citi-news letter..."on the other hand, we have taken into account the problems being faced by...
TRANSCRIPT
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Cotlook A Index - Cents/lb (Change from previous day)
19-12-2019 75.90 (+0.20)
17-12-2018 87.80
18-12-2017 86.65
New York Cotton Futures (Cents/lb) As on 23.12.2019 (Change from
previous day)
Mar 2020 66.93 (+0.35)
May 2020 68.64 (+0.02)
July 2020 69.58 (+0.26)
23rd December
2019
Centre consults large Corporates, MSMEs to slay slowdown
All existing notified SEZs deemed to be multi-sector SEZs: Government
Yield improvement need of the hour for cotton sector, says apex trade
body
Polyester yarnmakers set for higher profit margin on crude price
recovery
High input tax credit mismatch under I-T lens
Cotton and Yarn Futures
ZCE - Daily Data (Change from previous day)
MCX (Change from previous day)
Dec 2019 19170 (+40)
Cotton 12870 (+50) Jan 2020 19390 (+60)
Yarn 19635 (+70) Feb 2020 19580 (+40)
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2 CITI-NEWS LETTER
-------------------------------------------------------------------------------------- Centre consults large Corporates, MSMEs to slay slowdown
All existing notified SEZs deemed to be multi-sector SEZs:
Government
Yield improvement need of the hour for cotton sector, says
apex trade body
Polyester yarnmakers set for higher profit margin on crude
price recovery
Companies under IBC process may get GST relief
No GST rate increase till revenue stabilizes
Economy faces liquidity problem, demand recession:
Assocham president Niranjan Hiranandani
High input tax credit mismatch under I-T lens
Economic revival unlikely soon: International Monetary Fund
Digital economy: Make digital highway attractive for MSMEs
------------------------------------------------------------------------------ Why Vietnam provides a useful benchmark for Bangladesh
Policy Hub suggests ways towards circularity
Circular economic climate, a costs that goes round
RoK group sets up US$860 million investment fund for
Vietnam
Kenya approves GM crop for the primary time
--------------- --------------------------------------------------
NATIONAL
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GLOBAL
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3 CITI-NEWS LETTER
NATIONAL:
Centre consults large Corporates, MSMEs to slay slowdown
(Source: Economic Times, December 22, 2019)
In a two-pronged strategy to boost private investment as well as generate jobs, Centre has
launched a mega out-reach programme to understand and resolve the issues being faced
by large corporates on one hand and MSMEs on the other.
In a two-pronged strategy to boost private investment as well as generate jobs, Centre has
launched a mega out-reach programme to understand and resolve the issues being faced
by large corporates on one hand and MSMEs on the other.
Accordingly, the Ministry of Commerce and Industry has been in dialogue with 25 large
corporates and 25 MSMEs groups for the past one month to understand their concerns.
The out-reach effort under -- Project Management Cell -- aims to understand challenges
such as current regulations and liquidity conditions faced by corporates in expanding
their operations.
Till now, top corporate leaders of Tata Group, Wipro, Bharti Group amongst others have
met with Commerce and Industry Minister Piyush Goyal.
Alternatively, consultation meets with MSME groups have also been held with the
minister.
Centre envisages MSME sector to play a major role in the employment generation.
Besides, Goyal will meet representatives from aviation, road, textiles, food processing,
renewable energy, tourism and mining industries along with these sector's concerned
ministries.
"Its a two-pronged strategy, whereby, we are trying to understand and address the issues
being faced by corporates in expanding operations and enhancing their investments," a
senior ministry official told IANS here.
"On the other hand, we have taken into account the problems being faced by the MSMEs,
which are job generating engine and the backbone of any economy."
Consequently, Goyal in collaboration with other ministers, hopes to boost private
investment leading to demand augmentation, thereby, reversing the cycle of de-growth.
At present, the government expects the private sector to play a major role in employment
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4 CITI-NEWS LETTER
generation, as it plans to exit from various PSUs and hand over the management control
to strategic investors.
The development assumes significance as the economy at the present juncture faces --
Stagflation -- an economic trend marked by rising inflation and falling GDP growth rate.
Especially, alarming is the fact that subdued consumption trend, along with a massive
contraction in manufacturing, agriculture and mining activities has pulled India's GDP
growth rate down to 4.5 per cent in the second quarter of 2019-20.
This is the slowest GDP growth rate in around six years. The growth on a year-on-year
basis during Q2 2018-19 stood at 7 per cent.
Economy watchers have blamed subdued demand, high taxation, low job creation,
stagnant wages and stressed rural sector for creating the economic slowdown.
Already, sectors such as automobile, consumer durables and capital goods have come
under heavy pressure due to the slowdown.
Home
All existing notified SEZs deemed to be multi-sector SEZs: Government
(Source: T E Narasimhan, Business Standard, December 22, 2019)
Aim is to get more entities to set up manufacturing facilities in SEZs and to help developers
to monetise their unutilised land
The central government has notified that all notified and existing Special Economic
Zones (SEZs) shall be deemed to be multi-sector economic zones. This would release land
parcels in single commodity SEZs for other sectors.
The aim is to get more entities to set up manufacturing facilities in SEZs and to help
developers to monetise their unutilised land, say sources. This amendment to
the SEZ rules of 2006 ensures units from two or more sectors can start operations in any,
including trading and warehousing.
