28th June 2021

Cotton and Yarn Futures Cotlook A Index - Cents/lb (Change ZCE - Daily Data MCX (Change from previous day) from previous day) (Change from 24-06-2021 96.20 (+1.25) previous day) June 2021 24570 (+290) 17-06-2020 77.05 Cotton 15800 (+75) Jul 2021 24630 (+160) 18-06-2019 98.85 Yarn 21930 (+20) Aug 2021 24860 (+160) PM calls for strengthening of ties between India and New York Cotton Futures (Cents/lb) Japan As on 28.06.2021 (Change from previous day) Many large e-comm firms have blatantly flouted laws of Jul 2021 86.25 (+0.22) land: Goyal Oct 2021 87.78 (+0.25) Commerce Ministry wants SEZ doors to be opened for Dec 2021 86.95 (+0.22) non-export manufacturing units

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------PM calls for strengthening of ties between India and Japan NATIONAL Many large e-comm firms have blatantly flouted laws of land: Goyal

Commerce Ministry wants SEZ doors to be opened for non-export manufacturing units

Covid-19: Govts must build comprehensive work from home policies, says Union labour secretary Apurva Chandra Stakeholder talks begin on India-UK trade pact

Govt panel for jute to meet on June 30, discuss reservation for packaging of commodities

Some states concerned about proposed ecommerce rules, fear negative impact on jobs, MSMEs

Indian economy showed signs of cooling in May before gaining momentum

India Inc can now claim deduction for Covid support Gujarat: Sowing sluggish as 10 dists record deficit rain

Top CEOs seek large fiscal stimulus or tax sops to jumpstart economy

Slow start to Kharif sowing; acreage of some pulses, soyabean high

Sustaining the nascent economic recovery

In covid’s shadow, India Inc. cut debt like never before

Women bear COVID’s Economic brunt

Kidswear in vogue

We need to get the engines of the economy started: Gautam Singhania

Madhya Pradesh: Starvation stares textile workers in the face, 20,000 Chanderi, Bagh, Maheshwari artisans in dire straits

------Australian cotton exports to China are plummeting

Export earnings hit $1b from jute, jute goods in last 11 months: Gazi

‘Export action plan needed to prepare for RCEP’ ------Govt to set merchandising export target at $43b for FY22 GLOBAL Textile exporters plan to shift industries to other countries Nike 'a Brand Of China And For China': CEO After Facing Boycott Call Over Uyghur Remarks

It’s time to talk about cotton

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NATIONAL:

PM calls for strengthening of ties between India and Japan

(Source: Millennium Post, June 28, 2021)

The Indo-Japanese friendship and partnership during the COVID-19 crisis is more relevant for global stability and prosperity, Prime Minister Narendra Modi said on Sunday and called for further strengthening of the ties between the two countries. The PM was speaking after virtually inaugurating a Japanese Zen garden and Kaizen Academy set up at the premises of the Ahmedabad Management Association (AMA) here. In his address via video conference, Modi said the opening of the Zen garden and the Kaizen Academy here "is a symbol of the spontaneity and modernity of relations between India and Japan".

"The current Prime Minister of Japan, Yoshihide Suga, is a very straight-forward person. PM Suga and I believe that during the time of this COVID-19 pandemic crisis, the Indo- Japanese friendship and our partnership has become even more relevant for global stability and prosperity. Today, when we are facing several global challenges, it is the need of the hour that our friendship and relationship get stronger day by day," Modi said. He said efforts like setting up of the Kaizen Academy are a beautiful reflection of this relationship. "We also have a strong belief in centuries-old cultural ties, and a common vision for future. Based on this, we have been continuously strengthening our special strategic and global partnership over the years. For this, we have also made a special arrangement of 'Japan Plus' (team of officials to promote greater Japanese investments in India) in the PMO (Prime Minister's Office)," he said.

'Zen-Kaizen' at the AMA seeks to showcase several elements of Japanese art, culture, landscape and architecture. It is a joint endeavour of the Japan Information and Study Centre at AMA and the Indo-Japan Friendship Association (IJFA), Gujarat, supported by the Hyogo International Association (HIA), Japan, a release earlier said. Modi said this occasion of the launch of the Zen garden and Kaizen Academy is a "symbol of the spontaneity and modernity of India-Japan relations". The PM said he is confident that this will further strengthen the relationship between India and Japan, bringing citizens of the two countries closer.

"I would like the Kaizen Academy to spread the work culture of Japan in India, and increase business interaction between the two countries. We also have to give new energy to the efforts already going on in this direction. I am sure our efforts will continue like this, and India and Japan will together reach new heights of development," he said. Talking about former Japanese prime minister Shinzo Abe, Modi said relations between the two countries gained a new impetus when Abe had visited Gujarat. He was very

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excited when the work of the (Mumbai-Ahmedabad) bullet train project started, the PM said. "Even today, when I talk to him, he remembers his Gujarat tour," he said. Modi also said India and Japan have been devoted to external progress and prosperity, as much as the importance given to internal peace and progress by the two countries. He said the Japanese Zen garden is "a beautiful expression of this quest for peace, this simplicity." Modi said the peace, ease and simplicity that the people of India have learnt through yoga and spirituality for centuries, they will see a glimpse of the same here. "What is 'Zen' in Japan is 'dhyan' (meditation) in India," he said.

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Many large e-comm firms have blatantly flouted laws of land: Goyal

(Source: Business Standard, June 27, 2021)

All ecommerce companies should follow the law of the land and do not use muscle or money power to hurt Indian interests, Commerce and Industry Minister Piyush Goyal said

All ecommerce companies should follow the law of the land and do not use muscle or money power to hurt Indian interests as many of these large online firms have come into India and "very" blatantly flouted the laws of the land, in more ways than one, Commerce and Industry Minister Piyush Goyal said on Saturday.

He said that many of the practices which these companies follow are against the interest of consumers and the government has recently come out with draft rules for e- commerce companies or marketplace models, which are applicable to all entities including Indian.

These rules are to protect consumer interest, he said at a webinar.

"The Indian market is big and we welcome all players to come and participate. But clearly we have to have them working within the rules and laws of the country. Unfortunately, many of these large e-commerce companies have come into India and very blatantly flouted the laws of the land, in more ways than one," the minister said.

"I have had several engagements with these large companies, particularly the American ones, I can see a little bit of arrogance of their being big and their ability to finance large amounts of money in the initial stages to try and capture the Indian market or larger part of the Indian market particularly certain products to the detriment of our mom and pop stores," he added.

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Goyal said that it was "very" unfair that just because they are large and have large pools of low cost capital, they should be allowed to get away with hurting domestic interests or domestic consumer interests.

"So, I think it will be good that all companies follow the law of the land and do not use muscle power or money power to try and hurt Indian interests," he said.

Recalling one of his comments made on an announcement of an ecommerce giant investing USD 1 billion in India, Goyal said that the company was doing that funding because they had incurred losses in the previous two years.

In January 2020, the minister stated that Jeff Bezos's firm Amazon was not doing a favour to the country by doing investments and questioned how the online retailing major could incur such big losses but for its predatory pricing.

They have to invest it because the company used that money to do predatory pricing, to probably subsidise some products and capture a larger share of the market to the detriment of small mom and pop stores, he said.

"...and when questions about it keep fobbing off, they keep delaying giving the information and when people complain to CCI (Competition Commission of India) , they immediately start forum shopping in the law courts of India.

"If these companies have nothing to hide and if they are doing honest business practices, why do they not respond to CCI?" he questioned.

The fact that they are trying to evade that probably only justifies that they are probably indulging in predatory pricing, they are trying to influence market behaviour, their algorithms are trying to influence consumer choice and these are not permitted in India, he said.

"So very clearly, their irregular practices are the cause of their discomfort, if any, they should have submitted to the requirements of the Indian law," Goyal said.

He also said that several countries like the US are working on anti-trust laws for e- commerce and the UK's competition and market authority has opened investigations into big tech mainly US forms, "now clearly the world is waking up to the realities of these large tech and big ecommerce companies".

"We in India have about 60 million mom and pop stores spread across the country...Today it may not look threatening. One can say how these companies would impact the villages, how will they reach out everywhere, but the strength of money power, technology and their ability to sustain for long period of time, does pose risks to nearly 100 million people

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who are engaged in one form or the other through the small retail stores across the country," the minister said.

When these large companies talk about providing a million jobs or giving support to maybe 100,000 Indian small manufacturers, "I think very conveniently (they) forget to also say what will be the job losses because of their influence," he said.

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Commerce Ministry wants SEZ doors to be opened for non-export manufacturing units

(Source: Amiti Sen, The Hindu Businessline, June 27, 2021)

Revenue Department examining implications of the proposal

The Commerce & Industry Ministry is trying to convince the Revenue Department to allow non-export manufacturing units that produce only for……………..

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Covid-19: Govts must build comprehensive work from home policies, says Union labour secretary Apurva Chandra

(Source: Financial Express, June 27, 2021)

Delivering his concluding speech before the Governing Body in Geneva, Chandra said many employers were exploring options of WFH and also as a long-term opportunity to supplement present work arrangements, with a view to mitigate the challenges of Covid- 19 pandemic.

In view of the Covid-19 pandemic, governments must seek to build comprehensive work from home (WFH) policies, Union labour secretary Apurva Chandra, who completed his tenure as Chair of the Governing Body of International Labour Organisation (ILO) on June 25, said.

