Cotlook A Index - Cents/lb (Change from previous day)

07-12-2018 87.25 (-1.95)

07-12-2017 83.20

07-12-2016 79.80

New York Cotton Futures (Cents/lb) As on 11.12.2018 (Change from

previous day)

December 2018 77.16 (+0.52)

March 2019 78.84 (+0.16)

May 2019 79.85 (+0.10)

11th December

2018

DIPP floats draft patent rule

‘Definition based on turnover will hurt MSMEs’

Country’s 1st textile university proposed in Harpur

Global yarn production up in Q2/18; fabric dips

slightly

Cotton and Yarn Futures

ZCE - Daily Data (Change from previous day)

MCX (Change from previous day)

Dec 2018 22200 (+290)

Cotton 14635 (+75) Jan 2019 22450 (+320)

Yarn 24175 (+135) Feb 2019 22710 (+360)

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2 CITI-NEWS LETTER

-------------------------------------------------------------------------------------- Unfortunate exit

DIPP floats draft patent rule

‘Definition based on turnover will hurt MSMEs’

Rupee plunges 50 paise to 71.32 against U.S. dollar

Country’s 1st textile university proposed in Harpur

Decoding GST's future course in India

Traders to cash in on city’s fast-paced growth rate

Quilt India Foundation Announces Events at India's First Quilt

Festival

SRTEPC welcomes new duty drawback rates on MMF textiles

Special drive to check minimum wage rules

Sircilla weavers get ₹100-cr. order for school uniform

------------------------------------------------------------------------------------------------- Global fashion sector to step up climate actions

Global yarn production up in Q2/18; fabric dips slightly

Canada will be potential market for Vietnamese export garments

Uzbekistan reduces cotton production to 2.3 million tons

Saudi Arabia Introduces New Technical Regulations for Textile

Products

NRF: October sets new monthly import volume record

------------------------------------------------------------------------------------------------

NATIONAL

----------------------

GLOBAL

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3 CITI-NEWS LETTER

NATIONAL:

Unfortunate exit

(Source: The Hindu Business Line, December 10, 2018)

Urjit Patel’s departure reflects poorly on the state of institutional health in India

Urjit Patel’s abrupt resignation as Reserve Bank Governor only affirms a growing view

that the Centre is unable to strike the right balance between autonomy and oversight.

Differences between the Centre and the RBI have been the norm rather than the

exception, and are, in fact, compatible with institutional autonomy. But this time, some

limit appears to have been breached. For this, the Centre must shoulder most of the

blame. The RBI has been regarded the world over as a competent monetary authority —

a reputation well earned for its handling of the Global Financial Crisis and before that,

the East Asian Crisis. Patel’s exit cannot do the central bank’s stature and image much

good and will shake the confidence of foreign investors. Seen along with the fracas over

the new GDP numbers, which raises questions about the autonomy of India’s premier

data agency, it would seem that India is staring at an institutional crisis. This slide must

be arrested. There can be no better place to start than the RBI. The RBI board meeting,

scheduled for this Friday, must signal an end to the acrimony.

Patel’s resignation does not come as a bolt from the blue. The rift seemed to set in after

the ‘February circular’, which withdrew all old loan restructuring schemes and effectively

nudged banks to move all the unresolved cases under the IBC. The Centre, possibly

apprehensive after the impact of demonetisation on small industries, wanted the RBI to

loosen lending norms for the 11 weak banks placed under the ‘Prompt Corrective Action’

framework; it argued that Basel III-plus norms were not applicable in the Indian context.

It challenged the February circular in court, an inexplicable and extreme step — never

perhaps had the RBI and the Centre ever locked horns this way. Finally, anxious that it

was about to breach its fiscal deficit limit, it sought to argue that the RBI was sitting on

excessive reserves. A deceptive truce of sorts was arrived at during the November 19 board

meeting, where committees were set up to defuse the tension (see our editorial of

November 20). But the biggest irritant of all, it appears, was the presence of openly

critical, ‘political’ government appointees on the RBI board, who seemed bent on pushing

the RBI top brass into a corner. While the RBI board is dominated by government and

industry nominees, they cannot afford to disregard the central bank’s autonomy. The

balance of power between the RBI management and the board has been ruptured.

Ironically, some of these assertive board members were also votaries of demonetisation,

which flattened small industry. Patel did not cover himself with glory at that time; he

disappeared from the scene and allowed the Finance Ministry to decide unilaterally on

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4 CITI-NEWS LETTER

currency management, an area that ought to be the RBI’s domain. Patel may have

overcompensated for his silence by taking a stubborn view on credit norms. But surely all

of this could have been sorted out across the table. We need more sobriety at the highest

levels.

Home

DIPP floats draft patent rule

(Source: Economic Times, December 10, 2018)

The commerce and industry ministry has floated a draft to amend the existing patent rules

with a view to further streamline examination of applications.

The draft rules will amend the Patents Rules, 2003, the department of industrial policy

and promotion (DIPP), under the ministry, said in a notification Monday.

The department has sought views of stakeholders on the draft rules till January.

It has suggested amendment in the rules pertaining to expedite examination of

applications, opposition proceedings to grant of patent, and fees for international

application.

The draft rules have suggested removal of the transmittal fee for international application

(for e-patent cooperation treaty filing) for startups and small entities.