Besides, the minimum area required for an SEZ or Free Trade Warehousing Zone (other
than for information technology, IT-enabled services, biotech or health services) has been
fixed as 50 hectares; in some northern and northeastern states, 25 hectares.
For IT, ITeS, biotech or health (other than hospital) services, there is no minimum area
requirement for an SEZ. The requirement for minimum built-up area has been brought
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5 CITI-NEWS LETTER
down from 100,000 sq metres to 50,000 sq m in Category A cities, from 50,000 sq m to
25,000 sq m in Category B and from 25,000 sq m to 15,000 sq m in Category C cities.
Senior officials from the state government here took the credit for the change to their
continuous lobbying in this regard. The Tamil Nadu government has been raising the
issue continuously with the Union ministry of commerce, said one.
Business representatives say in the 13 years since the rules were made, much has changed.
Sector-specific SEZs did not have enough takers. Besides, technology has entered many
sectors, making units sector-agnostic and breaching the standard definitions at earlier
sector-specific SEZs.
“A lot of land remained unutilised and a lot of opportunity was being lost by new units
which wanted to set up. A new industry which is into artificial intelligence — we didn’t
know which category to fit them into. By opening it up, we are saying every industry player
can set up a unit in any SEZ ,according to market conditions,” said Sunil Rallan, chairman
of J Matadee Free Trade Zone and president of the Tamil Nadu Association of SEZ
Infrastructure Developers.
The Government of India has given formal approval for 417 SEZs; the number of those
notified is 349. Of these, the number of operational SEZs is 238. The number of units
which are approved in these SEZs is 5,168; almost two-third are IT SEZs. The non-IT ones
had a lot of unutilised land. Total land area for the approved SEZs is 48,000 hectares,
says Rallan.
“The government is no longer going to set up artificial barriers to curtail the choices for a
prospective investor. There are a lot of units in China-US trade war that are looking to
move out of China or starting additional factories. India was an attractive destination but
because of the virtual barriers. created by policy, people were not able to plug into SEZs,”
he adds.
With this, the existing SEZs will get more units coming in, and more approved SEZs will
be active, it is expected. Earlier, it required 500 hectare to get a multiproduct SEZs, now
brought down to 50 ha. Getting tjis much land is far more achievable and it is better to
have a small number of multi-product SEZs than one big multi-product SEZ, said Rallan.
New investments and new business will come up and shareholders of developer firms will
start seeing new revenue coming up.
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6 CITI-NEWS LETTER
Yield improvement need of the hour for cotton sector, says apex trade body
(Source: The Hindu Business Line, December 20, 2019)
Underlining the need for yield improvement in cotton cultivation in the country, trade
leaders called for better resource management and protection from pest infestations.
At the 97th Annual General Meeting (AGM) of apex cotton trade body Cotton Association
of India (CAI), Atul Ganatra, President, stated that the domestic productivity level of the
fibre remains one of the lowest in the world.
“Cotton productivity has increased from around 300 kg/ha in 2002-03 to nearly 500
kg/ha now. However, it is still among the lowest in the world. With an average
productivity of 2,028 kgs/ha, Australia is on the top. Even smaller countries such as Syria,
Myanmar, Pakistan, etc have higher cotton productivity than India. We need to be more
efficient and effective in improving resource management to achieve higher productivity,”
Ganatra said in his address.
He also added that India is striving hard to improve its cotton productivity level through
implementation of High Density Planting and efficient and better protection from pest
infestations.
Following robust crop prospects and a production outlook of about 354.5 lakh bales (each
of 170 kg), Ganatra expressed confidence that India is likely to retain its numero-uno
position this year from China.
He also flagged several challenges for Indian cotton, in the form of contamination issues.
Even though it has excellent intrinsic value, Indian cotton faces contamination and excess
moisture due to pouring of water and poor bale packaging etc, which diminishes the value.
Home
Polyester yarnmakers set for higher profit margin on crude price recovery
(Source: Dilip Kumar Jha, Business Standard, December 22, 2019)
After falling to $57.77 a barrel on October 2, crude oil prices bounced back to trade almost
at three-month high of $67.50 a barrel on Friday
Recovery in crude oil prices is set to benefit synthetic yarn manufacturers because of their
ability to pass on the increase to consumers, that is, fabric manufacturers.
After falling to $57.77 a barrel on October 2, crude oil prices bounced back to trade almost
at three-month high of $67.50 a barrel on Friday.
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7 CITI-NEWS LETTER
Since synthetic yarn is a derivative of crude oil, manufacturers have been able to raise
their product prices. Synthetic yarn has become costlier by 5-7 per cent in the last two
months along with a jump in cotton yarn prices.
Changing consumer preferences, like the needs of sportswear firms, have resulted in the
increasing demand for synthetic yarn in India.
Looking at the vast potential, Indian synthetic yarn and fabric manufacturers have also
started exploring overseas markets for exports.
“Consumer preferences have changed over the last few years. The demand for synthetic
yarn and fabric has increased. As against 60:40 cotton-to-synthetic yarn consumption in
India two years ago, the ratio has now changed to 55:45. This is going to continue further
and catch up with the global standard of 40:60 of cotton-to-synthetic,” said a senior
official with a leading polyester maker.
