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02nd

February

2023

Cotton and Yarn Futures Cotlook A Index - Cents/lb (Change


ZCE - Daily Data MCX (Change from previous day) from previous day)
(Change from previous 30-01-2023 100.40 (-1.60)
day) Dec 2023 28300 (-20)
Cotton 15160 (+90) 18-01-2023 133.10
Yarn 21380 (+175)
18-01-2021 87.10
Budget proposals to help boost India's exports: Piyush Goyal
New York Cotton Futures (Cents/lb)
Budget 2023: Extra-long staple cotton gets extra attention As on 02.02.2023 (Change from
previous day)
Budget will boost growth: Kovai Inc Mar 2023 86.50 (+0.89)

A Budget for India in the Amrit Kaal May 2023 86.24 (+0.50)
Some industries happy with green push, others feel left out July 2023 86.62 (-0.84)
2 CITI-NEWS LETTER

Budget proposals to help boost India's exports: Piyush Goyal

NATIONAL Budget 2023: Extra-long staple cotton gets extra attention

Budget will boost growth: Kovai Inc

A Budget for India in the Amrit Kaal

Some industries happy with green push, others feel left out

Budget will trigger growth, say textile bodies

Budget 23-24: Indian textiles' smiles on provisions, duty rise a worry

Budget 2023-24 shows govt's priorities for Indian textiles sector

Facing losses, textile industry disappointed

India Economic Survey 2022-23: Slowdown in textiles on many parameters

Basic customs duty on cotton unchanged in Gujarat

Indian FM announces benefits for MSMEs, ELS cotton in Budget 2023-24

Budget will trigger growth, say textile bodies

A new dawn beckons the Indian textile industry

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

EU’s textile waste and used clothing in Pakistan


GLOBAL UK's trade minister visits Asia-Pacific to promote accession to CPTPP

China reconnects to world in every field after COVID despite lingering Western smears

GTAS 2023 to discuss opportunities in Vietnam's textile industry

Pakistan’s textile industry is in crisis – and women are bearing the brunt of its decline

Forget fast fashion. This challenge encourages upcycling and mending old clothes to create new trends

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

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3 CITI-NEWS LETTER

NATIONAL:
Budget proposals to help boost India's exports: Piyush Goyal

(Source: Economic Times, February 01, 2023)

A number of measures such as tweaks in customs duties on certain products announced


in the Union Budget for 2023-24 will help boost the country's exports, Commerce and
Industry Minister Piyush Goyal said on Wednesday. He said that despite global economic
uncertainties, India's goods and services exports together are registering nearly 14-15 per
cent growth.

"The world is seeing recessionary conditions and global growth and global trade is also
expected to slow down. Despite that when we combine our merchandise and service
exports, we are still at quite a sweet spot...We believe that we will close this year also at a
double-digit growth in goods and services combined," Goyal told PTI. He said that
merchandise outbound shipments will be "slightly less" as the whole world is overstocked,
high inventories are there, and inflation has caused consumer demand to fall.

"As the global economy recovers from these stresses, particularly of inflation, next year
we hope to do better even in merchandise exports and the finance minister (Nirmala
Sitharaman) has been generous with her budget allocations for the commerce and
industry ministry. So I am quite confident that this will give a boost to our exports," he
added.

When asked about the tweak in customs duties on certain products, the minister said the
finance minister has "intelligently" calibrated the duties both upward and downward. In
the Budget, customs duty on lab-grown diamonds has been removed from 5 per cent
earlier. Goyal said that seeds used in lab-grown diamonds (LGD) are essential raw
materials which are processed in India and help us create high-quality LGD which have a
large market.

LGD exports have grown multi-fold in the last 3-4 years and the industry tells us that
there is a potential for adding nearly another 4x or 5x growth in the next few years," he
added. Replying to a question on the announcement about continuation of concessional
import duty on lithium-ion cells, the commerce minister said that the government is

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4 CITI-NEWS LETTER

promoting domestic manufacturing of electric vehicles and these cells are an essential
component.

"Since we do not have domestic manufacturing (of these cells) as yet, it is essential to
continue this concessional duty so that the cost of 2, 3, 4 wheeler EVS can be kept under
control and low which will encourage faster adoption of EVs," he added. Sitharaman in
the budget for 2023-24 proposed a cut in import duty on seeds used to make lab-grown
diamonds with a view to boosting domestic manufacturing.

The minister also announced that the government from April 1, 2013, will launch a
revamped credit guarantee scheme for MSMEs with an outlay of Rs 9,000 crore.

Home

Budget 2023: Extra-long staple cotton gets extra attention

(Source: Rutam Vora/K V Kurmanath, Financial Express, February 01, 2023)


FM proposes PPP model to boost production of ELS cotton, which enjoys huge demand
from textile industry

Extra-long staple cotton, a niche produce greatly in demand in the textile industry,
received a major boost with a slew of measures announced by Union Finance Minister
Nirmala Sitharaman for enhanced output and higher returns to farmers. “We will adopt
a cluster-based and value chain approach through public-private partnerships (PPP) to
enhance the productivity of extra-long staple cotton,” she said.

“This will mean collaboration between farmers, the State governments and industry for
input supplies, extension services, and market linkages,” she said……………………………..’

Home

Budget will boost growth: Kovai Inc

(Source: Times of India, February 01, 2023)

Industrial bodies in the district on Wednesday said the Union Budget for 2023-24 had a
clear focus on laying a strong foundation for the country’s future development. “It’s a

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5 CITI-NEWS LETTER

growth-oriented one,” they said, welcoming the Budget. B Sriramalu, president, Indian
Chamber of Commerce and Industry (ICCI), Coimbatore, said the increase in income tax
slab to 3 lakh from 2.5 lakh and raising the rebate level to 7 lakh from 5 lakh would spur
local consumption and growth. “The Union government’s decision to invest in various
public sectors will also boost growth.”

V Sundaram, vice-president, ICCI, said the measures taken for skill development of youth,
modernization of farming and the decision to continue credit guarantee scheme for the
micro, small and medium enterprises (MSMEs) were some of the highlights of the Budget.
“We expected changes in the Goods and Services Tax (GST) and measures to curb the
price rise of raw materials. We would have been happier if there was any announcement
on those issues.” Prashanth, president, district chapter of Confederation of Indian
Industry, said it was a well-thought of and planned Budget aimed at growth prospects of
the country. “Digitization has been given a thrust in the Budget and it will help the
government improve tax collection. Capital investment up to 10 lakh crore will fuel the
growth and job creation.” He said the investment in improving skill sets of youths to help
them land jobs and introduction of a national digital library would improve youths’
knowledge base. “Importance has been given to sustainable environment and renewable
energy.

T Rajkumar, chairman, Confederation of Indian Textile Industry (CITI), lauded the


focused approach of the government to enhance the productivity of extra-long staple
cotton through public-private partnerships. “The textile industry is eagerly looking
forward to further details of policy in this regard.” He also welcomed the setting up of an
agriculture accelerator fund to encourage agriculture startups by young entrepreneurs in
rural areas. In the pre-Budget meeting, CITI had proposed removal of 10% import duty
on cotton and continuing with the present 5% import duty on all types of textile
machinery. “But the increase in import duty on textile machinery to 7% is a concern,”
Rajkumar said.

J James, district president, Tamil Nadu Association of Cottage and Tiny Enterprises,
welcomed various aspects of the Budget. He said lack of supportive measures for the
MSMEs had disappointed him. “We had expected the government to solve GST issues,
create a separate ministry for MSMEs and waiver of interest on the loans taken by MSMEs
during the Covid-19 pandemic.

Home

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6 CITI-NEWS LETTER

A Budget for India in the Amrit Kaal

(Source: Financial Express, February 01, 2023)


With robust public finances, capex and a consumption push, India is set to enter a virtuous
growth cycle. The Budget must be lauded for ensuring growth across the board and
providing a foundation for India in the Amrit Kaal

One of the keys to unlock India’s growth potential is raising private investment. This year,
the finance minister has more than delivered through a transformative Budget. The focus
on capital expenditure, sunrise sectors, technology and green growth will boost our long-
term growth potential.

First, the sustained focus on capex must be lauded. A 33% increase in expenditure will
take capital expenditure to Rs 10 trillion in FY24, compared to Rs 7.5 trillion in FY23. The
railways will see record capex of Rs 2.5 trillion. Furthermore, 100 critical transport
infrastructure projects, for both first and last mile connectivity, will be taken up on
priority. Regional air connectivity saw a huge boost through 50 additional airports,
heliports, water aerodromes, and advance landing grounds. The newly established Urban
Infrastructure Development Fund will enable us to build the cities of tomorrow. The
credit guarantee scheme for MSMEs has been revamped, with a Rs 9,000 crore infusion.
This will enable collateral-free guaranteed credit of Rs 2 trillion.

