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The recent show ‘The Vietnam International Trade Fair for Apparel, Textiles and Textile Technologies (VIATT) 24’ sent a clear message: Vietnam's textile and apparel industry is a force to be reckoned with. The expo's success highlights a complex relationship between Vietnam and China, a story of competition and potential collaboration in the global market.
VIATT 2024: A Springboard for Vietnam
VIATT 2024 showcased Vietnam's growing capacity for mid-range apparel and value-added services, attracting new partnerships. Industry leaders believe the expo will strengthen regional collaboration within Southeast Asia, creating a more robust textile and apparel ecosystem. This new found confidence positions Vietnam as a key player, potentially influencing its future trade dynamics with China.
Data Table: Vietnam Textile & Apparel Exports (USD Billion)
| Year | Exports |
| 2020 | 31.1 |
| 2021 | 38.8 |
| 2022 | 40.0 (est.) |
| 2023 | 40 |
Vietnam shares a symbiotic, yet competitive landscape with China
From China's perspective, Vietnam is both a competitor and a collaborator. Vietnam's garment exports have surged to $40 billion in 2023, fueled by rising labor costs and trade tensions faced by China. However, Vietnam still relies heavily on China for raw materials like fabric, thread, and zippers with only 30-40% sourced locally. This creates a complex interdependence.
Vietnam: Trade agreements with China & the USA
Both China and Vietnam are members of the ASEAN Free Trade Area (AFTA), promoting lower tariffs for regional trade. This facilitates the movement of textiles and garments between the two countries. Whereas, China recently implemented stricter quality control measures (Order No. 259) for imported textiles, potentially impacting Vietnamese exports in the short term.
The US trade war with China has fueled the "China+1" strategy, with American companies seeking to diversify their sourcing. Vietnam's lower labor costs and geographical proximity make it a prime candidate, benefiting its garment industry. However, Vietnam still faces stiff competition from China in the US market, especially for high-volume, low-cost production.
Looking Ahead: Collaboration or competition?
Both China and Vietnam are experiencing rising labor costs and are moving towards higher-value production and automation. This shift could create opportunities for collaboration in areas like technology and design. Meeting stricter sustainability standards set by the EU and US will be crucial for both countries to maintain competitiveness.
VIATT 2024 has highlighted Vietnam's ambitions in the textile and apparel industry. China will likely view this with a mix of caution and opportunity. While Vietnam's rise presents competition, collaboration in areas like raw material sourcing and technological advancements could be mutually beneficial. The future of China-Vietnam textile trade hinges on navigating this complex dynamic, with VIATT potentially serving as a springboard for a more balanced and collaborative relationship.
The fashion industry has long been synonymous with cheap, disposable clothing and a relentless pursuit of the latest trends. Social media influencers, showcasing their fast fashion "hauls," have propelled this culture of overconsumption. However, a counter-movement led by figures like climate activist Greta Thunberg has emerged, championing sustainability as a lifestyle choice. As consumer choices face increasing scrutiny, what we wear is deeply intertwined with our identities.
Environmental impact of textile production
Behind the allure of fast fashion lies a significant environmental cost. The energy-intensive processes and reliance on synthetic materials contribute to 10 per cent of global carbon emissions, surpassing even the aviation sector. Despite these alarming figures, there's a glimmer of hope as consumer sentiment shifts towards sustainability, with over 70 per cent expressing willingness to pay more for ethically produced goods.
The textile industry grapples with the challenge of meeting market demands while ethically sourcing environmentally friendly materials. The Asia-Pacific region dominates the ethical fashion market, reflecting a growing awareness and demand for sustainable practices. However, achieving this balance requires a holistic approach that considers both environmental and social impacts.
Materials matter: The role of MMCFs
A significant aspect of the industry's transition involves the adoption of sustainable materials, particularly Man-made cellulosic fibers (MMCFs) derived from plant-based sources. While these offer a greener alternative to synthetic fibers, challenges such as deforestation and ethical labor practices in their sourcing must be addressed. A comprehensive approach that encompasses the entire lifecycle of these fibers is essential for meaningful progress.
The Rana Plaza tragedy serves as a stark reminder of the human toll behind the fashion industry's relentless pursuit of profit. Exploitative labor practices, inadequate safety measures, and wage theft persist in many regions. Transparency emerges as a key solution, empowering consumers to make informed choices and holding brands accountable for their supply chain practices.
