Synopsis Union Budget 2025: The commerce ministry plans to request an extension of the interest equalisation scheme for rupee export credit in the upcoming Budget. The scheme supports exporters amid global economic challenges by offering subsidies. It initially started in 2015 and has received several extensions. Exporters advocate for its continuation, highlighting its role in maintaining competitiveness. Budget expectations 2025: The commerce ministry is likely to seek further extension of the interest equalisation scheme in the forthcoming Budget on pre- and postshipment rupee export credit for another ve years to promote the country's outbound shipments, an oicial said. The scheme ended on December 31 last year. The scheme helps exporters from identied sectors and all MSME manufacturer exporters to avail of rupee export credit at competitive rates at a time when the global economy is facing headwinds. Exporters get subsidies under the Interest Equalisation Scheme for pre- and post-shipment rupee export credit. "The ministry may request for the extension of the scheme," the oicial said. The scheme was started on April 1, 2015, and was initially valid for ve years up to March 31, 2020. It has been continued thereafter, including a one-year extension during COVID-19, and with further extensions and fund allocations. In September last year, the government extended the scheme till December 31, 2024 Earlier, the scheme provided an interest equalisation benet at the rate of 2 per cent on pre- and post-shipment rupee export credit to merchant and manufacturer exporters of 410 identied tari lines (or product categories) at 4-digit level and 3 per cent to all MSME manufacturer exporters. These sectors include handicrafts, leather, certain fabrics, carpets and readymade garments. Benets to individual exporters were capped at Rs 50 lakh crore per annum per IEC (Import Export Code). The scheme was implemented by the RBI through various public and nonpublic sector banks that provide pre- and post-shipment credit to the exporters. It is jointly monitored by the Directorate General of Foreign Trade (DGFT) and From April 2023 to November 30, 2024, the government disbursed Rs 2,641.28 crore against the allocated budget of Rs 2,932 crore under the scheme. Rs 3,118 crore was disbursed in 2022-23 and Rs 3,488 crore in 2021-22. Exporters too are demanding extension of the scheme saying it is helping them in the current turbulent times. Federation of Indian Export Organisation (FIEO) President Ashwani Kumar said the support measures under the scheme help in increasing the competitiveness of Indian exporters in the international markets. "In China, the rate of interest is 2-3 per cent and that helps their exporters immensely. The government should positively consider extending the scheme," Kumar said.
Source: Economic Times
Synopsis The UK government has relaunched Free Trade Agreement (FTA) talks with India, aiming to enhance their bilateral relationship, focusing on trade and green technologies. Foreign Secretary David Lammy highlighted meetings with Indian business leaders and an invitation for his Indian counterpart. The FTA, which saw negotiations paused for elections, is set to resume, potentially boosting the GBP 42 billion trade. The UK government on Tuesday told Parliament that the Free Trade Agreement (FTA) talks with India have been relaunched to deliver a joint ambition of taking the bilateral relationship to "even greater heights". During a debate on UK economic growth in the House of Commons, British Indian Labour MP Jeevun Sandher asked Foreign Secretary David Lammy about the steps being taken to get a "good UK-India trade deal over the line" Describing 2025 as an "exciting year" for the UK's trading relationship with India, the co-chair of the India All Party Parliamentary Group (APPG) agged the "exchange of green technologies to help prevent and reduce the warming of our planet" among the areas of focus. "We are two nations with an intertwined history and common democratic ideals and we face the risks of a dangerous world and a warming planet," said Sandher, a rst-time member of Parliament from Loughborough, in the East Midlands region of England. In response, Lammy pointed to his India visit within weeks of the Labour government being elected in July last year and British Prime Minister Keir Starmer hosting a roundtable with Indian business leaders at 10 Downing Street last month. "We have relaunched the Free Trade Agreement (FTA) - we have said that it is a oor, not a ceiling on our ambition - and it was important that a delegation of Indian businessmen met the chancellor of the exchequer, me and the prime minister [Keir Starmer] just a few weeks before Christmas," said Lammy. The UK foreign secretary reiterated his own Indian connection with a "great grandmother on my mother's side, who was from Calcutta" and went on to reveal that he plans to invite his Indian counterpart, External Aairs Minister S Jaishankar, to the UK in the coming spring months. "The UK and India's prime ministers have committed to an ambitious refresh of the Comprehensive Strategic Partnership. They announced that the UK India trade talks will relaunch, which will deliver our joint ambition to take the UK-India relationship to even greater heights, and India is one of a handful of countries that will determine whether we meet the global warming limit of 1.5 degrees Celsius," said the senior UK Cabinet minister, referencing the meeting between Starmer and Prime Minister Narendra Modi on the sidelines of the G20 Summit in Brazil last November. According to the oicial UK Departmentfor Business and Trade (DBT) statistics, the total trade in goods and services between the UK and India was GBP 42 billion in the four quarters to the end of 2024. This is expected to be signicantly enhanced with an FTA, negotiations for which began in January 2022 before being paused in the fourteenth round for general elections in both countries in 2024. The FTA talks are expected to resume later this month.
