Cotlook A Index - Cents/lb (Change from previous day)

03-09-2019 70.15 (Unch)

03-09-2018 92.15

04-09-2017 81.90

New York Cotton Futures (Cents/lb) As on 05.09.2019 (Change from

previous day)

Oct 2019 58.61 (+0.30)

Dec 2019 58.56 (-0.27)

Mar 2020 59.55 (-0.10)

05th September

2019

Commerce Minister to meet exporters on September 11 to discuss

measures to push shipments

RBI asks banks to link retail and MSME loans to external benchmark from

1 Oct

Top trade advisory body to meet next week to discuss export promotion,

manufacturing, competitiveness

US clothing companies push for India-US FTA for greater engagement

Cotton and Yarn Futures

ZCE - Daily Data (Change from previous day)

MCX (Change from previous day)

Oct 2019 19420 (-40)

Cotton 12520 (+55) Nov 2019 19210 (+10)

Yarn 20250 (+35) Dec 2019 19210 (+30)

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2 CITI-NEWS LETTER

-------------------------------------------------------------------------------------- Commerce Minister to meet exporters on September 11 to discuss

measures to push shipments

RBI asks banks to link retail and MSME loans to external benchmark

from 1 Oct

Top trade advisory body to meet next week to discuss export

promotion, manufacturing, competitiveness

US clothing companies push for India-US FTA for greater engagement

US fashion brands seek to scale up sourcing in India

FDI inflows up 28 percent in Q1 to $16.3 bn

Modi govt in talks with World bank, ADB, KfW for low cost capital

to MSMEs

How to increase India’s textile exports?

India likely to miss fiscal deficit target amid pressure for more

stimulus

Government to pull out all the stops to cut use of plastics

Khadi by Raymond launched in 300 countrywide stores in 2018

India ITME 2020 to be held in December next year

-------------------------------------------------------------------------------

Chinese pin hopes on Bangladesh’s product diversity, quality

Turkey says it faces up to $3 billion in trade losses with Britain under

no-deal Brexit

Textile industry: Too many unfulfilled promises

Pakistan: Textiles ready to adopt renewable energy solutions

Picanol plans to discontinue activities of French subsidiary

--------------------------------------------------------- ----------

NATIONAL

---------------------

GLOBAL

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3 CITI-NEWS LETTER

NATIONAL:

Commerce Minister to meet exporters on September 11 to discuss measures

to push shipments

(Source: Amiti Sen, The Hindu BusinessLine, September 04, 2019)

Falling exports a cause of greater concern as GDP growth slows down

To push languishing exports on a higher growth track, Commerce Minister Piyush Goyal

has called a meeting of stakeholders, including export bodies, to give suggestions on trade

policy instruments that could stimulate development.

“There is an urgency in the Commerce Ministry on the need to take decisions that would

boost export growth. The meeting called by the Minister on September 11 will focus on

measures that could be taken to aid exports and spur development,” a government official

told BusinessLine.

The urgency stems from the fact that the Indian economy has slowed down to a six-year

low. Exports, too, have declined in the first four months of the fiscal with July figures

showing a meagre growth of 2.25 per cent. “The government recognises the fact that a

good performance in exports is important for the GDP to show robust growth. A lot more

needs to be done to encourage exports,” the official said.

Seeking inputs

The Commerce Minister wants to get inputs from the exporting community on the

measures and trade instruments that could lead to a possible increase in outbound

shipments from their particular sectors.

For instance, yarn and fabric exporters, who have witnessed a sharp fall in exports over

the last few months, have been demanding extension of the new Rebate of State and

Central Taxes and Levies (RoSCTL) beyond garments and made-ups for the entire textile

chain.

Exporters say that with competition from producers in Bangladesh and Vietnam

increasing, they will not be able to sustain their presence in the global market if the

government doesn’t refund all input taxes.

Exporters of engineering goods, too, have sought government support. The sector, which

has traditionally been on the top of the country’s export charts, has witnessed a fall in

exports in the first quarter of the fiscal mostly due to shrinking global demand.

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4 CITI-NEWS LETTER

Engineering exporters’ body EEPC has asked the Centre to take immediate measures like

faster refund of State and Central taxes and also make steel available at international

prices.

“Once the Minister meets stakeholders face-to-face many more suggestions would come

up and can be discussed,” the official said.

With India’s per capita Gross National Income crossing the threshold limit of $1000, the

country may not be able to continue its export subsidy schemes such as the popular

Merchandise Export from India Scheme (MEIS) for long.

Viable schemes needed

The Centre, therefore, also needs to finalise viable incentive schemes for exporters that

are not linked to exports.

India’s exports in April-July 2019-20 contracted 0.37 per cent to $107.41 billion.

Home

RBI asks banks to link retail and MSME loans to external benchmark from 1

Oct

(Source: Shayan Ghosh, Live Mint, September 04, 2019)

In order to improve transmission of interest rates, the Reserve Bank of India (RBI) on

Wednesday asked banks to link their lending rates on floating rate loans to retail, personal

and micro, small and medium enterprises (MSME) borrowers to an external benchmark

from 1 October.

However, banks can link loans to other segments of borrowers as well, RBI said.

