FW
India's textiles and apparel exports rose by 4.08 per cent to $8.785 billion during Q1, FY24 spanning April-June 2024. Textile exports increased by 3.99 per cent during this quarter while apparel exports grew by 4.20 per cent.
According to the Ministry of Commerce and Trade, India’s T&A exports increased by 6.04 per cent Y-o-Y to $4.935 billion in April-June 2024 from $4.746 billion in the corresponding quarter of the previous fiscal. Exports of cotton yarn, fabrics, made-ups, and handloom products rose by 5.71 per cent to $2.916 billion while man-made yarn, fabrics, and made-ups shipments increased by 0.37 per cent to $1.165 billion.
In June 2024, India’s T&A exports amounted to $2.919 billion. Textile exports saw amarginal growth of 0.05 per cent to $1.625 billion from $1.624 billion in June 2023. Exports of cotton yarn, fabrics, made-ups, and handloom products grew by 0.92 per cent to $959.55 million and man-made yarn, fabrics, and made-ups shipments increased by 2.79 per cent to $383.16 million.
Apparel exports improved by 4.20 per cent to $3.849 billion during the April-June 2024 quarter, compared to $3.694 billion in the corresponding quarter of the previous year. In May 2024, apparel exports increased by 3.68 per cent to $1.293 billion from $1.248 billion in May 2023.
On the other hand, imports of raw cotton and waste declined by 23.42 per cent to $152.01 million in Q1 spanning April-June 2024 from $198.49 million in the same period of 2023.
However, imports of textile yarn, fabric, and made-ups increased by 7.47 per cent to $557.2 million from $518.4 million. Specifically, the inbound shipment of raw cotton and waste dropped by 26.16 per cent to $70.22 million, while imports of textile yarn, fabric, and made-ups rose by 23.83 per cent to $209.23 million in June 2024.
RakeshMehra, Chairman, Confederation of Indian Textile Industry (CITI), attributes the increase in India’s T&A exports to a greater share of the US market relative to competitors.
The US accounts for about 27 per cent of India’s total T&A exports. From Jan-May’24, India’s T&A exports to the US increased by about 2.5 per cent compared to the same period in 2023, while exports from competitors like China and Bangladesh declined by about 1.3 per cent and 11.9 per cent, respectively.
Leaders from the Indian fabric industry are urging Finance Minister NirmalaSitharaman to implement measures to protect the domestic market from the dumping of fabrics and garments.
Industry leaders believe, without such measures in the upcoming Budget 2024-25, the country will struggle to achieve the double-digit growth necessary to meet its 2030 and 2047 goals.
Ashish Gujarati, Vice President, Southern Gujarat Chamber of Commerce and Industry (SGCCI), recommends, the finance minister should impose a Minimum Import Price (MIP) on all types of fabric under various HSN codes. He emphasiseson the importance of excluding fabric and garments from free trade agreements (FTAs) with various countries, as the domestic industry is suffering from massive imports.
He also highlights the need for a special incentive scheme for the weaving and knitting industry as the fabric sector is currently squeezed between dominant yarn and fiber producers and slow demand from the garment industry.
Furthermore, Gujarati proposes deferring of the MSME payment rule for at least one year to allow a gradual shift to a shorter credit system. He says, it is necessary to ensure the availability of raw materials at international prices and quality to compete globally, he says.
GaurangBhagat, President, Gujarat-based Maskati Cloth Market Association, notes,the domestic textile industry is in crisis due to cheap imports. The spinning, weaving/knitting, and dyeing and processing industries are suffering due to availability of finished fabricsat lower prices, he adds.
Subir Mukherjee, Business Head-Denim, Bhaskar Industries, recommends, cotton imports for fabric exports should be made duty-free to offset the impact on fabric exporters. Alternatively, the government could refund import duty to exporters, he adds. According to him, current schemes like duty drawback and RoDTEP (Remission of Duties and Taxes on Exported Products) do not sufficiently compensate for import duties on cotton. He also demands an increase in the RoDTEP value cap for chapter 5211 to match that of chapter 5209, as denim exports under chapter 5211 constitute over 40 per cent of India's total denim exports.
