: Economic Times
Pranjul Bhandari, chief India economist at HSBC, said that India's manufacturing activity ended a strong 2024 on soft note, amidst more signs of a slowing trend, albeit moderate, in industrial sector India's manufacturing sector growth slipped to a 12-month low in December, as fresh business orders and production expanded at softer rates, according to a monthly survey released on Thursday. The HSBC India Manufacturing Purchasing Managers' Index (PMI) compiled by S&P Global slipped to 56.4 in December from 56.5 in November, indicating a weaker improvement in operating conditions. In January 2024, the figure stood at 56.5. Typically, a figure above 50 in the index denotes expansion in activity and below it signifies contraction. “With the sole exception of finished goods stocks, all final index readings for the HSBC India Manufacturing PMI survey came in below their 'ash' estimates. December data showed the sector improving to the least extent in 2024, amid softer increases in output, new orders and stocks of purchases,” the survey said. However, the rates of growth remained substantial, underpinning further expansion in the buying levels and employment, even as the cost pressures receded, but charge inflation remained historically high. Pranjul Bhandari, chief India economist at HSBC, said India’s manufacturing activity ended a strong 2024 with a soft note amid more signs of a slowing trend, albeit moderate, in the industrial sector. “The rate of expansion in new orders was the slowest in the year, suggesting weaker growth in future production. That said, there was some uplift in the growth of new export orders, which rose at the fastest pace since July. The rise in input prices eased slightly, wrapping up the year when Indian manufacturers felt the strain of sharp cost pressures” she added. The new export sales rose at a slower rate than the total new business, the pace of growth for the former strengthened as rms were able to secure international orders from across the globe. “With container, material and labour costs reportedly rising since November, Indian manufacturers registered another increase in the overall expenses. Having eased since the previous month, the rate of input price inflation was moderate by historical standards,” the survey noted. On the employment front, the survey noted that not only did manufacturing employment increase for the tenth month in a row during December, but also the rate of job creation quickened at the fastest pace in four months. “Around one in ten companies recruited extra staff, while fewer than 2 per cent of rms shed jobs,” it added. Looking at 2025, the survey noted the Indian manufacturers were confident of a rise in output. The optimism reflected advertising, investment and expectation of favourable demand. The sentiment was curbed by concerns around inflation and competitive pressures.
Source: Business Standard
India's textile sector aims to boost exports to $100 billion by 2030 through government initiatives, improved infrastructure, and expansion into technical textiles, despite challenges. The textile industry is a crucial part of India’s economic growth, contributing significantly to employment, value addition, and export earnings. With 45 million people working in this sector, it stands as one of India’s largest employers. Traditional areas such as handlooms, handicrafts, and power looms are significant in rural and semi-urban employment, while SMEs play a major role in providing livelihoods, particularly for women.
Export Ambitions: $100 Billion Target
India aims to increase its textile exports to $100 billion by 2030, a steep rise from $44 billion in fiscal 2022. To achieve this, India must enhance its competitiveness against dominant textile exporters like China and Bangladesh. The country’s value chain spans cotton production to finished goods like ready-made garments (RMG) and home furnishings.
As per the CRISIL report, India contributes 23% to the global output of cotton production. It also contributes significantly to cotton yarn exports, being the largest exporter worldwide and the third-largest exporter of polyester yarn. The market size of the cotton yarn and ready-made garment industry is estimated to have crossed ₹6,000 billion in FY 2024. However, India lags in weaving, knitting, and processing, where competition from China is strong. The country’s share in global RMG trade is only 3%, far behind other countries like Bangladesh and Vietnam, which have gained ground due to factors like lower costs and better technology.
Government Support: Initiatives and Trade Pacts
To boost exports, India has implemented several initiatives such as the PM MITRA Parks and Production Linked Incentive (PLI) schemes, aimed at modernising infrastructure and encouraging investments in the textile sector. Additionally, trade pacts, particularly with Australia, have proven beneficial by enhancing competitiveness and increasing exports. The duty drawback and RoDTEP schemes, along with labour reforms, also help strengthen India’s textile exports.
Strategic Focus Areas to Boost Exports
India’s export success depends on several key factors, including:
Trade Pacts: FTA agreements with countries like Australia offer better market access.
Infrastructure Support: Development of specialised textile parks and improved logistics.
Diversification: A shift toward technical textiles, catering to industries like automotive, healthcare, and agriculture, could open up new growth avenues.
SME Support: Small enterprises need better access to funding, technology, and modern practices to remain competitive.
A growing global demand for sustainable products and a renewed interest in traditional Indian textiles could further enhance India’s export prospects. Luxury and slow fashion sectors are recognizing Indian textiles for their unique designs and cultural value, which could help India move closer to its $100 billion export target.
