CALL US : 
WAPP : 
Textile and clothing exporters, especially those in the Micro, Small and Medium-scale Enterprises (MSMEs) category, have welcomed the GST relaxations announced on Thursday.
K.V. Srinivasan, chairman of the Cotton Textiles Export Promotion Council, has said in a press release that the expansion of the Composition Scheme from the turnover threshold of ?1 crore to ?1.5 crore will be a relief to several small-scale tax payers.
They would now have to pay the tax on a quarterly basis and file the returns annually. The small-scale tax payers who were so far unable to file the returns on time would benefit from this. The GST exemption limit had also been increased from ?20 lakh to ?40 lakh. This would help the small or medium scale textile exporters and encourage growth in the textile sector.
According to A. Sakthivel, vice-chairman of the Apparel Export Promotion Council, the increase in GST exemption limit will benefit the knitwear industry and the MSMEs in Tirupur.
Units catering to the domestic or export market and have turnover of less than ?40 lakh will now be exempted. There are many such units in the knitting, embroidery, and stitching activities and these do job work for larger units, he said.
Archives
Given the rising challenge to the free trade, Commerce and Industry Minister Suresh Prabhu said Sunday that while the aim is to open up more for free trade and make WTO more efficient, the government is also keen to work on bilateral trade with more nations.
“One of the big challenges before the world is protectionism. We as a country are supporting open trade with all the countries…but we also want to develop bilateral trade agreements with many countries. For each of the geographies we are keen to have free trade agreements with the countries in Latin America, Africa, Southeast Asia,” he said, adding that New Delhi already has trade pacts with ASEAN and some other countries.
Addressing a CII event, he also said there has been an ongoing discussion with Sri Lanka for a Comprehensive Economic Partnership Agreement (CEPA).
For countries in Africa like Angola, he said such association can be in the form of technical assistance, financial assistance and a trade agreement which will not initially have any ambitious targets but will be a win-win for both the parties.
Prabhu, who is also the Civil Aviation Minister, said the United Arab Emirates and Saudi Arabia have decided to use India as a base for their food security.
“This is happening at an interesting time because we just had made a policy for agriculture exports which has identified food items that can be exported,” he said.
He informed that this year the country would be producing 290 million tonnes of farm produce as per advance estimates, and 305-310 million tonnes of horticultural items.
“In the export policy, we have decided to remove all restrictions on organic products and processed products. Both the UAE and Saudi want to invest in both organic as well as food processing industries. This will be a win-win situation for the UAE, Saudi, and other GCC countries but also for us, particularly for our farmers, who want better prices to their produce,” he said.
Saudi Arabia has said it can make investment in logistics, food parks and make sector-specific investment in food processing, Prabhu said.
The farm export policy will go a long way in reducing wastage, the minister said.
On the Udan policy, he said the government will announce its phase III in the next few days, which will also focus on air cargo. On January 15, the government will be announcing the first air cargo policy, Prabhu added.
The UAE and Saudi Arabia are keen to invest in all these infrastructure initiatives, he said.
The technical textile industry in India has the potential to grow at a rate of 15-20 per cent annually to touch $30 billion over the next five years. Despite the huge potential, the investment in technical textiles sector has not gained much momentum in the past, according to a top official of the textile machinery division of Voltas Limited.
“There have been sporadic investments to manufacture in artificial leather, hygiene textiles, medical textiles and geotextiles, etc. However, India may need to accelerate investments quickly to encash the opportunities, as otherwise it would be taken over by other competing countries,” said C Kamatchisundaram, vp-textile machinery division, Voltas, in an interview to Fibre2Fashion.
Voltas’s textile machinery division is a leading technology provider in India with a product suite including capital equipment, machinery, accessories, allied machinery and services for spinning, knitting, weaving, processing and finishing sectors. The company offers latest technology machines from globally reputed machine manufacturers like LMW, Terrot, Brueckner, Thies, Reggiani, Benninger, Shima Seiki, etc, in each part of the textile value chain. In the spinning machinery market, its principal-LMW holds a market share of more than 55 per cent and is used to make yarn meant for technical textiles, which include yarns made from specialty fibres like Kevlar, Nomex, etc.