Looking at the enormous potential, Filatex India has raised capacity at its polymer
production unit in Dahej from 150 tonnes per day (TPD) through debottlenecking to 170
TPD.
“We are glad to report a steady performance despite the turbulent economic conditions
and slowdown across industries in the country. We have maintained a high capacity
utilisation and increased production during the challenging period,” said Madhusudhan
Bhageria, chairman and managing director, Filatex India said.
Going ahead, demand of polyester fibres is expected to remain firm, led by healthy
demand expected in the domestic apparel industry.
India’s better demographics, expected increase in per capita income, increasing
urbanisation and expanding organised market would be the key drivers for raising
domestic demand for apparels.
Moreover, the low interest rate regime, improving liquidity condition of non-banking
financial companies (NBFCs) and expected government and private spending would help
the domestic apparel sector see better demand.
Apart from that, cotton yarn prices have jumped to trade at Rs 185-190 a kg of the
benchmark 30-count variety. The 40-count variety of cotton yarn prices have also risen
to quote between Rs 210 and Rs 215 a kg now.
“Indian cotton is outpriced by Rs 2,000 a tonne in the world market. For India to export
cotton, either the world price has to rise or the domestic price will have to decline. Thus,
India’s cotton exports are currently under tremendous pressure,” said Arun Sakseria, a
leading cotton trader and exporter.
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8 CITI-NEWS LETTER
Cotton prices have declined by nearly 15 per cent since September this year to trade the
medium staple at Rs 5,255 a quintal in Gondal (Rajkot) market.
Apart from that cotton yarn prices have jumped to trade currently at Rs 185-190 a kg of
the benchmark 30 count variety. The 40 count variety of cotton yarn prices have risen
similarly to quote between Rs 210-215 a kg now.
“Indian cotton is outpriced by Rs 2000 a tonne in the world market. For India to export
cotton, either the world price has to rise or the domestic price should have to decline.
Thus, India’s cotton exports are currently under tremendous pressure;” said Arun
Sakseria, a leading cotton trader and exporter.
Cotton prices have declined by nearly 15 per cent since September this year to trade the
medium staple at Rs 5255 a quintal in Gondal (Rajkot) market.
A recent release from Reliance Industries states that domestic polyester markets grew by
9 per cent y-o-y. India’s filament demand grew 6 per cent y-o-y ahead of seasonal demand
and improved buying appetite due to low filament prices.
Meanwhile, overall profitability of Indian polyester yarn manufacturers would continue
to see better scenario, considering the factors like continuous rise in polyester yarns
demand from textiles players, benefits to India from US-China trade war and declining
cost competitiveness of China.
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Companies under IBC process may get GST relief
(Source: Economic Times, December 23, 2019)
The government may allow companies undergoing resolution under the Insolvency and
Bankruptcy Code (IBC) to pay current levies of goods and services tax (GST) without the
mandatory payment of past dues. This will remove a hurdle in the bankruptcy resolution
process.
Ministry of Corporate Affairs and Department of Revenue (DoR) officials have begun
talks on the matter and a framework is likely to be unveiled soon, two senior government
officials told ET. “The issue is under discussion... A procedure will be worked out,” said
one of them, adding that the officials are expected to meet this week to finalise the
contours. Tax authorities are treated on a par with operational creditors and eligible to
receive payments with others. However, GST framework currently doesn’t allow a firm to
file current tax dues if it has past dues. Penal action has been initiated for noncompliance
even in cases where the insolvency resolution process has been initiated or GST
registration has been cancelled.
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9 CITI-NEWS LETTER
This comes in the way of efforts to revive a company under IBC process. Industry
organisations have lobbied the government on the issue, asking it to accept current GST
dues while giving a moratorium on past ones. Experts said there’s a need to align GST and
IBC. “It is important that the period during which the corporate insolvency resolution
process (CIRP) takes place is insulated from the past GST compliances of the company,”
said Pratik Jain, indirect taxes leader, PwC. Industry backs immunity for corporate
debtors from penalties or prosecution for noncompliance under the GST regime. “There
is a need to recognise the fact that there could be several cases of default in GST
filings/payments due to genuine reasons,” said MS Mani, partner, Deloitte India. “Such
defaults should be condoned, possibly with a small penalty and the focus should be to
avoid business disruptions.”
The Chennai bench of National Company Law Tribunal (NCLT) recently directed revenue
authorities to allow corporate debtors to access the GST portal to file taxes after the
commencement of insolvency proceedings.
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No GST rate increase till revenue stabilizes
(Source: Economic Times, December 22, 2019)
There is no possibility of change in GST rates till GST revenue stabilises, the convenor of
a panel of state ministers said on Saturday. Speaking at Ficci’s 92nd annual convention
on the theme ‘India: Roadmap to a $5 Trillion Economy’, Sushil Kumar Modi, Bihar
deputy CM and convener of the group of ministers on IGST, said, “I want to assure you
no state or the Centre is ready to raise tax rates. At a time when the economy is in a
slowdown, if you cannot cut rates to increase consumption, at least don’t raise them.”
On the prospects of reduction in GST rates, he said, “Till GST revenue doesn’t stabilise,
we can’t think of decreasing the rates. In fact, there is no possibility of change in slabs and
tax rates — hike or cut — in the near future.” Modi said. The GST council, in its last
meeting, had decided to consider changing tax rates only once a year and not in each
meeting.