Toward a sustainable future: Accountability and transparency
Initiatives like Fashion Revolution and the Fashion Transparency Index aim to shed light on the systemic challenges within the industry. However, progress remains slow, with many brands failing to address labor and environmental concerns adequately. Independent certification schemes like PEFC offer promise in verifying sustainable sourcing practices, but their effectiveness in addressing social issues warrants further scrutiny.
While consumer demand for sustainable fashion grows, true transformation requires collaboration across the supply chain. Brands must move beyond superficial changes and actively engage with suppliers, communities, and NGOs to embed ethical practices. The challenge lies in ensuring that sustainability encompasses both material sourcing and labor standards, reflecting a genuine commitment to positive change.
As the ethical fashion segment continues to expand, the industry faces a critical juncture. Will brands rise to the challenge of aligning profit with purpose, or will superficial gestures overshadow genuine progress? The answer lies in a collective effort to prioritize sustainability, transparency, and ethical labor practices across the fashion ecosystem.
Denim Expert Ltd. emerges as a beacon of sustainability in the garment manufacturing sector, spearheading a transformative shift towards eco-conscious practices. Pioneering the charge towards zero impact, the company's unwavering commitment to environmental stewardship takes center stage with its pledge to achieve 100 per cent water recycling and eliminate the discharge of hazardous chemicals.
At the heart of this endeavor lies the unveiling of a cutting-edge effluent treatment plant (ETP), signaling a monumental leap in sustainable water management. This state-of-the-art facility underscores Denim Expert's relentless pursuit of reducing its ecological footprint and safeguarding local ecosystems through advanced water treatment technologies.
Mostafiz Uddin, Managing Director and CEO of Denim Expert Ltd., emphasizes the company's steadfast dedication to sustainable manufacturing practices. He champions the establishment of the new biological ETP as a testament to Denim Expert's commitment to upholding values that foster a healthier planet for generations to come.
Denim Expert's proactive stance on sustainability has earned global recognition, with accolades including being named a 'New Champion' by the World Economic Forum and partnerships with esteemed organizations such as the Sustainable Apparel Coalition, UNFCCC, and the Ellen MacArthur Foundation's Jeans Redesign program.
The company's initiatives, including joining the Partnership for Cleaner Textile and implementing the 3E program, underscore its resolve to achieve 100 per cent water reuse and reliance on solar energy, cementing its position as a harbinger of positive environmental change.
Under Uddin's leadership, Denim Expert's sustainability initiatives have garnered prestigious awards, including the 'Sustainable Fashion Champion' at the Drapers Sustainable Fashion Awards 2021 and Uddin's recognition as a 'Sustainability Thought Leader' in the Vogue Business 100 Innovators list for 2023. These accolades underscore Denim Expert's role in leading the fashion industry towards a more sustainable future.
Beyond its environmental endeavors, Denim Expert champions corporate social responsibility by employing marginalized individuals and advocating for higher education for female employees. The company's support for worker welfare associations further highlights its commitment to social inclusivity and welfare.
In essence, Denim Expert Ltd.'s proactive approach to safety, sustainability, and responsible business practices positions it as a catalyst for positive change. With an unwavering commitment to continuous improvement, Denim Expert leads the charge towards a brighter, more sustainable future in the garment manufacturing industry.
The Regional Comprehensive Economic Partnership (RCEP), the world's largest free trade agreement, has shown promising results for Cambodia in its first year. Its total trade with RCEP members reached nearly $30 billion, with exports growing by 28 per cent and imports falling by 13 per cent. However, the story is not without its nuances, and challenges remain for the future.
Cambodia emerges biggest gainer
RCEP has facilitated increased regional trade. Overall trade between Cambodia and other RCEP members reached nearly $30 billion in 2023, a positive sign for regional integration. Tariff reductions have benefited specific countries. Cambodia's exports to several RCEP members, like Indonesia, grew due to lowered tariffs. Indonesia emerged as the biggest gainer, becoming Cambodia's 6th largest trading partner with a 15 per cent trade volume increase. While imports also grew initially, they stabilized in 2023, potentially suggesting a shift towards higher value-added exports
|
Year |
Cambodia-RCEP Trade Value ($ billion) |
Cambodia Exports to RCEP (($ billion) |
Cambodia Imports from RCEP (($ billion) |
|
2021 (Pre-RCEP) |
N/A |
N/A |
N/A |
|
2022 |
25.8 |
6.35 |
19.45 |
|
2023 |
30.0 |
8.17 |
21.28 |
Concerns about gains
Even though RCEP promises tariff free trade among members, there are several concerns about its outcome. Viz.