"The draft rules to further amend the Patents Rules, 2003 which the central government

proposes to make...and notice is hereby given that the said draft rules will be taken into

consideration after the expiry of a period of thirty days...," according to the notification.

The move assumes significance as the ministry is taking steps to fast track examination

of patent applications particularly for startups.

Home

‘Definition based on turnover will hurt MSMEs’

(Source: The Hindu Business Line, December 10, 2018)

The Karnataka Small Scale Industries Association (Kassia) has said that the proposed

definition of MSME (micro, small and medium enterprises) will not help the sector.

Addressing presspersons in Mangaluru on Monday, Basavraj S Javali, Kassia president,

said that the Union Cabinet has come up with a draft completely revising the definition of

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5 CITI-NEWS LETTER

MSME making turnover as the basis. As per the MSME Act 2006, MSMEs in India are

defined on the basis of investment in plant and machinery.

Spike in numbers

However, the proposal for the new definition is in the draft stage, and requires

amendments to be made to the MSME Act and passed in Parliament.

He said that the proposed definition will bring in large number of firms within the

definition of SME. This is a serious worry as such a thing will likely crowd out a large

number of small units from the benefits targeted at them as there will be higher demand

for such benefits from a greater number of businesses.

The distinction between manufacturing and service has been removed in the new

definition. This will add to the numbers and negatively impact on the manufacturing and

there-by creation of jobs and enterprise development, Javali said.

“There is a strong feeling among MSMEs that the investment in plant and machinery

criteria should be maintained with suitably increased limits,” he said.

Referring to GST on labour charges, he said job works were earlier exempted from

payment of tax under the VAT. However with the introduction of GST, labour charge is

taxed at 18 per cent, which is causing lot of hardship to the micro and small units who are

the main players performing the service for larger units.

Home

Rupee plunges 50 paise to 71.32 against U.S. dollar

(Source: The Hindu, December 10, 2018)

The Indian rupee on Monday tumbled 50 paise to close at 71.32

against the U.S. dollar as nagging worries on global trade war front

and uncertain crude prices hurt Forex market sentiment.

Besides, the trading pattern in the Forex market was impacted by

massive sell-offs in domestic equities as investors panicked over exit

polls suggesting the Congress giving a tough fight to the ruling BJP

in State elections.

It was a virtual collapse for the Indian unit during the session as investors hit the panic

button in view of several headwinds confronting trading sentiment.

The rupee opened lower at 71.28 against the U.S. dollar and dropped further to 71.44. The

Indian unit hit a high of 71.23 during the day.

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6 CITI-NEWS LETTER

However, global crude oil declined on December 10, in line with plunging global stock

markets, wiping out the gains made last week when cartel OPEC and other non members

agreed to slash their crude production from January.

Brent crude oil was trading at $61.03, a decline of 1.04%.

“Rupee and bond prices were under pressure also due to rising current account deficit...

The 10-year government bond yield rose 13 bps at 7.59% from its previous close of

7.464%,” an analyst said.

The Indian rupee is likely to be face extreme volatility during Tuesday’s session amid

crucial event of state election results, he added.

Exit polls for the recently concluded assembly elections have predicted a tight finish

between the ruling BJP and the Congress in Madhya Pradesh and Chhattisgarh and a win

for the opposition party in Rajasthan, impacting trading pattern on the domestic bourses

in a big way.

Heightened risk associated with the current account deficit against the grim backdrop of

surging global crude prices and global turmoil have all contributed to excess volatility on

the trading front.

Escalating global trade tensions could prompt further weakening the domestic currency

along with exodus of capital from a nation also added excess volatility.

The Financial Benchmarks India private limited (FBIL) meanwhile fixed the reference

rate for the rupee/dollar at 71.3257 and for the rupee/euro at 81.5738.

The reference rate for rupee/British pound was fixed at 90.9108 and for rupee/100

Japanese yen at 63.43.

Home

Country’s 1st textile university proposed in Harpur

(Source: Ananya Anparthi, Times of India, December 11, 2018)

The state government’s Cooperation, Marketing and Textile Department has proposed to

develop a textile university at Harpur on Umred Road in South Nagpur. If the plan

materializes, it will be the nation’s first textile university, according to textiles secretary

Atul Patne.

The Nagpur Improvement Trust (NIT) has been appointed as nodal agency for planning

and construction of the university which is to be developed on the State Handloom

Corporation’s two-acre land.

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7 CITI-NEWS LETTER

The State Handloom Corporation own five acres of land. The administrative building of

the corporation will come up on one acre and other related infra on the remaining two.

The NIT board of trustees in the meeting held recently appointed Nela Designers of

Harish Chandani as architect and project management consultant of the project.

“A few courses related to textile are available in some colleges. But there is no dedicated

university for textiles. We plan to invite an international institution running a textile or

related university to set it up,” said Patne.

As 80% of powerloom industries of the nation are situated in the state, a “textile university

in Maharashtra will encourage the sector to a great extent”, according to Patne.

Patne added that new sources of textile will be explored through the proposed university.

“Non-conventional yarn is being produced from cotton at present. A high quality non-

conventional yarn can be produced from Deccan bull, sheep, banana, bamboo etc.

Courses related to these sources will be introduced in this university,” he said.