Source: Economic Times
Synopsis India is finalizing fair and balanced free trade agreements (FTAs) only after extensive consultations, Commerce Minister Piyush Goyal said. Highlighting the $100 billion FDI commitment from EFTA and notable pacts with Australia and UAE, Goyal addressed India's robust export gures and manufacturing growth, attributing successes to the government's transformative governance principles. Commerce and Industry Minister Piyush Goyal on Tuesday said India is nalising free trade agreements (FTAs) only after extensive consultations with all the concerned stakeholders. He said that unlike in the past, these pacts are now fair, equitable and balanced. "We are not doing FTAs like in the past. Every agreement is after extensive stakeholder consultation," he said at the Thuglak Annual Meet in Chennai. Citing the agreement with the four-European nation bloc EFTA, he said that for the rst time in the history of FTAs, India has received a commitment of USD 100 billion FDI (foreign direct investment) in this pact. The Modi government has implemented these pacts with countries like Australia and the UAE. He also said that India's decision to opt out of RCEP (Regional Comprehensive Partnership Agreement) demonstrates its commitment to safeguarding national interests. "It was not in the interest of MSMEs, and it would have opened a oodgate for Chinese goods into the country. Therefore, we refused to join RCEP," he added. Talking about exports, he said the country's goods and services exports touched USD 778 billion in 2023-24, and this year, it is expected to cross USD 800 billion. "We will maintain our CAD (current account decit) at still around one per cent of GDP, which is a reasonable level to maintain," he said. He added that the government has rolled out a series of software measures to boost domestic manufacturing, and today India is the second largest mobile maker in the world. Foxconn in Chennai, he said, is exporting smartphones in good numbers. Further, Goyal said that under the leadership of Prime Minister Narendra Modi, during the last 10 years, 10 foundational principles of governance have been the pillar of this decade of unprecedented transformation. These include decisive leadership, root cause analysis, outcome-oriented action, rule of law and transparency, time-bound execution, prioritisation of issues, accountability and monitoring, adoption of technology, innovative nancing and partnership with all stakeholders, he said. While listing out the various achievements of the government, Goyal also acknowledges the challenges ahead. "While we are building inclusive growth, we must confront the evolving realities of a world that tests our unity, security, and aspirations. Our progress faces opposition from those seeking to undermine our hard-earned gains. Yet, the same resilience that has powered India's ascent will guide us through these obstacles," he said.
Source: Economic Times
Synopsis India's commerce and revenue departments, along with BCAS, are creating a standard procedure to enable e-commerce export hubs. DHL, Lexship, goGlocal, Ship rocket, and Cargo Service Center have received approvals to set up these hubs in major cities. These hubs will facilitate expedited customs, security clearances, and re-import policies, boosting e-commerce export growth. The departments of commerce and revenue, along with the Bureau of Civil Aviation Security (BCAS), are working on formulating a standard operating procedure (SOP) to enable the operationalisation of e-commerce export hubs in the country, an official said. The commerce ministry has already approved ve applications of DHL, Lexship, goGlocal, logistics aggregator Ship rocket, and air cargo handling company Cargo Service Centre to set up these hubs, the government official said. While DHL has been assigned Bengaluru, goGlocal's hub will come up in Mumbai. Shiprocket and Cargo Service Centre's hubs will come up in and around Delhi airport. and how to do security clearances of goods. On all these issues, they are preparing an SOP. Once that is finalised, they will start operations," the oicial said. The hubs will have facilities for expedited customs and security clearance inhouse. Provision for quality and certifying agencies will also happen within the hub. It will also have an easy re-import policy to enable the return of ecommerce consignments and rejects without payment of import duty. The move assumes significance as India is looking to tap into the growing export opportunities in this segment. E-commerce exports have the potential to grow to over USD 100 billion by 2030 and then further to USD 200-250 billion in the coming years. As per the estimates, global ecommerce exports are expected to touch USD 2 trillion in 2030 from USD 800 billion now. India's exports through this medium are only about USD 5 billion compared to China's USD 250 billion annually. China, which is a leader in ecommerce exports, is also a pioneer in export hubs for ecommerce. China's exports through this route are 6.4 per cent of its total merchandise exports in 2023. In the Foreign Trade Policy of 2023, the intent and road map for setting up ecommerce export hubs were outlined.
Source: Economic Times
Synopsis India plans to enhance its textile and garment industry with financial support, reduced tariffs on crucial inputs, and local production incentives in its upcoming budget. The political turmoil in Bangladesh has led global retailers to consider India as an alternative, leading to increased export orders for Indian garment producers. The government may raise textile ministry budget allocation and production-linked incentives. NEW DELHI - India aims to boost its textile and garments industry in next month's budget with financial support, An ongoing political crisis in neighbouring Bangladesh has prompted global retailers to explore alternatives, including India, for garment imports, exporters told Reuters. "Indian exporters are finding it difficult to meet the rush of export orders in last few months as many U.S. companies are looking for alternative suppliers," said Mithileshwar Thakur, secretary general at India's Apparel Export Promotion Council.