Unequal benefits: Concerns exist regarding potential uneven distribution of benefits among member countries, with larger economies potentially dominating trade.
Competition: Increased regional competition within the textile and apparel sector could pressure smaller players like Cambodia to further enhance competitiveness.
Non-Tariff barriers: Simplifying non-tariff barriers remains crucial to fully unlock RCEP's potential. Concerns remain regarding non-tariff barriers. Complex customs procedures and regulations continue to hinder smooth trade flow in some regions. Some RCEP members saw declining exports from Cambodia, highlighting the need for diversification and value chain integration.
Road ahead
The RCEP is expected to further boost Cambodia's trade and economic growth. Diversifying exports beyond textiles and apparel remains crucial for long-term sustainability. Cambodia must address infrastructure gaps, improve logistics, and enhance competitiveness to fully capitalize on RCEP benefits. To move ahead, it’s important to eliminate trade barriers and foster regional cooperation to create a robust, integrated market. Streamline regulations, invest in infrastructure, and promote innovation for success. Moreover, countries need to look beyond traditional garment production and explore opportunities in higher-value segments like technical textiles and eco-friendly apparel.
Renowned for its pioneering digital textile dyeing solutions, Alchemie Technology will unveil the first-ever in-market demonstration of its innovative Endeavor digital textile dyeing process at Nantou, Taiwan, from April 10-12, 2024.
This exclusive event will offer attendees a unique opportunity to witness the Endeavor digital dyeing solutions in action, focusing specifically on polyester woven fabrics. Alchemie Endeavor represents a groundbreaking digital dyeing technology that empowers fashion apparel brands and dyehouses to drastically reduce their carbon and chemical footprint, while simultaneously achieving substantial operational cost reductions of up to 50 per cent.
The innovative solution by Alchemie dramatically cuts down energy and CO2 emissions by up to 85 per cent, facilitates chemistry savings of up to 30 per cent, and slashes water usage by up to 95 per cent, effectively eliminating wastewater pollution associated with traditional dyeing methods.
Alchemie Technology will also organise a demonstration of its newly launched breakthrough Discovery lab system at the event. The Discovery system serves as a cost-effective research tool designed to offer a comprehensive understanding of Alchemie’s digital dyeing technology. It replicates the production process of Endeavour and eliminates the need for traditional lab dip processes.
Furthermore, Alchemie will unveil its ambitious plans for 2024, showcasing a wide array of applications and fabrics that push the boundaries of innovation in the textile industry.
Dr. Alan Hudd, Founder and CEO emphasises the company's commitment to bringing about positive change by addressing climate change through clean-tech technology. He highlights the urgency for brands and governments to realise the importance of achieving Environmental, Social, and Governance (ESG) targets and to actively participate in this endeavor.
The government has declared an expansion of benefits under the renowned export promotion scheme, Remission of Duties and Taxes on Exported Products (RoDTEP), to encompass export-oriented units (EOUs), units in special economic zones (SEZs), and Advance Authorisation (AA) holders.
This extension of the RoDTEP scheme aims to bolster India's export competitiveness in global markets in major sectors such as engineering, textiles, chemicals, pharmaceuticals, and food processing.
With a consideration for budgetary allocation, the extension of RoDTEP benefits to additional sectors is currently set until September 30, 2024, as per a release issued by the Commerce Department on Friday.
The decision acknowledges the substantial contribution these sectors make to India’s exports, constituting approximately 25 per cent of the total exports. Amidst global economic uncertainties and supply chain disruptions, extending RoDTEP to uncovered sectors such as AA, EOU, and SEZ units will assist the exporting community in navigating international headwinds
The RoDTEP scheme plays a pivotal role in refunding various embedded taxes and duties on exported products. Since its inception in January 2021, the scheme has provided support amounting to Rs 42,000 crore to over 10,500 export items. In the current financial year, the scheme has been allocated a budget of Rs 15,070 crore, with an additional increase of 10 per cent in FY25.
