Ministry of MSME re-activates the micro-industrialization process in Rural India

Source: IBEF.org, Sept 18, 2020

A few days ago, Ministry of Micro Small and Medium Enterprises (MSME), had announced expanding and doubling the support to Artisans who might be interested in making Agarbatti. Taking these efforts further, the Ministry has now come out with new guidelines for two more schemes which include ‘Pottery Activity’ and ‘Beekeeping Activity’.

These new initiatives of the Ministry with beneficiary-oriented Self-Employment schemes, are aimed at rejuvenating the grass root economy contributing to AtmaNirbhar Bharat Abhiyan.

For ‘Pottery Activity’ Government will provide assistance of pottery wheel, Clay Blunger, Granulator etc. It will also provide Wheel Pottery Training for traditional pottery artisans and Press Pottery training for pottery as well as non-pottery artisans in Self Help Groups. There is also provisioned to provide Jigger-Jolly training programme for pottery as well as non-pottery artisan in Self Help Groups.

This is being done:

  • In order to enhance the production, technical knowhow of pottery artisans and to develop new products at reduced costs.
  • To enhance the income of pottery artisans through training and modern / automated equipment;
  • To provide skill-development to SHGs of pottery-artisans on focused /decorative products, with new pottery designs;
  • To encourage the successful traditional potter to set up unit under PMEGP scheme;
  • To develop necessary market linkages by tying up with exports and large buying houses;
  • To innovate new products and raw materials to make international scale pottery in the country
  • Preparing them to graduate from pottery to crockery and
  • Trainer’s training programme for skilled pottery artisans who want to work as Master Trainers.

In case of the POTTERY improvements in the Scheme are:

i) skill-development training on focused products like garden pots, cooking-wares, khullad, water bottles, decorator products, mural, etc. to SHGs of pottery-artisans has been introduced.

ii) Focus of the new Scheme is to enhance the production, technical knowhow of pottery artisans and efficiency of potter energy kilns to reduce cost of production

iii) Efforts will be made to develop necessary market linkages by tying up with exports and large buying houses

A total of 6075 Traditional and others (non-traditional) pottery artisans/Rural Un-employed youth/Migrant Labourers will get benefitted from this Scheme.

As Financial support for the year 2020-21, an amount of Rs.19.50 crore (US$ 2.64 million) will be expended to support 6075 artisans with a Centre of Excellence, with MGIRI, Wardha, CGCRI, Khurja, VNIT, Nagpur and suitable IIT/NID/ NIFT etc, for product development, advance skill programme, and quality standardization of products.

Additional amount of Rs. 50.00 crore (INR 6.79 million) has been provisioned for setting up of clusters in Terracotta, Red clay pottery, with new innovative value-added products to build pottery to crockery/ tile making capabilities, under ‘ SFURTI’ scheme of the Ministry.

In case of the Scheme for ‘Beekeeping Activity’, Government will provide assistance of Bee boxes, Tool kits etc. Under this scheme, Bee boxes, with Bee colonies, will also be distributed to Migrant workers in Prime Minister Gareeb Kalyan Rozgar Abhiyaan (PMGKRA) districts. A 5 days’ beekeeping training will also be provided to the beneficiaries through various Training Centres /State Beekeeping Extension Centres/ Master Trainers as per prescribed syllabus;

This is being done:

In order to create sustainable employment for the beekeepers / farmers.

To provide supplementary income for beekeepers / farmers;

To create awareness about Honey and other Hive Products;

To help artisans adopt scientific Beekeeping & Management practices;

To utilize available natural resources in beekeeping;

To create awareness about the benefits of beekeeping in cross pollination.

Ministry officials said that in addition to creating additional income sources through these employment opportunities, the ultimate objective is to make India self-sufficient in these products and to eventually capture the export markets.

As Improvements in Scheme for BEEKEEPING are:

– To increase the earnings of the artisans, value addition to the honey products proposed.

– facilitating adoption of scientific Beekeeping & Management practices

– Aiming to provide help in enhancing exports of honey-based products

To begin with, Scheme proposes to cover, during 2020-21, a total of 2050 Beekeepers, Entrepreneurs, Farmers, Unemployed Youth, Adivasis will get benefitted from these projects/programme. For this purpose a financial support of Rs.13.00 crore (US$ 1.76 million) during 2020-21 has been provisioned to support 2050 artisans ( 1250 people from Self Help Groups and 800 Migrant labourers), with a Centre of Excellence with CSIR/ IIT Or other Top class Institute to develop honey based new value added products.

