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The Rajasthan government has signed an investment proposal for 23 textile projects amounting to a little over Rs 7,000 cores. As of now, 18 of them have got off the ground, said a top official in the industry department. The textile industry that was pilloried for inflicting large-scale damage to environment appears to have emerged as the dark horse to become the top sector for clinching the highest conversion rate of investment proposals into projects.
As most investors have land already in their possession, they have started construction of the units. In fact, companies like Nitin Spinners, RSWM, and Sudiva Spinners have actually started production, said L C Jain, additional director, industries. The states textiles sector, which provides direct and indirect jobs to nearly 7 lakh people and contributes 17 per cent to its exports, has been accorded priority status. It is one of the very few sectors to enjoy interest subsidy of 5-7 per cent given by the state government.
Other sweeteners like VAT exemption of 50 per cent on purchase of raw material and 50 per cent exemption of entry tax on capital goods are extended to the investors.
Rajasthan is today counted as one of the leading states for cotton production with an annual output of about 20 lakh bales. Similarly, 85 per cent of the wool produced in the country is from Rajasthan.
The US-based Meridian Specialty Yarn Group (MSYG), a leading specialty yarn manufacturer and producer of package dyed and space dyed yarn, is planning major expansion of their current manufacturing operations in Valdese, North Carolina. Meridian anticipates spending $8 million on the expansion.
Expansions will commence this winter on a new 113,000 SF manufacturing plant, which will be located at the company’s current manufacturing site in Valdese, North Carolina. Completion of the project, which includes renovations to the company’s existing 152,000 SF plant, is expected by early winter, 2017, and will greatly expand Meridian’s current capabilities.
A small section of the existing plant will be removed and the final manufacturing operation will span 260,000 square feet of production and warehouse space. Over the past eight years, as other US companies in the same sector have closed operations or moved overseas, MSYG has continued operations in North Carolina and has emerged a global leader. MSYG manufactures and dyes yarn for many industries including home furnishings and upholstery, hosiery, apparel, narrow fabrics, carpets and rugs, sewing thread, craft and industrial textiles.
MSYG’s wet processing plant in Valdese, Meridian offers the widest range of yarn dyeing products in the industry, including package dyed yarn, three processes of space dyed yarn, top dyed wool, yarn printing and twisting. Currently, products made by MSYG are found in retail and craft stores across the country, and also in carpets, furniture, window treatments, automobiles, tires, socks and more.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the apex apparel body in Bangladesh has sought an alternative customs channel as an emergency byway alongside the global Asycuda world system that repeated failed them in cargo shipment. Interruption in the system earlier had held back export and import trade through the seaports, they pointed out. BGMEA has proposed that the National Board of Revenue (NBR) arrange alternative servers in Dhaka and Chittagong customs houses to conduct uninterrupted external trade in readymade garments.
The BGMEA's proposal came after the country's export-import business faced a blow on January 18-22 due to technical glitch in the Asycuda world system. According to the officials the problem now has been resolved but reason behind the technical glitch was yet to be fixed by both local and foreign experts. Experts of the United Nations Conference on Trade and Development (UNCTAD) are now working to find out the fault line, they said.
The UNCTAD provided customs-data software and technical support to the revenue board in upgrading the Asycuda++ to Asycuda World.
Spanish company Jeanologia wants to double its size in three years. The company plans to invest €10 million in R & D to develop new sustainable technologies that transform the textile sector. Jeanologia specializes in laser technology for the textile industry. It’s estimated that 20 per cent of the 6,000 million pieces of jeans produced a year in the world use Jeanologia technology. This technology produces the same finishes on the garment as do traditional techniques like sandblasting, sanding, sprays or stonewashes, but with a considerably reduced or even zero use of water and chemicals and with no detrimental effect on workers’ well-being and health.
Jeanologia wants to raise this percentage to 50 per cent and introduce this technology in all areas of textile production. The company was founded in 1993. It closed 2015 with a turnover of €32 million, after a sustained growth of 20 per cent annually over the past five years. Nearly 90 per cent of the sales come from outside the company, which has customers in 50 countries on five continents, including Mexico, United States, Germany, India, China, Morocco, Pakistan, Bangladesh and Vietnam.
The main customers are textile producers hired by large European and American brands that manufacture in countries with cheaper labor like India, China and Pakistan.
eim.jeanologia.com/
In a bid to promote Indian products in a big way, the Export Promotion Council for Handicrafts (EPCFH) has submitted final proposal to the Ministry of Textiles for setting up two large handicraft warehouses in Latin America and Russia. EPCFH is waiting for a positive response soon from Ministry of Textiles.