India's textile sector employs an estimated 45 million people and the government is considering increasing the textile ministry's budget allocation for 2025/26 by 10%-15%, from the current 44.17 billion rupees ($511 million), said a government source privy to discussions. The government may also raise the allocation for production-linked incentives for the textile sector to around 600 million rupees from 450 million rupees for the current fiscal year, the source said. Under this scheme, the government offers tax incentives and other concessions to companies choosing to manufacture locally. Tari cuts on raw materials such as polyester and viscose staple fibre, along with textile machinery, are also under consideration, a second government source said. Import taris are currently in the range of 11%-27% on fibre, compared to almost nil duties in Bangladesh, impacting Indian garment exporters. The sources requested anonymity as they are not authorised to speak to the media about discussions on India's annual budget, which is due to be announced on Feb. 1. India's nance, commerce, and textile ministries did not respond to emails seeking comments. BANGLADESH CRISIS Bangladesh's garment exports to the U.S. fell by 0.46% to $6.7 billion between January and November last year, while India's exports rose 4.25% to $4.4 billion, data from the U.S. Oice of Textiles and Apparel showed. Shahidullah Azim, a Dhaka-based factory owner whose clients include North American and European retailers, told Reuters that some American buyers have shifted their orders to India and Vietnam, due to ongoing crisis in Bangladesh. In the rst eight months of the scal year through November, India's textile and garment exports rose by more than 7% year-on-year to over $23 billion, compared to just 2% growth in total goods exports. Readymade garment exports grew by more than 11% year-on-year, to near $10 billion during the same period, and are expected to cross $16 billion by March end, said Thakur at India's Apparel Export Promotion Council.
Source: Economic Times
Discussions on a term deal for crude oil purchases from Russia have ground to a halt in the wake of the latest sanctions on Russia, sources in the Ministry of Petroleum said. A joint front of state-owned refiners had been discussing the purchase of crude oil from Russia under a term deal. Crude oil from Russia is usually purchased at spot prices, while long-term contracts are reserved for crude from India’s traditional import sources in West Asia. Spot purchases allow refineries to secure different grades of oil that may otherwise be unavailable. However, last week’s sanctions on Russian oil and gas entities by the United States have put the talks on hold. Official sources have said the government is preoccupied with analysing the sanctions, which may cut off India’s access to discounted Russian crude and force it to buy at market prices. “Any deal in the current geopolitical climate requires careful planning and lengthy discussions so that shipments do not suddenly stop due to sanctions. But the escalating sanctions have complicated the matter,” an official source said. The government does not expect an immediate disruption in supplies, as volumes already in transit would take six-eight weeks to reach India. That would allow sufficient time for the geopolitical situation to evolve, as US President-elect Donald Trump is set to assume office on January 20, another source said. “This will give our refiners enough time to strike alternative arrangements, with Russia or otherwise. That may change the need for a term deal,” he said.
A term deal would reduce volatility in Russian crude prices and could allow India consistent access to Russian oil at lower prices. India remains prepared to continue purchasing oil from Russian companies permitted to make such sales, as prices are favourable. Petroleum and Natural Gas Minister Hardeep Singh Puri has repeatedly emphasised this point.
Source: Financial Express
The rupee rebounded from its lowest-ever level and settled 8 paise higher at 86.62 (provisional) against the US dollar on Tuesday as the American currency retreated from record high. Some recovery in domestic equity markets after the release of macroeconomic numbers also supported the Indian currency even though it remained under pressure due to elevated crude oil prices and continuous outflow of foreign funds. At the interbank foreign exchange, the rupee opened at 86.57 and touched the intra-day high of 86.45 before closing for the day at 86.62 (provisional) against the greenback, registering a gain of 8 paise from its previous close. On Monday, the rupee logged its steepest single day fall in nearly two years and ended the session 66 paise down at its historic low of 86.70 against the US dollar. The currency's previous record one-day fall of 68 paise was witnessed on February 6, 2023. The local unit has plunged more than Re 1 in the past two weeks from the closing level of 85.52 on December 30. It had breached the 85-per-dollar mark for the first time on December 19, 2024. The unit had depreciated 18 paise to settle at 86.04 against the US dollar on Friday, a day after registering a marginal gain of 5 paise. In the preceding back-to-back sessions on Tuesday and Wednesday, it had plunged 6 paise and 17 paise, respectively. Anuj Choudhary, Research Analyst at Mirae Asset Sharekhan, said the rupee recovered from all-time lows on a slight bounce back in the domestic markets and a weak US dollar. Cooling retail inflation and easing dollar brought some respite to the falling rupee, he said, but added that the Indian currency is expected to remain weak as crude oil prices continue to remain elevated, raising inflationary pressures.