Chandra handed over the Chair to ambassador Anna Jardfelt, Permanent Representative of Sweden to the United Nations Office in Geneva. India had assumed chairmanship of the governing body of ILO after a gap of 35 years for the period from October 2020 to June, 2021.

Delivering his concluding speech before the Governing Body in Geneva, Chandra said many employers were exploring options of WFH and also as a long-term opportunity to supplement present work arrangements, with a view to mitigate the challenges of Covid- 19 pandemic.

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“As member countries of ILO, committed to promoting rights at work, encouraging decent employment opportunities and enhancing social protection, governments in consultation with national workers’ and employers’ representatives must seek to build comprehensive WFH policies,” Chandra said.

The ILO has already devised international standards in form of Convention (177) and Recommendation (184) that regulates WFH in a comprehensive manner.

Through a draft model standing orders for services, manufacturing and mining sectors simultaneously issued on December 31 last year, the Indian labour ministry had proposed to formalise WFH facility for the services sector alone, but left the manufacturing and mining sectors outside the ambit of the concept for now. The draft is yet to be finalised.

Regarding the proliferation of gig and platform, which has been reshaping labour processes and transforming the future of work and associated rights of workers involved, Chandra emphasised the role of ILO in “devising flexible standards that support progressive realisation of rights of gig and platform workers in a phased manner.”

Chandra also suggested that the ILO may consider including some amount of flexibility in the conventions to suit the national circumstances of the member countries. “This will perhaps improve the number of ratifications by member countries,” he said.

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Stakeholder talks begin on India-UK trade pact

(Source: Kirtika Suneja, Economic Times, June 27, 2021)

The development comes a month after London announced its 14-week consultation with its industry until August 31 ahead of the formal trade negotiations. The ETP is a precursor to a full-fledged free trade agreement with the UK.

The development comes a month after London announced its 14-week consultation with its industry until August 31 ahead of the formal trade negotiations. The ETP is a precursor to a full-fledged free trade agreement with the UK. India has initiated stakeholdertalks on an Enhanced Trade Partnership (ETP) with the UK, with the commerce and industry ministry reaching out to businesses for suggestions on priority areas, sectoral thrusts and concerns the proposed would address. Stakeholders have until July 25 to send in their responses. The development comes a month after London announced its 14-week consultation with its industry until August 31 ahead of the formal trade negotiations. The ETP is a precursor to a full-fledged free trade agreement with the UK

“Stakeholders can give their comments on tariffs and market access issues in goods, rules of origin and certification issues, standards, intellectual property, geographic indications,

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government procurement, e-commerce, and trade and environment sustainable sustainability,” said an official.

The ETP aims at reduction or removal of tariffs on whisky and automotive products, and removal of barriers to trade in food and drink, services, and healthcare and medical devices sectors. “An FTA with the UK will allow us to explore futuristic opportunities in trade and investment…and enable greater access to Indian service providers,” the official said. The two sides had decided earlier this year to launch an ETP to develop a roadmap that would lead to a potential comprehensive FTA including considerations on an interim pact on a preferential basis. India's goods exports to the UK shrank 6.4% in FY21 at $8.2 billion.

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Govt panel for jute to meet on June 30, discuss reservation for packaging of commodities

(Source: Outlook India, June 27, 2021)

The standing advisory committee, under the aegis of the Union Textile Ministry, will meet on June 30 to examine, consider and recommend reservation for packaging of commodities in jute bags for the year 2021-22, industry sources said on Sunday.

There are apprehensions in some quarters about dilution in reservation by the central government, they said.

"It is widely believed that the government has retained 100 per cent reservation for packaging of food grains, and 20 per cent for sugar, in jute bags," one source said.

The Indian Jute Mills Association has written a letter to Chief Minister Mamata Banerjee, seeking her intervention to ensure that Bengal''s mills receive 100 per cent jute bag supply orders in 2021-22 for packing food grains and sugar.

Nearly three-fourths of raw jute is produced in West Bengal followed by Bihar and Assam.

Over 2.5 lakh workers are employed in 70 jute mills in the state, the sources said.

"Fifteen jute mills are closed because of last year''s raw jute scarcity and high price... This year''s situation might change. There is a bumper raw jute crop and all mills will start operating," the association said in the letter.

The SAC meeting will be held virtually and involve all stakeholders, including state governments.

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Some states concerned about proposed ecommerce rules, fear negative impact on jobs, MSMEs

(Source: Economic Times, June 27, 2021)

A large number of foreign and domestic investors and other business entities, who have either invested in various e-commerce platforms or are doing business with them, are also said to be wary of certain proposed rules, including on 'fall-back liability', flash sales, or deep discounting and data sharing.

Some states, mostly those ruled by non-BJP parties, are apprehensive about the new set of e-commerce rules proposed by the Union Consumer Affairs Ministry to check mis- selling and fraudulent discounts, as they fear there could be a negative impact on jobs and market access for MSMEs created by various digital platforms in recent years. These state governments plan to suggest strong safeguard measures in the proposed rules to ensure that any changes in the Consumer Protection (E-Commerce) Rules, 2020 do not hamper their economic growth NSE -1.15 % and revenue collections, officials from those states said.

However, it would be kept in mind that their suggestions do not come in way of the proposed rules enhancing the overall consumer protection framework, they asserted. Declining to be identified, these officials said it is a sensitive matter that needs to be tackled carefully as protecting consumers' interest is as important as safeguarding jobs, MSMEs and lakhs of self-employed individuals including artisans, weavers and those in agriculture and allied sectors who have been benefiting immensely from the growth of the e-commerce sector. The officials said formal suggestions on the draft rules would be made to the Centre, which has invited suggestions till July 6, would be made after deliberating all the issues and after consulting all stakeholders.

A large number of foreign and domestic investors and other business entities, who have either invested in various ecommerce platforms or are doing business with them, are also said to be wary of certain proposed rules, including on 'fall-back liability', flash sales, or deep discounting and data sharing. Their apprehensions include greater liabilities for online retailers for goods and services sold on their platforms, which could also impact the ability of e-commerce players to raise funds going forward and may prompt existing and prospective investors to put in place additional measures to safeguard their returns. Major e-commerce players such as Amazon and Walmart/Flipkart, as also some industry bodies, are also likely to submit their views on these proposals soon.

A senior official of a big non-BJP-ruled state said there is a view that the proposed rules can disturb the state's business ecosystem, especially with regard to MSMEs and small entrepreneurs and will also limit the choices for consumers, rather than safeguarding their interest.

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He pointed out that MSMEs contribute almost two-thirds of the annual revenues generated on just two major platforms - - Amazon and Flipkart -- and that itself runs into thousands of crores of rupees, while there is a big chain involved comprising of businesses, self-employed individuals, warehouses, farmers etc and these platforms have created lakhs of jobs in the recent years. Among various measures, the draft amendments propose banning of fraudulent flash sales and mis-selling of goods and services on e- commerce platforms. Ban on misleading users by manipulating search results, and appointment of chief compliance officer and resident grievance officer are some of the other amendments being proposed.

E-commerce entities are also required to provide information not later than 72 hours of the receipt of an order from a government agency for prevention, detection and investigation and prosecution of offences under any law, as per the proposed amendments. The Consumer Protection (E-Commerce) Rules, 2020 were first notified in July last year. Their violations attract penal action under the Consumer Protection Act, 2019. The government said that following the notification of the e-commerce rules, it has received several representations from aggrieved consumers, traders and associations "complaining against widespread cheating and unfair trade practices being observed in the e-commerce ecosystem."

Among the key amendments, the government has proposed a ban on mis-selling of goods and services offered on such platforms. Those engaging in 'cross-selling' will have to provide adequate disclosures to users displayed prominently. The government also seeks to ban 'flash sales' on e-commerce platforms "if such sales are organised by fraudulently intercepting the ordinary course of business using technological means with an intent to enable only a specified seller or group of sellers managed by such entity to sell goods or services on the platform." However, the ministry clarified, "Conventional e-commerce flash sales are not banned. Only specific flash sales or backto-back sales which limit customer choice, increase prices and prevent a level playing field are not allowed." "... Certain e-commerce entities are engaging in limiting consumer choice by indulging in 'back to back' or 'flash' sales wherein one seller selling on a platform does not carry any inventory or order fulfillment capability but merely places a 'flash or back-to-back' order with another seller controlled by platform," it said. Such sales will not be allowed as this prevents a level playing field and ultimately limits customer choice and increases prices, the ministry added. The proposed amendment defines 'flash sale' as that organised by an e-commerce entity at significantly reduced prices, high discounts or any other such promotional offers for a predetermined period of time. The government has also proposed 'fall-back liability' for every marketplace e-commerce entity to ensure that consumers are not adversely affected in the event where a seller fails to deliver goods or services due to negligent conduct by such seller.

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Indian economy showed signs of cooling in May before gaining momentum

(Source: Anirban Nag, Bloomberg, June 28, 2021)

A slew of data from services activity to automobile sales pointed to lack of demand last month, which in turn kept the needle on an overall activity indicator unchanged at 6.

India’s economy showed more signs of cooling in May, but the weakness is already beginning to dissipate of late as the nation exits lockdowns imposed to check the pandemic’s spread.

A slew of data from services activity to automobile sales pointed to lack of demand last month, which in turn kept the needle on an overall activity indicator unchanged at 6. The relatively strong score is because the gauge uses the three-month weighted average rates to smooth out volatility in the single-month readings.

With the second Covid-19 wave now receding, the economy is already beginning to stir back to life. A basket of high-frequency, alternative and market indicators such as retail activity and road congestion pointed to a pick up in the week to June 13, Abhishek Gupta, India economist at Bloomberg Economics, said in a report.

