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As we move forward into the remaining months of the current year, the prognosis for the World Economic Outlook by the IMF is "a long and difficult ascent", aptly summing up the challenges that lie ahead of us both at the global and national levels. According to reports, while each quarter is showing a stronger recovery than the previous one, we still have a long way to go before laying any claims to return to normalcy.
ITMF Hybrid Virtual Conference
At the recently concluded ITMF Conference held in Seoul from 20-22 October, 2020 in a hybrid (physical / virtual format) experts brought out the far reaching impact of the COVID-19 pandemic on businesses across the world and the expected structural shifts in the global trading environment in its wake.
For instance, it was pointed out that the world is witnessing the emergence of 3 D's viz., De-globalisation, Digitalising and De-Coupling which are likely to define trading patterns in the coming years. This basically means greater reliance on localism, contact -less businesses, and re-engineering of supply chains, specially in the context of US-China trade tensions.
It was also pointed out that the top 200 Textile Companies saw a decline in sales of 34% during the last eight months of the pandemic this year. Further, during the eight month pandemic period, online trading grew higher than the growth it registered during the last six years!
Speakers also emphasised the inexorable speed of technology and the onset of Industry 4.0 built around "Smart Factories" and "Advanced Manufacturing".
Analysts at the Conference indicated that 20 million Robots are likely to be put to use in the Textile and Clothing Sector by 2030. This is likely to result in layoffs of 30 million low skilled workers, even as one Robot replaces 1.6 workers.
Well friends, these estimates are meant to enable us to reflect on the way our business is likely to shape up in the future and our own preparedness in meeting new challenges.
The process of unlocking has been accelerated in our country, facilitating thereby the resuming of trade and manufacturing activities. This has also resulted in the gradual removal of trade restrictions and implementation of reform measures intended to facilitate growth in consumption and exports as mentioned below:
i) In a welcome move, the Government has removed restrictions on the exports of all types of masks.
ii) The Government has also extended the validity of the RoSCTL scheme from 31.03.2020 to 31.03.2021 or until such date the scheme is merged with the RoDTEP scheme, whichever is earlier.
iii) The Government has also extended the CGST exemption on airfreights and sea freights related to exports by one year from 30.09.2020
iv) The office of the Textile Commissioner has relaxed the timelines for the submission of applications for UIDs and JIT Inspections under the ATUF scheme and has also notified a checklist for the Joint Inspection Team (JIT) for physical verification of machineries which will be followed by its Regional Offices.
v) The Department of Revenue has started implementing the Customs (Administration of Rules of Origin under Trade Agreements) Rules, 2020 from September 21, 2020, on all imports on which preferential rates of duty are claimed in terms of a trade agreement.
vi) DGFT has issued the much awaited Notification to implement the ROSL scheme for the pending claims. The Department of Revenue has also issued Notification for the implementation of the scheme by the Customs. We now hope that the online application form for ROSL is activated on the DGFT website at the earliest so that exporters of Made ups and Garments can start applying for the duty credit scrips under the scheme.
vii) The Government has also brought about far reaching changes in Labour Laws which have a direct bearing on labour intensive sectors like Textiles and Clothing.
44 labour laws have been subsumed under 4 codes. The four Codes include: a) Code on Wages; b) Code on Industrial Relations; c) Code on Social Security; d) Code on Occupational Safety, Health and Working Conditions.
In order to familiarise the Trade and Industry with the changes in the Labour Laws, the Ministry of Textiles organised a Webinar on 22 October, which was addressed by the Hon'ble Minister of Textiles, Smt. Smriti Zubin Irani and Shri Ravi Capoor, Secretary, Ministry of Textiles. Leading members of the Council participated in the event where the Ministry of Labour made a presentation.
Members should take note of all these changes and be guided accordingly.
With regard to paragraph (v) above, members should take special care while importing under any Trade Agreement at concessional or zero duty and familiarise themselves thoroughly with the requirements for such imports before placing orders with the overseas suppliers.
Friends, even as we cope with the uncertainties in our businesses, the short-term economic outlook would depend on how we handle the "second wave" of infections. Already there are reports of lockdowns in the U.K. Germany, France, Belgium as the pandemic rears its head. How long it will continue is anybody's guess, as the world awaits a reliable vaccine to neutralise the pandemic.
Going forward with a sense of optimism can be possible, if we quickly appreciate and understand the underlying trends that are emerging and changing the way we may have to operate our businesses and transact with our customers.
Undoubtedly, the COVID-19 pandemic will prove to be a game changer in many ways!
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