citi-news letter · apprehensive after the impact of demonetisation on small industries, wanted the...
TRANSCRIPT
Cotlook A Index - Cents/lb (Change from previous day)
07-12-2018 87.25 (-1.95)
07-12-2017 83.20
07-12-2016 79.80
New York Cotton Futures (Cents/lb) As on 11.12.2018 (Change from
previous day)
December 2018 77.16 (+0.52)
March 2019 78.84 (+0.16)
May 2019 79.85 (+0.10)
11th December
2018
DIPP floats draft patent rule
‘Definition based on turnover will hurt MSMEs’
Country’s 1st textile university proposed in Harpur
Global yarn production up in Q2/18; fabric dips
slightly
Cotton and Yarn Futures
ZCE - Daily Data (Change from previous day)
MCX (Change from previous day)
Dec 2018 22200 (+290)
Cotton 14635 (+75) Jan 2019 22450 (+320)
Yarn 24175 (+135) Feb 2019 22710 (+360)
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2 CITI-NEWS LETTER
-------------------------------------------------------------------------------------- Unfortunate exit
DIPP floats draft patent rule
‘Definition based on turnover will hurt MSMEs’
Rupee plunges 50 paise to 71.32 against U.S. dollar
Country’s 1st textile university proposed in Harpur
Decoding GST's future course in India
Traders to cash in on city’s fast-paced growth rate
Quilt India Foundation Announces Events at India's First Quilt
Festival
SRTEPC welcomes new duty drawback rates on MMF textiles
Special drive to check minimum wage rules
Sircilla weavers get ₹100-cr. order for school uniform
------------------------------------------------------------------------------------------------- Global fashion sector to step up climate actions
Global yarn production up in Q2/18; fabric dips slightly
Canada will be potential market for Vietnamese export garments
Uzbekistan reduces cotton production to 2.3 million tons
Saudi Arabia Introduces New Technical Regulations for Textile
Products
NRF: October sets new monthly import volume record
------------------------------------------------------------------------------------------------
NATIONAL
----------------------
GLOBAL
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3 CITI-NEWS LETTER
NATIONAL:
Unfortunate exit
(Source: The Hindu Business Line, December 10, 2018)
Urjit Patel’s departure reflects poorly on the state of institutional health in India
Urjit Patel’s abrupt resignation as Reserve Bank Governor only affirms a growing view
that the Centre is unable to strike the right balance between autonomy and oversight.
Differences between the Centre and the RBI have been the norm rather than the
exception, and are, in fact, compatible with institutional autonomy. But this time, some
limit appears to have been breached. For this, the Centre must shoulder most of the
blame. The RBI has been regarded the world over as a competent monetary authority —
a reputation well earned for its handling of the Global Financial Crisis and before that,
the East Asian Crisis. Patel’s exit cannot do the central bank’s stature and image much
good and will shake the confidence of foreign investors. Seen along with the fracas over
the new GDP numbers, which raises questions about the autonomy of India’s premier
data agency, it would seem that India is staring at an institutional crisis. This slide must
be arrested. There can be no better place to start than the RBI. The RBI board meeting,
scheduled for this Friday, must signal an end to the acrimony.
Patel’s resignation does not come as a bolt from the blue. The rift seemed to set in after
the ‘February circular’, which withdrew all old loan restructuring schemes and effectively
nudged banks to move all the unresolved cases under the IBC. The Centre, possibly
apprehensive after the impact of demonetisation on small industries, wanted the RBI to
loosen lending norms for the 11 weak banks placed under the ‘Prompt Corrective Action’
framework; it argued that Basel III-plus norms were not applicable in the Indian context.
It challenged the February circular in court, an inexplicable and extreme step — never
perhaps had the RBI and the Centre ever locked horns this way. Finally, anxious that it
was about to breach its fiscal deficit limit, it sought to argue that the RBI was sitting on
excessive reserves. A deceptive truce of sorts was arrived at during the November 19 board
meeting, where committees were set up to defuse the tension (see our editorial of
November 20). But the biggest irritant of all, it appears, was the presence of openly
critical, ‘political’ government appointees on the RBI board, who seemed bent on pushing
the RBI top brass into a corner. While the RBI board is dominated by government and
industry nominees, they cannot afford to disregard the central bank’s autonomy. The
balance of power between the RBI management and the board has been ruptured.
Ironically, some of these assertive board members were also votaries of demonetisation,
which flattened small industry. Patel did not cover himself with glory at that time; he
disappeared from the scene and allowed the Finance Ministry to decide unilaterally on
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4 CITI-NEWS LETTER
currency management, an area that ought to be the RBI’s domain. Patel may have
overcompensated for his silence by taking a stubborn view on credit norms. But surely all
of this could have been sorted out across the table. We need more sobriety at the highest
levels.
Home
DIPP floats draft patent rule
(Source: Economic Times, December 10, 2018)
The commerce and industry ministry has floated a draft to amend the existing patent rules
with a view to further streamline examination of applications.
The draft rules will amend the Patents Rules, 2003, the department of industrial policy
and promotion (DIPP), under the ministry, said in a notification Monday.
The department has sought views of stakeholders on the draft rules till January.
It has suggested amendment in the rules pertaining to expedite examination of
applications, opposition proceedings to grant of patent, and fees for international
application.
