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There’s no sign of the much-hyped Chinese investment that was expected to end up in the basic textile sector of Pakistan, which, being the fourth largest cotton producer and home to low-cost skilled labour, should be the most ideal country for the relocation of that industry. The Chinese, on the face of it, are adhering to a wait and see policy as Pakistan’s basic textiles are under severe stress and in all likelihood they may be waiting for more units to die so that they could acquire them for peanuts. In Punjab alone the number All Pakistan Textile Mills Association members has dropped to 204 from 296 a year back.
More than 115 textile mills have closed for good and many have disposed of their machines at junk rates. Still their deserted sites are ideal for establishing modern textile units. They closed because they were operating on obsolete technology and lacked resources to bring in the new one. Apart from that they have the basic infrastructure to operate a modern unit. They have sheds and storage space and gas, power, and water connections. If interested, the Chinese can enter into joint ventures with the sponsors of the closed mills. The infrastructure and the facilities available could be assessed by any reputable financial consultant and be considered the share of Pakistani partner in the joint venture. The Chinese could chip in with the state-of-the-art spindles. The average cost of 25,000 spindles would be Rs2 billion that Pakistan spinners do not have.
The mills could be started within six months of investment and would be viable from day one. This is because the modern spindles consume 40 percent less power and require only one-third of the workforce than that working in most of the existing spinning mills in Pakistan. It makes business sense for Chinese to start spinning yarn in Pakistan.
It is indeed strange that they have entered into joint ventures in spinning in Vietnam their Far Eastern neighbor that lacks skilled basic textile workers, does not grow cotton and wages in Vietnam are three to four times higher than Pakistan. Many Pakistani basic textile entrepreneurs including the close mills have shown keenness to enter into joint venture with the scores Chinese entrepreneurs that have been visiting Pakistan for this purpose.
Why are the Chinese stalling on a lucrative opportunity? They seem to be in no hurry. They are perhaps waiting for Islamabad to grant concessions to the textile sector particularly for power tariff. The Chinese know that if the basic textile industry is not provided this support then it would not be possible for the mills that are still operating to go on for long. They are perhaps waiting for few more closures and then start making low offers to the sponsors of closed mills. Instead of entering into joint ventures they would try to buy the entire facilities minus obsolete machines at very low rates and then install modern spindles as sole owners of the facility.
The Chinese know that Pakistan is the only destination where they could establish low value-added basic textile units, but they are practising patience as they do not want to increase the value of existing basic textile facilities. They have investment in hand. They would demand concessions from the government to bring it in, but they would first want the state to spell out its concessions for the existing place so that they could ask over and above those concessions.
It would be prudent for the planners to make it absolutely clear that no foreigner including the Chinese would get any additional concession that is not available to the local investors. Pakistan is the only destination available to the Chinese for investment in textile including basic textiles. Pakistani entrepreneurs should woo investors from developed economies for joint ventures in basic textiles. The day we entered into one joint venture we would see scores of Chinese companies following the suit within a week.
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GUESS, the global lifestyle brand famous for its iconic ad campaigns and trend setting denim, is proud to partner with The Better Cotton Initiative (BCI), an organization that works with cotton farmers, helping them to use water efficiently and care for the environment, as well as promote higher standards of work, during cotton production.
Last year, GUESS published its FY16-17 Sustainability Report which includes the company’s first-ever sustainability plan and Denim Water Lifecycle Assessment of its denim category. Understanding that 64% of water use occurs during raw material production, namely for cotton, GUESS joined The Better Cotton Initiative to start to source ‘Better Cotton’ to help address its water use. GUESS will make public its official goals for sustainable cotton sourcing later this year.
By becoming a BCI Retailer and Brand Member, GUESS can commit to a more sustainable future for cotton production by investing in the Initiative which, last year, reached and trained 1.6 million cotton farmers on more sustainable agricultural practices, such as efficient use of inputs (water, pesticides), increasing yields, and addressing gender equality and child labor issues.
“At GUESS, we use cotton in many of our products,” says Victor Herrero, Chief Executive Officer of GUESS?, Inc. “It is important that we take the proper steps to source more sustainable cotton in the GUESS supply chain, which is why we have joined The Better Cotton Initiative. GUESS is excited to join BCI and the overall industry movement to improve the standards for global cotton production, and have that reflected in the cotton we source at GUESS.” – Victor Herrero
For more information and the latest updates on GUESS Sustainability, please visit http://sustainability.guess.com/.