The company has a footprint across India through its branches located in 16 locations, which are strategically positioned close to the textile clusters. It is an India-focused organisation and has its customer base mainly in India. The major clients of Voltas include Vardhaman, Trident, Nahar, Garg, Winsome, DCM in the north; Arvind, Welspun, RSWM, Sangam, Sintex, Shri Vallabh Pittie, Technocraft, Morarji in the west and Premier, Precot, GTN, Surya Group, Shanmugavel Group, GHCL, Thiagarajar group, Mohan Spintex in the south. The company has also partnered with machinery manufacturers in India and across the globe to bring technology solutions and services to the Indian textiles industry.
Voltas has partnered with Shandong RIfa, the largest manufacturer of airjet and rapier machines in the world, and has already created an installed base of more than 1,500 machines in the country at various clusters. The weaving machine manufactured by Shandong Rifa enables customers to produce almost at the level of European machines but with much less cost in investment.
The total global market size of both machine woven and handmade carpets and floor covering is about $35-40 billion per annum and handmade rugs have a share of about $5 billion in it. India has a share of about $1.6 billion, or about 35 per cent in the handmade carpets and rugs category, according to Carpet Export Promotion Council (CEPC).
The domestic export market of India currently stands at about $2.2 million for handmade rugs. The major markets for carpets made in India are the US (45 per cent share or $0.8 billion), EU and UK (20 per cent share each), told Mahavir Pratap Sharma, chairman, CEPC, in an interview to Fibre2Fashion.
New fibres and technologies like linen, hemp, jute and blended materials are trending in the global carpet industry. Also, hand tools have made strong inroads into the process of finishing and added much needed improvement on the finish and time required for the industry.
“There are many initiatives which CEPC has planned for 2019-20. It has launched a new social media marketing and branding campaign. It is also planning to open warehouses in China, and provide a permanent place for Indian exporters to stock their merchandise to sell in mainland China,” said Sharma. “Besides, CEPC is making itself more socially and environmentally compliant and adept for the future. Lastly, CEPC has come out with a weaver training programme, especially for women.”
“Indian manufacturers are very adaptive to new colours, designs, raw materials and products. And this trend will continue to grow in the right direction,” added Sharma.
CEPC is a non-profit organisation set up by the ministry of textiles to promote export of carpets, handmade knotted carpets, rugs, floor coverings and other allied products. With over 2,500 members across the country, CEPC helps sourcing needs of an importer anywhere in the world and selling needs of Indian exporters
The garment exporters of Tirupur and other parts of western districts have welcomed the Central Government’s move of raising the Goods and Services Tax (GST) exemption limit from Rs 20 lakh to Rs 40 lakh.
Union Minister of Finance Arun Jaitley had announced increasing the GST exemption limit from Rs 20 lakh to Rs 40 lakh on Thursday. This was almost instantly welcomed by garment exporters in Tirupur and Coimbatore region.
Mr. A Sakthivel, Vice Chairman, Apparel Export Promotion Council (AEPC), said, “this will definitely help Tirupur Knitwear industry, MSMEs in particular who are doing turnover up to 40 lakh. It will be helpful for industries, especially catering for exports and domestic. Small units who are involved in the process of knitting, embroidery, stitching units and mostly doing job work basis will also benefit a lot with this announcement.”
The economy will benefit as the tax is ushering in higher transparency, lowering transaction costs and improving compliance
Once again, the GST Council has made important modifications to the GST regime that will reinforce its growth potency. By raising thresholds, lowering frequency of returns and including services under the composition scheme, the Council has boosted ‘ease of doing business’ for small enterprises.
India’s reform journey took a huge leap forward with introduction of the GST. Bringing together Central and State governments and integrating numerous indirect taxes, GST is a far-reaching tax system and, as such, it is only to be expected that its full rollout would require an adjustment period.
Undeniable gains
GST has finally transformed India into one unified marketplace. For the first time, manufactured goods and services are on the same tax platform and all products and services are subject to the same tax rates throughout the country.
GST dismantled inter-State tax barriers for seamless transportation. Artificial distortions in the supply chain, as for example, creating depots in all States to avoid central sales tax, are behind us now. India successfully managed to get two GSTs to flow together in a unique structure which has not been seen in other countries.
Average monthly revenues have been on the uptrend over the last 18 months.
The number of returns filed has gone up from 3.76 million for August 2017 to 7.2 million in December 2018.
This reflects a rising culture of compliance. Manufacturers and traders who had remained out of the tax net now find it advantageous to be part of the formal supply chain under GST. Today, about 11.7 million enterprises are registered, with over five million of these being new registrations.