The secretary also said courses related to powerloom, handloom, spinning mills, silk,

hosiery etc will also be introduced in this industry. “Interested persons learn these skills

by seeing the work of people in these fields. There is no courses available in ITI,

polytechnic and engineering colleges to educate the students on these fields. All these will

be provided in the Textile University. Also, we can develop new technologies in these

fields,” he said.

Patne said the textile university was part of the textile policy launched by the government.

“Various other types of initiatives have been also taken under the textile policy,” he said.

Home

Decoding GST's future course in India

(Source: Hasmukh Adia, Economic Times, December 10, 2018)

GST has been a major structural reform of the current government. Replacing multiple

taxes and cesses of state and central governments into a single tax has been a major relief

to trade and industry. At the same time reduction in overall tax incidence has brought

relief to the end-consumers. The IT driven tax filing system of GST has made it difficult

for intermediaries in the value added chain to evade taxes.

The movement of goods across the country has become faster and less cumbersome with

the help of a single e-way bill carried by the transporter, and because of abolition of state

check posts. GST has given a big boost to the manufacturing sector as a whole, which will

accelerate the growth of the economy.

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8 CITI-NEWS LETTER

Initial difficulties faced in implementation of GST were not unexpected. However, they

were quickly resolved because of the flexibility shown by the GST council in correcting

course. The experience of other countries where GST was introduced shows that all of

them faced some teething troubles for the initial two to three years. As compared to

Australia and Malaysia, the Indian experience shows that GST has settled down fairly

well. Now GST has much wider acceptability even among MSMEs.

The question now is what GST’s future course should be in India. So far, the government

has gone by the maxim ‘the best should not be the enemy of the good’. But we must

continue on a quest for the best. Having implemented GST in a vast country like India

after taking 31 states on board, it is time to perfect the system gradually.

In order to move towards an ideal GST, we must set an agenda for the next three to five

years. Our first attention should go in the direction of stabilising revenue both for state

and Centre. While states are already comfortable because of the compensation

mechanism in which 14% incremental growth rate of revenue is assured, the Centre still

needs to worry about its revenue.

GST revenue is undoubtedly going to get a major boost when the government implements

the new system of return filing in which there will be perfect matching of invoices for

availing input tax credit. At present, the total tax liability declared by registered dealers

every month is Rs 5 lakh crore, of which approximately a lakh crore is paid in cash and

the remaining Rs 4 lakh crore is settled by way of input tax credit. Even if we stop 10%

leakage in wrong availment of input tax credit, it will mean that to that extent, the monthly

GST paid by cash should go up from Rs 1 lakh crore to Rs 1.4 lakh crore.

Second, an attempt should be made to bring all excluded items into GST one by one in the

next three to five years. This includes five petroleum products, electricity, real estate and

alcohol in that sequence. Among the petroleum products, the two items which can easily

be brought into GST are natural gas and aviation turbine fuel (ATF).

Exclusion of certain items from GST creates distortions such as cascading of tax and

reversal of input tax credit. Since tax on diesel and petrol gives substantial revenue to

states and Centre, it is obvious that bringing them into the GST net will be a difficult

decision. But this is doable with proper tax structuring of petroleum products, divided

between GST and cess.

The items of electricity duty and potable alcohol, on which at present only states have the

power to impose levies, can also be brought into the GST net by imposing only state GST

on them. But inclusion of these items will help in removing input tax credit blockages; it

will be both more efficient for industry and more affordable for consumers. By bringing

petrol, diesel and potable alcohol into GST, the rate at which these items are sold to

consumers will be common across states.

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9 CITI-NEWS LETTER

Third, we must try to rationalise the rate structure as and when the scope for revenue

sacrifice increases with rising revenues. Initially, we can move from a four slab structure

to a three slab structure, and gradually to a two slab structure. Multiplicity of slabs creates

classification disputes and duty inversions, necessitating blockage of funds and refunds.

Also, modest rates result in better compliance.

If we have to move to a three slab structure, no new item should now move from 18% to

12%, or 12% to 5%, or 5% to zero in the interest of revenue neutrality. If we deviate too

much from the mean or median rate slab, it will be difficult to then increase GST on these

items when the country aspires to have a single slab GST. We can easily set the goal of

having a two slab structure by the end of fifth year from now.

Fourth, in the present GST system there are certain items where input tax credit is not

allowed which breaks the chain. Some of these sectors are restaurants (GST rate on

restaurants is 5% but without input tax credit), transport vehicles, oil or gas pipelines,

telecom tower. Exclusion of items from availing input tax credit results in accumulated

credit and has a cascading effect.

The attempt here is to suggest a road map. The pace of actual implementation can be

based on revenue growth and practical considerations of consumer interest.

Home

Traders to cash in on city’s fast-paced growth rate

(Source: Deepak karthik, December 11, 2018)

After being adjudged the cleanest and most liveable city of the state in the same year,

Trichy has now been identified as the eighth fastest-growing city in the world in terms of

gross domestic product (GDP). With the city earning yet another accolade, the trade

bodies here have resolved to leave no stone unturned to sustain the achievements, attract

more investments and create employment opportunities.

The United Kingdom-based global forecasting and quantitative analysis group, Oxford

Economics, has stated after an economic survey that 17 of the 20 fastest-growing cities in

the world are in India. Among the top 10 such cities, Trichy has even surpassed state

capital Chennai in terms of the projected growth rate of GDP between 2019 and 2035.