Second, by revising tax slabs, the Budget gives a fillip to domestic consumption by putting
more money in the hands of people. As domestic consumption rises, so will domestic
capacity utilisation, leading to higher investment to meet the additional demand. Skilling
has been given a stimulus through the launch of Pradhan Mantri Kaushal Vikas Yojana
4.0, the unified Skill India Digital Platform, and providing stipend support to 47 lakh new
apprentices. Increased capex and tax reforms have been complemented to ease India’s
business environment. Using the PAN as a common identifier for businesses, an entity
digi-locker, simplified KYC processes, and a unified filing process will reduce the
compliance burden. Tourism has also been given due focus, with 50 destinations to be
developed as complete packages under challenge mode. States will be encouraged to set
up Unity Malls, giving a fillip to one district one product (ODOP), handicrafts, and GI
products.

Home

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7 CITI-NEWS LETTER

Some industries happy with green push, others feel left out

(Source: Indian Express, February 01, 2023)

Union Budget 2023-24 has got a mixed response from industry, middle income group and
tax consultants with many people terming it as an election budget that has tried to please
the majority. Here is how industrialists and tax consultants reacted to it:

Union Budget 2023-24 has got a mixed response from industry, middle income group and
tax consultants with many people terming it as an election budget that has tried to please
the majority. Here is how industrialists and tax consultants reacted to it:

It seems to be an overall good budget with an aim to improve infrastructure. The budget
proposes to spend 33% on infrastructure, it emphasises on skill development and
digitisation. These are all good indicators of growth and will boost the economy. Middle
income group will get the relief of tax rebate on income up to Rs 7 lakh in the new tax
regime and if most people opt for it, it will ensure single tax regime. However, in case of
the textile sector, there is no specific change. We were expecting custom duty to go from
cotton as this item was on the 2020-21 budget agenda, but even this time, it didn’t happen.
We pay 11% import duty on cotton so it is difficult to compete with other countries in
terms of export orders.

This budget holds significance as the country will go to polls in April-May 2024. The
announcements definitely prove the budget is much better than promised. The budget
has covered various sectors such as agriculture, digitalization, green energy, taxpayers
andhas catered to all economics classes. It is a forward looking budget as it has put on
priority 50 new airports, helipads, and aerodromes. It is comprehensive and a well
thought out strategy for a better India.

Custom duty on lithium ion batteries that are used in electric vehicles has been waived
off. This will be a big push for the sector which manufactures electric vehicles (EVs) and
it may even bring down the price of EVs. We hope that the sector will grow in the coming
year . Middle income group has also been benefited with the enhancement of tax rebate
up to Rs 7 lakh of income instead of Rs 5 lakh. At the same time, there has been no change
in corporate taxes and the maximum tax bracket has been reduced to 39% from the earlier
42.75%. Auto sector will get a boost after government allocated funds to scrap old vehicles
owned by government. Overall, it is a good budget.

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8 CITI-NEWS LETTER

Narinder Bhamra
President, Fasteners Manufactu-rers Association of India

The budget has nothing for micro entrepreneurs and small enterprises. We had expected
the creation of a separate Ministry for Micro Enterprise, more liberalised labour laws,
easing raw material prices such as formation of steel regulator, reduction in GST slab from
18% to 12% etc. Micro entrepreneurs are finding it difficult to survival due to fluctuations
in steel prices, imports from China etc and they needed a special package to come out of
crises. Even making the new tax regime the default tax regime is discouraging savings.
The government wants you to spend all your earnings. There is also no mention of social
security for tax payers such as free medical facility. In Optional Tax slab with standard
deductions income tax exemption limit is marginally increased from Rs 2.5 lakh to Rs 3
lakh whereas it should be 5 Lakh considering the inflation. The standard deduction limit
under Chapter 6A such as 80C, 80 D etc has been kept at Rs 1.5 lakhs, but it should have
been increased to Rs 3 lakh. There is no mention of CLCSS (Credit Linked Capital Subsidy
Scheme) which in on halt since 2020. We were expecting the revival of CLCSS with
increase of limit from Rs 1 crore to Rs 5 crore. Yet again, corporates have been given a big
relief by decreasing surcharge from 37% to 25%. Besides, the highest income tax slab for
corporates is 15% to 22% + surcharge. Whereas for firms it is 30%, majority of which is
MSEs. It is a disastrous budget as the Centre is concerned only about corporates.

Upkar Singh Ahuja


President Chamber of Commerce and Industrial Undertakings

The budget has many good things to talk. If the infrastructure improves, the automobile
sector will get a boost automatically as more vehicles will run on good roads. We hope
that 33% increase in infrastructure budget is spent in the true letter and spirit. Credit
guarantee scheme, which earmarks Rs 9000 crore for the ones who have no collateral
security is again a welcome step as it will enhance self employment. Aggressive
digitisation, change in tax slabs are again welcome steps.

Rajnish Ahuja
President, Apex Chamber of Commerce and Undertakings

It is a please all budget ahead of the Lok Sabha polls and scores a 9.5 out of 10. Election
budgets are always lucrative but if all announcements of this budget are fulfilled, it can
take India to a robust development path. They have removed 3400 legal formalities and

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9 CITI-NEWS LETTER

it will increase the ease of doing business. The new generation was unhappy with undue
paper work, several permissions etc and hence was keen on leaving India. Perhaps, this
budget will change their perspective. We welcome the allocation of Rs 9000 crore for
credit guarantee scheme where people with no collateral security can get loans to start
business. This will not only make them self employed but they will also generate
employment for others. The rebate of 1% on loans given to MSMEs is a relief to the micro,
small and medium enterprises.

No doubt it is an election budget but if we talk about the MSME sector their total budget
in trade 2022-23 was Rs 21,422 crore, which has been increased to Rs 22,137 crore in
2023-24. Hence, a minor change. Even for the textile sector, the annual budget has been
kept at Rs 4,389 crore in 2023-24, which was Rs 12,382 crore in 2022-23. There has been
no mention on credit linked capital subsidy scheme, which is on halt since 2020 under
which industry used to get rebate of 15% on purchase of machinery. This scheme had been
started during Manmohan Singh’s first term of government. Overall the budget has more
pros than cons.

KPS Bawa
Advocate, direct and indirect taxes

The change in tax slabs is a welcome step under as people with income of up to Rs 7 lakh
will not have to pay any tax. It is an indirect message to spend more as the same money
will rotate in the market. Leave encashment up to Rs 25 lakh is tax free, maximum rate of
income tax has been reduced to 39% from 42.75%. However, if your income exceeds Rs 7
lakh, you have to pay tax as per the slabs. Hence, middle income group can get relief from
this enhanced tax rebate in which no investment proofs are needed.

Gaurav Munjal, MD, Hero Ecotech Ltd

It is a balanced budget with focus on health, education, agriculture, employment etc.


Special attention has been given to environment friendly and green energy to reduce
carbon footprints of India on the global map. An attempt has been made to strengthen
ease of doing business by reducing more than 39000 compliances and decriminalization
of 3400 provisions. MSMEs and middle class is taken care of by reducing income tax slabs
and by increasing deductions, exemptions and rebate.

Overall it is a balanced budget. The move to develop 50 tourist destinations will give a big
boost to the tourism industry. We are also happy with the announcement of revitalisation

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10 CITI-NEWS LETTER

of 50 airports, heliports, aerodromes, and advanced landing zones. This will not only
improve connectivity but will also give impetus to the tourism sector. The government
has announced investing Rs 75,000 crore, including Rs 15,000 crore from private sources
into 100 critical transport infra projects for steel, ports, fertilizer, coal, and foodgrain
sectors. This is a welcome step that would lead to a new growth trajectory for the tourism
industry and also provide more jobs. The budget has given a boost to the railway with
plans to provide a capital outlay of Rs 2.40 lakh crore, which is the highest ever and is
nine times over the Financial Year 2014.

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Budget will trigger growth, say textile bodies

(Source: Economic Times, February 01, 2023)


However, there was no announcement on continuance of ATUF scheme in this budget and
he was hopeful that government would announce it in the near future, he said.

Major textile bodies in the region on Wednesday welcomed the Union Budget by terming
it as one aiming at strong and stable economic growth. President of Tirupur Exporters
Association (TEA) K M Subramanian said the budget mentions the seven priorities
"Saptarishi" that would trigger the economic growth. In a statement, he said the priority
for infrastructure development would reduce logistics cost. He said he appreciates the
focus given to green growth. While welcoming the increased allocation of Rs 900 crore
for ATUF (amended technology upgradation fund) scheme for 2023-24 as against Rs 600
crore last year, Subramanian said he was hopeful that the increased allocation would help
to clear the ATUF pending claims.

However, there was no announcement on continuance of ATUF scheme in this budget


and he was hopeful that government would announce it in the near future, he said. The
focus on enhancing the yield of extra-long staple (ELS) cotton would help increase the
manufacturing of value-added garments and also to reduce import of ELS cotton.

He welcomed the extension of the credit guarantee scheme for MSMEs with an infusion
of Rs 9,000 crore, collateral for Rs 2 lakh crore loans to MSMEs, effective from April 1,
2023. In a statement, chairman of Southern India Mills Association Ravi Sam appreciated
the thrust on inclusive growth and skill development that would help the labour- and

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11 CITI-NEWS LETTER

capital- intensive textile industry. He thanked the government for considering the
proposal submitted by SIMA and announcing a scheme for increasing the production of
extra-long staple cotton. SIMA can match international ELS cotton varieties and would
take initiatives to increase the production, he said. After introduction of BT technology
only for long staple cotton, the industry started facing shortage of ELS cotton, he said.