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Economy faces liquidity problem, demand recession: Assocham president
Niranjan Hiranandani
(Source: Kirtika Suneja, Economic Times, December 23, 2019)
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10 CITI-NEWS LETTER
The economy is facing a liquidity problem and demand recession, and it requires
measures to lift consumption, including reduction in goods and services tax and personal
income tax and improved credit flow, to revive, Assocham president Niranjan
Hiranandani has said. The country’s economy needs to grow at 12% — more than double
of the growth rate in the first half of this fiscal — to be inclusive, the industry body head
told ET.
“The demand side economics is
not taken care of,” said
Hiranandani, who is also
cofounder and managing director
of real estate developer
Hiranandani Group of
Companies. There is a demand
recession, and to overcome it the
industry needs a one-time
rollover of banking credit which
was done in 2008 during the
Lehman Brothers crisis, he said. It calls for a cut in GST and personal I-T rates, he said.
Hiranandani said liquidity has dried up in the economy especially after demonetisation
in 2016 when banks stopped lending. “They did not lend to SMEs, builders and small
players but to non-banking financial companies, which are now in the line of being saved,”
he said. “They can’t save other people when they themselves are being saved.” Batting for
higher government expenditure, Hiranandani said, “World over you always overspent in
a recession. It's a question of saving the economy. You're in distress; you're in a war.”
India’s GDP growth rate slumped to a six-year low of 4.5% in the July-September quarter.
The government has taken a series of steps to boost supply. It reduced corporate tax rate,
released Rs 70,000 crore to state-run banks, and made additional provision for lending
and liquidity of Rs 5 lakh crore to increase credit flow to industries, among others. Experts
now call for measures to boost demand. On the employment front, Hiranandani said he
is “scared of the lack of employment potential.” Infrastructure, textiles, tourism, micro,
small and medium enterprises and education sectors are employment generators that can
lead to inclusive growth that goes beyond GDP, he said. Though the central bank has
halted monetary easing after cutting rates by 135 basis points this year, Hiranandani
advocated further cuts even as the RBI urged banks to pass on rate cuts. “When the
economy moves up…all this trust deficit will go,” Hiranandani said “You bring back the
double-digit growth in the economy, (and) every company will invest.” On the US-China
trade war, the industry captain said India hasn’t benefited and other countries have
benefited much more.
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11 CITI-NEWS LETTER
High input tax credit mismatch under I-T lens
(Source: Economic Times, December 21, 2019)
Taxpayers having high input tax credit (ITC) mismatch with personal income tax returns
will come under the tax authorities’ lens, as will those who suppress personal income or
evade taxes by showing lower turnover in GST. Revenue secretary Ajay Bhushan Pandey
has directed senior income tax officials to identify cases of suppression of personal income
or tax evasion, and take stern action, but without troubling genuine tax payers.
“Directions were given to the taxmen to put forward special efforts to identify and book
tax evaders through data analytics and information sharing and also share the findings
with GST officials to initiate stern actions against wilful tax evaders or those using fake
invoices or inflated or fake e-way Bills,” said a source aware of the development.
Home
Economic revival unlikely soon: International Monetary Fund
(Source: Economic Times, December 21, 2019)
India's economy may not see recovery any time soon going by highfrequency indicators,
International Monetary Fund chief economist Gita Gopinath said while advocating
“important reforms” for land acquisition and labour laws to get its manufacturing going
and becoming part of the global value chain.
Gopinath also wanted India to pursue fiscal consolidation path with consolidated fiscal
deficit of state and Centre being the highest in the G-20. “Our expectation was that the
first two quarters of fiscal 2019-20 would be a slowing scenario and then there would be
an uptick in the third and the fourth quarter. But, looking at some of the high frequency
indicators, we're not seeing the kind of uptick we were projecting,” Gopinath told the
FICCI annual general meeting on Friday. She pointed out that after witnessing a sharp
weakness in investment, the country is seeing weakness in consumption growth. She said
the IMF will be revising the numbers again in January when it puts out an update.
Gopinath said India will need to pursue the clean-up of the banking sector as also take
steps to boost rural incomes while focussing on macroeconomic stability.
Pointing at the continued stress in nonbanking finance companies and slow transmission
of policy cuts, Gopinath also stressed the need to fix problems on the financing side and
for creating a positive sentiment towards investment. “For India, macroeconomic stability
is very important, which means stability on the fiscal front. A clear sense of keeping to the
target of fiscal consolidation is very important. That would require increasing revenue
mobilisation and also rationalising expenditure,” Gopinath said. India has pegged FY20
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12 CITI-NEWS LETTER
fiscal deficit target to 3.3% of GDP. The India-born economist, however, said fiscal deficit
consolidation is seen as a medium-term target and not something that needs to be
addressed overnight. For reforms, greater clarity and certainty would help, she said. “This
is also applies to big reforms like the GST (goods and services tax).”
Gopinath said another set of big reforms are required to get manufacturing on the ground
and for India to have bigger presence on the export front. There are important reforms
needed with respect to land acquisition and labour laws.