To be sure, banks have already started linking their lending rates to an external

benchmark. Among these are public sector lender State Bank of India, Union Bank of

India, Central Bank of India, Punjab National Bank and private sector lender Federal

Bank. Other banks mostly price loans under the marginal cost of funds-based lending rate

(MCLR).

The central bank said, in a statement on Wednesday, that the transmission of policy rate

changes to the lending rate of banks under the current MCLR framework has not been

satisfactory.

Banks have been allowed to choose between RBI’s repo rate, government of India’s three-

month treasury bill yield published by the Financial Benchmarks India Private Ltd

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5 CITI-NEWS LETTER

(FBIL), government’s six-month treasury bill yield published by the FBIL or any other

benchmark market interest rate published by the FBIL.

However, a bank will have to adopt a uniform external benchmark within a loan category,

meaning that the adoption of multiple benchmarks by the same bank is not allowed within

a loan category.

While lenders can decide on the spread they charge over the benchmark to calculate the

final interest rate, RBI said that the spread can be changed only if the credit assessment

of the borrower undergoes a substantial change. The interest rate under external

benchmark shall be reset at least once in three months, RBI said.

Home

Top trade advisory body to meet next week to discuss export promotion,

manufacturing, competitiveness

(Source: Kritika Suneja, Economic Times, September 05, 2019)

The commerce and industry minister chaired Board of Trade (BoT), which advises the

government on foreign trade policy (FTP), will meet on September 12.

A top advisory body on external trade will meet next week to discuss issues related to

export promotion, domestic manufacturing and competitiveness in the wake of a fall in

exports of traditional, employment-generating sectors such as gems and jewellery,

leather, handloom and cotton yarn and fabrics. The commerce and industry minister

chaired Board of Trade (BoT), which advises the government on foreign trade policy

(FTP), will meet on September 12. It last met in June when it was merged with the Council

of Trade Development and Promotion to streamline the consultation process with all

stakeholders for promoting trade.

The commerce and industry minister chaired Board of Trade (BoT), which advises the

government on foreign trade policy (FTP), will meet on September 12. It last met in June

when it was merged with the Council of Trade Development and Promotion to streamline

the consultation process with all stakeholders for promoting trade. “Besides export

promotion and domestic manufacturing, India’s free trade agreements and domestic

competitiveness are also on the agenda,” said an official in the know of the details. The

meeting comes in the wake of a decline in outward shipments in July by gems and

jewellery (6.82%), engineering goods (1.69%) and petroleum products (5 %). In April-

July 2019, exports dipped 0.37% to $107.41 billion, while imports contracted 3.63% to

$166.8 billion. The new board provides a platform to states and union territories for

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6 CITI-NEWS LETTER

articulating their perspectives on trade policy and help states to develop and pursue

export strategies in line with the national foreign trade policy.

Its members include state ministers who are in charge of trade, secretaries of different

departments like revenue, commerce, health and agriculture besides NITI Aayog CEO,

Deputy Governor RBI, and CBIC chairman. Presidents and chairpersons of industry

chambers among others are ex-officio members.

Home

US clothing companies push for India-US FTA for greater engagement

(Source: The Hindu Business Line, September 04, 2019)

The on-going US-China trade war provides big opportunity for India to attract US

investments in garments

American clothing companies, scouting for greater investment opportunities in India

following the US-China trade war, have made a case for a free trade agreement between

the US and India to increase trade in the sector.

Other suggestions given by a group of fifteen American companies to Textile Minister

Smriti Irani, during their meeting on Tuesday, was to improve the ease of doing business

on the ground, provide higher skills to workers and draw up a sustainable growth plan for

the sector, according to Tara Joseph, President, AMCHAM Hong Kong.

‘Opportunity for India’

“We are at an inflexion point. Manufacturing is moving away from China. There is a

window of opportunity for India to attract investments in manufacturing. However, there

is a lot of competition from countries like Bangladesh, Vietnam and Indonesia, and and

India needs to do all it can to increase its relevance,” Joseph said addressing a press

conference.

In the last four years, investments worth $30 billion in textiles had moved out of China

because of various factors including rising input costs, but very little had come to India,

Gautam Nair, Chair, CII Textiles Task Force, pointed out.

With the on-going trade war between the US and China, a greater number of American

companies are looking at moving their investments from China. “On paper, India has

significant strength and could be the natural successor to China. We have to speak with

potential investors to find out why this has not been happening and act accordingly,” Nair

said.

The delegation, which comprises representatives from American textile majors such as

Ralph Lauren, the PVH Group (which owns brands like Calvin Klein, Timmy Hilfiger, Van

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7 CITI-NEWS LETTER

Heusen and Arrow) and Carter's Inc, also discussed future possibilities with Niti Aayog

CEO Amitabh Kant.

According to Joseph, an FTA between the US and India would promote business in the

textiles sector. “Where there is a will, there is a way,” she said, on being pointed out that

the two countries have not even been able to work out a limited trade agreement involving

a few products.

The Amcham delegation also met the faculty of the National Institute of Fashion

Technology (NIFT) to exchange ideas on the latest trends in design.

