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

15-10-2019 72.80 (-1.45)

15-10-2018 87.65

16-10-2017 78.50

New York Cotton Futures (Cents/lb) As on 17.10.2019 (Change from

previous day)

Oct 2019 60.71 (+0.19)

Dec 2019 64.58 (+0.04)

Mar 2020 61.23 (-0.43)

17th October

2019

India cannot sacrifice economic strength to comply with US sanctions: FM

Textiles Secretary Inaugurates IHGF-Delhi Fair

Civil society organisations question govt on RCEP’s benefits when India’s economy

is slowing

‘RCEP will pave way for China to dump $50 billion worth fabrics in India’

IMF says US-China trade war will have 'real spillover effects' for EMs

Pakistan, Egypt agree to promote trade

Cotton and Yarn Futures

ZCE - Daily Data (Change from previous day)

MCX (Change from previous day)

Oct 2019 19490 (-30)

Cotton 12655 (+30) Nov 2019 19240 (+30)

Yarn 20655 (+25) Dec 2019 19260 (-20)

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2 CITI-NEWS LETTER

-------------------------------------------------------------------------------------- India cannot sacrifice economic strength to comply with US sanctions: FM

Textiles Secretary Inaugurates IHGF-Delhi Fair

Civil society organisations question govt on RCEP’s benefits when India’s economy is

slowing

‘RCEP will pave way for China to dump $50 billion worth fabrics in India’

Ban on import of National Flag a gift to Khadi artisans: KVIC

Fundamentals of economy 'very very strong', says CEA Subramanian

Roundtable conference to improve safety of women in Tamil Nadu’s textile industries in

held

India, Bhutan celebrates their textile heritage

USTR may visit India soon to seal limited scope deal

FIEO delegation to explore business opportunities in Africa

Allow self assessment of developing country status, 45 nations insist

State governments and industry have committed to train 7 lakh apprentices in the current

fiscal: Skill Development Ministry

India-bound FDI may face thorough frisking

Rs 75,000-crore minimum alternate tax credit dilemma grips India Inc

Tangedco wants industry to give up legacy concessions

------------------------------------------------------------------------------ IMF says US-China trade war will have 'real spillover effects' for EMs

Pakistan, Egypt agree to promote trade

Circular economy a viable solution for developing economies

Cotton Output To Remain Dismal Due To Lack Of Initiatives: Mian Zahid Hussain

Jute geo-textile can earn billion dollar from domestic market

RGE commits $200m to textile fibre innovation

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

NATIONAL

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

GLOBAL

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3 CITI-NEWS LETTER

NATIONAL:

India cannot sacrifice economic strength to comply with US sanctions: FM

(Source: Business Standard, October 17, 2019)

Sitharaman said the Indian government has expressed its view to the United States

India wants to comply with global sanctions, including US sanctions on Venezuela and

Russia, but also needs to maintain its own strength and strategic interests, Finance

Minister Nirmala Sitharaman said in an interview on Tuesday.

The United States in January imposed the toughest sanctions yet on Venezuela's oil

industry. The move has scared away some global customers, but with few alternative

suppliers of heavy oil, Indian refiner Reliance Industries Ltd has been buying Venezuelan

crude from Russian major Rosneft. The company is set to resume direct oil loadings in

the South American nation after a four-month pause.

Sitharaman said the Indian government has expressed its view to the United States.

"In specific issues which are critical for India's strategic interests, we have explained to

the United States that India is a strategic partner for the United States of America and

you want a strategic partner to be strong and not weakened," she said.

"We value the strong partnership with the USA, but we should equally be allowed to be a

strong economy."

The International Monetary Fund earlier on Tuesday lowered its outlook for Indian

growth in 2019, citing weaker-than-expected domestic demand. The US-China trade war

will cut 2019 global growth to its slowest pace since the 2008/09 financial crisis, the IMF

said.

India's gross domestic product grew at its weakest pace since 2013 between April and

June, stoking expectations of further stimulus.

"Global headwinds ... are getting stronger by the day," Sitharaman said. Asked about

further fiscal stimulus, she said: "I have not closed the door" on that.

New Delhi has been trying to boost domestic growth through an infrastructure package

and a new loan programme organised with the banking sector that has doled out loans

worth over 80,000 crore (8.7 billion pounds), she said.

The finance minister defended the government's controversial actions in Jammu and

Kashmir in August. India stripped the Muslim-majority portion of the state, which is

claimed by both India and Pakistan, of autonomy on Aug. 5. Since then the government

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4 CITI-NEWS LETTER

has shut off phone networks, imposed curfew-like restrictions in some areas, and arrested

thousands, including hundreds of local politicians.

The removal of the constitutional article that granted special status to Jammu and

Kashmir will boost the region and the country's economic potential, she said.

Human rights groups say the crackdown is spreading fear among the local population.

For decades before India's recent actions, women, scheduled castes, and nomadic tribes

were denied human rights in Kashmir, Sitharaman said. "Where was the global

community's human rights concern at that time?"

Home

Textiles Secretary Inaugurates IHGF-Delhi Fair

(Source: Orissa Dairy, October 16, 2019)

Textiles Secretary, Ravi Capoor, inaugurated the 48th edition of the Indian Handicrafts

and Gifts Fair (IHGF) at the India Expo Centre & Mart at Greater Noidatoday.

Overseasbuyers from 110 countries are in India to source home, lifestyle, fashion,

furniture and textiles products from around 3200 Indian exhibitors who are participating

in the Fair that will be on from 16 – 20 October 2019.

Textiles Secretary, Ravi Capoor, while speaking at the inaugural ceremony, urged the

organisers of the IHGF-Delhi Fair to make all efforts to ensure that next year the Fair

attracts over 10,000 exhibitors. He further said that with the skills of Indian artisans and

the crafts heritage of India the handicrafts industry has the potential to achieve greater

growth for not only the sector but for the artisans and the exporters and increase the

handicrafts exports of India to Rs. 100,000 crore from the exiting Rs. 26,590 crore.

Textiles Secretary further said the Export Promotion Council for Handicrafts (EPCH)

must explore the possibility of opening handicrafts parks in India and develop those parks

as tourism and crafts centres. He welcomed the proposal of EPCH for setting up of

handicrafts parks for apparel and handlooms and assured the support of the Textiles

Ministry for setting up of apparel and handlooms parks by EPCH. Shifting of the

production from small organized units to these parks will be beneficial for the small units

as it will reduce overhead costs.

He also directed EPCH to include new segments in the IHGF-Delhi Fair for women

entrepreneurs and new artisans and also ensure that the handicrafts industry works on a

sustainable model where the entire production process will function as a zero waste

manufacturing sector.

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5 CITI-NEWS LETTER

Director General EPCH, Rakesh Kumar, said that effortsare being made by EPCH for

sustainable development and preservation of environment by focusing on reduce, reuse

and recycle at this edition of the Fair. Around 50 tonnes waste material like plastic, metal,

wood and fabric are being reused to enhance and decorateIHGF-Delhi Fair 2019.