"Traders may take cues from PPI (producer price index) data from US today and CPI data from US tomorrow. USD-INR spot price is expected to trade in a range of Rs 86.40 to Rs 86.85," Choudhary added. Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.39 per cent lower at 109.38. Brent crude, the global oil benchmark, rose 0.10 per cent to USD 81.09 per barrel in futures trade. In the domestic equity market, the 30-share BSE Sensex climbed 169.62 points, or 0.22 per cent, to settle at 76,499.63 points, while the Nifty rose 90.10 points, or 0.39 per cent, to 23,176.05 points. Foreign institutional investors (FIIs) offloaded equities worth Rs 4,892.84 crore on Monday. Government data released on Tuesday showed, wholesale price inflation rose to 2.37 per cent in December 2024, led by a spike in manufactured products even though prices of food items eased. Retail inflation, however, declined to a four-month low of 5.22 per cent in December amid easing of prices in the food basket, giving headroom to the Reserve Bank of India (RBI) to reduce the key interest rate in upcoming monetary policy reviews, according to the data released on Monday. The inflation-based on the Consumer Price Index (CPI) eased for the second month in a row after it breached the RBI's upper tolerance level of 6 per cent in October.
Source: Business Standard
Donald Trump’s inauguration promises to usher in an era of upheaval in global commerce, forcing governments around the world to scramble in preparation for a tariff onslaught even before he’s back in the White House. Soon after calls to congratulate the president-elect on his Nov 5 victory, officials began quietly looking for ways to appease him while simultaneously mapping out ways to retaliate if needed. The threat to China is longstanding, meaning its leaders have had ample time to prepare defenses and retaliatory strategies. But this time around, Trump and the trade hawks he’s enlisted are broadening their scope in what threatens to be a more prolonged and unpredictable trade war than during his first presidency.
Mexico and Canada have borne much of the brunt of Trump’s trade threats since election day, prompting leaders from both American neighbors to publicly warn of retaliation. Others are making preparations behind the scenes — Vietnam’s officials have promised to buy more US goods, the European Union has bolstered its ability to counter tariffs, while Indian officials aim to negotiate their way through the coming storm. “Trump 2.0 trade policy seems to be much more radical compared to 1.0,” says Yeo Han-koo , senior fellow at the Peterson Institute for International Economics and former South Korean trade minister. “It’s like a prisoner’s dilemma — the best scenario for all these countries is to band together and then resist, but there’s a motivation for each country to race to get a better deal compared to your competitors.” If implemented, Trump’s threats to increase levies on Chinese goods to 60 per cent and to 20 per cent for the rest of the world would transform the structure of global trade flows away from the US, according to Bloomberg Economics. Retaliation would exacerbate the shock.
Behind the Scenes
In Mexico, President Claudia Sheinbaum warned of the hit to US inflation in response to Trump’s 25 per cent tariff threats. The country has been quietly rolling out a strategy to reduce reliance on China. Developed over the last few months, the government’s plan includes tapping major automakers about sourcing components elsewhere. Law enforcement kicked off a country-wide “cleaning operation” with a raid on a Mexico City shopping complex filled with Chinese goods in November. The following week, Mexico announced its biggest-ever seizure of fentanyl pills, a drug Trump says is being smuggled into the US from its southern neighbour. Mexico is set to scale up such efforts, carrying out searches for goods that entered the country without proper taxation. To that end, Mexico slapped 19 per cent tariffs on goods imported through courier companies, a move that analysts said targets major e-retailers Temu and Shein. “If we coordinate on this, there won’t be any tariffs,” Sheinbaum said about working with the US in late November. In Canada, outgoing Prime Minister Justin Trudeau flew to meet with Trump days after his 25 per cent tariff threat. Following Trump’s suggestion that its northern neighbor become America’s 51st state, Trudeau shot back there’s not a “snowball’s chance in hell” of that happening. How the country approaches Trump has been thrown in limbo with Trudeau’s resignation. Behind the scenes, officials are examining export taxes on major commodities it sends to the US in a move that would drive up American prices. When Trump enacted levies on $200 billion in imports from China in 2018-2019, Vietnam was one of the biggest beneficiaries as exports to the US more than doubled. Up to 16 per cent of the increase in 2021 alone was a result of rerouting of goods to avoid US tariffs on China, according to a Harvard Business School white paper. Now, Vietnam — which has the fourth-biggest trade surplus with the US after China, Mexico and Canada — appears to be in Trump’s sights. His trade adviser Peter Navarro called out the country by name in Project 2025, a right-wing policy blueprint. Vietnam’s leaders in recent months have made efforts to balance the relationship between China and the US. The country’s deputy minister of foreign affairs has vowed to buy more aircraft, liquefied natural gas and other products while Prime Minister Pham Minh Chinh has emphasized the need to “remove all remaining obstacles” with the US. Similarly, South Korea and Taiwan are considering plans to boost energy imports from the US to avoid Trump’s ire.
Balancing Act
Increased dependency on the US as a source of demand makes economies such as Vietnam more exposed should Trump decide to apply a universal tariff on all imports, by undercutting the business case to build new factories. Apart from China, economies such as South Korea, Taiwan, Malaysia and Thailand would be more exposed considering their high trade orientation, economists at Morgan Stanley led by Chetan Ahya wrote in a November note. South Korea was forced to revise down its growth outlook, partly as a result of the growing geopolitical tensions contributing to weaker demand for the country’s exports. A top national security adviser to Japanese Prime Minister Shigeru Ishiba said the country should be prepared for the US following through on tariff threats, meeting with Trump’s team during a visit to the US late last year.
