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J&K woollen sector to get major revamp under World Bank project

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Move to help boost employment: CEO JKERA

BK News

Srinagar, Sept 30: The traditional wool-based industry in Jammu and Kashmir is being given a major overhaul under the  ongoing World Bank-funded Jhelum Tawi Flood Recovery Project (JTFRP).

The move is being hailed by the people associated with the wool production as well as the employees working at  the heritage Bemina Woollen Mills, Srinagar, according to an official spokesperson.

Chief Executive Officer J& K Economic Reconstruction Agency Syed Abid Rasheed Shah said that the JKERA under the component of Restoration and Strengthening of Livelihoods of the World Bank funded JTFRP is taking concrete steps for the restoration and strengthening  of livelihoods under the traditional cottage based industry and this step a major revamp is underway for the restoration of Bemina Woollen Mills. He said that the objective of the sub-project is to strengthen the infrastructure of the heritage mill  and provide the machinery with latest equipment so that the production of wool products is maximised to full potential. Besides the local wool producers also get a good demand for their produce locally, CEO said.

The CEO said that the work under the component of Strengthening & Restoration of Livelihood as well as other components of JTFRP are going on smoothly , saying that with the completion of such projects, the concerned sectors would get hugely benefited.

“We are trying to work on the various components across Jammu and Kashmir at the same time. We hope our interventions bring about a positive impact in the lives of beneficiaries”   the CEO said.

He said for the heritage Bemina Woollen Mills, the project is being executed by the Department of Industries and Commerce as the project implementation unit.

The sub-project involves the construction of  a building of Showroom and for Wool products manufactured at the Govt. Woollen Mills , Bemina, were  wool products manufactured at the Govt. Woollen Mills, Bemina will be showcased which is being constructed at a cost of Rs 2 crores . It also includes the restoration and repair works of the Government Woolen Mill at Bemina which had suffered immense damage during the floods of 2014 .Work is nearing completion and is expected to be completed soon with more than 80% progress achieved on the sub-project with work alreadycompleted on the main buildings and work underway on  interior finishing components.

Sajid Nazir, Nodal Officer, Industries and Commerce, J&K, said that under the component various latest equipment’s have been being procured, including 8 hi-tech looms in order to strengthen the infrastructure at Government Woolen Mills Bemina. Besides this, the component aims to carry out the procurement of Rapier looms, boilers, dyeing and related types of equipment etc for which contract has been awarded.

“Overall the sub-project involves the civil work component under which new showrooms cum interpretation centre came up. The Showroom would be completedsoon and this will surely help our products to get the better market,” Nazir said.

He said that in order to arrest losses, the J & K government from time to time invested money into the rundown Bemina Woolen Mills to improve its products that had plummeted to an all-time low.

He said that Jammu and Kashmir is one of the top ten states/UTs, which has the top quality wool production. Nazir said that with the commissioning of several of these sub-projects, the demand for the raw wool produced locally would be in great demand at Government Bemina Woollen Mill would not only benefit the department but around 3000 families associated with the wool production and its processing.

Another official, Khurshid Ahmad at BeminaWoolen Mills said that “2014 floods washed away everything at the Mill and most of the expensive machines and looms got washed away,” he said. He said that while a washing unit was installed and old machines repaired, most of the capital infusion was devoured by the civil works.”

He said that the upgradation works of the Govt. Woollen Mill at Bemina will help them to increase the production from next fiscal. “We have nearly hundreds of workers and the unit has suffered immensely and once we achieve the target, we should be able to have a bit of profit as well,” he said.

Pertinently, the government-run Bemina Woollen Mill is marketing certain finished products and is trying to compete with larger manufactures like Raymonds and Vimal beside the J&K Handicrafts Development Corporation which is the major Tweed manufacturer in J&K. The officials said that thrust would remain on producing high quality woollen& worsted tweed suiting, serge, Angola, Terricot, blankets.

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FICCI holds workshop on ATA Carnet for J&K importers, exporters

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Workshop on ATA Carnet
BK News

Srinagar, Sept 26: The apex trade and industry body of the country Federation of Indian Chambers of Commerce and Industry (FICCI) here on Monday organised an awareness workshop on ATA Carnet and its operational aspects for exporters and importers of J&K.
The workshop was held in collaboration with the Kashmir Chamber of Commerce and Industry (KCCI).
ATA Carnet ‘facilitates green channel route for doing business in India and abroad’. Also known as ‘Passport for Goods’, it is an international customs document that permits the tax-free and duty-free temporary export and import of nonperishable goods for up to one year.

