The Purchasing Managers Index (PMI) for Manufacturing in India recorded a growth for the third consecutive month, reaching a level of 55.9 in October as compared to it’s September level of 53.7. It augurs well with the country’s economy as a PMI value greater than 50 signifies expansion in economic activity. Reports suggest that this sharp turn also saw factory output increase at a sharp pace.
Despite these encouraging developments, concerns are also being raised about the pressure of rising input costs and price escalations due to delay in supplies on account of non-availability of containers, higher freight charges, and other supply chain disruptions. Some firms were able to pass on the additional cost burden to their clients by raising output charges. However, a large section of manufacturers falling in the SME bracket who were unable to negotiate higher prices are seeing a moderate impact on the margins, as per the report.
India’s merchandise exports in October 2021 was USD 35.47 billion, an increase of 42.33% over USD 24.92 billion in October 2020 and an increase of 35.21% over USD 26.23 billion in October 2019. India’s cumulative merchandise exports in April-October 2021 was USD 232.58 billion, an increase of 54.51% over USD 150.53 billion in April-October 2020 and an increase of 25.45% over USD 185.4 billion in April-October 2019.
Following a positive trajectory, India’s exports of cotton textiles (yarn, fabrics, madeups, etc.) under the purview of Council, recorded a growth of 46.1 percent reaching a level of US $ 1,333 million in the month of October 2021 as compared to US $ 912 million achieved during October 2020. The exports during October 2021 also marked an increase of 55.9 percent over US $ 855 million achieved during October 2019 and an increase of 46.4 percent over US $ 911 million achieved during October 2018.
The cumulative exports of cotton textiles (yarn, fabrics, madeups, etc.) compared year-on-year for the period April – October 2021 have also achieved a growth of 74.5 percent and are valued at US $ 8,616 million as compared to US $ 4,938 million achieved during April – October 2020. The cumulative exports during April – October 2021 also marked an increase of 47.5 percent over US $ 5,840 million achieved during April – October 2019 and an increase of 29.1 percent growth over US $ 6,673 million) achieved during April – October 2018.
Recently textile manufacturing in China continues to be impacted due to the electricity crisis that has forced their government to undertake rationing of power supplies. The situation is leading to a worldwide shortage of goods produced in China and depending on how long the shortage lasts, this is expected to lower China’s GDP growth for the year.
In order to analyse the situation, the Council held an online panel discussion on “Recent Developments in China in view of the electricity crisis” on 25th October 2021. At the meeting, I welcomed Dr. N. Nandakumar, Consul General, Indian Consulate, Shanghai and other eminent panelists that included some of our leading member exporters like Shri. Sharad Saraf, Past Chairman FIEO & CMD, Technocraft Industries, Shri. Ujwal Lahoti, Chairman, Lahoti Overseas, Shri. Rahul Shah, MD, ACME Yarns Pvt Ltd. and Shri. Dharmendra Goyal, MD, Shreedhar Cotsyn.
The Hon’ble Consul General shared an insight on the ground realities in electricity shortage and related issues. He congratulated the Council for the brilliant effort in organising the group discussion on the vital topic useful for development of Indian textile trade.
The panelists shared their views and latest updates on recent developments in textile manufacturing in China due to the electricity crisis. Towards the end of the meeting, Shri Sunil Patwari, Vice Chairman, TEXPROCIL summarised the discussions at the meeting and analysed the possible changes in demand – supply situation for yarn and other commodities of interest to the Indian textile and clothing sector. Members attending the program found the discussions useful as it provided an insight on real-time developments in China in the wake of the electricity crisis.
On the TUF Scheme, in the 5th Meeting of the Inter Ministerial Steering Committee (IMSC) held on 22.10.2021, a decision has been taken to condone the delay in submitting UID applications in certain cases. Accordingly, units can now submit their UID applications on the i-TUFS Portal on or before January 19, 2021. Further, the office of the Textile Commissioner has granted relaxation in the timeline for submission of UID applications. Under this relaxation, all those units and banks who could not submit their UID applications from March 23, 2021 and October 22, 2021 due to the lock down on account of the second wave of COVID–19, can now submit their UID applications on the i-TUFS portal till January 20, 2022. I am sure both these facilities will benefit a large number of textile units who have made huge investments in machineries under the TUF scheme.
The Online system for the RODTEP scheme has been activated. Exporters are now able to generate the E-Scripts on the ICEGATE portal. This has come as a huge relief to the exporters. The Council had conducted a Webinar on the Implementation of the RODTEP scheme for its members on 27.10.2021 to educate them regarding the scheme as well as its operation. The Webinar covered all aspects of the RODTEP scheme such as generation and transfer of the E-Scrips, declarations to be given on the Shipping bills, conditions related to payments, precautions to be taken by the exporters while operating under the scheme etc. The Webinar was well attended and widely appreciated by the participants. The Council will conduct many such Webinars for its members in future also.
The Government has re-constituted the RODTEP Committee to examine the various issues related to the RODTEP scheme. The Council will be submitting its proposals before the Committee for an increase in the RODTEP rates for Knitted fabrics and also for home textiles products covered under Chapter 94. The Council will also represent before the Committee to extend the RODTEP scheme on exports under the Advance Authorization Scheme and on exports made by the EOUs and SEZ units. I urge all the members to send their representations to the Council on any issue related to the RODTEP scheme along with justification and supporting data so that the same can be taken up with the Committee.
Friends, all reports suggest that the onset of the festive season in India and the upcoming holiday buying season in the West augur well for all types of trade in merchandise goods. As the world opens up after almost 18 months, the shopping spree should lead to higher consumption thereby adding to positive growth in exports and overall economy.