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India’s manufacturing industry is showing signs of revival as the INDEX of INDUSTRIAL PRODUCTION (IIP) grew by 3.6% during the period April- March 2018 -2019 as factories raise their output on the back of some signs of improving consumer demand, both within India and from overseas customers.

For the Textiles & Clothing Sector, the IIP for the corresponding period showed an increase of 4.2% during the previous fiscal year. Amongst the sectors the IIP for “manufacture of wearing apparel” showed a healthy growth of 10.8% in the previous fiscal year and 3.1% in April of this year. Coupled with a positive growth of around 4.4% in exports in April this year, the Apparel Sector should set the pace for industrial recovery & growth during the current fiscal year.

100 Days Agenda

India has resoundingly re-elected the Government under the leadership of Hon’ble Prime Minister Shri Narendra Modi. Clearly, the government mandate will be to continue with the unfinished agenda of reforms it has been pursuing over the past five years that includes — reforming the banking sector, sharpening the roll-out of GST and investing in building core infrastructure.

India's exports that have been hovering at around $300 billion since 2011-12, grew by 9% to US $331 billion during 2018-19. Textile & Clothing exports have also been in the range of around US$ 40 billion during the last few years, there is a need to make significant breakthroughs to scale higher levels of export growth in line with that being achieved / promised by our immediate competitors like, Bangladesh, Vietnam & even China, Indonesia.

One of the major concerns is to make credit for export finance available at competitive rates, ease costs by at least refunding the Central/ State Levies and “embedded” taxes, bridge the liquidity gap as the banks have become extremely cautious and are taking enormous time besides asking for voluminous documents.

With job creation a key concern for the new government, we can expect renewed focus on labour reforms with special emphasis on increasing female labour force participation.

The government also has the unfinished agenda to bring India into the top 50 in the World Bank's Ease of Doing Business rankings. It has succeeded in raising India to 77, quite a feat considering that it was 140 when the government assumed power in 2014. Other key areas like higher levels of foreign direct investment, technology transfer, and impetus for growth of micro, small, and medium enterprises will also receive special attention.

Meeting with Hon’ble Minister of Textiles

We met the Hon’ble Minister of Textiles Smt. Smriti Zubin Irani on June 7 at New Delhi and complimented her on her historic win in the recent elections. We also requested her to fast track some of our pending issues like extension of ROSCL auto Fabrics and Yarns, extend 3% interest equalisation schemes to Cotton Yarn, resolve some procedural issues in the Foreign Trade Policy, address the issue of cross- subsidies in power generation and refund of electricity duties.

Many other export related issues were also flagged with her. The Hon’ble Minister was fully aware of the pending issues and agreed to take them up with the concerned ministries.

We also met the DGFT and apprised him of some of the pending issues including the need to announce an alternative scheme in place of MEIS which is likely to be phased out. We also brought out the anomalies relating to payment of IGST with regard to 100% EOU’s. The DGFT agreed to take up these issues on a priority basis.

A gist of the issues flagged by the Council is also published in this Newsletter. Members are requested to send in their issues also to the Council so that we can take them up with the Government.

Budget 2019

Finance Minister Smt. Nirmala Sitharaman will present the first budget of the Modi 2.0 government on July 5. The government has sought inputs from the Council/ Citizens on the Union Budget 2019-20 with a view to make the Budget making exercise more participative and inclusive. The comments have been sought on government's 'mygov.in' portal by June 20.

The Budget will have to address slowing economy, financial sector troubles like rising NPAs and liquidity crisis in NBFCs, job creation, private investments, exports revival, agrarian crisis and raise public investment without compromising on fiscal prudence.

TEXPROCIL Seminar on Japan

On its part, TEXPROCIL in association with Japan India Industry Promotion Association (JIIPA) organized a Seminar by Japanese designers on 3rd June, 2015 at the Council’s Head Office in Mumbai. The Seminar was organised with a view to providing detailed information on demand and fashion trends in Japanese market and business practices to our members. Quality, which is very integral to exports of various types of products to Japan was also highlighted. All specifications related to major technical parameters were discussed at the Seminar.

Color and fabric forecasts were also discussed to help Indian exporters understand Japan’s changing styles, provide detailed information on demand and fashion trends in Japan and also advise on market entry strategies. Basic methods of display in exhibitions, particularly in Japan, were also discussed especially in the light of participation at the forthcoming India Trend Fair in Tokyo Japan from 24-26 July 2019.

We should get over our apprehensions regarding “Quality Issues” with Japan and strive to gain the confidence of the Importers by showing due diligence and commitment in our export efforts.

SLCP LAUNCH IN MUMBAI

The Council facilitated organising the launch event of the Social and Labor Convergence Program (SLCP), on June 5, 2019 in Mumbai. The SLCP is an initiative led by the world’s leading manufacturers, brands, retailers, industry groups, (inter)governmental organizations, service providers and civil society organizations. It has developed a Convergence Assessment Framework (CAF), aiming to improve working conditions in global supply chains by eliminating the need for multiple social compliance audits.

In October 2015, 33 parties announced their commitment to the rationale and principles of this joint program: collaboratively building the tools and verification methodology, as well as the intention to replace proprietary tools with the Converged Assessment Framework. Since then to date, the number of signatories has increased from 33 to 199 from buyers and sellers, retail chains and departmental stores.

Last year SLCP launched operations in mainland China and Sri Lanka with around 200 facilities participating in the process. This year they are starting operations in India, Taiwan, Mexico, Spain, Turkey and the United States with an estimated 1,250 facilities. The India operations were launched in Bangalore, Tirupur, Delhi cities with the Mumbai launch being hosted by TEXPROCIL.

Way forward

Friends, as the new Government at the Centre assumes office all of us look forward to benefitting from stability in policies and continuity of leadership., India and the world are going through challenging times due to trade barriers, unforeseen developments and falling economic growth.

Therefore, there is greater need for undertaking focused efforts to maintain our position and grow in world trade. This requires refining our export strategies and calls for a greater engagement and synergy among all stakeholders including the Government so that all round improvements can be made in our export basket.

We welcome the new Government with a lot of hope and look forward to rigorously joining in the all out efforts to promote investments and generate jobs in our sector.

(Dr. K. V. Srinivasan)

Chairman

:: TEXPROCIL ::