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The handloom and handicraft sector in India is looking for new markets and opportunities. Global companies are willing to tie-up with Indian weavers and artisans. While most exports to global markets registered a decline, export of handicrafts continued to grow at 17 per cent.
A MoU has been signed with 20 e-commerce companies to engage with artisans and weavers in different handloom and handicraft clusters and help them market their products directly. This will go a long way in ensuring the clusters get the right price for their product as they are able to sell their product directly to the consumer.
Steps are being taken for skilling weavers, giving them design inputs, quality raw material, tools and upgrading their looms to empower them so that they continue to remain engaged in this craft. At design workshops weavers and artisans are informed about current market trends and the demands of the market.
Many weavers and artisans have become workers and laborers in the hands of traders or exporters. They get paid wages on a daily basis on whatever work they do a day, so instead of selling their craft and talent, they are now selling their labor. As a result, this has disinterested the young generation.
Textile mills and cotton-weaving powerlooms in Ichalkaranji, better known as the Manchester of Maharashtra, are facing a strange situation. Since demonetisation, cloth traders have been offering them payment only in invalid currency. Mills unwilling to accept such payment face the threat of cancelled orders.
Since mills have no option but to refuse, contracts worth more than Rs 100 crores have been scrapped. The demand for chemicals at the looms has gone down drastically due to cancellation of orders. The nearly 1.25 lakh looms in the town were expecting good business after the bountiful monsoon this year and had secured orders from north India and Karnataka. But their expectations have been shattered.
In just 15 days, the daily turnover at the textile hub has fallen from Rs 45 crores to Rs 13 crores. In turn workers at these units haven’t got their wages. There are more than 80,000 workers engaged in the looms and the yarning, sizing and processing units. Most of these workers are from Uttar Pradesh and Bihar. Ichalkaranji is a major textile hub in the country and sends ready made clothes to Ahmedabad, Mumbai, Madhya Pradesh, Delhi, West Bengal and Karnataka. It has thrived on the booming cotton trade that caters to the needs of major national and international brands.
Tamil Nadu’s Tirupur cluster is pressing for the right infrastructure such as a world-class design studio, a research and development center and an incubation centre for technical textiles. It feels these infrastructure facilities will facilitate rapid growth of not only the existing textile business but also enable its foray into the niche segments creating quantum growth opportunities to the industry.
The cluster is interested in having a focused and dedicated agency for the knitwear sector, similar to the silk or the coir board, which could serve as a catalyst for rapid growth of this segment.
Tirupur is the knitwear capital of the country with a 46 per cent market share in knitwear exports. It aims for a turnover of Rs lakh crore by 2020 from the present Rs 35,000 crores. Exporters say housing and hostel facilities will attract and retain skilled laborers. They are also looking forward to the implementation of the Factories (Amendment) Bill 2016, which would benefit the garment sector and will be helpful to fulfill buyers’ compliances.
The cluster argues since apparels are essentials, they should attract a lower slab rate under GST considering that the cumulative tax on textile products, including the non-availability of input tax credit on the inter-state purchase of cotton and other raw materials, presently comes to only around 7 to 8 per cent.
Ludhiana, best known for its woolens, is now a picture of gloom post demonetisation. The city’s small and medium textile enterprises (SMEs) were one of the first victims of the systemic shock. Across the region, SMEs, which have an annual turnover ranging from Rs 25 lakh to Rs 10 crores, have seen massive dips in production, which most unit owners pegged at 80 per cent.
The demonetisation has had a cascading effect on this sector. Liquidity crunch brought on by the move caused demand to plummet in retail markets, and orders stopped almost overnight. The Rs 50,000 weekly withdrawal limit from current accounts has also made it difficult to pay workers; most of them daily-wage migrant labourers. So much so, that many of them are now leaving town.
Government data shows that the knitwear industry in Ludhiana employs close to 3,80,000 people. Between 70 to 80 per cent of all woolen garments supplied to North India comes from this town. A majority of these units deal with traders in the unorganised sector across – small retailers who do not access the banking infrastructure and depend on cash for their transactions. The traders also do not pay Value Added Tax and their transactions are therefore unaccounted-for.
The timing of the demonetisation has been fatal for the garment industry. Textile units which produce winter garments count on the September-November period to boost profits and the smaller units get 80 per cent of all their revenue in this season. This makes them extremely vulnerable to big-ticket reforms that could have a short-term fallout in these months.
Mumbai is ready to host the next edition of ITME. Twenty four product launches, 1,050 exhibitors, 38 countries, 17 chapters and 11 exhibiting halls the six-day fair, is the largest and apex exhibition for textile machinery and technology in India and one of the most awaited business event for textile industry members. The exhibition will be held at Nesco grounds, Goregaon, Mumbai from December 3 to 8.
Gujarat and Karnataka, two key states with a strong presence in textiles will be participating as state partners. This once in four years mega event is also supported by Department of Heavy Industry, Textile Ministry, and the government of India. The government of Maharashtra is also the state partner. That makes the exhibition the most important platform for the government officials and the industry members to interact and work together.
