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Indian knitwear Industry Gears up to defeat China in Apparel Export

T.R. Vijaya Kumar, the great Indian clothes maker thinks it’s time for his country to take on Bangladesh, Vietnam, and even China for leadership in the global apparel industry.

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Textile. Wikimedia

Sept 17, 2016: T.R. Vijaya Kumar, the great Indian clothes maker thinks it’s time for his country to take on Bangladesh, Vietnam, and even China for leadership in the global apparel industry.

He’s a second-generation manufacturer, who transformed his small family clothing business in southern India into an apparel exporter of 1,700 employees and his goal is to double its sales by 2020. When it comes to his hometown of Tiruppur, which is mostly referred to as the knitwear capital of India, his ambitions are bigger and  broader, tripling exports and adding 500,000 jobs in the process, reported Bloomberg.

But the problem that is occurring is that other Asian countries are more ahead than India. India’s $17 billion exports of apparel were half as much as Bangladesh’s last year and its 3.7 percent global market share were behind Vietnam’s 5.1 percent. Apparel is a labor-intensive industry, which has helped developing economies transition out of agriculture. The Indian economy needs to generate more than eighty million new jobs by 2025 to keep up with its fast-growing population.

Indian Knitwear Industry in Tiruppur

PM Narendra Modi’s biggest failure so far has been an inability to boost employment, according to a recent poll. His new government recently announced a nearly $1 billion package for textile and garment makers, including subsidies for hiring, tax refunds and relaxation of overtime rules with a goal to create 10 million jobs and boost exports by $30 billion in the next three years.  Adding to the challenge is that the textile industry suffered a reputation blow last month, August 2016, when Target Corp. terminated $90 million of business with Welspun India Ltd. for labelling cheaper bedsheets as premium Egyptian cotton.

A key weakness of the sector is worker productivity, which is almost three times lower than in China. About 78 percent of Indian companies employ less than 50 workers, compared with 15 percent in China, according to Subramanium. That also means a lot of them remain below the threshold of government taxes and regulation, known by economists as the “informal” economy. A report released this year by the World Bank showed that Bangladesh had 15 times more garment workers formally employed than in the informal sector, while India has about seven times more informal garment workers than formal.

That gap could widen as foreign garment and textile producers continue to embrace automation. “India needs to start climbing the ladder fast to take advantage of its young population,” said Russell Green, an international economics fellow at Rice University’s Baker Institute for Public Policy in Texas. “Automation is making the ladder shorter and shorter over time.”

There’s more holding India back. A focus on cotton garments limitThat gap could widen as foreign garment and textile producers continue to embrace automation. “India needs to start climbing the ladder fast to take advantage of its young population,” said Russell Green, an international economics fellow at Rice University’s Baker Institute for Public Policy in Texas. “Automation is making the ladder shorter and shorter over time.”s its access to the winter clothes market, while buyers perceive the country as slower and less reliable than China or Vietnam, according to the World Bank report. In neighbouring Bangladesh, where garments account for 80 percent of overseas shipments, the monthly minimum wage is about 30 percent lower than India’s $105, and exporters don’t pay duties to the European Union.

Among them is Venkatachalam Babu, a small business owner who pays workers by the piece. In a workshop attached to his home, his staff of 12, including two family members, cut and stitch children’s underwear and pants from leftover fabric he buys from exporters.

While foreign markets are out of reach, Babu can bank on a fast-expanding domestic market that smaller rivals don’t have. Once an employee himself, he started his company 20 years ago with four workers. He’ll register it, he said, when the headcount crosses 20 people.

“We want to grow big,” he said as his mother sat cross-legged on the floor sorting pieces, surrounded by bags of fabric. “A problem is labor shortage.”

Tiruppur exporters have also joined forces to lower costs by educating companies on “lean” production management techniques and training factory staff to raise output. The government is partly funding the programs.

