Textile Industry Updates (From 1st March to 31st March 2019)

01 Apr 2019

Textile Industry Updates (From 1st March to 31st March 2019)

April 01, 2019Market Watch

1) The India government on Thursday relaxed the norms for e-way bills. Rules regarding validity have been changed, while a facility has been provided for auto-calculating the route distance.

Under the goods and services tax (GST) regime, an e-way bill has to be generated if goods worth over Rs 50,000 are transported.

2) Vietnam reaped roughly 7.3 billion U.S. dollars from exporting garments and textiles in the first quarter of this year, up 13.3% on-year, according to the country’s Ministry of Industry and Trade on Friday.

The turnovers of Vietnamese garments and textiles exported to the United States went up 12.3%, to the European Union (EU) up 9.8%, to the Association of Southeast Asian Nations (ASEAN) up 40.5%, to Japan up 7.4%, and to South Korea up 6.4%.

3) Synthetic textile manufacturers in India have planned to expand the capcity in nest 3 years.

The industry saw nearly 300,000 tonnes of new capacity across the entire value chain in the past two to three years with the central government clearing some bottlenecks. Synthetic textile manufacturers are planning a cumulative 500,000 tonnes of capacity addition, at an investment of about Rs 70,000 crore, over the next two to three years.

4) Uzbek cotton is no longer on the US list of banned products because now the US feels the use of forced child labor in cotton harvest in Uzbekistan has been significantly reduced.

The US had imposed a ban in 2010 over suspicion that Uzbek cotton was produced, or manufactured by forced child labor.

5) Cotton prices are steadily moving up even as about 70% of the estimated crop have already arrived in the market. Since early March, prices have strengthened by INR 3,000 a candy (of 356 kg each) to ₹44,500 now.

6) An India government is working on a plan to extend the upgraded Rebate of State and Central Taxes and Levies scheme (RoSCTL) that reimburses garments and made-up exporters all un-remitted input taxes paid at the State and Central levels, to all textile products.

7) State-owned Jawaharlal Nehru Port Trust (JNPT) has handled 5 million twenty-foot equivalent units (TEUs) this fiscal, becoming the first Indian port to scale the peak.

The milestone comes three decades after JNPT was built as a satellite port to de-congest Mumbai Port Trust with an investment of ₹1,109 crore, of which ₹956.97 crore was loaned by funding agencies, with the World Bank being one of the major contributors.

8) The important agricultural campaign for cotton sowing was launched in the Turkmenistan. On the instructions of the head of state Akhal, Lebap and Mary velayats’ cotton growers began sowing. Shortly thereafter, on April 3 Dashoguz velayat’s farmers will follow them.

9) A free trade deal between Sri Lanka and Singapore is in operation and there are no ongoing talks on changing the deal.

The deal gives economic freedoms to poorer Sri Lankans and stronger investor protections to investors from Singapore.

10) The U.S. has announced an agreement with Morocco that could see more duty free imports from the country.

As part of the U.S.-Morocco Free Trade Agreement (USMFTA), the originating status rule for five classes of woven garments has been modified to allow for them to receive duty-free status.

This means the country of origin for garments made with these fabrics imported from Morocco into the U.S. can be sourced from outside of Morocco or the U.S. and still be eligible for the preferential treatment, effective April 1.

11) Indian textile mills have started manufacturing in Ethiopia to take advantage of lower labour cost, duty savings, and shorter shipment time to the US and European.

12) According to the latest sectoral credit deployment data of the RBI, export credit came down 45.5% year-on-year (till January 2018-end). In FY19, there was a decline of 38.1% in export credit.

Export credit, which is on the priority sector lending list of banks, fell from ₹32,100 crore in January 2018 to ₹17,500 crore in January 2019.

13) With prices firming up, the cotton procurement by state-run Cotton Corporation of India (Cotton Corp) has almost come to a standstill.

CCI has procured 11.6 lakh bales so far, nearly four times the amount collected during the same period the previous year, top officials said and maintained the cotton body would remain in the market to ensure that prices remain stable. Procurement is likely to touch 15 lakh bales by the end of this season.

14) Banks and other foreign exchange dealers in Nigeria are prohibited from selling forex to any person seeking to import textiles and other clothing into the country.

Instead the Central Bank of Nigeria would provide financial support at single digit interest rates to the textile sector to enable operators rejuvenate their capacities through refitting, retooling and upgrading of their factories.

These initiatives are expected to help the textile manufacturing sector bounce back to service the domestic market and the export sector.

15) India and the Association of Southeast Asian Nations (ASEAN) are among the fastest growing nations with even faster growth rates for e-commerce and digital trade sectors, says a report by the Federation of Indian Chambers of Commerce and Industry (FICCI) and consulting firm KPMG.

16) Egypt is having talks with Greek investors and companies to establish a readymade garments (RMG) market, according to head of the Egyptian Internal Trade Development Authority (ITDA).

17) World cotton production is expected to rise 6.8% with yields rebounding in several countries and area also rising, according to the first projections for 2019-20 season released by the US department of agriculture (USDA).

In the US, cotton production is expected at 22.5 million bales, based on higher planted area and sharply lower abandonment.

18) India and 10-member ASEAN are among the fastest growing economies in the world with even faster growth rates for e-commerce and digital trade sectors, according to a new report by industry body FICCI and consulting major KPMG.

19) Textile and garment exports from Vietnam increased 16% to US$ 30.4 billion in 2018. Cotton import volumes increased 20% to 1.56 million tonne and fabric import went up 11.14% to US$ 12.7 billion. The import of Brazilian cotton has risen 54% and US cotton decreased 3%.

20) Bangladesh demanded fair prices for garment exported to the USA and EU as the local apparel exporters spend billions of dollars to strengthen workplace safety leading to an increase in the cost of production.

21) The 3.4% rise has been recorded in the Turkish exports done in the month of February 2019.

Sales of goods including textiles and garments to target markets like India and Mexico also recorded substantial growth. On a sectoral basis, the automotive industry came first in February exports followed by chemicals, and the textile and garment sector.

22) India in the next budget of 2018-19 extended the reduced tax rate of 25% to companies with turnover of up to INR 250 crore.

The Government has promised to lower corporate tax rate to 25% per cent for all companies once Goods and Services Tax (GST) mop-up improves.

23) China has asked India to allow duty-free import of 85% of its products into the country.

During the countries’ bilateral discussions, Indian officials were told that China was willing to give duty-free access to 92% of Indian exports, provided the bar was raised for Chinese products. India has offered to open up 74% of its market to Chinese goods in phases but China is not satisfied with the proposal.

24) BGMEA informed the ambassador that Bangladeshi spinners are keen to set up spinning mills in the USA.

Bangladesh will import more cotton from the United States if the American government offers duty benefits for apparel items manufactured of American cotton.

25) Global cotton consumption is projected to slow to an increase of only 0.4% in the 2018-2019 season, as many of the top consuming countries are seeing a slackening of usage of the raw material, according to a monthly update from the International Cotton Advisory Committee (ICAC).

26) Bangladesh Bank has increased the size of the Export Development Fund (EDF) by 16.7%.

The fund was increased to boost exports and reduce the liquidity crisis in the banks, as a result of which exporters will get more loan facilities now.

27) The DGFT, Ministry of Commerce and Industry of the Government of India, instituted an online portal on Febraury 11 where such traders can raise their disputes online.

This portal will also provide facility to foreign citizens to raise their disputes regarding Indian exporters or importers.

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