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The single window clearance mechanism for importers which India has launched could significantly cut cost and time and help improve ease of doing business. To further simplify inbound shipments, all physical import licenses will be uploaded online with a digital signature. This will do away with the cumbersome compliance measures requiring importers to show physical copies of import licenses or rules of origin certificates to the authorities each time.
The next step will be to do away with the need to present physical copies of licenses each time one imports. The import facilitation move is expected to benefit a large volume of imports and, in turn, economic growth and manufacturing, which is largely import-dependent.
Currently a bill of entry requires an average of three documents. An importer has to go and present physical copies of documents for approval from the authorities. The proposed initiative will allow importers to upload scanned documents with digital signatures.
The single-window mechanism framework launched in April is seeing 17,000 bills of entries every day. Now an importer is not required to go through various other agencies while making a consignment declaration. They are automatically routed through.
"With the start of the economic crisis, many Russian retailers have started moving their production from Asian countries to Russia. With the Russian ruble still weak against major currencies, low costs are tempting some of the world’s leading clothes retailers to consider relocating their production facilities to Russia. The owner of the Zara, Pull & Bear, and Massimo Dutti brands among those in talks with the authorities."
With the start of the economic crisis, many Russian retailers have started moving their production from Asian countries to Russia. With the Russian ruble still weak against major currencies, low costs are tempting some of the world’s leading clothes retailers to consider relocating their production facilities to Russia. The owner of the Zara, Pull & Bear, and Massimo Dutti brands among those in talks with the authorities.
Last March, the world’s second wealthiest person, Amancio Ortega, 79, the owner of the Inditex clothing empire, received an unexpected offer from Russia. The country’s authorities invited the billionaire (Forbes estimates Ortega’s fortune at $67 billion in 2016) to move his factories to Russia, where – due to the weak ruble – production costs have become lower than in China.
Ortega is now considering relocating its production to Russia and is in talks with the Russian Industry and Trade Ministry. Other manufacturers, including H&M, IKEA and Decathlon, are ready to follow Ortega’s example.
Favourable conditions
Zara’s interest in Russian factories is driven by the favorable conditions that have emerged in Russia because of the economic crisis. Thanks to the devaluation of its national currency, Russia has ended up on the list of countries with the world’s cheapest labour.
As per the data from the information and analysis agency Infoline, the monthly cost of a textile factory worker in China is now $250-300, whereas in Russia it is just $200 (15,000 rubles). In these circumstances, the drive to develop the country’s textile industry is a clever move on the part of the Russian authorities, market experts agree.Incidentally, the average salary in Russia is lower than in China and Poland.
It is not surprising that Inditex has turned its attention to production capacities in Russia. Currently, Inditex makes its clothes at factories in Vietnam, Indonesia, China, Turkey and Europe. The group runs 485 stores in Russia and, despite the crisis, managed to open 30 new outlets in 2015, increasing its Russian network by 6 percent, according to the company’s annual report. This makes Russia the third biggest market for Inditex (after Spain and China, with 1,826 and 566 stores respectively).
Foreign players’ interest in the Russian textile industry is further spurred by tensions in Russia’s relations with Turkey after Turkey downed a Russian military aircraft on the border with Syria in November 2015.
Competitive advantage
Russian factories have been working only with local retailers and customers so far. So it remains to be seen how competitive Russian factories are compared with their rivals in China or Vietnam, which operate several shifts and turn out a hundred times as much output.
If clothes under the Zara or H&M brand are made in Russia, their quality will not be adversely affected, insists Lyudmila Ivanova, head of the Fashion Industry Committee under the Russian Textile Industry Union.
Major Russian clothes brands, including Gloria Jeans and Sela, have so far been making their clothes at Asian factories.
Said the vice-president of Russian clothes chain Sela, Eduard Ostrobrod that at the moment, we place our orders with factories in China and Bangladesh, but we are interested in Russian manufacturers. The company is now busy looking for opportunities to move its production to Russia.
With the start of the economic crisis, many Russian retailers have started moving their production from Asian countries to Russia. Thus, the local brands Befree, Zarina and Love Republic have increased the number of orders they place with Russian factories.
Meanwhile, Kira Plastinina has launched its own production in the Moscow Region, not far from the capital. The list of those contemplating a move to Russia is not limited to just Russian brands. The MMD East and West group of companies that forms part of the Bosco di Ciliegi group (which makes clothes for Russia’s Olympic team) intends to build a sports clothing factory in the Kameshkovo industrial part in Vladimir Region (130 miles southeast of Moscow). Investment in the project is estimated at 1 billion rubles ($17.4 million).
The French sports clothing retailer Decathlon has signed a memorandum of intent with the Novosibirsk-based factory S-Tep to produce trainers. To begin with, the factory will produce trainers for Decathlon’s stores in Russia but in future, for the chain’s global network too, the business daily Vedomosti reported in February 2015.
At the same time, many Russian manufacturers are not too overjoyed at the prospect of the arrival of foreign players.
