Centre for Trade Facilitation and Research in Textiles

Transcription

1 Centre for Trade Facilitation and Research in Textiles Textile Economic Intelligence (WEEK ENDING ) NEWS HIGHLIGHTS China sets 2018 GDP growth target at around 6.5 pct India Overtakes China in GDP Growth but Data Suggest No Reprieve for Job Seekers Ethiopian Garment Exports Fall Short Of Target despite Y-o-Y Leap APTMA plans to invest $7 bn in Pakistan's garments sector 2.5 lakh jobs created in India s garments, made-ups segments Tamil Nadu to introduce textile policy Ministry of Textiles aims to double production by 2025 Arvind aims to generate business of Rs.100 billion over next 4-5 years

2 GLOBAL ECONOMIC NEWS a) Euro appreciated against Dollar by 0.25% from per dollar on 19th March 18 to per dollar on 23rd March 18 and Japanese Yen appreciated against dollar by 1.09% from per dollar on19th March 18 to per dollar on 23rd March 18. b) Brent Crude oil price index increased by 6.53% from 19th March 18 to 23rd March 18. It increased from $66.05 per barrel on 19th March 18 to $70.36 per barrel on 23rd March 18. c) Cot Look A Index decreased by 0.60% from 92.1 cents/pound on 19th March 18 to cents/pound on 23rd March 18. d) The US stock market indicator Dow Jones came down by 2.65% from on 19th March 18 to on 23rd March 18. In Asian market, NIKKEI (Japanese market) came down by 4.02% from on 19th March 18 to on 23rd March 18. SSE Composite Came down by 3.86% from on 19th March 18 to on 23rd March 18 and Hang sang came down by 3.82% from on 19th March 18 to on 23rd March 18. China sets 2018 GDP growth target at around 6.5 pct China has set its GDP growth target at around 6.5 percent for 2018, unchanged from that for 2017, according to a government work report. Given China's economic fundamentals and capacity for job creation, GDP growth of around 6.5 percent will enable China to achieve relatively full employment. China aims to maintain inflation level at around 3 percent and create over 11 million new urban jobs. The surveyed urban unemployment rate is projected to stay within 5.5 percent, the registered urban jobless rate within 4.5 percent. The projected growth rate reflects China's position of not over-emphasizing speed but stressing improvements in the quality and effect of development, according to another report from the country's top economic planner. The International Monetary Fund in January raised its forecast for China's GDP growth from 6.5 percent to 6.6 percent amid an upbeat outlook for the global recovery. International investment banks including UBS, J.P. Morgan and Nomura also revised their China 2018 GDP growth prediction upward to as high as 6.7 percent. Today, China's material and technological foundations are much stronger; its industrial system is complete, its market is vast, its human resources are abundant, and its entrepreneurs and innovators are dynamic.

3 Although it has bid farewell to breakneck expansion, China, with a higher-quality growth, will continue its role of stabilizing the global economy by further opening up its market. The country will completely open up its general manufacturing sector to foreign investors this year. Meanwhile, access to sectors like telecommunications, medical services, education, elderly care and new energy vehicles will also be expanded for foreign investment. China's rising middle-income group, with a population of around 400 million, show increasingly bigger appetite for imported products. To encourage imports, China will host the first China International Import Expo this year and lower import tariffs on products including automobiles and some everyday consumer goods.

