Pakistan will impose a standard sales tax on cotton in the Budget 2015-16 with a view to generating about Rs 50 billion in revenue. Currently sales tax exemption is available on local cotton and a 5 per cent sales tax is applicable on the import of cotton. However, in the upcoming budget, the government has proposed imposition of sales tax on cotton.
The government has set a cotton target for the next season (2015-16) at 15.49 million bales against the revised target of 13.48 million bales for the outgoing season (2014-15). The government had set an initial target of 15.1 million bales for the current season (2014-15). However, later the target was revised three times to finally set at 13.48 million bales due to multiple issues including water shortage, rains/floods, and shortage of certified seed.
A notification grants exemption on import and supply of plant and machinery not manufactured locally subject to certain conditions. Sales tax was charged at a reduced rate of 5 per cent on such plant and machinery, subject to the same conditions.
Despite a slowdown in nonwovens, the global per capita consumption is expected to grow from 1 kg in 2011 to 2 kg by 2025. And nonwoven and nonwoven-based products find wide applications in personal healthcare, infrastructure, air and water purification and mobility.
A recent symposium on hi-tech application of nonwovens by the Indian Technical Textile Association (ITTA) in Mumbai recently focused on the challenges facing the segment and the opportunities in the global nonwoven industry; innovations: growth driver of nonwovens; and emerging opportunities in agro and hygiene applications.
The Indian Technical Textile Association is the only association of technical textile industry which represents the technical textile value chain including raw materials, finished goods producers, consultants, machinery manufacturers, centers of excellence and R&D institutes.
The association has a membership of over 200 companies. The objective of ITTA is to promote, support, develop and increase the production, consumption and export of technical textiles. It wants to make India a powerhouse of technical textiles. To support and empower technical textile manufacturers and suppliers, ITTA has close interaction with the government of India and helps it in formulating policies to remove ambiguities in the system. ITTA is fully dedicated to its members’ success and aims to become the sole voice of the Indian technical textile industry to bring together all stockholders of the sector under one roof.
www.ittaindia.org/
Bangladesh is fast turning into a major source of denim products as international retailers prefer the country to other destinations for its low prices. Bangladesh manufacturers are also increasing their production capacities because of the higher demand from foreign customers.
Denim will play an important role in raising exports of Bangladesh, which is already the second largest garment exporter worldwide after China. Currently, 25 denim factories are operating in Bangladesh. Five new companies have also been set up.
International retailers are coming in with increased volume of work orders, thanks to low prices. Among the global players in the $60 billion denim market, Bangladesh lags behind China, the US, Italy and some Latin American countries. Denim is expected to contribute around $2 billion to the country’s garment export target of $50 billion by 2021.
There has been a shift in work orders from China to Bangladesh. China is losing out on its denim business due to high costs of production and a shortage of workers. Bangladesh’s share in the global denim market stands at about one $1billion. Local denim factories produce around 20 million yards of the fabric a month, meeting half of the local consumption. The rest is imported.
India is mulling a 10 per cent cap on the volume of cotton to be exported. The proposal is to put a 10 per cent cap on the amount of exportable cotton per year and a 10 per cent duty on the export of cotton over and above this exportable surplus.
The reasoning is that this is in line with the budget proposal to save domestic industry by building a cotton reservoir. But this move raises doubts as the country is heading for surplus stocks amid an export scenario hurt by China’s import policy.
India exports nearly 60 per cent of its cotton to China, the world’s largest importer, which has a stockpile of nearly 63 million cotton bales. Due to China’s decision to offload its substantial stock of cotton, the market demand is lower than supply. This has resulted in prices of cotton coming down.
Cotton exports from India into China declined 26.4 per cent year on year over April-October 2014 compared to a 4.3 per cent decline the year earlier. Lower global cotton prices and the relatively stable Indian rupee will keep the attractiveness of Indian cotton under pressure in the export market. India’s cotton exports to other destinations are unlikely to replace the quantum of lower trade with China.
WTO member countries like the US, the European Union, Turkey, Japan have asked India to phase out export subsidies on textiles and the apparel sectors. WTO says India has crossed the export competitiveness limit (exports reaching 3.25 per cent of world trade) consecutively for two years in these sectors.
The sops that will have to be phased out include the popular Focus Product and Focus Market schemes under which exports to targeted markets are incentivised, the EPCG scheme and the interest subvention scheme for export credit. However, the government has not taken any decision on phasing out of subsidies.
India’s share in world trade for textile and clothing was 4.66 per cent in 2013 with exports worth $37 billion. Textile and clothing exports contribute more than 10 per cent to India’s export basket. They are the fourth largest product group in India’s outbound shipment basket.
As per the WTO, when the share of a developing country in global exports touches 3.25 per cent in any product category for two straight years, thereby gaining export competitiveness, it has to phase out export subsidies for the items eight years from the second year of breach. In case of nations with higher income levels, such subsidies are a strict no-no.
India, however, cites the WTO rule book to insist it has time until January 2018 as the multilateral trade body asked the country to consider phasing out the subsidies for textiles and clothing only in 2010.