The draft rules have suggested removal of the transmittal fee for international application
(for e-patent cooperation treaty filing) for startups and small entities.
"The draft rules to further amend the Patents Rules, 2003 which the central government
proposes to make...and notice is hereby given that the said draft rules will be taken into
consideration after the expiry of a period of thirty days...," according to the notification.
The move assumes significance as the ministry is taking steps to fast track examination
of patent applications particularly for startups.
Home
‘Definition based on turnover will hurt MSMEs’
(Source: The Hindu Business Line, December 10, 2018)
The Karnataka Small Scale Industries Association (Kassia) has said that the proposed
definition of MSME (micro, small and medium enterprises) will not help the sector.
Addressing presspersons in Mangaluru on Monday, Basavraj S Javali, Kassia president,
said that the Union Cabinet has come up with a draft completely revising the definition of
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5 CITI-NEWS LETTER
MSME making turnover as the basis. As per the MSME Act 2006, MSMEs in India are
defined on the basis of investment in plant and machinery.
Spike in numbers
However, the proposal for the new definition is in the draft stage, and requires
amendments to be made to the MSME Act and passed in Parliament.
He said that the proposed definition will bring in large number of firms within the
definition of SME. This is a serious worry as such a thing will likely crowd out a large
number of small units from the benefits targeted at them as there will be higher demand
for such benefits from a greater number of businesses.
The distinction between manufacturing and service has been removed in the new
definition. This will add to the numbers and negatively impact on the manufacturing and
there-by creation of jobs and enterprise development, Javali said.
“There is a strong feeling among MSMEs that the investment in plant and machinery
criteria should be maintained with suitably increased limits,” he said.
Referring to GST on labour charges, he said job works were earlier exempted from
payment of tax under the VAT. However with the introduction of GST, labour charge is
taxed at 18 per cent, which is causing lot of hardship to the micro and small units who are
the main players performing the service for larger units.
Home
Rupee plunges 50 paise to 71.32 against U.S. dollar
(Source: The Hindu, December 10, 2018)
The Indian rupee on Monday tumbled 50 paise to close at 71.32
against the U.S. dollar as nagging worries on global trade war front
and uncertain crude prices hurt Forex market sentiment.
Besides, the trading pattern in the Forex market was impacted by
massive sell-offs in domestic equities as investors panicked over exit
polls suggesting the Congress giving a tough fight to the ruling BJP
in State elections.
It was a virtual collapse for the Indian unit during the session as investors hit the panic
button in view of several headwinds confronting trading sentiment.
The rupee opened lower at 71.28 against the U.S. dollar and dropped further to 71.44. The
Indian unit hit a high of 71.23 during the day.
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6 CITI-NEWS LETTER
However, global crude oil declined on December 10, in line with plunging global stock
markets, wiping out the gains made last week when cartel OPEC and other non members
agreed to slash their crude production from January.
Brent crude oil was trading at $61.03, a decline of 1.04%.
“Rupee and bond prices were under pressure also due to rising current account deficit...
The 10-year government bond yield rose 13 bps at 7.59% from its previous close of
7.464%,” an analyst said.
The Indian rupee is likely to be face extreme volatility during Tuesday’s session amid
crucial event of state election results, he added.
Exit polls for the recently concluded assembly elections have predicted a tight finish
between the ruling BJP and the Congress in Madhya Pradesh and Chhattisgarh and a win
for the opposition party in Rajasthan, impacting trading pattern on the domestic bourses
in a big way.
Heightened risk associated with the current account deficit against the grim backdrop of
surging global crude prices and global turmoil have all contributed to excess volatility on
the trading front.
Escalating global trade tensions could prompt further weakening the domestic currency
along with exodus of capital from a nation also added excess volatility.
The Financial Benchmarks India private limited (FBIL) meanwhile fixed the reference
rate for the rupee/dollar at 71.3257 and for the rupee/euro at 81.5738.
The reference rate for rupee/British pound was fixed at 90.9108 and for rupee/100
Japanese yen at 63.43.
Home
Country’s 1st textile university proposed in Harpur
(Source: Ananya Anparthi, Times of India, December 11, 2018)
The state government’s Cooperation, Marketing and Textile Department has proposed to
develop a textile university at Harpur on Umred Road in South Nagpur. If the plan
materializes, it will be the nation’s first textile university, according to textiles secretary
Atul Patne.
The Nagpur Improvement Trust (NIT) has been appointed as nodal agency for planning
and construction of the university which is to be developed on the State Handloom
Corporation’s two-acre land.
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7 CITI-NEWS LETTER
The State Handloom Corporation own five acres of land. The administrative building of
the corporation will come up on one acre and other related infra on the remaining two.
The NIT board of trustees in the meeting held recently appointed Nela Designers of
Harish Chandani as architect and project management consultant of the project.
“A few courses related to textile are available in some colleges. But there is no dedicated
university for textiles. We plan to invite an international institution running a textile or
related university to set it up,” said Patne.
As 80% of powerloom industries of the nation are situated in the state, a “textile university
in Maharashtra will encourage the sector to a great extent”, according to Patne.
Patne added that new sources of textile will be explored through the proposed university.
“Non-conventional yarn is being produced from cotton at present. A high quality non-
conventional yarn can be produced from Deccan bull, sheep, banana, bamboo etc.