Mukherjee further recommends, duty-free imports should be allowed only if the fabric originates from Bangladesh or India. This would prevent Chinese fabric from entering India through Bangladesh, he adds. The Indo-Bangla textile trade should be conducted in Indian rupees instead of USD to reduce transaction costs, he proposes. Additionally, significant investments in infrastructure, including roads and warehousing facilities on both sides of the India-Bangladesh border should be made to ensure faster and more reliable transit times should be made, he adds.
Rieter has signed a historic purchase contract with Shanghai Digital Intelligence World Industrial Technology Group Co., Ltd. (DIW) for over 700 Autoconer X6 winding machines. This marks the largest order ever for Rieter China and strengthens the strategic partnership between the companies aimed at advancing spinning operations.
The Autoconer X6, known for its productivity, intelligent automation, and superior splicing and winding quality, plays a crucial role in quality assurance during the ring spinning and compact-spinning processes. DIW's order will enhance its vertical integration and support its growth strategy in the cotton spinning industry, reinforcing its leadership in global markets.
This order follows an initial batch placed in March 2024 when Rieter and DIW first partnered to develop intelligent yarn manufacturing technology through digitization and automation.
Liu Yifang, Vice Chairman of DIW, emphasized that the partnership positions the company for significant growth in the cotton spinning industry by enhancing operational efficiency. Michael Hubensteiner, Country Managing Director of Rieter China, noted that Rieter's high-performance machines will help DIW meet the increasing demand for higher efficiency, thereby strengthening their cooperation and enabling them to seize growth opportunities together.
This renewed collaboration aims to create a major player in the cotton spinning industry and ensure long-term, stable cooperation between Rieter and DIW.
Adidas announced preliminary Q2 2024 results, reporting an 11 per cent increase in currency-neutral revenues compared to the previous year. In euros, revenues grew 9 per cent to €5.822 billion, up from €5.343 billion in 2023. Excluding Yeezy sales, currency-neutral revenues rose 16 per cent for the quarter.
The gross margin for Q2 was 50.8 per cent, slightly down from 50.9 per cent in 2023. The core Adidas gross margin saw strong improvement due to better sell-through rates, reduced discounting, lower sourcing costs, and a favorable category mix. However, the reduced Yeezy business negatively impacted year-over-year comparisons. Operating profit for Q2 increased to €346 million from €176 million in 2023, bolstered by a €50 million contribution from Yeezy inventory sales.
Adidas raised its full-year guidance following the strong quarterly performance and positive momentum. The company now expects high-single-digit growth in currency-neutral revenues for 2024, up from the previous mid- to high-single-digit estimate. Operating profit is projected to reach around €1 billion, an increase from the prior forecast of €700 million.
The guidance assumes that remaining Yeezy inventory will be sold at cost, contributing approximately €150 million in additional sales without further profit impact. Despite this, Adidas expects significant unfavorable currency effects to continue weighing on profitability and gross margin development throughout the year.
For decades, Indian apparel brands and retailers relied primarily on domestic sourcing. However, in recent years, there's been a significant shift towards Bangladesh. This trend, spurred by several factors, is transforming the landscape of the Indian apparel market.
Bangladesh a cost-competitive edge
The primary driver for this shift is cost competitiveness. Bangladesh offers significant advantages over domestic sourcing for Indian companies.
Labor costs: Bangladesh boasts lower labor costs compared to India. A 2023 study by the Garment Manufacturers and Exporters Association (BGMEA) of Bangladesh revealed that average wages in the Bangladeshi garment industry are nearly 20 per cent lower than their Indian counterparts.
Duty benefits: The South Asian Free Trade Agreement (SAFTA) allows duty-free import of certain apparel items from Bangladesh to India. This significantly reduces landed costs for Indian companies.
Strong manufacturing base: Bangladesh has emerged as a global leader in apparel manufacturing, boasting a skilled workforce and efficient production lines. Leading brands like H&M, Zara, and GAP source heavily from Bangladesh, a testament to its capabilities.