Home

US fashion brands seek to scale up sourcing in India

(Source: Suneera Tandon, Live Mint, September 04, 2019)

Amid an ongoing trade war between China and the US, some of America’s top fashion

brands met government officials in New Delhi on Tuesday to discuss more sourcing

opportunities from India, while also pushing for a free trade agreement (FTA) between

India and the US.

A delegation of 18 members of the American Chamber of Commerce in Hong Kong

comprising sourcing heads of large apparel and footwear brands such as Carter’s Inc.,

Ralph Lauren Asia Pacific Ltd, Gap Inc., PVH Corp. (that owns brands such as Calvin

Klein, Tommy Hilfiger and Arrow), and other large apparel sourcing companies—is on a

three-day visit to India to discuss their expectations and the long-term benefits of

sourcing from India.

The delegation met textiles minister Smriti Irani, textiles secretary Ravi Capoor, and NITI

Aayog chief executive Amitabh Kant.

Although most of these brands have been sourcing from India for decades, their visit

comes at a time when India is losing out on apparel exports to other Asian countries such

as Bangladesh and Vietnam that score better in cost efficiencies. However, with an

escalation in trade tensions between China and the US, India stands to gain.

“India is at a point of inflection today in the way supply chains are moving and

manufacturing is moving away from China. India has an opportunity to get out and really

compete on that front," Tara Joseph, president, American Chamber of Commerce in Hong

Kong, told reporters late Tuesday.

The executives discussed issues on sustainable sourcing, skilling of employees, sourcing

of goods at scale, ease of doing business in India, and working on an FTA with the US for

smoother flow of goods from India to other markets.

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8 CITI-NEWS LETTER

Joseph said brands and retailers could further spruce up investments in factories and

work with their Indian partners. “The American brands that are thinking of coming in,

are not looking for a few million dollars worth of investment or for a few years. “The large

brands want to make substantial investments beyond a hundred million dollars and that’s

for a long period of time," she said.

“Fruitful interaction with textile, apparel & footwear delegation from the American

Chamber of Commerce, Hong Kong. Wonderful to see their immense interest in sourcing

from & investing in India," Kant said in a tweet.

To be sure, India has been a key sourcing base for some of the world’s largest brands such

as IKEA, Inditex, Hennes & Mauritz AB and Gap Inc.

The US and the European Union together comprise about 60% of India’s total apparel

exports in terms of value, according to an April report by CARE Ratings. However, in the

past decade, other low-cost markets in Asia such as Vietnam and Bangladesh have gained

a bigger share of apparel and footwear sourcing. China, on the other hand, has been losing

market share, the report said.

Home

FDI inflows up 28 percent in Q1 to $16.3 bn

(Source: Kritika Suneja, Economic Times, September 05, 2019)

Among sectors, telecommunications garnered the maximum FDI at $4.2 billion, followed

by services sector ($2.8 billion).

Foreign direct investment (FDI) equity

inflows rose 28% in the first quarter of

2019-20 to $16.3 billion from $12.7 billion

in the year-ago period, official data showed

on Wednesday. Singapore continued to be

the top source of FDI at $5.3 billion,

followed by Mauritius ($4.6 billion).

Among sectors, telecommunications garnered the maximum FDI at $4.2 billion, followed

by services sector ($2.8 billion). The services include financial, banking, insurance, non-

financial/business, outsourcing, research and development, courier, technology testing

and analysis.

Last week, India opened its doors further to FDI, diluting the stringent condition of local

sourcing for single-brand retail, in continuation of measures aimed at reviving growth. It

also allowed 100% FDI in commercial coal mining as well as in contract manufacturing

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9 CITI-NEWS LETTER

through the automatic route, hoping to attract global vendors looking to diversify supply

chains as the US and China battle it out in a tariff war.

Earlier, the government had issued a notification allowing 100% FDI in insurance

intermediaries. The government also allowed up to 26% FDI in digital news and current

affairs media on a prior approval basis. India-bound FDI had dipped 1% to $44.4 billion

in 2018-19 from $44.8 billion in the previous fiscal. This was the first decline in six years.

“E-tailers and investment in online companies – be it payments apps, travel aggregators

or cab services – have contributed significantly to FDI,” said an expert on foreign

investment matters.

Between April 2000 and June 2019, India received $139-billion FDI from Mauritius and

$88.3 billion from Singapore. “While Mauritius does not provide any tax incentives

anymore, a lot of investors use Singapore as their regional headquarters,” said Akash

Gupt, partner at PwC. In the first quarter, June saw the highest inflows of $7.2 billion and

May the least ($3.8 billion). The National Capital Region (Delhi, part of Uttar Pradesh

and Haryana) attracted FDI of $5.04 billion, the highest among the states. However,

Maharashtra, Dadra & Nagar Haveli, and Daman & Diu, which were the top spot for FDI

in whole of 2018-19, slipped to fourth position in the quarter with combined investment

of $1.5 billion

Home

Modi govt in talks with World bank, ADB, KfW for low cost capital to MSMEs

(Source: Financial Express, September 04, 2019)

The Narendra Modi government has been holding meetings with Asian Development

Bank, World Bank, and German state-owned development bank KfW for access to low-

cost capital to Indian MSMEs.