Success stories
Examples of successful integration between global business and the Russian consumer goods industry are many. The Swedish company IKEA, which together with clothes retailers has received an invitation from the country’s authorities, has been successfully cooperating with Russian manufacturers for a long time. IKEA’s purchasing office was opened in Russia back in 1991, long before its first store.
The IKEA in Russia press service said that at present, over 50 percent of volumes sold in IKEA stores in Russia are locally produced. In the textiles category, locally-produced goods make up 40 per cent.Furthermore, IKEA is planning to further increase its local production in Russia.
Currently, the Swedish retailer sources its goods from some 60 Russian factories. Russian manufacturers are fully integrated into the global production and distribution chain: Russian-made goods can be found in IKEA stores in Europe, America and Asia. In addition, IKEA owns four factories in Russia and is planning to launch a fifth one soon.
Hugo Boss shareholders heard about the luxury fashion brand’s illegal treatment of union members in Turkey at the company’s annual general meeting in Stuttgart, Germany.
The company has a long-running anti-union policy in Izmir, which has seen many unionised workers illegally sacked since Industrial Global Union’s Turkish affiliate, Teksif, began organising at the factory in 2011.
Said Industrial Organizing and Campaigns Director Adam Lee, that Hugo Boss’ anti-union behaviour in Izmir is a threat to shareholder value. The ongoing violations have generated negative media coverage. Over 107,000 potential Hugo Boss customers have signed a petition demanding that Hugo Boss respect workers’ rights. The longer these violations in Izmir continue, the greater the risk that the Hugo Boss brand will be damaged.
Out of the 163 lawsuits for unfair dismissals since October 2011, the Turkish courts have sided with workers in 76 per cent of finalised cases. The Fair Labor Association (FLA), which Hugo Boss is affiliated to, also concluded in a January 2016 report that many of these dismissals were related to unionization efforts.
Meanwhile, despite the court decisions and FLA report, Hugo Boss claims there are no problems in Izmir.
The Cotton Advisory Board (CAB) has set up a sub-committee that will work on ensuring sustainability of cotton production. This follows concerns that actual cotton production could turn out to be lower than estimates. Earlier the CAB had estimated that cotton production this season (October 2015 to September 2016) would touch 352 lakhbales.
Howeveractual production could be lower than the estimated level, with the average yield now being 500 kg per hectare as against 570 kg a hectare a few years ago.
The price of Shankar – 6 cotton, a variety popular with textile mills, was Rs33,300 a candy on April 1, going up to Rs 36,500 a candy by the end of April, before settling at Rs 35,000.
However, there is no complaint of shortage of cotton. There are adequate stocks. The area under cotton in the Punjab, Rajasthan, and Haryana is expected to decline, even as farmers in Maharashtra and Telengana show little interest in the crop.
India is the world’s leading cotton producer. A clearer picture is expected to emerge after the monsoon sets in. Rains over cotton growing belts are expected to be bountiful for the first time in three years.
Texfair is being held in Coimbatore, May 20 to 23, 2016. This is an exhibition for the textile industry and showcases modern developments. It is a platform for textile mills to zero in on their requirements, meet all suppliers under one roof and plan their investments, cost cutting options and ways to improve their quality. Textile mills on an average spend three per cent of their annual turnover on spares and accessories and six per cent on modernisation.
The event has 220 exhibitors displaying their products across 231 stalls. Major products on display are textile machinery, spares, accessories, testing equipment and electrical and electronic components. It is featuring exhibitors from China and Italy besides Gujarat, New Delhi, Goa, Maharashtra and Punjab.
The objectives of the fair are to provide a platform for stakeholders to zero in their investments and expenses prudently, showcase their inventions and cost effective items and other products, enable technocrats and shop floor technicians to update their knowledge on the latest technology and create an awareness on cost cutting, to encourage micro, small and medium entrepreneurs also to showcase their products and get exposure to the market.
The Southern India Mills’ Association has so far conducted nine exhibitions of textile machinery, spares and accessories since 2001.
The apparel and footwear industries in the US stand to gain once the TPP comes into force. Over the next 15 years, apparel employment is projected to increase by 0.9 per cent and output by one per cent. Footwear employment will increase by 0.8 per cent and output by 0.5 per cent.
US consumers will also benefit as substantial duty savings help drive up income gains by about 57.3 billion dollars by the year 2032 – or about 600 dollars a year for the average family of four.
So the apparel and footwear industries say the TPP should be considered, approved, and entered into force as soon as possible and that every year it’s delayed the industry will lose more than a billion dollars in lost duty savings.
The American Apparel & Footwear Association, formed in 2000, provides its members with an array of services and resources designed to drive competitiveness in the global market. These services and resources include helpful production and safety tools, best-in-class research and reporting, and other industry best practices. The association feels the TPP will provide opportunities to reduce costs, stay competitive, and enter new markets since nearly every US job in this business depends on access to foreign customers or global supply chains or both.