After being a leading city in terms of cleanliness and liveability, the recognition for the

city’s economic growth has elated city-development enthusiasts and trade bodies.

Already, trade bodies like Young Indians (Yi) of Confederation of Indian Industry (CII)

have started highlighting the achievements of Trichy to attract investors and

entrepreneurs to consider it for their future business ventures. “As we are striving to

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10 CITI-NEWS LETTER

promote a startup culture in Trichy, we have to market our city’s credentials such as

cleanest city, most liveable city, and now the fastest-growing city. Such recognition will

certainly be used for attracting investments,” N Ratnakumar, chair, Young Indian (Yi),

Trichy chapter, told TOI.

Since the city figures in the defence industrial corridor too, entrepreneurs in heavy

engineering and fabrication termed the fastest-growing city tag as a timely upliftment for

the city. “Trichy is an accommodative city for industrial growth and the decades-long

expertise we have in engineering and fabrication sectors has played a role in becoming

the fastgrowing city. We will market such tags among international entrepreneurs to

invest in Trichy,” said S Ashok Sundaresan, president of BHEL Small and Medium

Industries Association (Bhelsia).

Being identified as an education hub of the central districts thanks to the presence of

premier technical and management institutes, trade bodies said that sourcing talented

human resources should be an easy task for the investors including IT majors. With

Trichy’s achievements now taking an international dimension surpassing several other

tier-ii cities in the country, trade bodies said that investors would be persuaded to make

a foray into the city.

Graphic Elements:

Fastest-growing cities in the world (2019-2035)

Rank

City

% of growth (in terms of GDP)

GDP in 2018 (in trillion US dollars)

GDP in 2035

1 Surat 9.17 28.5 126.8 6

Tiruppur 8.36, 4.3, 17.0 8

Trichy 8.29 4.9 19.0 9

Chennai 8.17, 36.0, 136.8

Accolades of Trichy in 2018:

1.Cleanest city of Tamil Nadu

(Swachh national survey 2018, conducted by MoHUA)

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11 CITI-NEWS LETTER

2) Most liveable city of Tamil Nadu

(Ease of living index-2018, conducted by MoHUA)

3) 8th fastest-growing city in the world

(Conducted by UK based Oxford Economics)

Trichy’s recent national ranks: Swachh Survekshan 2018:

Rank 13 Liveable city ranking:

Rank 12 Statistics of Micro and Small Enterprises in Trichy district:

1) Agro-based industries: 1,1,30

2) Cotton textiles: 99

3) Readymade garments: 3,991

4) Engineering units: 1,477

5) Steel fabrication: 829 Source: MSME, 2016

Premier Education Institutes in Trichy:

1) National Institute of Technology.

2) Indian Institute of Management 3) Tamil Nadu National Law School.

Major ongoing projects/schemes for which Trichy has been selected:

1) Smart city mission from Union government

2) Defence industrial corridor to produce indigenous equipment

3) Nationally Appropriate Mitigation Action (NAMA) project (international project)

Dr M A Aleem, member, Trichy District Welfare Fund Committee: “Trichy has got a

unique comprehensive setup of educational institutes such as NIT, IIM, National Law

School, agriculture college and centuries-old arts and science colleges at one place. We

should sustain our achievements to invite more private industries to invest here.”

M Muthuganesan, member, Thailand Tamil Sangam: “Keeping in view the accolades

Trichy is fetching for the state, including the recent one from Oxford Economics, the

government should improve the city’s existing infrastructure. More domestic connectivity

through air and rail transport is also the need of the hour.”

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12 CITI-NEWS LETTER

N Kanagasabapathy, president of Trichy District Tiny and Small Scale Industries

Association (TIDITSSIA): “We need to enhance the exports we are already sending to the

middle east and south-east Asian nations. Without a doubt, trade bodies will utilize the

achievements of Trichy to attract investors.”

Home

Quilt India Foundation Announces Events at India's First Quilt Festival

(Source: Business Standard, December 10, 2018)

Events include Day-long Workshops, Quilt Show Competition, Vendor Pavilions, Curated

Exhibits, Textile journeys across India

Quilt India Foundation (QIF) announced that the first India Quilt Festival (IQF 2019)

will be held in Chennai from 25-27 January, 2019.

The festival includes Quilt Show Competition, Workshops where participants can learn

from renowned Indian and International faculty, curated quilted exhibits from different

parts of the world and private collections. The Quilt show and Special Exhibits can be

viewed at Sri Sankara Hall, TTK Road, Chennai. Visitor entry to the festival is free.

Tina Katwal, Director-Shows, says - "We are extremely pleased and excited to hold this

festival for the first time in India. The festival has been planned to run on the lines of Quilt

shows organized across the world with elements of competition, exhibition, education and

a market place. We invite quilters in India and overseas to participate in the competition

segment of the Quilt Show." The categories for the competition section of Quilt show

include - Traditional, Modern, Art, Novice and Theme Quilts. While the 'Novice' category

is aimed at Quilters who have been quilting for 2 years or less, the 'Theme' Quilts will

revolve around IQF 2019 theme 'The Dance of the Peacock'. Awards for the Competition

quilts will be sponsored by leading Indian and Global brands. In addition to the

Competition section, the curated section - 'Quilts Across Time and Nation', will showcase

Antique Indian Quilts and Quilts from different regions of India in addition to Quilts from

USA, Egypt, South Korea and other countries.