Under RoDTEP, applicable to over 8,500 products, various central and state duties, taxes, and levies imposed on input products are refunded to exporters. The current RoDTEP rates range from 0.3 per cent to 4.3 per cent.
The Greater Birmingham Chamber of Commerce (GBCC) and the Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) have signed an MoU to boost garment and textile (T&A) exports between the two countries.
According to the MoU, the GBCC and PRGMEA will collaborate to build a dependable, pragmatic and advantageous relationship, besides initiating effective and cordial relations between the two associations through increased cooperation among industrialists, businessmen, and entrepreneurs.
Mubashar Naseer Butt, Central Chairman, PRGMEA says, the MoU benefits both the organisations, and will enhance growth and interaction between them.
Both the parties will able to disseminate maximum information amongst each other leading to further promotion of trade and industry. The MoU will also benefit the exporters, industrialists, and entrepereneurs, he adds.
Nasir Awan,, President, GBCC adds, the centre will continue to support and nurture local businesses in Birmingham, while PRGMEA, representing Pakistan's readymade garments industry, will become a supportive partner.
Awan maintains, Greater Birmingham Chamber will connect, support and grow local businesses situated in Birmingham while PRGMEA will extend all support, cooperation, and assistance needed for the initiative.
Both organisations agreed to develop concrete proposals and recommend advance trading and industrial activities in their respective countries. They also committed to safeguard investments and promote bilateral activities among their members.
Bangladesh's Ready-Made Garment (RMG) exports surged by 13.93 per cent Y-o-Y to $4.49 billion in February 2024. As per data released by the Export Promotion Bureau (EPB), in January 2024, Bangladesh’s RMG exports had surged by 12.45 per cent Y-o-Y to $4.97 billion.
On a cumulative basis, RMG exports during the first two months surged by13.15 per cent to $9.47 billion as compared to the corresponding period in the previous year. Meanwhile exports during July-Feb 2023-24 surged by 4.77 per cent Y-o-Y to $32.86 billion from $31.37 billion in the same period of FY23.
Of this, knitwear exports surged by 9 per cent Y-o-Y to $18.59 billion, while exports of woven items declined by 0.26 per cent to $14.26 billion compared to FY23.
Faruque Hassan, President, Bangladesh Garment Manufacturers and Exporters Association (BGMEA), says, the growth in Bangladesh’s RMG exports reflects the industry’s product and market diversification initiatives and its success in value addition. The industry’s emphasis on quality particularly in backward linkage will help enhance the production of high-quality goods over the next five years, he adds.
Despite global trade challenges stemming from inflation and the Russia-Ukraine war, industry insiders remain hopeful about Bangladesh's RMG sector. They believe, the positive growth in non-traditional markets, with apparel exports reaching $8.87 billion in 2023, presents a significant opportunity for further expansion and export value enhancement.
The 35th edition of Garment Technology Expo (GTE) will be held from Mar 08-11, 2024 at NSIC Exhibition Complex, Okhla, New Delhi. GTE is Southeast Asia's biggest garment technology exhibition showcasing innovations in garment manufacturing.
Over 800 exhibitors and 20,000 businesses are expected to attend the event. GTE aims to help garment manufacturers compete globally by showcasing the latest technologies.
The exhibition will feature demonstrations of cutting-edge technologies from over 20 countries. Sewing machines, fabric washing machines, embroidery machines, and knitting machines are some of the technologies that will be on display.
GTE has been a key platform for garment manufacturers in India for the past 23 years. The next edition of GTE Bengaluru will be held from September 20 to 22, 2024.
Expressing gratitude for the unwavering support received over the years, Vicky Sahni, Joint Managing Director, Garment Technology Expo, emphasised on the remarkable journey since the inception of GTE in 2001.
Ambareesh Chopra, Director, Garment Technology Expo, adds, with participation from over 20 countries and 500 brands, the upcoming edition promises to showcase the latest innovations in the garment industry.