Reliance Retail, one of India's largest retail chains, exemplifies this trend. In 2017, they established a sourcing office in Bangladesh and have since ramped up their procurement from the country. As Mohit Batra, Country Head of Reliance's Bangladesh operations explains, they are offering huge quantities and are looking for manufacturers that can offer 20 per cent of their capacity. This highlights the significant cost savings Reliance enjoys by sourcing from Bangladesh.
Table: Bangladesh apparel exports to India productwise
|
Product category |
Percentage |
|
Knitwear (T-shirts, polos, etc.) |
60% |
|
Woven Shirts and Blouses |
20% |
|
Bottoms (Jeans, trousers) |
15% |
|
Others (Dresses, jackets) |
5% |
Product diversification in focus
While cost remains a major driver, Indian brands are also looking at Bangladesh for product diversification. Bangladesh excels in knitwear production, particularly T-shirts, polos, and sweatshirts. This aligns perfectly with India's growing demand for casual wear. Sweaters, hoodies, and other knitted garments are popular Bangladeshi exports, leveraging the country's expertise in knitwear manufacturing. Jeans and denim clothing are another major category, as Bangladesh has emerged as a global leader in denim production.
|
Year |
Bangladesh apparel exports to India |
Growth rate |
|
2017 |
129.81 |
- |
|
2018 |
279.19 |
115% |
|
2023 (estimated) |
403 |
45% (CAGR) |
The increasing sourcing from Bangladesh presents a win-win situation for both countries. India gains access to cost-competitive, high-quality garments, while Bangladesh expands its export market. As Deepak Mohindra, Founder of Apparel Sourcing Week, predicts, "Bangladesh's exports of garments to India could exceed $1 billion in two years." This trend is likely to continue as Indian brands and retailers seek to optimize their supply chains and cater to the growing demand for affordable fashion.
Thousands of visitors from brands like Clarks, French Connection, PepsiCo, and Amazon gathered at Olympia London for day two of Source Fashion, Europe's largest responsible sourcing show. The event featured seminars on trends, legislation, and big-brand sustainability approaches.
Event Director Suzanne Ellingham emphasized collaboration, education, and storytelling as keys to improving the fashion industry. Attendees listened to fashion activist Caryn Franklin and former ASOS CEO Nick Beighton discuss leadership and sustainability. Beighton highlighted the need for purpose-driven brands and transparent production practices, advocating for conscious capitalism to drive positive change.
Jack Stratten of Insider Trends spoke on the significance of storytelling in brand loyalty amidst AI-fueled fast fashion. Mike Coates from the UK Competition and Markets Authority addressed greenwashing and the importance of transparency in product journeys.
Afternoon sessions included a fireside chat with Jo Mourant of Next Retail on responsible sourcing challenges and opportunities. Hayley Shore from PepsiCo showcased a new sustainable fashion collection, stressing the importance of traceability and collaboration.
Caryn Franklin returned to discuss the intersection of culture and politics in fashion with Tina Wetshi, Creative Director of Colechi. They highlighted the need to re-humanize fashion by reconnecting it with nature and agriculture.
The final day of Source Fashion promises talks on education and certification, including the Developing Countries Trading Scheme and Global Organic Textile Standard. The event aims to foster an ecosystem where the industry can discuss big issues and success stories in a safe space.
Kering has announced Ewa Abrams as the new President of Kering Americas, effective August 1, 2024. Abrams, who has been the General Counsel of Kering Americas since 2018, will succeed Laurent Claquin, who has been promoted to Group Chief Brand Officer. In her new role, Abrams will report directly to Jean-Marc Duplaix, Deputy CEO in charge of Operations and Finance.
Abrams brings extensive experience to the position, having served on the Kering Foundation Board in the Americas and co-chairing the Women In Luxury Americas program. Prior to Kering, she spent over 17 years at Tiffany & Co., where she was Vice President, Associate General Counsel, and Chief Compliance & Privacy Officer.