Director General EPCH further informed that in order to reduce the usage of plastic, the

Council has decided to do away with bottled water and instead is offering metal water

bottles to the visitors and exhibitors which may be refilled at the water stations spread

across the Fair venue. A 3 MW roof top solarenergy panel has been installed in the Fair to

minimise carbon emissions.

The IHGF-Delhi Fair 2019 will have knowledge seminars on various topics by expert

faculties, fashion shows and ramp walks by models wearing fashion jewellery, accessories

and utility items sourced from exhibitors at the Fair.

EPCH is a nodal agency for promoting exports of handicrafts from the country to various

destinations of the world and projecting India’s image abroad as a reliable supplier of high

quality handicrafts goods and services. EPCH has set up Handicrafts Carpet Sector Skill

Council which has set up the initiative VRIKSH, the Indian Timber Legality Assessment

and Verification Scheme, to establish the chain of custody and legality of the wood which

has further been mapped with the UN Sustainable Development Goals. VRIKSH ensures,

encourages and supports sustainable development and encourages women

entrepreneurs.

Home

Civil society organisations question govt on RCEP’s benefits when India’s

economy is slowing

(Source: Kritika Suneja, Economic Times, October 16, 2019)

Farmer and civil society organisations on Wednesday questioned the government about

the benefits of the proposed Regional Comprehensive Economic Partnership (RCEP)

trade agreement especially when the economy is going through a period of slowdown and

there are apprehensions from many sectors.

They said various sectors of the Indian economy including agriculture, dairy, services and

data would be impacted, going by the leaked texts of the agreement and asked why the

government is involved in e-commerce negotiations in the pact when it is opposed to even

engaging on the subject at the World Trade Organization (WTO).

Stating that major manufacturing sectors are facing serious headwinds, essentially due to

sagging domestic demand, the Forum For Trade Justice said: “Acceding to RCEP at this

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6 CITI-NEWS LETTER

juncture will accentuate the uncertainties and could result in loss of jobs and incomes

which the country can ill afford”.

We would like to know the sectors that will benefit from RCEP and if the government has

done any analysis for this. When India’s own growth is dipping, does it make sense to

share it with the others,” said Biswajit Dhar, professor at Jawaharlal Nehru University.

He said that India had foregone revenues of $5.3 billion due to preferential rates under

FTAs in 2018 and at the same time considering releasing sovereign bonds to get some

funds. The Indian economy grew 5% in the first quarter of the current financial year and

most multilateral institutions have scaled down the country’s growth forecast for the year.

The International Monetary Fund on Tuesday cut India's growth forecast for 2019 to 6.1%

% from the 7% made in July and by 1.2% from the 7.3% in April.

The key sticking point for India in RCEP is its trade deficit with China which is feared to

increase once the pact is in place and has proposed different levels of tariff concessions

for China to safeguard its domestic industry from cheap imports. “Tariff differential with

China will be meaningless as they can use the rules of origin which allow any product with

some value creation in the RCEP region to enter Indian markets duty free,” said Ranja

Sengupta of The Third World Network.

Dhar said that there are apprehensions about the proposed safeguards and the auto

trigger mechanism to check sudden surge in imports. The organisations also highlighted

the vulnerability of India’s agricultural sector. “The drastic reduction in import duty and

flooding of cheap agricultural produce will negatively impact farmgate prices in India,”

said Yudhvir Singh, All India Coordination Committee of Farmers Movements. However,

he raised questions at the government’s estimates of milk production and the number of

families associated with the dairy sector.

“80% of the milk is produced and consumed locally and doesn’t reach the dairy sector. 12

crore families are linked with the sector and not 1.5 crore,” he said.

Investment, e-commerce

The groups also expressed concern at the rules on investment and e-commerce. Referring

to a leaked draft of the investment chapter of the agreement, they said Japan wants a ban

on caps on royalty payments and technology transfers, something that will be a drain on

India’s revenues. They said India is negotiating ‘standstill’ and ‘ratchet’ clauses which

mean that the governments have to freeze their current levels of market opening, and if

they liberalise more they cannot go back. Moreover, New Delhi is said to be seeking

exclusion from ratchet only on the controversial investor state dispute settlement (ISDS)

and that too pertains to taxation to avoid cases like Vodafone.

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7 CITI-NEWS LETTER

“Intellectual property and compulsory license are also investments which are protected

in the bilateral investment treaties in ‘public interest exceptions’ but not in RCEP”, they

said. On the issue of data localisation, the groups warned that “accepting free global data

flows as per RCEP demands is to give up all data policy space and data sovereignty”. India

has proposed locating computing facilities inside the country if it is meant to protect its

essential security interests and national interests. “Such public policy exemptions have

never worked effectively, especially for developing countries,” they cautioned and said

that India’s involvement in e-commerce negotiations at RCEP was unexpected as it

doesn’t even talk about the subject at the WTO.

“India is also said to be showing flexibility in e-transfers and authentication related issues.

With China’s presence in the group, all technology flows will get tilted towards China”.

On services, the organisations asked if India is ready to accept labour coming from

Myanmar, which is an RCEP member.

Home

‘RCEP will pave way for China to dump $50 billion worth fabrics in India’

(Source: Times of India, October 17, 2019)

Powerloom weavers from across the country have raised serious concerns on the Chinese

fabric manufacturers dumping huge amount of finished goods in the country with the

central government proposing to include textile sector under the Regional

Comprehensive Economic Partnership (RCEP) scheme. Powerloom weavers from the

major textile hubs across the country including Bhiwandi, Mumbai, Malegaon,

Ichhalkaranji, Ahmedabad etc. met at Southern Gujarat Chamber of Commerce and

Industry (SGCCI) on Wednesday to discuss and protest the proposed move.

They said lakhs of workers would be rendered jobless and small and medium powerloom

units will shut down. Puneet Khimasiya, leader of the Bhiwandi Powerloom Association

said, “If textile sector is included under RCEP then China would be the major beneficiary.

China has about $50 billion worth of finished fabric stock in the factories. Due to the US-

China trade war, Chinese are eagerly looking at dumping their cheap fabrics in India.”

Kiran Pandya, senior executive from Aditya Birla group said, “China needs a big market

like India to dump its products including textiles.” President of the Federation of Gujarat

Weavers’ Association (FOGWA), Ashok Jirawala said, “The government is already

running Foreign Trade Agreement (FTA) scheme where certain countries are allowed to

sell their products in India. There is no need for RCEP in the textile sector.

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8 CITI-NEWS LETTER

President of SGCCI, Ketan Desai said, “We have started compiling the industry data. A

delegation of industry leaders would be going to meet the concerned ministers in the

government to oppose the proposed inclusion of textile sector under RCEP”

Home

Ban on import of National Flag a gift to Khadi artisans: KVIC

(Source: Financial Express, October 16, 2019)

In other words, KVIC is the only statutory entity established by an act of Parliament

having the right to manufacture Indian National Flags.