Kumar said the push was inspired by Modi, who during a 2013 campaign stop told the manufacturers to make proposals to expand, rather than just list concerns. Now the group hopes to take its action plan to the capital, 1,500 miles north, and have Modi mobilize all ministers at once.

– prepared by Shayari Dutta of NewsGram 

  • Manthra koliyer

    Our knit wear and handicrafts have always been sought after.

  • Antara

    Indian knitwear can seriously beat other countries in uniqueness and exclusivity!

  • Arya Sharan

    Indian knitwear has always been in a great demand and with some more attention and infrastructure provided, we can surely beat other countries.

  • enakshi

    Indian knitwear can beat China, but the rate of productivity is lacking somewhere because of the employement issues!

  • Rawshan Iajdani

    This guy has only 1700 worker and talking about taking on Bangladesh and China. I have a close friend who employed 70,000 workers in his factories in Dhaka.

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  • Manthra koliyer

    Our knit wear and handicrafts have always been sought after.

  • Antara

    Indian knitwear can seriously beat other countries in uniqueness and exclusivity!

  • Arya Sharan

    Indian knitwear has always been in a great demand and with some more attention and infrastructure provided, we can surely beat other countries.

  • enakshi

    Indian knitwear can beat China, but the rate of productivity is lacking somewhere because of the employement issues!

  • Rawshan Iajdani

    This guy has only 1700 worker and talking about taking on Bangladesh and China. I have a close friend who employed 70,000 workers in his factories in Dhaka.

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The USD/INR Outlook – Is the Indian Rupee in Decline?

Due to the Coronavirus pandemic Indian economy is expected to contract by 5% in the financial year 2021

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Indian Rupee has fluctuated wildly during the last couple of weeks mainly bacuse of the pandemic. Pixabay

Not all nations have handled the coronavirus outbreak with the same measure of efficiency, with India’s chaotic lockdown and confused messaging creating significant uncertainty about the region’s short and medium-term future.

According to the American brokerage firm Goldman Sachs, the Indian economy is subsequently expected to contract by 5% in the financial year 2021, representing the nation’s worst ever performance in this respect.

Despite this sustained economic decline, the Indian Rupee has fluctuated wildly during the last couple of weeks. But why is this the case, and what’s the long-term outlook for this emerging currency?

How has the INR Fared in Recent Times?

Unsurprisingly, the Indian Rupee edged lower during the first week of May, pairing back some of the gains that it made since its initial crash in March (when the lockdown was first announced at incredibly short notice).

Indian rupee
The INR has also enjoyed brief periods of growth against the USD more recently. Pixabay

This depreciation came after the INR actually made gains of 0.3% against the greenback at the end of April, capping three consecutive weeks of modestly rising sentiment for the INR/USD.

This decline came against the backdrop of an increasingly negative economic outlook, with agencies such as the International Monetary Fund (IMF) and World Bank providing decidedly downbeat forecasts for medium and longer-term growth.

However, the INR has also enjoyed brief periods of growth against the USD more recently, as it began to incrementally recoup losses and trade within a far wider range. This was largely attributed to better-than-expected Chinese export data, but this trend will not necessarily be sustained over time.

What Does This Tell Us About the Market?

The most recent rise in the performance of the INR also highlighted a slight increase in the market’s appetite for risk, with traders leveraging platforms such as Oanda to track daily price shifts and profit directly from these as the global sentiment improves incrementally against a backdrop of falling Covid-19 cases.

The INR remains a currency to avoid for risk-averse traders, however, particularly as a growing fiscal deficit and increased quantitative easing measures in India continue to restrict growth and devalue the rupee considerably.

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The most recent rise in the performance of the INR also highlighted a slight increase in the market’s appetite for risk Pixabay

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This, combined with rising daily volatility and a slight increase in demand, will definitely divide opinion in the forex market depending on each trader’s unique outlook and overall investment philosophy.

These factors also combine to create an increasingly negative long-term outlook, especially for the remainder of 2020.

Make no mistake; as quantitative easing continues and the base interest rate in India remains noticeably low, the value of the INR will depreciate incrementally over time while experiencing a significant shortage in demand.

