The Canadian Parvasi - Issue 107

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The International News Weekly Edit 06 August 16, 2019 | Toronto The w w w . canadianparv asi. c o m Publisher & CEO Associate Editor Editor (India) Online Graphic Designer Official Photographer Contact Editorial Sales Rajinder Saini Meenakshi Saini Gursheesh Kshitiz Dalal Naveen Bashir Nasir editor@canadianparvasi.com sales@canadianparvasi.com Do What It Takes On 73rd Independence Day it is India’s economic future that is in focus The identity of this government is that it neither avoids problems nor lets them fester. So said Prime Minister Narendra Modi in his Independence Day address to the nation from the ramparts of the Red Fort. He was referring to the momentous decision to nullify Article 370. In this view, a temporary provision came to endure for seven decades because earlier governments lacked the courage for course correction. A like charge can be laid at the Modi government’s door, on the economy front. Signs of a worrying slowdown are all around. However, the PM says that every citizen should be dreaming of India becoming a five trillion dollar economy in the next five years, which means that instead of the usual incremental progress it is time to “jump high”. Such exponential progress requires confronting the problems that are holding up the economy. Indeed, the PM called for honouring wealth creators and touched on the need to expand exports, which implies a reversal of the current approach of piling on taxes, tariffs, harassment by tax agencies, high spectrum charges and the like – a ‘maximum government’ approach that ends up hobbling the global competitiveness of the Indian economy. One concrete outcome of the speech was Modi’s announcement of his government’s decision to deliver on the long pending demand for a chief of defence staff for the Indian armed forces – essential for its modernisation and integration and hanging fire since establishing such a post was recommended after the 1999 Kargil war. If the PM’s first term was signatured by the Swachh Bharat campaign, a similar role in the second term may be performed by the Jal Shakti Abhiyan. With many areas suffering drought followed by flooding in recent months it is obvious that India’s water infrastructure and administration need a radical makeover. More efficient use of water is, indeed, a necessary ingredient for India’s economic revitalisation. For such revitalisation, and if India is to hit the $5 trillion target, the government must display decisiveness similar to that which it is willing to exhibit on the security front. It needs to get out of the business of running businesses, including most public sector banks, and to courageously reform the factor markets that have been making India increasingly uncompetitive. TNN Regain India’s Textile Glory How to reverse the slide in apparel exports and ride a high growth path Ajay Srivastava A look at last year’s apparel export figures is chastening. China exported $145 billion, Bangladesh $36 billion, Vietnam $33 billion and India a mere $17 billion. India is far behind China and steadily losing to smaller countries. The biggest reason is India’s near absence from the main product category that accounts for 70% of world trade in apparels – synthetic apparels. Today, most formal, sports and fashion wear uses synthetic fabrics. They are durable, do not fade, can have any colour. Easy blending with wool, cotton, or rubber allows experimentation. Unsurprisingly, synthetics have overtaken cottons and become favourites of the fashion industry. With weak synthetics, India’s apparel industry is a horse running with one leg tied. The results are low exports, low wages, and low investments in the sector. Here is how. Globally cotton dominates spring and summer sales seasons. Synthetics and blends dominate autumn and winter seasons. Indian units run six months a year to produce cotton apparels. In the remaining six months, most units are shut or run at a low capacity as they do not have orders for synthetics/ winter wear. Most workers go home. Also, a factory that runs only six months a year still has to pay the full year’s fixed costs – rent, salary for minimal staff, interest on loans, etc. This makes anything made in the factory expensive. Absence from synthetics also affects workers’ wages. Winter wears are more expensive than informal cotton wear. So, at 20% labour cost, a worker making a suit would earn more money than the worker making a blouse. Since India is mainly an informal cotton wear exporting country, wages remain at minimal levels. Entry into synthetics would make factories run full year, and increase wages manifold. Why is India weak in synthetics? Here are three major pain points. One, expensive raw material. India is almost a captive market for a few large firms that produce 90% of the synthetics raw materials consumed in India. Domestic prices are tied to import prices. And imports are expensive because of high customs and anti-dumping duties on raw materials like PTA, PSF, PFY, acrylic fibers, etc. Duty-free imports to exporters offer some relief, but the domestic synthetics ecosystem remains stunted. Two, weak weaving and processing. The textile value chain consists of yarn making, weaving, fabric processing and apparel making. Weaving and fabric processing are the weak links that threaten to fragment this chain, forcing the export of yarn and import of fabric. Most weaving and processing units are small, informal units that lack expertise, scale and technology. Power outage and reduced capacity use doubles the cost of weaving in India, making it as expensive as in the EU or US. Fabric processing faces similar issues. Chinese units process 10 lakh metres of cloth a day, Indian units less than 20,000 metres. For large orders, Indian units do batch processing that often results in output with varying shrinkage, feel and shades. Also, most