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RMG exports from India have been falling continuously over the past few months. Apparel exports have been plummeting since October 2017. There was a sharp fall of 16.6 per cent in May 2018. The main problem faced by the garments industry is the block in GST refunds, slow disbursements in Rebates on State Levies (RoSL) and the sharp decline in RoSL rates which has led to working capital’s drying up.
While the larger units have somehow managed to survive, many small units are not in a position to take orders. Exporters have not been able to book orders in the peak summer season and losing markets to competitors from other countries such as Bangladesh and Vietnam.
To help garment exporters, the Merchandise Export from India Scheme for garments and made-ups has been extended indefinitely. Under the MEIS scheme, garment and made-up exporters get duty exemption scrips, freely transferable for cash, worth four per cent of their total exports. The rate of incentive for the two sectors was doubled to four per cent from two per cent in October 2017 when exports started slipping. As a result, India’s overall cotton exports are likely to rise 21 per cent for the cotton year ending this September.
The global luxury market is set to grow six to eight per cent this year. Customers are responding to targeted strategies, and top performing brands are already winning over the customers of tomorrow. Currency fluctuations will have an impact, but the healthy trend is expected to continue across all regions and customer segments. Chinese consumers continue to stand out as a growth driver for the industry, and are more fashion-savvy and digitally advanced than ever before.
Canada is growing while performance in Latin America is mixed. The region as a whole is expected to grow between three to five per cent in 2018. Mainland China is expected to account for the lion’s share of growth in 2018. Brands are learning how to cater to local consumers, often young and heavily influenced by social media.
Across rest of Asia, Hong Kong and Macau continue on their recovery trajectory. South Korea benefits from visitors from China, but political tensions in the region could have a crucial impact on 2018 growth trends. Dubai remains stable and supported by international tourists, while Australia is set to benefit from a larger store footprint. Online continues to gain ground as boundaries blur with traditional physical channels.
As per the new economic reform program, Ethiopia has opened up its markets for foreign direct investment. The country received $3 billion in aid and investments. The financing agreement includes $2 billion inward net FDI inflow on productive investments in industrial parks, manufacturing, hospitals, hotel and mall. An additional $1 billion will be deposited into the National Bank of Ethiopia to address the temporary forex constraints.
Recently, the government also announced plans to privatise some of the country’s most valued public enterprises, including the Ethiopian Airlines Group, as well as the state-owned EthioTelecom, to attract more FDI. Ethiopians will be offered 5 per cent in the new firms, and 30 to 40 per cent will be sold to telecoms players globally.
It also agreed to jointly invest in four seaports with Mogadishu as the two nations seek to attract foreign investment. Ethiopia also has an agreement with Somaliland signed in March to manage the Berbera port, with Addis acquiring a 19 per cent stake in the port.
The resolution plan for bankrupt Alok Industries offered by Reliance Industries and JM Financial Asset Reconstruction is not a done deal yet. Some creditors have objected to the contours of the proposal and this would delay the process. The proposal says the lenders should assign their entire debt in favor of JM Financial ARC, which if done would take away their right to invoke personal guarantees given by the promoters of Alok Industries.
The dissenting creditors, around 18 per cent of the lenders in terms of the total debt, are opposed to assigning their debt in favor of JM Financial ARC. The sole bidder had offered a Rs 5,050 crore cash payment to settle the company’s debt of Rs 29,500 crores, implying that the lenders would get only 17 per cent of what Alok Industries owes them. However, in case of liquidation, the creditors would receive less as the liquidation value is only Rs 4,200 crores.
In almost all cases, banks have done a one-time settlement of loans while retaining the right to recover dues from promoters, but in this case, assigning debt means transfer of debt along with security from the books of the lenders to ARC.
As per latest Situation and Outlook report by the Ministry of Primary Industries, demand for NZ cross bred wool from China has just starting to return. Auction prices too have lifted slightly in recent months. The wool market had been struggling for the past 18 months or more. The main reasons were a lack of crossbred wool demand from China and increased competition from cheaper synthetic fibres. That had led to a build-up of inventory on farms and throughout the supply chain, which was slowly being worked through.
As opposed to crossbred wool, fine wool prices had reached record highs but fine wool accounted for only 8 per cent of production. The price difference between fine wool (less than 24.5 micron) and crossbred wool (over 31.4 micron) had never been greater. From January to March this year, fine wool export prices were five and a-half times higher than crossbred.