Khadi and Village Industries Commission (KVIC) on Wednesday said the government’s

decision to ban import of the National Flag is a “Diwali Gift” to millions of Khadi artisans.

The Directorate General of Foreign Trade (DGFT) has issued a notification under which

“import of Indian National Flag not adhering to the specifications prescribed under Part

– 1, Section 1.2 of Flag Code of India, 2002, is prohibited”. KVIC said as per the flag code,

the National Flag should be made of hand spun and woven wool or cotton or silk Khadi

bunting.

In other words, KVIC is the only statutory entity established by an act of Parliament

having the right to manufacture Indian National Flags. “Since the last two years KVIC

noticed that the sale of National Flag was going down,” it said in a release.

During 2017-18, the sale was Rs 3.69 crore and during 2018-19 it came down to Rs 3.16

crore, a decline of more than 14 per cent. In 2019-20 so far, the sale was only Rs 1.94

crore. KVIC Chairman Vinai Kumar Saxena said the declining sale of the flag was brought

to the notice of Minister of Commerce and Industry Piyush Goyal.

In a letter to Goyal, Saxena had said import of counterfeit flags (mostly plastic) is a blatant

violation of the Flag Code of India also. The KVIC has urged the minister to immediately

impose restriction on the imports. Most of the flags were being imported from China, a

source said.

Home

Fundamentals of economy 'very very strong', says CEA Subramanian

(Source: Business Standard, October 16, 2019)

The CEA further said the slowdown in the economy is due to a decline in investment, which

is a key driver

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9 CITI-NEWS LETTER

Chief Economic Advisor K V Subramanian on Wednesday called upon the industry to start

making investments, stressing that the fundamentals of the economy are "very very

strong".

On more than Rs 40,000 crore of dues pending to small companies, he nudged large

corporates to ensure timely payment to the MSME sector as small players are dependent

on cash flows.

Large companies must play a critical role in clearing cash dues to smaller companies, he

said at an event organised by industry chamber Ficci being attended by several

corporates.

Finance Minister Nirmala Sitharaman on Monday had said that according to returns filed

by large corporates to the Corporate Affairs Ministry, as much as Rs 40,000 crore was

due to the MSME sector.

The CEA further said the slowdown in the economy is due to a decline in investment,

which is a key driver.

Corporates must recognise that in a slowdown labour is available cheaper and so it is the

time to make investments, Subramanian said and added investment must be made from

a long-term perspective.

"The government has been at its toes addressing various aspects of the economy," he said.

The CEA said the "fundamentals of the economy are very very strong...fundamentals of

the economy have not changed" and it would be back on the 7-8 per cent growth path.

Earlier this month, the Reserve Bank of India sharply cut its economic growth projection

for this fiscal to 6.1 per cent from 6.9 per cent earlier.

The central bank's estimates come in the wake of GDP growth sliding to a six-year low of

5 per cent in the June quarter, on a massive slowdown in consumption and private sector

investments.

As against India's real growth rate of 6.8 per cent in 2018, the IMF in its latest World

Economic Outlook on Tuesday projected India's growth rate at 6.1 per cent in 2019 and

noted that the Indian economy is expected to pick up the next year at 7.0 per cent in 2020.

On Sunday, the World Bank in its latest edition of the South Asia Economic Focus said

India's growth rate is projected to fall to 6 per cent in 2019 from 6.9 per cent of 2018.

Home

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10 CITI-NEWS LETTER

Roundtable conference to improve safety of women in Tamil Nadu’s textile

industries in held

(Source: The Hindu, October 17, 2019)

Better implementation of Sexual Harrassment of Women at Workplace (Prevention,

Prohibition and Redressal) Act 2013 among the issues discussed

A State-level roundtable conference on improving safety measures for women employees

working in textile industries in Tamil Nadu was organised in the city jointly by Tamil

Nadu State Commission for Women and Community Awareness Research Education

Trust (CARE-T).

The event was inaugurated by Kannegi Packianathan, chairperson of the commission. The

State has over 2,000 textile mills and 4,000 garment and textile supply chain units with

an estimated 4 lakh women employees. There have been reports and data that show that

many women workers suffered verbal, physical and sexual violence. However, many are

not reported.

A release pointed out that the Sexual Harassment of Women at Workplace (Prevention,

Prohibition and Redressal) Act 2013 is a powerful tool to address workplace violence

against women. “The law clearly states that any workplace with more than 10 women

should have an internal complaints committee. Unless there is serious implementation of

the standards and local law, it is tremendously difficult to address these issues,” read the

release.

The roundtable also stressed the need for working together to find effective long term

solutions and strategic action plan for implementation of internal complaint committees

at workplace, hostels, and other safety measures for women workers in textile supply

chain in the state.

Home

India, Bhutan celebrates their textile heritage

(Source: Deccan Herald, October 17, 2019)

Mahatma Gandhi and his legacy of 'Swadeshi' movement were at the centre as fashion

designers from India and Bhutan came together on Wednesday to celebrate the textile

heritage of the two countries here.

The presentation at the Royal Textile Academy (RTA), organised by the Embassy of India

in Thimpu celebrate the 150th birth anniversary of Gandhi and the friendship between

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11 CITI-NEWS LETTER

the two nations, saw designers from India and Bhutan showcase their creations in Khadi

and Thagzo

Ambassador of India to Bhutan, Ruchira Kamboj started the evening by welcoming the

members of the Royal family of Bhutan – Queen mother Ashi Sangay Choden Wangchuk,

Princess Euphelma Choden Wangchuk and Ashi Dekhi Yangzom Wangchuk, along with

Prime Minister of Bhutan Lotay Tshering, other ministers and Khadi and Village

Industries Commission (KVIC) chairman, Vinai Kumar Saxena.

Kamboj said the initiative will further deepen the already strong partnership between

Indian and Bhutan. "Tonight, we honour our countries through collaboration, our people

with compassion and our remarkable friendship through art...The night is not just about

glorious textile presentation but also about the opening of new collaborations," she said.

Organised with the support of India's Ministry of Micro, Small & Medium Enterprises

(MSME) and the Fashion Design Council of India (FDCI), the event commenced with a

soulful rendition of Gandhi's favourite bhajan "Vaishnav jan to tene kahiye" by renowned

Rajasthani folk artiste Samandar Khan and his troop.

The presentation started with four leading Bhutanese designers – Chandrika Tamang,

Kencho Wangmo, Tshering Choden and Sangay Choden showcasing their collection, an

amalgamation of their traditional weaves and Khadi, provided to them by the FDCI.

Tshering’s range, in white and maroon, was a contemporary take on the country's

traditional clothing, while Sangay’s creations were in white with Bhutanese weaves

adding a touch of colour. Kencho again opted for whites with a hint of beige, but her

silhouettes from the mountains of Bhutan made a perfect choice for a beach vacation.