The industry requirement of ELS cotton is around 20 lakh bales while the country
produces only 5 lakh bales and heavily depends on imports of superior quality ELS cotton,
he said adding that this is an initiative towards the Aatmanirbar Bharat benefit for the
whole textile value chain, including the cotton farmers. While welcoming the budget,
chairman of Confederation of Indian Textile Industry T Rajkumar said the setting up of
an agriculture accelerator fund to encourage farm startups by young entrepreneurs in
rural areas. The fund would help bring in innovative and affordable solutions, modern
technologies to transform agricultural practice, and increase productivity, he said. The
textile sector looks forward to attain a skilled workforce and quick production of smart
textiles, he said.

Home

Budget 23-24: Indian textiles' smiles on provisions, duty rise a worry

(Source: Fibre 2 Fashion, February 01, 2023)

Indian textile industry bodies have welcomed the announcements made by the finance
minister Nirmala Sitharaman in Union Budget 2023-24, which she presented in the
Parliament today. The industry leaders expect the focused approach of the government to
boost textile sector. However, they were concerned on higher custom duty on textile
machinery.

T Rajkumar, chairman, Confederation of Indian Textile Industry (CITI) termed the


Budget as pragmatic and futuristic. He thanked the government for carrying out wide
range of reforms and sound policies implemented over the years for the consistent growth
of the Indian economy and the textile sector. CITI chairman acknowledged the focused
approach for enhancing the productivity of Extra-Long Staple (ELS) cotton. He stated
that five new HS Codes for further classification of cotton as per staple length will help in
calibrating policy support for the segments which are import dependent or need further

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12 CITI-NEWS LETTER

incentivisation. The industry also welcomes the higher budgetary allocations for schemes
promoting capacity building and investments like National Technical Textiles Mission
(NTTM), PM MITRA, and Textile Development cluster scheme. However, the industry is
concerned to note the increase in import duty of textile machinery to 7.5 per cent. It will
impact new investments planned in the sector.

Ravi Sam, chairman, The Southern India Mills’ Association (SIMA) has appreciated the
government for giving thrust for inclusive growth, infrastructure and investment for
green growth and skill development. SIMA chairman thanked the government for
considering the proposal of SIMA for ELS cotton. He said that after introduction of Bt
technology only for Long Staple cotton, the industry started facing shortage of ELS
cotton. He added that the industry’s requirement of ELS cotton is around 20 lakh bales
while the country produces only 5 lakh bales and heavily depends on imports of superior
quality ELS cotton. Ravi Sam appreciated higher allocation of funds for textile related
projects and programmes and new HS codes for cotton based on length.

KM Subramanian, president of Tiruppur Exporters’ Association (TEA) welcomed the


growth oriented and people centric Budget. He thanked the government for increase in
Budget allocation for textile projects and schemes. He was hopeful that the increased
allocation would help to clear the ATUFS pending claims, a major requirement of textile
industry. Special focus on ELS cotton will help to increase manufacturing of value-added
garments and also to reduce the import of ELS cotton, he added.

Home

Budget 2023-24 shows govt's priorities for Indian textiles sector

(Source: Fibre 2 Fashion, February 01, 2023)

The announcements made by finance minister Nirmala Sitharaman in Union Budget


2023-24 shows government’s priorities for India’s textiles sector. The minister gave
special focus on Extra-Long Staple (ELS) cotton. Five new HS codes will also sharpen
government’s policy measures. Plus, higher allocations under RoDTEP, RoSCTL and
ATUFS may provide relief.

The government has identified five new HS Codes for cotton, for further classification of
cotton as per staple length. This will help in calibrating policy support for the segments
which are import dependent or need further incentivisation.

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13 CITI-NEWS LETTER

Finance minister has indicated government’s focused approach for enhancing the
productivity of ELS cotton, by adopting a cluster-based and value chain approach through
public private partnerships (PPP) which means collaboration between farmers, state and
industry for input supplies, extension services, and market linkages. The textile industry
now eagerly looks forward to further details of the policy in this regard.

However, the minister also announced increase in import duty of textile machinery to 7.5
per cent. It may impact the new investments planned in this sector. But it is in line with
the government priorities of Atma Nirbhar Bharat and ‘Make in India’. In this regard, the
industry body CITI has requested for retaining 5 per cent import duty for all types of
textile machineries for the next three years or till the domestic manufacturers establish
themselves to meet the domestic demand.

As per Budget documents, outlay for RoDTEP scheme has been increased from ₹13,699
crore in 2022-23 to ₹15,069 crore in 2023-24. The allocation for RoSCTL scheme is
increased from ₹7,641 crore for 2022-23 to ₹8,405 crore for 2023-24. Likewise, the outlay
for Amended Technology Upgradation Fund Scheme (ATUFS) is increased from ₹650
crore in 2022-23 to ₹900 crore in 2023-24. Customs duty on naphtha is increased from
1 per cent to 2.5 per cent.

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Facing losses, textile industry disappointed

(Source: Tribune India, February 01, 2023)

Was expecting relief for this labour-intensive sector to beat financial crisis

The textile industry has expressed its disappointment at the Union Budget, as the
industrialists were expecting relief for the most labour-intensive sector, which is facing a
financial crisis due to the Covid pandemic and the Ukraine war. They said their major
demands had not been met in this Budget.

“We were expecting relief as the industry is already facing losses. We were thinking that
the government would focus on export, but no major relief was given to this industry,”
said Lalit Goel, chief, Panipat Exporters Association.

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14 CITI-NEWS LETTER

“We are demanding a rebate on interest on the bank loan, which was 5% two years back,
but the government had reduced it to 3% last year. We have already raised this issue with
the Union Commerce Minister, but no relief was given to us,” he said.

Tilak Raj Khattar, president, Panipat Handloom Traders’ Association, said the Union
Minister had announced the enhancement of the production of extra-long staple (ELS)
cotton in the Budget, which might provide some relief to the domestic industry. “It may
provide ELS cotton locally and reduce the dependency

on ELS cotton import from different countries. Apart from it, nothing major has been
done for this industry.”

Bheem Rana, chairman of the Federation of Industrial Association, Panipat, said they
were competing with China in the textile sector. So the government should have extended
relief to this industry. Instead, it had increased the import duty of textile machinery,
which would also affect the industry in an adverse way. “We request the government to
retain the import duty for all types of textile machinery,” he added.

Vibhu Paliwal, secretary, Panipat Export Association, and chief, Haryana Traders Welfare
Board, said the government had given a big relief to salaried persons by increasing the tax
slab. “It shouldn’t have increased the import duty on textile machinery since we are still
dependent on other countries for the equipment,” Paliwal added.

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India Economic Survey 2022-23: Slowdown in textiles on many parameters

(Source: Fibre 2 Fashion, February 01, 2023)

India’s Economic Survey 2022-23 indicates that private investment gathered momentum
during the current fiscal in all major sectors, including the textile sector. However,
manufacturing industries like textiles, apparel and leather have been showing tepid
growth as the export demand for these products remained soft due to slow global demand.

The survey was tabled in Parliament by finance minister Nirmala Sitharaman on January
31.

A quick study of the survey report by the Confederation of Indian Textile Industry (CITI)
showed that the textile sector recorded private investment of about ₹10,000 crore in first

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15 CITI-NEWS LETTER

half of 2022-23 (i.e., April 2022 to September 2022). But the investment slowed down to
around ₹7,000 crore in second half of the current fiscal. Textile sector was
underperformer compared to other economic sectors like steel, electricity, chemical, auto
and pharma.

The growth in textile sector was disappointing because of tepid demand from global
market. In the first eight months of the current fiscal, the sector could maintain positive
growth (of 5.9 per cent year-on-year) only in May. The textiles sector growth remained
negative in the remaining seven months from April to November 2022. The sector
witnessed negative growth of 0.4 per cent in April 2022, 3.1 per cent in June, 9 per cent
in July, 12.5 per cent in August, 13.9 per cent in September, 18.7 per cent in October and
9 per cent in November 2022.

As per the report, wearing apparel industry recorded growth in April (55.2 per cent), May
(69.9 per cent), June (42.6 per cent) and July 2022 (15.1 per cent). But it went into red in
August (-18.3 per cent), September (-21.6 per cent), October (-36.6 per cent) and
November 2022 (-11.7 per cent). Leather and related products noted growth of 5 per cent
in April, 47.5 per cent in May and 1.9 per cent in June 2022. But they too turned negative
in subsequent months and registered degrowth of 13.5 per cent in July, 16 per cent in
August, 17.5 per cent in September, 25.5 per cent in October and 2 per cent in November
2022.

The survey indicated that most of the segments within the manufacturing sector, except
the textile industry, witnessed growth in credit offtake in November 2022. Foreign Direct
Investment (FDI) could not recover in the textile sector after COVID disruption in fiscal
2020-21.