A free trade agreement (FTA) signed between India and the European Free Trade Association (EFTA) on Sunday promises a significant shake-up in the textiles, apparel, and fashion trade landscape. While the deal boasts job creation and economic benefits, its impact on these specific sectors remains to be seen.
Potential boost for Indian exports
Indian exporters, particularly those specializing in cost-competitive garments, stand to gain from the pact. The removal or reduction of tariffs on textiles and apparel entering EFTA countries could lead to a surge in exports. According to a study by the Centre for Monitoring Indian Economy (CMIE), India's textile and apparel exports to the EFTA region currently stand at around $5 billion annually. The FTA has the potential to push this figure significantly higher.
Increased competition for Indian manufacturers
However, the FTA is a double-edged sword. Easier access to the Indian market for European apparel brands could pose a threat to domestic manufacturers. Established European fashion houses, known for their quality and brand recognition, may find a receptive audience among India's growing middle class. This could lead to increased competition for Indian companies in their home market.
The reasons for India's hesitation in the past
India has been cautious about entering FTAs in the past, fearing negative consequences for domestic industries. The reasons for this apprehension included competition from Established brands, as they are known for their quality and brand recognition, which could threaten Indian manufacturers in their home market and job losses; the increased competition could lead to job losses in the Indian textile and apparel sector, particularly for low-skilled workers.
Historical Case Study: The rise of fast fashion
Similar concerns were raised when India liberalized its textile trade in the early 2000s. While the move did boost overall exports, it also opened the door for cheaper garments from countries like Bangladesh and Vietnam. This led to the rise of fast fashion brands in India, which cater to price-conscious consumers but may not prioritize ethical labor practices or environmental sustainability.
Potential impact of EFTA agreement on the key sectors
|
Sector |
Potential Impact |
|
Indian Apparel Exports |
Increase |
|
Competition for Indian Manufacturers |
Increase |
|
Foreign Investment in Indian Textiles |
Potential Increase |
|
Job Creation |
Potential Increase (long-term) |
EFTA and trade with India
The EFTA is a four-member trading bloc comprising Switzerland, Norway, Iceland, and Liechtenstein. These countries are not members of the European Union and have their own independent trade agreements. As per the data from the Ministry of Commerce & Industry, India, here's a breakdown of their current trade with India. Total EFTA-India Trade, the two-way trade between India and EFTA stood at approximately $18.65 billion in 2022-23, down from $27.23 billion in the previous year. Sector-wise, India is a major exporter of textiles and apparel globally, and EFTA countries likely import a portion of these goods. And for fibres and yarns, EFTA countries may also import raw materials like cotton and synthetic fibers for their own textile industries.
EFTA countries trade with India, individually
Switzerland: India's largest trading partner within EFTA.
o Exports to India: $15.79 billion (mainly machinery, gold, pharmaceuticals)
o Imports from India: $1.34 billion (mainly chemicals, gems & jewellery)
Norway:
o Exports to India: $2.3 billion (mainly seafood, mineral fuels)
o Imports from India: $1.2 billion (mainly textiles, apparel, machinery)
Iceland:
o Exports to India: $30 million (mainly fish & fishery products)
o Imports from India: $10 million (mainly pharmaceuticals, chemicals)
Liechtenstein:
o Exports to India: Negligible
o Imports from India: Negligible
A Balanced Approach Needed:
The success of the FTA for India's textiles and fashion industry will hinge on a balanced approach. The government can play a role by investing in skill development for workers, promoting design innovation, and ensuring adherence to stricter labor and environmental regulations. This will allow Indian manufacturers to compete effectively with European brands while maintaining ethical and sustainable practices.
Future Outlook and potential impact of the agreement
The impact of the FTA will likely unfold in multiple stages could be in short-to-mid term, Indian apparel exporters focusing on cost-competitive garments may see a rise in exports. However, domestic manufacturers could face increased competition from European brands. Whereas, in the long term the success of the FTA hinges on India's ability to enhance its design abilities and also to upskill its workforce to compete in the evolving market.
India-EFTA FTA presents a mixed bag for the textiles and fashion sector. The FTA has the potential to significantly impact the textiles, apparel, and fashion trade. While Indian exporters have a chance to expand their reach, domestic manufacturers need to prepare for heightened competition. A focus on innovation, quality, and sustainability will be key for Indian companies to thrive in the new trade environment.