Home
Digital economy: Make digital highway attractive for MSMEs
(Source: Uma Ganesh, Financial Express, December 23, 2019)
Digital is no longer a question of ‘if’, it has to be ‘how soon and what areas to transform’
The global spend for digital technologies is slated to touch $6 trillion by 2024 as per an
IDC report. In India, several large businesses have been investing in digital technologies
and have started realising the benefits of digital transformation as evidenced in banking,
insurance, manufacturing and retail sectors. The ongoing digital led successes of these
businesses from customer facing or operations domains are leading them to undertake
digital transformation initiatives in other facets of business too. Yet, we have a significant
distance to cover in the global digital competitiveness, with India being placed 48th
among 63 nations.
One of the key stakeholders who would contribute to digital competitiveness – the
MSMEs— have been slow to adopt digital technologies. For India’s aspiration to become
a $5 trillion economy, MSMEs will have a significant role to play and adoption of digital
technologies would be the corner stone for this roadmap. It is also true that the risks
involved with digital initiatives are also high with 60-80% of them failing to deliver on
the expectations of digital transformation. Not only is the risk appetite low with the
MSMEs, they also need help with risk analysis and minimise the potential failures even
though their investments would be much smaller. Therefore, in order to make the MSME
sector vibrant we need a multi pronged approach for digital transformation.
Due to digitalisation, the requirements of large businesses from their vendors and
distributors would be changing dramatically and in order for them to continue to remain
their business partners, it is important to train and mentor them for the transformation
journey, extending their own digital knowhow and experiences. We need to launch a
national movement similar to the quality movement of the ’90s when large companies
started adopting ISO 9000 practices to be able to do business with European companies
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13 CITI-NEWS LETTER
and in turn set expectations from their vendors to enhance their quality standards. In
order to build momentum for this drive, industry associations like CII came forward with
an effective assessment programme to help ready the organisations for quality
certification.
The innovation ecosystem and the Centres of Excellence set up by the STPIs is a
noteworthy initiative to support the digital enterprise creation in the country. In addition
to the focus on incubation of startups under these COEs, efforts should also be specifically
directed towards strengthening the MSMEs in their core domain areas or assist them in.
There is also a requirement to create a special fund to help the MSMEs with attractive
credit terms for their digital initiatives for acquiring the new knowhow to succeed in the
digital era. The recently launched Centre for Digital Transformation and the DXL
initiative by CII aimed at assessment of businesses and the business units for their digital
maturity is an excellent step in this direction. This assessment coupled with the creation
of the ecosystem to support the MSMEs for training, coaching, consulting,
implementation and case study pointers to build confidence, minimise the risks and take
advantage of industry best practices would be a welcome initiative to reinvent
productivity or create new revenue opportunities. In order to remain globally competitive,
digital is no longer a question of ‘if’, it has to be ‘how soon and what areas to transform’.
The writer is chairperson, Global Talent Track, a corporate training solutions company
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14 CITI-NEWS LETTER
GLOBAL
Why Vietnam provides a useful benchmark for Bangladesh
(Source: Mostafiz Uddin, The Daily Star, December 23, 2019)
If we were to describe the global garment and textile industry as a three-horse race, China
would be out in front with two other horses fast closing in. These two horses are, of course,
Bangladesh and Vietnam. Much has been written about the competition between these
two countries in recent years. My personal view, which I will expand upon below, is that
both countries have strengths in different areas when it comes to apparel manufacturing.
For this reason, we have a great deal to gain by looking at areas we can learn from Vietnam
in order to improve our competitive position and build on our existing strengths.
The most recent figures show that Bangladesh garment exports between January and
September stood at USD 26.1 billion while Vietnamese exports were worth USD 24.43
billion. Taking October into account, Bangladesh exports amounted to USD 27.63 billion
while Vietnam was at USD 27.10 billion.
At present, I believe Bangladesh has a number of competitive advantages over Vietnam.
It has a more readily available supply of skilled and semi-skilled labour. Vietnam is
certainly strong in the area of industry training but the textile industry there faces
competition from other fast developing industries which, in many cases, pay higher
wages.
There are two other areas where I believe Bangladesh outshines Vietnam in terms of
apparel production. One is in the realm of sustainability and—a related issue—factory
safety. Bangladesh has the safest garment industry in the world and, and the rewards for
our massive efforts in the area of factory safety are still to be seen.
We are also, as an industry, leading the way in terms of sustainability generally, with many
of our factories shifting to new, greener methods of production which use less water and
energy and which are less energy-intensive. This shift has, of course, been demanded by
apparel brands but our industry has shown a willingness and adaptability to respond. It
has taken giant strides in this area, which are not always visible to the outside world.
But where can we learn from Vietnam? This is where I see huge opportunities. Firstly, it
is worth considering that efficiency in Vietnam’s apparel industry is higher than ours.
Their efficiency is around 65 compared to 40 in Bangladesh. This means their export
value is similar to ours despite the fact that their industry has around two million workers
compared to four million in Bangladesh. This added value will only be matched by
Bangladesh if we continue to invest in training and R&D, and surely this should send a
clear message to policymakers in our country.
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15 CITI-NEWS LETTER
Vietnam has a major strength in high value products, and this is a direct result of the
investment they made in training. Vietnam has invested in high standards of education
in textiles and apparel, all aimed at implementing new industry technologies.
In Bangladesh, while we have lots of textile engineers, we need more innovators in areas
such as machinery, software, digitalisation, automation, and robotisation. We cannot
afford to allow Vietnam to steal a march on us on these areas.