To support Myanmar’s move toward democracy and facilitate economic development the United States has eased some sanctions. The steps are intended to support trade, facilitate the movement of goods, allow certain incidental transactions related to certain individuals residing in Myanmar and to allow more transactions involving designated financial institutions in the country.
Trade and financial transactions were restricted between the two countries since military rule in 1988.
The measure would allow Myanmar’s banks on the blacklist to engage in financial transactions with US banks as well as connect Myanmar’s financial system with the global economy. These Myanmar banks would no longer face any restrictions.
Myanmar’s state-owned enterprises such as those involved in mining, timber and jade would be able to do business with their counterparts from the US. The lifting of the sanctions may result in more quality exports from Myanmar, especially gems and jewelry, and garments. The US may become Myanmar’s next export target.
Myanmar-US bilateral trade has steadily increased since sanctions were first formally eased in July 2012. Trade volume is also expected to increase, thanks to the potential increase in bilateral economic activities. Major US firms like General Electric, Western Union, Gap and Coca-Cola have made business forays into Myanmar.
Techtextil North America was held in the US, May 3 to 5, 2016. This is a biennial show. It is the only one in the United States that is dedicated to technical textiles and nonwovens.
Students of fashion design and fashion marketing were able to meet top designers and learn about the different machinery and software programs that are used in the industry. Some company representatives took time out to talk one-on-one with students and gave a presentation on how their technology actually works.
Shima Seiki USA showed through their software how knits can be manipulated on screen in 2D before coming to life in 3D form. This hands-on industry experience helped students put into perspective the future of their careers and all that is involved in the process of producing textiles for fashion. They got an idea of what it is to work with innovative ideas and machines.
Axiom America was another national textile company that was present at the fair. Its concentration lies heavily on digital textiles rather than knit manipulation and production. The company’s process is more straightforward as it simply goes from software to printing on fabric to heat press fixation. Not only does it print on textiles for fabrics, but furnishings and decor as well.
Spinexpo will be held in France, July 6 to 7, 2016. Organised by independent textile specialists, Spinexpo presents an international top level offer in the field of fibers, yarns for knitting, circular knit and weaving (fabrics and upholstery), socks, laces, labels and technical textiles.
For this edition, the show will present the spring/summer 2017-18 collection of trends from which designers and manufacturers can draw ideas and inspirations for their next products. The exhibition will also feature a seminar program and some valuable market analysis as well as latest exhibits by leading companies and brands.
In response to the increasing demand from buyers for reliable and high performance products, the exhibition is focused on bringing suppliers closer to their consumers. The goal of the upcoming event is to bring together spinners and knitwear manufacturers, who invest in innovation and have become the most effective suppliers of US and EU brands, to Paris.
Leading mills in spinning and knitwear manufacturing will be present. Among the exhibitors will be a leading spinning specialist Consinee Group and a knitwear manufacturer Hong Kong Sales.
Consinee is an integrated group in the dyeing and spinning of woolen, worsted, semi-worsted and fancy yarns as well as high quality fabrics. Hong Kong Sales is a leading knitwear design specialist. The company provides a one-stop service that ranges from initial design, selection of yarn, sample making, monitoring of production progress, quality checking and export of goods in order to guarantee a quick response and on-time delivery for customers.
Deputy minister of industry and trade Tran Quoc Khanh, disclosed Vietnam and the European Union (EU) are working towards finalising legal and language-related issues in the EU-Vietnam free trade agreement (EVFTA), before the official signing and ratification of the trade deal next year. At a workshop on the EVFTA held by the French Business Federation (MEDEF) and the Asia Centre in Paris, Khanh stressed on the common goals of the two sides to implement the agreement, after signing the deal and said that his government is looking at a specific plan to carry out the agreement.
The chief of the negotiation delegation of the EVFTA Raffaele Mauro Petriccione assessed the approval process for the agreement could take a long time as the EU is a trade bloc that has many members. Participants noted Vietnam’s active foreign economic-trade policy and highlighted their leading role in recent global events, mainly the Asia-Pacific Economic Co-operation (APEC) forum held in Da Nang.
Nguyen Dinh Cung, Director, Central Institute for Economic Management (CIEM), highlighted the importance of the EVFTA agreement in Vietnam’s integration process. The trade agreement brings great benefits to the country, as it is estimated it would generate an additional 2.5 per cent to Vietnam’s GDP by 2020 and 4.6 per cent by 2025.
The agreement is expected to help enhance Vietnam’s exports to the EU while creating new jobs for the Vietnamese labour force — especially for those working in rural and agricultural areas. It would also make it easier for Vietnam to import advanced technologies which would help improve the country’s economic rating. Vietnam is the third largest trade partner of the EU in ASEAN with trade touching $48.7 billion in 2016. Vietnam mainly exports electronics, textiles, footwear, rice, seafood and coffee to the EU while imports include hi- tech products, industrial machines and pharmaceuticals.