Indian processors are struggling to meet the zero-liquid discharge (ZLD) norms set by Madras high court in 2011. Not surprisingly, while India is the number one yarn exporter (India 23% share, China 13%) when it comes to fabrics, performance falls (India, 6%, China 52%). Yarn sector has large units, while weaving and processing happen in small informal units. Three, low preparedness of Indian exporters to meet the demands of the fast fashion industry (FFI). Key FFI players are the low-cost retailers like Walmart, high fashion brands like Zara, H&M, Gap, and online-only retailers like Amazon, Zalando. They conjure new fashion trends and convert designs into affordable clothing within a few weeks. Any delay means a change in fashion and the product ending into surplus. This forces FFI to place orders only with firms that deliver fast and are compliant with labour and other rules. Cost is an important issue. One metric used by FFI for making payments to apparel manufacturers is standard allowed minute (SAM). It measures the time taken in making a garment. FFI firms compare SAM across manufacturers and countries while placing orders. Skilled labour and the latest technology are a must to ensure a good SAM. 80% of Indian exporters do not meet SAM or other requirements. A three step plan will unshackle the sector and set it on a high growth path. One, lower import duties on synthetics raw materials. Lower duties will bring down the prices by 30% to 50%, almost at par with global prices. This would free the apparel industry to scale up and invest in synthetics. Without low import duties, the synthetics industry and hence exports cannot take off in a big way. Two, strengthen the weaving and processing segments. Only large units with the latest technology can meet the quality requirements. Setting up ten big scale weaving and processing units could be an annual goal. High investments in the latest machinery set Chinese industry on a high growth path. Three, take priority action to make more factories FFI compliant. The good news is India has about 1,200 compliant factories supplying cotton products to FFI and other large buyers. Many of these would invest in synthetics and export new products to the same set of buyers. Indian has a rich textile heritage with thousands of firms and skilled craftsmen. The suggested actions would make us a significant player in apparel trade. The industry engages 50 million people. Change will benefit everyone associated. Source Credit: This article was first published in The Times of India. The writer is an Indian Trade Service officer. Views are personal Parvasi weekly & people associated with it are not responsible for any claims made by the advertisement & do not endorse any product or service advertised in Canadian Parvasi. Please consult your lawyer before buying/hiring/contracting through the advertisement Publised in this newspaper. The Canadian Parvasi is in the business of selling space and the clains made by the advertisement are not tested/confirmed by an independent source.
The International News Weekly world August 16, 2019 | Toronto 07 All 24 Indian crew aboard Iranian oil tanker released in Gibraltar London : All 24 Indian crew aboard VLCC Grace 1, an Iranian oil tanker, have been released by Gibraltar authorities and are free to return to India, Minister of State for External Affairs V. Muraleedharan said on Thursday. In a tweet, Muraleedharan said: "Spoke to our High Commission in London. They confirmed all 24 Indian crew aboard VLCC Grace 1 have been released by Gibraltar authorities and are free to return to India." “I am grateful and thankful for my release. And I am grateful to all who have facilitated my release in my legal team,” the Captain of the Grace 1 tanker said in a statement. A spokesman for Gibraltar’s government also confirmed that police proceedings against four members of the crew had ended. The arrested Indian crew members – the Master, Chief Officer and two Second Mates – were aboard the Panamaflagged supertanker that was detained off Europa Point in Gibraltar, a British Overseas Territory on the Spanish coast, last month. The Gibraltar authorities had said the vessel is loaded to capacity with crude oil enroute to Syria, in breach of European Union (EU) sanctions. But after a hearing in Gibraltar on Thursday, the local Supreme Court of the region ruled that the tanker should be released after formal written assurances from Iran that the ship would not discharge its cargo in Syria and therefore not be in breach of EU sanctions. “On 13 August, I received written assurance from the Republic of Iran that, if released, the destination of Grace 1 would not be an entity that is subject to European Union sanctions. I welcome that assurance. This is an important material change in the destination of the vessel and the beneficiary of its cargo,” said Fabian Picardo, Chief Minister of Gibraltar, a semi-autonomous British Overseas Territory. “Indeed, this assurance has the effect of ensuring that we have deprived the Assad regime in Syria of more than USD 140-million of valuable crude oil… In light of the assurances we have received, there are no longer any reasonable grounds for the continued legal detention of the Grace 1 in order to ensure compliance with the EU Sanctions Regulation,” he said. A total of 28 crew on board the vessel include majority Indians but also Russians, Latvians and Filipinos, who had spent over a month in detention on board the ship since it was seized in early July. They should now be able to sail on to a destination agreed with Iran and the owner of the tanker – the National Iranian Oil Company. Picardo, who said he has been conducting consultations with the Iranian authorities for weeks in an effort to de-escalate the political tensions surrounding the seizure of the vessel, confirmed that the tanker has since been re-flagged under the flag of Iran and re-insured. He added: “Separately, the US Department of Justice has requested that a new legal procedure for the detention of the vessel should be commenced. That is a matter for our independent Mutual Legal Assistance authorities who will make an objective, legal determination of that request for separate proceedings. “The Grace 1 is therefore now released from detention under the Sanctions Act by operation of law, as confirmed by the Chief Justice of the Supreme Court.” The UK Foreign Office has declined to comment on the US request and said “investigations conducted around the Grace 1 are a matter for the government of Gibraltar”. The Gibraltar port and law enforcement agencies had detained the supertanker and its cargo on July 4 during an operation conducted by the Royal Gibraltar Police (RGP), Customs and Port Authority with the support of British Royal Marines. The detention of the vessel relates to the suspected destination of the cargo, the Banyas refinery in Syria, which is owned by the Banyas Oil Refinery Company. The Gibraltar government said that its investigations produced evidence confirming that at the time of its detention the Grace 1 was “indeed carrying its cargo to the Baniyas refinery in Syria”, which was in contravention of Article 14 of the EU Regulation on Sanctions on Syria. However, following the assurances given by Iran and the captain of the ship, the Gibraltar government has “revoked the Specification of the Vessel” order. The US demand is reportedly part of the Trump administration’s efforts to intensify the effect of existing Western economic sanctions on both Iran and Syria. Iran had called for the UK to release its oil tanker and warned Britain not to get involved in “this dangerous game”, which eventually led to Iran’s seizure of a British-flagged tanker in the Gulf as well. Tehran blames the US for arranging to have its ship seized in the wake of sanctions imposed against Iran with the aim of halting all its oil exports. European countries do not have sanctions against Iran but have had them in place against Iran’s ally Syria since 2011. ‘Kashmiris and Pakistanis are one’, says Pak President on I-Day Islamabad : Pakistan President Arif Alvi on Wednesday said “Kashmiris and Pakistanis are one” people and the country will continue to stand with the people of Kashmir. Addressing the main function here to mark the 73rd Independence Day, he reiterated Pakistan government's stand against India's move to revoke the special status to Jammu and Kashmir and said Islamabad will move the UN Security Council against New Delhi's decision. He said by changing the special status of Kashmir, India not only violated the UN resolution, but also the Simla agreement. India has categorically told the international community that its move to scrap Article 370 of the Constitution removing the special status to Jammu and Kashmir is an internal matter and has also advised Pakistan to accept the reality. Alvi in his speech reaffirmed Pakistan’s support to the people of Kashmir. “We will not leave them alone at any stage. Kashmiris and Pakistanis are one. Our grief is common as their tears move our hearts. We were with them; we are standing with them and will continue to do so,” the staterun Associated Press of Pakistan reported quoting Alvi as saying. He said India has been violating the ceasefire agreements by firing and shelling on civilian populations along the Line of Control. “Pakistan is a peaceloving country and wants to resolve the Kashmir dispute through negotiations and dialogue. India, however, should not misunderstand our policy of peace as our weakness,” he said. Meanwhile, Pakistanis across the country celebrated the Independence Day, media reports said. The day dawned with the usual official functions and ceremonies - a 31-gun salute in the capital and 21- gun salutes in the four provincial capitals as well as a major event in Islamabad in which top government functionaries and armed forces’ officials took part. Special prayers were offered at the mosques for peace, progress and prosperity of the country. Pakistan has decided to observe the Independence Day as ‘Kashmir Solidarity Day’ and August 15 (India’s Independence Day) as ‘Black Day’ to protest India’s move to scrap the special status to Jammu and Kashmir and bifurcating the state into two Union Territories. Pakistan launches crackdown on sale of Indian film CDs Islamabad : The Pakistan government has launched a crackdown on the sale of CDs of Indian movies after New Delhi revoked the special status to Jammu and Kashmir, according to a media report on Friday. The crackdown is the latest in series of measures announced by Pakistan in reaction to revocation of special status of Kashmir by India. It also comes after Pakistan Electronic Media Regulatory Authority (Pemra) banned the airing of advertisements featuring Indian artists and India-made products. "We have banned Indian advertisements and launched a crackdown on CD shops to confiscate Indian movies," Dawn newspaper quoted Firdous Ashiq Awan, the Special Assistant to the Prime Minister on Information, as saying. She said the Interior Ministry had already started a crackdown on Indian movies in the federal capital and it would be expanded to other parts of the country soon in collaboration with the provincial governments. "Today the interior ministry raided some compact disc shops in Islamabad and confiscated Indian movies." Pemra on Wednesday circulated a letter dated Aug 14 on Wednesday announcing the ban. Pemra said that it already withdrew the permission for airing Indian channels and content on the directions of the Pakistan Supreme Court in October last year. "However, it has been observed that advertisements of various products of multinationals which are either produced in India or carrying Indian characters/talent [are] being aired on electronic media," according to the Pemra letter.
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