FW
Federal Tax Ombudsman (FTO) Mushtaq Ahmad Sukhera has said increasing exports is the only viable solution to address the economic imbalance. Addressing the businessmen of the Value-Added Sector at Pakistan Hosiery Manufacturers and Exporters Association (PHMA) House on Friday, he assessed that widening trade and current account deficit and lowering exports were bad for the economy.
“Instead of taking measures to improve exports, the sovereignty has been mortgaged,” he said, while explaining the issuance of sukuk bonds and foreign loans.
Some time back annual exports had risen to $25 billion, which later declined to $20 billion, he said, and assessed, “If exports increased to $30 billion instead, the country had no need to go for foreign loans.”
The FTO said the government should quickly resolve the problems faced by exporters.
He noted the volatile exchange rates and said it would be difficult for the industry to determine prices for exporting goods.
He was dismayed over the low tax-to-GDP ratio and said our neighbouring economies have much better rates. He said India’s ratio was around 18 to 20 per cent of the GDP. Even Bangladesh and Sri Lanka have better ratio than Pakistan, he decried.
The FTO said there was a trust gap between the Federal Board of Revenue (FBR) and taxpayers. “The tax machinery has created trust deficit and people do not want to come into the tax net,” he evaluated.
The FBR should change its priorities and pursue potential taxpayers, instead of harassing existing ones. “Once an audit notice is issued, a taxpayer faces problems,” he explained.
The Ombudsman asked the FBR to change its attitude. “The FBR should change audit parameters and instead of harassing the genuine taxpayers, the priority should be identifying suspicious transactions,” he suggested.
The currency and continuing disruptions due to demonetisation and GST remain to haunt the economy despite some contrary beliefs that a strong rupee is good for the economy as it makes imports cheaper.
While India’s exports grew by 11.2 per cent, imports rose in April-November 2017, recording a growth of 22.4 per cent in FY17, however, on the other hand, imports were almost steady and grew by just 0.9 per cent.
Hardening crude oil prices resulted in imports growing at a faster rate than in FY17; for two earlier years, oil imports contracted in value terms. While oil imports rose by $11.7 billion in April-November, overall imports grew by $54.5 billion.
If one exempts gold and oil, it shows that, for the April-November period, FY18 imports grew by a phenomenal 29.8 per cent; in contrast, during FY17, non-oil non-gold imports rose a marginal 1.4 per cent.
Since consumer demand hasn’t grown in the first eight months of FY18, one can assume that increased imports have largely replaced domestic supplies, either because local supply chains continue to be hit and/or because, with the rupee continuing to strengthen, imports have become 5 to 6 per cent cheaper.
In FY17, the rupee was more stable (66.2 to the dollar) on January 3, 2016; 68.14 on January 2, 2017; and 63.69 on January 1, 2018. With the current account deficit currently looking troubling and estimates show it at over 2 per cent of the GDP for FY18, this is definitely a cause of concern for the government. This is where issues like India’s high interest rates come in since they make India more attractive for foreign debt money.
The same supply-chain problems, along with the rupee, are clearly affecting India’s exports. Crisil noted that while India’s exports grew be 9.5 per cent in April to October 2017, Vietnam’s exports rose by 23.8 per cent, South Korea’s by 18.5 per cent, Indonesia’s by 17.8 per cent in the same period, however, at 7.4 per cent, China’s exports grew slower than India’s but the base is so much higher.
The apparel export body has made around 8-10 demands ahead of the Budget 2018. Reeling from a continued fall in export growth and marginal refunds on the goods and services tax (GST), the Apparel Export Promotion Council (AEPC) has written to the government, seeking 12-15 types of relief. They want the duty drawback and the refund of state levies (ROSL) to be restored to pre-GST levels, and also exemptions from the new indirect tax for exporters.
Growth of apparel exports has clocked a negative 39 per cent, 11 per cent and 8 per cent, respectively, in October, November and December last year, according to H K L Magu, chairman, AEPC.
In the run-up to the Union Budget, the export body has sought incentives from the government, to boost exports. It wants the duty drawback on cotton apparels to be restored to pre-GST rates of 7.5 per cent and the ROSL of 3.5 per cent. They also want to be exempted from 18 per cent GST for air freight.