4 INDIAN ECONOMIC NEWS EXCHANGE RATE: The Rupee depreciated by 0.14% from Rs 65.04/$ on19th March 18 to Rs /$ on 23rd March 18 weaken by Rs FINANCIAL MARKET TRENDS: The Sensex came down by points or 0.99% from on19th March 18 to on 23rd March 18. The Nifty came down by 96.2 points or 0.95% from on19th March 18 to on 23rd March 18. CHANGE IN FOREIGN EXCHANGE RESERVES: India s Foreign exchange reserves decreased by $0.153 bn. to reach $ On 23rd March 18 from $ bn. on 16 th March 18. INFLATION RATE FOR THE MONTH OF February 2018: The consumer price index for the month of is 4.44 per cent as compared to 5.07per cent in January The wholesale price index for the month of is 2.84 per cent same as in last month 2.84 per cent January India Overtakes China in GDP Growth but Data Suggest No Reprieve for Job Seekers The Indian economy reported a growth rate of 7.2% during the third quarter of the current financial year ending March This came as a major relief to Prime Minister, who had come under heavy criticism after growth plummeted to below six percent following their decision to demonetize most of the country's banknotes in November GDP at constant ( ) prices in Q3 of is showing a growth rate of 7.2 percent. GDP growth rates for Q1 and Q2 of at constant prices are 5.7 percent and 6.5 percent respectively, said by Ministry of Statistics & Programme Implementation. India's GDP growth momentum continues strongly & sustainably jumps to 7.2% in 3rd quarter of , makes India the fastest growing large economy in the world. The average growth in the gross domestic product (GDP) during is estimated at 6.6 percent, as compared to the growth rate of 7.1 percent in The rebound in GDP figures may provide some relief to the government, which is facing severe criticism over a growing bad debt situation in the banking sector. Government data estimated that over seven percent growth is likely to be achieved in for services like electricity, gas, water supply and financial, real estate and professional services

5 HS Code GLOBAL TEXTILE NEWS BANGLADESH TEXTILES & APPAREL EXPORT INCREASED BY 9.1% IN JUL-FEB 2018: The total Textiles & Apparels Exports of Bangladesh to World for the month of February 2018 increased to $ Mn from $ Mn in the corresponding month last year registering a positive growth rate of 9.1%. The cumulative Exports of Bangladesh from July 2017 to Jan 2018 increased from $ Mn to $ Mn registering a positive growth of 9.1%. The highest share in Bangladesh Exports remained of Woven fabric which stood at $ Mn. The Second highest share was of Knitted fabric which was exported for the value of $ Mn. Bangladesh Textiles & Apparels Exports to World (USD Mn) Description Feb 2018 Cumulative Exports (July Feb 2018) Cumulative Exports (July Feb 2017) % Change 52 Cotton Other vegetable textile fibres; paper yarn and 53 woven fabrics of paper yarn Man-made filaments Man-made staple fibres Wadding, felt and non-wovens; special yarns; 56 twine, cordage, ropes & cables Carpets and other textile floor coverings Special woven fabrics; lace and tapestries Impregnated, coated, covered or laminated 59 textile fabrics; industrial use Knitted or crocheted fabrics Knit Woven Made ups GRAND TOTAL CHINA EXPORTS OF TEXTILE AND GARMENTS DESCEND BY 3% FOR THE MONTH OF JANUARY 2018: The Textile Exports by China increased by 4% to $9985 Mn in Jan 2018 as compared to corresponding month last year when it stood at $9584 Mn. Whereas, the Garment Export by China decreased by 8% to $13122 Mn in Jan 2018 as compared to corresponding month last year when it stood at $14320 Mn. Hence, the overall Export of Textiles and Garments by China came down by 3%

6 China Export of Garment and Textiles, Jan 2018 (USD Mn) S.NO. COMMODITY VALUE (Jan) % Change 18/17 1 Textile yarn, fabrics and made-up articles Garments and clothing accessories Total of which: Cotton yarn Cotton woven fabrics Woven fabrics of synthetic staple fibres Garments, not knitted nor crocheted Garments, knitted or crocheted Ethiopian Garment Exports Fall Short Of Target despite Y-o-Y Leap A quantum leap in export of textiles and garments was witnessed by Ethiopia when its earnings reached USD 68.5 million during a period of eight months commencing from July 8, Currently the government of Ethiopia is viewing this sector as a one of the key areas to develop growth in the country and has set a target figure of USD 30 billion for the year The leap in revenue stood at a significant 23.1 percent when effectuating a y-o-y comparison. However, the figures achieved are yet 50% short of the targeted figures for the current year. Ethiopian industry circles disclosed that of the total USD 68.5 million, USD 12.6 million was secured by local companies numbering 58 and the rest of the corpus was yielded by foreign owned companies. An industry spokesperson detailed the contributing factors to the shortfall from the expected target for Ethiopia, saying, Managerial and technical limitations, inadequate supply of inputs, failure to meet international criteria and shortage of skilled manpower were responsible for the current state of affairs. At present the government of Ethiopia is seeking to diversify from agro-based exports to strategic industrial products like textiles and garments. Consequently, upward of 10 industrial parks has been opened in different parts of the country. APTMA plans to invest $7 bn in Pakistan's garments sector All Pakistan Textile Mills Association (APTMA) members are ready to set up 1,000 garment manufacturing plants with an investment of $7 billion to resolve the crisis in the sector, the association proposed recently. These will be set up near textile-producing cities like Lahore, Sheikhupura, Faisalabad, Kasur, Multan, Sialkot, Rawalpindi, Karachi and Peshawar. The planned units will install half a million stitching machines, which will boost annual production to three billion pieces. Investments in the country s textile industry have dwindled over the last decade due to high cost of business and therefore, the industry has lost technological advantage over its competitors, according to an APTMA proposal presented to the government. Around 35 per cent of the sector s production capacity was impaired now,