Courses related to these sources will be introduced in this university,” he said.
The secretary also said courses related to powerloom, handloom, spinning mills, silk,
hosiery etc will also be introduced in this industry. “Interested persons learn these skills
by seeing the work of people in these fields. There is no courses available in ITI,
polytechnic and engineering colleges to educate the students on these fields. All these will
be provided in the Textile University. Also, we can develop new technologies in these
fields,” he said.
Patne said the textile university was part of the textile policy launched by the government.
“Various other types of initiatives have been also taken under the textile policy,” he said.
Home
Decoding GST's future course in India
(Source: Hasmukh Adia, Economic Times, December 10, 2018)
GST has been a major structural reform of the current government. Replacing multiple
taxes and cesses of state and central governments into a single tax has been a major relief
to trade and industry. At the same time reduction in overall tax incidence has brought
relief to the end-consumers. The IT driven tax filing system of GST has made it difficult
for intermediaries in the value added chain to evade taxes.
The movement of goods across the country has become faster and less cumbersome with
the help of a single e-way bill carried by the transporter, and because of abolition of state
check posts. GST has given a big boost to the manufacturing sector as a whole, which will
accelerate the growth of the economy.
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8 CITI-NEWS LETTER
Initial difficulties faced in implementation of GST were not unexpected. However, they
were quickly resolved because of the flexibility shown by the GST council in correcting
course. The experience of other countries where GST was introduced shows that all of
them faced some teething troubles for the initial two to three years. As compared to
Australia and Malaysia, the Indian experience shows that GST has settled down fairly
well. Now GST has much wider acceptability even among MSMEs.
The question now is what GST’s future course should be in India. So far, the government
has gone by the maxim ‘the best should not be the enemy of the good’. But we must
continue on a quest for the best. Having implemented GST in a vast country like India
after taking 31 states on board, it is time to perfect the system gradually.
In order to move towards an ideal GST, we must set an agenda for the next three to five
years. Our first attention should go in the direction of stabilising revenue both for state
and Centre. While states are already comfortable because of the compensation
mechanism in which 14% incremental growth rate of revenue is assured, the Centre still
needs to worry about its revenue.
GST revenue is undoubtedly going to get a major boost when the government implements
the new system of return filing in which there will be perfect matching of invoices for
availing input tax credit. At present, the total tax liability declared by registered dealers
every month is Rs 5 lakh crore, of which approximately a lakh crore is paid in cash and
the remaining Rs 4 lakh crore is settled by way of input tax credit. Even if we stop 10%
leakage in wrong availment of input tax credit, it will mean that to that extent, the monthly
GST paid by cash should go up from Rs 1 lakh crore to Rs 1.4 lakh crore.
Second, an attempt should be made to bring all excluded items into GST one by one in the
next three to five years. This includes five petroleum products, electricity, real estate and
alcohol in that sequence. Among the petroleum products, the two items which can easily
be brought into GST are natural gas and aviation turbine fuel (ATF).
Exclusion of certain items from GST creates distortions such as cascading of tax and
reversal of input tax credit. Since tax on diesel and petrol gives substantial revenue to
states and Centre, it is obvious that bringing them into the GST net will be a difficult
decision. But this is doable with proper tax structuring of petroleum products, divided
between GST and cess.
The items of electricity duty and potable alcohol, on which at present only states have the
power to impose levies, can also be brought into the GST net by imposing only state GST
on them. But inclusion of these items will help in removing input tax credit blockages; it
will be both more efficient for industry and more affordable for consumers. By bringing
petrol, diesel and potable alcohol into GST, the rate at which these items are sold to
consumers will be common across states.
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9 CITI-NEWS LETTER
Third, we must try to rationalise the rate structure as and when the scope for revenue
sacrifice increases with rising revenues. Initially, we can move from a four slab structure
to a three slab structure, and gradually to a two slab structure. Multiplicity of slabs creates
classification disputes and duty inversions, necessitating blockage of funds and refunds.
Also, modest rates result in better compliance.
If we have to move to a three slab structure, no new item should now move from 18% to
12%, or 12% to 5%, or 5% to zero in the interest of revenue neutrality. If we deviate too
much from the mean or median rate slab, it will be difficult to then increase GST on these
items when the country aspires to have a single slab GST. We can easily set the goal of
having a two slab structure by the end of fifth year from now.
Fourth, in the present GST system there are certain items where input tax credit is not
allowed which breaks the chain. Some of these sectors are restaurants (GST rate on
restaurants is 5% but without input tax credit), transport vehicles, oil or gas pipelines,
telecom tower. Exclusion of items from availing input tax credit results in accumulated
credit and has a cascading effect.
The attempt here is to suggest a road map. The pace of actual implementation can be
based on revenue growth and practical considerations of consumer interest.
Home
Traders to cash in on city’s fast-paced growth rate
(Source: Deepak karthik, December 11, 2018)
After being adjudged the cleanest and most liveable city of the state in the same year,
Trichy has now been identified as the eighth fastest-growing city in the world in terms of
gross domestic product (GDP). With the city earning yet another accolade, the trade
bodies here have resolved to leave no stone unturned to sustain the achievements, attract
more investments and create employment opportunities.