Additional amount of Rs. 50.00 crore (INR 6.79 million) has also been kept for developing Beekeeping honey clusters under the ‘ SFURTI scheme of the Ministry.

Detailed guidelines for these Schemes in English and Hindi have been put on the Ministry’s websites. The same are also being circulated through social media outreach. It may be recalled that the initiative to rejuvenate Agarbatti making at grass-root level few days back, is a step which also directed towards make India AatmNirbhar in supply of this household consumption item. The interventions include the support to the artisans through training, raw material, innovation in the fragrance & packaging, use of new / alternate raw materials, marketing and financial support. The program will immediately benefit about 1500 artisans, in providing sustainable employment with increased earnings. Artisans living in rural areas, Self Help Groups (SHGs) and ‘Migrant workers’ will particularly benefit from the program. In addition to enhancing employment opportunities locally, the programme will also help in capturing the export market in such products.

Government extends mandatory BIS norms for toys

Source: ETRetail.com, Sept 16, 2020

NEW DELHI: In what has come as a big relief for domestic toy manufacturers, the government on Tuesday extended the mandatory BIS certification by four months. The new norm will be implemented from January 1, 2021. This will allow the manufacturers to dispose of their stocks, which otherwise were not allowed to be sold in the market from September 1.

The government had implemented the mandatory BIS certification for all toys meant for children below 14 years from September 1, which had put the domestic industry in deep crisis as only two toy makers had got the BIS licence and the process was underway for 81 other cases.

This was first published in TOI online on September 13 highlighting how domestic players were more hit due the government decision. Officials had said as per the law, the sale of non-BIS toys manufactured before September 1 was not permitted. “We welcome the government decision to extend the date for implementation of the quality control order (QCO). This is a big relief. We had been demanding this so that industry gets little more time to put the systems in place to comply with the order. We are completely with the government for complying with standards as children safety is our priority,” said Ajay Aggarwal, president of Toys Association of India said.

Representatives of major toy makers associations had told the government that the kicking in of the mandatory standards had hit Indian manufacturers.

India to organize world’s largest virtual fair for textiles

Source: ETRetail.com, Sept 17, 2020

New Delhi: India is organizing the world’s largest virtual fair for textiles with around 5,000 sellers and 30,000 buyers across the globe. Textiles secretary Ravi Capoor on Wednesday said the government is planning a Textile India Fair and looking for an Indian platform for the same.

“India is planning a Textile India Fair. We are organizing the largest virtual fair in the globe with 4,000-5,000 sellers and 25,000-30,000 buyers across the globe,” Capoor said at GLOBIZ- Global Textile & Home Furnishing Expo event organised by Ficci, adding that the government is looking for an Indian platform for the fair.

He said while India has competition in apparel, home furnishings and textiles sector has the potential to double exports in two years and asked industry to plan a huge outreach programme to expand the country’s exports to new markets such as Japan, CIS and Latin America. “80% of our exports go to 5-6 markets and we are focused on a few markets which is good but we need to expand to newer markets… We can move to new areas when the chips are down for major suppliers,” he said.

Capoor said orders are coming in for Indian textiles sector and it is about how industry meets the supplies and adheres to delivery schedules.

In the April-August period, India’s exports of cotton yarn, fabrics, made-ups, handloom products, man-made yarn, fabrics and made-ups, readymade garments, jute products, handicrafts and carpets were $8.7 billion.

Tencent invests $62.8 million in Walmart-controlled Flipkart

Source: Financial Express, Sept 17, 2020

Tencent is investing about $62.8 million in Walmart-controlled Flipkart, according to filings sourced from business signals platform paper.vc. The investment is most likely part of Walmart-led $1.2 billion infusion in Flipkart announced in July.

Tencent’s stake in Flipkart is estimated to be between 4%-5.3% currently. China-based Tencent is a minority investor in the e-commerce firm and shares the cap table with other minority investors including Tiger Global, Accel, former CEO and co-founder Binny Bansal, Microsoft and Singapore GIC.

The Walmart-led $1.2 billion equity round gave Flipkart a post-money valuation of $24.9 billion. The investment round was also backed by the company’s existing stakeholders.

Flipkart had said in a statement that the funds would be released in two tranches during the financial year.

