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The world trade organisation (WTO) has revised its global trade growth outlook for 2023 upwards to 1.7% from the previous estimate of 1% in October 2022. The report further expects a rebound in trade growth to 3.2% in 2024 as GDP growth picks up to 2.6%. However, the pace of trade expansion in 2023 is still going to be subpar and the trade rebound in 2024 is going to be more uncertain than usual.
The report has advised the governments and the regulators to be cautiously optimistic about these projections. As per WTO, the trade forecast continues to be weighed down by the presence of substantial downside risks, including ongoing war in Ukraine, geopolitical tensions, stubbornly high inflation, tighter monetary policies and financial insecurities.
Despite being in a relatively sweet spot, India’s economy too cannot stay immune with respect to the global downturns. With few signs of recovery on the horizon, businesses are focusing on a leaner structure to strengthen their balance-sheet. The government’s reforms agenda has also tried to instil some confidence among the exporters to leverage exports and leapfrog to success in the coming months.
New Foreign Trade Policy 2023
The new Foreign Trade Policy 2023 was unveiled by the Hon’ble Union Minister of Commerce and Industry, Textiles, Consumer Affairs, Food and Public Distribution, Shri Piyush Goyal on 31st March, 2023. The new trade strategy aims at boosting India’s goods and services exports which is expected to hit $750 billion in the ongoing fiscal year, compared with $676 billion in fiscal 2022. The government has envisioned to take India’s goods and services exports to $2 trillion by 2030.
Welcoming the new policy, the government needs to be congratulated for introducing a dynamic policy - which will have no end date to be able to update it as and when required. The added features such as the new Amnesty scheme for one-time settlement of defaults in Export obligation by Advance and EPCG license holders will benefit the exporters. Also, revising the export performance threshold will ensure higher recognition and brand image for the “Status Holders”.
As part of our suggestions, the Council has urged the government to enhance the time period for availing pre- and post-shipment credit to exporters, remove import duty on raw cotton and reinstate interest equalisation scheme to original levels of 3 per cent for 410 items. We have also reiterated the demand to increase RoDTEP rates for certain categories of made-up products (Home Textiles) falling under Chapter 94.
PM MITRA Parks
On March 17, the Government of India announced the sites for setting up of 7 PM Mega Integrated Textile Regions and Apparel (PM MITRA) Parks for the Textile industry. The Parks will come up in Tamil Nadu, Telangana, Gujarat, Karnataka, Madhya Pradesh, Uttar Pradesh and Maharashtra. These Mega Parks will feature world class infrastructure and “plug & play” facilities that will help to reduce production delays and reduce the cost of manufacturing thereby making exports of Indian textiles immensely competitive.
We express our heartfelt gratitude to the Hon’ble Prime Minister for his far-sighted vision to integrate the 5 F's of the textile sector viz. Farm to Fibre to Factory to Fashion to Foreign within the walls of the PM MITRA parks. In my view, the Parks will strengthen the foundations of “Atmanirbhar Bharat '' making India a strong and dynamic player in global trade in Textiles and Clothing and serve as a catalyst in achieving the export target of US$ 100 Bn by 2030.
India is undertaking rigorous trade facilitation measures to help create a trade conducive infrastructure. The reforms include initiatives for domestic capacity creation, providing level playing field to our MSMEs, easing the raw material supply-side constraints, enhancing ease of doing business and attracting investments as enabler to other policy initiatives such as PLIs and phased manufacturing plans under PM MITRA Parks Scheme.
With aims to facilitate trade, the Council took part in a “Global Cotton Conference” based on the theme “Empowering our Supply Chain” co-organised by GOTS, IFOAM and Organic Cotton Accelerator (OCA) from 28th Feb to 2 Mar 2023 in Indore, Madhya Pradesh. On 1st March 2023, the Council participated in the session titled “Enhancing Organic Cotton Integrity” that was aimed at addressing the organic and sustainability aspects of trade in India.
The Department of Commerce, through DGFT, is working with the State / UT Governments to enable MSMEs and aspiring exporters to grow exports by focusing on District led Export Growth. To support this initiative, the Council participated in the District as Export Hub (DEH) meeting under the theme “Ways and Means of Doubling the Exports from Silvassa” on 14th March 2023 in Silvassa, Dadra and Nagar Haveli (UT). The meeting was jointly organised by FIEO (WR), Additional DGFT (Mumbai), District Industries Centre (Silvassa) along with the EPCs viz. EEPC and TEXPROCIL.
On the exporting front, global trade shows are increasingly giving opportunities for showcasing goods. Realising this, the Council undertook a wide ambit of export promotion activities by organising group participation in overseas exhibitions and holding RBSM in India.
In the last quarter of FY 2022-2023 the Council organised participation in seven events viz. Heimtextil, Frankfurt Germany (10 – 13 January, 2023); ColombiaTex, Medellin, Colombia (24 – 26 January, 2023); Texworld Evolution, Paris, France (6-8 February 2023); Firenze Home Texstyle, Florence, Italy (11-13 February 2023); Dhaka International Yarn & Fabric Show, Dhaka, Bangladesh (1-4 March 2023); Preview in Daegu, South Korea (2-4 March 2023) and the third edition of the Council’s flagship event Ind-Texpo 2023 - RBSM, Delhi, India (22-23 March 2023).
While more detailed information about these events has been circulated elsewhere by the Council, it needs to be pointed out that many Indian companies are appearing to reduce their marketing expenditure on account of the global headwinds. This might hurt the visibility of Indian products in the international market as the current times call for undertaking aggressive marketing to showcase our products globally.
I sincerely appeal to all our member companies to participate in large numbers in the Council organised events to leverage our textile exports.
Friends, the slowdown in global textile and clothing trade has raised the need for improving cooperation and collaboration in the sector. The government is fully committed to establishing a modern, dynamic, integrated and world-class textile sector in India. Trade resilience in response to changing global situations, backed by a dynamic strategy to integrate better with the global value chains can provide required certainty to grow our share in world textile trade.
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