[Disclaimer: The article published above promotes links of commercial interests.]

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Revival Of Indian Economy: PM Modi Is Doing His Job, What About Others ?     

PM Modi alone can not revive the economy he needs many helping hands in the industry

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PM Modi is doing his part in the pandemic, what is the role of other ? (Photo by Rob Stothard/Getty Images)
By N.S.Venkataraman

On 12th May 2020, Indian Prime Minister Modi addressed the nation, which can be described as a morale-boosting talk.

With such eloquent talk and the promise of Rs. 20 lakh crore economic revival package, Modi Ji completed his talk, raising expectations amongst the people as to how he would proceed further to revive the economy in the coming days.

Economic revival package :

Subsequent to Modi’s talk, the Finance Minister announced a huge economic package including the statement that the Government of India would not float global tenders  for value of less than Rs. 200 crore,  which would mean that the government would buy products from domestic medium and small enterprises  to a considerable extent.

However, the fact is that many crucial products made in India today are not of globally competitive standards at present and no buyer in India including the government can afford to buy a low-quality product, simply because they are made in India. One wonders why Finance Minister ignored this problem?

Prime Minister needs support :

The question is can Mr. Modi alone revive the economy without equal commitment and efficiency from bureaucracy, project promoters, investors, technologists and research bodies, and of course trade unions.

Today, there is a serious mindset issue amongst the investors/project promoters, bureaucrats and government officials at various levels, research and development personnel and leadership of trade unions, which necessarily have to be admitted. Their overall role and output are much below the national needs. The trade unions ,  whose leadership are now dominated by politicians , have become politically affiliated  unions and the members of the unions play to the tune of politicians, which often are against the interest of the country as well as workmen themselves.

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Modi Ji has announced a 20lac crore package but industries need to come together to support this. WikimediaCommons

Need to create progressive mindset :

Prime Minister has to necessarily create  mindset of progressive ideas, vision and commitment to the national cause amongst the stake holders and  people in various walks of life. It is evident that in the last six years , Mr. Modi’s  clean India campaign, skill development programme , make in India scheme , yoga movement, construction of millions of toilets for poor households , opening zero bank account for poor people  etc. are  all aimed at bringing a better mindset amongst people. Prime Minister  has been trying to achieve  this with partial success , which is not adequate enough.

Ground reality:-

At present, in India, the ground reality is that investors and project promoters all the time seek relief measures from the government and do not do adequately on their own to  professionalise the managements , improve productivity, develop technology and achieve global competitiveness. Of course, some do but they are few and far between.

India’s  overall technology development efforts are poor , though there are some isolated achievements in space science, atomic energy etc.  India largely depends on overseas sources for technology inputs and equipment of modernized design that are in tune with the global standards. Indigenisation efforts,  which can be ensured only by project promoters , scientists and engineers,  are nowhere near the required level.

Are private entrepreneurs facing image crisis ?

In the last few months, it has been seen that several project promoters / investors in India announcing public issues and planning to take big chunk of the shares  to get a better hold and ownership of the company,. They claim that they do not have the money to invest in the projects but have money to buy equity shares in their own companies !

Some private sector organisations are now loan defaulters  of several crore of rupees to the banks and financing institutions and some  of the promoters have succeeded in running away from the country and some trying to leave the country, so that they would not be caught for their malpractices. Because of such willful defaulters, the overall image of project promoters and business men in the country has suffered and people wonder whether  the Prime Minister can depend on such project promoters and investors to revive the economy in the scale that he wants ?

Commitment level of bureaucracy :

The overall performance of the bureaucracy in India are again  not measuring upto the speed and efficiency standards of the Prime Minister. A few  of them have been caught for corrupt practices and  many of them are really not known for efficiency and commitment. With number of  bureaucrats showing disappointing performance,  can Prime Minister take the country forward ?