"We are extremely happy to have some of the leading names in the Industry as faculty for

the workshops. These workshops are an opportunity for Quilters in India to learn

about Quilting techniques - traditional and modern - from world over. QIF also aims to

revive traditional Indian Quilting traditions and our workshops reflect that." - Katwal

adds. In addition to the full day workshops spread across the 3 days of India Quilt Festival,

lectures by eminent Quilters and Authors are also planned. Workshops and lectures will

be held at WelcomHotel, Cathedral Road, Chennai.

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13 CITI-NEWS LETTER

The festival also has Vendor Booths and a Makers' market for Quilting related machines,

fabrics, notions as well as Quilted products. Visitors can also check out product demos of

leading sewing machine brands at their pavilions. Textile tours are also planned to

coincide with the festival. These experiential tours include trips to

Kerala, Pondicherry and Kutch.

Home

SRTEPC welcomes new duty drawback rates on MMF textiles

(Source: Fibre2Fashion, December 10, 2018)

The Synthetic & Rayon Textiles Export Promotion Council (SRTEPC) has welcomed the

new duty drawback rates announced by the Government of India. Stating that the

increased rates will provide relief to the exporters, SRTEPC chairman Narain Aggarwal

said the drawback rates declared now need to be enhanced at least up to 6 per cent to 7

per cent.

The maximum increase of drawback rates on MMF textiles is by about 1.5 per cent and

also the product of nylon filament yarn (dyed) has been added under drawback code as

540203 at the rate 6.7 per cent with a cap of ₹31.2/kg.

Aggarwal expressed his gratitude to the government for hearing SRTEPC’s plea and urged

to consider the recommendations forwarded by the SRTEPC. Requesting for upward

revision of the drawback rates, he said it would help the exporters face the competition in

the overseas market.

He also thanked SRTEPC members for their kind cooperation and support in

substantiating the data. He has also sought support and cooperation of the industry in the

matter for more favourable rates in the future.

Home

Special drive to check minimum wage rules

(Source: The Hindu, December 10, 2018)

Delhi govt launches 10-day initiative

The Labour Department on Monday launched a 10-day special drive to check minimum

wages rules, said Delhi Labour Minister Gopal Rai. Inspections were conducted at 20

public and private institutions on the first day of the drive, he said.

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14 CITI-NEWS LETTER

During an interaction with journalists, Mr. Rai said inspection by nine teams of a Special

Task Force (STF) in west Delhi revealed that some government and private institutions

were not complying with the minimum wages rules notified by the Aam Aadmi Party

(AAP) government.

“Those who were found violating rules in relation to non-payment of wages as per

prescribed rates, including government officials required to see the payment of these to

agencies to whom work has been outsourced, are being issued show-cause notices

requiring them to appear before the Labour Court of west Delhi on December 24 with

proper documents,” Mr. Rai said.

He said the drive will continue with similar inspections to be conducted in south district

on Tuesday, followed by others over the coming days. Nine teams have been formed to

inspect factories and firms to check whether they are paying minimum wages or not.

The daily minimum wages applicable in Delhi from November this year are: ₹538 (or

₹14,000 per month) for unskilled workers; ₹592 (or ₹15,400 per month) for semi-

skilled workers; and ₹692 (or ₹16,962 per month) for skilled workers.

Home

Sircilla weavers get ₹100-cr. order for school uniform

(Source: K M Dayashankar, The Hindu, December 10, 2018)

To weave 2 crore metres of fabric, instead of the usual 1.5 crore metres

The handiwork of Sircilla’s powerloom weavers is set to be adorned by schoolchildren for

the fourth year in a row. Rajiv Vidya Mission (RVM), the agency which funds school

uniforms in Telangana, has enlisted the weavers’ services for the coming financial year,

placing orders for around 2 crore metres of fabric worth ₹100 crore.

For the past three years, RVM has been placing bulk orders for weaving uniforms to be

distributed among students of government educational institutions. Earlier, the orders

were for only 1.5 crore metres of cloth worth ₹75 crore, but this time round, it has been

bumped up to 2 crore metres to cover high school students too.

Tericot fabric

Around 13,500-odd powerloom weavers of the textile town will use tericot fabric to

fashion pants and shirts for boys and salwar-kameez and scarf (chunni) for girls.

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15 CITI-NEWS LETTER

Assistant Director of Handlooms and Textiles V. Ashok Rao told The Hindu on Monday

that bulk orders by the government had brought about a lot of change in the lives of

distressed weavers and kept them busy throughout the year.

Christmas gifts

Even as weavers completed work on Bathukamma sarees, they are now busy with

Christmas gifts to be delivered within a few days for distribution by the government, he

said.

After the Christmas order, the weavers would be engaged in weaving the school uniforms,

Mr. Rao said and added that the work is expected to be completed within three months,

in time for distribution among students for the next academic year.

With regard to the distribution of Bathukamma sarees, which was stalled following the

election code of conduct, Mr. Rao said the targeted production of 90 lakh sarees worth

₹280 crore had been completed.

