Centre for Trade Facilitation and Research in Textiles Textile Economic Intelligence (WEEK ENDING 11-08-2018) NEWS HIGHLIGHTS: IMF urges India to accelerate pace of fiscal consolidation. India's average per capita income higher in last 4 years at Rs 80,000. Govt s Import Duty Decision on Textile Goods Faces Bangladesh Hitch. US finalizes next China tariff list targeting $16 bn in imports. Arvind revenues increase 10% in Q1F. Indian govt doubles import duty on 328 textile items. India's Andhra Pradesh approves textile policy 2018-23 Bombay Dyeing s net loss widens to Rs.937.4 million in June 2018 quarter. Fall in exports to China worries textile industry.
GLOBAL ECONOMIC NEWS a) Euro depreciated against Dollar by 0.92% from 0.865 per dollar on 6th August 18 to 0.873 per dollar on 10th August 18 and Japanese Yen appreciated against dollar by 0.45% from 111.43 per dollar on 6th August 18 to 110.93 per dollar on 10th August 18. b) Brent Crude oil price index decreased by 1.27% from 6th August 18 to 10th August 18. It decreased from $73.75 per barrel on 6th August 18 to $72.81 per barrel on 10th August 18. c) Cot Look a Index decreased by 1.47% from 98.75 cents/pound on 6th August 18 to 97.3 cents/pound on 10th August 18. d) The US stock market indicator Dow Jones Came down by 0.59% from 25462.58 on 6th August 18 to 25313.14 on 10th August 18. In Asian market, NIKKEI (Japanese market) came down by 0.93% from 22507.32 on 6th August 18 to 22298.08 on 10th August 18. SSE Composite Went up by 3.31% from 2705.84 on 6th August 18 to 2795.44 on 10th August 18 and Hang sang went up by 1.97% from 27819.56 on 6th August 18 to 28366.62 on 10th August 18.
INDIAN ECONOMIC NEWS EXCHANGE RATE: The Rupee depreciated by 0.12% from Rs 68.81/$ on 6th August 18 to Rs. 68.89/$ on 10th August 18 weaken by Rs. 0.08 FINANCIAL MARKET TRENDS: The Sensex went up by 177.34 points or 0.47% from 37691.89 on 6th August 18 to 37869.23 on 10th August 18. The Nifty went up by points 42.4 or 0.37% from 11387.1 on 6th August 18 to 11429.5 on 10th August 18. CHANGE IN FOREIGN EXCHANGE RESERVES: India s Foreign exchange reserves decreased by $1.489 bn. To reach $ 402.703. On 10th August 18 from $404.192 bn. On 3 rd August 18. Sectoral Index of Industrial Production: The Indices of Industrial Production for the Mining, Manufacturing and General sectors for the month of June 2018 stand at 105.0, 128.6 and 127.7 respectively, with the corresponding growth rates of 6.6 per cent, 6.9 per cent and 7.0 per cent as compared to June 2017 when it was 0.1 per cent, -0.7 per cent and -0.3 per cent respectively. The cumulative growth in these three sectors during April-June 2018-19 over the corresponding period of 2017-18 has been 5.4 per cent, 5.2 per cent and 5.2 per cent respectively. The growth rate for Textiles and Clothing for the month of June 2018 is -0.8 per cent and 4.4 per cent respectively. The cumulative growth during April-June 2018-19 over the corresponding period of 2017-18 was -0.4per cent and -4.9 per cent IMF urges India to accelerate pace of fiscal consolidation The International Monetary Fund (IMF) has urged India to use improved economic conditions to accelerate the pace of fiscal consolidation. In its annual assessment of the Indian economy, the IMF said the country s economy is picking up and growth prospects look bright, one reason being the implementation of recent policies, such as the goods and services tax (GST). A faster pace of consolidation would help cap the rise in long-term bond yields, reduce external and banking vulnerabilities, and improve market confidence, IMF said in its report, prepared after consultations with the government. India should gradually cut subsidies gradually by 0.5 per cent of the gross domestic product (GDP) over four years, with a 0.3 per cent of GDP cut in fertilizer subsidies, elimination of fuel subsidies and a modest cut to food subsidies to achieve accelerated fiscal consolidation, suggested the global organization. Further reforms and continued measures to raise tax collections will also help fiscal consolidation, it said. IMF retained its growth projection for India at 7.3 per cent for 2018-19 and 7.5 per cent for the following year. IMF stressed the need to take advantage of the projected acceleration in economic growth to achieve a public debt level of 60 per cent of GDP by 2022-23, as recommended by the Fiscal
Responsibility and Budget Management Review Committee. The government in its 2018-19 budget had said it would achieve the target with a two-year delay in 2024-25. According to head of IMF team of India, goods and services tax should improve productivity and boost medium-term potential growth, while also creating room for the government to increase much needed social and infrastructure spending, Salgado added. India's average per capita income higher in last 4 years at Rs 80,000 India's average per capita income in the last four financial years was higher at Rs 79,882 as compared to the preceding four fiscals, Parliament was informed. In contrast, from 2011-12 to 2014-15 it was Rs 67,594. According to Minister of State for Statistics, the average Per Capita NNI (net national income) in the country during 2011-12 to 2014-15 is estimated at Rs 67,594 whereas average Per Capita NNI in the country during 2014-15 to 2017-18 is estimated at Rs 79, 882,. According to statement, the per capita income grew by 4.6 percent in 2013-14 to Rs 68,572; 6.2 percent to Rs 72,805 in 2014-15; 6.9 percent to Rs 77,826 in 2015-16 and by 5.7 percent to Rs 82,229 in 2016-17.