, Rakesh Kumar, Executive Director of EPCFH says they have proposed two handicraft warehouses: one in Uruguay in Latin America and Latvia in Russia. These will promote their products as these markets are potential in terms of business. Each warehouse will be built with an investment of Rs 100 crores. The idea is to help exporters who are currently facing several transport, credit and other related difficulties in the process of export and full circle transaction which normally stretches to a span of six months.
Meanwhile, the Ministry of Textiles had built an export cluster with an investment of Rs 17 crores in AP to facilitate lace handicraft workers and exporters scale up to the growing demand for the products across the world.
The government is aiming at Rs 20,500 crores handicrafts exports for the current fiscal, over Rs. 2,000 crores more than the last fiscal. The government focused on southern region. For lace and crochet here, the target is pegged at Rs 500 crores exports in the coming five years. The current export is Rs 60 crores.
The International Labour Organisation has urged Bangladesh to complete the remediation process in the garment sector as soon as possible to save the sector from any future catastrophe. It may be remembered that remediation is only part one, a lot of factories are investing and fixing their safety issues on their own, said Srinivas Reddy, Country Director of the UN agency at a roundtable at The Daily Star Centre in Dhaka.
Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and The Daily Star jointly organised a seminar on the garment exporters’ target to reach $50 billion in exports by 2021.Reddy said respect for labour rights, continuous social dialogue and investment in people are crucial for sustainability of the country’s garment sector.
The ILO official requested factory owners to hear workers’ viewpoints on a regular basis and have a culture of cooperation. Workers have to be made a partner in progress. International standards should be followed in all issues, whether it is freedom of association or collective bargaining, he added.
According to Mohan Seneviratne, a Program Manager at International Finance Corporation, garment makers and retailers should also focus on environmental sustainability in Bangladesh as the level of water in Dhaka has been depleting by 2.5 meters every year for higher consumption by the industries. As of December 2015, 102 BGMEA member factories have adopted modern technologies under a program called ‘Partnership for Cleaner Textiles’ focused on the wet dyeing and finishing sector, sponsored by the Dutch government, 10 brands, IFC, BGMEA and Solidaridad. These factories have saved 14 billion liters of water in a year, according to Seneviratne.
India has extended the anti-dumping duty on import of melamine from China for five years. The justification is that continued dumping of the chemical product from China is causing injury to the domestic industry. Melamine is used in beauty and utility products.
India first imposed the restrictive duty on melamine imported from China in November 2004. The duty stretched up to February 18, 2016. It has now been extended for five more years. It was felt that if the anti-dumping duty were to be withdrawn, dumping of goods from China and injury to the domestic market is likely to continue or intensify.
India has also imposed a levy on imports of mulberry raw silk from China to protect the domestic industry from cheap inbound shipments. Imports of the silk from China increased considerably during April 2013 to June 2014.
Anti-dumping measures are taken to ensure fair trade and provide a level playing field to domestic industry. It is not a measure to restrict imports or cause an unjustified increase in the cost of products.
Ethiopia’s textile exports have reached only 70 per cent of the target for the 2015-16 fiscal year. One reason is that companies have a strong focus on local market. Their managerial and technical capacities are not developed. Other reasons include power outage and fluctuations, shortage of manpower and high attrition, weak company linkages, investment project implementation delays and the like.
The country has a comparative advantage in cotton production. But due to El Nino, over 14,000 hectares of cotton plantation were damaged and replanted with other crops. However, a total of 65,000 hectares was reversed from sugar to cotton production. Though the textile sector has been growing significantly from time to time in terms of capacity, scale, production, employment and export, much remains to be done. And because of the practice of crop rotation, it is impossible for producers to plant cotton every year. If the land is covered with cotton this year, it has to be covered with another crop, say, sesame, the next year.
Five universities have launched textile programs to produce engineers for the sector. Industrial parks suitable for textile production have also been established. Besides formulating the appropriate policy framework, work is on to produce the manpower needed to develop the textile industry and exports. In addition, various institutions have been established to provide support to the sector.
"If India decides to be a part of the TPP agreement, the country will have to focus on upgrading its production standards. But such measures could take a lot of time adversely impacting the country’s export industries. Additionally, India’s labour market will also have to undergo a sophisticated evolution. The labour market in India is dominated by informal employment that accounts for 92 per cent of the total labour force employment (as per the NSSO data 2011-12)."