Here’s more India data worth tracking in the days ahead:

• Goods and services tax data released by the Finance Ministry around the first week of every month is a key indicator of consumption.

• Surveys of purchasing managers by IHS Markit, also out early next month, will offer an early glimpse of manufacturing and services activity

• Auto sales published by companies such as Maruti Suzuki India Ltd. and Hero MotoCorp Ltd. on the first day of every month serve as an indicator of demand

• Unemployment rate for May from research firm Centre for Monitoring Indian Economy Pvt. will also be out early next week, serving as a window on the labor market in the absence of real-time official data

Here are the details of the dashboard for May:

Business Activity

Activity in India’s dominant services sector contracted for the first time in eight months in May. The IHS Markit India Services Purchasing Managers’ Index slid to 46.4 last month from 54 in April, falling below the 50 level that divides contraction from expansion. Services sector accounts for more than half of the nation’s gross domestic product.

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A similar survey earlier showed activity in the manufacturing sector losing momentum all of which dragged the composite index to 48.1 in May from 55.4 the previous month.

Exports

Exports growth picked up at 69.4% year-on-year in May, aided by a favorable base and robust global demand. The performance was strong even sequentially, helped by shipments of petroleum products, engineering goods and chemicals. On the other hand, momentum for imports tapered, contracting from a month earlier, primarily on account of a sequential drop in demand for oil and gold.

Consumer Activity

Retail auto sales -- a bellwether of consumer demand -- fell by more than half in May from the previous month as local lockdowns kept dealerships shut. That together with falling consumer confidence and increasing job losses weighed on discretionary purchases.

Bank credit grew 6% in May from a year earlier, picking up from 5.7% expansion seen in end-April, central bank data showed. Liquidity conditions stayed comfortable, with the banking system in surplus.

Industrial Activity

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Industrial production expanded, jumping 134.4% in April from a year earlier, mainly because of a favorable base effect -- with activity last year coming to a halt owing to a nationwide lockdown to control the pandemic’s spread.

Similarly, output at infrastructure industries, which makes up 40% of the industrial production index, expanded 56.1% in April from a year ago. Both data are published with a one-month lag.

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India Inc can now claim deduction for Covid support

(Source: Deepshikha Sikarwar, Economic Times, June 27, 2021)

On Friday, the government exempted recipients from taxation for financial help received from employers or others to meet Covid-19 treatment expenditures from financial year 2019-20 onwards.

India Inc will be able to claim deduction on financial support provided to employees and their families for medical expenses or exgratia payments in the event of death due to Covid-19, a top government official said. “These can be claimed as a deduction,” the official said.

Experts, however, said a clear guideline on deduction may be needed to remove any ambiguity……………..

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Gujarat: Sowing sluggish as 10 dists record deficit rain

(Source: Gopal B Kateshiya, Indian Express, June 28, 2021)

Farmers have completed sowing in just 6.89 lakh hectare (lh) or around eight per cent of last three year’s annual sowing area of the state, latest data of the Directorate of Agriculture (DAG) of Gujarat shows.

SOWING OF Kharif crop has been sluggish this season as around one-third of the state’s 33 districts have recorded deficient rainfall, with Saurashtra running the largest arrears.

Farmers have completed sowing in just 6.89 lakh hectare (lh) or around eight percent of last three year’s annual sowing area of the state, latest data of the Directorate of Agriculture (DAG) of Gujarat shows. The 6.89 lh is almost half of 13.94 lh sowing recorded during corresponding period last year. Saurashtra, the region which comprises 11 districts of the state, is leading the chart with farmers having completed sowing in 4.97 lh. North Gujarat farmers have completed planting operations in 1.07 lh while their counterparts in

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central Gujarat and south Gujarat have done so in 42,300 hectare and 15,100 ha respectively.

Amreli in Saurashtra is the only district in the state which has reported sowing in more than one lh. Farmers in this district, which was hit by cyclone Tauktae, have completed sowing in 1.58 lh. It is followed by Morbi (88,500ha) and Rajkot (88,000 ha). Devbhumi Dwarka and Jamnagar have reported sowing in less than 1,000 ha each. Chhota Depur and Dahod in central Gujarat and the Dangs and Navsari in south Gujarat too have reported planting in less than 1,000 ha area each.

The sluggishness is apparently a result of the Amreli, Gir Somnath, Jamnagar, Porbandar, Junagadh and Rajkot districts in Saurashtra, Aravalli in north Gujarat, Chhota Udepur and Dahod in central Gujarat and Vyara in south Gujarat region having recorded less than normal rainfall between June 6 and June 27 this year, data of the Indian Meteorological Department (IMD) shows.

Of these 10 districts, Porbandar (-77%), Gir Somnath (-73%) and Junagadh (-66%) have large deficits (LD) while in the rest seven districts, the deficit is in the range of 59 per cent to 20 per cent. Anand, Kheda, Mehsana, Sabarkantha and Patan are the only districts which have recorded rainfall in large excess during the month of June. Ahmedabad and Surat too have received excess rainfall while the remaining 16 districts have experienced normal rainfall so far, the IMD data further shows.

Among the sowing done so far, cotton accounts for 3.52 lh or more than a half of the total sowing. The largest acreage, 2.83 lh, has been reported from Saurashtra even as sowing of this cash crop has not been reported from Devbhumi Dwarka district of the region so far. Amreli (92,100 ha) and Morbi (50,600 ha) are the leading districts.

Groundnut is the other crop which has been planted in 2.60 lh so far. Saurashtra has reported 2.32 lh of that with Amreli (59,800 ha) and Rajkot (52,600 ha) being the largest districts of this crop at this stage. Overall, cotton acreage stands at 13.79 per cent of the last three years’ average area and groundnut 15.35 per cent. Oilseed crops are reported to have been sown in 2.64 lh (10.28%), pulse crops in 4,558 ha (1.06 %), cereals in 10,876 ha (0.80%) and cash crops, including cotton, as well vegetables and fodder in 4.08 lh (9.76%), as per the DAG data.

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Top CEOs seek large fiscal stimulus or tax sops to jumpstart economy

(Source: Economic Times, June 27, 2021)

Eighty-two per cent of the 59 top corner-room occupants who voted in the ET poll see 5-10% GDP growth in FY22 while 56% said demand for their goods or services had been impacted adversely by pandemic’s second wave.

India’s top CEOs called for a large fiscal stimulus or tax incentives from the government, expressing concern about a modest economic recovery in the next two quarters though many see a swift recovery in their own sectors, a survey by ET showed…………..

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Slow start to Kharif sowing; acreage of some pulses, soyabean high

(Source: Financial Express, June 28, 2021)

Agriculture centres across 355 talukas have directed farmers to wait for a while to ensure adequate showers. They have been told to gradually start the sowing process from July first week.

Sowing of summer crops in the first three weeks of the season has remained below last year’s levels in most parts of the country, according to data gathered by FE from a few states, but these are still very early days to conclude that kharif area will be lower this time around.

While the southwest monsoon covered most of the country earlier than the normal schedule, causing sufficient precipitation to create a ground conducive for sowing, a stalling of the phenomenon on June 19 caused some problems for farmers in many areas.

While waterlogging occurred in a section of the area covered by monsoon, there was rainfall deficiency in some other parts.

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The agriculture ministry is yet to start releasing the weekly sowing update even as nearly four weeks have passed since the onset of monsoon rains in the country on June 3.

Among six major agricultural states of which FE gathered data, barring Madhya Pradesh, the other five – Maharashtra, Uttar Pradesh, Gujarat, Rajasthan and Haryana – reported sluggishness in sowing activities. However, areas under some pulses and oilseeds which are sown in high-plateau regions were higher than the year ago period as on June 25.

Usually, around 15-17% of kharif sowing gets competed in the first three weeks of the season.

The sowing area of soyabean in Madhya Pradesh, the largest producer state, has been 10 times more than last year’s level at 8.17 lakh hectares as of June 21. On the other hand, groundnut acreage in Gujarat, the biggest producing state, has seen a drop of 60% at 2,60,220 hectare, largely because monsoon rainfall has been 16% lower than normal in Saurashtra and Kutch regions.

Area under pulses in Madhya Pradesh, Rajasthan and Haryana were higher (106-833% on year) as on June 25. The acreage of arhar is significantly higher than the year-ago levels in Madhya Pradesh, Gujarat and Rajasthan. In Uttar Pradesh, the kharif acreage of paddy and urad is higher while there has been a drop in bajra, moong, arhar and soyabean.

Farmers in Maharashtra have completed sowing on 22.75 lakh hectares (16%) of the targeted area under cultivation for the current kharif season. The long-term average of kharif crops in the state including sugarcane is 151.33 lakh hectares and sowing has been completed 23.04 lakh hectare, or 15% of the long-term area. Last year, around the same time, the sown area in the state, including sugarcane, had touched 60.6 lakh (40%). Excluding sugarcane, the sown area in the previous year was 59.6 lakh hectares (42%).

Preparations are in full swing for the sowing operations with farmers working on nurseries of paddy and ragi crops. Slowing operations for crops including jowar, bajra, cotton, soybean, tur, moong and urad have commenced. Maharashtra received an average rainfall of 145.3 mm between June 1 to June 21 this month.

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Meanwhile, the Maharashtra agriculture department has issued an advisory, urging farmers not to rush for kharif sowing after a few spells of rain. Agriculture centres across 355 talukas have directed farmers to wait for a while to ensure adequate showers. They have been told to gradually start the sowing process from July first week.