The first half of the textile presentation ended with Chandrika showcasing her collection.

She chose yellow, the royal colour of Bhutan, to celebrate sustainability. Her creations

were an appealing mix of contemporary Indian silhouettes adorned by Bhutanese

patterns and weaves. The beautiful RTA building, one of the most visited tourist spots in

Thimpu, acted as a magical background for the show, which was carried forward by Indian

designers – Rajesh Pratap Singh, Anamika Khanna and Samant Chauhan Singh presented

his signature modern designs craed on worthy gowns in beige.

Anamika, the only female Indian designer showcasing at the event, brought her

contemporary versions of Indian drapes to Bhutan. FDCI chairman Sunil Sethi said the

presentation is not a one-time aair and he is looking forward to many more collaborations

between the two countries. "We have a lot of plans to carry this initiative forward. We are

planning to have a Bhutanese stall and India Fashion Week in March next year," Sethi

told PTI. Chef Akshay Kumar had created a wholesome Satvik cuisine, especially curated

for the event, from the spiritual city of Varanasi.

Home

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12 CITI-NEWS LETTER

USTR may visit India soon to seal limited scope deal

(Source: Kritika Suneja, Economic Times, October 16, 2019)

United States trade representative Robert Lighthizer is likely to visit India within the next

two weeks as the two sides work towards resolving their bilateral trade issues. Sources

said a limited scope trade deal is on the menu for his visit.

This will be the second high-level visit of an American trade official this month. US

secretary of commerce Wilbur Ross met commerce and industry minister Piyush Goyal

on October 3.

The USTR will visit India soon but the dates are yet to be firmed up,” said one official

aware of the development. This would be current USTR's first visit to India. India and the

US have ruled out any structural reason or major issue holding back a bilateral trade deal,

which was expected to be announced during Prime Minister Narendra Modi’s meeting

with US President Donald Trump last month. While the two sides have been entangled in

a series of trade issues, restoration of Generalized System of Preferences (GSP), price

controls on medical devices, duty cuts on Harley Davidson bikes and market access to

American agricultural commodities were discussed to be part of the limited scope trade

deal.

Lighthizer’s visit is crucial as the office of the US trade representative had previously

linked market access in the two areas of dairy and medical devices to continuation of GSP

and also sought data-related relaxations, including in India’s ecommerce policy. Earlier,

there were talks that the GSP reinstatement would be partial because India is not likely to

lift the price caps on medical devices.

Home

FIEO delegation to explore business opportunities in Africa

(Source: Economic Times, October 16, 2019)

A high level 37 member FIEO business delegation led by Israr Ahmed, regional chairman,

FIEO southern region will be visiting Nairobi and Addis Ababa from November 17 to 22

to explore business opportunities in agriculture, machinery and food processing sector.

The programme is organised with the support of International Trade Centre (ITC)

Geneva. FIEO is taking the delegation in the background of building on the momentum

of the newly ratified African Continental Free Trade Area. This single market in

development hosts 1.2 billion people with an aggregate GDP of over $2 trillion, and

expected to open up new business opportunities for India.

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13 CITI-NEWS LETTER

The product profile of FIEO delegation comprises agricultural including fruits,

vegetables, meat, cereals, dairy, tea, coffee, spices as well as agri-processing technologies,

machinery and packaging solutions. The business delegation also aims at providing

cutting-edge machinery for food processing, storage and packaging solutions for a variety

of agricultural products to Africa. ``At a time when trade tensions and escalating,

protectionism are undermining the rules based multilateral system, by initiating this

delegation, FIEO intend to help in diversification of trade to unexplored African

countries, ‘’ Ahmed said.

Trade between Africa and India has increased more than eight-fold from $7.2 billion in

2001 to $62.5 billion in 2018, making India Africa’s fourth-largest national trading

partner, accounting for more than 6.4 percent of total African trade in 2018, up from 2.7

percent in 2001.

Home

Allow self assessment of developing country status, 45 nations insist

(Source: Kritika Suneja, Economic Times, October 16, 2019)

A group of 45 nations including India and China has insisted that countries must be

allowed to make their own assessments regarding their developing country status. In a

submission to the World Trade Organization (WTO), which is to be taken up for

discussion this week at the General Council, they pushed for continuation of developing

countries’ unconditional rights to special and differential treatment (S&DT) in rules and

negotiations.

The submission comes amid the US working on new rules to end benefits enjoyed by

developing countries at the WTO. S&DT are special provisions for developing countries,

which allow them more time to implement agreements and commitments, including

measures to increase trading opportunities, safeguard their trade interests, and support

to build capacity to handle disputes and implement technical standards.

The coalition, including Cuba, Oman, Bolivia and the African Group, warned that “any

unilateral action depriving developing members including LDCs of treaty-embedded

rights would be inconsistent with members’ obligations... cause lasting and systemic

damage to the trading system”. The paper floated by India has found support from many

developing countries, said sources aware of the submission.

In July, US President Donald Trump had directed his administration to change rules in

the next 90 days to prevent “self-declared developing countries from availing themselves

of flexibilities” in global trade. He said nearly two-thirds of the members of the

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14 CITI-NEWS LETTER

multilateral trade body have been able to avail special treatment and take on weaker

commitments by designating themselves as developing countries. The countries also

cautioned that attempts to water down these principles would be a recipe for “intractable

deadlock at the WTO, including in the negotiations on fisheries subsidies”.

The countries also cautioned that attempts to water down these principles would be a

recipe for “intractable deadlock at the WTO, including in the negotiations on fisheries

subsidies”. They said that developing countries need S&D to access and benefit from

international markets as they face more serious challenges compared to developed

countries. “As a result, S&D is an unconditional and treaty-embedded right that has been

provided to all developing countries... The WTO allows developing countries to make their

own assessment about their development status,” they said. They also reaffirmed that

existing S&D provisions must be upheld and provided in current and future negotiations.

Home

State governments and industry have committed to train 7 lakh apprentices

in the current fiscal: Skill Development Ministry

(Source: Yogima Seth Sharma, Economic Times, October 16, 2019)

The skills development ministry, on Wednesday, said that state governments and

industry has together committed to train 7 lakh apprentices in the current fiscal at the

just concluded 15-day apprenticeship pakhwada organised by the skills development

ministry.

“The industry has committed to engage 4.5 lakh more apprentices with States committing

another 2.5 lakh apprentices,” skills development ministry said. MSDE has pledged Rs

560 crore to state governments to promote demand-driven and industry-linked skill

development and signed 22 MoUs with various states through third party aggregators

(TPAs).

The number of apprentices has almost doubled after the 15-day Pakhwada. In 2016,

government had introduced comprehensive reforms to the Apprenticeship Act, 1961, a

move that saw about 7.5 lakh apprentices engaged in a span of two-and-a-half years.