Then there’s the blow from second-round consequences.
“If Trump’s tariffs lead to China’s exports redirecting to the rest of Asia — and they’re very competitive — it’s very difficult for countries to compete,” said Sonal Varma, chief economist for India and Asia-ex Japan at Nomura Singapore Ltd. “That is something a lot of governments are thinking about.” Among those economies that are increasingly worried about unfair competition from China is the EU, which faces twin concerns of an influx of cheap Chinese goods — particularly electric vehicles — and a new wave of tariffs from the US. Officials there have already prepared a list of American goods it could target with tariffs in the event Trump follows through with his threats. Since Trump’s first term, EU member states have agreed to a new set of trade powers that will allow the bloc to strike back at third countries that use economic restrictions for political retribution. The EU’s new anti-coercion instrument strengthens trade defenses and enables the commission to impose tariffs or other punitive measures in response to such politically motivated restrictions. Officials in Brazil appear less concerned of any US tariffs, believing the nation can ramp up sales to other markets including Asian countries in the case it’s targeted. Indian officials are also allaying apprehensions for now, betting Prime Minister Narendra Modi’s good relations with Trump during his first presidency will continue and they have room to lower import duties for US goods as part of any forthcoming negotiations. “Economies are just stuck between a rock and a hard place in many ways,” said Frederic Neumann, chief Asia economist at HSBC Holdings Plc in Hong Kong. “It’s a very, very difficult course to navigate to appease both US demands to decouple from China, but at the same time to remain economically engaged with China.”
Source: Business Standard
Heimtextil kicks off the new trade fair year with over 3,000 exhibitors from 65 countries. With steady growth, the leading trade fair for home and contract textiles and textile design is strongly positioned. This makes it a reliable platform for international participants. At the opening, architect and designer Patricia Urquiola presented her installation ‘among-us’ at Heimtextil. With over 3,000 exhibitors from 65 countries, Heimtextil 2025 sets the course for the future of textile interior design. The most important trade fair for home and contract textiles and textile design thus presents itself stable with steady growth. This underlines the international industry's confidence in Heimtextil. As a constant partner, it opens up solutions for sustainable business success for retail, industry and the contract business – particularly relevant regarding the current market situation. Recession, energy prices and regulations present companies with challenges which require innovative and future-orientated approaches. “The steady growth and the very high level of internationality confirm the strength of Heimtextil. As leading international trade fair for home and contract textiles and textile design, it is an indispensable partner for the global industry – this is more important today than ever before. Especially in challenging times, Heimtextil offers companies the opportunity to strengthen their market position: through international visibility, the identification and realisation of potential and the development of new global business partners”, says Detlef Braun, member of the executive board of Messe Frankfurt.
Installation by Patricia Urquiola: design concepts for retail and hospitality
At the Heimtextil opening press conference, star designer and architect Patricia Urquiola presented her design installation ‘among-us’ in Hall 12.0. The area contains products made specially for Heimtextil. For example, a hanging carpet created by the traditional dhurrie technique. Patricia Urquiola developed the unique pieces together with partners such as Kettal, Moroso, cc-tapis, Aquafil and Cimento. Embedded in the installation, they show retail and hospitality the possibilities opened up by the textile design of tomorrow. Patricia Urquiola emphasises holistically designed rooms and objects, living areas that merge seamlessly as well as materiality and versatility. “‘among-us’ is a convivial and intuitive textile installation that shows the evolving possibilities of textiles, exploring their hybrid potentials across various scales – from product design to one/off pieces. The title, among-us, refers to the concept of being together and reflects the intent of the installation to celebrate hybrid new relations”, explains Patricia Urquiola.
In ‘among-us’, physical and virtual worlds merge through a grid on the floor inspired by drafting software. At the centre are textile elements in abstract and organic forms such as a sofa or an upholstered sculpture. They demonstrate the interplay of materials and technologies. Screens show their virtual counterparts and encourage interaction. At the same time, ‘among-us’ shows how textile innovations influence design processes. Textiles combine functionality, aesthetics and sustainability and create unique possibilities. The installation also shows how traditional craftsmanship can be integrated into the design of spaces and products.
Heimtextil 2025: trends, design inspiration and global market overview
Visitors to the leading trade fair for home and contract textiles find a globally unique range of products on 16 hall levels. This spans from wallpapers, upholstery fabrics, mattresses and sleep systems, towelling products, textile designs, fibres and yarns to carpets. The Carpets & Rugs area counts three times as many exhibitors in 2025 and is growing by several hall levels. Heimtextil is the home of the global carpet industry. The Heimtextil Trends 25/26, curated for the first time by the Milan-based design platform Alcova, offer inspiration and sustainable solutions. In the Trend Arena in Hall 3.0, they are spectacularly staged. They are looking at material qualities, colours and innovative production processes.
The content programme covers the most important industry topics. It addresses different visitor groups – from retailers, wholesalers, industry, designers, furniture and bedding shops, interior architects, interior designers, architects, contract furnishers and many other decision-makers. At the Retail Stage in Hall 12.1, topics ranging from sleep and sustainability to AI in retail and optimising the customer experience are being highlighted. The Texpertise Stage in Hall 4.0 focuses on materials for contract furnishings, trends in hotel design, carpets and the Heimtextil Trends 25/26.