The Maharashtra government has set higher production targets for the coming kharif season of 2021-22 by increasing the state’s sowing area to 157 lakh hectares (ha) from last season’s 140 lakh ha.

As the terms of trade for agriculture are expected to improve in FY22 following sharp rise in domestic and international prices of many agri commodities, it will have a strong positive effect on acreage, productivity and farmers’ realisations, Niti Aayog member Ramesh Chand said last month. There may be a shift in favour of pulses and oilseeds as their prices relative to other crops witnessed an increase, he said.

Besides higher agri commodities prices, the normal monsoon, as predicted by the weather bureau, will also have a strong positive effect on agriculture growth which is likely to be better than FY21, Chand said.

As per official data, the Indian economy contracted by 7.3%, the sharpest in record history, in FY21. But the agriculture and allied sector remained one of the brightest spots, with 3.6% growth in gross value added (GVA) in real term even on a relatively unfavourable base (the farm sector GVA grew as much as 4.3% in FY20).

During the same period last year, the sowing operations were completed in 30% of the normal area. July, the wettest of the four-month monsoon season (June-September), is the key period for sowing and about 85% of sowing gets completed in the first two months.

During 2020-21, total area sown under kharif crops was at 109.54 million hectares, as against 108.57 million hectares in 2019-20.

“All farmers wait for monsoon to take their sowing decision, even in most of the irrigated areas. For instance, Haryana and west UP are mostly irrigated, but many parts have not yet received monsoon rains. Though, rainfall is more than the long period average (LPA) by 34% in Haryana and 32% in west UP, the sowing operation is much lower than year- ago level,” said a government official.

During June 1-26, the all India rainfall was 20% above normal with 21 out of 36 meteorological sub divisions reporting ‘excess’ or ‘large excess’ precipitation and seven ‘normal’. When rainfall is more than 60%, 20-59% and between (-)19% and 19% of LPA, it is categorised as large excess, excess and normal, respectively.

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Sustaining the nascent economic recovery

(Source: RK Pattnaik, The Hindu Businessline, June 27, 2021)

Response to RBI’s liquidity stimulus has not been encouraging so far. It’s time for banks and private sector to push investments

India is 16 months into the Covid-19 pandemic. In this period, we have seen a colossal loss of human lives coupled with a huge contraction in output. The rate of real economic growth measured in terms of GDP at constant market prices (base year 2012) has revived in 2020-21 and entered into a positive territory in Q3 (0.4 per cent) and Q4 (1.6 per cent).

The second wave of Covid turned virulent, pointing to the urgent need to speed-up and scale-up vaccination to save lives and to support the recovery process. The OECD Economic Outlook (May 2021) for India has observed that the chronic underinvestment in public health infrastructure makes the situation calamitous.

The retail headline official inflation, however, measured in terms of consumer price index-combined (CPI-C) was 6.3 per cent in May 2021, thus crossing the upper band of the mandated inflation target of 6 per cent. This was primarily on account of fuel inflation which swelled to double digits (11.6 per cent). The core inflation (headline inflation minus food and fuel), which measures the persistence of inflation, was 6.6 per cent, the highest since May 2014, as per RBI estimates.

Data released by the Centre for Monitoring Indian Economy (CMIE) reveal that in May 2021, the unemployment rate was 11.9 per cent, which is higher than unemployment figures of around 8 per cent in April 2021. The number is also higher than that seen during the period June 2020 through March 2021, which was in the range of 6.5 per cent (for March 2021) and around 10.2 per cent (for June 2020). These are worrying trends.

We have seen unprecedented fiscal and monetary policy stimulus with the intention of reviving the economy. Fiscal stimulus was reflected in massive fiscal deficit and government debt relative to GDP. For instance, general government (Centre plus States) deficit is estimated at around 10.8 per cent of GDP in 2021-22 on the top of 14.3 per cent of GDP recorded in the previous year. As a result, the debt-to-GDP ratio crossed 90 per cent against the mandated level of 60 per cent for the general government. These figures are the highest levels since the institution of the Fiscal Responsibility and Budget Management (FRBM) Act 2003.

At this level of deficit and debt, there is hardly any space available for further fiscal stimulus with counter-cyclical deficit and debt though there has been a persistent clamour from many quarters, particularly from industry captains, for enhanced fiscal sops. If the fiscal policy is pushed further for more stimuli with higher borrowings, it will lead to higher debt levels, resulting in higher interest rates.

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Crowding out investment

Higher interest rates will result in crowding-out of private sector investments as interest rates becomes higher for the private sector. Alternatively, if the government takes recourse to money finance by printing money, an option offered by some, the potential inflation threat will loom large.

Already, inflation (both headline and core) as alluded to earlier, has been at a higher level. Any further increase in the inflation rate will be a threat to input cost and will jeopardise recovery.

Given the inadequate fiscal space, the contraction in economic activity due to the pandemic was addressed by front-loading the monetary policy with an accommodative stance and maintaining status quo in the policy repo rate. The monetary accommodation announced by the RBI during the period February 6, 2020 to March 31, 2021, was to the tune of ₹13,61,200 crore or 6.9 per cent GDP.

However, it is pertinent to mention that as per the RBI State of Economy review in the June Bulletin, the liquidity availed of was much lower, at ₹8,91361 crore or 4.5 per cent of GDP. Similarly, the monetary accommodation announced during fiscal 2021-22 so far (up to June 7) aggregated ₹3, 61,000 crore or 1.8 per cent of GDP.

However, the amount availed has been much lower at ₹98,355 crore or 0.5 per cent of GDP. In this context, it is of interest to note that the monetary policy accommodation has not been very encouraging except for net OMO purchases which imply purchasing government securities by the banks from the RBI in the open market. For example, as against the announcement of ₹1,50,000 crore, the net OMO purchase was ₹3,56,265 crore.

The market appetite for most of the unconventional monetary policy instruments such as Long Term Repo Operation (LTRO), Targeted Long Term Repo Operation (TLTRO) and the much acclaimed G-SAP has not been very reassuring. For example, up to June 4, as against the announced amount of ₹2 lakh crore for G-SAP (including regular OMO), the availed amount was only ₹97, 955 crore.

This development, seen in conjunction with the transmission of monetary policy, reveal that the reduction in the weighted average lending rate (WALR) is far lower than the policy repo rate (PRR) reduction. For example, the PRR was reduced by 250 basis points (bps) during the period February 2019 to May 2021 but the corresponding reduction in WALR was only 187 basis points (bps).

Furthermore, the non-food credit offtake has also been slower in the case of most of industries. On the financial year basis so far (April 2021), the growth rate of credit off- take by all industries has been - 0.8 per cent and services -1.5 per cent. Industry-wise

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break-up of credit off-take revealed that during the same period, infrastructure has been 0 per cent, textiles -0.9 per cent, all engineering 0.2 per cent and construction 2 per cent.

Given the lower availment of monetary accommodation and slower transmission of monetary policy from the reduction of policy repo rate to bank lending rate, coupled with the lack of appetitive for credit off-take, it is important to mention that the monetary stimulus provided by the RBI has not been encouraging.

There is an urgent need for a proactive role by banks and the private corporate sector to be partners in the growth process. In this context, banks should facilitate monetary policy transmission and also credit off-take. Private sector as a partner has a much greater role and responsibility to move the economy to a higher growth trajectory.

The government has already provided a substantial amount aggregating ₹14,40,730 crore under three Atma Nirbhar Bharat Abhiyan schemes announced by the Central government. This amount needs to be channelled and spent efficiently and effectively. Here the private sector has an important role to play.

It is well-recognised that at a global level that the Covid-19 pandemic is a once-in-a-life- time crisis and the global recovery, though nascent, is “no ordinary recovery” (in the words of the OECD). In India, all the stakeholders, the RBI, government, banks and above all the private sector will have to play a proactive role in pushing growth.

In this context, it is appropriate to quote the RBI’s review of the state of the economy, “A virtuous combination of public and private investment can ignite a shift towards investment and thereby a trajectory of sustained growth.” But of course, that is easier said than done.

The writer, a former central banker, is a faculty member at Bhavan’s SPJIMR.

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In covid’s shadow, India Inc. cut debt like never before

(Source: Harsha Jethmalani, Live Mint, June 28, 2021)

As covid forced firms to defer capex, they may have used funds set aside for expansion to retire debt, say analysts

For Indian companies battling the covid pandemic, fiscal 2021 was not all about cost rationalization; it was also about repairing their leveraged balance sheets. An analysis of the top 15 sectors, representing more than 1,000 publicly traded firms, by the research arm of State Bank of India (SBI), showed companies reduced debt of more than ₹1.7 trillion in FY21. For perspective, this amounted to a fifth of their debt at the end of FY20.

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Never before has India Inc. cut debt so drastically, market experts said, adding that leverage is now at a record low……………………

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Women bear COVID’s Economic brunt

(Source: Archana Datta, Daily Pioneer, June 28, 2021)

An exhaustive assistance package, in rural and urban areas, is urgently required to bridge the gender-poverty gap

The impact of the crises has never been gender-neutral, while in the Covid19 pandemic, men reportedly have a higher fatality rate, but, women and girls are especially hurt by its economic and social fallout," asserted the UNWomen in a report, titled 'From Insight to Action'. About 96 million people will be driven into extreme poverty by 2021, 47 million of whom are women and girls, further widening the gender-poverty gap, the report revealed.