About GUESS?, Inc.
Established in 1981, GUESS began as a jeans company and has since successfully grown into a global lifestyle brand. Guess?, Inc. designs, markets, distributes and licenses a lifestyle collection of contemporary apparel, denim, handbags, watches, footwear and other related consumer products. Guess? products are distributed through branded Guess? stores as well as better department and specialty stores around the world. As of February 3, 2018, the Company directly operated 1,011 retail stores in the Americas, Europe and Asia. The Company’s licensees and distributors operated 652 additional retail stores worldwide. As of February 3, 2018, the Company and its licensees and distributors operated in approximately 100 countries worldwide. For more information about the Company, please visit www.guess.com.
About the Better Cotton Initiative
The Better Cotton Initiative (BCI), a global not-for-profit organisation, is the largest cotton sustainability programme in the world. Last year, together with our partners we provided training on more sustainable agricultural practices to 1.6 million farmers from 23 countries. We are truly a joint effort, encompassing organisations all the way from farms to fashion and textile brands, driving the cotton sector towards sustainability. Thanks to these efforts, Better Cotton accounts for around 15% of global cotton production. BCI aims to transform cotton production worldwide by developing Better Cotton as a sustainable mainstream commodity. By 2020, our goal is to train 5 million farmers worldwide on more sustainable agricultural practises, and account for 30% of global cotton production.
The Cotton Association of India (CAI) plans to set up a full-fledged training institute for farmers in Mumbai, at a time when the country’s cotton sector is experiencing a difficult phase, an official said here on Thursday.
CAI President A.S. Ganatra said that its board has cleared the proposal to establish an All India Training Centre for Farmers at its Cotton Green premises in south Mumbai.
“We are conscious of the challenges ahead in realising this dream. But, with the support of all the stakeholders, we can achieve it. It would go a long way in realising Prime Minister Narendra Modi’s dream of doubling farmers’ incomes by 2022,” Ganatra said at the inaugural session of “Cotton India 2018” national conference earlier.
At present, cotton is grown in 10 states in the country over 122 lakh hectares, under varying agro-climatic conditions, with relatively small land holdings. Nearly 60 per cent of the total area under cotton is rain-fed making is susceptible to the vagaries of nature.
“Despite all odds, the sector has notched an envious growth and carved a niche for itself in the world cotton market. Today, India is the world leader with a crop of 360 lakh bales of 170 kg cotton each, from nearly one-third of the global acreage,” Ganatra said. Besides, India is the second-largest consumer of cotton, ranking next only to China, with the annual domestic consumption likely to touch 330 lakh bales during the current year.
This is further bolstered by several new textile mills coming up in Gujarat and other states adding around 3.50 million new spindles this year, he added. India is not only the second-largest exporter of cotton in the world after the USA but also has a vibrant import market. He said that there exists a huge untapped potential in this sector and if exploited to its optimum, Indian can become a “cotton superpower” in the world.
“We have taken giant strides in terms of productivity, but its still below the global average. Against the world average productivity mark of 779 kg per hectare, India still manages around 500 kgs per hectare,” Ganatra pointed out.
If the country can achieve the world per hectare average productivity mark, the Indian cotton output would witness a quantum jump, he opined. Referring to other issues bogging down the sector, he said excess moisture due to pouring water on the cotton bales, poor quality of package of the bales, lack of uniformity in bale weight and different trading norms across the country, absence of contract sanctity and lack of training facilities need urgent attention.
On April 11, 2018, a division bench of the Delhi High Court pronounced a judgment overturning the decision of a single-judge bench regarding the interpretation of Section 3(j) of the Indian Patents Act, 1970, holding that transgenic plants, seeds and varieties cannot be patented. This is a path breaking judgment, the full import of which is yet to be assessed. The case arose over a dispute between several seed companies and Monsanto regarding Bt cotton trait fee payments. This genetically modified seed was introduced in India in 2002 amidst a raging controversy. Many “activists” were alarmed at the government’s decision to permit GM crops in India, and there were widespread agitations. Perhaps, because of that past history, Bt cotton continues to be the only genetically modified crop permitted in India, and has captured about 95% of the crop area under cotton. However, the increase in productivity has not been commensurate. The average yield was 472 kg per hectare in 2005-06 (when only about 15% of the cotton crop was covered by Bt cotton.) The yield rose marginally to 484 kg per hectare in 2015-16.