The United Kingdom-based global forecasting and quantitative analysis group, Oxford
Economics, has stated after an economic survey that 17 of the 20 fastest-growing cities in
the world are in India. Among the top 10 such cities, Trichy has even surpassed state
capital Chennai in terms of the projected growth rate of GDP between 2019 and 2035.
After being a leading city in terms of cleanliness and liveability, the recognition for the
city’s economic growth has elated city-development enthusiasts and trade bodies.
Already, trade bodies like Young Indians (Yi) of Confederation of Indian Industry (CII)
have started highlighting the achievements of Trichy to attract investors and
entrepreneurs to consider it for their future business ventures. “As we are striving to
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10 CITI-NEWS LETTER
promote a startup culture in Trichy, we have to market our city’s credentials such as
cleanest city, most liveable city, and now the fastest-growing city. Such recognition will
certainly be used for attracting investments,” N Ratnakumar, chair, Young Indian (Yi),
Trichy chapter, told TOI.
Since the city figures in the defence industrial corridor too, entrepreneurs in heavy
engineering and fabrication termed the fastest-growing city tag as a timely upliftment for
the city. “Trichy is an accommodative city for industrial growth and the decades-long
expertise we have in engineering and fabrication sectors has played a role in becoming
the fastgrowing city. We will market such tags among international entrepreneurs to
invest in Trichy,” said S Ashok Sundaresan, president of BHEL Small and Medium
Industries Association (Bhelsia).
Being identified as an education hub of the central districts thanks to the presence of
premier technical and management institutes, trade bodies said that sourcing talented
human resources should be an easy task for the investors including IT majors. With
Trichy’s achievements now taking an international dimension surpassing several other
tier-ii cities in the country, trade bodies said that investors would be persuaded to make
a foray into the city.
Graphic Elements:
Fastest-growing cities in the world (2019-2035)
Rank
City
% of growth (in terms of GDP)
GDP in 2018 (in trillion US dollars)
GDP in 2035
1 Surat 9.17 28.5 126.8 6
Tiruppur 8.36, 4.3, 17.0 8
Trichy 8.29 4.9 19.0 9
Chennai 8.17, 36.0, 136.8
Accolades of Trichy in 2018:
1.Cleanest city of Tamil Nadu
(Swachh national survey 2018, conducted by MoHUA)
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11 CITI-NEWS LETTER
2) Most liveable city of Tamil Nadu
(Ease of living index-2018, conducted by MoHUA)
3) 8th fastest-growing city in the world
(Conducted by UK based Oxford Economics)
Trichy’s recent national ranks: Swachh Survekshan 2018:
Rank 13 Liveable city ranking:
Rank 12 Statistics of Micro and Small Enterprises in Trichy district:
1) Agro-based industries: 1,1,30
2) Cotton textiles: 99
3) Readymade garments: 3,991
4) Engineering units: 1,477
5) Steel fabrication: 829 Source: MSME, 2016
Premier Education Institutes in Trichy:
1) National Institute of Technology.
2) Indian Institute of Management 3) Tamil Nadu National Law School.
Major ongoing projects/schemes for which Trichy has been selected:
1) Smart city mission from Union government
2) Defence industrial corridor to produce indigenous equipment
3) Nationally Appropriate Mitigation Action (NAMA) project (international project)
Dr M A Aleem, member, Trichy District Welfare Fund Committee: “Trichy has got a
unique comprehensive setup of educational institutes such as NIT, IIM, National Law
School, agriculture college and centuries-old arts and science colleges at one place. We
should sustain our achievements to invite more private industries to invest here.”
M Muthuganesan, member, Thailand Tamil Sangam: “Keeping in view the accolades
Trichy is fetching for the state, including the recent one from Oxford Economics, the
government should improve the city’s existing infrastructure. More domestic connectivity
through air and rail transport is also the need of the hour.”
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12 CITI-NEWS LETTER
N Kanagasabapathy, president of Trichy District Tiny and Small Scale Industries
Association (TIDITSSIA): “We need to enhance the exports we are already sending to the
middle east and south-east Asian nations. Without a doubt, trade bodies will utilize the
achievements of Trichy to attract investors.”
Home
Quilt India Foundation Announces Events at India's First Quilt Festival
(Source: Business Standard, December 10, 2018)
Events include Day-long Workshops, Quilt Show Competition, Vendor Pavilions, Curated
Exhibits, Textile journeys across India
Quilt India Foundation (QIF) announced that the first India Quilt Festival (IQF 2019)
will be held in Chennai from 25-27 January, 2019.
The festival includes Quilt Show Competition, Workshops where participants can learn
from renowned Indian and International faculty, curated quilted exhibits from different
parts of the world and private collections. The Quilt show and Special Exhibits can be
viewed at Sri Sankara Hall, TTK Road, Chennai. Visitor entry to the festival is free.
Tina Katwal, Director-Shows, says - "We are extremely pleased and excited to hold this
festival for the first time in India. The festival has been planned to run on the lines of Quilt
shows organized across the world with elements of competition, exhibition, education and
a market place. We invite quilters in India and overseas to participate in the competition
segment of the Quilt Show." The categories for the competition section of Quilt show
include - Traditional, Modern, Art, Novice and Theme Quilts. While the 'Novice' category
is aimed at Quilters who have been quilting for 2 years or less, the 'Theme' Quilts will
revolve around IQF 2019 theme 'The Dance of the Peacock'. Awards for the Competition
quilts will be sponsored by leading Indian and Global brands. In addition to the
Competition section, the curated section - 'Quilts Across Time and Nation', will showcase
Antique Indian Quilts and Quilts from different regions of India in addition to Quilts from
USA, Egypt, South Korea and other countries.