Workshop on ATA Carnet

The event provided an opportunity for exporters, importers and business experts to share their mutually beneficial knowledge and experiences. They discussed issues involved in the temporary import of goods and drew benefits from the deliberations of the session. The experts and guests interacted with the workshop participants on ATA Carnet and responded to several queries while clarifying doubts about the operational aspects of ATA Carnet.
Divisional Commissioner, Kashmir, Pandurang K Pole, in his address, said the ATA Carnet should be promoted with the ‘One District One Product initiative’ of the Government of India to reap its benefits for exporting local produce.
Deputy Commissioner of Customs, Srinagar, Danish Inder Singh Gill said, “It is right to call ATA Carnet as FICCI Green Channel Route to make it more popular with the business community in India”.
Director, Handicrafts & Handloom, Kashmir, Mehmood Ahmad Shah, talked about the initiatives, issues & challenges of the Handicrafts & Handloom sector of Kashmir.

Workshop on ATA CarnetHighlighting the importance of the workshop for the local export community, Chairman FICCI Jammu & Kashmir, Irfan Ahmad Guju, in his welcome remarks, said it is an initiative in educating people on the use of ATA Carnet and appreciating the value it brings to the export community”.
President, KCCI, Sheikh Ashiq Ahmad, also spoke at the occasion. Senior Consultant, FICCI & Former Member Customs Excise & Service Tax Appellate Tribunal (CESTAT), PS Pruthi; Deputy Secretary General, FICCI, Nirankar Saxena; and Co-Chair, FICCI Jammu & Kashmir, Rajesh Sharma interacted with the participants of the workshop and responded to several queries to clarify doubts on the operational aspects of ATA Carnet.
Carnets are like passports for goods replacing normal customs documentation enabling fast trouble-free importation into member countries without having to pay duty or tax. The system gives a number of advantages to businessmen seeking new opportunities on foreign markets. It can benefit business travellers, sales executives, fair exhibitors, film and tv crews, artists, engineers, educationalists, entertainers, sports teams and many more during their overseas trips.
The key benefit is that it can be used for multiple trips throughout its one-year validity. It reduces delays and standardises procedures that are vital in today’s economic world. In addition, it significantly simplifies customs paperwork.
FICCI has been functioning as the National Issuing & Guaranteeing Association (NIGA) for the operation of the ATA Carnet system in India.

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J&K’s Dwindling Corrugation Industry

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J&K’s Dwindling Corrugation Industry

Dhaar Mehak M

Pazeer Kataria

J&K’s Dwindling Corrugation Industry! The corrugation industry is a sub-category of the paper industry. It essentially deals with the manufacturing of customised boxes made from the amalgamation of cardboard, kraft paper, adhesives, stitching, wiring etc. Corrugation boxes are an improvisation over ordinary cardboard boxes. These boxes are stronger, durable, environment friendly, cost-effective, sustainable, recyclable and easy to customise. The corrugation industry has revolutionised the modern-day world because of its environment-friendly nature. The main output produced by this industry is (customised) packaging material for multiple purposes across various intermediate and final uses.

India’s corrugation market is estimated to be worth Rs 30,000 crore. Over time, this sector has grown steadily and sustainably. Given the enormous size of the Indian economy, there has always been a high demand for the goods and services supplied by this sector. It has consistently been a highly popular business among potential entrepreneurs. The Covid-19 pandemic has, however, caused this industry to experience a recent nationwide decline. The cost of all raw materials, including the fuel for running the machinery and the cost of transportation, has skyrocketed. The sector has been further restricted by the limited import of less expensive raw materials and the increased tax burden on businesses.

In Jammu and Kashmir, the corrugation industry is directly linked to the horticulture sector. Cardboard boxes have replaced traditional wooden boxes for apple packaging to a large extent. Though the corrugation industry of J&K produces boxes for beverages, bakery, medicines, yoghurt, processed foods etc. apart from horticulture the main demand comes from the latter itself. As such the corrugation industry has been a very popular venture amongst the potential entrepreneurs in J&K. However, the post-pandemic world hasn’t been the same for the corrugators of J&K. The corrugation industry in the region has been running in losses since the beginning of the pandemic.

All of a sudden it was decided that the GST on the corrugated boxes would be increased by 6 percentage points. Initially, the purchase sale tax was 12% and so was the sales tax. After this decision, while the purchase tax is the same, the sales tax has increased to 18%. There is a direct 6% dead weight loss created, the brunt of which is born by the manufacturer. Meanwhile, the rates of the boxes have tended to remain constant declining the profit of the manufacturers by a big slash.