The Narendra Modi government has been holding meetings with Asian Development

Bank, World Bank, and German state-owned development bank KfW for access to low-

cost capital to Indian MSMEs, according to MSME minister Nitin Gadkari. The comments

gain significance as lack of capital is the biggest challenge for the growth of MSMEs even

as they grapple with the issue of delayed payments from large public sector units and

government enterprises that choke their supply of working capital and impact their

businesses.

Highlighting MSMEs contribution to the Indian economy, Nitin Gadkari at an event

recently to address the roadmap for the growth of MSMEs said that “MSMEs are the

backbone of India’s economy as it contributes 40 per cent share to India’s exports, created

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10 CITI-NEWS LETTER

11 crore jobs and we have created a mission of creating 4 crores more jobs in five years.

MSMEs also contributes 29 per cent to India’s GDP.” The minister also stressed on the

huge potential among MSMEs for generating income and employment, eradication of

poverty, boosting exports and contributing to economic growth.

The minister announced of generating 50 lakh jobs in the Khadi sector and will focus on

developing 115 socio-economic backward regions identified by Prime Minister Modi on

behalf of Khadi Gramudyog. “To achieve this, we need to create new channels for funding,

make the sector investor-friendly, bring in technological innovations, and reduce logistics

cost to make our products competitive, provide adequate skilling and market support,”

according to Nitin Gadkari. The minister also called for diversification in the MSME

sector to areas such as bamboo, honey production, fisheries, bio-fuel

production, Agarbatti making, dairy, etc., for new businesses.

Nitin Gadkari further stressed on the need to reduce imports through technology and

innovation while boosting exports while adding that a new policy will soon be announced

for this. “In sectors such as medical devices, we have imported goods worth Rs 50,000

crore. We opened a medical devices park in Visakhapatnam (to work on reducing the cost

of manufacturing goods) and surprisingly let’s say the MRI machine cost which otherwise

is Rs 4.5 crore is being made in only Rs 98 lacs. We are going to create 10 such parks in

the country and will focus on adopting technology through joint ventures so that we can

produce medical devices at lower costs and boost our exports and generate more

employment,” the minister added.

Home

How to increase India’s textile exports?

(Source: Sneha Alexander, Live Mint, September 04, 2019)

Despite its size, India's textile industry has struggled on the global market. India’s share

in global textile exports has declined while countries like Bangladesh and Vietnam are

expanding their market share. A new study suggests India’s textile exports are

constrained by high costs, unhelpful customs policies and competition from abroad.

In an article published on Ideas for India, a policy research portal, Saon Ray of the Indian

Council for Research on International Economic Relations (ICRIER) explores the reasons

for Indian garment exporters' struggles by drawing on data from surveys conducted in

2010. The survey covered 127 firms and 25 respondents in five apparel production centers

in Bangalore, Delhi, Kolkata, Ludhiana, and Tirupur.

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11 CITI-NEWS LETTER

She finds that, partly because of India’s large domestic garment market, garment

production in India is organized according to the production logistics of a handful of large

firms. This results in low integration of Indian garment exporters into the global value

chain

According to the survey, the biggest constraints for Indian firms are production costs,

time involved in exports and competition from other countries. Specifically, factors such

as high electricity and raw material costs make it difficult for manufacturers to meet strict

quality requirements for exports and deliver exports on schedule.

In terms of competition, India’s garment export competition comes from countries like

China, Vietnam and Cambodia which produce similar garments, rather than

neighbouring countries such as Bangladesh and Sri Lanka which produce different types

of garments. To make Indian textiles more competitive, the government should improve

infrastructure networks to streamline the textile input-procurement process and ease

credit constraints for textile exporters, the authors suggest.

Home

India likely to miss fiscal deficit target amid pressure for more stimulus

(Source: The Hindu Business Line, September 04, 2019)

The government is likely to raise the fiscal deficit target to 3.5 per cent of GDP from 3.3

per cent, amid pressure for additional stimulus measures.

India is likely to miss its fiscal deficit target for the current financial year, despite receiving

an additional dividend from the central bank, five government officials and advisers said,

as tax collections have sunk amid a sharp slowdown.

With economic growth falling to a six-year low of 5 per cent in the April-June quarter, the

sources said the government could toward the end of 2019 be forced to raise the fiscal

deficit target to 3.5 per cent of GDP from 3.3 per cent, amid pressure for additional

stimulus measures.

The officials asked not to be identified as they have not been authorized to discuss the

matter with media.

A Finance Ministry spokesman did not immediately respond to requests for comment.

Tax collections could fall by as much as ₹1 lakh crore ($14 billion), or 4 per cent of $344

billion annual target, two of the officials said, noting that sharp shortfalls are expected

both in goods and services tax (GST) and income tax collections.

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12 CITI-NEWS LETTER

“Overshooting the fiscal deficit target is inevitable this year as the economic slowdown

has hit government revenue,” a senior adviser said, adding the deficit would rise unless

the government resorts to hefty spending cuts.