"We are extremely happy to have some of the leading names in the Industry as faculty for
the workshops. These workshops are an opportunity for Quilters in India to learn
about Quilting techniques - traditional and modern - from world over. QIF also aims to
revive traditional Indian Quilting traditions and our workshops reflect that." - Katwal
adds. In addition to the full day workshops spread across the 3 days of India Quilt Festival,
lectures by eminent Quilters and Authors are also planned. Workshops and lectures will
be held at WelcomHotel, Cathedral Road, Chennai.
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13 CITI-NEWS LETTER
The festival also has Vendor Booths and a Makers' market for Quilting related machines,
fabrics, notions as well as Quilted products. Visitors can also check out product demos of
leading sewing machine brands at their pavilions. Textile tours are also planned to
coincide with the festival. These experiential tours include trips to
Kerala, Pondicherry and Kutch.
Home
SRTEPC welcomes new duty drawback rates on MMF textiles
(Source: Fibre2Fashion, December 10, 2018)
The Synthetic & Rayon Textiles Export Promotion Council (SRTEPC) has welcomed the
new duty drawback rates announced by the Government of India. Stating that the
increased rates will provide relief to the exporters, SRTEPC chairman Narain Aggarwal
said the drawback rates declared now need to be enhanced at least up to 6 per cent to 7
per cent.
The maximum increase of drawback rates on MMF textiles is by about 1.5 per cent and
also the product of nylon filament yarn (dyed) has been added under drawback code as
540203 at the rate 6.7 per cent with a cap of ₹31.2/kg.
Aggarwal expressed his gratitude to the government for hearing SRTEPC’s plea and urged
to consider the recommendations forwarded by the SRTEPC. Requesting for upward
revision of the drawback rates, he said it would help the exporters face the competition in
the overseas market.
He also thanked SRTEPC members for their kind cooperation and support in
substantiating the data. He has also sought support and cooperation of the industry in the
matter for more favourable rates in the future.
Home
Special drive to check minimum wage rules
(Source: The Hindu, December 10, 2018)
Delhi govt launches 10-day initiative
The Labour Department on Monday launched a 10-day special drive to check minimum
wages rules, said Delhi Labour Minister Gopal Rai. Inspections were conducted at 20
public and private institutions on the first day of the drive, he said.
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14 CITI-NEWS LETTER
During an interaction with journalists, Mr. Rai said inspection by nine teams of a Special
Task Force (STF) in west Delhi revealed that some government and private institutions
were not complying with the minimum wages rules notified by the Aam Aadmi Party
(AAP) government.
“Those who were found violating rules in relation to non-payment of wages as per
prescribed rates, including government officials required to see the payment of these to
agencies to whom work has been outsourced, are being issued show-cause notices
requiring them to appear before the Labour Court of west Delhi on December 24 with
proper documents,” Mr. Rai said.
He said the drive will continue with similar inspections to be conducted in south district
on Tuesday, followed by others over the coming days. Nine teams have been formed to
inspect factories and firms to check whether they are paying minimum wages or not.
The daily minimum wages applicable in Delhi from November this year are: ₹538 (or
₹14,000 per month) for unskilled workers; ₹592 (or ₹15,400 per month) for semi-
skilled workers; and ₹692 (or ₹16,962 per month) for skilled workers.
Home
Sircilla weavers get ₹100-cr. order for school uniform
(Source: K M Dayashankar, The Hindu, December 10, 2018)
To weave 2 crore metres of fabric, instead of the usual 1.5 crore metres
The handiwork of Sircilla’s powerloom weavers is set to be adorned by schoolchildren for
the fourth year in a row. Rajiv Vidya Mission (RVM), the agency which funds school
uniforms in Telangana, has enlisted the weavers’ services for the coming financial year,
placing orders for around 2 crore metres of fabric worth ₹100 crore.
For the past three years, RVM has been placing bulk orders for weaving uniforms to be
distributed among students of government educational institutions. Earlier, the orders
were for only 1.5 crore metres of cloth worth ₹75 crore, but this time round, it has been
bumped up to 2 crore metres to cover high school students too.
Tericot fabric
Around 13,500-odd powerloom weavers of the textile town will use tericot fabric to
fashion pants and shirts for boys and salwar-kameez and scarf (chunni) for girls.
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15 CITI-NEWS LETTER
Assistant Director of Handlooms and Textiles V. Ashok Rao told The Hindu on Monday
that bulk orders by the government had brought about a lot of change in the lives of
distressed weavers and kept them busy throughout the year.
Christmas gifts
Even as weavers completed work on Bathukamma sarees, they are now busy with
Christmas gifts to be delivered within a few days for distribution by the government, he
said.
After the Christmas order, the weavers would be engaged in weaving the school uniforms,
Mr. Rao said and added that the work is expected to be completed within three months,
in time for distribution among students for the next academic year.
With regard to the distribution of Bathukamma sarees, which was stalled following the
election code of conduct, Mr. Rao said the targeted production of 90 lakh sarees worth
₹280 crore had been completed.