Revised poverty forecasts by UN bodies estimate that worldwide around 435 million women and girls will be living on less than $1.90 a day, which includes 47 million specifically impoverished by the pandemic impact.

Women's over-whelming responsibilities of child-rearing, family care, and other obligations often deter them from opting for paid work, adversely affecting their prospects of earning during the prime working years, thus creating income insecurity in old age. No wonder that among those aged 55+, women make up the majority of those living in extreme poverty (53 per cent).

The 2021 projections in the face of higher job losses, shrinking work hours, and greater care burdens, pose a graver threat of shoving 38 million more women aged 55+ into extreme poverty, as compared to 34 million men. Further, extreme poverty among girls ( 0-14 years) and young women (15-24 years) will also rise by 43.7 per cent and 17.2 per cent, respectively.

In the wake of the pandemic, thus, the hard-earned gains in poverty reduction during the last few decades are going to be neutralised. Reducing the gender gap in poverty (25-34 years) also remains a far-off reality.

Turning attention to India, the number of women and girls in extreme poverty in 2020 was 87 million, which is projected to touch 100 million in 2021. India's gender poverty gap stands at 120 poor women vs 100 poor men in 2021, which is predicted to deteriorate further to 129 poor women per 100 poor men by 2030.

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An Action Aid Association's survey conducted in May-June 2020 found that 79.23 percent of women lost their jobs and over 51 percent of them were deprived of their rightful wages during the lockdown period. Women-owned small businesses, largely operated in consumer-facing sectors such as textiles, food processing, and handicrafts, faced a sharp demand shock, while in the informal sectors, men are being preferred more for re- employment with the reopening of the economy.

Azim Premji University, in a study titled 'State of Working India 2021: One Year of Covid- 19', observed that around 23 crore people have fallen below the national minimum wage poverty line, around 1.5 crore workers remained jobless by the end of 2020, and reported a rise in poverty. The report said that the calamity has unleashed 'a systemic and moral failure', affecting the 'women and the young workers most'.

Amidst such a grim scenario, the UN Women Executive Director, Phumzile Mlambo- Ngcuka, deplored that 'the increase in women's extreme poverty is a stark indictment of deep flaws existing in our societies and economies', and urged for putting in place a 'women-centric restorative policy action for pandemic recovery'.

India has so far rolled out three fiscal stimulus packages amounting to Rs 29.87 trillion since March 2020. Have these emergency measures taken into account the gendered impact of the crisis? While the recent announcement of free rations to 80 crore people till November is indeed welcome news, what really is required to lift the impoverished households from the grip of poverty, hunger, and myriad economic challenges, is an exhaustive assistance package, based on the real needs of women, rural and urban, be it for direct cash transfers or free rations or job creations.

(The writer is Former Director-General, Doordarshan and All India Radio.

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Kidswear in vogue

(Source: Sheena Sachdeva, Financial Express, June 28, 2021)

Share of kidswear in the online fashion market has risen

The kidswear category, which has hitherto been overshadowed by menswear and womenswear online, has witnessed substantial growth over the past year. According to a Unicommerce report, the share of the online kidswear segment in the overall online apparel market has increased from 3% in FY20 to 17% in FY21, with a 200% growth in order volume.

There has been a conspicuous shift in the type of kidswear being bought, too. E-commerce platforms such as Amazon Fashion, Myntra, Ajio and Flipkart Fashion have launched

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kidswear brand stores, and introduced new categories like toys and combos of apparel and footwear to tap into this demand.

Mini shopping spree

Amazon Fashion has seen an 80% rise in kidswear sales in FY21. Apart from cotton dresses, jumpsuits and dungarees, t-shirts and pyjamas, Saurabh Srivastava, director and head – Amazon Fashion India, says the infant wear (rompers and clothing sets) segment, too, has seen high demand, especially for multipack products. “Customers are open to spending an average of Rs 1,000 per purchase on kids’ apparel,” Srivastava notes.

Flipkart Fashion, too, has seen sales from its infant wear segment double in the past six months. “People are now dependent on e-commerce, especially for innerwear and sleepwear for babies. It continues to witness high demand from consumers across India,” says Nishit Garg, vice president, Flipkart Fashion.

Ajio, meanwhile, claims to have recorded a surge in first-time buyers during the pandemic. “Our company’s revenue has grown four times, and the kidswear category has seen a twofold increase,” says a spokesperson from Ajio. Currently, Ajio has around 60,000 kids apparel and footwear products, and plans to continue to focus on this category.

Myntra recently added brands such as House of Pataudi Kids, Jockey and Jack & Jones under its kids segment. “Overall, the kids category has seen high double-digit growth in the past year, and 40% growth in April-May 2021 alone,” says Ayyappan Rajagopal, chief business officer, Myntra. The online fashion retailer launched a toy store six months ago.

What the future holds

The consensus among marketplaces is that customers have not curtailed their spends on kidswear, despite the pandemic. However, while transactions in this category have gone up, the average basket size has remained the same, analysts say. “We might see a surge in order volumes but that won’t translate into GMV growth for the platform,” says Sanjeev Kumar, forecast analyst, Forrester.

As parents get more comfortable ordering online, the industry expects to see numerous kidswear-focussed D2C brands come up over the next few years. “It’s an unexplored territory with growth potential,” says Kapil Makhija, CEO, Unicommerce. Existing brands are also expected to expand their product portfolio and add categories such as kids furniture and toys, he adds. Flipkart recently partnered with Ace Turtle to bring brands Toys“R”Us and Babies“R”Us to its platform.

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The kidswear category saw an uptick of over 300% in order volumes from tier II and III cities, and 100% from tier I cities in 2020. “A lot of traction will be driven by smaller cities where brands have a limited presence,” says Kumar.

Although the pandemic has given an impetus to the kidswear category, its share in the overall online apparel market “may not go beyond 20%”, Kumar says. He attributes this to the resumption of physical retail by next year or so, and to the continuing reign of womenswear and menswear in the online fashion market. “Every category has limited legroom for growth. Also, spending for womenswear and menswear will always be higher,” Kumar adds. In FY21, the share of womenswear in the online apparel market was 50%, while that of menswear was 33%.

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We need to get the engines of the economy started: Gautam Singhania

(Source: Your Story, June 27, 2021)

Gautam Hari Singhania, Chairman and Managing Director of Raymond Group, says companies shouldn't lose sight of the bigger picture while coping with the pandemic.

Over two decades, Gautam Hari Singhania has steered the Raymond Group into new categories like FMCG, auto components, and engineering, whilst deepening its core textiles and apparels business. A year before the pandemic, the company launched Raymond Realty to foray into the real estate sector. In this interview with YourStory Media Founder Shradha Sharma, Singhania reflects on the challenging year that the group has faced.

Enterprise Story: In the grim backdrop of the COVID-19 pandemic, what would you tell young entrepreneurs and businesspeople in the country?

Gautam Singhania: We are specifically talking in light of the pandemic and what's going on. These are tough times. These are very, very tough times. And there are a few takeaways from this.

You've got to really reengineer business and look at it with a microscope, look at it very hard and say this is the way I can change my business because the survival instinct has to come into play.

The second most important thing is: have faith that this will pass. Whether it's in sport, business or life, don't lose hope. Because a positive attitude is the only thing that'll take you through.

So, these are the times that we are in—relook at what you're doing. Stay focused. And remember that famous saying: this too shall pass.

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When the pandemic began to spread in India last year, you told shareholders: “It is posing serious existential questions that needs thorough introspection, logical recalibration and prudent decisions.” What are the demands that the pandemic thrust on the Raymond Group?

Raymond is a 97-year-old group. If you go back to April and May last year, we had very little data. We didn't even know what could actually be a cure to the pandemic or the disease, much less have a vaccination. And we were looking at a very long pause.

But as I had said that time—and I continue to believe the same—that as soon as the pandemic is over or things start opening up, you will see a bounce-back. If you go back to my interviews last April and May, I said the minute it opens up, you'll find people taking a flight and going to Goa. So what if they can’t go to London? A person needs a break. He needs a break. It could be in Goa and he might not go to London.

That's exactly what happened. If you see tourist places or safari parks, it was all chock-a- block. It's unfortunate that the second wave has come, and we're seeing a temporary blip. My view is that between the first of June and the 15th of June, most of India should open up.

So, there is an optimism and I also believe that the bounce-back will be strong. We're cautiously optimistic, but I think we will come back.

One of the immediate measures the Raymond Group took was to make personal protective equipment (PPE) products and even personal hygiene products. What do you remember about the agility with which your company responded to the crisis?

When everything was closed, we looked at the need of the hour. We had our garmenting facilities, and PPE (personal protective equipment) masks were the need of the hour. And we made that. We also have an FMCG company with the ability to make hand-sanitisers, floor cleaners and so on. So, we quickly adapted to that.

Today’s world is all about that: how quickly you can adapt and move forward.

How did you pull off the cost reduction target of 33 percent?

It is just a mindset. If you have to survive, there's a survival instinct that kicks in. You then got to do what you've got to do. There were very hard and very painful decisions that had to be taken.

If you’re in the Arctic with only one bottle of water, which is exactly your cash flow for one month. You know you've got only one bottle of water. You've got

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to figure out how to melt the ice (and) what you're going to do. You've got to figure it out.

The Raymond Group has invested in omni-channel shopping or ‘phygital’. Post pandemic, is the group looking at going the Direct To Consumer (D2C) way?