India and China two important economies are not a part of the coveted the Trans-Pacific Partnership Agreement (TPP), initiated by the US. Should India be a part of the deal to enjoy duty-free access to the US market or is there some other way, it can benefit by not being a part of it is the moot point now.
TPP benefits and India’s position
The US-led regional trade agreement, initiated in November 2009 under President Barack Obama’s administration concluded in October 2015. The treaty includes the US and 11 other Asia-Pacific countries, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. The major motive of this movement is eliminating tariff and non-tariff barriers on trade in goods and services, push foreign investment among member countries, conform to the newly crafted labour and environmental standards, intellectual property (IP) rights framework and establish a level-playing field for state owned enterprises (SOEs) and private firms (Office of the USTR).
Highly condemned for its secretive nature, experts call TPP as something more than just a free trade deal. They say through this agreement, the US seeks to integrate its economy with the Asian economies. In the Indian context, TPP member nations such as the US, Japan and Singapore have traditionally been important trade partners. As per industry estimates, India’s trade with 12 TPP countries was recorded to be worth $31.6 billion in 2003, which increased to $152.3 billion in 2014, while the share of TPP countries in India’s world trade declined from 24 per cent in 2003 to 19.6 per cent in 2014. However, these nations continue to be the important export destinations for some Indian products like petroleum oils and bituminous minerals, textiles, agricultural products and motor vehicles. The US accounted for the largest share of 13.44 per cent in India’s world exports in 2014, followed by Singapore and Vietnam with 3.05 per cent and 2.06 per cent respectively.
Since around 48.5 per cent of India’s total textile exports are exported to the US at an average bound tariff rate of 27.3 per cent, the provision of a ‘yarn forward rule’ in the TPP, will benefit Hanoi textile industry, since it will have duty-free access to the US market post-TPP. This yarn forward rule, coupled with the need to harmonise domestic production standards upwards will considerably alter India’s position in the GVCs for textile products, leading to greater export losses for the country.
How India can cope-up with competition
If India decides to be a part of the TPP agreement, the country will have to focus on upgrading its production standards. But such measures could take a lot of time adversely impacting the country’s export industries. Additionally, India’s labour market will also have to undergo a sophisticated evolution. The labour market in India is dominated by informal employment that accounts for 92 per cent of the total labour force employment (as per the NSSO data 2011-12). The country is yet to ratify three of the five internationally recognised labour principles as laid down in the 1998 ILO Declaration that have been a basis for the labour standards set out in the TPP agreement, which again is a time consuming process.
Experts say India’s strong trade relations with most TPP economies viz. Japan, Singapore, Chile, Australia and Canada could help in further strengthening ties with these countries mitigate some of these export losses, making it less costly for India to stay out of the TPP. Moreover, the negotiations on other multilateral trade agreements such as the Regional Comprehensive Economic Partnership (RCEP) will have to be expedited.
The country also needs to focus on improving the bilateral investment treaty (BIT) with the US, to remain competitive in the post-TPP era and push for bilateral dialogues with other Asia-Pacific economies like China, Hong-Kong.
Along with reforms in logistics and other sectors and government support in the form of able export policy, India’s exports sector will also have to deal with the threat of being negatively impacted by the Trans Pacific Partnership, a trade agreement “Trans Pacific Partnership countries account for 25 per cent of India’s exports. So by not being a part of TPP, India risks losing out a significant chunk of its export market to rivals. Clearly, India needs to invest quickly in skilling its large manpower and developing infrastructure to be able to attract foreign investment and become a world-class exporting hub,” a recent report by Crisil exclaims.
www.crisil.com
Canada has joined Sustainability Compact which is partnership between Bangladesh government, EU, ILO and the US’s collective effort for better factory safety and workers’ rights. Prior to the second follow-up meeting of Compact in Dhaka, Benoit-Pierre Laramee, the Canadian High Commissioner to Bangladesh, proclaimed their joining. He even added that the idea was to ensure Bangladeshi clothes they wear were manufactured in safe working scenario.
The worst-ever factory disaster. the Rana Plaza building collapse of 2013 that killed 1,100 people has been the initiation point of ‘Sustainability Compact’ action plan in July 2013. Soon after the Rana Plaza collapse, the US withdrew GSP privilege stating few Bangladesh’s products -- not counting garments -- were enjoying in its market. It also sketched a separate action plan to improve safety standards as well as workers' rights.