Heimtextil takes place from 14 to 17 January 2025.
Source: Fibre2fashion
Textile millers have requested that the Bangladesh Bank take necessary steps to clear an outstanding payment of $44.31 million owed to 66 factories for matured bills of yarn and fabric supplied through various banks. According to the Bangladesh Textile Mills Association (BTMA), the amount represents "Accepted/Matured" bills under 961 back-to-back letters of credit (LCs) opened with banks for export-oriented apparel factories in the country. The association has also urged the central bank to extend the credit period to facilitate the import of industrial raw materials and support smooth import-export operations. The BTMA put forward these demands in two letters to the central bank governor and a deputy governor on 13 January. One letter highlighted that many BTMA member mills are facing a liquidity crisis due to a large number of unpaid bills.
This issue was also discussed in detail during a meeting between Bangladesh Bank Governor Ahsan H Mansur and the BTMA delegation on 17 December, where the governor assured that steps would be taken to clear the outstanding payments as soon as possible. The letter also noted that BTMA, the largest organisation in the primary textile sector, has 1,850 member mills, including spinning, weaving, and dyeing-printing-finishing units. The sector represents an investment of around $22 billion, making it the largest private sector investment. The textile and apparel industry accounts for about 84% of the country's export earnings, with domestic mills supplying 70% of the raw materials and contributing around 30% of foreign exchange earnings.
Why millers seek extension of credit period
One of the letters highlighted that a central bank circular issued on 30 June 2024 had extended the credit period for importing raw materials until 31 December 2024. However, with the expiration of this tenure, millers are now facing difficulties in importing the necessary raw materials.
On 17 December 2024, during a meeting between bank representatives and the BTMA delegation, discussions were held on the challenges facing the sector, including the proposal to extend the credit period for industrial raw material imports. Following the meeting, BTMA submitted a comprehensive report outlining the problems and challenges in the export-oriented textile sector, along with possible solutions and recommendations, prioritizing key actions to address these issues. The report highlighted several factors affecting production capacity, including the Ukraine-Russia and Israel-Palestine conflicts, the global economic recession, significant depreciation of the taka, a 250% increase in gas prices, a 70% rise in workers' wages, political unrest, worker strikes, and shortages in gas and electricity supply.
As a result, mills are operating at just 40%-50% of their production capacity, it added.
Additionally, the export-oriented textile industry, including manufacturing units, has faced substantial losses due to adverse exchange rate impacts on raw material imports. While the central bank's circular extending the credit period until 31 December 2024 provided temporary relief, the expiration of this period has led to mounting difficulties for the industry. Given these challenges, textile millers have emphasized the urgent need to further extend the credit period for importing industrial raw materials to sustain trade operations. The BTMA has urged the central bank to take immediate action to extend the credit period in line with the 30 June 2024 circular. The circular, dated 14 December 2023, extended the usance period to 360 days from 180 days for the import of industrial raw materials, including back-to-back imports, and for agricultural implements and chemical fertilizers under supplier's/buyer's credit.
The policy support has been extended until 31 December 2024, although the extended usance period will not apply to imports under EDF loans. Other relevant instructions remain unchanged.
Source: TB News
FRANKFURT: Pakistan is showcasing its textile sector at the world's largest trade fair for home textiles, Heimtextil 2025, with a record number of exhibitors and a significant boost to its export prospects. The event, which commenced on January 14 in Frankfurt, Germany, features 2,800 exhibitors from 130 countries, with Pakistan emerging as the fourth-largest exhibiting nation. This year, Pakistan's participation at Heimtextil has reached unprecedented levels, with over 275 exhibitors showcasing their products more than 10% increase from last year. The country's national pavilion, organised by the Ministry of Commerce, includes 64 small companies, marking Pakistan's largest-ever presence at the event."Heimtextil is crucial for Pakistan's home textile exports," said Shafaat Ahmad Kaleem, Pakistan's Consul General in Frankfurt. "This year's record participation is expected to result in a significant increase in exports. Business meetings between Pakistani exporters and global buyers, scheduled for January 15 under the 'Thread Connect' initiative, will further strengthen these ties." Messe Frankfurt's representative in Pakistan, Omar Salahuddin, expressed enthusiasm about the scale of Pakistani participation. "This year, the exhibition features a record 275 exhibitors from Pakistan," Salahuddin said. "With larger stalls and a better, more strategic location for our exhibitors, we expect to see a significant boost in Pakistan's export potential."
Pakistani exhibitors are presenting a diverse range of home textile products, including towels, bed linen, and apparel. Messe Frankfurt is also providing marketing support to help these exhibitors access new global markets.