Under the composition scheme where smaller enterprises pay as per fixed tax rates, another 1.8 million have signed up.
The recent decisions of the GST Council are likely to cut the number of enterprises covered under GST from April; however, this is outweighed by the relief provided to these small units.
The rising coverage is despite the fact that adhering to GST means large-scale change in processes, formats of invoices, tax accounting and coordination up and down the supply chain.
Encouragingly, many operational issues have been addressed on a real-time basis by the GST Council of State finance ministers chaired by the Union Finance Minister. Over 32 meetings, they have considered detailed inputs from industry and provided workable solutions. These have greatly raised confidence in the system.
Input tax credit refunds are generally quick and regular, streamlining the whole supply chain. Initial technical issues on the GST Network are also largely resolved.
Deferment of GSTR 2 and introduction of the simplified new return filing model have brought in efficiency. Special drives have addressed delays in refund of IGST on exports and accumulated input tax credits due to inverted tax structure.
For consumers, the overall benefits have been significant. Tax rates have been continuously reduced on key items, leaving only about 30 items in the highest bracket and most mass consumption goods in the lower categories.
Elimination of cascading taxation and lower logistics costs have stabilised prices. Further, consumer protection through anti-profiteering provisions has ensured that the benefits of input tax credit or reduction in tax rates are passed on to the consumers.
As the entire ecosystem becomes accustomed to this regime, an efficient business environment will emerge with higher transparency, lower transaction costs and better compliance.
Some tweaks needed
Going forward, some provisions of the GST laws need to be simplified and inconsistencies should be removed. Petroleum products, alcohol, electricity and real estate may be brought under GST ambit for providing seamless input tax credit across sectors. The number of rates too can be reduced to just three slabs, standard rates on items of mass consumption, demerit goods in the highest tax category, and certain items at a lower slab.
The government is already working on these issues and in time to come, GST would not only benefit businesses and consumers but also strengthen India’s competitiveness in the global marketplace. On the whole, GST is moving towards a stable compliance environment, buoyancy in tax revenues, expansion of tax base and formalisation of the economy, achieving its vision as a transformative tax.
With seven weeks to go until a deadline that could see the U.S. ramp up tariffs on Chinese goods once again, the economic damage wrought by the months-long trade war is becoming clearer even as a pathway to a lasting resolution remains muddied.
While Chinese goods going to the U.S. initially held up in the face of higher tariffs due to so-called front-loading, their value slumped in the final quarter of 2018, according to the latest available data. For sales going the other direction, the crunch was more immediate. In both cases, further declines are on the cards if the talks fail to produce a resolution.
Negotiators from both the U.S. and China expressed optimism after mid-level talks wrapped in Beijing this week, boosting sentiment across global markets. Still, the path forward remains unclear: Another round of talks hasn’t been scheduled, and the government shutdown in the U.S. has dominated President Donald Trump’s attention.
Both Trump and Chinese Vice President Wang Qishan were slated to appear later this month at the World Economic Forum in Davos, Switzerland, providing an opportunity for high-level dialogue. But the shutdown may yet prevent Trump’s appearance, according to a report in the Wall Street Journal.
Companies in both countries just want to see a deal get done.
“We urge both governments to use the time remaining in the 90-day negotiating period to make tangible progress on the important issues at the core of the current dispute: equal treatment of foreign companies in China, as well as China’s intellectual property and technology transfer policies,” said Jake Parker, vice president of China operations at the U.S.-China Business Council in Beijing. “Uncertainty is bad for business.”
As evidence mounts by the day that the slowdown in China’s economy is worsening, policy makers in Beijing are focusing on getting rid of the duties that Trump has leveled on Chinese goods since last year, according to a former high-level official briefed on the government’s thinking. U.S. officials appear to want to maintain the pressure of tariffs, the official said.
China’s Rekindled Deflation Fears Add to Global Growth Concerns
China and the U.S. will move ahead with trade talks as scheduled, Ministry of Commerce Spokesman Gao Feng told reporters in Beijing at a regular weekly briefing Thursday, without giving any further details over when they would take place. He wouldn’t confirm reports that Vice Premier Liu He will visit the U.S. soon to meet U.S. Trade Representative Robert Lighthizer.
Meanwhile, the economic risks are growing. Economists now see the threat of deflation in China after producer price inflation slowed sharply in December, to the weakest pace since 2016.