The funds will come in handy as Flipkart is gearing up for its upcoming Big Billion Days sale.

E-commerce companies like Flipkart and Amazon have been expanding their capacities and recruiting fresh staff as order volumes increased manifold on the back of most consumers shifting to online platforms. On Tuesday, Flipkart said that it expects the upcoming festive sale to create more than 70,000 direct jobs. The direct jobs will be in addition to lakhs of indirect seasonal employment opportunities that the sale event has the potential to generate.

Exporters face liquidity crunch with piling GST, MEIS entitlement dues

Source: Financial Express, Sept 17, 2020

At a time when exporters are hit with a slump in global market in the wake of Covid-19, they have to cope with a tedious process of getting GST refunds and the MEIS (merchandise exports from India scheme) entitlements due for the period much before the Rs 2 crore limit was fixed.

The piling dues have led to liquidity crunch for exporters, for which they are approaching banks for extension of moratorium.

The MEIS scheme was designed to offset infrastructural inefficiencies and associated costs involved in exporting merchandise products.

Mahesh Desai, chairman, EEPC India, the apex body of engineering exporters, said, the body was receiving grievances from members that the shipping bills were not receiving validation in time for processing GST refunds. “The July bills, submitted within due dates have not been validated so far,” he said.

The government has imposed a Rs 2-crore reward limit per import export code (IEC) under the MEIS from September 1.

However, this year exporters have not received the entitlements even for April-August.

“Greater clarity is required and dues as per the old norms should be paid for the period as there is no limit on the rewards,” Desai said, adding that exporters are also confronted with lack of access for GST refunds through the concerned GST portal.

While the global trade is re-opening, exporters are facing huge problems of logistics, regulatory hurdles as also skewed demand.

Under such circumstances, the exports need to be supported by the government.

Engineering exports generate large scale employment , particularly in the small and medium enterprises.

The lockdown has been officially lifted but there are several problems still being faced by manufacturers.

The shortage of labour is still being felt.

Despite Union home ministry guidelines to allow movement of personnel from one state to the other, their movements are being restricted.

Banks are also not willing to extend the moratorium on loan repayments while GST dues are piling up coupled with MEIS entitlements, Desai said.

Garment exports begin to see revival, September fall lowest in 5 months

Source: Business Standard, Sept 17, 2020

Chennai: After witnessing a sharp decline since April, ready-made garment exports are on a road to revival. In April, exports dropped by around 91.04 per cent in dollar terms, and in August, the fall was 14 per cent. In April, exports fell to $126 million, compared to $1.409 billion in April 2019.

In August, exports stood at $1.084 billion, compared to $1.260 billion in the corresponding month of the previous year. Recovery was largely driven by the European Union (EU) markets. With garments seeing demand revival, capacity utilisation has increased to 60-80 per cent.

Companies said customers are placing new orders based on the season and the number of stores that opened have globally. E-commerce is also picking up. They expect growth to return by early next year.

The development comes months after shipments were kept on hold by international customers due to lockdown imposed in their respective countries. This led to revenue loss during the lockdown period. But now, they have started witnessing significant recovery in the order flow, compared to May.

Raja N Shanmugam, president of the Tiruppur Exporters’ Association, said enquiry levels are more than last year’s.

Brands are now looking for alternatives from China. But some major challenges Indian exporters need to address are quality, consistency, quantity, and timely delivery. “These factors have always been obstacles for any buyer to look at procuring from India. Pricing challenge is part of any trade. If we can address these factors, we can get a good pie of the global trade,” he said. “If we address these lacunae, we are going to get orders from brands since there is a silent anti-China feeling prevalent all over.”

On the impact of the Merchandise Exports from India Scheme (MEIS), he said, it will not hit apparel exports since it has been withdrawn last year itself. It was replaced with the Rebate of State & Central Taxes and Levies (RoSCTL).

Now, the government is replacing RoSCTL with Remission of Duties or Taxes on Export Products (RoDTEP). So, we don’t see any impact in the government’s decision of not to extend MEIS.

SP Apparels, one of the leading exporters in the country, said all the factories are operating around 60 per cent capacity due to social distancing norms imposed by the authorities.

The company managed to address labour shortage by providing migrant workers with accommodation and food in the hostel premises. Those who had gone have also started returning while the return of some others has been hampered due to transportation issues.