The duty drawback fell to 2 per cent after the GST roll-out last year, ROSL to 1.5 per cent on cotton apparels, and 2.5 per cent and 1.5 per cent, respectively, on different man-made apparels.
Till September, when the previous rates were applicable, apparel exports grew in double-digits. However, October onwards, exports began taking a hit.
SIDCOs trade centre near Panchapur and SIPCOTs industrial park near Manapparai have entered a crucial stage in attracting and promulgating investments in Trichy, however, the long pending demand to establish a mini textile park (MTP) seems far from becoming a reality. Despite the fact that the scheme to establish a MTP in Trichy was announced in 2015, there has been no progress to source required land. Sources in the state handlooms and textiles department said that Sethurapatti near Srirangam could be a possible site for establishing the park. The western districts such as Coimbatore, Karur and Tirupur are renowned for textile manufacturing, however, there districts are reportedly reaching a saturation point. Industry experts in the small-scale industries disclosed that investors are looking forward to expand their presence in non-textile manufacturing districts such as Trichy given the availability of land/manpower coupled with. A floating population of two lakh people per day largely due to the well-known temples situated there.
Earlier in 2017, officials with the regional office of textile commissioner, functioning under the Union Ministry of Textiles assessed that Trichy has immense potential to market textile products.
Following this assessment, the state government in 2015 announced that a mini textile park spread over 10 acres would be established in Trichy, but unfortunately nothing much has done as OD date.
President of TIDITSSIA, N Kanagasabapathy noted. "In Puthanampatti village near Manapparai, units with readymade manufacturing cluster are even exporting their products. Provided we establish a proper platform with financial and technical support for interested investors in textile sector, not just in Trichy but in central districts there is a possibility for textile industry to flourish.
An official source from the handlooms and textile department said, "Ten acres of land required for the textile park is yet to be identified and also the investment potential is yet to be studied."
Industrialists suggested that 10 acres of land in SIPCOT industrial park in Manapparai should be earmarking for the project.
Three major investment catalysts for Trichy are: SIDCO trade centre, 9.4 acres in Panchapur, status, SIDCO awaits enter-upon permission to commence construction work; SIPCOT Industrial Park, 1,050 acres, Manapparai, status, land acquired but environmental clearance needed to prepare layout for site; Mini textile park, minimum 10 acres needed, status, land yet to be identified.
Challenging market conditions dampened the mood at the London Textile Fair’s latest expo, but the show maintained a steady stream of buyers and exhibitors walk in.
Around 475 exhibitors showcased their products at the two-day spring 19 edition, held at the Business Design Centre in Islington on 10th and 11th January. Another 20 to 30 businesses were on the waiting list to exhibit, the show organiser John Kelly reportedly said. Designers and buyers from brands and retailers such as Asos, Ted Baker, Vivienne Westwood, Hobbs, Boden, Topshop, Sunspel and Private White were seen. The print and design area were popular this season.
Exhibitors and buyers alike were all praise for the show given the quality of fabrics on display, and its timing, as it takes place before rival shows Milano Unica in Milan on 6 to 8 February and Première Vision in Paris on 13 to 15 February. Financial issues and growing cost pressures continued to be areas of concern on attendees’ minds.
John Kelly assesses, “The mood is not super-positive – it’s not a boom year [for the industry]. I don’t want to sound too doom and gloom, but the general message is: The industry is OK. Christmas hasn’t been terrible, but it has been slightly down. There just isn’t any excitement at the moment.
“The market continues to be affected by price rises and the euro exchange rate against the dollar. A lot of mills are also trying to be more eco-friendly and sustainable, at a big cost for them.
“Larger manufacturers are making decisions on where to source based on whether a mill can provide sourcing information from the beginning of the process. “It’s an expensive thing for mills to do – you have to bring in [external] people, check the weaving, spinning, finishing, dye stuffs … They’re all working towards it, but sustainability is an important issue.”
On the stands, eco-friendly fabrics continued to form a key trend for spring 19. Other popular lines included sand-washed silks, jacquard fabrics and laminated technical materials. “This edition has been busy for us – we’ve seen a lot of interest in cashmere and wool-linen blends for spring 19. Interest in heritage is increasing and there has also been rising interest in sourcing locally because of the Brexit factor, so our orders are up and we’re confident going into the next season. That said, it all depends on currency rates, which remains a big challenge in the industry,” he added.