Separately, a finance ministry official said plans to sell minority stakes in some state-run

entities including electricity producer NTPC, state insurer General Insurance Corp and

construction finance company HUDCO could be deferred, as market sentiment has

weakened.

Two government advisers said they have also urged the Prime Minister Narendra Modi-

led government to defer the fiscal target to tackle the economic slowdown and outline

stimulus steps to help the hard-hit sectors such as autos and textiles.

Downward revisions

Private economists have revised growth forecasts to as low as 5.8 per cent for 2019/20,

one percentage point lower than the prior year, saying the slowdown could persist for two

or three years while much needed cyclical as well as structural reforms are put in place.

The flat manufacturing sector growth of 0.6 per cent during the April-June period, and

contraction in the auto sector by nearly 30 per cent in July, has hit GST and corporate tax

collections, while consumer spending cuts amid job losses have dented revenue

collections.

So far, the government has resisted pressure to announce a big-bang stimulus package

while nudging the central bank to cut its benchmark repo rate, which is already down 110

basis points since February.

Another government adviser said despite receiving a bonanza of around $8 billion in extra

dividends from the central bank, the fiscal deficit would rise as nominal GDP growth has

fallen well below the budgeted estimate for the fiscal year.

Policy advisers fear that the government's recently outlined plan to merge 10 public sector

banks into four megabanks this year, could also prove to be a distraction for bankers,

reducing their focus on credit growth, delaying recoveries on bad loans, and in turn

impacting their profits and their dividend payouts to the government.

In 2018/19, government revenue receipts fell 11 per cent against the budgeted target, and

the government resorted to spending cuts of ₹1.46 lakh crore ($20.42 billion), and the

deficit rose 3.4 per cent of GDP against the initial target of 3.3 per cent.

Home

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13 CITI-NEWS LETTER

Government to pull out all the stops to cut use of plastics

(Source: The Hindu Business Line, September 04, 2019)

Multi-Ministry effort will begin on October 2, includes voluntary work and awareness.

After Prime Minister Narendra Modi’s message on Independence Day, the Union

government is working on a multi-ministerial plan to discourage the use of single use

plastics across the country, likely to kick off on October 2, Gandhi Jayanti. A presentation

for the same has been prepared and circulated across the Ministries.

The nodal Ministry for the scheme would be the Ministry of Environment, Forests and

Climate Change, which has been asked not just to ensure and enforce the ban on single

use plastics but also finalise the pending policy for Extended Producer Responsibility

(EPR), especially on milk packets.

The Department of Industrial Promotion is to ensure that all cement factories use plastic

as fuel, while the National Highway Authority of India (NHAI) has been asked to ensure

that not only is plastic waste collected and transported responsibly along National

Highways but also all collected plastic waste is used for road construction. According to

studies quoted by officials, roads constructed using water plastic are durable against

extreme weather conditions and are also cost-effective.

The Railways Ministry will organise massive shramdaans (voluntary work) on October 2

for collection of plastic waste at railway stations and along rail tracks and will run

advertising radio spots on all trains.

Since 70% of the total plastic waste in India is from urban areas, all 4,378 urban local

bodies have been tasked with massive shramdaan for plastic collection and to collect and

segregate waste into recyclable and non-recyclable categories. Gram panchayats have

been asked to mobilise shramdaan on October 2 to ensure that all roads under the Prime

Minister Gram Sadak Yojana are built using plastic waste and segregate waste in rural

areas.

End to plastic bags

Ministries of Tourism and Textiles have also been roped in for the campaign, including

pushing for greater production of jute bags etc. to replace plastic bags. The Tourism

Ministry has been asked to ensure awareness on SUPs at iconic tourist spots. Prime

Minister Modi had flagged the discouraging of SUP, population control and encouraging

domestic tourism in his address. The ban on SUP is likely to be the first to be taken up

among these causes with Mr. Modi aiming at 2022 as the year when SUP will be weeded

out completely. A ban on import of certain plastic products is also on the anvil.

Home

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14 CITI-NEWS LETTER

Khadi by Raymond launched in 300 countrywide stores in 2018

(Source: India CSR, September 04, 2019)

In the year 2018, Khadi by Raymond was launched country-wide in more than 300

company stores, a move accompanied by a high-decibel marketing campaign.

The first Khadi store by Raymond was started at Kala Ghoda, Mumbai in February 2019.

Khadi means handspun and handwoven cloth. In 1918 Mahatma Gandhi started his

movement for Khadi as relief programme for the poor masses living in India’s villages.

As India is celebrating 150th birth anniversary of Mahatama Gandhi Ji,Charkha

Dialogue(Samvad), an annual mega conference dedicated to Gandhian philosophy on

rural economy, governance, and sustainable development is being organised on October

11, 2019 in New Delhi.

Raymond Group, Indian textile major has created over 3 million (30 Lakh) work hours of

employability for Khadi artisans at 30% higher wages in more than 75 clusters across 16

states during FY 2018-19.

“We created over 3 million hours of employability for Khadi artisans in more than 75

clusters across 16 states in India.”, said Gautam Hari Singhania, Chairman and Managing

Director in Annual Report 2018-19.