We’ll continue to be in omni-channel. And as far as we are concerned, our product category is such that there's a lot of touch and feel to it. People want to touch the fabric, feel the fabric, drape the fabric, come with their family member. Typically, we have three people coming as a group to buy a fabric because the Indian consumer still needs a reassurance from his wife, daughter or son.

How does it look on him? He lacks the confidence to buy the product on the internet. It's unlike buying a soap or deodorant on the Internet, where you know which brand you use. That's a commodity.

Number two, in our business, shopping is an experience. Going to a Raymond shop is an experience. Going there with your wife. It's an outing. So all in all, I'm very optimistic that the shopping that we see per se will continue.

What are some of the innovations you think that the company has done, which has kept it agile?

Across businesses, it eventually comes down to the word ‘trust’. Trust comes from quality and excellence. That's what the brand stands for, and (it) is about product development. You stay on the forefront if you get the right product at the right value in the lifestyle and fabric space, which we are doing.

If you see today in our real estate space, which we entered 18 to 24 months ago, our project is doing exceedingly well. It’s probably the number one project in Thane, because eventually it’s the right product, right place, right price, right location. And that's what it's all about. And we've actually gone out of our way to design a top class product. And eventually, it's a top-class product that sells.

It's also about staying true to the basics of what people want.

We are the only brand in the world that goes through 6,000 times in price point under the same brand. We go from Rs 150 a metre to Rs 10 lakh a metre under the same brand.

Like we say, from the taxi driver to Mr Tata, everybody buys us and there's no other brand in the world that will instil that kind of confidence across such a socioeconomic strata of people.

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Toyota launches Lexus. There’s Four Seasons and Ritz. So, no brand actually runs through such a large group of people. That's really the power of the brand.

In that context, tell me how do you build an iconic brand?

The core of the brand is delivering quality consistently. You have to deliver. Like I always said, putting a brand on the map is like throwing a dart on the wall and seeing where it hits.

A brand actually gets established over a very long period of time. So if launch a brand, it could take between two and three years for somebody to try your brand. Then, the customer experiences it, then a repeat purchase, and recommends it to somebody. This process could be at least 10 years. It's very rare that you will get a brand that becomes a brand overnight.

I've seen a brand that came out with phenomenal advertising. I thought it was a super- looking brand, but they failed on the supply chain. And two weeks later, it was over. So, an iconic brand is normally built over a long period of time—Raymond has been here for 97 years. It’s seen the ups and it’s seen the downs. That’s what really makes it a brand.

When you look back at how you have consolidated and grown the Raymond Group, what are some of the things you have done right as a leader that has worked?

The single most important philosophy is to do the right thing. The right thing is never the easiest thing, but you have to do the right thing and be committed to what you believe in.

If you've committed to what you believe in and you do the right things, sometimes it's the harder route, but eventually you get there.

How do you look at overall stakeholder engagement and management?

It's a normal challenge. This week alone, I would have reached out to over 5,000 people in my trade. And it's really communicating with them, telling them what you're doing. Sometimes, there is miscommunication as to why the company is doing something.

So this week alone, I would have reached out to more than 5,000 people in the trade. I've been to 10 cities myself in the last one month and met customers, explained to them what we're doing, and why we are doing it.

Eventually, it's a partnership between your trade and yourself, your stakeholders and yourself. And they must believe in what you're doing.

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A brand is more than its product. A management guru once said 60 percent of the reasons people buy your product is the brand; 40 percent are other reasons, like what the brand is, ease of availability, trust in the company, etc.

What are some of the challenges you have faced as a business leader, and how did you face those things?

The biggest challenge everybody is in is the lockdown. And I’ll give you an anecdote. I was in a Zoom call with some people. There was a guy from China who said, “Hey man, I love this lockdown. I love this work from home. I can do it for the rest of my life.”

When it was my turn to speak, I said, “You know, I can't wait for the lockdown to get over and get back to living life because life is more than looking at an iPad screen and having a conversation with 10 people around the world.”

Yes, you can do different things. You can connect with different people, which you could never do before. But life is about experiences. I mean, if you don't go out and experience life, what do you talk about?

I gave a talk about six months ago, and I was so deprived from my experiences of the previous three months. I found it very difficult to talk to people about anything because I said I've just been looking at a screen and been in my office and worked from home.

The challenges of work from home are different. I think we need to get the engines of the economy started, and actually get out there and do things. When we do things, life will be back to normal.

What anchors you?

Everybody feels the challenge today. It is just about staying positive. I’ll give you an example. I speak to a lot of my friends and what are they doing at 7 o'clock? They open the bottle, and having a drink because there's nothing else to do. And one thing I've done is I've completely gone off drinks.

This is not the time to drink and make merry. This is the time to stay focused because alcohol actually makes you happy in the short term and then depresses you in the long term. It doesn't let you focus. And the one thing I need today to bring to the job every morning is focus.

So, maybe on a Saturday night, I'll have a couple of glasses of wine, but everybody need to relax. But I've gone the other way. Currently, stay focused, stay positive. That's the most important thing.

What do you thing we need to do as a country from here?

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First and the most important thing is: vaccinate, vaccinate, vaccinate!

The faster you vaccinate, the faster our dreams will get fulfilled. You just have to vaccinate, vaccinate and vaccinate.

If you look at a basic number, We have 1.3 billion people. You need 2.6 billion vaccines. Even if it's ten dollars a vaccine, that is $26 billion. But for $26 billion, if you vaccinate, you open up a $3.5 trillion economy.

Look at the numbers. It's a no-brainer. Some of the countries have got it so right that they are back to business as usual. Look at Dubai today. It's opening up again. It’s totally opened up and it's billions and billions and billions of dollars of tourism. Look at the US. They're back to normal and it's a $20 trillion dollar economy. What is the cost of vaccines to keep that engine going?.

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Madhya Pradesh: Starvation stares textile workers in the face, 20,000 Chanderi, Bagh, Maheshwari artisans in dire straits

(Source: Smita, Free Press Journal, June 28, 2021)

With a ban on exhibitions and with markets closed for long periods, their sales have dipped. The traders are not making fresh purchases as they are already burdened with unsold stocks

Around 20,000 artisans in Chanderi, Bagh and Maheshwar towns in the state are in dire straits. The two waves of the corona pandemic have chomped through their earnings.

Bhopal (Madhya Pradesh): Around 20,000 artisans in Chanderi, Bagh and Maheshwar towns in the state are in dire straits. The two waves of the corona pandemic have chomped through their earnings.

With a ban on exhibitions and with markets closed for long periods, their sales have dipped. The traders are not making fresh purchases for they are already burdened with unsold stocks. The government, too, has not extended any help to them. “When our supreme leader is asking us to become Atmanirbhar, how can we expect any help?” asks Allauddin Ansari, a master craftsman from Maheshwar.

‘Worker pool is drying out’

According to Vijay Koli, a Chanderi master craftsman, the municipal town is home to around 25,000 families, of which 12,000 are associated with the production of Chanderi apparel. Koli, who used to employ around 50 workers, now has just 15 left. While the

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demand has dipped to 5 per cent, the cost of raw materials has skyrocketed. The price of silk thread used in making Chanderi sarees has increased from Rs 3,500 to Rs 6,000 per kg. “The government has simply forgotten about us. Let alone helping us, the government agencies have stopped buying our stocks,” he says.

Hike in cotton fabric price

Umar Faruk Khatri, a Bagh master craftsman, says the pandemic has reduced their business by 60-80 per cent. He used to organise exclusive exhibitions of his products every year at Gauhar Mahal in Bhopal. But they have not been held for two years now. He says some of his workers have migrated to Rajasthan and Gujarat in search of work. “We’ve been able to sell a very small part of our production online. The rest is lying in the godowns,” he says. He also complains of a hike in raw material prices. “Cotton fabric now costs Rs 50 per metre, up from Rs 20 per metre before Covid-19 struck,” he says.

Cloth locked in godown

Another Bagh master craftsman, Mohammed Bilal Khatri, says he, alone, has lost business worth Rs 20 lakh. He used to sell his products at exhibitions in foreign countries, as well as in major cities in the country. But all that has now stopped. “I’ve taken a cash credit (CC) limit of Rs 25 lakh and I’m paying some amount to my workers so they can survive,” he says. Around 10,000 metres of cloth and 1,000 suits are locked in his godown. “Yes, shops have reopened, but where are the buyers?” he asks. Around 2,000 artisans in Bagh are dependent on this work for their livelihood.

All the artisans say that, in their times of distress, neither the Mignayanee chain of government-owned emporiums, nor the Laghu Udyog Nigam is coming forward to buy their products.

‘On the verge of starvation’

According to Ansari, Maheshwari products worth Rs 10 crore are lying unsold in the town. “What’s Rs 10 crore for the government? We only want them to buy our goods and make payments at the earliest possible opportunity,” he says. “But now, the workers are on the verge of starvation,” he says. Around 5,000 artisans in Maheshwar are associated with this work here. Most of them are doing odd jobs, such as selling vegetables and working as labourers due to the pandemic, says Ansari.

The artisans say that the government should lift the ban on exhibitions and do something to help the artisans. “They’re talented, self-respecting and hardworking people. They deserve help,” says Koli.

Nationally known centres

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Chanderi in Ashoknagar, Bagh in Dhar and Maheshwar in Khargone district are nationally known centres of production of traditional handloom textiles.

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GLOBAL

Australian cotton exports to China are plummeting

(Source: Global Times, June 27, 2021)

Increased domestic production, diversified imports make up the gap.

The quantity of Australian cotton that passed Chinese customs clearance remained low, while price quotation and purchasing remained sluggish for the commodity as Chinese businesses had become cautious about importing Australian cotton amid the two countries' fraught relations.

