Category Archives: Editorials

The Global Village is Breaking Up

GDJASUJA

The liberalization, privatization and globalization (LPG), as we know today, was the brainchild of some of the most developed countries aimed at tremendously enhancing their market reach. The advancements in technology as a result of extensive research and development helped them to invent novel new products and services that could have huge potential globally. So, the idea of free market was floated in a way that would sound as a path towards prosperity for most countries around the world – a win-win for all. The market restrictions prevented them to scale up their businesses beyond their borders but slowly, other countries started easing up in the hope of selling their own products also to the developed world at lucrative prices.

Our Core Mentality Of ‘Chalta Hai’ Continues In Digital India

GDJASUJA

The Hindi word ‘Jugad’ perhaps got international acceptance when it came to be recognized that Indians had got this unique ability to manage almost all kinds of tricky situations and problems by finding ways and means – fair, not-so-fair, fairly unfair, un/conventional, funny, and at times even foolish. Mostly, we have taken this in a good sense and as a compliment to the problem solving skills of Indians in all kind of adversities. We even feel proud of it when any foreign expert describes it as one of the known characteristics of most Indians, in general.

The Complex World of Intellectual Property Rights

GDJASUJA

We quite often come across the term ‘Intellectual Property Right or IPR’ when reading some article about the liberal trade practices being followed by developing countries including China and India when it comes to protecting the rights of the IP holders. These articles written by foreign trade experts specifically warn technically advanced companies mostly in the US and the EU to take the necessary steps to protect their IPRs when considering doing business with countries like China, India and others. China has the presence of world’s most advanced companies in almost all the sectors where IPRs are supposed to be the key elements of the countless goods being made in factories located in China. For example, Apple’s iPhone to Nike’s apparel or footwear. This has also resulted in the maximum abuse of IPRs in China. There are people in China who can copy any design or product and sell you at a much cheaper rate.

No “wait and see” approach, please!

GDJASUJA

We are living in what is being termed as “The Age of Disruption.” Fast changes are taking place on various fronts – the technogical, social (labour), political as well as climatic etc. The disruption leads to uncertainties, dislocation, anxieties, disparities. It affects the way we live and conduct our business. A new World Order is taking shape which, at the first glance, appears to be a disorder. Whether this disorder will become the new World Order, or we are destined to a better World Order, is nearly impossible to predict at the moment.

The Global Village Stares at the First World Trade War

GDJASUJA

The US trade policy under the Trump Administration has become the hottest topic of discussion in the global business world. Industry leaders in the textile and clothing sector everywhere are busy in evaluating the possible impact of the US-China trade war which involves imposition of tariffs on each other’s imports. The US has released a list of 1300 products from China that will attract tariffs as high as 25 percent. Imports of apparel, footwear, and travel goods from China have been spared from any tariffs but the list includes items of machinery for: textile printing, carding, spinning, weaving, knitting, embroidery and sewing machines—and many of the parts that go into operating those machines. Imports of these machines from China would attract tariffs of 25 percent.

Let’s Have the New ’10-Page’ Textile Policy

GDJASUJA

There appears to be a race among various states in the country for attracting new investments in various sectors including textile and clothing. Textile and clothing because these sectors are quite labour intensive and the country has a good track record of productive functioning of SMEs in these sectors. In this respect, the intensity with which the Gujarat Model of arranging Vibrant Gujarat type events can be seen in almost every state from Chhattisgarh to Karnataka. The number of MoUs and their total project cost are the main indicators of the success of these events. The first and foremost step being taken by states is to announce a new policy document for the industry.

The Future, as usual, is Bright. But…..