S.NO. GLOBAL TEXTILE NEWS VIETNAM EXPORTS OF YARNS, TEXTILE AND GARMENTS FOR THE MONTH OF JUNE 2018 RISES: The Yarns Exports by Vietnam went up by 20% to $364 Mn as compared to corresponding month last year when it stood at $303 Mn. The Textile and Garment Export by Vietnam also went up by 16% to $2745 Mn as compared to corresponding month last year when it stood at $2374 Mn. Year-to-Date Yarns Exports by Vietnam for the period of January-June 2018 went up to $2534 Mn as against $1675 Mn in January-June 2017 registering a positive growth rate of 51%. Also, Year-to-Date Textiles and Garments Exports by Vietnam for the period of January-June 2018 went up to $17762 Mn as against $11822 Mn in January-June 2017 registering a positive growth rate of 50%. Export of Yarns and Textiles by Vietnam (In USD Mn) COMMODITY VALUE June % Change YTD (JAN-June) 2018 2017 18/17 2018 2017 % Change 18/17 1 Yarns 364 303 20 2534 1675 51 2 Textiles & Garments 2,745 2374 16 17762 11822 50 TOTAL EXPORTS 3110 2677 16 20296 13497 50 Govt s Import Duty Decision on Textile Goods Faces Bangladesh Hitch Despite the government move to double import duty on 328 textile products the textile industry may not be able to heave a sigh of relief as shipments from Bangladesh would remain unaffected by this proposal. Bangladesh happens to be the main source of increase in garment imports into India, it was disclosed. According to Industry sources, Chinese fabric is imported by Bangladesh and is converted into garments by using cheap labour. These garments are subsequently exported to India without their having to pay any duty. As Made in China fabrics imported by Bangladesh are used for exports, the country does not impose any import duty on them. Since import of Made in China fabrics is meant for exports, Bangladesh doesn t impose any import duties either. Under the South Asian Free Trade Area (SAFTA) there are specified garment items that India imports from Bangladesh which are exempt from duty. Post the implementation of the Goods and Services Tax (GST) in previous July, India has witnessed a continuous increase in import of textile products. There has been a 44% surge in import of apparels from Bangladesh y-o-y and the figure stands at USD 201 million in 2017-18. The total quantum of Indian textile and apparel imports stood at USD 7 billion in 2017-18. This amounts to a 16% year-on-year rise. Chairmen Confederation of Indian Textile industry expressed the opinion that India should have a made in country of origin clause. This should mandate the mention of the origin country in the wash care labels on the apparel. This procedure is being followed by Indian exporters catering to the US markets.
US finalizes next China tariff list targeting $16 bn in imports According US Trade Representative's office, the United States will begin collecting 25 per cent tariffs on another $16 billion in Chinese goods. It published a final tariff list targeting 279 import product lines. The action is the latest by US President to put pressure on China to negotiate trade concessions after imposing tariffs on $34 billion in goods last month. China has vowed to retaliate to an equal degree. The latest $16 billion list will hit semiconductors from China, even though many of the basic chips in these products originate from the United States, Taiwan or South Korea. The 25 per cent tariffs also will apply to a broad range of Chinese electronics, plastics, chemicals and railway equipment that the Office of the US Trade Representative (USTR) has said benefit from the Made in China 2025 industrial plan, aimed at making China competitive in hightechnology industries. The latest list brings the total Chinese imports that face a 25 per cent tariff to about $50 billion in a rapidly escalating trade war that could eventually slap duties on all goods traded between the world's two largest economies. US president has also threatened 25 per cent tariffs on another $200 billion worth of Chinese goods, and possibly another $300 billion worth, in his administration's quest for changes to China's intellectual property, market access and industrial subsidy policies.