7 causing an export loss of nearly $4.14 billion. Once the proposal enters the implementation phase, the sector will need an additional 10.3 million bales of raw cotton, 345 million kg of man-made fibre, billion kg of additional yarn and an additional billion square metres of processed fibre. Cotton-producing area and cotton production, however, have declined by 30 per cent and 38 per cent respectively in Punjab since APTMA has demanded corrective and conducive policy measures from the concerned government departments in return for the investment planned. It sought a long-term policy for consistent energy prices across the country and removal of surcharge on electricity tariff and also suggested that foreign brands be encouraged to establish buying houses in commercial enclaves in major cities with rent-free space. INDIAN TEXTILE NEWS 2.5 lakh jobs created in India s garments, made-ups segments The relief package announced in 2016 helped the garments and made-ups sectors create around 2.5 lakh new jobs in the country. This was revealed by the Union Textile Commissioner, who was in Coimbatore (Tamil Nadu) recently to inaugurate the Regional Office of the Synthetic & Rayon Textiles Export Promotion Council (SRTEPC) at SIMA (Southern India Mills Association) premises. Notably, the readymade garment sector is the largest contributor to the country s overall textile exports and employs about 12 million persons now. The Textile Commissioner said various benefits have been announced by the Union Government including giving employer s contribution to the employee provident fund (EPF) for new workers for those earning less than Rs. 15,000 per month during the first three years of employment. Government also made EPF for workers earning less than Rs. 15,000 monthly. The Government had also relaxed the provision of 240 days employment per year for workers under Section 80JJAA of the Income Tax Act to150 days annually for the garment industry. A new scheme was also introduced to refund the state levies which were not refunded earlier. The capital subsidy under amended TUFS (technology upgradation fund scheme) was increased to 25% from 15%. The Textile Commissioner said that the new textile industry policies announced over the years will help the industry increase its revenue. However, the tumbling exports from the country remains a serious concern for many stakeholders Tamil Nadu to introduce textile policy The Tamil Nadu government is planning to introduce a New Integrated Textile Policy. According to deputy chief minister, the policy will aim to develop the power loom, handloom, knitwear and garment sectors. This comes as the Tripura Exporter s Association requested the government to provide a 10 per cent capital subsidy and an eight per cent interest subsidy under the Technology Upgradation Fund Scheme. The association is also seeking a constitution of a knitwear board, incentives to set up textile units, effluent treatment plants, power stations and power tariff subsidy. Ministry of Textiles aims to double production by 2025 The Ministry of Textiles is aiming to double textile production in India and trade to USD 300 billion by 2025, according to textile commissioner. To achieve this target, productivity and yields of both cotton fibre and synthetic fibre will have to be increased. They also said that domestic price of cotton fibre is lower than international prices and Indian cotton has the highest intrinsic value. They also urged the trade to make sure that the fibre is contaminationfree and unadulterated.

8 Arvind aims to generate business of Rs.100 billion over next 4-5 years Textiles firm Arvind is aiming to generate Rs.100 billion from its business over the next 4-5 years. The company has also set aside Rs.15 billion towards capacity expansion and set-up of new facilities over the next 3-5 years. The company is planning to foray into newer areas such as athleisure as it is a significant opportunity. The chief executive officer of Arvind Lifestyle Fabrics- Denim, the company is expected to continue its growth at a compounded annual growth rate (CAGR) of 16 per cent in coming years.