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Basic customs duty on cotton unchanged in Gujarat

(Source: Times of India, February 02, 2023)

With no change in the 10% basic customs duty (BCD) on cotton import, customers will
get no respite from the rising prices of apparel and textiles. Thanks to a higher degree of
volatility in Indian cotton prices, which touched an all-time high last year, apparel prices
have increased by 15- 20% in the past year or so, say industry players.

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16 CITI-NEWS LETTER

To boost demand and exports, the industry actively batted for abolishing import duty on
cotton to help rationalize prices. "Cotton prices are still volatile, though it has fallen below
average the past fortnight. A moderate 15-20% increase in apparel price has impacted
demand across value-based and high-priced brands. The industry will struggle to boost
the demand with a higher cost of production amidst no respite in prices," said Rahul
Mehta, chief mentor of the Clothing Manufacturers' Association of India (CMAI). With a
basic customs duty of 8.25% imposed on high-speed weaving machines (HSWM), weavers
expressed concern over the rise in the cost of production.

"India is import-dependent when it comes to procuring HSWMs, and the duty will only
hamper the growth of weavers," said Ashish Gujarati, former president of the Southern
Gujarat Chamber of Commerce and Industry (SGCCI).

Textile industry players, however, are happy with the schemes to enhance the productivity
of extra-long staple cotton through public-private partnerships.

"This will help improve the production of Indian cotton and enable the industry to make
indigenous, high-quality textiles and command better realizations," said T Rajkumar,
chairman of the Confederation of Indian Textile Industry (CITI).

Boosting disposable income through a change in the income-tax slab will also aid demand
in the textile sector by increasing discretionary spending, said industry players.

Home

Indian FM announces benefits for MSMEs, ELS cotton in Budget 2023-24

(Source: Fibre 2 Fashion, February 02, 2023)

Enhancing productivity of extra-long staple (ELS) cotton, benefit of presumptive taxation


to micro, small and medium enterprises (MSMEs), and setting up of Entity DigiLocker
for use by MSMEs and large business are among the announcements made by Indian
finance minister Nirmala Sitharaman in her Union Budget 2023-24 speech in Parliament
today.

“To enhance the productivity of ELS cotton, we will adopt a cluster-based and value chain
approach through Public Private Partnerships (PPP). This will mean collaboration
between farmers, state and industry for input supplies, extension services, and market
linkages,” Sitharaman said in her speech.

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17 CITI-NEWS LETTER

Under the PM VIshwakarma KAushal Samman (PM VIKAS), for the first time, a new
package of assistance has been conceptualised for traditional artisans and
craftspeople. The new scheme will enable them to improve the quality, scale and reach of
their products, integrating them with the MSME value chain. The components of the
scheme will include not only financial support but also access to advanced skill training,
knowledge of modern digital techniques and efficient green technologies, brand
promotion, linkage with local and global markets, digital payments, and social security.
This will greatly benefit the Scheduled Castes, Scheduled Tribes, OBCs, women and
people belonging to the weaker sections. To provide relief for MSMEs, under the Vivad se
Vishwas I, in cases of failure by MSMEs to execute contracts during the COVID period,
95 per cent of the forfeited amount relating to bid or performance security, will be
returned to them by government and government undertakings.

The finance minister also announced that an Entity DigiLocker will be set up for use by
MSMEs, large business and charitable trusts. This will be towards storing and sharing
documents online securely, whenever needed, with various authorities, regulators, banks
and other business entities.

The minister said that the digital ecosystem for skilling will be further expanded with the
launch of a unified Skill India Digital platform for enabling demand-based formal skilling,
linking with employers including MSMEs, and facilitating access to entrepreneurship
schemes.

The minister also announced that the revamped credit guarantee scheme for MSMEs will
take effect from April 1, 2023 through infusion of ₹9,000 crore in the corpus. “This will
enable additional collateral-free guaranteed credit of ₹2 lakh crore. Further, the cost of
the credit will be reduced by about 1 per cent,” Sitharaman said. Further, stating that
MSMEs are growth engines of the country’s economy, the minister announced that “micro
enterprises with turnover up to ₹2 crore and certain professionals with turnover of up to
₹50 lakh can avail the benefit of presumptive taxation. I propose to provide enhanced
limits of ₹3 crore and ₹75 lakh respectively, to the taxpayers whose cash receipts are no
more than 5 per cent. Moreover, to support MSMEs in timely receipt of payments, I
propose to allow deduction for expenditure incurred on payments made to them only
when payment is actually made.”

Home

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18 CITI-NEWS LETTER

Budget will trigger growth, say textile bodies

(Source: News Drum, February 02, 2023)

Major textile bodies in the region on Wednesday welcomed the Union Budget by terming
it as one aiming at strong and stable economic growth.

President of Tirupur Exporters Association (TEA) K M Subramanian said the budget


mentions the seven priorities “Saptarishi” that would trigger the economic growth.

In a statement, he said the priority for infrastructure development would reduce logistics
cost. He said he appreciates the focus given to green growth.

While welcoming the increased allocation of Rs 900 crore for ATUF (amended technology
upgradation fund) scheme for 2023-24 as against Rs 600 crore last year, Subramanian
said he was hopeful that the increased allocation would help to clear the ATUF pending
claims.

However, there was no announcement on continuance of ATUF scheme in this budget


and he was hopeful that government would announce it in the near future, he said.

The focus on enhancing the yield of extra-long staple (ELS) cotton would help increase
the manufacturing of value-added garments and also to reduce import of ELS cotton.

He welcomed the extension of the credit guarantee scheme for MSMEs with an infusion
of Rs 9,000 crore, collateral for Rs 2 lakh crore loans to MSMEs, effective from April 1,
2023.

In a statement, chairman of Southern India Mills Association Ravi Sam appreciated the
thrust on inclusive growth and skill development that would help the labour- and capital-
intensive textile industry.

He thanked the government for considering the proposal submitted by SIMA and
announcing a scheme for increasing the production of extra-long staple cotton.

SIMA can match international ELS cotton varieties and would take initiatives to increase
the production, he said. After introduction of BT technology only for long staple cotton,
the industry started facing shortage of ELS cotton, he said.

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19 CITI-NEWS LETTER

The industry requirement of ELS cotton is around 20 lakh bales while the country
produces only 5 lakh bales and heavily depends on imports of superior quality ELS cotton,
he said adding that this is an initiative towards the Aatmanirbar Bharat benefit for the
whole textile value chain, including the cotton farmers.

While welcoming the budget, chairman of Confederaton of Indian Textile Industry T


Rajkumar said the setting up of an agriculture accelerator fund to encourage farm
startups by young entrepreneurs in rural areas. The fund would help bring in innovative
and affordable solutions, modern technologies to transform agricultural practice, and
increase productivity, he said.

The textile sector looks forward to attain skilled workforce and quick production of smart
textiles, he said.

A new dawn beckons the Indian textile industry

(Source: Indian Textile Magazine, February 02, 2023)

2023 has dawned with bright hopes for the Indian textile industry. The industry seems to
be headed towards a positive steady growth phase, after a period of turbulence and
uncertainty. With a world that is hopefully coming to the end of the pandemic, things are
looking up for the textile industry. This buoyant mood stems from the series of measures
taken by the Union Government to revive the fortunes of the textile industry. These
measures ranging from giving a push to technical textiles to the PLI scheme, launch of
mega textile parks to signing of FTA’s and MoU’s with many countries, etc., the initiatives
are aimed at catapulting the fortunes of the Indian textile industry, to new heights.

Fillip to technical textiles

Technical textiles have created a buzz among the Indian textile fraternity. The
government has identified this segment as a growth enabler and providing the necessary
push to the segment. The National Technical Textiles Mission (NTTM) has been approved
with a four year implementation period from FY 2020-21 to 2023-24. The aim is to
increase the domestic market size from USD 40 billion to USD 50 billion by 2024 and
position India as a global leader in technical textiles.

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20 CITI-NEWS LETTER

Under NTTM, 74 research proposals valuing Rs.232 crore have been approved in the
category of speciality fibre and technical textile. Other steps taken include development
of 31 new HSN codes. The Synthetic & Rayon Textiles Export Promotion Council, has been
assigned the role of export promotional council for technical textiles.

Another step taken by the Ministry of Textiles towards positioning India as a global leader
in technical textiles manufacturing is the invitation of Research proposals for Funding for
Design, Development and Manufacturing of Machinery, Tools, Equipment, and Testing
Instruments under NTTM.

At present most of the machinery, equipment, plants and accessories meant for the
manufacturing of technical textiles is being largely imported. In order to make the country
self-reliant in the field and truly ‘Atmanirbhar’, NTTM under Component-I (Research,
Innovation and Development) envisages indigenous manufacturing of machinery,
equipment, tools and testing instruments for technical textiles.

The indigenous development of latest machinery and equipment is expected to play a key
role in driving forward India’s technology readiness levels in the manufacture of technical
textiles.

PLI Scheme

For the textile industry which was grappling with downturn caused by the Covid
pandemic and subsequent fall in demand, the Production Linked Incentive (PLI) scheme
announced by the government with an outlay of Rs.10,683 crore has come as a shot in the
arm.