Trump Said to Want Trade Deal With China to Boost Stock Market
That would not only squeeze corporate profitability at home, but also put pressure on global price gains, as export prices usually follow those at factory gate. With industrial output and retail sales growth both at the weakest levels in a decade, China’s woes would also mean softer demand for imports, hurting other economies including the U.S.
A reduction in Chinese imports of U.S. goods came quickly after the retaliatory imposition of tariffs, the data show. Without a breakthrough in talks, U.S. corporations are likely to experience a deepening decline in their Chinese sales, with Bank of America Merrill Lynch analysts even seeing an “informal boycott” in place.
Tariff Consequences
The full year numbers will look somewhat different, partly because China has resumed purchases of U.S. soybeans and other goods. Even if the current truce is made permanent and the tariffs are eventually rolled back, the damage to many companies may already be done.
China’s trade data for the full year of 2018 is due to be released on Jan. 14, and economists see year-on-year export growth slowing in December from November.
The Trump administration is pushing for a way to make sure China delivers on its commitments in any deal. Trump and Xi have given their officials until March 1 to reach an accord on “structural changes” to China’s economy on issues such as the forced transfer of American technology, intellectual-property rights and non-tariff barriers.
“The hard work of addressing structural issues to create a level playing field in China do not appear to have been resolved,” said Lester Ross, a policy committee chief at the American Chamber of Commerce and also partner-in-charge at the Beijing office of law firm WilmerHale. “And China going forward will likely still want to increase the diversification of its sources of supply even for agricultural commodities.”
The 90-day time frame is a tight window in which to nail down deep changes to China’s economic model, reforms which past U.S. administrations advocated for years and U.S. lawmakers on both sides of the aisle support.
Even so, progress in talks signals that an interim deal that suspends new tariff hikes is possible, according to Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong.
“The earlier escalation of the trade conflict between the U.S. and China and souring bilateral relations appear to have given way to a more conciliatory approach since early December,” he wrote in a note Thursday. “However, we do not see the U.S. fully removing the specter of tariff hikes any time soon.”
Chinese Vice Premier Liu He is set to visit Washington on January 30 and 31 for further trade talks, according to people familiar with the plans, signaling progress in efforts to tamp down the dispute.
Liu would meet with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, according to the people, who declined to be named because the details haven’t been made public. The visit’s timing could still change, one of the people said. The Wall Street Journal reported the dates earlier.
Mnuchin had flagged the trip to reporters on Thursday in Washington, saying that “the current intent” is for Liu to visit later in the month and that he doesn’t expect the partial government shutdown to interfere with those plans.
Liu is a key economic adviser to President Xi Jinping and is in charge of the talks with the U.S. This would be his second trip to Washington to talk trade, after he had appeared to reach an agreement with the U.S. in May, only for Trump to back away from it.
Negotiators from both the U.S. and China expressed optimism after mid-level talks wrapped up in Beijing this week, bolstering sentiment across global markets. Liu made a surprise appearance at the first day of those talks.
The history of the negotiations
However, neither side has give any detail as to what was agreed at the meetings. There are about seven weeks before the U.S.-imposed deadline for a deal, after which President Donald Trump may order a resumption of tariff hikes.
The economic damage to China from the dispute is becoming clearer, with exports of tariffed goods to the U.S. slumping in the fourth quarter of last year. And while China has resumed purchases of some U.S. products such as soybeans and cut tariffs on U.S. car exports temporarily, that could stop if no deal is made.
Trump is also increasingly eager to strike a deal with China soon in an effort to perk up financial markets that have slumped on concerns over the trade war, according to people familiar with internal White House deliberations.
China and the U.S. will move ahead with the trade talks as scheduled, Chinese Ministry of Commerce spokesman Gao Feng told reporters in Beijing at a regular weekly briefing on Thursday. He didn’t give any further details about when they would take place.
Marks and Spencer (M&S) has witnessed 14 per cent revenue growth from its online Clothing & Home segment during the third quarter of fiscal 2018. The growth during the quarter was driven by improvements to proposition and operations. While, Clothing & Home revenue also reflected lower footfall to stores, partly as a result of increasing pace of closures.