Performance of state governments :

Most of the projects and development programmes in India are being implemented  by state governments. Number of politicians running the state governments are known to be corrupt, not well educated in the nuances of administration and often indulge in  appeasing people at the cost of the state,  to retain their vote bank. With such weak state governments, can the Prime Minister push the country forward ?

Need efficient ministers :

While announced fiscal measures are good and Prime Minister’s motivating talk on 12th May,2020 are impressive and his goals and objectives are laudable, Prime Minister needs many intelligent, knowledgeable and committed ministers at  the state and central government. How can he ensure this ?

Also Read: Know More About the International Day Against Homophobia, Transphobia, Biphobia

Need to move on :

Prime Minister  Modi should move on with courage of conviction and he should reveal very strong qualities of merciless approach towards inefficient and corrupt people in the government and business as well as other sectors.

People are willing to support him in his reform measures and he has to respond without allowing political considerations to influence the decision-making process. One only hope Prime Minister will raise up to the expectations.

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Prime Minister Narendra Modi Stresses Cooperative Federalism for Ganga Rejuvenation

The meeting was attended by Union Ministers for Jal Shakti, Environment, Agriculture and Rural Development, Health, Urban Affairs, Power, Tourism, Shipping, and the Chief Ministers of UP and Uttarakhand, the Deputy Chief Minister of Bihar, the Vice-Chairman of the Niti Aayog and other senior officials

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Indian Prime Minister Narendra Modi. Wikimedia Commons

Prime Minister Narendra Modi has said the River Ganga rejuvenation should be an example of cooperative federalism and it has been a long-pending challenge.

The Prime Minister made this observation at the first meeting of the National Ganga Council in Kanpur, UP, on Saturday. The meeting was aimed at reinforcing the importance of a Ganga-centric approach in all departments of the states concerned as well as relevant central ministries.

He also asked for formation of a digital dashboard where data from villages and urban bodies would be monitored on a daily basis by the Niti Ayog and the Ministry of Jal Shakti. All districts bordering Ganga should be made a focus area for monitoring efforts under the Namami Gange project, he said.

Modi said a lot had been accomplished since the government took up ‘Namami Gange’ in 2014 as a comprehensive initiative, integrating various government efforts and activities, with the aim of reducing pollution, and conservation and rejuvenation of Ganga.

Notable achievements had been zero waste creation by paper mills and reduction in pollution from tanneries, he said and added, but a lot was required to be done.

River Ganga is one of the holiest, yet the most polluted river.
River Ganga is one of the holiest, yet the most polluted river. Wikimedia Commons

The Prime Minister emphasised that improvement would require full cooperation from the public at large and greater awareness through dissemination of best practices from cities situated along the banks of national rivers.

“For the first time, the central government has made a commitment of Rs 20,000 crore for 2015-20 to the five states through which Ganga passes, to ensure adequate as well as uninterrupted water flow. Rs 7,700 crore has been spent, prominently for construction of new sewage treatment plants,” said a government statement.

Prime Minister also urged for a holistic thinking process where ‘Namami Gange’ would evolved into ‘Arth Ganga’ or a sustainable development model with a focus on economic activities related to Ganga.

Also Read: Chinese Scientists Reveal Distribution History of Endangered Trees

“As part of this process, farmers should be encouraged to engage in sustainable agriculture practices, including zero budget farming, planting of fruit trees and building plant nurseries along the banks of Ganga. Priority could be given to women self-help groups and ex-servicemen organisations for these programmes,” it added.

The meeting discussed tapping the hybrid tourism potential of the river basin area for religious and adventure tourism. “The income generated from encouraging eco-tourism and Ganga wildlife conservation and cruise tourism would help generate sustainable income streams for cleaning of Ganga,” the government said.

The meeting was attended by Union Ministers for Jal Shakti, Environment, Agriculture and Rural Development, Health, Urban Affairs, Power, Tourism, Shipping, and the Chief Ministers of UP and Uttarakhand, the Deputy Chief Minister of Bihar, the Vice-Chairman of the Niti Aayog and other senior officials. (IANS)