The approved outlay is for promoting the production of MMF apparel, MMF fabrics and
technical textiles in the country. A total of 67 applications have been received through the
PLI web portal from 01.01.2022 to 28.02.2022. The Selection Committee chaired by the
Secretary, Textiles has selected 64 applicants under the scheme. 56 applicants have
completed the mandatory criteria for formation of a new company and approval letters
have been issued to them. Investment to the tune of Rs. 1536 crore approximately has
been made so far under the scheme.

Textile parks

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21 CITI-NEWS LETTER

Another key step that the government has taken towards providing growth momentum to
the textile industry is the PM Mega Integrated Textile Region and Apparel (PM MITRA)
Parks. These parks which will offer world-class infrastructure have been approved with
an outlay of Rs.4, 445 crore for a period up to 2021-28.

The guidelines in respect of scheme have been published and there have been multiple
interactions with State Governments for inviting proposals. In response 18 proposals
from 13 States have been received. A National Conference was organized on 04.05.2022
for discussion on proposals with the Senior Officers from State Governments and
Industry Associations. Evaluation of proposed PM MITRA park sites was done through
‘Gati Shakti’ portal to understand locational advantage. As of now detailed scrutiny for
selection of sites is underway.

Employment generation

The Indian textile industry was always known for its employment generation capabilities.
A slew of schemes announced in recent times are expected to further increase
employment opportunities in the industry.

According to Darshana Jardosh, the Union Minister of State for Textiles, as per figures
from National Accounts Statistics, the contribution of textile industry in GDP in terms of
percentage share of industrial output was around 7% during the last three years. Direct
Employment in Textiles sector is estimated at 45 million. Government is implementing
various schemes/programmes to increase employment, investment and expansion of
textile industry including modernization of weaving and processing including, Integrated
Processing Development Scheme, National Handloom Development Programme,
National Handicraft Development Programme, SAMARTH–Scheme for Capacity
Building in Textiles Sector, Silk Samagra 2 & Scheme for Integrated Textile Parks,
PLI|scheme, PM MITRA scheme etc.

FDI inflow

Foreign Direct Investment (FDI) brought investment of $ 1522.23 million in the textile
sector from 2017-2022. Darshana Jardosh shares that, the Government has taken
following steps to modernize the textile industry, enhance export and to promote FDI in
textile sector on pan-India basis:

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22 CITI-NEWS LETTER

i) Government has approved setting up of Seven PradhanMantri Mega Integrated Textile


Region and Apparel (PM MITRA) Parks in Greenfield/Brownfield sites with an outlay of
Rs. 4,445 crore for a period of seven years up to 2027-28.
ii) Government has approved the Production Linked Incentive (PLI) Scheme for Textiles,
with an approved outlay of Rs 10,683 crore, to promote production of Man Made Fibre
(MMF) Apparel, MMF Fabrics and Products of Technical Textiles in the country.
iii) Government has allocated an outlay of Rs 1480 crore for the National Technical
Textiles Mission (NTTM) to promote and develop technical textiles sector in India.
iv) Silk Samagra-2 scheme is being implemented from the year 2021-22 to 2025-26 for
development of sericulture industry in the country.
v) Government is also implementing various schemes/ programmes such as SAMARTH-
Scheme for Capacity Building in Textile Sector, National Handloom Development
Programme, Raw Material Supply Scheme, National Handicraft Development
Programme, Comprehensive Handicrafts Cluster Development Scheme, Integrated Wool
Development Programme etc. to promote and develop indigenous textile sector.
vi) India has so far signed 13 Free Trade Agreements (FTAs) including recently concluded
Comprehensive Economic Partnership Agreement with UAE and Economic Cooperation
and Trade Agreement with Australia; and 6 Preferential Trade Agreements with various
trading partners. Government has entered into negotiations for FTA with trading partners
such as the United Kingdom, European Union, Canada for enhancing market access of
Indian products, including textiles, keeping in mind the national interest and domestic
sensitivities.
vii) Market Access Initiative scheme provides financial support to various Export
Promotion Councils and Trade Bodies engaged in promotion of textiles and garments
exports, for organising and participating in trade fairs, exhibitions, buyer-seller meets etc.
viii) Government has put in place liberal and transparent investor-friendly Foreign Direct
Investment (FDI) policy. 100% FDI is allowed in the textile sector under the automatic
route. The amount of investment brought through FDI in the textile sector from 2017-
2022 was US $ 1522.23 million.

MoUs signed

A series of MoU’s have been signed to give a boost to the textile industry in the country.
These include:-

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23 CITI-NEWS LETTER

• MoU with National Agriculture Food Research Organization, Japan to promote


collaborative research in the field of silkworm and silk industry.
• MoU signed between Central Silk Board and “Uzbekipaksanoat”, Uzbekistan on
cooperation in Sericulture and Silk industry.
• MoU signed between Ministry of Textiles, Govt. of India and Department of Agriculture,
Fisheries and Forestry, Govt. of Australia for establishing a Joint Working Group on
cooperation in the field of Wool and Woolen products.
• MoU between India and Sri Lanka on procedural arrangements for import of apparel
articles from Sri Lanka to India on Tariff Rate Quota under India Sri Lanka Free Trade
Agreement.
• MoU between India and Sri Lanka on cooperation in the development of Small and
Medium-sized Enterprises in handloom, powerloom and textiles.
• MoU signed between Textiles Committee, Govt. of India and M/s Nissenken Quality
Evaluation Centre, Japan.
• Government is implementing various schemes such as PM-MITRA, PLI, NTTM etc. for
undertaking numerous technology centric approaches for increasing production in the
textile sector all over the country.

Sector wise scenario

Efforts have been made to enable growth momentum in key sectors, namely, silk, jute,
cotton, wool, handloom and handicrafts sectors. Let us take a look at the initiatives one
by one.

Silk Sector

The total Raw Silk production was 28106 MT. R&D projects numbering 44 were initiated
and 23 were concluded with the achievement of training 9777 persons in various activities
related to silk sector.

Jute Sector

JUTE-ICARE (Improved Cultivation and Advanced Retting Exercise) Scheme: covers 170
jute growing blocks with 1, 89,483 hectare had benefitted 4, 20,309 jute farmers. Export
Performance has improved due to Market Development & Promotion Scheme (MDPS) as
export performance rose by 38% from the last year with current value at Rs. 3786 crore.
The value of exported Jute diversified products is Rs. 1744 crore with increasing trend by

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24 CITI-NEWS LETTER

46% from the last year. A total quantity of around 26.87 lakh bales of jute bags worth
Rs.9.80 thousand crore (approx.) have been indented.

Cotton Sector

Cotton cultivation has been increased by 5% to 125.02 lakh hectare as against 119.10 lakh
hectare during last year. Brand named ‘Kasturi Cotton India’ for Indian cotton has been
launched and to encourage mechanized harvesting of cotton, improving quality of cotton
and to reduce labour cost. Further 75000 hand held kapas plucker machines are being
distributed.

Wool Sector

Projects to Animal/Sheep Husbandry Dept., Leh have been approved of revolving fund of
Rs.2 crore for procurement of pashmina wool, distribution of 400 portable tents to
Nomads of Leh in order to improve living conditions. Further construction of 300
Predator proof corrals for safety of pashmina goat along with project to procure 50 sheep
shearing machines for Uttarakhand.

Handloom Sector

Financial assistance of Rs.76.60 Crore has been provided to 91 Handloom Clusters. 1,109
weavers provided improved looms and accessories under HSS. Skill up-gradation training
was imparted to 2,107 handloom workers under Handloom Clusters of National
Handloom Development Programme. Assistance amounting to Rs.18.49 crore has been
released for 141 marketing events. Moreover assistance of Rs.10.40 crore has also been
released for various activities sanctioned to Mega Handloom Clusters under
Comprehensive Handloom Cluster Development Scheme. 102.05 lakh kg of yarn was
supplied under transport subsidy component, 73.79 lakh kg of yarn supplied under-price
subsidy component and total of 175.84 lakh kg of yarn supplied under Raw Material
Supply Scheme (RMSS).

Handicrafts Sector

A total of 272 marketing events were organized, benefiting 19330 artisans. ‘Pahchan
cards’ were issued to 30 lakh artisan and uploaded on public domain. 52 artisan Producer
Companies were formed and supported. 418 training programme and Design workshops
were conducted benefiting 12480 artisans. Modern Toolkit were distributed to 13579

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25 CITI-NEWS LETTER

artisans. Shilp Guru & National Awards for the years 2017, 2018 & 2019 were awarded to
108 artisans.

Home

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

GLOBAL
EU’s textile waste and used clothing in Pakistan

(Source: Shahid Sattar/Noreen Akhtar, Global Village Space, February 02, 2023)

Textile circularity is now a matter of utmost attention for Pakistan’s textile industry. The
industry is currently experiencing a massive transition from only manufacturing new
textiles in the absence of strategies to ensure their circularity, to initiating circular
business models, with a major focus on eco-designed textile products and recycling of
used textiles.

With the rising global trends in fast fashion, the export of textile waste or unwanted
clothes to destinations outside the EU has steadily increased. This export reached 1.4
million tonnes in 2021. Around 2.1 million tonnes of post-consumer clothing and home
textiles are collected in the EU annually for recycling or sale on global reuse markets. This
represents around 38% of textiles placed on the EU market. The remaining get discarded
in the mixed waste streams.