GO awaited
Now, government orders are awaited for the distribution of those sarees among
beneficiaries.
Home
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GLOBAL:
Global fashion sector to step up climate actions
(Source: Business Standard, December 11, 2018)
The global fashion sector on Monday significantly increased momentum to
address climate change by launching the Fashion Industry Charter for Climate Action.
Under the UN climate change, leading fashion brands, retailers, supplier organisations,
and others, including a major shipping company, have agreed to collectively address the
climate impact of the fashion sector across its entire value chain.
Forty-three leaders, including Adidas, Burberry, Esprit, Guess, Gap Inc. Hugo Boss, H&M
Group and Inditex; leading membership organizations, including Business for Social
Responsibility, Sustainable Apparel Coalition, China National Textile and Apparel
Council, Outdoor Industry Association and Textile Exchange; global logistics company
Maersk; and global NGO WWF International have committed to implementing or
supporting the 16 principles and targets that underpin the Fashion Climate Charter.
The charter, which is open for other companies and organizations to join, recognizes the
crucial role that fashion plays on both sides of the climate equation; as a contributor to
greenhouse gas emissions, and as a sector with multiple opportunities to reduce
emissions while contributing to sustainable development.
Aligned with the goals of the Paris Agreement, the charter contains the vision for the
industry to achieve net zero emissions by 2050 and defines issues that will be addressed
by signatories, ranging from decarbonisation of the production phase, selection of
climate-friendly and sustainable materials, low-carbon transport, etc.
To make concrete progress on these commitments, six working groups have been
established in which signatories will work to define steps for implementation.
The signatories are not waiting for these issues to be fully elaborated and have set an
initial target to reduce their aggregate greenhouse gas emissions by 30 per cent by 2030
and have defined concrete measures, such as phasing out coal-fired boilers or other
sources of coal-fired heat and power generation in their own companies and direct
suppliers from 2025.
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17 CITI-NEWS LETTER
"The fashion industry is always two steps ahead when it comes to defining world culture,
so I am pleased to see it now also leading the way in terms of climate action," said
UN Climate Change Executive Secretary Patricia Espinosa.
PUMA CEO Bjorn Gulden said: "We are aware that more than 90 per cent of PUMA's
carbon footprint is being generated in shared supply chains. If we want to reduce carbon
emissions in our supply chains, we need to work together with our industry peers."
In early 2018, fashion leaders volunteered to shape a climate movement through
discussions in working groups chaired by PUMA SE and H&M Group.
The launch on Monday, during the critical UN Climate Change Conference (COP24) in
this Polish city reflects genuine sectoral buy-in and is a clarion call to the fashion industry
globally to sign-up to climate action.
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Global yarn production up in Q2/18; fabric dips slightly
(Source: Fibre2Fashion, December 10, 2018)
Global yarn production increased by 5 per cent between Q1/18 and Q2/18 whereas global
fabric production decreased from Q1/18 to Q2/18, according to the ITMF
(International Textile Manufacturers Federation) State of Trade Report 2018, prepared
by Olivier Zieschank, ITMF economist. It is an international forum for the world’s textile
industries.
Higher output where observed in Egypt (+1.4 per cent), the US (+3.2 per cent), South
Africa (+3.3 per cent), and globally in Asia, where the overall +5.7 per cent increase was
led by Chinese Taipei and Korea, Rep. (respective growth rates of +8.1 per cent and +8.8
per cent). An opposite trend has been observed in all surveyed European countries, Brazil,
and Japan. Forecasts for Q3/18 are only optimistic in Africa but the Q4/18 previsions turn
positive in all regions except Brazil where stability is expected. Global yarn stocks
decreased globally by -4.75 per cent. This is the effect of small contractions in Asia and
Europe (between -3 per cent and -4 per cent), a +18 per cent increase in Brazil, and a -20
per cent average decrease in the African countries surveyed. Altogether, yarn stocks
reached 85 per cent of their previous year’s level for the same quarter. Global yarn orders
decreased by -6 per cent led by a strong reduction in the Brazilian market (-28 per cent).
Yarn orders, however, increased in Africa and Europe by +5.7 per cent and +7.5 per cent,
respectively.
Global fabric production slightly decreased from Q1/18 to Q2/18. The +0.25 per cent
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18 CITI-NEWS LETTER
contraction reflects a -6 per cent output reduction in Africa, a decrease of -0.5 per cent in
Asia, a +1.6 per cent increase in Europe, and a +3.7 percent jump in Brazil. The world
output level now reaches 87 per cent of its Q2/17 level. Fabric production in all regions is
expected to decrease in Q3/18 except in Brazil where stability is foreseen. Q4/18 should
see improvements in all regions. In Q2/18, the global fabric stock level grew by almost +2
per cent. It was driven by Brazil’s stock increase of +7 per cent, which brought global
fabrics stocks 11 per cent above their Q2/17 level. Stocks remain stable in Asia, Europe,
and the US. They continue to steadily drop in Egypt. Global fabric orders have risen by
+43 per cent at world level in Q2/18, led by a +65 per cent increase in Brazil that followed
an unusually low first quarter. Orders in Asia and Europe have stagnated and contracted
in Egypt, respectively. Global fabric orders are now 16 per cent above their level observed
in Q2/17.