On the Covid-19 impact, the company said, besides the order flow, the rupee depreciated significantly in the fourth quarter, compared to last year’s. This impacted the company’s hedged positions and resulted in hedging losses. Loss of revenue due to the pandemic is expected to impact hedges and may see an impact in the first and second quarters also.

Rahul Mehta, chief mentor at The Clothing Manufacturers Association of India, had said, “Most of the cancelled orders are being reinstated to start with, and new enquiries are also being received. Most of the European as well as US buyers are talking to exporters. Discussions have started about the ability to supply.”

Self-reliance in select sectors can lead to import substitution of USD 186 bn: Study

Source: The Economic Times, Sept 16, 2020

Mumbai: Promoting self-reliance in sectors such as electronics, defence equipment, pharmaceuticals, among others, can lead to import substitution of over USD 186 billion for the country, says a study by Export and Import Bank of India (Exim Bank). Other sectors identified for import substitution and enhancing domestic production include machinery, chemicals and allied sectors, and select agricultural products, according to the study titled ‘Self-Reliant India: Approach and Strategic Sectors to Focus’.

The study has also included sectors such as auto components, and iron and steel where, though there is overall trade surplus for the country, but in some sub-categories, there is trade deficit, particularly with China.

It has included rare earth elements in the scope, as securing these strategic minerals is important for the country to enter high-tech manufacturing.

“These sectors account for more than USD 186 billion of imports by India, with a share of nearly 39 per cent in overall imports and 50 per cent in the non-oil imports by India,” the study showed.

The study was released by K Rajaraman, additional secretary, department of economic affairs, the Ministry of Finance, in a webinar organised by Exim Bank.

According to the study, the recent performance of the manufacturing sector in the country is indicative of an underlying inertia, with the share of manufacturing in the country’s gross value added declining to 15.1 per cent in 2019-20, as compared to 18.4 per cent in 2010-11, despite the strong and growing private consumption demand in the country.

“This weakness in the domestic manufacturing sector has translated into greater dependence on imports to meet the growing domestic demand over the years,” it noted.

The study recommended several sector-specific strategies for reducing import dependence by enhancing domestic production, based on an assessment of the specific needs and issues faced by each of the sectors.

For instance, in sectors like agriculture and rare earth, there is a need for strategies that enable collaborative arrangements and encourage outward investments into partner countries for meeting domestic requirements, it said.

In technology-intensive sectors, the focus should be on creating domestic capacities for reducing import dependence.

Some of the other strategies suggested by the study include- specific interventions for encouraging innovation-led manufacturing, addressing deficiencies in tax and duty structures, encouraging joint ventures, revisiting government regulations and programmes, among others.

Speaking at the webinar, Exim Bank’s managing director David Rasquinha said with the current international attention on the country’s tremendous potential for economic growth, international trade and global value chain participation, it would be an opportune time to push for rapid progress on structural reforms to increase domestic capabilities.

Final approval given to 37 mega food parks: Ministry

Source: The Hindu Business Line, Sept 15, 2020

New Delhi: The Food Processing Ministry on Tuesday said that so far it has given final approval to 37 mega food parks in 23 States and UTs and are under various stages of implementation.

In a written reply, the Ministry informed the Lok Sabha that 19 mega food parks out of the 37 are currently operational and that the government had envisaged a total of 42 mega food parks.

“This scheme is now a component of the new Central Sector Umbrella Scheme– Pradhan Mantri Kisan Sampada Yojana (PMKSY). The Mega Food Park Scheme (MFPS) aims at providing modern infrastructure facilities for food processing along the value chain from farm to market,” it added.

As per the scheme guidelines, each fully operational mega food park will provide direct/indirect employment to 5,000 persons. The schemes aims to have a positive impact on increased realisation of farmers, reduction in wastage and creation of an efficient supply chain backed by collection centres, primary processing centres and logistic infrastructure, the Ministry added. The scheme provides for a capital grant at the rate of 50 per cent of the project cost (excluding land cost) in general areas and at the rate of 75 per cent of the project cost (excluding land cost) in difficult and hilly areas — North East Region including Sikkim, J&K, Himachal Pradesh, Uttarakhand and ITDP notified areas of the States subject to a maximum of ₹50 crore per project.

Facebook India announces a grant of $4.3 million for small businesses

Source: Financial Express, Sept 16, 2020

Facebook India on Tuesday announced a grant of $4.3 million (Rs 32 crore) for more than 3,000 small businesses across Delhi, Gurgaon, Mumbai, Hyderabad, and Bengaluru where the company has offices.