Initially, the crux of the dispute between Monsanto and the seed companies was the quantum of royalties or trait value to be paid by the latter. In 2010, some state governments fixed the maximum retail prices of cotton seeds, which included the trait values as a component. The governments did this so as to ensure that seeds were available to the farmers at reasonable prices. However, Monsanto put pressure on the seed companies to pay the trait values as determined by them on the ground that they had a patent on Bt cotton seeds. The seed companies had no alternative but to pay under protest. In June 2015, the Nagpur Bench of the Bombay High Court upheld the right and, therefore, the action of the government of Maharashtra in fixing the maximum retail price of seeds, including the trait value. Subsequently, in July 2015, the seed companies wrote to Monsanto that they cannot pay a higher trait value. Interestingly, it was not only the seed companies of Andhra Pradesh, but almost all others, along with the National Seeds Association of India, that backed this action.
Since different state governments were fixing different retail prices and trait values, the Centre decided that in the best interest of all stakeholders, it would be advisable to have a uniform price and trait value for the entire country. In pursuance thereof, it issued orders in December 2015, fixing uniform prices for the entire country, with effect from April 1, 2016. Predictably, Monsanto challenged this diktat. It was during the course of meeting this challenge that the fundamental question arose as to whether Monsanto had a valid patent in conformity with the Indian Patents Act, 1970. The main issue before the division bench of the Delhi High Court was whether Section 3 (j) of the Indian Patents Act, 1970, excludes from patentability plants and animals in whole or any part thereof, other than microorganisms but including seeds, varieties and species and essentially biological processes for production or propagation of plants and animals.
The division bench has ruled that Monsanto does not have a valid patent and, therefore, at best, it can seek compensation under the Protection of Plant Varieties and Farmers Rights Act, 2001. The judgment has been criticised on various grounds; one of them being that the patent had been granted by the Patent Office of the government. This is a tangential argument. Many patents granted by the Patent Office in the past have been challenged, some successfully. All actions of the government bodies are open to scrutiny and challenge at any point in time. The entire issue has grave implications for security of agriculture in the country as nearly half the population is financially dependent on it. The Parliament was conscious of the dangers of monopoly in the supply of agricultural inputs, including seeds. That is why it excluded from patentability “a method of agriculture or horticulture” under section 3(h) and “plants and animals in whole or any part thereof… including seeds…” under section 3(j).
Having excluded seeds, etc, from the ambit of patents to give due protection and encouragement to research, the Centre enacted a sui generis law, viz, the Protection of Plant Varieties & Farmers Rights Act 2001, to protect the intellectual property rights of breeders of plant varieties. In terms of acreage, India is ranked fourth after the US, Brazil and Argentina in adopting GM crops, but while the top three grow more than one GM crop, we have only cotton. Brinjal was cleared for introduction by the Genetic Engineering Approvals Committee in 2010, but it has been put on an indefinite hold.
It has been argued by some that this judgment of the Delhi High Court will discourage research and development in agriculture. On the contrary, others anticipate that with the clarity flowing out of the judgment, research will get a shot in the arm. Only time will tell which way research in agriculture will be impacted. But, it is abundantly clear that in a country where farming is largely of the subsistence variety, the state governments and the Centre will not let monopolists dictate prices of essential inputs.
India’s farm ministry will announce its course of action on cotton seed prices by next week after the Delhi High Court judgement that said Monsanto Technologies’ patents on Bt cotton seed variety Bollgard II were not valid.
Officials in the agriculture ministry said they want to assess implications of the order on cotton seed prices for which the ministry is the regulatory agency. Meanwhile, the agriculture secretary said normal monsoon forecast by the weather office was a shot in the arm for the sector and good for the agriculture economy. He added that they expected growth in productivity due to availability of water and agriculture growth to be better than that in the previous years.
“By next week, the course of action the government needs to take…we will see. After reading the judgment, if there are any directions to the government… we will abide by that,” said Shobhana K Pattanayak, secretary, department of agriculture, cooperation & farmers’ welfare.