Around 100 North American and European brands, who participated in the US-based NGO Cotton Campaign, signed up for the Responsible Sourcing Network’s Cotton Pledge. The pledge requires these brands to boycott cotton from Uzbekistan. Almost all western brands are signatories.
These brands are protesting against the state-imposed system of forced labor, including children taken out of schools to harvest cotton, which has been in force since the days of the Soviet Union. The new President, Shavkat Mirziyoyev had promised far reaching reforms. But a report by the Uzbek-German Forum for Human Rights, which monitored the 2017 harvest, found evidence that state-sponsored forced labor continues, including in World Bank-funded cotton projects, contrary to the bank’s loan agreements.
Bennett Freeman, a co-founder of the Cotton Campaign and former Senior Vice-President for Calvert Investments, last month led a delegation of human rights, labor groups and supply chain specialists to Uzbekistan, and presented Uzbek government agencies with a roadmap for eliminating the systematic use of forced labor, starting with this year’s upcoming cotton harvest.
The Indian ministry of textiles has approved the first benchmark study to identify gaps and suggest measures for developing the man-made fibre (MMF) industry. The study will be jointly undertaken by the ministry in consortium with Synthetic Rayon Textile Export Promotion Council (SRTEPC). Both sides are shortlisting a competent agency for issuing request for proposals as part of the bidding process. The study will be completed in four months. It will suggest measures and innovative ideas to cater to consumer requirements and improve competitiveness of the Indian MMF textile both in domestic and export markets to help India emerge as the leading country in this segment.
India is the second largest producer of polyester and viscose in the world, but ranks 66th in export of MMF textile, which has been stagnant at around $6 billion in the last couple of years.
Bangladesh has demanded better prices for its apparel products considering the huge investments made by apparel manufacturers that have helped improve safety measures and the working environment. Garment manufacturers say they have modernized readymade garment factories and ensured building and fire safety with an improved working environment in place. Though they have invested a lot in these areas prices of apparel products have not risen.
Brands are generally paying less for garments from Bangladesh today than they did before the Rana Plaza disaster. The price of cotton boys’ and men’s trousers going from Bangladesh to the US has fallen 13 per cent in the years since the disaster. In the same period, the price paid for T-shirts exported to the European Union has fallen about five per cent. This happened even as cotton prices went up more than 20 per cent between 2015 and 2017.
The price drop over the last five years underscores the dynamics at play in the global garment supply chain. As clothing sales have become increasingly concentrated in the hands of massive multinational retailers who place gigantic orders, the buyer’s power—and ability to get cents shaved off the cost of an item of clothing—has become increasingly concentrated too.
Avantex Paris will be held from September 17 to 20. It puts innovation and sustainable development at the heart of services, materials or technologies for textiles and clothing. With some 30 exhibitors, the September show promises a wealth of materials and potential to be discovered by visitors keen on high-tech fashion.
Each season, Avantex Paris is certain to spark great interest among visitors with very topical propositions for products and solutions. Start-ups at the show attract labels, designers, other exhibitors, researchers or teachers, who see an opportunity to exchange ideas or compare their views.
Avantex has become a network, an aggregator of ideas, a lab that goes beyond the world of fashion in the strict sense. It provides a stimulus for every sector of fashion. Avantex Fashion Pitch, a competition organised in conjunction with its partner Wirate each season, allows a light to be shone on a budding new talent from the industry.
At this seventh show, Asia will be well represented with high-tech technical textiles from China and Taiwan. As for South Korea, it will be presenting its skills when it comes to outdoors materials from Bosung Textile, but also the best in applied research and experimental development from the International Korean Institute of Industrial Technology.
Jyoti Apparels has been awarded AEO Certificate by S Ramesh, Member (Admn.), CBIC. In view of growing concern among customs administrations about the threat posed through misuse of channels of import and export, there is a need to ensure security in global supply chain in international movement of goods. A business authorized by the customs as an AEO can enjoy benefit flowing from being a more compliant and secure company as well as favorable consideration in any customs proceedings coupled with better relations with Customs. AEO status will also ensure a low risk score is incorporated into customs ‘Risk Management System’ (RMS) and used to determine the frequency of Customs physical and documentary checks. The benefits may also include simplified Customs procedure, declarations, etc. besides faster Customs clearance of consignments of/for AEO status holders.
Jyoti Apparels says, “AEO is a very user friendly scheme providing several monetary and non-monetary benefits to importers and exporters. However, it has been seen that the entities are not showing full interest and not coming forward for the same. The custom department approach is very positive towards AEO program. In our opinion, more and more organizations should go for the affiliation of AEO program”