Exporter Syed Osman Ali highlighted the increasing opportunities for Pakistani textiles in Western markets. "The export value of home textile products is already $2 billion, and with the US tightening policies on Chinese products and cotton, Pakistani textiles are well-positioned to capture more market share," he said. "This exhibition is the perfect platform to tap into that potential." As the exhibition progresses, Pakistani exporters remain optimistic about the future of the textile industry, especially with the European Union's sustainability regulations set to take effect between 2025 and 2030. Industry insiders revealed that approximately 30% of Pakistan's textile sector currently meets international sustainability standards, a figure that must double by 2030 to remain competitive globally. "This exhibition will help us plan production for the next six months," said a participant, "from cotton procurement to the logistics of delivering finished products. With stable utility costs and a strong rupee, fulfilling export orders will be much easier."
Source: Tribune
The National Chamber of the Textile Industry (CANAINTEX) of Mexico and the National Council of Textile Organizations (NCTO) have come together to endorse the Mexican government’s recent trade decree, which imposes new tariffs of up to 35 percent on imports from across the globe. In a letter to President Claudia Sheinbaum, the groups, which represent textile and apparel producers in the U.S. and Mexico, said the government’s Dec. 19 decision to implement new duties on finished apparel products like knitwear, jackets, and lingerie will help stem the flow of “illegal and subsidized products into our markets that evade tariffs, taxes, and fees and undermine our critical sectors.” According to NCTO and CANAINTEX, China has been able to circumvent both Mexican and American trade laws by flouting regulations, like those laid out in the country’s IMMEX program, and illegally obtain duty-free benefits on shipments into the U.S. via de minimis or the U.S.-Mexico-Canada Agreement (USMCA). “Despite the legal efforts of Mexico and the United States to prevent the importation of goods that are undervalued, made with forced labor or with tariff or regulatory restrictions, we have seen firsthand how the Asian market has gained an unfair advantage through predatory trade practices, displacing companies and workers in the USMCA industries and undermining our critical coproduction chain,” the groups wrote. The textile and apparel coproduction chain between the U.S. and Mexico supports hundreds of thousands of jobs, they added. However, according to the country’s economy minister Marcelo Ebrard, the Mexican apparel and textile industry has shed more than 70,000 jobs over the past year alone, in large part because of displacement by foreign-made imports.
The tariffs on China-made products will allow Mexico to build back its domestic textile sector, the letter added. By making the country a less hospitable trade environment for Chinese imports, market demand will increase for domestically made products, they believe. “Regrettably, Mexico’s job loss has been astronomical in this sector,” NCTO president and CEO Kim Glas told Sourcing Journal. The U.S. textile sector, too, has taken a major hit—25 plants closed in the past 18 months—and Glas attributes the loss of business to foreign shipments deluging both markets. “The distress that the Mexican industry is feeling is being felt throughout the hemisphere, including here in the United States,” she added. “My understanding is that the Mexican industry has been raising the alarm with the economic minister and with the new president around job loss, revenue loss to the Mexican government, and how non [free trade agreement] partners are benefiting.” According to Glas, Chinese exporters and others are “essentially legally trans-shipping goods through Mexico via de minimis” to the U.S. They’re also “not being penalized for subsidized products coming into the Mexican market that are putting their industry at a significant disadvantage.” Goods meant for export through the country’s IMMEX trade program—which allows for the duty-free importation of garment inputs, provided they are exported during a particular time frame—are making their way into the hands of Mexican consumers. Importers of these products aren’t paying import taxes, nor are they being properly taxed on the sales that they’re making in the country illegally.
The new decree provides a much-needed antidote to these issues, according to CANAINTEX chairman Rafael Zaga Saba. The apparel and textile manufacturing sector’s contribution to Mexico’s GDP has fallen from 3.6 percent two decades ago to 1.8 percent in the third quarter of 2024. “We have been facing eight consecutive quarters with a decline every single quarter; for eight quarters, we have been losing jobs and losing [market] share,” Zaga told Sourcing Journal. The outcry from the industry prompted the government to review its market data, which revealed that “China and Asian products—finished garments particularly—were killing our market.” From Zaga’s perspective, the Mexican government is clear-eyed about the threats that China poses to the sector, and “is putting a lot of effort into making the hemisphere stronger on textiles, and work within USMCA rules.” The revisions to the country’s IMMEX trade program will be particularly helpful, he believes. The decree strengthens the spirit of the program, which was meant to give Mexican importers access to apparel inputs not available in the domestic market. Instead, it’s allowed Mexico to become a stopover for finished garments coming from China, with sometimes little to no finishing by Mexican manufacturers, he said. Often, goods are shipped into Mexico to warehouses near the U.S. border, and simply repackaged for shipment into the U.S. That cuts Mexican producers out of the equation. Now, finished goods like coats, jackets, suits, pants, dresses, sweaters, bed linens, curtains, and towels will be explicitly banned from the program, though importers will still receive duty-free benefits on several fabrics, yarns and other components. “The IMMEX program works perfectly fine when we are talking about raw materials or other items that will [undergo] a transformation and that will put some work back into Mexico to export to other countries,” Zaga said. “We don’t want to be a bridge to… send all these garments—finished garments made in China—that Mexico doesn’t do anything besides pack.” Zaga believes the legislative moves will ultimately strengthen the co-production chain between American textile manufacturers and Mexican producers. “Between the U.S. and Mexico, we have a very tight relationship. We buy a lot of fabric. We buy a lot of filament yarns. We buy a lot of cotton. So we are complementary to one another, and this will benefit a lot the industries of both countries.”