GO awaited

Now, government orders are awaited for the distribution of those sarees among

beneficiaries.

Home

--------------------------

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16 CITI-NEWS LETTER

GLOBAL:

Global fashion sector to step up climate actions

(Source: Business Standard, December 11, 2018)

The global fashion sector on Monday significantly increased momentum to

address climate change by launching the Fashion Industry Charter for Climate Action.

Under the UN climate change, leading fashion brands, retailers, supplier organisations,

and others, including a major shipping company, have agreed to collectively address the

climate impact of the fashion sector across its entire value chain.

Forty-three leaders, including Adidas, Burberry, Esprit, Guess, Gap Inc. Hugo Boss, H&M

Group and Inditex; leading membership organizations, including Business for Social

Responsibility, Sustainable Apparel Coalition, China National Textile and Apparel

Council, Outdoor Industry Association and Textile Exchange; global logistics company

Maersk; and global NGO WWF International have committed to implementing or

supporting the 16 principles and targets that underpin the Fashion Climate Charter.

The charter, which is open for other companies and organizations to join, recognizes the

crucial role that fashion plays on both sides of the climate equation; as a contributor to

greenhouse gas emissions, and as a sector with multiple opportunities to reduce

emissions while contributing to sustainable development.

Aligned with the goals of the Paris Agreement, the charter contains the vision for the

industry to achieve net zero emissions by 2050 and defines issues that will be addressed

by signatories, ranging from decarbonisation of the production phase, selection of

climate-friendly and sustainable materials, low-carbon transport, etc.

To make concrete progress on these commitments, six working groups have been

established in which signatories will work to define steps for implementation.

The signatories are not waiting for these issues to be fully elaborated and have set an

initial target to reduce their aggregate greenhouse gas emissions by 30 per cent by 2030

and have defined concrete measures, such as phasing out coal-fired boilers or other

sources of coal-fired heat and power generation in their own companies and direct

suppliers from 2025.

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17 CITI-NEWS LETTER

"The fashion industry is always two steps ahead when it comes to defining world culture,

so I am pleased to see it now also leading the way in terms of climate action," said

UN Climate Change Executive Secretary Patricia Espinosa.

PUMA CEO Bjorn Gulden said: "We are aware that more than 90 per cent of PUMA's

carbon footprint is being generated in shared supply chains. If we want to reduce carbon

emissions in our supply chains, we need to work together with our industry peers."

In early 2018, fashion leaders volunteered to shape a climate movement through

discussions in working groups chaired by PUMA SE and H&M Group.

The launch on Monday, during the critical UN Climate Change Conference (COP24) in

this Polish city reflects genuine sectoral buy-in and is a clarion call to the fashion industry

globally to sign-up to climate action.

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Global yarn production up in Q2/18; fabric dips slightly

(Source: Fibre2Fashion, December 10, 2018)

Global yarn production increased by 5 per cent between Q1/18 and Q2/18 whereas global

fabric production decreased from Q1/18 to Q2/18, according to the ITMF

(International Textile Manufacturers Federation) State of Trade Report 2018, prepared

by Olivier Zieschank, ITMF economist. It is an international forum for the world’s textile

industries.

Higher output where observed in Egypt (+1.4 per cent), the US (+3.2 per cent), South

Africa (+3.3 per cent), and globally in Asia, where the overall +5.7 per cent increase was

led by Chinese Taipei and Korea, Rep. (respective growth rates of +8.1 per cent and +8.8

per cent). An opposite trend has been observed in all surveyed European countries, Brazil,

and Japan. Forecasts for Q3/18 are only optimistic in Africa but the Q4/18 previsions turn

positive in all regions except Brazil where stability is expected. Global yarn stocks

decreased globally by -4.75 per cent. This is the effect of small contractions in Asia and

Europe (between -3 per cent and -4 per cent), a +18 per cent increase in Brazil, and a -20

per cent average decrease in the African countries surveyed. Altogether, yarn stocks

reached 85 per cent of their previous year’s level for the same quarter. Global yarn orders

decreased by -6 per cent led by a strong reduction in the Brazilian market (-28 per cent).

Yarn orders, however, increased in Africa and Europe by +5.7 per cent and +7.5 per cent,

respectively.

Global fabric production slightly decreased from Q1/18 to Q2/18. The +0.25 per cent

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18 CITI-NEWS LETTER

contraction reflects a -6 per cent output reduction in Africa, a decrease of -0.5 per cent in

Asia, a +1.6 per cent increase in Europe, and a +3.7 percent jump in Brazil. The world

output level now reaches 87 per cent of its Q2/17 level. Fabric production in all regions is

expected to decrease in Q3/18 except in Brazil where stability is foreseen. Q4/18 should

see improvements in all regions. In Q2/18, the global fabric stock level grew by almost +2

per cent. It was driven by Brazil’s stock increase of +7 per cent, which brought global

fabrics stocks 11 per cent above their Q2/17 level. Stocks remain stable in Asia, Europe,

and the US. They continue to steadily drop in Egypt. Global fabric orders have risen by

+43 per cent at world level in Q2/18, led by a +65 per cent increase in Brazil that followed

an unusually low first quarter. Orders in Asia and Europe have stagnated and contracted

in Egypt, respectively. Global fabric orders are now 16 per cent above their level observed

in Q2/17.