Pakistan is one of the dumping grounds for post-consumer textile waste or unwanted
clothes discarded every year from the EU. In 2021, used clothing worth 46 million USD
export value was exported from the EU to Pakistan. Used clothes from the EU’s high
streets end up reaching resale markets and also, dumping sites in the country.

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26 CITI-NEWS LETTER

In the absence of efficient traceability criteria and waste hierarchy in both the EU and
Pakistan, that distinguishes between textile waste and second-hand textile products, the
textile waste streams falsely labeled as second-hand clothes are imported to Pakistan, a
major portion of which adds to the already mounting ecosystem challenges in the country.
The unregulated waste streams of used clothing and lack of their recycling not only cause
more GHG emissions and unsustainable water consumption, as this leads to the
manufacturing of more new clothing but also causes an increase in the dumping of textile
waste in landfills.

EU is now giving utmost consideration to sustainability, promoting textile circularity, and


regulating the export of textile waste streams to other nations. EU’s legislative reforms
will change the game for Pakistan’s textile and secondhand clothing industry, which will
not only significantly minimize the dumping of textile waste but also support the
alignment of the current textile business models with the textile circularity business
models.

Current scenario

Affordability and business through resale platforms are the massive forces behind large
imports of used clothing from the EU to Pakistan. With the growing economic crisis,
consumers have become mindful of their expenses and their preference for secondhand
clothing, which is believed to have superior quality, has grown. Pakistan has a huge textile
resale market, that resales imported used clothes, some of which are recycled while most
are sold directly.

This expansion of the secondhand clothing market in the country is not only a pushback
against the mounting fast-fashion systems but also poses fewer environmental
consequences compared to the fashion industry and manufacturing of new textiles. For
instance, recycling and reshaping secondhand clothes emit fewer GHGs and cause less
water pollution compared to the emissions and pollution from new clothing production.
However, the inflow of unregulated textile waste streams, falsely labeled as secondhand
clothing, and unmonitored dumping of textile waste is a rising environmental concern
and a challenge to promote textile circularity in Pakistan.

Pakistan has a huge potential to recycle and redesign used textiles

The current scenario indicates that imported used clothes are recycled by some industries,
but the progress is not significant and major portions of these clothes enter resale markets

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27 CITI-NEWS LETTER

and dumping sites directly. For instance, Karachi Export Processing Zone (KEPZ) is
greatly benefiting from the used textile industry. It recycles and resales imported used
clothes globally. Given the preference for the use of recycled material in new clothes, if
industries are channeled into the market of recycled fashion, the recycling and
redesigning of imported and locally generated used clothes can become a significant
business market for Pakistan.

Recycled Polyester Staple Fiber (rPSF) is a highly suitable alternative for the industry to
promote business through recycled fashion. The installment of recycling plants for the
production of rPSF can uplift and green the industry’s business development, as it is the
most preferred recycled content. rPSF has a huge business potential for brands and is now
gaining high popularity, as it supports sustainability and compliance with the Global
Recycling Standards (GRS) due to various desired physical properties including higher
strength, low moisture absorbency, high elasticity, and comparatively easy production.

Textile circularity is now a matter of utmost attention for Pakistan’s textile industry. The
industry is currently experiencing a massive transition from only manufacturing new
textiles in the absence of strategies to ensure their circularity, to initiating circular
business models, with a major focus on eco-designed textile products and recycling of
used textiles. From knowledge dissemination to preparing skilled labor, implementing
sustainable business models, and upscaling technology, textile companies are actively
internalizing the EU’s guidelines and strategies to achieve zero waste targets. The
progress, however, needs to be enhanced in the entire industry through coordination, the
right financial allocations, and training.

The next big thing

EU Strategy for Sustainable and Circular Textiles will enormously transform the
textile production patterns in Pakistan. Driving fast fashion out of fashion by reversing
overconsumption and overproduction is a major target of the strategy. The industry will
be obligated to adopt resource-efficient manufacturing processes and circular business
models. This will not only promote the manufacturing of superior quality clothing, but
also the recycling of secondhand clothes, thus causing a massive shift in the consumers’
preference towards recycled secondhand textile products.

With the motto of #ReFashionNow, the EU is underlining the introduction of eco-


design requirements for textiles including quality, durability, longer use, repair, and

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28 CITI-NEWS LETTER

reuse of textile products, that will ultimately decouple textile waste generation from
growth. The textile industry will experience mandatory requirements to give a second life
to used textiles, which will require major shifts in industrial functioning. This will require
skilled labor, efficient policies for waste hierarchy and collection, and technical progress
for recycling, and treatment of used clothes.

As the EU’s strategy for textile circularity is getting stricter, the information requirements
to track the origin of all the textile products via traceability mechanisms are also becoming
a norm in the EU’s green economy plan. Through its Digital Product
Passport initiative, the EU is introducing mandatory information requirements on
circularity and key environmental aspects of textiles. This indicates that traceability
mechanisms will gradually become applicable to secondhand textile products, both in the
EU and Pakistan. From the export of secondhand textiles to their recycling and reuse
points, this mechanism will trace all the necessary information of the product’s lifecycle,
thus reducing dumping of the used textiles to the minimum.

Digital Product Passport is a milestone initiative to deal with greenwashing, which


misleads buyers by giving a false impression of the environmental footprint of the
companies. The EU’s criteria to avoid greenwashing are getting immensely stringent, as
the European Commission is seeking to define all greenwashing tactics (figure 1) and
disseminate information about them. While this will give enormous recognition to the
textile companies in Pakistan who are making efforts to green their products; it will also
hold accountable, the poorly performing companies, for their high environmental
footprint.

Aligning business growth with the EU’s strategy for textile circularity by focusing
maximum on eco-designed new products and recycling used textiles is the next step
towards a new normal for Pakistan’s textile industry, as the strategy will soon enter into
force. This will not only regulate the EU’s post-consumer textile waste misleadingly
labeled as secondhand textiles entering Pakistan but will also reduce the dumping of
textile waste to the minimum levels.

It is a must for Pakistan’s textile industry to adopt waste hierarchy protocols for the
imported and internally generated post-consumer textile waste and strengthen the
traceability mechanism to trace its recycling and end-of-life points. As the EU is a top
textile export destination for Pakistan and is increasingly focusing on eco-design
requirements for textiles, management of post-consumer textile waste will fulfill the EU’s

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29 CITI-NEWS LETTER

mounting requirements for textile circularity. The industry will observe a transition, as
manufacturing of superior quality textile products and recycling and exporting of used
clothes will dominate the industrial functioning. This will reduce the environmental
footprint of the industry to a significant level and promote green economy-based
industrial development.

This will require the right financial allocations, upscaling of the current technology,
skilled labor, and coordination among the relevant stakeholders for knowledge
dissemination, the absence of which will affect the industry’s compliance performance
compared to its regional competitors, ultimately distressing the export-based business
market to the EU.

Home

UK's trade minister visits Asia-Pacific to promote accession to CPTPP

(Source: Fibre 2 Fashion, February 02, 2023)

UK’s trade minister Greg Hands is visiting Vietnam, Malaysia, and Singapore today for
high level trade talks on how the UK joining the Comprehensive and Progressive
Agreement for Trans-Pacific Partnership (CPTPP) will boost the economic clout of the
world’s most dynamic trade bloc. This visit emphasises UK’s post-Brexit shift to enhance
trade with Indo-Pacific region, which is predicted to account for majority of global growth
by 2050.

The country’s membership of the CPTPP will add another like-minded partner and strong
voice to this powerful alliance, taking the trade bloc’s GDP to £11 trillion. It will give UK
businesses tariff-free access on over 99 per cent of goods to a market of around 500
million customers.

As a major economy and strong advocate of free trade, the country’s membership will
support the trade bloc to shape the high standards of global trade, particularly in the face
of increased protectionism, UK government said in a press release.

With the next round of CPTPP negotiations taking place soon, the trade minister will
express the UK’s desire to finalise accession at the earliest opportunity—a top priority for
both the trade secretary, Kemi Badenoch, and the minister.

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30 CITI-NEWS LETTER

Minister of state for trade, Policy Greg Hands, said: “Joining CPTPP will add even more
economic clout to this exciting and dynamic trade alliance, helping it grow to £11 trillion
or from 12 to 15 per cent of global GDP.

“This visit will also strengthen our bilateral trade relationships with Vietnam, Malaysia,
and Singapore—which total £32 billion.”

Home

China reconnects to world in every field after COVID despite lingering


Western smears

(Source: Global Times, February 02, 2023)

After three years of the COVID-19 pandemic, global businesses were glad to see Chinese
visitors once again arriving at their local tourist attractions and shopping malls over the
just concluded Spring Festival holidays. The recovery of Chinese outbound tourism has
injected strong vitality to overseas tourism and consumer markets, industry insiders
commented.

While the mainstream international community has welcomed China's optimized


domestic COVID-19 response, and embraced its increasing external exchanges and
communications, a few people in the West are, however, trying to hinder China from
further connecting to the world.