Ten US cotton organisations have pledged industry contributions in 2018 to support the demand-building activities of Cotton Council International (CCI), the National Cotton Council’s (NCC) export promotion arm, headquartered in Washington, D.C.
The ten organisations that have pledged to support CCI activities are the National Cotton Council; Cotton Incorporated; American Cotton Shippers Association; AMCOT; California Cotton Alliance; the Committee for Cotton Research; ICE Futures U.S.; Plains Cotton Growers, Inc.; Southern Cotton Growers, Inc.; and Supima.
Plains Cotton Growers executive vice president Steve Verett announced in a weekly newsletter of Cotton USA, “Our growers believe that contributing to CCI is an investment in the future of our industry and ultimately is essential to our success. The work they do is vital to helping ensure that the rest of the world knows why US cotton is a superior product and worthy of sourcing. The fact that 80 per cent of US cotton is exported highlights the critical need for a healthy export market.”
US cotton industry contributions go a long way to support CCI to build export markets for US cotton fibre, yarn and other cotton products and are a very important additional help to the funding from the USDAs Foreign Agricultural Service’s Market Access Program (MAP) and Foreign Market Development (FMD) programme.
CCI is the largest recipient of MAP and FMD funding to promote US cotton abroad. Its use of funds from USDA and US cotton organisations has enabled it to efficiently enhance cotton exports and to improve the economic returns of 18,500 cotton farms in the US.
CCI executive director Bruce Atherley noted, “CCI showcases US cotton’s quality, sustainability, transparency, premium value and innovation, all of which make US cotton the cotton the world trusts. I’m a strong believer that every industry has to have ‘skin in the game’ to be successful. So, our US cotton industry contributions are critical in making US cotton the preferred fibre for mills, manufacturers, brands, retailers and consumers worldwide.”
Export markets are key to the US cotton industry, as nearly all cotton grown in the US is exported either as fibre or cotton yarn. Currently, the US is the leading exporter of cotton fibre in the world with a 39 per cent share internationally. In the 2016 marketing year, the US cotton industry exported 18.4 million bales of raw cotton and cotton textiles.
In a fast-paced world, the fast fashion industry has to move fast on the delivery treadmill as the seasons shorten. This is correspondingly damaging our one and only habitable planet — as of now.
The fashion industry’s carbon footprint is huge. High profile public figures and even newbies are jumping into the fashion bandwagon. Clothing lines are created every day to meet the ever increasing demands of consumers who never want to miss out on the current trend. Today, clothes are even manufactured to last for such a short time that the next one is on the production line.
Natural fibres, such as cotton, linen, hemp, bamboo and silk undergo rigorous processes including bleaching, dyeing, printed on and dunked in chemical baths and when disposed of in landfills, the chemicals used can leach and end up polluting groundwater. Burning clothing will release the toxins in the air.
Organic cotton requires 5000 gallons of water to manufacture a T-Shirt and a pair of jeans. Cotton is a chemical dependent plant using huge volumes of pesticides and fertilisers. When, these chemicals, if not monitored, get into the water table it poisons our soil.
Synthetic fibres such as polyester, acrylic and nylon take over 1000 years to decompose. Micro-plastics from synthetic fibres also end up in our seas, post washing — and if you go to see, we have only one contiguous sea, with different names. Studies have reportedly found that microfibers are dangerous and are eaten by fish etc. and accumulate in the gut and correspondingly move higher up the food chain and what is on our bodies end up in our bodies.
To resolve these issues the industry needs to be more creative and invest in sustainable apparel by encouraging recycling and upcycling. Customers can be advised to bring in their old clothing for recycling into new fibres and further into new clothing and upcycling where a garment is turned into something new. Old jeans and T-shirts can be transformed into bags and more. Rugs and mats can be made from T-shirts using Tapestry mats. We can decide to choose what we buy and where we buy clothing. We can be the agent of change
Because of the significant investments in the construction of new high-tech, enterprises with the participation of foreign partners have expanded the export capabilities of the industry the textile complex of Turkmenistan, which has a powerful production infrastructure and raw materials base, holds one of the leading places in the country's economy.
Cooperation with world-renowned foreign companies and large financial institutions such as the European Bank for Reconstruction and Development, the Japanese Bank for International Cooperation, Mitsubishi Corporation (Japan) promotes the introduction of advanced technologies that ensure the production of high-quality and competitive products in the world market.