Also worth noting is that in five to 10 years time, the low labour cost advantage of sourcing
from Bangladesh will be obsolete and replaced by automation. We therefore need smart,
well-educated local people who can guide us on how to adapt production lines
accordingly, using the latest tech solutions.
Another area we can surely improve on is in terms of proximity of our RMG sector to the
ports and associated infrastructure. Vietnam has an edge on Bangladesh in this area but
it needn’t be this way. Public-private sector partnerships could surely be developed to
improve transport routes to Chittagong as well as the broader development of logistics
infrastructure, including modernisation of the port facilities.
Finally, we have to look at how Vietnam has aggressively pursued foreign trade
agreements, with the EU and Asia Pacific. Can we be doing more in terms of trade
agreements? Our primary markets lie in the EU but is there an opportunity to tap into the
US market—as Vietnam has so successfully done—or even the burgeoning Chinese
market? Proximity brings its own challenges, but it needn’t be a complete barrier to
market success.
In summary, Bangladesh and Vietnam each has their own strengths and weaknesses in
terms of apparel production. Some might suggest that a comparison between the two
countries is a fruitless exercise but I believe it is highly insightful, for surely there is no
better way to improve one’s own standing than by learning from a successful competitor.
To succeed long-term, our RMG sector must be on a journey of continuous improvement,
and benchmarking against other leaders in the field can be an invaluable part in this
process.
Mostafiz Uddin is the Managing Director of Denim Expert Limited. He is also the
Founder and CEO of Bangladesh Denim Expo and Bangladesh Apparel Exchange (BAE).
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Policy Hub suggests ways towards circularity
(Source: Fibre2Fashion, December 22, 2019)
The Policy Hub - launched by the Sustainable Apparel Coalition (SAC) in collaboration
with the Federation of the European Sporting Goods Industry (FESI) and Global Fashion
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16 CITI-NEWS LETTER
Agenda (GFA) – has suggested ways for the policymakers to progress towards circularity
in the sector. It has published two position papers outlining these ways and principles.
Funded by C&A Foundation, the three organisations within the Policy Hub represent over
300 brands, retailers, manufacturers and other stakeholders from the apparel and
footwear sectors, making the position papers a landmark step in creating a unified
framework for circularity.
The position papers published are - the ‘Building blocks for a sustainable circular
economy for textiles’ which offers fundamental recommendations for EU policymakers
when establishing a circular economy for the textiles industry, and ‘A common framework
for extended producer responsibility (EPR) in the apparel and footwear industry’ which
outlines the necessary principles if EPR is to be implemented as the regulatory
requirement to separately collect textiles by 2025.
“These new policy papers reflect comprehensive and collaborative work of industry
experts through the Policy Hub to outline for EU policymakers how they can lead in
mitigating the harmful impacts of climate change,” said Amina Razvi SAC executive
director. “Policymakers can influence and enable lasting change at scale in the apparel
and footwear industry by prioritising legislation and incentivising action that supports a
circular economy.”
The Policy Hub unites the textile industry and its stakeholders to speak in one voice; and
to propose policies that accelerate circular practices in the apparel, footwear and textile
sectors. With the recent European Green Deal reinforcing EU ambitions for a circular
economy, the position papers highlight how the Policy Hub is playing an active role in
helping to shape targets.
“In my opinion the Policy Hub is the most ambitious yet realistic set of policy
recommendations that will support the drive towards the circularity of the garment and
footwear sector” said Jérome Pero, secretary general, FESI. “If all stakeholders engage in
this exercise, I am confident that Europe will be once more the policy defining actor on
one of the important challenges of our time.”
Circularity is a necessary priority to minimise the use of finite resources and enable the
sector to operate within planetary boundaries. European Environment Agency’s report
Textiles in Europe´s circular economy revealed the environmental and climate pressures
caused by textile consumption and speaks to the growing need for policymakers and
companies to take swift action. The Pulse of the Fashion Industry also reported that 73
per cent of the world’s clothing eventually ends up in landfills and the global fashion
industry is projected to grow by 81 per cent by 2030, exerting an unprecedented strain on
the planet.
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“It is vital that we establish a circular economy in textiles if fashion is to thrive sustainably,
but this can only be achieved with progressive policy.” said Jonas Eder-Hansen, public
affairs director, Global Fashion Agenda. “I hope policymakers will use the new position
papers as tools to inform and accelerate action on circularity.”
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Circular economic climate, a costs that goes round
(Source: Riol Malone, OBN, Kenya, December 22, 2019)
The National Assembly followed to start with reading and nearly unanimously the anti-
waste law served by Brune Poirson. In specific, it desires to bolster the polluter will pay
concept.
"Parliamentarians allow France to take a very big step on the path of ecological and
united transition, to get our society out of disposable everything, fight against
overproduction, against overconsumption." This is the way the Minister when it comes
to Ecological and Inclusive Transition, Elisabeth Borne, along with her Secretary of State
Brune Poirson welcomed the use, on Friday to start with reading-in the National
Assembly, associated with the anti-waste bill for a circular economic climate. . Prepared
and transported by Brune Poirson, this text, which she defines as "major", is mainly
altered by parliamentarians and may never be altered a lot of whenever it had been final
assessed in January.