The Gujarat Chamber of Commerce and industry in association with Maskati Cloth Market Mahajan (MCMM) is going to organize Farm to Fashion: Indian Textile Global Summit 2018 from May 4-6, 2018.
With this summit, entire value chain of textiles will get a common platform to develop a vision for the industry for 2030. All the participants of this event will get an opportunity to build a web of network with exhibitors, delegates, government officials and various representatives of the textile industries from various parts of the country.
The event will also shed light on various issues related to women empowerment, youth employment, challenges faced by cotton farmers and positioning of Indian textile industry as the pioneer in environment-friendly industry practices.
This global textile summit will have 17 technical sessions by global speakers and 150 exhibitors from India will exhibit best of Indian Fabrics.
Apart from that, other attraction points of the event are café corners, fashion show and industrial visit.
Experts and scholars will offer information and unveil insights about latest research, trends, innovations, best practices along with the solutions to the challenges at hand.
As the title suggest, Farm to Fashion, this summit will showcase exclusive ranges of clothing lines with an iconic fashion show by few of country’s distinguished fashion designers, apparitional stylists and leading fabric companies of the world.
The farm to fashion global summit is an initiative taken by Gujarat government to fill the production and-manufacturing gap.
Being a highest cotton growing state, Gujarat falls behind in manufacturing and thus in this direction Gujarat government is following PM Modi 5F formula – farm to fibre, fibre to factory, factory to fashion, fashion to foreign,” said Mr. Shailesh Patwari, President, GCCI.
He added that the summit will deliberate upon the opportunity and challenges in various areas such as cotton, ginning, spinning, weaving, processing, garmenting, technical textiles, environment management, and skill development in detail.
The government has advanced the deadlines for filing of seller forms under the goods and services tax, GSTR-1, for April, May and June, in comparison to those given for previous months.
GSTR-1 for the month of April will have to be filed by May 31. Earlier, 40 days were given for filing these, which would have made June 10 the deadline. Returns for May have to be filed by June 10 and for June by July 10. So, only 10 days after the month ends, against the earlier 40 days.
Abhishek Jain, indirect tax partner at consultants EY India, said businesses take four of five days to close the accounts after the month ends. Leaving them five or six days to file the return.
However, the government has not changed the deadline for filing GSTR-3B. These are to still be filed by the 20th of the following month. The idea is to allow reconciliation between the two forms, GSTR-3B and GSTR-1. According to the original plan, the GST Council had decided to give only 10 days to file GSTR-1, after which GSTR-2, the return for buyers, had to be finalised and filed within the next five days. These were to be then used for filing GSTR-3 forms, to claim credits.
However, the outcry over complicated returns prompted the Council to redo this. GSTR-1 was retained; GSTR-2 and GSTR-3 forms were suspended. In place of GSTR-3 came GSTR-3B, meant for the initial months but continuing.
Also, the government gave 40 days for an assessee to file GSTR-1 after the month in question ended. Since GSTR-2 has been suspended, such reconciliation will enable companies to liase with their vendors to rectify any incorrect recording at their end, Jain said.
However, the issue is why the deadlines have been changed when the group of ministers on the subject, headed by Bihar’s deputy chief minister, Sushil Modi, is trying to bring in single returns.
The UK India Business Council (UKIBC) said the joint trade review being undertaken by both the sides is an important initiative, which will secure quicker wins. A free trade agreement (FTA) between India and the UK will help boost two-way commerce and investments between the countries, a UKIBC’s report said. The UK India Business Council (UKIBC) said the joint trade review being undertaken by both the sides is an important initiative, which will secure quicker wins. “An India-UK free trade agreement would, no doubt, boost trade by lowering tariffs and aligning standards. This, however, will not happen quickly,” the council said in its report – The UK and India: The Bilateral Trade Relationship. In a FTA, two trading partners cut or eliminate duties on most number of goods traded between them besides liberalise norms to promote services trade and boost investments.
Besides, the report suggested for a tighter alignment of the bilateral economic architecture, including the UK-India CEO Forum and Joint Economic and Trade Committee. It also called for a focused outreach campaigns in both the countries, informing trade associations about the opportunities in each other markets and ways to access them.
It recommended that like the UK’s Department for International Trade’s Export Opportunities programme, which identifies opportunities in India for UK exporters, Indian government should also consider introducing a similar programme. Further, it stated that huge potential exists for businesses of both the countries to increase trade and investments.