As many as 8 PSUs including Bharat Heavy Electrical Limited (BHEL), Cochin Shipyard,

Gas Authority of India Ltd (GAIL), Indian Tourism Development Corporation (ITDC),

International Trade Promotion Organisation (ITPO), Rashtriya Ispat Nigam Ltd (RINL)

committed to train about 35,000 apprentices. Additionally, Hindustan Petroleum

Corporation Ltd (HPCL) signed an MoU with NSTI Mumbai to train solar technicians for

sustainable energy sector.

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15 CITI-NEWS LETTER

“It is important to understand and map the demand for skilling programs in SME cluster

associations in growth areas and industries, especially in the rural, agricultural and tribal

areas of the country. In fact, we need to reduce our dependence on imports and move

towards growing skills in traditional skills that will inch us closer to realizing the ambition

of creating a five-trillion dollar economy,” MSME minister Nitin Gadkari said.

“Apprenticeship can provide hands-on training to candidates and provide a better

industry exposure to help them gain confidence in a working environment. New job roles

will need new skill sets and it is therefore important to inspire the youth to equip

themselves with industry-relevant skill sets,” skills development minister Mahendra Nath

Pandey said.

Home

India-bound FDI may face thorough frisking

(Source: Deepshikha Sikarwar, Economic Times, October 16, 2019)

India is taking a fresh look at security protocols to be followed by foreign direct investors

as concerns rise over money coming in from countries that New Delhi has sensitive ties

with and monitors closely.

The Department for Promotion of Industry and Internal Trade (DPIIT), the finance

ministry’s department of revenue and the home ministry are holding discussions on the

matter, said people with knowledge of the matter. The review comes amid the rising trend

of FDI being screened worldwide. The EU recently adopted a screening framework on the

grounds of security and public order. The US has stepped up scrutiny of Chinese

investments in the country amid a trade war over concerns about acquisition of American

assets.

Under the heightened oversight, the framework for disclosures made to the RBI could be

enhanced for better capturing FDI inflow data and source of funds, especially in sectors

on the automatic route. The DPIIT is also in talks with security agencies to determine

whether existing safeguards need to be stepped up.

‘Some Concerns’

“There are some concerns,” said a senior official aware of the deliberations. “We are

looking at the constituents of the security protocol… What needs to be done.”

India has widened the opening for FDI, allowing overseas money into most sectors

through the automatic route, having abolished the Foreign Investment Promotion Board

(FIPB) in 2017.

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16 CITI-NEWS LETTER

Rs 75,000-crore minimum alternate tax credit dilemma grips India Inc

(Source: Ashley Coutinho & Sudipto Dey, Business Standard, October 16, 2019)

Fifteen heavyweight companies have accumulated MAT credit in excess of Rs 1,000 crore

each

Vast swathes of Corporate India may not be in a hurry to

shift to the new corporation tax regime. Ninety-nine

companies, which also include some unlisted ones, have

more than Rs 100 crore each of minimum alternate tax

(MAT) credit on their books, cumulatively adding up to Rs

75,000 crore. Of these, 15 heavyweights such as NTPC,

Reliance Industries, Bharti Airtel, Vedanta, and TCS have

MAT credit in excess of Rs 1,000 crore each.

“By utilising MAT credit, many companies will be able to

bring down their effective tax cost to 17.47 per cent from

25.17 per cent (under the new regime), leading to

substantial tax savings of about 8 per cent,” said Saumil Shah, partner, Dhruva Advisors.

“Only those companies whose effective tax cost is higher than 25.17 per cent will shift to

the new regime.”

MAT credit is the difference between the tax the company pays under MAT and the

regular tax, and is allowed to be carried forward for a period of 15 financial years.

According to experts, infrastructure companies as well as those from sunrise sectors such

as telecom, IT, and renewable energy are likely to maintain the status quo owing to the

substantial MAT credit on their books and the tax holidays enjoyed by them in the past.

A third of the 850 top CRISIL-rated companies surveyed – from capex-heavy sectors such

as power and oil & gas – have expressed a desire to continue with the current tax regime,

CRISIL said in a note on Tuesday.

“The MAT rate has reduced irrespective of whether you come under the new tax regime

or not. So, if you were to defer your migration to the new regime, you still pay only 17.16

per cent tax under MAT (as opposed to 21.16 per cent until March 31, 2019). By doing so,

the company may not be required to write down the MAT asset,” said Bhavin Shah, leader,

financial services tax, PwC India.

Companies that are mainly into exports may also eschew moving to the new regime. “If a

company has more of local business for which it is not claiming any incentives, it can set

up a new company for its local business and benefit from the new 25 per cent tax rate.

However, it can let the export part of the business remain in the old company,” said Rajesh

Gandhi, partner, Deloitte India.

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17 CITI-NEWS LETTER

“For large corporate groups like ourselves, it will continue to be attractive to stay with tax

holidays and additional depreciation benefits as we have invested very heavily in capex,”

Pallavi Joshi Bakhru, group head taxation, Vedanta, had told Business Standard earlier

this month.

Companies in the highest effective tax rate of 34.94 per cent — including banks, NBFCs,

and FMCG majors — would move to the new regime as they would get 9 per cent benefit.

Those from sectors such as auto, chemicals, textiles, gems & jewellery, and retail are also

likely to shift.

Manufacturing companies and those into sole proprietary businesses may want to set up

a new company to take advantage of the lower tax rates. These companies, however, have

to ensure that they set up a new business for getting the lower rate of 15 per cent and not

just transfer business from an existing company, experts said.

“Companies in the highest tax bracket wanting to move to the new regime would need to

be aware that MAT credit, brought forward losses in account of any tax holidays or R&D

benefit and additional depreciation would be lost and may require re-computation of past

tax returns to determine losses or depreciation available,” said Saumil Shah.

The Central Board of Direct Taxes (CBDT) clarified earlier this month that companies

would not be allowed to adjust the MAT credit against their tax liabilities if they opted for

lower corporation tax rates. They will also have to let go of incentives under special

economic and tax-free zones. Companies opting for the new regime can’t go back to the

old one.

MAT is akin to an advance tax. The concept of MAT credit was re-introduced in 2005 with

a carry forward mechanism of five years. This was subsequently increased to 10 years, and

to 15 years in 2018.

Home

Tangedco wants industry to give up legacy concessions

(Source: G Balachandar, The Hindu Business Line, October 16, 2019)

Tangedco continues to be in deep financial distress despite several efficiency improvement

measures, says Chairman and Managing Director

The Tamil Nadu Generation and Distribution Corporation wants the power industry to

forego certain legacy concessions in order to turn healthy, and for the benefit of all

stakeholders, as the utility continues to grapple with massive debt despite its efforts to

cut losses and improve revenues.

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18 CITI-NEWS LETTER

“Tangedco continues to be in deep financial distress despite several efficiency

improvement measures. It is time to revisit the concessions the industry has been

enjoying historically. This has to be done in order to make the utility healthy which is

essential for the benefit of all stakeholders,” Vikram Kapur, Chairman and Managing

Director, Tangedco and Additional Chief Secretary, Government of Tamil Nadu, said here

on the sidelines of a CII meeting on Tuesday.