Prospects and Challenges
The textile sector has significant potential, with India poised to retain its leadership in cotton yarn production. However, challenges such as high tariffs in key markets, reliance on cotton textiles, and competition from low-cost producers persist. Addressing these challenges, including improving labour conditions and modernising MSMEs, will be key to sustaining growth in both domestic and international markets. India’s textile industry holds immense potential, backed by a strong cotton supply, government support, and opportunities in sustainable and technical textiles. Overcoming challenges related to competitiveness and trade agreements will be essential for achieving the $100 billion export target by 2030.
Source: Economic Times
Ahead of the Union Budget 2025-26, exporters urged the finance ministry to approve a US-focused marketing scheme worth Rs 750 crore to generate an additional $25 billion in exports to the US over the next three years. According to the Federation of Indian Export Organisations (FIEO), the US’ plan to impose higher tariffs on China presents a “significant opportunity” for Indian exports, particularly in sectors where China has been a dominant supplier. These sectors include electronics, electrical equipment, footwear, textile, garment, furniture, automotive parts, toy, and chemical. The largest gains are expected in consumer electronics, such as mobile phones, televisions, and electrical components, with an estimated $10 billion in additional exports. “For that, we need to increase our presence in the US by showcasing in numerous exhibitions, holding buyer-seller meetings, and partnering large local retailer associations. A marketing scheme focusing on the US, with a corpus of Rs 250 crore per year (Rs 750 crore overall) for three years, maybe launched to generate additional exports of $25 billion by the end of three years,” FIEO President Ashwani Kumar said. In addition, FIEO has requested a tax deduction of 200-250 per cent for research and development spending under Section 35(2AB) of the Income-Tax Act to foster product innovation. At a pre-Budget meeting with the finance minister and top officials from the finance ministry in North Block, exporters also called for the continuation of the interest equalisation scheme, which ends on December 31, along with additional funds for marketing and trade promotion of specific export items, and income-tax relief for micro, small and medium enterprise (MSME) manufacturing units. The interest equalisation scheme (IES) provides interest rate benefits for pre- and post-shipment rupee export credits, with the government compensating lenders. This initiative aims to ease the financial burden on exporters, particularly those in labour-intensive sectors and MSMEs. Engineering Exports Promotion Council of India Chairman Pankaj Chadha proposed increasing the annual benefit cap for MSME manufacturers from Rs 50 lakh to Rs 10 crore. This change would offer substantial financial support to MSME exporters. FIEO noted that a long-term IES would enable exporters to secure orders more effectively, especially in sectors with wafer-thin profit margins, as a 3 per cent interest subvention could make the difference between winning or losing an order. Gem & Jewellery Export Promotion Council Chairman Vipul Shah underscored the need for separate funding for marketing, particularly for diamonds. Exporters also called for government support for energy audits and compliance with the carbon border tax. Chadha recommended reimbursing 50 per cent of these costs under the market access initiative scheme and providing targeted support for compliance with the carbon border adjustment mechanism to help MSMEs adopt sustainable practices and remain globally competitive.
Key steps to boost US exports
Source: Business Standard
The 11th edition of the Surat International Textile Expo is set to take place from 10th to 12th January 2025, at the SIECC Campus in Sarsana, Surat. Organised by the Southern Gujarat Chamber of Commerce and Industry, the expo aims to bolster the region’s textile sector by providing a platform for manufacturers, dealers, wholesalers, and retailers to showcase their products and services. The event will feature a wide range of cutting-edge textile technology, including weaving machinery such as waterjet, rapier, and air jet machines, power looms, needle looms, and high-speed warping machines. In addition, visitors can expect to see the latest advancements in knitting machines, jacquard technology, digital printing machines, and spare parts.
The Surat International Textile Expo is expected to attract significant industry attention and contribute to the continued growth and development of the textile sector in South Gujarat.
Source: Apparel Resource
India’s textiles and apparel exports, including handicrafts, grew 7% during the April-October period to USD 21.35 billion, the government said on Thursday.