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Canada will be potential market for Vietnamese export garments
(Source: Vietnam News, December 11, 2018)
Canada will be a potential market for Việt Nam’s export garment products when the
Comprehensive Partnership and Trans-Pacific Partnership (CPTPP) takes effect in early
2019, according to Lê Tiến Trường, general director of Việt Nam National Textile and
Garment Group (Vinatex).
Trường said although the CPTPP does not include the US - which accounts for nearly half
of Việt Nam’s annual garment export value, it has other great potential markets such as
Australia, New Zealand, Chile and Canada
Canada imports textiles and garments worth of US$13.3 billion per year. However, Việt
Nam’s textile and garment export value to Canada has reached only about $550 million a
year, he said.
Meanwhile, Việt Nam the CPTPP is Việt Nam’s first free trade deal including Canada.
To seize this opportunity to access the Canadian market, Vinatex has sought Canadian
garment enterprises and provided them information about Vietnamese export textile and
garment products.
Specifically, Vinatex sent a delegation of local textile and garment companies to Canada
to look for opportunities with textile and garment importers in this market, including Hà
Nội Textile and Garment Joint Stock Corporation (Hanosimex), Hòa Thọ Textile and
Garment Joint Stock Corporation, Đức Giang Corporation and Phong Phú Corporation.
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19 CITI-NEWS LETTER
In Canada, the firms introduced their potential and strong points to potential partners.
Phong Phú’s representative said the corporation learned about the demand for textile and
garment products of this market via direct contacts with Canadian customers. Next, it will
set up production plans to achieve its goals in Canada.
Meanwhile, Hanosimex introduced its production meeting yarn rules of origin for two
products. It has met 12 companies and introduced to them 40 kinds of cotton towel and
knitwear.
Hanosimex has looked for more input material suppliers in Việt Nam or other member
countries of the CPTPP to diversify commodities and build a flexible production model to
meet demand from contracts of large volume with medium quality to contracts of small
volume with high quality products.
Besides of trade promotion activities held by Vinatex, Hòa Thọ Textile and Garment Joint
Stock Corporation has connected with 14 customers to introduce 15 samples of trousers
and suits made from Vietnamese, Thai and Indian materials.
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Uzbekistan reduces cotton production to 2.3 million tons
(Source: Abdul Kerimkhanov, Azer News, December 10, 2018)
As many as 2.3 million tons of cotton were produced in Uzbekistan in 2018, Uzbek media
reports.
According to the State Statistics Committee, country collected more than 2.9 million tons
of raw cotton in 2017.
"Indeed, severe drought, unexpected torrential rains and winds in spring, sultry heat and
water scarcity for summer irrigation Autumn rainfall, as well as various pests and plant
diseases, became a serious challenge for agricultural workers of the country, ” said the
President of Uzbekistan congatulating agriculture workers.
In general, for the year of hard work, agricultural products were produced for 58.19
trillion soums ($7 billion).
Traditionally, cotton is Uzbekistan’s most important cash crop. One of the policy
priorities of Uzbekistan, the world’s sixth-largest cotton producer, is further development
of its textile industry. Uzbekistan takes consistent steps to increase the volume of cotton
fiber processing.
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20 CITI-NEWS LETTER
In particular, it is planned to create 112 modern, high-tech industrial factories, expand,
modernize and technologically upgrade 20 operating capacities. All this will increase the
export potential of the industry up to $2.5 billion a year and create more than 25,000
jobs.
In the period 2010-2014, the textile industry of Uzbekistan received and spent foreign
investments worth $785 million while 147 new textile enterprises with participation of
investors from Germany, Switzerland, Japan, South Korea, the U.S., Turkey and other
countries were commissioned. Export potential of these enterprises amounted to $670
million.
Currently, Uzbekistan continues to attract foreign investments for the construction of
textile enterprises in Uzbekistan. In late August, another Polish company Polcotton
agreed to invest about $60 million in the construction of the textile complex in
Uzbekistan. The future factory is expected to have a capacity of 10,000 tons of finished
products per year and to generate as many as 1,200 new jobs.
Home
Saudi Arabia Introduces New Technical Regulations for Textile Products
(Source: SGS, December 10, 2018)
The Kingdom of Saudi Arabia’s new ‘Technical Regulations for Textile Products’ will be
implemented on February 23, 2019. The new regulations – 13.02.1439H – (24.8.2018) –
were published on August 24, 2018.
Issued by the Saudi Standards, Metrology and Quality Organization (SASO), the new
technical regulations for textile products define the basic requirements for textile
products and determine the assessment procedures a supplier must adhere to before
placing a textile product unto the market in Saudi Arabia. The new regulations look at
both consumer health and safety and environmental protection.