Source: The Yucatan times
Bangladesh's textile millers have asked the Bangladesh Bank to extend the credit period to help ease the financial burden of importing raw materials and support their import-export trade. The textile millers sent a letter regarding this to Ahsan H Mansur, governor of Bangladesh Bank, on Monday. Brig Gen (retd) Zakir Hossain, general secretary of the Bangladesh Textile Mills Association (BTMA), signed the letter. A central bank circular dated June 30, 2024, extended the credit period for importing industrial raw materials until December 31, 2024. The bank representatives and the BTMA delegation held a detailed meeting on December 17, where they discussed the problems, challenges, and potential solutions, including the proposal to extend the crediting period for importing industrial raw materials once more.
Following the discussion, the BTMA also sent a detailed report identifying the existing problems and challenges of the export-oriented textile sector, along with potential recommendations for resolution and prioritization. The letter explained that mills are unable to operate at full capacity because of several reasons.
That includes the Ukraine-Russia and Israel-Palestine wars, the global economic recession, significant depreciation of the taka against foreign currencies, a 250% increase in gas prices, a 70% increase in workers’ wages, recent political unrest in the country, workers’ unrest, and a lack of necessary gas and electricity supply, mills are unable to use their full production capacity. Moreover, the export-oriented textile industry, including the manufacturing industries, has faced huge losses due to the exchange rate when importing raw materials. The export-oriented textile industry has been facing several problems since the deadline for the extended crediting period has passed, the letter added. Considering the overall aspect, it has become necessary to increase the credit period for the import of industrial raw materials urgently to facilitate the import-export trade. The textile millers urged the central bank to take necessary measures to extend the credit period for importing industrial raw materials for the textile mills belonging to BTMA per the circular of June 30, 2024. The BTMA, in a separate letter, also urged the central bank to take necessary steps to pay the outstanding amount of “Accepted/Matured” bills against the value of yarn and fabric supplied worth approximately $44.31 against 961 LCs of 66 BTMA member mills against back-to-back LCs by the LC opening banks. The letter said that many of the concerned BTMA member mills are facing a liquidity crisis due to such a large number of unpaid bills. Moreover, this issue was also discussed in detail in the meeting held by the Bangladesh Bank governor with the BTMA delegation on December 17, where he assured that steps would be taken to pay the outstanding bills as soon as possible. The investment in this sector is about $22 billion, which is the highest single investment in the private sector. The textile and apparel sector earns about 84% of the country's export earnings, with the country's textile millers supplying 70% of the raw materials and gaining about 30% of foreign exchange through it.
Source: Dhaka Tribune
The Pakistan Textile Council (PTC) has called on Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb to implement immediate policy reforms to prevent the collapse of the textile industry. In a letter addressed to the minister, PTC Chairman Fawad Anwar warned that the sector, which accounts for nearly 60% of Pakistan’s export earnings and employs over 15 million people, is under severe financial strain. The council highlighted surging energy costs as a critical challenge, with industrial electricity tariffs now at 16-18 cents per kWh—nearly double the rates in countries like Vietnam, Bangladesh, India, and China. Gas prices for captive power plants have risen to $13-14 per MMBtu, compared to $5-8 in regional economies. The situation is further aggravated by additional capacity charges and surcharges, driving up production costs and eroding competitiveness in global markets. Working capital rates have also spiked from 2% to approximately 14%, while tax policies introduced under the International Monetary Fund (IMF) program, such as minimum turnover and super taxes, have pushed effective tax rates to over 50%. These financial pressures have severely impacted the low-margin, high-volume textile industry, making reinvestments almost impossible due to escalating short-term interest rates. PTC expressed concerns over the long-term consequences of the crisis, pointing out that similar conditions in countries like Argentina and Greece in the past led to economic recessions, social unrest, and permanent losses of industrial capacity. The council warned that if the financial challenges persist, many textile mills could shut down, resulting in mass unemployment, civil instability, and significant economic disruption. The letter also noted that some textile manufacturers have already begun shifting operations abroad due to rising costs in Pakistan. This trend threatens to undermine the country’s status as a key player in global textile manufacturing. The council urged the government to adopt a balanced approach to reforms, ensuring that macroeconomic goals do not jeopardize the industry’s viability. It emphasized the need for sustainable energy pricing, reduced capacity charges through renegotiations with power producers, and competitive gas rates for industrial use. Additionally, PTC called for a fair taxation framework to retain the industry’s profitability and maintain critical foreign exchange inflows. PTC Chairman Fawad Anwar stressed the urgency of a calibrated policy response to safeguard the textile sector, stating, “The industry is at a critical juncture. Immediate and well-considered measures are required to prevent irreversible damage while ensuring Pakistan’s economic stability.” The textile sector, which has been a cornerstone of Pakistan’s economy, is now at risk of losing its competitive edge without swift and decisive action from the government.
Source: Pakistan Today
