FW
Garment traders in Jharkhand may close shop for a day in protest against the five per cent Goods and Services Tax (GST). They say it is extremely difficult for a trader doing his garment business in almost no space and sometimes at almost no profit to install a set-up for GST compliance. The systems, training and education and so many other things associated with it would only force traders to exit the business if GST is imposed on garments.
The Jharkhand Wholesale Garment Traders Association has strongly opposed the five per cent GST on garments saying that garments are a basic need of the poorest of the poor and imposing any tax on garments would be similar to imposing a tax on shrouds.
GST would benefit the industry in terms of lower logistic costs, low lead times, make pan-India selling easier by removal of forms needed, reduce administrative hassles by creating a single tax window, reduce costs by allowing taxes in all expenses to be adjusted etc.
However there a few oversights and anomalies which need to be corrected. Textiles is a very fragmented and unorganised industry. Mostly manufacturers just do a single process and hence a lot of job working is involved. Pre GST it was recognised as a manufacturing activity and exempt from service tax. However such exemption is missing in the current GST exemptions for services. This means it would have a 18 per cent GST rate which would make the job work segments and their principals uncompetitive against large composite mills who will not have this impact due to in-house production.
The Rebate of State Levies scheme helped India achieve an export growth of 31.7 per cent in April 2017 compared to April 2016.This is what a survey done in 8 states by Apparel Export Promotion Council (AEPC) discovered.
It’s believed continued ROSL support will help exporters expand their factories, lead to a higher rate of employment, better work environment and better prices for farmers. Since its rollout in September last year, the scheme has helped turn the tide of falling apparel exports. Since then growth has been on an upward trajectory, peaking in April this year.
During March to April 2017, Indian garment exporters were able to increase production by around 30 per cent for achieving this growth and employed at least five per cent more workers during the same period. The Rebate of State Levies has helped the industry increase production at very competitive rates for a larger share of global markets.
64 per cent of the respondents are of opinion that continued ROSL support will help them expand their factories. The respondents are also of opinion that expansion of factories will also lead to higher rate of employment (67%), better work environment (73%) and better prices for farmers (50%).Moreover, 77% exporters are of the view that ROSL can be continued in its existing form. Commenting on the findings of the survey, Ashok G Rajani, chairman AEPC said, “AEPC has been reiterating the importance of ROSL for the industry. ROSL has helped industry deliver phenomenal growth for the sector. ROSL since its announcement in last June added a positive sentiment amongst exporters and roll-out in September last year helped lifting the falling apparel exports. Since then the growth has been on an upward trajectory peaking in April this year.”
An overwhelming proportion of beneficiaries of the ROSL scheme are exporters with a turnover of less than Rs 10 crores a year.The ROSL scheme is in tune with the recognized economic principle of zero rating of export products and in recognition of the fact that at present only central levies are rebated by way of drawback schemes.
The ROSL benefit not only ensured Indian made-ups were competitive in the world markets but also encouraged Indian players to expand capacity to meet overseas demand.
Incorporated in 1978, AEPC is the official body of apparel exporters in India. It provides invaluable assistance to Indian exporters as well as importers/ international buyers who choose India as their preferred sourcing destination for garments.
The country’s export to its giant next door neighbour increased marginally in July-May period of the current fiscal year.Latest statistics, released by the Export Promotion Bureau (EPB), showed that export to India stood at $636 million during the period under review.
The amount was 3.75 per cent higher than the export value of the 11months of the past fiscal year. Export to India fetched $613 million in July-May period of the fiscal year 2015-16 (FY16). Total annual export to India in the past fiscal year was $689.62 million.
After India granted duty free quota free access to Bangladesh in 2011, the RMG exports to India have more than doubled to $136.4 million in 2015-16 from $55 million in 2011-12. In 2015-16, Bangladesh’s RMG exports to India grew by 31 percent. Bangladesh’s overall exports to India have also increased by 30.82 percent at the same time.
Missoni is a Made in Italy artisanal luxury fashion brand. It is a relatively small company considering that the luxury sector is characterized by giant international groups. About 85 per cent of Missoni’s customers are foreigners, with the US, the UK, Korea, Japan and the Middle East as top buyers. The next stop is China.
The company, which manages all the production phases both of clothing and accessories, is eyeing investments in the future to accelerate growth. Legendary Italian brand Missoni is loved for its instantly recognizable zigzag patterns and signature crochet knitwear. Its bikinis epitomize jetset glamour.
Missoni was founded in 1953. Its online shop, created seven years ago in partnership with Yoox, is registering a 50 per cent sales growth year after year. It will re-unite men’s and women’s runaways, starting from September fashion week in Milan, to respond to a rapidly changing market.