Home

Canada will be potential market for Vietnamese export garments

(Source: Vietnam News, December 11, 2018)

Canada will be a potential market for Việt Nam’s export garment products when the

Comprehensive Partnership and Trans-Pacific Partnership (CPTPP) takes effect in early

2019, according to Lê Tiến Trường, general director of Việt Nam National Textile and

Garment Group (Vinatex).

Trường said although the CPTPP does not include the US - which accounts for nearly half

of Việt Nam’s annual garment export value, it has other great potential markets such as

Australia, New Zealand, Chile and Canada

Canada imports textiles and garments worth of US$13.3 billion per year. However, Việt

Nam’s textile and garment export value to Canada has reached only about $550 million a

year, he said.

Meanwhile, Việt Nam the CPTPP is Việt Nam’s first free trade deal including Canada.

To seize this opportunity to access the Canadian market, Vinatex has sought Canadian

garment enterprises and provided them information about Vietnamese export textile and

garment products.

Specifically, Vinatex sent a delegation of local textile and garment companies to Canada

to look for opportunities with textile and garment importers in this market, including Hà

Nội Textile and Garment Joint Stock Corporation (Hanosimex), Hòa Thọ Textile and

Garment Joint Stock Corporation, Đức Giang Corporation and Phong Phú Corporation.

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19 CITI-NEWS LETTER

In Canada, the firms introduced their potential and strong points to potential partners.

Phong Phú’s representative said the corporation learned about the demand for textile and

garment products of this market via direct contacts with Canadian customers. Next, it will

set up production plans to achieve its goals in Canada.

Meanwhile, Hanosimex introduced its production meeting yarn rules of origin for two

products. It has met 12 companies and introduced to them 40 kinds of cotton towel and

knitwear.

Hanosimex has looked for more input material suppliers in Việt Nam or other member

countries of the CPTPP to diversify commodities and build a flexible production model to

meet demand from contracts of large volume with medium quality to contracts of small

volume with high quality products.

Besides of trade promotion activities held by Vinatex, Hòa Thọ Textile and Garment Joint

Stock Corporation has connected with 14 customers to introduce 15 samples of trousers

and suits made from Vietnamese, Thai and Indian materials.

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Uzbekistan reduces cotton production to 2.3 million tons

(Source: Abdul Kerimkhanov, Azer News, December 10, 2018)

As many as 2.3 million tons of cotton were produced in Uzbekistan in 2018, Uzbek media

reports.

According to the State Statistics Committee, country collected more than 2.9 million tons

of raw cotton in 2017.

"Indeed, severe drought, unexpected torrential rains and winds in spring, sultry heat and

water scarcity for summer irrigation Autumn rainfall, as well as various pests and plant

diseases, became a serious challenge for agricultural workers of the country, ” said the

President of Uzbekistan congatulating agriculture workers.

In general, for the year of hard work, agricultural products were produced for 58.19

trillion soums ($7 billion).

Traditionally, cotton is Uzbekistan’s most important cash crop. One of the policy

priorities of Uzbekistan, the world’s sixth-largest cotton producer, is further development

of its textile industry. Uzbekistan takes consistent steps to increase the volume of cotton

fiber processing.

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20 CITI-NEWS LETTER

In particular, it is planned to create 112 modern, high-tech industrial factories, expand,

modernize and technologically upgrade 20 operating capacities. All this will increase the

export potential of the industry up to $2.5 billion a year and create more than 25,000

jobs.

In the period 2010-2014, the textile industry of Uzbekistan received and spent foreign

investments worth $785 million while 147 new textile enterprises with participation of

investors from Germany, Switzerland, Japan, South Korea, the U.S., Turkey and other

countries were commissioned. Export potential of these enterprises amounted to $670

million.

Currently, Uzbekistan continues to attract foreign investments for the construction of

textile enterprises in Uzbekistan. In late August, another Polish company Polcotton

agreed to invest about $60 million in the construction of the textile complex in

Uzbekistan. The future factory is expected to have a capacity of 10,000 tons of finished

products per year and to generate as many as 1,200 new jobs.

Home

Saudi Arabia Introduces New Technical Regulations for Textile Products

(Source: SGS, December 10, 2018)

The Kingdom of Saudi Arabia’s new ‘Technical Regulations for Textile Products’ will be

implemented on February 23, 2019. The new regulations – 13.02.1439H – (24.8.2018) –

were published on August 24, 2018.

Issued by the Saudi Standards, Metrology and Quality Organization (SASO), the new

technical regulations for textile products define the basic requirements for textile

products and determine the assessment procedures a supplier must adhere to before

placing a textile product unto the market in Saudi Arabia. The new regulations look at

both consumer health and safety and environmental protection.