Her commitment to mentorship is evident through her role as an Adjunct Professor of Law at Fordham University since 2016. Abrams holds a JD from Brooklyn Law School and a degree from Bucknell University.
Her appointment underscores Kering's focus on leveraging deep industry expertise to drive strategic growth and development in the Americas.
Marking a challenging start to fiscal 2025, UK-based luxury fashion house, the Burberry Group reported a 22 per cent Y-o-Y decline in revenue during Q1, FY25. The brand’s revenue plummeted to £458 million while it also registered a 21 per cent decline in comparable store sales during the quarter with all regions except Japan experiencing declines.
In the Asia Pacific region, the brand’s sales dropped by 23 per cent, with sales in Mainland China declining by 21 per cent and those in South Asia Pacific facing a substantial 38 per cent decline. The brand’s sales in South Korea decreased by 26 per cent during the quarter while in sales in Japan rose by 6 per cent owing to increased expenditure on tourism by the country, particularly on tourists from Chinese and other nearby Asian countries.
The Americas region also struggled with a 23 per cent decline in sales as local customer spending reduced. Similarly, the Europe, Middle East, India, and Africa (EMEIA) region saw sales decline by 16 per cent, with local spending deteriorating compared to the previous quarter. Tourist spending, which constituted a significant portion of retail revenues, experienced a high single-digit percentage decline.
Despite these challenges, certain product categories such as outerwear and scarves performed well globally. Citing the company’s swift adaption amid a tougher luxury market, Gerry Murphy, Chairman, warned of a potential operating loss for the first half of the fiscal year if current trends persist through Q2.
The European Textile and Clothing industry (Euratex) supports the EU’s proposed customs reforms, highlighting the necessity for an updated framework to tackle digital age challenges and promote fair competition.
Dirk Vantyghem, Euratex Director General, emphasized the crucial role of customs in ensuring fair competition and compliance with EU standards, highlighting the necessity for a modernized system that addresses the rise of e-commerce and the increasing complexity of regulations.
Central to Euratex's demands is the immediate abolition of the €150 import duty exemption for small consignments. The organization argues that this loophole has been exploited by e-commerce giants, undermining European manufacturers.
Additionally, Euratex seeks a harmonized customs regime across the EU, simplifying procedures and reducing bureaucracy, particularly for SMEs. Data security, transparency, and effective implementation of the Trust & Check Trader status are also key priorities.
The industry body emphasizes the importance of a robust EU Data Hub with clear regulations, and calls for close cooperation between policymakers and businesses in its development. Euratex also stresses the need for support for SMEs in obtaining Authorized Economic Operator statuses.
Finally, Euratex welcomes the establishment of the EU Customs Authority but insists on a strong dialogue with industry to ensure effective coordination.
Recording its strongest financial performance in the brand’s 40-year history, Mango registered a 6.3 per cent rise in revenue to £1.3 billion (€1.543 billion) during the first half of the year.
The revenues of Mango Man grew by over 21 per cent over this period, while those of Mango Kids and Teen expanded by more than 11 per cent. The cornerstone of the company's business, Mango Woman achieved a modest 4 per cent growth, marking its highest revenue in a six-month period and contributing 79 per cent of total revenue.
The company attributes this success to the positive reception of its collections and its value proposition crafted in Barcelona. Notably, Mango launched new capsule collections, including collaborations such as with Victoria Beckham for its Woman line and with Boglioli for Mango Man, alongside new editions of its Capsule and Selection lines.
Geographically, Mango's international business accounted for over 78 per cent of its total revenue. The company continued to expand its physical presence by opening 57 new stores, bringing its global store count to 2,743 by the end of June.
In the UK, Mango plans to open over twenty new stores this year, including debuts in Northern Ireland and central and southern England, alongside new locations in London and Scotland. The company recently launched its first Mango Teen store in London as part of its expansion strategy.
Expressing satisfaction with the brand’s performance amidst a competitive market, Toni Ruiz, CEO, highlights their commitment to value proposition, business model, and plans to expand to international markets.