He felt that some of the legacy concessions such as banking of energy, open access and

group captive status were causing huge stress and are a heavy financial burden to the

Discom (Tangedco).

Legal tangle

“People who claim group captive status don’t allow us to verify. If we verify, most of them

will not be eligible for concessions such as waiver of cross-subsidy surcharge, which is a

substantial portion per unit. The moment we attempt to verify, they get a stay from the

court and litigation takes its own time and we are losing a lot of money,” he added.

In open-access system, since we have surplus power, we can go back to the old method of

allowing a smaller consumer to buy power, he said.

“But some people have gone to the court and for the past two years, we have not been able

to get the stay vacated. I confess that we are not able to make much headway in these

areas. This is where the industry can partner with us. Maybe it is time to give up these

concessions they have been enjoying. Unless these concessions are revisited entities like

Tangedco will never be commercially viable and they will not able to service the industry

and customers. It is in our mutual interest to ensure that we sit across the table and try to

relook at the concessions. Unless Tangedco is taken back to health, it will take the industry

downhill,” he said.

UDAY experience mixed

Kapur earlier explained that Tangedco’s UDAY experience has been mixed.

“There were some initial gains. Unfortunately, we are seeing some plateauing of these.

We are slipping back on the trajectory that was promised or assured. Despite making

several improvements, various factors beyond our control continue to cause financial

stress for Tangedco,” he said.

As most of the coal comes from domestic sources, Tangedco has no control on prices.

Railways control freights and rates. Central power stations that provide 30 per cent of the

power have a mechanism that leads to a regular increase in cost of power. “Also, we

continue to expand projects across generation, distribution and transmission, capex is

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19 CITI-NEWS LETTER

undertaken and that adds to the interest burden. Higher wages due to periodic

settlements also cause huge burden,” he stated.

Gaja cyclone losses

Natural calamities from time to time wreak havoc on the State’s power infrastructure.

Last year’s Gaja cyclone devastated the electrical infrastructure completely in four

districts of Tamil Nadu.

“It was virtually re-electrification of nearly 66 lakh consumers and their infrastructure. It

burnt a hole of nearly ₹2,500 crore in Tangedco and only one-fifth of it was reimbursed.

Rest we had to bear,” he added.

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20 CITI-NEWS LETTER

GLOBAL

IMF says US-China trade war will have 'real spillover effects' for EMs

(Source: Reuters, October 16, 2019)

The fight could set up a "domino effect" for smaller economies, according to

a second IMF official

Trade tensions between the United States and China — the world’s two largest economies

— are a significant source of risk for the global economy, with “real spillover effects” for

emerging markets, top IMF officials said on Wednesday.

Tobias Adrian, director of the monetary and capital markets department of

the International Monetary Fund, told reporters the tit-for-tat trade war between

Washington and Beijing had a significant impact on financial markets over the past two

years.

The fight could set up a "domino effect" for smaller economies, according to a second IMF

official.

"We urge policymakers around the world to continue to work together in order to resolve

those trade tensions as that is significant source of uncertainty and a significant source of

creation of downturn risks," he said. "There are real spillover effects for emerging

markets."

The IMF's chief economist, Gita Gopinath, on Tuesday welcomed a preliminary and

partial trade agreement reached last week by Washington and Beijing and urged

continued work by both sides to end trade tensions that have weighed on global growth

and business confidence. She said global gross domestic product would be reduced by 0.8

per cent if Washington and Beijing imposed the additional tariffs in October and

December, but only 0.6 per cent if the two countries forgo the additional increases.

Home

Pakistan, Egypt agree to promote trade

(Source: Mubarak Zeb Khan, The Dawn, October 17, 2019)

Pakistan and Egypt on Wednesday agreed to work out measures for capturing untapped

economic potential and promoting bilateral trade.

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21 CITI-NEWS LETTER

The decision took place at the first meeting of the Pakistan-Egypt Joint Working Group

(JWG) on Trade held in the capital. The JWG was established at the sidelines of Pakistan-

Egypt trade conference held in Islamabad on Wednesday. On the occasion, the Ministry

of Commerce and Egyptian Commercial Service signed a Memorandum of Understanding

(MoU) for the establishment of the JWG on trade.

The Pakistan delegation was led by Secretary Commerce Ahmed Sukhera while Egypt was

represented by First Undersecretary of Egyptian Commercial Service Ahmed Anter.

The two sides emphasised on the relative importance of Pakistani-Egyptian trade and

economic relations as well as enhancing the current trade volume.

According to the minutes of the JWG meeting, it was agreed to enhance trade in key

sectors including agricultural products, engineering industries (electrical apparatuses

and power appliances), construction and building materials, fertilisers and chemicals,

textiles and leather products, medical and surgical instruments and pharmaceuticals was

reached.

Both sides agreed to enhance trade promotion efforts by signing an MoU between Trade

Development of Pakistan (TDAP) and Egyptian Commercial Service, organisation of

Single Country Exhibition in Cairo and Karachi and frequent exchange of delegations and

participation in each other’s International trade fairs.

At the sidelines, business to business meetings were arranged between Egyptian and

Pakistani businessmen.

Meanwhile, the Ministry of Commerce and Textile organised a Pakistan-Egypt Trade

Conference in Islamabad. It was the first of a series of such conferences planned with

African countries under the ‘Look Africa Policy Initiative’ of the ministry.

Addressing to the Egyptian delegation, the Adviser to the Prime Minister on Commerce,

Razak Dawood expressed the desire to make the trade relations commensurate with the

political relations.

The adviser emphasised export potential of Pakistan in sectors including engineering

goods, rice, agro-processed products, surgical, pharmaceutical and sports goods. He also

highlighted the investment opportunities available in Pakistan especially in engineering

sector.

During the conference, Sukhera announced details of the ‘Look Africa Policy Initiative’ of

the government and relocation of six commercial sections to Africa in Egypt, Algeria,

Senegal, Ethiopia, Tanzania and Sudan.

Home

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22 CITI-NEWS LETTER

Circular economy a viable solution for developing economies

(Source: Hassnain Javed, The Daily Times, October 17, 2019)

To meet the needs of future generations, fundamental change in the way we use natural

resources is necessary. Current global resource extraction patterns are inconsistent with

internationally agreed goals to limit global average temperature increases to below 1.5 °

C above pre-industrial levels. Redirecting to a sustainable growth direction would require

significant changes in both the productive use of primary resources and a significant

degree of primary resource replacement with secondary materials – those obtained from

waste streams and reused or reconditioned for further use.

The definition of ‘ circular economy ‘ is increasingly becoming a new robust growth model.