“In a bid to encourage inclusive growth, Raymond continues to enrich the tailoring

ecosystem, providing a platform for skill development in the textiles and apparel

manufacturing industry by rapidly adding tailoring hubs across the country.”, Gautam

Hari Singhania said.

Raymond has established a Greenfield linen manufacturing plant of Amravati during the

year.

India’s apparel market is majorly driven by menswear, which holds major share in the

apparel business, accounting for 43% of the total market. Women’s wear contributes

almost 36%, while kids wear constitutes 21% of the apparel market. The sector is one of

the fastest growing markets globally, supported by a robust demand growth.

“With world-class product quality and steadily increasing sourcing capability, we are

committed to make Khadi a global currency of fashion from India.”, said, Sanjay Behl,

CEO – Lifestyle Business.

“With a strong financial performance during FY 18-19 by all our businesses and

purposeful strides on strategic milestones, we are making steady progress towards our

vision of Raymond Reimagined.” report added.

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15 CITI-NEWS LETTER

India’s textiles industry is among the oldest industries in the country dating back several

centuries. It is one of the largest contributors to the economy accounting for 4% of the

GDP. It is the second largest contributor towards employment generation, after

agriculture, contributing 10% to the country’s manufacturing, owing to its labour-

intensive nature. The industry is characterised by its robust vertical integration in almost

all the sub-sectors.

As a flagship business of Raymond Group, its Branded Textile segment has a dominant

position in the Indian market as a B2C branded player for suiting and shirting fabrics.

The vertical has grown over the years on the back of strong channel partner relationships,

some lasting more than 50 years, as well as wide distribution reach.

With a strong distribution network that addresses robust fabric demand across Tier 1

cities to Tier 6 towns, the business has consistently launched new products and services

keeping up with the customers’ needs and preferences. In FY 2018-19, it witnessed strong

growth driven by network expansion supported by growth in institutional and exports

category.

The textiles and apparel industry constitutes 14% of the total exports of the country. India

is the second largest producer and exporter of textiles after China and fourth largest

producer and exporter of apparel after China, Bangladesh and Vietnam.

The fundamental strength of India’s textile industry is its strong production base with a

wide range of fibres and yarns that include natural fibres like cotton, jute, silk and wool;

and synthetic and manmade fibres such as polyester, viscose, nylon and acrylic.

The Indian apparel industry was worth an estimated $54 billion in 2018 and projected to

reach $118 billion in 2028 growing at CAGR of 8% over 2018-28 period.

Home

India ITME 2020 to be held in December next year

(Source: Fibre2Fashion, September 04, 2019)

The eleventh edition of India ITME 2020 will be held in India Exposition Mart Ltd, Noida,

from December 10-15, 2020. The total number of halls will be 15 with a total area of

2,35,000 sqm, making it the largest in this industry segment. The event is expected to

host more than 1800 exhibitors in 21 chapters and have over 1,50,000 visitors over 6 days

period.

The main objectives of the event are a)To develop India as a textile and textile engineering

sourcing destination b)To encourage investment in India for textile machinery

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16 CITI-NEWS LETTER

manufacturing and thus support Government initiative to develop India 'as a

manufacturing hub' for textile engineering c)To encourage new market development to

generate new custom lead from 2nd tire and rural markets for the manufacturers d)To

facilitate connect to agents, dealers, distributors for overseas market as well as the

domestic market for the manufacturers e)To facilitate joint ventures and technology

transfer f)To promote/support the growth of textile Industry in India through new

technologies along with Ancillary and Allied Industries & Trade.

India ITME 2020 will offer unmatched business to the exhibitors as the Indian textiles

industry is set for strong growth, buoyed by strong domestic consumption as well

as export demand. It will open windows to various business verticals in form of leads,

contacts enquiries on a massive platform.

Participation from 91 countries and 21 chapters, will make India ITME 2020 a one stop

platform for the engineering solutions and technical technology for textile industry,

servicing the whole of Indian textile industry and building India brand.

Home

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17 CITI-NEWS LETTER

GLOBAL

Chinese pin hopes on Bangladesh’s product diversity, quality

(Source: The Daily Star, September 05, 2019)

Chinese fabric manufacturers foresee continuous business with Bangladesh thanks to the

diversification in the latter’s readymade garments sector along with qualitative

improvements.

The optimism was expressed to The Daily Star by participants of the “20th Textech

Bangladesh International Expo 2019”, “16th Dhaka International Yarn & Fabric Show

2019-Summer Edition” and “38th Dye+Chem Bangladesh 2019 International Expo”.

Industries Minister Nurul Majid Mahmud Humayun inaugurated the four-day

concurrent exhibitions, organised by the Conference & Exhibition Management Services

(CEMS) Global at the International Convention City Bashundhara yesterday.

Bangladesh, the world’s second largest garment exporter, largely relies on China when

importing fabric as a raw material for the garment industry, with annual figures reaching

as much as $5 billion.

India is the second largest source accounting for imports of some $2 billion.

Lucca Cao, manager of Changzhou Outex Corporation which specialises in knit fabric,

said she has been taking part in the annual fair for the last three years and managed to

attract three clients in Bangladesh.