The creativity and capacity for innovation inherent in the company are proof of substantial knowhow. Among the distinctive values of the products, as well as imaginative use of patterns and colors, stand out the selection of the right materials and careful workmanship that are distinguished by the refined techniques, even manuals, such as embroidery.
Chinese designers have made strides in recent years by shifting from copying to developing their own identities based on creativity and culture. More than 200 colleges and universities in China now offer design-related majors, preparing fashion aficionados for jobs in the industry.
The industry has also attracted talented designers who have returned from studying and working abroad, including those who have worked for world-renowned luxury brands such as Celine and Burberry. Designers in China are also experimenting with a mix of design and lifestyle by opening spaces that offer coffee, books, exhibitions, and clothes.
Instead of just selling products or services, Chinese fashion companies are now also selling culture. China's strong manufacturing power has laid a solid foundation for the development of the fashion industry, allowing ideas to be executed and products to be sold more efficiently.
As Chinese manufacturers try to move up the value chain as part of the country's Made in China 2025 plan, designers in China are working to reinvent themselves from mere imitators to innovators.
Unlike in France or Italy, China's fashion industry took off around the same time as the development of the internet, which made it easier for industry insiders to have an internet mindset and computer skills. Technology is helping fashion designers with tailored marketing and flexible production, making personalized customer experiences possible.
GST will enable a seamless flow of credit to happen. However there are certain challenges which arise in terms of the input tax credit because of the way the entire supply chain is structured.
Today there are service providers in the manufacturing chain who are job workers, processors, knitters etc. In the past there was zero tax on the services that they provided and now a tax of 18 per cent has been proposed.
The industry would like the rate of tax to be payable on job workers, knitters and processors to come down from 18 per cent to five per cent. So the benefits that are due to come due to lowering of the tax rate at five per cent can be passed on to the end consumer and the amount of input tax credit that would be left behind actually reduces back to the original level.
There are two aspects to it. One is a state forward savings which comes in because of any reduction that has happened in the effective tax rate. Two, there is a significant amount of opportunity to optimise and bring in efficiency in the supply chain which could lead to a reduction in the cost.
German exports rose more strongly than expected in April while imports posted an even bigger increase. This helped narrow the trade surplus. Seasonally adjusted exports were up 0.9 per cent on the month while imports jumped 1.2 per cent.
Germany’s robust economic upswing is likely to continue. Domestic demand has replaced exports as the main growth driver in Germany as consumers and the state are benefiting from falling unemployment, rising tax revenues and record low borrowing costs.
The German economy grew by 1.9 per cent in 2016, the strongest rate in half a decade, helped by soaring private consumption, higher state spending and increased construction. In the first quarter of 2017, the economy picked up further speed as exports also helped to drive growth.
Germany is Europe’s biggest economy. The seasonally adjusted trade surplus edged down to 19.8 billion euros from a revised 19.9 billion euros in March. The country’s wider current account surplus, which measures the flow of goods, services and investments, plunged to 15.1 billion euros after a revised 31.1 billion euros in March. The German central bank has increased its growth forecasts of 1.9 per cent in 2017, 1.7 per cent in 2018 and 1.6 per cent in 2019.
"The proposed changes in the North American Free Trade Agreement (NAFTA), has resulted in companies planning to shift their manufacturing base away from Los Angeles. As Mateo Juarez, GM, United Jeans says, in Los Angeles County, the minimum wage for businesses with more than 26 employees rises to $12 an hour from July 1, from the current $10.50 an hour. Nobody wants to pay this minimum wage as it is adding to additional cost of an already higher production price that keeps going up in California with new laws and regulations."
The proposed changes in the North American Free Trade Agreement (NAFTA), has resulted in companies planning to shift their manufacturing base away from Los Angeles. As Mateo Juarez, GM, United Jeans says, in Los Angeles County, the minimum wage for businesses with more than 26 employees rises to $12 an hour from July 1, from the current $10.50 an hour. Nobody wants to pay this minimum wage as it is adding to additional cost of an already higher production price that keeps going up in California with new laws and regulations. Giving an example, Juarez explains that if you make blue jeans in China, including the fabric washes, it would cost up to $6. In Mexico, it would cost $10, which includes dropping off to Los Angeles. While in the US, it would cost around $40 to $50. Lot many producers such as Steve Rhee, owner of Jean Mart Inc, and Atomic Denim, which has 200 workers have made premium blue jeans for Tom Ford, Diesel and Hudson, have been getting calls from brands doing an exploratory search for possible Los Angeles production facilities.