The outbound shipments from the sector stood at USD 20 billion in the same period of the previous financial year, FY 2023-24. “The Ready Made Garments (RMG) category with exports of USD 8,733 million has the largest share (41%) in the total exports (USD 21,358 million) during the period of April-October of FY 2024-25, followed by Cotton Textiles (33%, USD 7,082 million), Man-Made Textiles (15%, USD 3,105 million),” the Textiles Ministry said. PTI
Source: Ahmedabad Mirror
Devendra Fadnavis, the chief minister of Maharashtra, has ordered officials to move to strengthen the textile industry in the state. He underlined the state’s active involvement in Bharat Tex 2025, which is set to take place in New Delhi, and gave them instructions to establish the Maharashtra Technical Textile Mission (MTTM) and Maharashtra State Textile Development Corporation (MSTDC). These declarations were made while the Chief Minister was reviewing the 100-day action plan from the Department of Rural Development and Panchayati Raj. The CM emphasised the significance of successfully implementing the Captive Market Scheme to boost the local textile sector and urged for the invitation of Expressions of Interest (EOIs) to establish technological textile parks. According to officials, Fadnavis ordered the establishment of an old-age pension plan to guarantee social security and assist handloom weavers. He advocated for the establishment of “Urban Haat” centres to support and promote handloom craftsmen in accordance with the Integrated and Sustainable Textile Policy 2023-28. Additionally, he suggested that Prasar Bharati and he work together to broadcast the first episode of the traditional textile industry serial “Kargha.” The Chief Minister gave staff instructions about the digitising and automation of programs within the textile department and emphasised the value of creativity and efficiency. He also urged spinning mills throughout the state to use solar energy more frequently.
Source: Apparel Resource
The Indian rupee ended 2024 at a fresh closing low of 85.61 per US dollar, slipping 0.09 per cent on Tuesday. This marked the seventh straight year of depreciation against the greenback. After a 10 per cent fall in 2022 following the war in Europe, the Reserve Bank of India (RBI) intervened to keep the rupee in a tight range, resulting in a modest 0.6 per cent decline in 2023. Till mid-September this year, the rupee remained one of the most stable currencies.However, it came under pressure in the final quarter due to two major global developments — a US Federal Reserve interest rate cut and Donald Trump’s victory in the US presidential election. In the October-December period, the unit depreciated by 1.8 per cent, including a 1.31 per cent drop in December. India’s foreign exchange reserves fell by nearly $60 billion in the past three months as the RBI intervened to curb volatility.
The reserves, which touched an all-time high of $705 billion in September, ended the year at $644.4 billion. Despite the decline, India’s reserves remain the fourth-largest globally, covering 99 per cent of the country’s external debt or nearly a year of merchandise imports as of September-end.
Source: Business Standard
Iran is looking at ways to resume supplying crude oil to India and is keen on expanding the overall trade basket including in the petrol-chemical sector through the strategically located Chabahar port, a senior Iranian official said on Thursday. Tehran is also keen to expand counter-terror cooperation with India as the possibility of rise in the terrorist activities looming large over West Asia in view of the fragile situation in the region, especially in Syria, he said. The senior Iranian official told a group of journalists that the incoming Donald Trump administration is unlikely to be similar to that of his first term towards Tehran as the global geopolitics have undergone significant changes with China increasing its strategic heft. In his first term as the US president, Trump tightened the noose of sanctions on Iran, eyeing over 80 per cent of the country's economy and even ended Washington's participation in the 2015 nuclear deal with Tehran. On the overall situation in West Asia, the Iranian official on condition of anonymity said the Palestinian issue is now "more internationalised" because of Israel's brutal actions in Gaza and nobody would be able to "erase" it from the global agenda. "The core issue has been the occupation of Palestine and it must be addressed. We want to see an independent Palestine state," he said. Pitching for resumption of supply of Iranian crude oil to India, the official said both sides need to find a way out. India stopped procurement of crude oil from Iran in mid-2019 following sanctions on the Persian Gulf nation by the Trump administration. "It is important to address this issue," the Iranian official said on resumption of supply of Iranian crude oil to India. The remarks came when asked why India is buying crude oil from Russia despite Western sanctions and why it is not doing the same for Iranian crude oil.
"The circumstances of sanctions against Russia and Iran are different. We need to see how this issue can be resolved. We do not want any hardships for India," the official said. At the same time, he indicated that the issue is on the table for discussions between India and Iran.
The official said the development of Chabahar port has offered significant opportunities for India and Iran to boost trade and economic engagement. The port is outside the purview of US sanctions against Tehran. "We think there are many untapped opportunities around the Chabahar Port and it could be a significant point for economic relations," he said. Without elaborating, the official said India has evinced interest in cooperation in the petrochemical industries around the port. Located in the Sistan-Balochistan province on the energy-rich Iran's southern coast, the Chabahar port is being developed by India and Iran to boost connectivity and trade ties. "We need to look at the future to further enhance our cooperation in Chabahar," the senior Iranian official said. In May last year, India signed an agreement with Iran to operate the Shahid Beheshti terminal of the port for the next 10 years. On non-oil trade between India and Iran, he identified tourism and agriculture as areas having immense potential. The official identified terrorism as a major challenge facing both India and Iran and underlined the importance of expansion of cooperation between the two sides to confront the challenge. The fragile situation in West Asia, especially in Syria is likely to fuel the upsurge of terrorism in the region, he said adding India and Iran need to work closely to deal with the challenge. On Pakistan supporting cross-border terrorism against India, the official said all the concerned countries must work against terror networks. The Iranian official said Tehran has not recognised the Taliban regime in Afghanistan and it supports a government with broad representations from various groups to rule that country. He acknowledged Iran's growing closeness with China and that Beijing is getting stronger because of its economic heft across the globe. "The Iran-China engagement is not only oil-trade related. It is much more than oil and trade," he said.