After the vote, some, among NGOs and business alike, protested their particular
discontent. WWF France calls the written text "very disappointing", judging him "Far
from the account regarding bans on single-use plastics" (which in fact originates from
the transposition of European directives) and deploring the postponement until 2023
associated with the utilization of a mandatory deposit for synthetic beverage bottles. For
its component, the connection of synthetic and flexible packaging businesses, Elipso,
denounces a "Escalating unrealistic bans". Still, the balance had been the topic of a quasi-
consensus throughout the vote Friday because of the deputies: associated with 50 votes
cast, 49 voted for (LREM, LR, Modem, PS, UDI) and something against ( BIA).
Packaging. And the writing goes far beyond easy arrangements on single-use synthetic
or deposit. It promotes the restoration of services and products, forbids the destruction
of unsold unsold services and products and combats crazy deposits in the open. It
additionally strengthens the prolonged producer responsibility (EPR), which arises from
the polluter will pay concept. Since the 1990s, the State has recently designated 14 groups
of services and products which is why manufacturers tend to be obliged to invest in waste
management ahead of time (packaging, report, electric and digital gear, furnishings, etc.).
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18 CITI-NEWS LETTER
The bill provides that in 2022, manufacturers of toys, creating products, shoe, Do-it-
yourself, farming or two and three-wheeled motorized automobiles can also be
susceptible to this representative. Same regime but from 2021 for "Tobacco products
fitted with filters made of all or part of plastic". From 2024 is going to be affected "Non-
biodegradable synthetic chewing gum", either gum, and "Single-use sanitary textiles,
including pre-soaked wipes for personal and household use". In 2025, it’s going to be the
change of "Fishing gear containing plastic", in other words the nets that decimate many
marine animals.
To strengthen the effective use of this polluter will pay concept, probably one of the most
important actions into the text would be the development of a bonus-penalty, such as
exactly what currently is out there for automobiles. Something will hence be susceptible
to an added bonus or a penalty based whether or perhaps not it satisfies ecological overall
performance requirements (incorporation of recycled product, usage of green sources,
toughness, repairability, probabilities of re-use, recyclability, existence of dangerous
substances…). The penalty may portray up to 20% associated with the product sales cost
excluding taxes. The customer can consequently finally pay less for greener services and
products and can need to pay even more for polluting items.
The bill also intends to enhance customer information in ecological, health insurance and
personal issues. MEPs have actually enriched the written text with really tangible actions
in this region. For instance, to any extent further, anybody that will put on industry
services and products containing substances skilled by the National Agency for Food,
Environmental and Occupational Health Safety (Endocrine Disruptors) to change the
hormone system also to be in the source of varied ailments) proven or suspected will need
to make offered to the general public the data permitting to spot the current presence of
such substances within these services and products.
Methodology. Another novelty: from 2022, Internet companies will need to notify their
clients associated with the quantity of information used and suggest exactly what this
suggests when it comes to greenhouse fuel emissions, based on a methodology made
offered by the Environment and power administration company and never because of the
vendors on their own. The text additionally provides that, in around three many
years, "Any natural or legal person who puts on the national market on a professional
basis more than 100,000 units of textile clothing products per year" is needed to applied
an environmental and personal screen. In various other terms, it’s going to then be
feasible to understand whether a dress offered by H & M or Zara could have already been
made by young ones in Bangladesh or perhaps not. Precious.
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RoK group sets up US$860 million investment fund for Vietnam
(Source: Nhan Dhan Online, December 22, 2019)
The National Pension Service of Korea recently launched a US$860 million corporate
partnership fund with SK Group of the Republic of Korea that will allow the latter to
increase investment in Vietnamese firms Masan Group and Vingroup, according to the
Korean Investors news outlet.
Under the partnership, SK Group will be able to co-invest with Vietnamese companies
in new businesses, enjoy higher priority when making an equity investment in their
Merger and Acquisition deals, and invest in Masan and Vingroup's listed subsidiaries.
In May, SK Group invested US$1 billion to buy a 6.1% share in Vingroup, and US$470
million for a 9.4% share in Masan Group last year.
Naturon Co Ltd, a Korean-based textile company, noted that Vietnam's market has high
potential because of the country's stable, high-growth economy and young population.
In addition, the RoK government's New Southern Policy has identified ASEAN and
Vietnam as markets for which the RoK will prioritise its investment.
Korean businesses are pouring more money into retail, finance and green energy
industries in Vietnam as opposed to mostly electronic components as they have done in
the past. The food processing industry is also seeing more investment from Korean
businesses.
Vo Tanh Thanh, deputy chairman of the Vietnam Chamber of Commerce and Industry,
said the Vietnamese government was improving foreign investment attraction policies
for environmentally-friendly projects that use advanced technology, and for companies
that want to work closely with Vietnamese businesses.