Apart from the highly criticized entry restrictions imposed by several countries reportedly
targeting Chinese visitors, observers have seen some Western media outlets pointing
fingers at China's COVID policies. They claim that the optimized measures implemented
by the country, which intend to better reconnect the globe, may instead lead to the
country's "disconnection" or "isolation" from the world.

Behind such ridiculous claims, some Western media sources, by fear-mongering that
inbound Chinese visitors may cause new infection waves locally, have attempted to depict
China's recent COVID policy move as "unwelcome" and "unaccepted," analysts told the
Global Times.

In sharp contrast to the Western sources' accusations, China has been in close contact

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31 CITI-NEWS LETTER

with the world in various fields in recent years, and now the COVID policy optimization
is bringing better opportunities for further cooperation. Many Chinese and foreign
nationals reached by the Global Times said they are actively resuming exchanges.

"The Western media's coverage of China is mainly negative, but we business people are
not media guys; we are rational," said textile exporter Xu Yihong, who flew to Japan to
negotiate with Japanese clients in December 2022 with the help of the Chinese local
government.

"No matter what they (Western media sources) have said, we continue to focus on facts,"
Xu told the Global Times. "My international clients and I maintain excellent
communication."

Embrace the world

From government officials to busy businesspersons to culture and art industry


practitioners, China has been actively embracing the world in various fields while
overcoming the difficulties brought about by a global pandemic.

Data shows that during this year's Spring Festival, or Chinese New Year, immigration
management agencies across China inspected 1.443 million people who left the country,
a 117.8 percent surge year-on-year.

Outbound Chinese tourists showed their strong buying power in this first week-long
holiday after COVID policy optimization, as the transaction amount of domestic
consumers using UnionPay cards at overseas ATMs and merchants grew by some 60
percent, the Beijing Youth Daily reported on January 30.

Domestically, after China optimized its COVID policy, authorities then conducted one-
on-one visits to foreign enterprises and business associations to collect their responses,
said the Chinese Ministry of Commerce on January 6.

At a thematic briefing on January 10, officials from sectors including healthcare,


commerce, customs, immigration, and civil aviation explained China's new COVID policy
to more than 120 foreign enterprises and business associations from over 30 countries,
and provided answers to related questions, such as "how does China monitor the virus'
mutation" and "when will direct flights between China and the US resume."

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"Foreign businessmen that we know welcome the new opening policy," Loh Wee Keng,
chairman of the Malaysian Chamber of Commerce and Industry in China, told the Global
Times at the briefing. "There are a lot of companies that really can't wait to invest in
China."

At regional governments, officials also work hard to help local exporters reconnect with
overseas clients offline as soon as possible.

On December 4, 2022, days before China officially announced the optimization of the
COVID policy, 48-year-old Xu had arrived in Japan along with dozens of textile exporters.
They are from Jiaxing, East China's Zhejiang Province.

By taking a charter flight provided by the Jiaxing government, the exporters were able to
attend Asia Fashion Fair there to seek new Japanese clients who were out of reach in the
three years of the global pandemic.

Xu owns a textile company in Jiaxing. Before the global pandemic, more than 90 percent
of her orders were from Japan. The pandemic brought great losses for her company
because of previous entry and exit restrictions, but fortunately the hard days seem to have
come to an end.

"This time in Japan, I talked to potential buyers face to face and got many intent orders,"
Xu told the Global Times after returning to China. "I appreciate the government's efforts
in sending us out, such as applying for visas, chartering the flight, and covering some of
our costs."

Jiaxing was among the many Chinese cities that had tried hard in recent years to provide
conveniences for local exporters in reconnecting with overseas clientele offline. In
Suzhou, East China's Jiangsu Province, for instance, the commerce authority chartered a
flight for local exporters to Japan in early November 2022, becoming one of the first
Chinese regional governments to provide such a service since COVID-19 broke out in
2020. Through this trip, Suzhou exporters brought back orders valued at more than 1
billion yuan ($147.4 million) in total, Chinese media sources reported.

Optimistic about her business this year after COVID, Xu said she is looking forward to a
"fair competition" between her and her foreign peers, and is confident about the cost-
effective products she offers.

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33 CITI-NEWS LETTER

In the culture and art sector, China's adjusted COVID policy also brings a new spring to
cultural exchanges and communication, said insiders reached by the Global Times.

Over the just concluded Chinese New Year holidays in Shanghai, for instance, there were
long queues in front of the Shanghai Museum every day, with citizens waiting with
excitement to watch an exhibition of 52 masterpieces by renowned European artists
including Van Gogh.

Jointly held by the Shanghai Museum and the National Gallery of the UK, the exhibition
was hailed as the first high-level Western art exhibition in China since COVID policy
optimization. "The pandemic never stopped us from communicating with the world," the
museum's director Chu Xiaobo told the Global Times. "We overcame various difficulties
and continue to be an envoy of cultural exchanges."

Undoubtedly, the world is glad to see China's increase in external communications in


various fields after the global pandemic, a trend unlikely to be slowed or hindered by
Western media sources' skewed reporting.

"Since China has opened its door after the global pandemic, its link with the world will
only get tighter this year," Li Haidong, a professor at the Institute of International
Relations at the China Foreign Affairs University, told the Global Times.

Toxic media campaign

Although COVID-19 strains currently found in China have also circulated in other
countries, some Western media outlets kept demonizing the infection waves in the
country after China adjusted its COVID response policy, while trying hard to portray
China as a "troublemaker" in the world.

Observers found that a common tactic used by such media sources is to quote certain
Chinese netizens' posts out of context, especially those that don't reflect the mainstream
voices on Chinese social media. Such a tactic feeds an atmosphere of panic, fear, and
vilification of the country and any potential tourists as to what they might bring in.

Another tactic recently employed was imposing arbitrary temporary entry restrictions
against Chinese visitors after the optimization of China's COVID policy, under claims that
the world distrusted China and was dissatisfied with its COVID response efforts.

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34 CITI-NEWS LETTER

Scanning through recent reports by Western media outlets including the VOA, the Wall
Street Journal (WSJ), and RFI (Radio France International), readers can clearly note the
use of inflammatory buzzwords such as "chaos," "uncertainty," and "suspicious"
frequently used in their stories.

For the last three years of the pandemic, some Western media sources have denigrated
China, and China's COVID policy adjustment is just another new pretext for them to
continue with the ceaseless onslaught, although previously they were among those who
clamored for the loosening of the country's initial zero-COVID policy, Chinese media and
international relations experts told the Global Times. No matter how big the contributions
made by China's resumption of people-to-people exchanges will be to global economic
recovery, some anti-China media pundits in the West and the forces behind them will
continue to display their plain displeasure at China reconnecting with the world, said Li.
"They naively think they can obstruct China's ties with the world through their biased
articles," he added.

Along with such a propaganda campaign that intends to isolate China, a few countries set
entry restrictions on Chinese visitors in December 2022 under various pretexts. And a
few media outlets just don't bother hiding their nefarious intentions, such as German
newspaper Frankfurter Allgemeine Zeitung which said in a January article that, although
conducting mandatory COVID testing on inbound Chinese visitors does not make much
scientific sense, the political pressure of the measure should not be underestimated.

Partly because of media games, the West's hostility to China rose over the years during
the pandemic, said observers. "It's [unreasonable for] Western countries to politicize their
anti-COVID policies and regulations to contain China; we resolutely oppose such
measures," Zhu Feng, executive dean of the School of International Studies under Nanjing
University, told the Global Times.

Textile exporter Xu, who said she found that "most China-related coverage by Western
media sources is negative," also protested such unfounded slanders against China.
"[Western] media sources know that criticizing China is kind of a method to get more
views," said Xu. "They will say whatever things just to please some of their anti-China
readers."

Home

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35 CITI-NEWS LETTER

GTAS 2023 to discuss opportunities in Vietnam's textile industry

(Source: Fibre 2 Fashion, February 02, 2023)

The 3rd Global Textile & Apparel Summit (GTAS) Vietnam 2023, slated to take place on
April 20-21 in Hanoi, is a 2-day gathering of international experts from all over the world
to share project case studies, discuss opportunities and deliver solutions for the major
challenges faced by the Vietnamese industry. Fibre2Fashion is the Digital Media Partner
for the event.

The key topics to be covered at the event include What's the Development Plan within
Next Five Years for Vietnam Textile and Apparel Industry and Outlook for 2040; Regional
Policy Updates and Master Plan on Vietnam's Textile & Apparel Industry; Deep Analysis:
EVFTA and its Impact on Vietnam Textile and Apparel Industry; The Latest Impact of
COVID-19 on Vietnam Production and Analysis on Trade & Tax; and How to Fix the Woes
of Textile Raw Material Sourcing Main from China during US-China Trade War, the
organisers UMS Institute and InnoRetail said in a press release.

The event will also discuss topics like Under the New Global Trade Environment, How
Will Manufactures and Brands Work Together to Build a More Resilient Supply Chain;
Under the Background of Industrial 4.0, Will Digital Transformation Help Vietnam
Recover from COVID-19 and Grow Faster; Rethinking Business Models for the Fashion
Industry: Digital Fashion and the Metaverse; Quality & Compliance: Turning a Pain Point
Into a Competitive Advantage; and Fashionably Sustainable: What's next for the Garment
Industry.