Experts said that Australian cotton is losing its once favored market status in China as demands soared for domestically produced cotton, particularly produced in Northwest China's Xinjiang Uygur Autonomous Region, which is of good quality.

In 2019 and 2020, the quantity of Australian cotton that passed customs clearance at major Chinese ports were low, and certain traders only had one to three containers of cotton to be sold, a report of Chinese cotton news portal cncotton.com said, citing port traders. The report said that most Chinese traders and middlemen were cautious about purchasing Australian cotton at present.

A manager surnamed Chen, of a cotton trading agency based in Qingdao, East China's Shandong Province, said that cotton imported from Australia has encountered problems with customs clearance in recent months and was at increased risk of being denied entry into China.

"Many [of our] clients are worried and don't want to order Australian cotton any more, their motivation in enquiring for the price of Australian cotton has been very low," he told the Global Times.

Data calculated by the China Cotton Association showed that the China's cotton import from Australia has been edging down since 2019, but the drop has intensified since 2020. Last year, China imported 40,170 tons of cotton from Australia in 2020, down 68 percent from 2019.

The association's statistics showed that cotton imports from Australia have continued to slump this year. In the first four months this year, China imported 12,706 tons of cotton from Australia, down 68.4 percent on a yearly basis.

China was the top destination for Australian cotton from September 2020 to March 2021, accounting at 36.5 percent of its total cotton exports. During the same period, the US

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accounted for 47 percent of China's total cotton imports, followed by 28.8 percent from Brazil and 13.1 percent from India. Australia only ranked the fourth at 2.7 percent.

The drop in China's imports of Australian cotton came amid increasingly fraying relations between the two nations. In 2020, China's imports from Australia decreased 4.6 percent on a yearly basis to 796 billion yuan ($123 billion), a Chinese customs spokesperson said in January.

Jiao Shanwei, editor-in-chief of cngrain.com, a website specializing in grain news, said that the cooling diplomatic relations has primarily caused the slumping exports of Australian cotton to China.

"Importers should be worried that China may impose anti-dumping and anti-subsidy duties on Australia cotton similar to barley, and shun the commodity's trade to prevent potential risks," he told the Global Times on Thursday.

Some Australian media have reported that there is speculation that a hefty punitive tariff might be slapped on Australian cotton.

Chinese experts said that Australia is "eating its own medicine" for losing market share in China, not only as a result of the country's growing hostility toward China in policymaking, but also because its products have lost edge in terms of price or quality.

Wang Zhankui, a senior industry analyst, told the Global Times that China's cotton has gained a reputation for being of high-quality, and can replace Australian imports.

"Previously, Australia's cotton had some edge, but with the rising quality of domestic cotton produced in Xinjiang and elsewhere, Australian cotton's advantages are lost," he said.

He added that another reason why high-yield domestic cotton is well placed to supplant Australian cotton.

Currently, domestic cotton produced in Xinjiang accounted for about 90 percent of China's cotton consumption, while the Australian cotton plantations are only around five million mu (333,000 hectares), which is even smaller than the cotton production field of Aksu Prefecture in Xinjiang, experts said.

Huang Tingyu, vice president of Chinese textile company Grace, told Global Times that they only use domestically produced cotton for knitting and had never used Australian cotton.

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"When we began to build cotton processing base, we had compared the features and quality of cottons from US, Pakistan and India, and finally we settled on Xinjiang cotton," said Huang. "The cotton from Australia didn't appear on our candidates list."

According to the experts, China's annual production of cotton is about 6 million tons a year, but the country's annual consumption of cotton has hovered at about 8 million tons, which means that China needs to sustain that amount of imports every year to meet the demand. However, there are multiple alternatives to replace cotton imported from Australia.

"As China is a major grower of cotton, changes in imports wouldn't affect the country's cotton consumption and supply much. If cotton imports from Australia plummet, we can increase cotton growing area in the country or import it from other destinations like Brazil or the Black Sea countries," Jiao said.

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Export earnings hit $1b from jute, jute goods in last 11 months: Gazi

(Source: The Daily Star, June 27, 2021)

BJMC jute mills to be resumed soon under private management, he says

Textiles and Jute Minister Golam Dastagir Gazi today said Bangladesh has earned $1062.54 million by exporting jute and jute products in the last 11 months since July last year.

"This export earning is 33.23 per cent higher than the same period last year and 2.57 per cent more than the target," the minister said, adding that jute is the second-largest export trade of Bangladesh.

He was speaking at the signing ceremony of the 'Integrity Award, 2020-21' and Annual Performance Agreement for the next financial year, 2021-22 for the departments or agencies under the ministry.

The minister also said the closed mills of Bangladesh Jute Mill Corporation (BJMC) will be resumed under private management based on lease soon.

The workers who lost jobs for the closure of the mills will get job opportunities on a priority basis when the mills would be re-launched, he said.

"At the same time, these will create new employment opportunities for the skilled workers. All workers must be rehabilitated in phases," Gazi said.

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Mentioning the jute as one of the most important sectors of Bangladesh's economy, the minister said the government is working to ensure the best use of this jute as Bangladesh traditionally produces the best quality jute in the world.

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‘Export action plan needed to prepare for RCEP’

(Source: Louella Desiderio, Philstar, June 28, 2021)

The government needs to undertake a massive development program for the export industry in preparation for the implementation of the Regional Comprehensive Economic Partnership (RCEP) so the country does not lose out to competitors.

Foreign Buyers Association of the Philippines president Robert Young, who also serves as Philippine Exporters Confederation Inc. trustee for the textile sector, said in an email the government, with the private sector, should draw up an action plan to develop the industry as the country is not ready to compete and take advantage of opportunities the RCEP would open for members.

“We have to do a massive program for the development of the export industry whether it is mango, whether garments, whether hard goods, handicraft or car parts…In my mind, I always compare it to joining a basketball tournament and you are not ready with your players,” he said.

Signed by the Association of Southeast Asian Nations (ASEAN) members such as the Philippines, Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Singapore, Thailand and Vietnam, and trade partners Australia, China, Japan, South Korea, and New Zealand in November last year, the RCEP is the world’s largest free trade deal accounting for about 30 percent of the global gross domestic product and population.

The deal goes beyond trade in goods, services, investment, economic and technical cooperation, as it also covers electronic commerce, intellectual property, government procurement and competition.

The RCEP is being promoted by the Department of Trade and Industry (DTI) as a deal that would benefit the country through improved market access for auto parts, electronics, aerospace, chemicals, construction, garments, furniture, agriculture products, and information technology - business process management.

For the garments sector, Young said it would be hard to compete as the country’s exports are costlier than those produced by competitors, with local manufacturers having to procure textiles overseas.

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“How can we compete when they are actually our competitors? How can we sell them jeans which are actually $2 more than what they price?” he said.

The DTI also sees the RCEP as a deal that would help the country attract investments from non-member countries looking to set up manufacturing operations to sell products to RCEP members.

Young said compared to our ASEAN neighbors however, the country is not competitive given higher labor, electricity and power costs.

To prepare the export industry, he said the action plan should identify steps and priority tasks with deadlines, identified resources, complete with monitoring and evaluation.

He also suggested the grant of subsidies to address the high cost of doing business.

He said a massive information drive regarding the trade deal should be undertaken, as well as training programs to address skills gaps and workshops on the latest modern machinery, state of the art equipment, production processes and on the latest trends on technical materials.

RCEP would enter into effect 60 days after being ratified by at least six ASEAN countries and three non-ASEAN members.

Countries that have deposited their instruments for the ratification of the RCEP to the ASEAN Secretariat are Singapore, China and Japan.

Trade assistant secretary Allan Gepty earlier said the Philippines aims to complete the ratification process for the RCEP within the year.

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Govt to set merchandising export target at $43b for FY22

(Source: New Age, June 27, 2021)

The government is considering a target of $43 billion for the country’s merchandising export with 11 per cent year-on-year growth for the upcoming financial year 2021-22.

Although the export earnings target drafted by the commerce ministry is $2 billion higher than the target of $41 billion for FY21, the amount is $2.5 billion lower than the target for FY20.

According to sources, the Export Promotion Bureau sent a draft to the commerce ministry proposing a $43-billion export earnings target for goods for FY22.

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The export earnings target for readymade garment products is likely to be set at $34 billion with a 10-per cent growth from the performance in FY21, sources said.

The commerce ministry on June 22 held a stakeholder consultation to fix the export earnings targets for FY22.

The ministry officials said that they had prepared a primary draft of the export target for the next fiscal and it might be announced in the first week of July.

They said that the proposed target had been set considering the ongoing Covid situation and the trend of the global economy.

According to sources, the Export Promotion Bureau sent a draft to the commerce ministry proposing a $43-billion export earnings target for goods for FY22.

The export earnings target for readymade garment products is likely to be set at $34 billion with a 10-per cent growth from the performance in FY21, sources said.

The commerce ministry on June 22 held a stakeholder consultation to fix the export earnings targets for FY22.

The ministry officials said that they had prepared a primary draft of the export target for the next fiscal and it might be announced in the first week of July.

They said that the proposed target had been set considering the ongoing Covid situation and the trend of the global economy.

Bangladesh Knitwear Manufacturers and Exporters Association director Fazle Ehsan Shamim said that they proposed 15 per cent growth from knitwear export in the next fiscal as demand for the item had started to increase in Europe.

He said that the economies of Europe and the United States had started to recover and the export orders would increase in the coming months.