The regulations apply to:
• Products containing at least 80% by weight of textile fibers (e.g. curtains, furniture,
carpets, clothing, technical fabrics and textiles)
• Furniture, umbrellas and sunshade coverings containing at least 80% by weight of
textile components
• Textile components of:
• Upper layer of the multi-layered floor covering
• Mattress covers
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21 CITI-NEWS LETTER
• Coverings of camping equipment and goods, provided that the components constitute
at least 80% by weight of such upper layers or coverings
• Textiles incorporated in other products and forming an integral part thereof, including
footwear, bags and head-covers
The regulations define mandatory labeling requirements:
• Labeling on the product, packaging, and technical documents with marketing, must
conform with the technical requirements listed in the Technical Regulations and
relevant standard specifications
• Label must be legible, visible, clear and in a character set which is uniform regarding
its size, style and font. It must be written in Arabic or in Arabic and English, be
inerasable and easy to read for the consumer before the purchase, including when the
purchase is made through electronic means
• Label must be sewn or firmly attached to the product and should not be easy to
remove. It should be in a place commonly used in the textile industry
• Labels must be correct and affixed
• Labels shall not include any Quranic verses or the word of majesty and images and
words used on the packaging shall not violate public order, public morality and the
Islamic values prevailing in the Kingdom of Saudi Arabia
• Labeling must include:
o Fibre composition, described by the name listed in the regulation and allowed by mass
percentage, in accordance to the relevant standard specifications defied in Annex (4)
o Product weight, size or dimension
o Supplier name and commercial registration on the external packaging
o Country of origin
o Care instructions
The updated Technical Regulations also specify requirements to protect the
environment and the consumer from risks associated with color fastness and chemicals
used in textile products when they are in direct contact with or close to skin. The listed
chemical substances are classified as carcinogenic, mutagenic and reprotoxic (CMR),
very persistent and very bio-accumulative (vPvB), persistent, bio-accumulative and toxic
(PBT), as well as a broad set of substances including:
• Formaldehyde
• Phenols
• Heavy metals
• Hazardous dyes
• Flame retardants
• Pesticides, herbicides, fungicides
• Chlorinated organic compounds
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22 CITI-NEWS LETTER
• Phthalates
• Organotin compounds
To place an item on the market in the Kingdom of Saudi Arabia, the supplier must
obtain a certificate of conformity issued by a notified body according to one of the
following two categories:
• Type 3 – children’s products and underwear
• Type A1 – other textile products not including children’s products and underwear
The following technical documentations must be provided:
• Conformity declaration of the supplier (manufacturer / importer) in accordance with
Annex 12 of the Technical Regulations
•Product Safety Test Report regarding safety from hazardous chemicals
The regulations make it clear the supplier must cooperate with relevant Regulatory
Bodies and with Market Surveillance Authorities.
Products will be treated as meeting the requirements if they bear:
•Saudi Quality Mark or an equivalent
•Eco-Label or equivalent (granted by an Authority-approved body)
Stakeholders should be aware that products for medical purposes or with medical claims
are excluded from these Technical Regulations because they fall under the Saudi Food
and Drug Authority (SFDA) requirements and regulations.
Home
NRF: October sets new monthly import volume record
(Source: Home Textiles Today, December 10, 2018)
National Retail Federation’s latest Global Tracker finds imports at the nation’s major
retail container ports for the first time reached 2 million containers in a single month.
“President Trump has declared a temporary truce in the trade war, but these imports
came in before that announcement was made,” explained Jonathan Gold, NRF vice
president for supply chain and customs policy.
He added, “We hope that the temporary stand-down becomes permanent, but in the
meantime there has been a rush to bring merchandise in before existing tariffs go up or
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23 CITI-NEWS LETTER
new ones can be imposed. China’s abuses of trade policy need to be addressed, but tariffs
that drive up prices for American families and costs for U.S. businesses are not the
answer.”
U.S. ports covered by Global Port Tracker include: Los Angeles/Long Beach, Oakland,
Seattle and Tacoma on the West Coast; New York/New Jersey, Port of Virginia,
Charleston, Savannah, Port Everglades, Miami and Jacksonville on the East Coast; and
Houston on the Gulf Coast.
Together, they handled 2.04 million Twenty-Foot Equivalent Units (TEU) in October, the
latest month for which after-the-fact numbers are available. That was up 9% from
September and up 13.6% year-over-year.
A TEU is one 20-foot-long cargo container or its equivalent.
The October number was the highest for a single month since Global Port Tracker began
counting cargo in 2000. It topped the previous record of 1.9 million TEU set in July, which
in turn had beat a record of 1.83 million TEU set in August 2017.
November was estimated at 2.01 million TEU, a 14 % year-over-year increase that would
have been a new record if not for the October number. December – normally a slow month
with holiday merchandise already on the shelves – is forecast at 1.83 million TEU, up 6.1%
year-over year.
Those numbers would bring 2018 to a total of 21.8 million TEU, an increase of 6.5% over
last year’s record 20.5 million TEU.
Both year-over-year growth rates and total volume are expected to slow considerably in
January, when 10% tariffs on $200 billion worth of Chinese products that took effect in
September had been scheduled to increase to 25%.
January 2019 is forecast at 1.72 million TEU, down 2.1% from January 2018; February at
1.67 million TEU, down 1% year-over-year; March at 1.57 million TEU, up 1.7%, and April
at 1.7 million TEU, up 3.7%. “We see a significant slowdown in import growth in 2019 as
the market adjusts to higher prices due to the Trump tariffs and the impact on consumer
and industry confidence going forward,” said Ben Hackett of Hackett Associates, which
compiles Global Tracker for NRF. “We project that imports at our monitored ports will
have grown significantly in 2018 but that there will be no import growth in the first half
of 2019 compared with the same period in 2018.”
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