A circular economy is one where goods and services are recycled, repaired and reused

instead of disposed, and waste from one industrial process becomes a prized input into

another. The design and optimization of resource ‘ loops ‘ across value chains can help

meet the material needs of growing populations by drastically lower levels of primary

resource use per capita. The concept of circular economy is now a fundamental

component of both the 2050 Long-Term Strategy for the EU to reach a climate-neutral

Europe and the five-year plans for China. Japan placed the circular economy as a priority

for the G20 Summit in 2019.

In contrast in our country Pakistan, given significant development and political progress,

inadequate attention has been paid to circular economy pathways and the same situation

prevails in other developing countries. Structural and political conditions, as well as the

faster pace of growth and industrial development, would demand different strategies to

those implemented in developed countries; for example, the agricultural sector has so far

received minimal attention in global circular economy discussions, but will need to play

a central role in the circular economy pathways of developing countries. Innovation is

already occurring in developing countries, in the agricultural sector and well beyond, and

policymakers in developing countries are starting to implement aggressive policies for

more resource-efficient and circular industrial growth patterns. The circular economy

presents the conventional manufacturing-led growth model with a compelling alternative

strategy for industrial development and job creation. The circular economy remains

mainly recognized as a tool for waste management and recycling, but the economic

opportunities are much wider and more complex. The adoption of this model could

provide new business opportunities for economic differentiation, value creation and skill

development with the right supporting conditions. Developing countries like Pakistan

should take advantage of the new economic opportunities in a strong position. A wide

informal industries are already involved in’ circular’ practices-for example in areas such

as electronic waste (e-waste) and telephone repairs -and could engage in supply chains

with higher-value circular economy. Therefore, with appropriate investment, developing

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23 CITI-NEWS LETTER

countries can’ leapfrog’ developed countries to incorporate sustainable production and

consumption at the core of their economies in digital and material innovation.

A transition to a circular economy carries with it some trade-offs that need constant

monitoring. In the absence of a systematic and strategic approach to the circular economy

at national or international level, there is a danger that under the circular economy

umbrella companies will pursue perfunctory-or, at worst, negative-practices that

discourage more efficient and higher-value use of content. For example, waste-to-energy

projects using under-standard waste disposal methods may carry environmental and

human health risks and may also rely on more suitable waste sources for previous-life

goods. Exchange-offs may also occur where circular proposals suggest major industrial

policy shifts: in mineral-intensive economies, for instance, circular strategies may

promote value-added, but may also threaten job losses among those working in resource

extraction and basic processing.

Circular economy’s progress in developing countries will be important in ensuring

sustainable growth for global efforts. Developing countries will already be global

production centers and are expected to become major market drivers. Progress now in

incorporating circular concepts in industrial growth and strategies for infrastructural

development will help meet the needs of rising and rapidly expanding populations while

balancing against a continuing increase in primary resource usage, related emissions, and

pollution. For instance, the CE can help deliver quality housing and infrastructure at low

economic and environmental costs by following flexible, responsive and resilient design

principles. Circularity in international value chains and the governance and investment

structures needed to enable a global circular economy need to be given greater attention.

In 2015, East African countries imposed a ban on secondary textile imports to protect

their domestic industries, worried about China’s entry into the market of large volumes

of cheap second-hand clothes. The ban was replaced by an import tax after the US

threatened retaliation, but the episode demonstrated how, if not carefully managed, trade

in secondary materials could lead to conflicts with conventional sectors and between

countries. And the implementation of a complete ban on solid waste by China in 2018

brought to light the importance of creating integrated, open supply chains in waste and

secondary materials if hazardous waste disposal activities are to be avoided and circular

economy value chains are to emerge on a scale. In order to agree on common rules and

standards for international circular value, greater cooperation is needed at global level.

There is an immediate need to extend the global circular economy conversation to include

developing countries and to invest political and financial capital in promoting an

inclusive, global circular economy growth. Governments in developed countries have an

important role to play in fostering meaningful dialog on how best to manage the global

complexities of circular economy policies. Support from international agencies such as

the UN Industrial Development Organization (UNIDO) and the UN Environment

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24 CITI-NEWS LETTER

Programme (UNEP) will be critical to facilitating the piloting of circular economy

solutions among small and medium-sized enterprises (SMEs) in developing countries and

along international value chains to demonstrate the viability of cross-border circular

value chains at scale. And proactive engagement by multinational companies with

suppliers in developing countries – including SMEs and those operating in the informal

sector – will be necessary for circular activities to be scaled up in a manner that is inclusive

and avoids the displacement of vulnerable workers.

Therefore, in order to conclude I believe action is required on three fronts firstly by

aligning the circular economy with current technology policy priorities. To incorporate

the circular economy into high-level business policies and policy planning, decision-

makers need trust that circular economy solutions are aligned with sustainable

development priorities, including promoting stable economic growth and providing the

most vulnerable people with opportunities. National governments in developing

countries must recognize synergies between the circular economy and existing national

plans and conduct an analysis of the scope of opportunities for transition to a circular

economy through key economic sectors. Governments of donors must embrace the

circular economy as an industrial development tool in developing countries and raise

funds to support the innovation and expansion of circular economy. Secondly, there is

need for continuity to invest in the basics in developed countries to support the transition

to the circular economy. There will be a need for effective governance mechanisms,

inclusive policies and collaborations at national, regional and international level to create

an enabling environment for testing and rolling out circular economy activities. Thirdly,

there should be support for an inclusive international circular economy strategy that

encourages cooperation and partnership. Trade and cooperation are key ingredients in

speeding up the circular economy in developing economies, and leveraging foreign

investment will rely on harnessing opportunities for innovation.

(The writer is Advisor (PITAC), Lahore operated under Federal Ministry of Industries

and Production, Islamabad)

Home

Cotton Output To Remain Dismal Due To Lack Of Initiatives: Mian Zahid

Hussain

(Source: Umer Jamshaid, Urdu Point, October 16, 2019)

President Pakistan Businessmen and Intellectuals Forum (PBIF), President All Karachi

Industrial Alliance (AKIA), Senior Vice Chairman of the Businessmen Panel of FPCCI and

former provincial minister, Mian Zahid Hussain on Wednesday said fixing the target for

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25 CITI-NEWS LETTER

cotton production is not enough which should be backed by supportive steps. Cotton

growers should be supported to discourage them from switching to other crops and

maintain area under cultivation which is shrinking otherwise it will be damaging for the

textile sector, he said.

Talking to the business community, the veteran business leader said that Pakistan must

import five million bales to keep market stable which will increase the import bill and cost

of doing business for the textile sector while it can hit the exports. He said that cotton

accounts for 4.5 percent of the agricultural GDP, one percent of national GDP and it

covers seventy percent cost in textile production.

Mian Zahid Hussain said that reduction in area under cultivation, pest attacks,

substandard seed, and pesticides, water scarcity, low profit and high cost of inputs will

reduce cotton output by 33 percent which will reduce GDP by two percent.