This is the only textile engineering exhibition with a strong presence and participation from both state and central governments where the idea of ‘Make in India’ in textile engineering segment shall be promoted to visitors and also propagate government schemes and incentives for the textile industry in India. India ITME Society is four-decade old non-profit organisation with a vision to support the industry through exhibitions facilitating investments and joint ventures and technology transfer. Foreign and domestic business visitors, academicians, research scholars, government officials from Philippians, Myanmar, Bangladesh, Srilanka, Iran, Turkey, Brazil, Indonesia, Poland, Malaysia etc.
It is known to all, that the denim fabric manufacturing industry is the sunrise industry of India. This has been proved by the fact that in the last decade, it has been growing at a healthy 15 per cent CAGR. Currently, the industry has an annual installed capacity of 1.4 billion meters which is supposed to be the world’s second largest after China. The sales turnover of the industry is estimated to be around Rs 15,000 crores, provides employment to approximately 4, 00,000 workers, besides the indirect employment.
However, with currency demonetisation the industry has been paralysed and 50 per cent capacity has shut down. The denim fabric is washed before it can be marketed, these upstream activities are majorly done in the unorganized sectors located in the SSI hubs of Gandhinagar and Tank Road, Delhi, Ulhasnagar in Mumbai and Bellary near Bengaluru. Since these hubs mainly deal in cash, they therefore have shut down due to the cash crunch. As 85 per cent of the fabric is sold in domestic market they are badly hit.
Experts fear, since upstream activities of garment sewing and washing in SSI hubs will take a while before they can change to working smoothly with the banking system, they are not foreseeing any short-term recovery of the market in the near future. This has led to shutdown of denim mills that has resulted in a loss of jobs. Considering the grave situation of the denim industry, it is likely that the government may announce immediate enhancement in present duty drawback rates and also extend some more benefits under focus product and focus market scheme so that mills can competitively try to shift to the export market.
The Bangladesh commerce minister Tofail Ahmed has said that the US excluded his country from duty privileges on political grounds, an assertion the US Ambassador to Bangladesh Marcia Bernicat publicly disagreed with. The minister said the US has reinstated Bangladesh's Generalised System of Preferences (GSP) status despite fulfilling all the 16 conditions laid out by the Obama administration in 2013.
After having met Bernicat to announce the postponement of this year's Trade and Investment Cooperation Forum Agreement (TICFA) meeting earlier scheduled for December 13, Tofail said there is no reason other than a political one for not giving back GSP to Bangladesh. Bernicat has said America absolutely disagrees that there was a political basis for GSP suspension.
The Obama administration suspended GSP status in the aftermath of the Rana Plaza building collapse, citing serious shortcomings in workplace safety and labour rights. Tofail said he does not agree with the claims that workers' rights in Bangladesh have not improved since the suspension of GSP.
Bangladesh amended labour lasw in July 2013 to allow workers full freedom of association at the factory level. But labour activists say they still face restrictions in entering factory premises and the government has failed to register their unions, which would have otherwise given them the legal right to represent workers.
With the Donald Trump declaring that the US will withdraw from the Trans-Pacific Partnership (TPP), this will boost competitiveness of Cambodia’s domestic garment and footwear industry, say senior official of the Garment Manufacturer’s Association of Cambodia (GMAC).
Trump’s lack of support for the TPP has caused other signatories to voice doubt over the partnership. On November 19, the Vietnamese government signaled that without US support, it would not seek to ratify the TPP in Parliament. Japanese Prime Minister Shinzo Abe has called the TPP meaningless, without the US on board. Kaing Monika, GMAC deputy secretary-general has said the US withdrawal would return Cambodia to closer parity with neighboring Vietnam, a signatory of the free-trade agreement. He clarified that if the US withdraws, the TPP would be dead because at least six member countries that account for 85 per cent of the combined GDP of the 12 nations must ratify the agreement. This needs both US and Japan.
In the absence of TPP, Cambodia is put back to the earlier position of competing against Vietnam, both on the FDI and export market fronts. But on the other hand, if the TPP is implemented it would not only affect Cambodia’s exports to the US but also other markets like Canada and Japan where the country similarly exports a substantial amount. The 12-country agreement was signed in February, a highlight of current US President Barack Obama’s time in office but is yet to be ratified by any country. If it comes into effect, 12 Pacific rim countries will enjoy free-trade arrangements aimed at boosting their economic partnerships, and it is seen by many as a check to Chinese influence in the region.
Pitti Bimbo, the trade show for children's fashion, that has evolved with time, has announced the creation of two new sections for its 84th edition, scheduled in Florence from January 19 to 21, 2017. According to Raffaello Napoleone, head of show organiser, the children's fashion industry is in a struggling stage when companies are going through a troubled period. That is the reason why the organizers keep on creating new initiatives to bolster the market and remain the benchmark trade show in the segment.