INDIAN TEXTILE NEWS Arvind revenues increase 10% in Q1F Arvind s revenues increased by 10 per cent in the June 2018 quarter. The company said that its branded apparel segment is expected to continue its over 20 per cent growth. Along with this, Arvind expects its textile segment to grow 10 per cent with improved margins due to expansion and launch of new products. Arvind s earnings before interest, tax, depreciation and amortisation (EBITDA) rose 18 per cent and profit after tax (PAT) increased by 13 per cent to Rs.750million. Indian govt doubles import duty on 328 textile items To provide a boost to manufacturing, the Government of India has doubled import duty on 328 textile products to 20 per cent from the earlier 10 per cent. This is in addition to the 50 textile products on which the government had doubled import duty last month. The increased duty is Expected to give an edge to domestic manufacturers and create jobs. According to minister of state for finance, increase Customs duty on 328 tariff lines of textile products from the existing rate of 10 per cent to 20 per cent...under Section 159 of the Customs Act, 1962. The increase in import duty would result in increased production activity in the sector, which already employs about 10.5 crore people. In June 2018, India s textile yarn, fabric and madeups imports stood at $168.64 million, registering a growth of 8.58 per cent year-on-year. On the other hand, exports of cotton yarn, fabric, madeups and handloom products increased by 24 per cent to $ 986.2 million. Man-made yarn, fabric and madeups exports grew 8.45 per cent to $403.4 million. However, exports of readymade garments dropped 12.3 per cent to $13.5 billion. India's Andhra Pradesh approves textile policy 2018-23 India s Andhra Pradesh state recently held a cabinet meeting to approve several policies and took decisions on projects on employment generation and agrarian crisis. The State Mega Seed Park Policy 2018, the Textile, Apparel and Garments Policy 2018-23 and formation of a special account for management of agricultural products collection were approved. A market stabilization fund was approved and it was decided to replace Visakhapatnam Urban Development Authority (VUDA) with Visakhapatnam Metropolitan Region Development Authority (VMRDA). The new park policy aims to make the state a seed capital by setting up of seed industries. The seed park will be set up at Tangadencha village in Kurnool district. The government expects to attract 3,000 crore in investments and create 40,000 jobs by 2023 through this park. The textile policy aims to attract 15,000 crore investments and generate employment for 2.5 lakh. It was also decided to set up nine private polytechnic colleges affiliated to Sri Venkateswara Veterinary University, Tirupati, and 11 private polytechnic colleges in the fisheries sector.
Bombay Dyeing s net loss widens to Rs.937.4 million in June 2018 quarter Bombay Dyeing s net loss widened to Rs.937.4 million in the June 2018 quarter. The company had incurred a net loss of Rs.327.1 million in the corresponding year-ago period. Total income too lowered to Rs.4.1 billion during the quarter as against Rs.6.38 billion in the June 2017 quarter. Bombay Dyeing maintained that these results are not comparable to previous year s period due to changes in accounting method. Fall in exports to China worries textile industry According to Chairman of the Confederation of Indian Textile Industry, said that in 2017-2018, India exported textile goods worth $1,362 million to China. But imports from China were to the tune of $2,905 million, indicating a trade deficit of $1,543 million. Between 2010 and 2014, India was a net exporter of textile and apparel products to China. However, after that, India s trade deficit with China was on the rise. Indian products attract 3.5% (yarn), 10% (fabric), and 14% (made-ups) duty in China, while Vietnam, Cambodia, Pakistan, and Indonesia enjoy duty-free access to the Chinese market. India s cotton yarn exports to China have decreased 53% in the last five years, while Vietnam s exports to China have increased 88%. The Indian textile industry is sensitive to even small changes and if it had a level-playing field as its competitors, Indian exports to China could double. Chairman of the Confederation of Indian Textile Industry told that China buys cotton fibre from India but prefers other countries for value added products, such as yarn and fabric. Even recently, when it cut import duty on several products, textiles were not included. We do not need incentives (from the Government). FTAs and bilateral agreements will help exports. Refund of embedded taxes to exporters and trade agreements wherever possible are two policy changes that are needed to boost exports.