Source: Business Standard
Pakistan's textile industry, once a leader in export earnings, is now facing challenges due to political instability. Despite a 10.51% increase in early FY25 exports, the sector struggles with diversification and competitiveness, leading to a potential shortfall in meeting its USD 25 billion export target. Pakistan's textile sector, which was once the backbone of the nation's economy, is now grappling with numerous challenges. The industry, a key contributor to export revenues, has witnessed a modest 0.93% growth in FY24. However, the early months of FY25 seemed promising with a 10.51% increase compared to last year. Ijaz Khokhar, Patron-in-Chief of Pakistan Textile Exports, expressed concerns over the industry's declining trend after initial positive growth. Political instability has been a primary hurdle, leading to a loss of export orders as buyers shift preferences to Vietnam. Missed opportunities from Bangladesh's political changes only added to the woes. Economists highlight the need for diversification, warning that continuing political tensions and stringent tax measures could severely impact the industry. Moreover, the shift of many textile companies to Dubai further complicates the situation, with potential under-invoicing affecting export revenues.
Source: Dev Discourse
HÀ NỘI — Việt Nam’s garment and textiles export is projected to hit nearly US$44 billion this year, positioning the country as the world’s second biggest exporter, only behind India, said General Director of the Việt Nam National Textile and Garment Group (Vinatex) Cao Hữu Hiếu. At a meeting in Hà Nội on December 25 to review Vinatex’s business operations and outline plans for 2025, Hiếu said Vinatex will pursue sustainable development across environment, society, governance and finance (ESGF) next year. Specifically, it will renew management practices through digital transformation and the adoption of best corporate governance models, including the integration of automation technology and artificial intelligence which is also meant to reduce reliance on labourers. Deputy Chief of the Vinatex Office Hoàng Mạnh Cầm highlighted the positive growth signals emerging from major import markets like the US and EU, where economic recovery and increased consumer spending are creating a promising outlook for the textile and garment industry. He also pointed out the significant opportunity presented by the shift of orders from Bangladesh, which could greatly benefit Vietnamese textile enterprises.
While the first half of 2024 saw only modest improvements, the latter half experienced a dramatic surge in orders, fueled by unexpected political upheavals in competing nations. Despite these hurdles, Vinatex and the broader industry maintained a growth trajectory, with no units reporting losses. The group's consolidated revenue is estimated at VNĐ18.1 trillion ($724 million), a 2.8 per cent increase year on year, while consolidated profit is projected to reach VNĐ740 billion, up 37.5 per cent. Additionally, the average monthly income of employees rose by 8.9 per cent, reaching VNĐ10.3 million. Hiếu attributed Vinatex’s successes to the exploration of new and niche markets with specialised, hi-tech products such as fire-resistant fabrics and clothing, developed in partnership with the UK’s COATS Group. The group has also focused on developing new filament core yarns and blended fibers, alongside adopting an enterprise resource planning (ERP) system to optimise business resource management. It also held conferences and seminars on sustainable development and adoption of environmental, social, and governance (ESG) practices. It is directing investments toward building a second wastewater treatment plant with a capacity of 8,000 cu.m per day and night, complementing the existing plant with a capacity of 10,000 cu.m at Phố Nối Textile and Garment Industrial Park in Hưng Yên Province, toward creating a model green textile industrial park in the northern region. — VNS
Source: Vietnam News
KARACHI: Chairperson of the Pakistan Textile Council (PTC) Fawad Anwar has expressed grave concerns over the country’s economic performance in the first quarter of FY2024-25. According to official data, the country posted a modest growth rate of 0.92 per cent, while the industrial sector contracted by 1.03 per cent during the same period.
Anwar underscored the mounting challenges faced by the industrial sector, citing the high cost of energy as a primary factor behind the contraction. “The textile sector, along with other industries, is struggling to stay competitive due to escalating energy prices, which significantly increase production costs and erode our global market competitiveness,” he added. He stressed the urgent need for policy reforms to address these structural issues. “The government must take immediate steps to ensure the availability of affordable and reliable energy for the industrial sector. Without such measures, the contraction in the industrial sector will likely persist, worsening unemployment and reducing export revenues,” he warned. Reaffirming the PTC’s dedication to supporting the sector, Anwar called for a collaborative approach. “We are ready to engage with stakeholders to develop a roadmap for economic recovery and sustained growth,” he concluded.
Source: The News PK