The government had set the export earnings target for goods at $41 billion with a 21.76- per cent growth for the financial year 2020-21 after the dismal performance of exports due to the coronavirus outbreak in FY2019-20.

Against the target, export earnings in July-May of FY21 stood at $35.18 billion with 13.64 per cent growth.

The commerce ministry estimated that export earnings in the financial year would stand at $38.39 billion with a 14.04-per cent growth.

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Textile exporters plan to shift industries to other countries

(Source: Usman Hanif, Tribune, June 27, 2021)

Form committee for due diligence in wake of gas crises

Perturbed from gas load-shedding, textile exporters have threatened to move their industries to other countries.

In a statement issued on Saturday, Pakistan Apparel Forum (PAF) Chairman Jawed Bilwani said that textile exporters have formed a committee for due diligence to shift industries in the wake of gas crises and unviable business environment.

During a meeting of prominent textile exporters of Pakistan, it was mentioned that since last 15 days (from June 11 2021) there was zero gas pressure, which has crippled industries and halted export production.

“During fiscal year 2020-21, some 99 days out of 320 working days, gas pressure was zero or low,” he added.

Furthermore, textile exporters having RLNG connections and paying the amounts with great difficulty, to meet export orders at a rate of Rs1,533 per mmbtu, are not provided gas.

The exporters questioned how industries would work without the basic raw material. They voiced concerns that there is no chance that the textile export industries will get the required gas smoothly with adequate pressure in future.

Textile industry is one of the leading export industries of Pakistan, said a textile sector research analyst. Exports clocked-in at $13.8 billion in the first 11 months of the outgoing fiscal year 2020-21 alone.

“This is more than twice the International Monetary Fund (IMF) facility of $6 billion,” the analyst said, adding that depriving the industry of gas will hurt exports of the country.

Similarly, non-export industries are also not getting gas as per their requirement. These industries also play a vital role in the manufacturing of value-added products for export industries, and also produce products for meeting local demand, said North Karachi Association of Trade and Industry (NKATI) President Faisal Moiz Khan.

“Therefore, non-export industries are as important as export industries and they should be ignored,” he maintained.

Bilwani added that amid the continuous gas crisis in the country, especially in Karachi, and given contradictory moves by the government towards its business policies by depriving the exporters of a level-playing field and viable business environment, the

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textile exporters have constituted a committee for due diligence to shift textile export industries elsewhere, on the exporters demand, to correspond and negotiate with those countries which have much better business and export-friendly policies and are offering most attractive incentives to their foreign investors as well as their local industries.

Khan urged Prime Minister Imran Khan to restore Karachi’s industries and save them from destruction so that production activities can resume as usual and workers can be saved from becoming unemployed.

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Nike 'a Brand Of China And For China': CEO After Facing Boycott Call Over Uyghur Remarks

(Source: Bhavya Sukheja, Republic World, June 27, 2021)

Nike CEO John Donahoe recently called Nike a “brand of China and for China” after facing backlash over remarks on Uyghur forced labour.

Nike CEO John Donahoe recently made a robust defence of the firm’s business in China after facing a consumer boycott there. According to ANI, Donahoe called Nike a “brand of China and for China” in response to a question about competition from Chinese brands. He even went on to explain that Nike had a long-term view of its operations in China, where it had been operating for about four decades.

Donahoe said, “We are the largest sports brand there, and we are a brand of China and for China”. He went on to add, “And the biggest asset we have in China is the consumer equity. Consumers feel a strong, deep connection to the Nike, Jordan and Converse brands in China. And it’s real”.

Xinjiang dispute

Donahoe’s comments come amid a time when Nike has come under fire in China for a comment it made raising concerns about forced labour practices in the Xinjiang Uyghur Autonomous Region (XUAR). Back then, the brand had reassured customers that it does not source textiles or products from the region, like cotton. After the US and other Western countries responded to the forced labour allegations with sanctions, Nike’s statement was again resurfaced and resulted in calls among Chinese consumers to boycott the brand.

The Chinese Communist Party (CCP) also released a statement over the matter slamming foreign brands for “cutting ties” with Xinjiang cotton. The Chinese government characterised companies’ decision to avoid using cotton sourced from the region as an effort to undermine its economy. It even denied allegations of forced labour and other claims of human rights abuses in the area, which is home to about 11 million Uyghurs, a

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predominantly Muslim ethnic minority that speak a language closely related to Turkish and have their own distinct culture.

The rights groups, on the other hand, accused Beijing of forcibly sterilising women and imposing forced labour. The European Union, Britain, Canada and the United States have sanctioned several members of Xinjiang’s political and economic hierarchy in coordinated action over the allegations. The US State Department estimates that since 2017, up to two million Uyghurs, Kazakhs and other ethnic minorities could have passed through the camp system, which China calls vocational training centres designed to fight extremism. Reports by Western media have also revealed that Chinese authorities were deliberately sending Uyghur woman of childbearing age into forced abortions, intrauterine injections and sterilisation in the region.

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It’s time to talk about cotton

(Source: Mostafiz Uddin, The Daily Star, June 28, 2021)

Cotton is the lifeblood of the Bangladesh RMG industry, with our country among the world's four largest users of this miracle fibre. The other three are China, India and Pakistan, the latter two of which also have large home textile markets.

In Bangladesh, cotton is the main feedstock of the garment export industry. Despite the slowdown caused by the global pandemic, the latest statistics from the US show that Bangladesh has increased its cotton import forecast for marketing year (MY) 2021/22 to 7.6 million bales as a result of higher demand for locally spun yarn.

The domestic consumption of cotton in MY 2021/22 is forecasted at 7.9 million bales, which is approximately the same consumption levels of MY 2020/21, due to sustained demand for yarn, fabric, apparel, and garments as the world economy slowly recovers from the pandemic.

I believe it's time for Bangladesh to make better use of this precious resource while also giving greater consideration to the opportunities afforded by recycled cotton. We take cotton for granted at our peril given our huge dependence on it as a raw material. Did you know, for instance, that in 2020 Bangladesh became the largest denim exporter to the US last year, giving our country a market share in the US of around 20 percent. Bangladesh is also the leading denim exporter to the European Union, and all of these denim products are made, of course, with cotton.

The first issue to consider here is cotton waste. It was reported recently that in 2019, Bangladesh produced approximately 577,000 tonnes of waste just from the RMG and

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fabrics mills of which almost half (250 thousand tonnes) was 100 percent pure cotton waste.

This subject was recently discussed at a meeting led by the BGMEA, which is now looking seriously at the issue of recycling due to growing demand for recycled garments from fashion brands and retailers.

Last year, more than 50 brands, manufacturers and textile recyclers signed up to a programme which aims to grow the textile recycling industry in Bangladesh by capturing and directing post-production cotton waste back into the production of new fashion products. The work is also looking to boost circular commercial collaborations between textile and garment manufacturers, recyclers and fashion brands operating in Bangladesh.

I have been banging the drum for textile recycling for many years. On my travels, I have seen more and more sophisticated recycling technologies are now entering the market and, as one of the world's leading cotton users, it is vital that Bangladesh is at the forefront of the next generation of cotton recycling. Bangladesh has an advantage here with our focus on cotton fibres—also known as cellulosic fibres—which are traditionally easier to recycle than synthetic garments.

The other issue is that our customers, brands and retailers, are now calling for recycled cotton in their collections. Virtually every major fashion brand has a recycled collection these days. Thus, as well as reducing waste, embracing cotton recycling solutions represent another opportunity for Bangladeshi suppliers to meet the future requirements of brands.

Just recently, for example, Primark introduced a new sustainable loungewear collection in an effort to source more recycled materials. The new collection has been certified by circular fashion business Recover (which is one of the partners in the circular partnership mentioned above). Primark has created an eight-piece collection partially made from recycled cotton, with each item made from between 15 percent and 25 percent recycled cotton. It is surely not beyond the skills of our RMG factories to cater for this need for recycled items—which often retail at a premium.

The other issue to consider around cotton is long-term. A recent study found that the current six highest cotton-producing countries—India, USA, China, Brazil, Pakistan and Turkey—will likely be exposed to increased climate risk, particularly from wildfire, drought and extreme rainfall in the next 20 years.

In fact, experts reckon that 40 percent of global cotton growing regions are projected to experience a decrease in growing season as temperatures increase beyond the optimum temperature range for cotton growing. Water scarcity and extremes in rainfall, from

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insufficient in some regions to extreme and more intense in others, will present increased risk for the world's most productive cotton growing regions, the study claims.

Consider what this might mean for Bangladesh and its supply of raw cotton. The report above is based on forecasts up until 2040—a sobering thought indeed for our industry, which is so heavily dependent on cotton.

Bangladesh RMG exports are forecast to grow in the next few years. That is certainly the aim as far as public policy is concerned as more exports equal increased job creation and rising wealth. But it will be a major logistical challenge for our production and output to continue increasing while there is growing pressure on our key raw material. Also consider that, at the current time, we are seeing high and rising prices for cotton, for a variety of reasons, one of them being that many brands no longer want to use cotton from Xinjiang, China, in their collections. Supply is being squeezed globally and this is causing prices to rise. With all the above in mind, I believe we need to give more consideration than ever to how we manage this raw material and seriously look to take a lead in cotton recycling and related technologies in coming years.

There is no time—or cotton—to waste.

Mostafiz Uddin is the Managing Director of Denim Expert Limited. He is also the Founder and CEO of Bangladesh Apparel Exchange (BAE) and Bangladesh Denim Expo.

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