The regulations apply to:

• Products containing at least 80% by weight of textile fibers (e.g. curtains, furniture,

carpets, clothing, technical fabrics and textiles)

• Furniture, umbrellas and sunshade coverings containing at least 80% by weight of

textile components

• Textile components of:

• Upper layer of the multi-layered floor covering

• Mattress covers

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21 CITI-NEWS LETTER

• Coverings of camping equipment and goods, provided that the components constitute

at least 80% by weight of such upper layers or coverings

• Textiles incorporated in other products and forming an integral part thereof, including

footwear, bags and head-covers

The regulations define mandatory labeling requirements:

• Labeling on the product, packaging, and technical documents with marketing, must

conform with the technical requirements listed in the Technical Regulations and

relevant standard specifications

• Label must be legible, visible, clear and in a character set which is uniform regarding

its size, style and font. It must be written in Arabic or in Arabic and English, be

inerasable and easy to read for the consumer before the purchase, including when the

purchase is made through electronic means

• Label must be sewn or firmly attached to the product and should not be easy to

remove. It should be in a place commonly used in the textile industry

• Labels must be correct and affixed

• Labels shall not include any Quranic verses or the word of majesty and images and

words used on the packaging shall not violate public order, public morality and the

Islamic values prevailing in the Kingdom of Saudi Arabia

• Labeling must include:

o Fibre composition, described by the name listed in the regulation and allowed by mass

percentage, in accordance to the relevant standard specifications defied in Annex (4)

o Product weight, size or dimension

o Supplier name and commercial registration on the external packaging

o Country of origin

o Care instructions

The updated Technical Regulations also specify requirements to protect the

environment and the consumer from risks associated with color fastness and chemicals

used in textile products when they are in direct contact with or close to skin. The listed

chemical substances are classified as carcinogenic, mutagenic and reprotoxic (CMR),

very persistent and very bio-accumulative (vPvB), persistent, bio-accumulative and toxic

(PBT), as well as a broad set of substances including:

• Formaldehyde

• Phenols

• Heavy metals

• Hazardous dyes

• Flame retardants

• Pesticides, herbicides, fungicides

• Chlorinated organic compounds

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22 CITI-NEWS LETTER

• Phthalates

• Organotin compounds

To place an item on the market in the Kingdom of Saudi Arabia, the supplier must

obtain a certificate of conformity issued by a notified body according to one of the

following two categories:

• Type 3 – children’s products and underwear

• Type A1 – other textile products not including children’s products and underwear

The following technical documentations must be provided:

• Conformity declaration of the supplier (manufacturer / importer) in accordance with

Annex 12 of the Technical Regulations

•Product Safety Test Report regarding safety from hazardous chemicals

The regulations make it clear the supplier must cooperate with relevant Regulatory

Bodies and with Market Surveillance Authorities.

Products will be treated as meeting the requirements if they bear:

•Saudi Quality Mark or an equivalent

•Eco-Label or equivalent (granted by an Authority-approved body)

Stakeholders should be aware that products for medical purposes or with medical claims

are excluded from these Technical Regulations because they fall under the Saudi Food

and Drug Authority (SFDA) requirements and regulations.

Home

NRF: October sets new monthly import volume record

(Source: Home Textiles Today, December 10, 2018)

National Retail Federation’s latest Global Tracker finds imports at the nation’s major

retail container ports for the first time reached 2 million containers in a single month.

“President Trump has declared a temporary truce in the trade war, but these imports

came in before that announcement was made,” explained Jonathan Gold, NRF vice

president for supply chain and customs policy.

He added, “We hope that the temporary stand-down becomes permanent, but in the

meantime there has been a rush to bring merchandise in before existing tariffs go up or

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23 CITI-NEWS LETTER

new ones can be imposed. China’s abuses of trade policy need to be addressed, but tariffs

that drive up prices for American families and costs for U.S. businesses are not the

answer.”

U.S. ports covered by Global Port Tracker include: Los Angeles/Long Beach, Oakland,

Seattle and Tacoma on the West Coast; New York/New Jersey, Port of Virginia,

Charleston, Savannah, Port Everglades, Miami and Jacksonville on the East Coast; and

Houston on the Gulf Coast.

Together, they handled 2.04 million Twenty-Foot Equivalent Units (TEU) in October, the

latest month for which after-the-fact numbers are available. That was up 9% from

September and up 13.6% year-over-year.

A TEU is one 20-foot-long cargo container or its equivalent.

The October number was the highest for a single month since Global Port Tracker began

counting cargo in 2000. It topped the previous record of 1.9 million TEU set in July, which

in turn had beat a record of 1.83 million TEU set in August 2017.

November was estimated at 2.01 million TEU, a 14 % year-over-year increase that would

have been a new record if not for the October number. December – normally a slow month

with holiday merchandise already on the shelves – is forecast at 1.83 million TEU, up 6.1%

year-over year.

Those numbers would bring 2018 to a total of 21.8 million TEU, an increase of 6.5% over

last year’s record 20.5 million TEU.

Both year-over-year growth rates and total volume are expected to slow considerably in

January, when 10% tariffs on $200 billion worth of Chinese products that took effect in

September had been scheduled to increase to 25%.

January 2019 is forecast at 1.72 million TEU, down 2.1% from January 2018; February at

1.67 million TEU, down 1% year-over-year; March at 1.57 million TEU, up 1.7%, and April

at 1.7 million TEU, up 3.7%. “We see a significant slowdown in import growth in 2019 as

the market adjusts to higher prices due to the Trump tariffs and the impact on consumer

and industry confidence going forward,” said Ben Hackett of Hackett Associates, which

compiles Global Tracker for NRF. “We project that imports at our monitored ports will

have grown significantly in 2018 but that there will be no import growth in the first half

of 2019 compared with the same period in 2018.”

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