The first blow came with the beginning of the Covid-19 pandemic right in China. Kraft paper, one of the essential raw materials, is imported into India from China. As soon as the pandemic was declared the imports were halted and the basic raw material shortage was felt. Steadily this had to be substituted with the indigenous craft paper which increased the cost of production. Other imported substitutes coming from the rest of the world also got expensive and the production cost of the industry rose immediately. This sudden nature of the shock gave the least time to the corrugators of J&K to come to terms with the outcomes.

Another major shock came with the updated taxation decision from the ministry of finance. All of a sudden it was decided that the GST on the corrugated boxes would be increased by 6 percentage points. Initially, the purchase sale tax was 12% and so was the sales tax. After this decision, while the purchase tax is the same, the sales tax has increased to 18%. There is a direct 6% dead weight loss created, the brunt of which is born by the manufacturer. Meanwhile, the rates of the boxes have tended to remain constant declining the profit of the manufacturers by a big slash.

The most important source of demand for corrugated boxes however comes from the horticulture sector in the region. And here the major concern is the competition given to the locally manufactured corrugation boxes by the imported ones coming from the neighbouring states. There are two main reasons behind this competition. One of the reasons quoted by the local manufacturers is that the business houses outside J&K are multi-project ventures, keeping the cost of production very low for the producers. As such, in the local market, these boxes are sold at a cheaper rate than those coming from our local producers. The second reason comes from the consumers who claim that the boxes coming from outside are not only superior in quality but are affordable too. The joint impact of both these reasons is a decline faced by this otherwise brimming and quoted ‘high potential’ industry in the region.

Another important local source of demand for the corrugation industry of J&K is the beverage industry located across the region. Corrugation boxes have been a preferred choice for these units. However, the growing prices of these boxes have forced this industry to look for alternatives and substitutes. After a brief research, it turns out that the beverage industry is substituting corrugation boxes with plastic and polythene packaging. At the same time posing a long-run threat to the fragile environment of the region!

 In Kashmir, the corrugation business has a direct and indirect impact on about 20,000 households. These people in a majority of the cases are not affiliated with any other economic activity. A loss to this industry will impact the members across all these households. In light of these events and factual realities, there arise some critical policy implications. For starters, the local government must restrain the unquestionable import of corrugation boxes from the rest of the country. Given that the horticulture sector is at the back of this industry, it is important that the two grow mutually and with an interdependence that is conjointly and positively reinforcing the overall growth. Immediate intervention and curtailment of the taxes is the most pressing pre-requisite for the sustenance and then eventual growth of this sector. From a longer-run perspective, the use of corrugation products instead of plastic and polythene is J&K is the basic need to keep up with the fragile ecosystem that the region is bestowed with.

The authors work with the Department of Economics, Islamic University of Science & Technology & can be reached at [email protected] 

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Lassipora industrialists call on newly appointed director

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Lassipora industrialists call on director

BK Media 

Srinagar, Aug 18: President Industrial Association Lassipora (IAL), Mohammad Muzaffer Ahanger, called on newly appointed Director Industries and Commerce, Kashmir, Saloni Rai to make her aware about the various problems faced by the industrialists of the estates.

While congratulating Rai for her appointment as the Director Industries Kashmir, Ahanger raised various issues faced by industrialists at Industrial Growth Centre, Lassipora.

Ahanger was accompanied by the president ply-board association and veneer industry, Irshad Ahmad Bhat,  and other members of IAL.

Some urgent issues like pending incentive claims, extension of revalidation of expired provisionally registered units and problems faced by the new allottees through online portal were also discussed with the director, according to a statement issued by IAL.

Developmental issues including repairing and macadamization of damaged roads at IGC Lassipora were also brought to her notice.

“It’s apparent how business fraternity had been facing difficulties for over a decade. Post 2014 floods, 2019 lockdown accompanied with Covid19 outbreak, losses are beyond the imagination,” Ahanger said. “We expect that the appointment of our new dynamic director will strengthen the ailing industries and navigate us towards further success. We have high expectations from her and we are confident that she will raise the bar.”

According to the statement, Saloni Rai assured that all the grievances and other related demands shall be resolved at the earliest and will also fast track the completion process of long pending issues.

Rai also told them that she will visit IGC Lassipora in the coming days to physically witness the condition of the estate by interacting with the industrial unit holders.

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