In Clothing & Home, M&S is at the early stages of far reaching changes in range, in style, customer focus and channel mix. “Our objective is to reshape our buy, deliver market leading value and focus on stylish and wearable wardrobe ‘Must-Haves’ as we grow our business with family aged customers seeking style, quality and value,” Steve Rowe, chief executive officer, said. Improvements to its online proposition and operations have helped to mitigate lower footfall to stores resulting from, in part, the increasing pace of change in the store estate. Its Clothing & Home online sales performance was strong, supported by an increased focus on digital marketing together with improvements to its delivery proposition and our operations at Castle Donington. Womenswear online growth has significantly outperformed driven by areas including dresses and knitwear reflecting our ‘Must-Haves’ and social media campaigns. A solid performance in October and on-going actions to improve the flow of stock in its supply chain resulted in a c.25 per cent reduction in stock in to the December sale. Its planned reduction in stock carrying levels meant that stock into sale was the lowest in five years
Nagaland’s famed loin looms are attempting a comeback
Weaving with the use of the traditional loin loom is a skill and occupation that is passed down generations among women in tribal communities in the North-East of the country. Even as women are engaged in cultivation, weaving is a secondary occupation, with every household owning a traditional loom.
Though women or girls may not necessarily undergo training in weaving, the skills are learnt through lived experiences and by participating in the activity from an early age while assisting their mothers or elders.
Traditionally, the loin loom has an economic significance as well and forms an important part of the socio-culture of tribal societies. But unfortunately, over the years, loin looms have been slowly disappearing and so is the weaving skill. “The younger generation no longer has the skill nor the knowledge as weaving is not done in their homes,” says Sonnie Kath, Co-Founder of Exotic Echo Society, an organisation that is engaged in reviving the skill.
Showcasing tradition
Exotic Echo Society primarily focuses on bringing back the tradition through empowerment of traditional weavers while training and exposing them to festivals and exhibitions. The attempt is also to provide a sustainable livelihood to hundreds of unemployed rural women with special emphasis on young women, mostly school dropouts.
Recently Diezephe village in Dimapur, Nagaland, organised a festival to showcase Naga loin loom weaving. Textiles, designs, and other hand-crafted products were exhibited to bring the work of over 50 Naga women into the public domain for designers and women group representatives to see. The event also discussed issues pertaining to preservation of the art, promotion and enhancement of livelihood through the tradition.
The festival explored how the tradition could be protected through indigenous property rights and knowledge and mechanism to fight for copyrights. It needs mention in this context that in recent years the Naga shawl has been under the process of being registered under the Geographical Indication (GI) Act to ensure that similar products manufactured in any other parts of the world cannot be sold as Naga shawls.
The festival was hosted and organised by Exotic Echo Society. “Even as women want to earn a living through weaving, they are without the skills. And marketing and selling their produce is a challenge,” says Kath, who registered her organisation in 2008 and has since been working to resurrect the dying loin loom and help women find a sustainable livelihood.
Looking towards exports
Weaving primarily disappeared from many parts of the North-East due to several reasons. With cheaper cloth making, weaving no longer provided women a livelihood. The onslaught of modern technology in the textile industry took its toll on the traditional trade. Cheap ready-made garments flooded the North-East markets — a lot of it coming in from Thailand, China and others countries in the neighbourhood.
This is where organisations such as Exotic Echo Society come in. With new designs, relevant garments and a willingness to explore the export market, they hope to take products created on the loin loom to distant free markets.
Traditional weaving is not merely about making an apparel or a dress. It involves an elaborate process. Exotic Echo Society begin their work from the root. Cotton growing on a large-scale was initiated in rural Nagaland. This is the cotton that is further processed into yarn and dyed using local organic herbs and leaves. It is then made ready for weaving.
Though the traditional loin loom is time-consuming and produces less quantity than the shuttle loom, the quality delivered is far superior.
“Modern technology such as shuttle looms are meant for mass production, but our loin looms have perspective and ideology,” says Kath. “It is quality production that is eco-friendly and sustainable”.
On the positive side, in recent times, the demand for loin loom products and hand-made items is picking up.
“People have begun to prefer quality products and appreciate the work. We have our own niche buyers. It’s gaining momentum,” Kath says.
Over 200 women weavers in Diezephe village alone are members and associated directly or indirectly with the Exotic Echo Society. They work at home in their own space and time. The Society helps in networking and marketing its produce both within the country and abroad.
At Exotic Society the weavers do not limit themselves to producing only tribal shawls or other products with traditional designs. “We also make modern fashionwear, apparels, bags, cushion covers and lots more” adds Kath. She is hopeful that thousands of looms will bloom in the future.