The development is in line with Facebook’s $100 million global grant for small businesses announced in March.

The grant includes both cash and ad credits, with cash constituting a larger share. The grant programme is open to small businesses from all industries and verticals, and businesses do not need to have a Facebook family of apps presence in order to apply. They are also free to do what they wish to do with this grant, Ajit Mohan, MD and VP at Facebook India said in a blog post.

Facebook conducted a survey on small and medium-sized businesses (SMBs) around the world to ascertain the impact of Covid-19 in collaboration with OECD and World Bank and found out that more than a third of operational SMBs on Facebook India expect cash flow to be a challenge in the next few months. The survey also revealed that 41% of operational SMBs on Facebook India reported to have made at least a quarter of their sales digitally.

“We hope that our grant, along with the numerous other steps that we’re taking to aid the recovery of small businesses, can help some of them emerge from the crisis,” Mohan said.

Facebook also announced the discovery and sale of gift cards to help small businesses reach more potential customers online. “Configuring gift cards on Facebook and Instagram is free for businesses, and we have tied up with multiple partners to enable the issuance and management of gift cards,” Mohan added.

Australia looks to boost trade with India after relations with China sour

Source: Financial Express, Sept 15, 2020

Australia’s escalating tensions with Beijing have shown up its reliance on China trade and propelled a push to increase links with Asia’s other giant economy, India. New enrollments of international students from India expanded 32% in 2019 from a year earlier and it’s the fastest growing major market for Australian services. India has overtaken China as the largest source of net migration to Australia, and its diaspora is the third largest Down Under, just behind China and the U.K.

India’s swelling population — set to overtake China’s in 2027 — suggests ongoing opportunities for Australia to diversify a trade portfolio that currently makes it the developed world’s most China-dependent economy. The need to switch things up has accelerated as ties sank to their lowest ebb in 30 years after Canberra’s calls for an international inquiry into Covid-19’s origins was taken by Beijing as a political attack, with China imposing barriers on barley, beef and wine from Down Under.

This has Australia looking to its democratic, cricket-loving ally to fill the void. Prime Minister Scott Morrison held a virtual summit with his Indian counterpart Narendra Modi in June and the two signed a defense agreement and upgraded ties to a Comprehensive Strategic Partnership. The trade ministers of Japan, India and Australia recently agreed to work toward achieving supply chain resilience in the Indo-Pacific region.

“We can sell India education, health care, and there’s potential in science and technology,” said Ian Hall, a professor of international relations at Griffith University in Queensland. “It’s much more the consumer market of India’s growing middle class than goods.”

Yet trade with India has its own challenges. Its government is wedded to economic nationalism, as showcased last year when it pulled out of the Regional Comprehensive Economic Partnership designed to free up trade.

Delhi wants to send lots of people to Australia on work visas and doesn’t want to reduce tariffs, according to former Australian Trade Minister Craig Emerson, who initiated the Australia-India free trade negotiations in 2011, resulting in a two-way trade around just one tenth of China-Australia shipments.

“India is highly concerned about its trade deficit,” said Lai-Ha Chan, a political scientist at the University of Technology in Sydney, who notes that after signing free trade agreements with South Korea and Japan, India’s trade deficit with those nations ballooned. “It would be very worried about Australian farm products, like dairy, harming Indian farmers.”

Australia’s most valuable export — iron ore — hasn’t been caught in China’s cross hairs yet, perhaps due to a lack of alternative suppliers. Yet Beijing appears to be giving itself greater flexibility, with Emerson noting that China is buying ore carriers that improve the economics of long-distance shipping from Brazil and purchasing Guinea mines.

“It’s entirely possible China, once it gets all three mineral provinces in a row — Guinea, Brazil and Australia — will play one off against the other to get a better price,” he said. “If you’re China, you’d say ‘where’s our vulnerability? Iron ore. So let’s diversify, let’s fix that.’ They may never need to activate it, but it’s there, it’s available.”

What Bloomberg’s Economists Say Australia’s services exports have been experiencing a quiet tectonic shift over the past 18 months. In education, growth in Indian enrollments has seen the number of Indian student visa holders eclipse Chinese students. While China’s dominance of Australia’s goods exports reflects commodities demand, in the employment-intensive services sector China’s importance has been challenged by a doubling of services exports to India over the past two years.