The experts coming to the event will take part in discussions on Development of Eco-
friendly Materials and Technologies to Adapt to Global Sustainable Fashion Trends;
Sustainability Strategy for Future Plan: Environmental and Value Chain; New Trends and
Practices for Technology Innovation in Textile and Garment Manufacturing; Post-COVID
Sourcing Strategy: What Should We Prepare for Sourcing in Vietnam and SEA; Supply
Chain Digitalization to Meet the Ever-Changing Demands of the Consumer and much
more.

The summit will also host discussions on digital textile printing, labour market trends,
supply chain and production chain issues, supply chain management and apparel
procurement among many other topics. Another key topic will be a case study on How to
Better Cooperate with Vietnamese Manufacturers as a European Brand Company.

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36 CITI-NEWS LETTER

Vietnam is considered as one of the world's leading manufacturers and exporters in the
textile and apparel industry. After Vietnam fully reopened its doors to international
visitors, the local market has quickly adapted to the new normal and is back on track after
the pandemic. Despite optimism for future development, Vietnam's textile and apparel
industry still faces many challenges such as rising costs, global supply chains and labour
deficit, the release added.

Vietnam's apparel exports in the first half of 2022 totalled around $22.3 billion, up 17.7
per cent year-on-year. The growth was fairly high amid challenges plaguing the global
market. Though many difficulties are expected to arise in the local market for the rest of
the year, Vietnam might fulfil its target to achieve $43-43.5 billion from textile and
apparel exports this year.

The high export revenue, coupled with high-quality Vietnamese products at competitive
prices, has recently made the Vietnam textile and garment industry more attractive to
foreign investors. Market trends and the post-COVID recovery of global exporters will
lead to a boom in the apparel sector in the near future.

Home

Pakistan’s textile industry is in crisis – and women are bearing the brunt of
its decline

(Source: Parveen Latif Ansari, The Guardian, February 02, 2023)

The threat of permanently lost jobs means many are frightened to speak up over basic
labour rights. My organisation helps women fight for their jobs – and decent conditions.

Over the years, women in Pakistan’s once thriving textile industry have played a crucial
role supplying Europe and the US with items from denim to towels. But since the
pandemic, 7 million workers have been laid off due to low exports and the country’s grave
economic crisis. In my city, Faisalabad, hundreds of thousands of the 1.3 million textile
workers – half of whom are women – have lost their jobs and the jobs of a huge number
are on the brink.

For Faisalabad’s female textile workers the biggest worry is that these jobs will be lost for
ever. That is worse than their delayed and underpaid salaries, the harassment they face at
work and having no healthcare facilities.

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37 CITI-NEWS LETTER

For those rural women who travel to the factories from surrounding areas early in the
morning and work long days for low pay, this is their only source of income.

My city is known as the Manchester of Pakistan, and produces textiles for the world. But
the pressure on the industry is immense: electricity costs have doubled; floods have
devastated cotton fields, adding to shortages; the government has placed limitations on
credit.

Hundreds of factories have closed or are working short shifts. Workers have been fired.
Even the cottage industry of female workers, sewing at home, lacks support or incentives.
They make gloves, socks and stockings for less than a dollar a day. I believe this artisanal
work has huge potential and the government should declare it an industry, ensuring
respectable wages.

The Women Workers’ Alliance (WWA) is protesting against the mass layoffs in the
industry, and demanding workers are paid. I’ve conducted education sessions with
hundreds of women over labour laws and collective rights but still there is a lack of
awareness. We estimate that of more than 150,000 workers in the hosiery sector alone,
only 4,200 have social security cards.

Women are reluctant to raise their voices because they fear it will mean losing their jobs.
WWA has helped workers form anti-harassment committees in textile sectors and other
industries. We have also held meetings with the government’s labour department
regarding the formation of anti-harassment committees and succeeded in getting them
into 40 mills in Faisalabad.

One of the key issues is that we cannot meet with women at their workplaces for any union
activity, and they are bussed in to these workplaces by the the owners. Three months ago,
workers from Masood Textile Mills succeeded in forcing the implementation of the legal
minimum wage, a battle that took us four months.

In small mills labour laws are ignored and workers denied even maternity leave. Women
rarely get much sympathy but despite this I’m hopeful – that jobs will return, that women
in the factories will become more aware of their rights and win out against the prejudice
to get financial freedom through respectable wages.

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38 CITI-NEWS LETTER

• Parveen Latif Ansari heads the Women Workers’ Alliance (WWA), campaigning
for better pay and conditions for thousands of women in the textile industry
in Faisalabad.

Home

Forget fast fashion. This challenge encourages upcycling and mending old
clothes to create new trends

(Source: Parveen Latif Ansari, The Guardian, February 02, 2023)

Canadians throw out a lot of clothes and most of it isn't garbage, according to a new
Ontario study Here's an environmentally stylish twist on the fast fashion approach to
dressing: Take those old clothes and instead of tossing them in the garbage, try making
them new again.

That's what two groups — the Fashion History Museum in Cambridge, Ont., and The
Guelph Tool Library — have in mind as they encourage people to reuse clothing that
otherwise would end up in landfills. And that approach, it appears, may go a long way in
helping reduce the amount of garment materials that end up in landfills, which according
to a new study is in the hundreds of millions of kilograms a year.

For its part, the Fashion History Museum is challenging people to repurpose clothing to
create daring new outfits. Anyone who sews can join the museum's upcycling challenge,
and the finished garments and accessories will be featured at an event this spring.
"Upcycling is something I think we're going to see more of in fashion," Jonathan Walford,
director and curator of the Fashion History Museum, told CBC Kitchener-Waterloo's The
Morning Edition.

"I think that's the wave of the future."

Turning 'unloved fabrics' into much-loved pieces

Upcycling involves taking old clothes and transforming them into something new. It's
one way to reuse textiles that may have otherwise ended up in the trash. Reusing fabric
from old clothing is not new, Walford said. In the 18th century, the most expensive part

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39 CITI-NEWS LETTER

of any outfit was the fabric. Women would keep the dresses in a trunk for their daughters
and granddaughters to take them apart, and repurpose the material, he explained.

"There are opportunities of taking old and unloved fabrics and materials, and using them
up for today and making them relevant for today's audience," Walford said. The clothing
industry has had its share of criticism when it comes to its environmental impact. Of
particular concern is fast fashion — clothing that's made inexpensively and rapidly in
response to the latest trends. These mass-marketed garments aren't designed to last long,
thus ending up in landfills quicker than garments of higher quality and cost.

According to a study by researchers at the University of Waterloo and Seneca College in


Toronto, Canadians throw out 500 million kilograms of fabric that could be reused and
recycled. The study analyzes how much fabric is ending up in Canada's landfills and
outlines a new grading system to help divert textile waste from the trash. Study co-author
Olaf Weber, a University of Waterloo professor in the school of environment, enterprise
and development, said 85 per cent of clothing that's thrown out "shouldn't be there."
"Only 15 per cent that we found is really waste — cannot be recycled, can't be reused, can't
be resold," Weber said.

Researchers evaluated a sample of about 10,000 items collected from municipalities


across Ontario between 2019 and 2020. Weber said it was surprising to see how much
textile waste was like new. Canada doesn't have a standardized system for sorting textiles,
but the researchers developed a new method to evaluate an item's quality, on a scale of A
to F, to determine whether it can be resold, recycled or thrown out. For example, a pair of
ripped and stained jeans might be flagged for repair instead of heading into the
trash. Weber said the study's goal was to determine the quality and quantity of textile
waste, and the next step is to encourage consumers to divert textile from landfills. Making
garment fabric uses a lot of energy and water, Weber said. And when clothing ends up in
the landfill, it produces greenhouse gas emissions, he said.

Education and marketing about social responsibility, new regulations, even


community clothing swaps can make a difference and divert some items, Weber added.

Trend to mend

Mending clothes to make them last is popular, as are opportunities to learn how to do it.

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40 CITI-NEWS LETTER

That's where The Guelph Tool Library comes in. It hosts repair cafés where people can
bring in clothes, as well as broken appliances and tools, to be fixed. The non-profit also
comes up with creative new ways to make household items last. Its newest initiative is
the Circular Store, a thrift store and mini-recycling centre that's set to open later this
month.

The Guelph Tool Library is partnering with Terracycle to collect common household items
that cannot be recycled through municipal recycling services, such as razor blades and
toothbrushes If donated clothing doesn't sell at the thrift store, it will get passed on to
community organizations that can use them, said Megan Clarke, co-ordinator of the
Circular Store.

"If they don't want it, then we look at it and see if we can take the clothing apart and source
it for materials that can be used in something else," she added.

"Our goals are purely sustainability minded. We will do everything we can to prevent their
items from going into landfills."

Textiles are difficult to recycle, Clarke said, which is why she believes buying second-hand
clothing is a sustainable and economical way to think about one's wardrobe. "People will
have to shift their consumption to a more circular way of shopping," Clarke said.

The Guelph Tool Library also accepts donations of items to sell at the Circular Store.

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