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Kenya approves GM crop for the primary time
(Source: Riol Malone, OBN, Kenya, December 22, 2019)
The announcement was made Thursday, December 19 within the midst of a terse
assertion that dealt, amongst different pressing issues, with the renaming of sure
holidays: Kenya has determined to permit the advertising and marketing of genetically
modified cotton. "The commercial cultivation of BT cotton (a GMO variety created by the
Monsanto company) should allow farmers to obtain better incomes through an increase
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in production," explains the presidency soberly. On the eve of Christmas holidays which
historically see Nairobi, the capital, emptying of its inhabitants, the choice virtually went
unnoticed. However, it is a main political and ecological turning level. GMOs had been
banned in Kenya since 2012. The nation, which appeared moderately open to transgenic
crops (it had specifically adopted a biosafety legislation in 2009), was afraid following the
examine of French biologist Gilles -Eric Séralini, establishing elevated dangers of
mortality in rats consumed GMO corn. Nairobi had banned all imports of transgenic
merchandise, whether or not meals or seeds for manufacturing. Only the analysis, very
supervised, had been in a position to proceed. Read our investigation: The Séralini affair
or the key story of a torpedoing Since then, a tenacious battle has opposed supporters and
critics of GMOs, each in authorities and in civil society. In March, the African Foundation
for Technological Agriculture, a pro-GM group primarily based in Nairobi, urged the chief
to carry its ban. In May, the National Biosafety Agency, the competent public authority,
went in the identical course, arguing that the Séralini examine had a posteriori been
"widely discredited" by the European Union (on this case by the Authority European
meals security). In October, conscious of "behind-the-scenes negotiations", Greenpeace
as an alternative referred to as on the federal government to take care of the ban with a
purpose to stop "a takeover of the food system by companies". According to our data, the
ministry of well being was against that of agriculture. Industrial argument President
Uhuru Kenyatta, who had publicly praised the deserves of transgenic cotton, lastly
determined. At least partially. Asked whether or not this choice meant lifting the overall
ban on GMOs, a spokesperson for the presidency declined to reply. "This is an exemption
(for cotton), not a general position," mentioned the chief secretary for agriculture (equal
to a deputy minister) Hamadi Boga, for whom the choice is "a very good news ". Cotton is
a step forward of different GM crops. Field experiments, the ultimate stage of analysis,
have been accomplished since August (whereas maize, the opposite main crop talked
about in Kenya, is just on the stage of exams in confined areas ). The analysis discovered
"yields 30% higher than conventional cotton," mentioned Hamadi Boga. The different
argument is industrial. The advertising and marketing of BT cotton "will also help boost
the industry component of the" Big Four "program, within which Kenya wishes to
establish itself as a regional leader in the production of textiles and clothing," the
assertion additionally mentioned. The nice political mantra of Uhuru Kenyatta, the "Big
Four" establishes 4 priorities for its second and final mandate: well being, housing, meals
safety but additionally business growth. Transgenic cotton is thus introduced as a method
of reaching this goal, by reviving a decimated cotton business within the 1990s and by
creating jobs in cultivated areas, such because the west of the nation. "Today, we import
cotton for our textile factories, and part of this cotton comes from India, it is GMO cotton,"
mentioned Hamadi Boga. Read our report: In Kenya, a strawberry-like revolution within
the battle in opposition to childhood tuberculosis According to data from Le Monde, an
environmental affect examine should nonetheless be carried out by the Kenyan
Environment Agency earlier than the seeds are usually not beginning to be obtainable
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within the fields for the subsequent planting season, in March-April. "It should be
launched in January 2020 and published in February," says a supply very concerned in
analysis. By then, anti-GMO activists plan to prepare. "It is very unfortunate, shocking,
that such an important decision was made just before Christmas. As a civil society we will
act, study the possible legal procedures ", protested Anne Maina, nationwide coordinator
of the Kenyan coalition for biodiversity, who was on the coronary heart of the dispute on
this topic. The Kenyan choice will mark a sure turning level within the area. “Considering
Kenya's place and strategic position because the main financial system in East Africa, the
nation has monumental potential to affect its neighbors, who share the identical
challenges by way of meals safety, the hunt for 'industrialization and job creation', Jimmy
Kiberu, head of business affairs at Bayer, who absorbed Monsanto in 2018, defined to us
not too long ago. Legislative arsenal More usually, the continent, generally introduced as
"the last frontier", stays pretty timid within the face of GMOs. "The industry remains
extremely frustrated in Africa," mentioned Mariam Mayet of the Africa Center for
Biodiversity, which brings collectively a community of African NGOs. According to her,
African nations are displaying reservations following criticism of glyphosate and the
lawsuits in opposition to Monsanto. The business even skilled a serious setback with the
abandonment of BT cotton by Burkina Faso in 2016 because of a deterioration within the
high quality of the fiber (particularly its size) in comparison with standard cotton. Only
two different African nations out of 54 have to this point cultivated GMOs: South Africa,
which launched within the late 1990s and produces cotton, corn and soybeans (all greater
than 80% transgenic) ; Sudan, which has been making cotton within the biggest discretion
since 2012. But over the previous 12 months, two heavyweights from the continent,
Nigeria and Ethiopia, have taken the plunge by authorizing the advertising and marketing
of GMO cotton . Read additionally Burkina Faso: classes to be discovered from the top of
transgenic cotton For Jimmy Kiberu of Bayer, "the momentum towards the adoption of
biotechnological crops is growing strongly, the new adopters drawing on the experience
of (those) who have successfully adopted around the world. " Others might add to this
checklist. Most African states have, or are within the technique of creating, a legislative
arsenal, based on knowledge launched by the FAO. About ten of them, together with
Cameroon, Tanzania and Uganda, are at the moment conducting analysis. Read
additionally GMOs spin unhealthy cotton in Burkina Faso Marion Douet (Nairobi,
correspondence)
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