GDJASUJA

Let’s examine the 2018-19 Union-Budget’s key points alongside the industry’s plight:

  1. The proposal to provide an outlay of Rs. 7148 crore for the textile sector in 2018-19. The industry feels that a large part of the increase in allocation will go to the state-owned Cotton Corporation of India (CCI) for ensuring the enhanced minimum support price (MSP) operations and hence, won’t be of much help to the industry.
  2. The proposal to increase the allocation for Remission of State Levies (ROSL) – scheme came into effect on Sept 20, 2016 – from Rs 1,855 crore in 2017-18 to Rs 2,163.85 crore. The industry leaders claim that the actual requirement of the RoSL funds for the apparel sector till March 31, 2018 is Rs 5,000 crore. On an average it is estimated to be about 3.5% of the FOB value of garments. The total RoSL amount allocated is not sufficient to cover the huge backlog even for the year 2017. Its high time the government realizes that the delay on its part to clear the long pending RoSL benefits, IGST refunds and other dues is causing businesses to suffer.
  3. The import duty on the pure silk has been increased from 10 per cent to 20 per cent to benefit the local pure silk industry people by protecting them from cheap imports from China. Silk apparel exporters are unhappy as they depend on cheap imports of raw material. Small silk producers happy with the support. Nothing can be done.
  4. The corporate tax on MSME (Micro, Small and Medium Enterprises) sector has been reduced from 30% to 25% for companies with a turnover of up to Rs 250 crore. Most units come under this turnover limit. A welcome step without any doubt.
  5. The Budget has a proposal to amend the Employee Provident Fund (EPF) scheme to reduce women employees’ contribution from 12% to 8% for the first three years of their employment. Just an illusion. Taking home more money is not getting more.
  6. The allocation for the Amended Technology Upgradation Fund Scheme (ATUFS) has been increased from Rs. 1956 crores to Rs. 2300 crores. The industry hopes this would mean that companies will get their arrears faster. Nothing more!
  7. The Budget proposes a reduction in the minimum employment period from 240 days to 150 days – for the new employees – necessary for the employers to claim the 30% deduction in Income Tax on emoluments paid to such eligible new employees. This IT deduction will also be allowed even for those new employees who are employed for less than the minimum period during the first year but continue to remain employed for the minimum period in the subsequent year. Clearly, a very good step for motivating employers to hire more, grow more.

Biodegradable Textiles From Algae, Fungi, Orange, Fruits….

GDJASUJA

It takes approximately ca. 8000 L of fresh water to grow 1 kg of cotton fibers; for the production of 1 kg of viscose or Tencel fibers, only ca. 450 L and ca. 300 L, respectively, are needed. Hence, there is a huge environmental price to be paid for the production of cotton and man-made cellulose fibers. Researchers worldwide are directing their efforts to develop environmentally friendly ways to produce newer fibres that do not use any toxic chemicals, generate waste, and requires less energy. Scientists and designers in close cooperation have developed a biologically derived filament that can be knit, whether by hand or machine, to create a new breed of textile composed of sodium alginate, a polysaccharide found in the cell walls of brown algae. It’s frequently used in the medical industry for wound dressing.

2018 to Bring Unique Crisis as well as Unique Opportunities

GDJASUJA

Despite several disrupting experiments by PM Modi like Notebandi and GST, India has managed to achieve a GDP growth rate of more than 7% – a figure which is under scrutiny by several leading economists & financial experts. The government claims several revolutionary achievements such as containing black money, make in India, ease of doing business, skill development programs, providing resources to youth to make them job creators instead of job seekers, faster infra development and so on. The future is being projected as rosy but it is no secret that there is a growing lack of confidence among a large section of general public – and also among the biz community – due to the growing unemployment, pathetic condition of our farmers, biz community’s overall hidden anger and also fast changing social & cultural changes being brought ignoring their long-term negative impact on country’s biz environment.

Emotional Blackmailing in the name of Sustainability?

GDJASUJA

“Sustainable Textile Innovation” has perhaps become the most talked of phrase in the textile and clothing industry. Most conferences being held these days have managed to prominently display their focus on the urgent need for saving the planet earth. Special sessions are devoted championing sustainable textiles and lecturing the industry leaders and professionals to concentrate on making the sustainability as a mainstream—rather than sideline-effort if they want the business to be good and attractive i.e. appealing enough for the end consumers. Thanks to the multi-million dollar campaigns of all sorts, more and more consumers (especially those who are more sensitive and emotional) have started taking this quite seriously without going deep into the merits of their buying behavior and/or decision.