She said though her company exported products worth $100 million solely to Bangladesh

in 2018, she did not deem it satisfactory.

“It is not a bulk order for us (compared to what the company exports to other countries),”

she said, adding, “I think there is good potential for knitting sector in Bangladesh.”

“Our fabric export will increase in the coming days as Outex manufactures high quality

knit…My company is looking for more good business with Bangladeshi readymade

garment manufacturers,” she said.

Hassan Tarique Imam, Bangladesh country manager for Dayao, said they supplied woven

fabric and denim only to select global brands which outsource RMG products from

Bangladesh.

“Dayao’s sales volume on an average is $2.5 to $3 million per month in Bangladesh and

the annual growth rate is 10 to 12 percent,” he said.

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18 CITI-NEWS LETTER

One participant who has been taking part in the fair every year is Michael, manager

(international sales) of Pinitex.

He said they currently supplied fabric directly to 10 readymade garment manufacturers

in Bangladesh and were taking part in the fair with hopes of the export volume to increase

in future.

Over 1,300 companies from countries including China, India, Germany, the UK, US,

Taiwan, Japan, Turkey, Italy and Sri Lanka are exhibiting products and services through

1,500 booths from 10:30am to 7:30pm.

Yesterday’s launching was addressed by CEMS Global Group CEO SS Sarwar, President

and Group Managing Director Meherun N Islam, and Textiles Secretary Mohammed

Belayet Hossain.

Home

Turkey says it faces up to $3 billion in trade losses with Britain under no-deal

Brexit

(Source: Euro News, September 04, 2019)

Turkey may lose trade with Britain worth up to $3 billion (£2 billion) in the event of a no-

deal Brexit, Trade Minister Ruhsar Pekcan said on Wednesday, adding that many Turkish

companies lacked information on the consequences of such a scenario. Pekcan, speaking

at a Turkey-UK Business Forum in Istanbul, said the losses would stem from Britain

hiking import tariffs after Brexit in sectors including steel, automotives and textiles.

“We expect that the most affected sectors will be automotive by a trade loss worth up to

$1.2 billion, textile with $1.3 billion and electronic and white goods by $500 million,”

Pekcan told a business forum in Istanbul.

“Unfortunately, even though both the British side and us want to sign a free trade deal,

we cannot do so because of our international commitments with the EU,” she added. She

said her ministry would begin touring the country to inform companies on the potential

impact of a no-deal Brexit.

“It seems that Brexit under a deal would be okay, but a no-deal Brexit will leave the

Turkish businesses in a difficult position,” Pekcan said.

British lawmakers, who on Tuesday seized control of the parliamentary timetable to avert

a no-deal outcome, are expected to introduce a bill on Wednesday seeking to stop Britain

from leaving the European Union on Oct. 31 without transitional arrangements.

Home

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19 CITI-NEWS LETTER

Textile industry: Too many unfulfilled promises

(Source: The Guardian, September 04, 2019)

Nigerians should have every reason to be tired of reports of every government’s move to

revive the textile industry since 1999 when democracy returned with some promise.

Despite all the noise and vaunting about revamping the industry, it is still in a sorry state.

The industry used to be investors delight in the 1960s when businessmen mainly from

Asian countries found it very attractive to commit their capital given the large market the

Nigerian economy presented then.

This is the same industry that used to provide employment to myriads of skills and cadres

of staff ranging from the very low, semi and highly skilled, which led to immense boom in

the national economy, particularly the economies of cities such as Kaduna, Asaba, Aba,

Ikeja, among others where textile production was a success story. In the sixties and years

later, these cities were centres of excellence of some sort with many trooping in from the

hinterland, to eke out a living for themselves, through small and medium-sized industries

that sprang up, by forward or backward linkages with these textile firms, with tremendous

positive effects on general commerce, increased tempo in economic activities and

enhanced living standards generally.

The story is now very different – a far cry from the glory days of the past. Workers in such

industries, including the current National Chairman of the All Progressives Congress,

APC, Comrade Adams Oshiomhole indeed have had reminiscences of such situations that

laid the foundation for vibrant labour unionism in the country.

Indeed, more significant citizens like Oshiomhole cut their teeth in trade unionism and

thereby had a rewarding career that propelled them to greater heights. Those were the

days of yore. Hence it was no surprise at the enthusiasm expressed by the representatives

of the National Union of Textile, Garment and Tailoring Workers, NUTGTW led by its

President, John Adaji at the promise by President Muhammadu Buhari to the union, at

the Presidential Villa in Abuja, to revive the textile industry and thus enhance job

creation, as one of the key pillars of his economic agenda in his second term in office. This

promise by the president is cheery news, not only to members of the NUTGTW but to the

generality of Nigerians who would be glad at the return of those days of boom. However,

on second thought, it must be clearly expressed that good wishes are indeed good and that

“if wishes were horses then beggars might ride.”