The Federal Board of Revenue (FBR) in Pakistan has warned ginners to pay taxes of one billion rupees before or on March 30, 2015. Otherwise notices would be served to them in default of payment of tax at the rate of Rs 6 per maund on binola (cotton seed) as per the agreement reached between the PCGA and the Ministry of Finance.
The Pakistan Cotton Ginners Association (PCGA) has asked members to pay tax on the sale of binola cotton seed at the rate of Rs 6 per maund till March 30, 2015, to save themselves from any trouble otherwise they would have to pay five per cent general sales tax on oil-cake (khal) and two percent on binola oil.
The Federal Board of Revenue and the Pakistan Cotton Ginners Association have reached an agreement to pay Rs 6 per maund tax on cotton seed instead of five per cent GST on oil-cake and two per cent on cotton seed oil.
Ginners would have to pay more Rs one billion as tax against the sale of 165.44 million maund of binola. About 88,23,511 tons of raw-cotton (phutti) was arrived in the ginneries. Of them 66,17,633 tons of cotton seed were sold to oil expellers.
The eighth international symposium of intimate apparel was held in Hong Kong on March 17. It was organised by the Institute of Textiles and Clothing (ITC) of the Hong Kong Polytechnic University. The event was supported by the world's leading lingerie and beachwear trade show organizer Eurovet, the Hong Kong Intimate Apparel Industries’ Association and The Hong Kong Research Institute of Textiles and Apparel.
With the theme Intimate Apparel, Cradle to Cradle, the symposium held this year brought together local and overseas lingerie experts to share their insights and experiences. It discussed the latest product trends and development in the global lingerie market. It also sharpened the industry’s competitive advantage on future product lifecycle management. The aim was to promote the exchange of the latest knowledge in intimate apparel among academics and industrialists.
Among participants were lingerie designers, retailers, traders, suppliers, manufacturers and academics from Hong Kong, China, Asia and all over the world. Distinguished speakers shared their ideas and experience on the new development in sustainability of the global intimate apparel industry.
The Ace Style Institute of Intimate Apparel of ITC is the first lingerie institute in the Asia Pacific. Over the years, the institute’s research has reaped fruitful results and gained an international reputation.
Bangladesh's cotton consumption is expected to keep rising. At present, Bangladesh imports cotton from the US, India, Uzbekistan and a host of African countries.
In fiscal 2004-05, the country imported three million bales of cotton but within a span of 10 years the country’s consumption has doubled. Cotton imports grew 8 per cent in fiscal 2013-14 and 6 per cent the previous year. Currently, local spinners and weavers have the capacity to consume 10 million bales of cotton, but they are unable to go into full production due to inadequate supply of gas and power to industrial units. The 400 local spinners supply 90 per cent of the demand for raw materials for the knitwear sub-sector of the apparel industry and 40 per cent for the woven sub-sector.
Garment exporters are looking to hit the $50 billion mark by the end of 2021, meaning more raw materials will be needed. This forecast for apparel exports looks optimistic. The country is the second largest cotton importer in the world after China. It recently hosted the first ever global cotton summit. Over 250 delegates from Bangladesh, India, Poland, US, Russia, Pakistan, China, UK, Turkey, Egypt, Switzerland, Singapore, Hong Kong and France participated.
In a big revelation, Bangladesh commerce minister Tofail Ahmed has alleged that foreign buyers are not paying fair prices for readymade garment products imported from the country. Tofail, while addressing a seminar ‘Bangladesh – Flaming the future: A high level conference on RMG and Beyond’ in Dhaka, said that money is required to usher in improvement in factories. Bangladeshi exporters are not getting a fair price for their products from overseas buyers.
Ahmed further said that export earnings will be more than $33 billion during the current fiscal and the country will transform into a middle income one till 2021. He expressed satisfaction over improved factory situation and RMG sector had been able to avoid any unwanted incident during last two years.
The Denmark Embassy in Dhaka and Danish Business Development Ministry jointly organised the seminar on the occasion of opening a new strategic sector initiative also marking the stepping into second year of the Rana Plaza incidence.
The Tirupur Exporters' Association (TEA) has urged the Tamil Nadu government to set up a textile board with a focused approach for the development of the sector in the state. It feels there is a good scope to increase global market share from the current level of about 2.6 per cent by exporting value added products and synthetic products.
TEA has also urged the state government to provide incentives for setting up technical textile units in Tamil Nadu. It says the state textile department needs to work closely with industry for the development of technical textiles. Requesting the provision of five per cent interest subsidy under the TUFS, exporters say the state textile policy should provide five per cent interest subsidy and 10 per cent capital subsidy for modernisation or it should include expansion of garment units on the lines of the Gujarat and the Maharashtra textile policy, which provide five and seven per cent interest subsidy respectively.
Tirupur contributes about 45 per cent of total knitwear exports from India and exports only cotton based garments. TEA says Tamil Nadu should bring out a separate state export policy in line with the foreign trade policy of the centre to give a focused approach for export development of the state.
www.tea-india.org/
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