In the last edition held last in June, Pitti Bimbo featured for the first time the Fun Glasses section, with children's eyewear, while the one to be held in January next will mark the inception of two new projects. The first 'The Nest', a new section located in the basement of the venue's central pavilion, organised in collaboration with Berlin concept store Little Pop Up Berlin. It will showcase a selection of smaller, independent and emerging junior fashion labels, distinctive for their creativity and product innovation like Atelier Choux Paris, Cherry Papaya Kids, Garbo&Friends, Kalinka Kids, Lieblinge, Mara Mea, Monkind, Poupee, Robe of Feathers and Where is Marlo.
The second section named the 'Fancy Room' would feature children's lifestyle products from design items to small accessories, toys, portable technology and gadgets. The island-shaped section, distinctive for its amusing decor, would also be located in the central pavilion's basement, and will host brands like Caco Design, Cute Cute, Design Letters & Friends, Enfance Paris, Fior di Coccole, Hape, Lapin & me, Lullaby Road, LuckyBoySunday, Miss Nella, Nailmatic Kids, Noé & Zoé Berlin, Passapò, Papillon, Popqorn, Prestige, Rò.Rò and Vandoma. For the forthcoming edition, Pitti Bimbo has announced the presentation of 468 collections compared to 437 in January last year of which 250 came from outside Italy.
"As is well known now, a recent investigation on luxury beddings offered by Welspun India to Walmartm the world’s largest retailers, has dented the futures of Indian textile industry among global peers. As per investigation, major American retailers, including Target and Walmart, have been selling premium-priced sheets purportedly made with Egyptian cotton – a byword for luxury in linen – but that may be woven with lower-quality cotton blends in reality."
As is well known now, a recent investigation on luxury beddings offered by Welspun India to Walmartm the world’s largest retailers, has dented the futures of Indian textile industry among global peers. As per investigation, major American retailers, including Target and Walmart, have been selling premium-priced sheets purportedly made with Egyptian cotton – a byword for luxury in linen – but that may be woven with lower-quality cotton blends in reality.
Three law suits seeking to be certified as class-actions have been filed against supplier Welspun India -- and a separate one last week was directed at Walmart. The complaint, filed in New York by customer Dorothy Monahan, accuses the world’s largest retailer of questioning the fibre content of Welspun’s products as early as 2008 but not halting its sales until after Target did so in August. The other lawsuits, all filed in the US against Welspun, allege the company fraudulently labelled its bedsheets as Egyptian cotton. If all reports are to believed, it’s PR machinery which is to be blamed for placing high-quality cotton and Egyptian cotton as synonymous.
Target has already ended its partnership of its $90 million in annual business with the Indian supplier, and Walmart Stores has stopped selling Welspun sheets that had been labelled 100 per cent Egyptian cotton. Bed Bath & Beyond Inc. followed suit.
The fake Egyptian sheet episode came to light after exhaustive work by Target investigators who analysed sheet fibres under microscopes and tracked their journey through a global supply chain. The probe found that 750,000 of Target’s Egyptian cotton sheets, sold for as much as $75 a pop, didn’t contain any Egyptian cotton at all, but a mix of lower-quality fibers from cheaper sources. It may also create a dent for Indian textile manufacturers in the race to supply Western consumers with high-quality sheets and towels, thereby making way for its competitors such as China to take on business.
The sheets fiasco reflects a simple reality: There’s a scarcity of Egyptian cotton. It first became a key export product in the early 19th century, when it arrived in France and became sought after for its silky feel. Production has been falling since the 1990s, however, and last year Egypt’s post-revolutionary military government ended subsidies for cotton farmers to shore up the state budget. A gradual decline in output has become a precipitous plunge. The U.S. Department of Agriculture estimates there will be a 53 percent decrease in production this year, to an all-time low of 160,000 bales.
Egyptian Cotton Certification Scenario
The system for certifying Egyptian cotton is administered from Cairo by the Cotton Egypt Association, an industry group that grants stamps of approval to suppliers of 100 per cent Egyptian cotton products. To receive one, a manufacturer pays an initial fee of $5,000 and submits records of Egyptian cotton purchases and product samples, which undergo DNA analysis to identify whether the fibres were grown in Egypt or elsewhere. The companies are charged an additional $3,000 annually for the certification.
But once a certification is granted, producers are mostly left alone until they need to renew their label a year later. Typically, suppliers like Welspun purchase cotton in raw form from Egypt for import to Asia, where it is converted into finished products for sale in the US and elsewhere. The highest-quality Egyptian material costs twice as much as the standard grade sourced from India, providing a powerful incentive to cheat. Factories have mixed the Egyptian cotton with other low quality cottons to make profit, which has ruined the reputation of Egyptian cotton.
Blending blunder
Blending has been rampant in the industry and is quietly compromised by many retail chains. Sometimes that means mixing good-quality non-Egyptian cotton that maintains the same feel amid shortages of the real thing, but it also often includes using cheaper grades to save money.