Since the days of the structural adjustment programme which commenced in 1986,

Nigeria has gone through a series of economic policy frameworks that have had negative

effects on its competitive relations with the rest of the world such that production

capacities for various sectors such as textile manufacturing have been lost, leading to the

setting in of de-industrialisation in the country. Nigerian firms do not currently have the

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20 CITI-NEWS LETTER

necessary comparative advantage in the production of many exportable commodities,

even in producing for the local market. With adjustments in the exchange rates, among

other changes in the macro-economy, which are different from what obtained in the days

of the textile industry boom, imported textile products have become much cheaper than

those produced locally thus making local industries largely unprofitable in production

and thus very difficult to sustain the existence of these firms. To change this narrative,

much work would need to be done in combination with good policy articulation and thus

bring a return of the good old days of the textile industry boom in Nigeria.

First, Nigeria must come up with a functional commercial and industrial policy to be able

to address the issue of the reversal of de-industrialisation in Nigeria. This would have to

be situated within the context of the Economic Recovery and Growth Plan (ERGP). This

invariably must not be at variance with the African Continental Free Trade Area (AfCFTA)

arrangement of which Nigeria is a signatory. The commercial policy to revive the textile

industry must be holistic, for it to have any meaningful impact on textile production in

Nigeria. One good thing that can be achieved from this is to divert trade away from non-

AfCFTA members and prepare for competition with other African producers. It must be

clear that the world economy is currently averse to trade protectionism unlike what

obtained in the days of textile industry boom in Nigeria. There is the existence of the

World Trade Organisation (WTO) which is focused on promoting free trade among

nations based on specified criteria. The current trade war between the U.S. and China is

quite instructive given the turbulence the global economy is currently going through by

such flexing of muscles by these global economic powers.

What the president and his economic team should be focusing on in the interim is the

revival of production for the domestic market by the textile firms. This can be backed up

by appropriate government policy pronouncements compelling officials of government

ministries, departments and agencies to patronise locally made textile wears and adorn

them at public functions. This is feasible and has been clearly demonstrated in our

neighbouring country, Ghana where it is common to see government officials wearing

their local “kente” fabrics at public and private functions. This has to be followed closely

by a massive public enlightenment campaign by the National Orientation Agency (NOA)

to sensitise Nigerians on the need to buy “Made in Nigeria” textiles. Another policy

posture the government must take is the effective surveillance of the borders, to check

incessant resort to smuggling by businessmen who want to evade paying duties or bring

in prohibited fabrics into the country for maximisation of profit. This definitely distorts

the structure of production in the economy.

Specifically, as this newspaper has been reiterating on this, smuggling must be dealt a

heavy blow to revive the textile industry; else domestic textile production will be a mirage,

as these firms will find it tough to survive in an uncensored economic environment.

Focusing on producing for the local market would also revive the cultivation of cotton

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21 CITI-NEWS LETTER

which used to blossom in the Northern parts of the country. That will also create jobs in

the agricultural sector.

One fact government must make clear to the operatives of the textile industry is that it

would take a lot of hard work to revive the industry and that all hands must be on deck. A

curious mix of good policy formulation, tariff measures and border control, exchange rate

management and good industrial incentives would have to be deployed to achieve this

great dream most Nigerians would want to be realised. The least the country can do in

this regard is to satisfy the domestic market and have a total reorientation of the populace

in the preference for locally made fabrics to those imported. We hope that the textile

industry and its good old days of boom in the sector will be revived. The only way to

achieve that is to migrate from rhetoric to action that the nation can feel.

Home

Pakistan: Textiles ready to adopt renewable energy solutions

(Source: The Nation, September 04, 2019)

The All Pakistan Textile Mills Association (APTMA) Punjab Chairman Adil Bashir has

said that the textile industry is ready for adopting renewable (solar hybrid) energy

solutions to deal with sustainability and competitiveness issues. He was speaking at an

awareness session organised for member mills at the APTMA Punjab office in association

with Solar Quality Foundation (SQF). Senior Vice Chairman APTMA Punjab Abdul Rahim

Nasir, Vice Chairman APTMA Punjab Aamir Sheikh, Treasurer-elect APTMA Punjab

Kamran Arshad, and a large number of representatives of mills were also present on this

occasion. While pointing out the energy affordability issue of Punjab-based industry, he

emphasized the importance of energy in the whole energy mix of industry and stated that

its share has become more than 35-40% in total conversion cost in the basic textiles, i.e.,

spinning and weaving.

Home

Picanol plans to discontinue activities of French subsidiary

(Source: Innovation in Textiles, September 04, 2019)

Picanol, a leading textile machinery manufacturer, has the intention to discontinue the

activities of its French subsidiary Burcklé sas (Bourbach-le-bas, France) at the end of

September and it will close the affected branch. Burcklé is active in the production of reed,

sectional frames and twin wire heddles.

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22 CITI-NEWS LETTER

“As a result of the sharp drop in demand for products, which has mainly been due to the

geopolitical situation in the market, production is no longer economically viable,” the

company reports. “The announced closure will impact 30 jobs and the employees affected

were informed of this news. Picanol Group is committed to reducing the social impact of

this decision as much as possible. The announced closure has no material impact on the

results of Picanol Group.”

Picanol Group is a diversified industrial group and it is active in the fields of mechanical

engineering, agriculture, food, water management, the efficient (re)use of natural

resources and other industrial markets. The group's products are used in a variety of

applications, industrial and consumer markets.

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