The highly productive spinning equipment of the well-known Swiss company Rieter was installed at the Tejen cotton mill during the partial modernization. The modernization allowed increasing the volume and improving the quality of the products. In the framework of the export-oriented program at the “Serdar” cotton spinning mill in Kaahka was launched a workshop for the production of twisted cotton yarn with a capacity of 1300 tons per year. The new production facility is equipped with SSM (Switzerland) and Saurer (Germany) equipment. The shop for the production of regenerated fiber from the waste of the spinning, weaving and sewing industries of the branch enterprises was commissioned based on the Ashgabat textile complex. The high-performance equipment of “Balkan” (Turkey) is installed in the workshop. It can process several thousand tons of textile waste per year. Last year, most of the regenerated fiber was sold to foreign consumers.
Partial modernization of the Bayramali textile complex is continuing, during which in the preparation workshop of weaving will be installed the equipment of the well-known German company Karl Mayer. In the weaving department will be installed the machines of the Italian company "Itema". Jacquard machines "Stäubli" planned to be installed to produce a new product range. All innovations makes possible the company to increase exports.
New varieties of blended fabrics of fashionable colors will be used to create seasonal collections. The textile industry plans to launch the production of new types of fabrics and finished products. It will be expanded the range of knitted products, as well as outerwear for children and adults.
In 2017 the jeans market saw the largest year-on-year growth in the sector since 2013, pulling in over $95bn worldwide compared with $91bn the previous year while sales of premium designer jeans doubled its growth. The jeans market is booming again as the US turns back the clock to denim’s glory days.
Witnesses believe shoppers are deciding to try other styles beyond the skinny silhouette that has been so popular for more than a decade. This season styles hark back to authentic American selvedge denim and come straight-legged, stiff and in a deep indigo type.
The trend began last year on the Calvin Klein catwalk, when designer Raf Simons paired dark indigo jeans with a matching shirt for his influential debut collection for the brand. For spring/summer 2018, a host of other designers joined the fray, showing not just indigo jeans but indigo denim in general. At Tom Ford, dark denim materialised in a sharp blazer with pointed shoulders and high-waisted, wide-legged jeans.
The impact of the trend is already being felt on the high street. Asos reported sales of jeans were up 58 per cent this week, compared with the same period last year, while denim dressing at the e-tailer was up 81 per cent from 2017.
Celia Cuthbert, the head of buying at Asos, says that “authentic dark, raw and untreated indigo” was its biggest denim trend this season, and that while its customers still loved slim and skinny jeans, the brand was seeing more and more sales coming through from wider-leg silhouettes and straight legs.
This look, similar to that immortalised by Marilyn Monroe in 1961’s The Misfits and Martin Sheen in 1973’s Badlands, evokes a glory time in American history when the US was the leading purveyor of denim worldwide.
Reliance previous year started offering cut-rate mobile services to promote its new telecom venture Jio, which it claims now has more than 160 million subscribers. The company had posted a loss of Rs 271 crore during the second quarter in 2017-18. The Mukesh Ambani-promoted company says its Digital Services Business posted standalone net profit of Rs. 504 crores for the December quarter, with revenues standing at Rs. 6,879 crores.
During the quarter, Reliance Market launched its 43rd store at Mysore and the business introduced several SKUs under a new range of own brands: Home One, Graphite and RelGlow across housewares, luggage and hard-line categories respectively.
According to the company, Reliance Trends crossed a milestone of 400 stores during the quarter with 25 new store additions. The company claims Reliance Trends witnessed 25 million customer walk-ins during the festive period.
Reliance Retail further strengthened its presence through its partnerships during this period. The joint venture with Marks & Spencer expanded its store network with 5 new stores opening during the quarter and reach extending to 24 cities with 63 stores, making India as the significant market for Marks & Spencer outside of UK.
Reliance, the operator of the world's biggest oil-refinery complex, stated that its operating earnings in the refining business marginally declined, while earnings at the petrochemicals business jumped 73 per cent. Airtel's net profit came in at Rs 305.8 crore for the three month period ended December 31, 2017 bruised by the tariff war in the industry and cut in call connect charges. Turnover from the business grew 116.4 percent year-on-year to Rs 18,798 crore and earnings before interest and tax grew 110.8 percent to Rs 487 crore.