“UK exporters will see growth across sectors, but particularly in food and drink, healthcare, machine tools, and technology-focused areas like smart cities, cyber security and digital services,” the report said. It added that Indian exporters could explore areas like pharmaceutical, apparel, footwear, vehicles and electronic equipment. On investment side, the report said that industry 4.0 provide opportunities for the UK and India to enhance collaboration.
Commerce and Industry Minister Suresh Prabhu, in a ministerial meeting on Wednesday, promised to address the problems faced by exporters and to take up the Goods and Service Tax (GST) refund issue with the Finance Ministry.
“I have asked exporters to give me details of the pending refunds. GST refund is a major issue for exports. I will take it up with the Finance Ministry,” Prabhu said.
Exporters have claimed that over 60 per cent of their refunds are caught in red tape. The delay in GST refund has blocked their working capital, they complained.
The government has sanctioned GST refunds to exporters to the tune of `17,616 crore till March 2018, of which `9,604 crore is on account of the Integrated GST refund and another `5,510 crore towards refund on input credit by the Centre.
“We need a concrete plan to work on that,” Prabhu said, adding that he would call a ministerial meeting to discuss issues pertaining to outbound shipments.
Apart from refunds, exporters also raised issues related to increasing logistics costs and inadequate infrastructure at ports.
In order to address the issues, Prabhu has sought a detailed action plan from exporters from all sectors in an interaction with them here.
India’s exports dipped after a gap of four months in March, but finished FY 2017-18 with a rise of 9.78 per cent to $302.84 billion.
The trade deficit remained a matter of concern and labour-intensive sectors such as gems and jewellery, RMG of all textiles, jute manufacturing including floor covering and carpets, and agri products were in the negative territory.
FIEO, the apex body of Indian export promotion organisations, said that these sectors, dominated by MSMEs, are still facing liquidity problems as banks and lending agencies are tightening norms.
Fiscal consolidation was paused in 2017/18 as the economy recovered from disruptions related to notes ban, GST, IMF says. India, which has recovered from disruptions caused by demonetisation and the rollout of the GST, must fully implement the new nationwide indirect tax to avoid tax revenue underperformance resulting in cuts to capital expenditures, the IMF said today.
In its Fiscal Monitor report titled ‘Capitalising on Good times’, the International Monetary Fund (IMF) said that relatively buoyant revenues supported by base-broadening efforts and lower capital expenditures were offset by higher spending (including higher compensation to states for the rollout of the GST) and lower profit transfers from the Reserve Bank of India due to costs incurred during the demonetisation.
In India, fiscal consolidation was paused in fiscal year 2017/18 at the federal level as the economy recovered from disruptions related to demonetisation and the rollout of the GST, it said.
“In India, a return to a gradual path of growth-friendly fiscal consolidation is desirable to create fiscal space, but full and smooth implementation of the new goods and services tax is necessary to avoid tax revenue underperformance resulting in cuts to capital expenditures,” the IMF said.
According to the IMF, overall fiscal deficits in emerging markets and middle-income economies fell marginally in 2017 for the first time after four years of steady increase, explained mainly by fiscal adjustment among commodity exporters.
On average, the overall deficit declined from 4.8 per cent of GDP in 2016 to 4.4 per cent of GDP in 2017, with diverging fiscal developments across countries. Commodity exporters have continued to push through reform to adjust to “lower for longer” oil prices.
The headline fiscal balances improved in most commodity exporters, supported by a pickup in commodity prices and by expenditure cuts (Gulf Cooperation Council members, Mexico, and Russia).
In contrast, the fiscal position was relaxed in major non commodity exporters, including to provide stimulus to the economy (China, India, Thailand), the IMF said.
The average trend among emerging market and middle-income economies is largely driven by rising fiscal deficits in China, which are higher when off-budget spending is also taken into account. In contrast, fiscal consolidation in Brazil continued in 2017, it added.
According to the report, in emerging market and developing economies, fiscal policy is appropriately focused on consolidation, especially in those countries that are still adjusting to lower commodity prices.
However, the speed of adjustment could be fine-tuned and, in some cases, it can be more ambitious, it said.
“Several countries could step up the speed of their fiscal adjustment,” the IMF said, adding that given the strength of the recovery, Brazil should quicken the pace of consolidation and front-load the fiscal effort.