NAFTA renegotiations
While the public hearings on NAFTA’s renegotiations is due on June 27 in Washington, DC, companies, industries and interested parties can suggest the changes they would like to see or not see implemented in a revamped trade agreement that hasn’t been overhauled in 23 years. The real work would start on August 16, when the renegotiations on the free-trade agreement between the United States, Canada and Mexico are scheduled.
Big industries such as autos, dairy, sugar, energy and e-commerce, etc., would be given due attention in renegotiated NAFTA. Experts say, apparel and textiles may be less affected because clothing imports from Mexico is minuscule compared to imports from China and Vietnam. Nicole Bivens Collinson, an attorney who leads the international trade and government-relations practice at international law firm Sandler, Travis & Rosenberg, points out some of the changes could include de minimis requirements that under NAFTA allow 7 per cent of the total weight of the component that determines the classification of a garment to be from outside the NAFTA region. Under the Dominican Republic–Central America Free Trade Agreement, the accord allows for 10 per cent to be from outside the region.
What will be included?
Sewing thread, pocket lining and other inputs are some of the subjects likely to be addressed. Currently, NAFTA rules allow the use of sewing thread, narrow elastic fabric and pocket lining fabric from outside of the United States, Mexico and Canada. But under DR-CAFTA, which began to be implemented in 2006, the rule is sewing thread, narrow elastic fabric, visible linings and pocket-lining fabric must come from the region unless they are short-supply fabrics.
Under free-trade agreements, garments have to be made of regionally made fabrics coming from regional yarns, but exceptions to this rule can be requested if a fabric is not made in any of the countries that are part of the free-trade agreement. This means fabrics can be added to a short-supply list after a formal request is made to the trade authorities of the participating member countries in the free-trade pact.
Under DR-CAFTA, the addition of a fabric to the short-supply list takes about 45 days. Under NAFTA, it can take years, Collinson said. Many would like to see a speedier process implemented under a new NAFTA.
Then there are trade-preference levels, which allow a certain amount of yarns and fabric produced outside the free-trade-agreement region to be used in apparel production as long as the non-regional goods are cut and sewn within the free-trade countries.
There is a possibility of a stronger enforcement of countervailing duties and anti-dumping laws that add tariffs on goods being subsidised by foreign governments or on goods priced below fair-market value. Julie Hughes, President, US Fashion Industry Association, Washington, DC, says in the current environment with tough retail and a tough consumer environment for fashion products, we don’t think it is the time to tear it apart and start all over again.
There has been a steady rise in demand for industrial sewing machines from the Asia Pacific region over the past as manufacturing of products using industrial sewing machines has witnessed a shift from the developing countries in North America and Europe to the developing countries of the Asia Pacific region.
High end industrial sewing machines are becoming a preferred choice for garment manufacturers as they save time and energy, and reduce complexity of the manufacturing process due to their enhanced features. Also, producing voluminous, high quality products with standardized precision in less time has been made possible through the application of these smart industrial sewing machines. For instance, specific models of industrial sewing machines display a maximum speed of 8,500 revolutions per minute.
It has been observed that automotive and textile industries, would largely contribute to the growing demand of industrial sewing machines, along with other factors, such as rising global population, the rising middle and high income group population in developing countries, such as India and China. The demand for industrial sewing machines in the various region is rising and reasons are as it is supported by relatively cheap labor. Currently many models of industrial sewing machines are computerized. Industrial sewing machines capable of automatically carrying out multiple tasks only with the press of a switch are being designed. While designing the new industrial sewing machines an environment friendly features such as reduced working noise and energy efficiency are considered.
The world’s biggest cushion, 20 feet tall, will be displayed at Heimtextil, New Delhi, June 20 to 22, 2017, expected to be inaugurated by Smriti Irani, Minister of Textiles, .
This textile masterpiece will represent the fabrics and embroideries of India. It will be curated with fabrics from India’s home furnishing brand D’decor. The theme is based on an unique design concept of harmony in nature and the congruence of man and woman inspired by DaVinci’s famous portrait.
The materials used in the making of the cushion represent fabrics of the nation such as khadi, brocade, morr, mixed embroideries, a blend of sustainable textiles such as yarn and fabric waste, among others.
The installation, a tribute to Indian capability, is meant to epitomise prowess, excellence, quality, vision and a capacity to overcome any challenge.
Heimtextil India is known for its mix of brands, design trends and home fashion innovations. This is India‘s leading home fashion business platform. Purchase managers from some of the top hotels and restaurant chains in India and Asia are expected to attend and engage in buyer-seller meetings.
The hospitality segment will continue to be one of the key focus areas of visitor engagement at the fair this year. Heimtextil India is a unique platform for hospitality buyers to meet exhibitors with international quality products.