The former minister noted that pink bollworm and whitefly wastes almost four million

bales due to the substandard seed which should be tackled.

He noted that the textile industry is earning thirteen billion dollars of foreign exchange

and providing employment to ten million people therefore it should be given preference

by policymakers. Pakistan is at the bottom of ten major cotton-producing countries while

the area under cultivation has been reduced by 29 percent since 2012. India will produce

30 million bales while Pakistan will produce hardly ten million bales during the current

year.

Pakistan and India have identical weather but the later is using latest machinery which

has boosted the production, he said, adding that growers are selling cotton for Rs 90 per

kg while textile mills are getting it for Rs 230 per kg which is damaging both. The

difference is pocketed by the middlemen which is not profit but exploitation which should

be discouraged. He also called for reforms to make Pakistan Central Cotton Committee

an effective institution to improve situation.

Home

Jute geo-textile can earn billion dollar from domestic market

(Source: Bilkis Irani, The Dhaka Tribune, October 16, 2019)

Experts say at a seminar, call for extensive use of jute geo-textile for environmental

protection

Bangladesh can earn billion dollar from the domestic market by ensuring proper use of

jute geo-textile (JGT) in preventing soil, river and embankment erosion and landslide in

hilly areas instead of exporting raw jute, experts have said.

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26 CITI-NEWS LETTER

On the other hand, the multi-purpose uses of jute in the domestic market can also ensure

fair prices for the farmers.

They came up with the observations at a seminar titled “Enhancing Effectiveness and Use

of Jute Geo-Textile” organized by Bangladesh Jute Mills Corporation (BJMC) in Dhaka

on Wednesday.

The experts also called for more research and innovation in this sector to develop new

products for both local and global markets.

Geo-textiles are the most versatile and cost-effective ground modification materials and

JGT is one of the most popular natural geo-textiles. The popularity of jute geo-textile in

the world market is for its eco-friendly characteristics.

“In the recent years, earnings from domestic market are higher than the export earnings

of JGT. The demands of the material is increasing in domestic market,” said BJMC

Chairman Shah Mohammod Nasim.

"There is a huge potential for JGT in the domestic market. If we can meet 85% domestic

demands through the private sector, the sector will make great progress and will

contribute in the economy," he said.

He urged all the stakeholders to boost the use of jute geo-textile in preventing soil, river

and embankment erosion and landslide in hilly areas.

Nasim also stressed marketing instead of only production as there is a huge stock of JGT,

worth around Tk700 crore, in the warehouse of BJMC.

Mobarak Ahmed khan, scientific advisor of BJMC, said: “We can get cellulose, a major

component of plant fibre, by recycling worn out jute bag as well. Around one kg cellulose

nannocrystals can be made from 2kg of jute, the market price of which is around Tk1

lakh.”

At the seminar, Bangladesh University of Engineering and Technology (BUET) Professor

and Bangladesh Public Service Commission Member Dr Abdul Jabbar Khan presented

the main article.

Geo-textiles are technical textiles used under earth or above earth surface in order to

obtain civil engineering benefits.

He said: "Synthetic geo-textiles (SGT) are polymer-based product, non-biodegradable

and vulnerable to ultraviolet (UV) radiation while natural or jute geo-textiles (JGT) are

produced from jute natural fibres, biodegradable and eco-friendly and can survive up to

five years with treatment."

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27 CITI-NEWS LETTER

He further pointed out that JGTs were capable of absorbing 300%-400% of water. For

example, one square meter of JGT can absorb 1.5-2.5 litres of water. JGTs biodegrade in

prolonged moist environment.

JGT can be used to strengthen construction of rural roads or street’s soil, to prevent river

corrosion, soil erosion, save the barrage or protect river bank, control erosion of hills and

to keep the soil and environment stable.

Home

RGE commits $200m to textile fibre innovation

(Source: Innovation in Textiles, October 16, 2019)

Leading resource-based manufacturing group Royal Golden Eagle (RGE) has announced

plans to invest US$ 200 million over the next 10 years into cellulosic textile fibre R&D.

The investment, revealed ahead of the Textile Exchange Sustainability Conference in

Vancouver, will support solutions in alternative cellulose or plant-based feedstock and

closed-loop manufacturing.

“This is a strategic business growth area for RGE. Our integrated portfolio of companies

across pulp, fibre and yarn production puts us in a unique upstream position in the textile

value chain to realise commercial scale and affordable solutions that support downstream

manufacturers and brands. We aspire not just to be the largest viscose producer but also

to be a leader in sustainable textile fibre production through innovation,” said Bey Soo

Khiang, Vice Chairman of RGE.

Partnerships

Through its business groups Sateri in China and Asia Pacific Rayon (APR) in Indonesia,

Singapore-based RGE is the world’s largest viscose producer with a total annual

production capacity at 1.4 million tonnes. Sateri and APR source wood-based dissolving

pulp from sustainably managed renewable plantations in Indonesia and Brazil through

RGE-managed companies, APRIL and Bracell.

“Sateri is proud to be part of this long-term commitment that RGE has made. We look

forward to supporting and scaling up solutions that can help Sateri produce even more

sustainably and deliver high quality and affordable products to our customers,”

commented Allen Zhang, President of Sateri.

Through partnerships with innovators and in-house research and development, several

initiatives are already underway. In August 2019, RGE invested in Finnish start-up

Infinited Fiber Company (IFC) to scale up its technology. A 500-ton pre-commercial plant

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28 CITI-NEWS LETTER

in Finland and customer training centre will be ready by early 2020. “Infinited Fiber

technology fits perfectly in RGE’s shift for using alternative feedstocks. Our ability to use

a diverse range of feedstock, especially mixed textile fibres, is a technological

breakthrough, and as RGE’s strategic partner we look forward to support their change,”

said Petri Alava, CEO of IFC.

Opportunity to innovate

In May, an MoU was signed with re:newcell for technical cooperation and trials on

production of viscose using recycled cotton, with the aim of industrial scale production

by 2025. “We are very happy about adding Sateri, a world-leading fibre producer, to our

group of validation partners for scaling up circular raw materials for fashion. Cooperation

between many actors in the value chain is crucial to achieve significant positive impact in

this industry,” said Patrik Lundström, CEO at re:newcell.

RGE has also commenced partnership discussions with Fashion for Good, whose

Innovation Platform is, at the core of its efforts, focused on sparking and scaling

technologies and business models that have the greatest potential to transform the

fashion industry. “As the world's largest viscose producer, RGE is uniquely positioned to

implement and scale our innovator's solutions across its global portfolio. There is a huge

opportunity to innovate in the area of next-generation fibre solutions. The potential for

change is enormous,” commented Katrin Ley, Managing Director, Fashion for Good.

In addition, RGE’s in-house R&D teams conduct research on alternative cellulosic

feedstock, such as agricultural waste and recycled cotton, as well as closed-loop

manufacturing for viscose production, in collaboration with leading universities and

global R&D centres.

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