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Indian garment exporters feel Britain's exit from the EU would significantly dilute the relevance of the FTA they have with EU. So they want a separate trade treaty with Britain since they feel this will significantly boost garment exports to the UK. The EU is a major destination for Indian readymade garments, with the UK a leading market. Europe makes up 46 per cent of apparel exports, of which Britain's share is a huge 40 per cent.
India currently enjoys a 12.5 per cent tariff preference in the EU under its GSP (generalised scheme of preferences) program. The export sop would now be impacted for textile shipments to the UK.
India has approved a Rs 6000-crores special package for the textile and apparel sectors. The aim is to create one crore textile jobs within three years, generate investments worth 11 billion dollars and 30 billion dollars in exports.
These incentives would enable Indian exporters to price their products much better than countries such as Bangladesh and Vietnam, which have low labor costs. They would also help Indian textile exporters to enter China and Southeast Asia. The fact is that while Europe is an important market for exporters, it is more or less saturated, and so they are interested in entering China and southeast Asia, which have a market for high-end products.
Nigeria once had a thriving textile industry. From the 1950s up to the 1980s, the country had over 140 textile manufacturing industries, accounting for 25 per cent of the nation’s employees in the manufacturing sector. The industry once employed about a million people, contributing about 15 per cent of manufacturing sector earnings to the Gross Domestic Product and accounted for over 60 per cent of the textile industry capacity in West Africa. The industry was ranked as the third largest textile producer, only behind Egypt and South Africa.
However the 1980s the focus shifted to the oil sector. Funding for textile companies became a problem. The economic recession of the 1990s further compounded the woes of the struggling textile manufacturers and many of their secondary sector counterparts. With the banks only willing to lend to the lucrative oil and gas sector, they were unable to procure raw materials and modern machinery. As such, an industry which once boasted of an annual growth rate of 67 per cent in 1991 now has 25 textile mills operating, with all running at less than 40 per cent of installed capacity and employing just over 25,000 people.
On the other hand, the textile industry in India is the second largest employment generating sector in the country, offering direct employment to over 35 million people.
Textile mills in the Coimbatore region want made-ups and home textiles to be included under the special package announced recently for garments. A Rs 6000 crores special package has been approved for the garment sector, which is aimed at creating one crores of new jobs, attracting Rs 74,000 crores in new investments and achieving a cumulative increase of $30 billion in foreign exchange in the next three years.
Mill owners say made-ups and home textiles constitute very high end products and exports to all major markets, especially the European Union and the US. Indian exports of made-ups and home furnishings have been facing a severe challenge from Pakistan, which enjoys duty free access to the EU and a few other markets. So this segment could not achieve the potential growth rate as the products attract equal tariff on a par with garments in most major international textile markets.
Also made-ups and home textile manufacturers pay much higher conversion charges for the fabric when compared to garment manufacturers. And since processes required for made-ups and home textile fabric manufacturing are capital intensive, only limited manufacturing facilities are available.
Home textiles and made-up units are specialised in manufacturing fabrics and fabric related products like pillow covers, gloves, bed spreads etc.
The new textile policy announced by the Government recently talks of a fixed term employment, fixed for a finite period, like two years at the outside. Such a fixed term employment covers all categories of workers, temporary, contract or any other kind. This legislation for the labour-intensive textile industry has features which other sectors will want to adopt and marks the first change in labour legislation.
However, trade unions have often been criticised that despite being a minuscule number in the enormous labour pool, the unorganised sector being several times larger, yet they want to keep the latter from reaping any benefits or extending some statutory protection. All employers are not necessarily exploitative, they are after all in business to make money; legislation ensures some protection for the labour not covered by trade unions with their negotiated wage hikes every three years.
Meanwhile, the concept of a fixed term employment which the textile policy mentions, takes into account the seasonality of business. Labour is thus protected with a guaranteed job for an upfront fixed term and so is the employer since wages are paid at rates comparable to permanent employees but only for the duration of the fixed term.
The Indian manmade fiber industry wants a duty levied on Chinese imports. The industry says Chinese exporters are undervaluing their manmade fiber merchandise and dumping cheap synthetic fibers in the Indian market. They say Chinese exporters are resorting to undervaluation of fabrics as they get duty benefits from the Chinese government. It says India should seek an explanation from China on the subsidies and hopes that a customs duty will be imposed on the landed price after factoring the subsidies given back home. Imports of fibers, yarns and value added products, the industry says, must be discouraged and the import of synthetic fabric should be restricted to actual users.
The total installed capacity of synthetic fiber in India is five million tons while China has a surplus of nine million tons. It’s felt that due to the slowdown in China, the country has been dumping the surplus into India on the back of subsidies offered by the government.
Indian imports of synthetic textile from China in 2015-16 stood at $800 million dollars, mainly due to the surplus capacity with China. More than 50 million tons of manmade fibers are produced every year. China is the leading pacesetter in the manmade fiber industry.
The First Denim Show in Vietnam by Denimsandjeans.com concluded with a encouraging response on June 17 at Gem Center, Ho Chi Minh City. With 1,025 visitors in two days to the invite only show, the market showed great interest in the event. Vietnam is the fastest growing apparel exporting country in the world with about $27 billion of exports of garments and textiles in 2015 and expected to grow to $30 billion in 2016.
The show was inaugurated on June 16th and 37 exhibitors from different regions participated including five companies from Vietnam. Top buyers, retailers, brands and factories from Vietnam and from other parts of the world including USA, Japan, Korea, Hong Kong, Germany, Italy, Spain, Indonesia, India, Thailand, Taiwan, Bangladesh, Cambodia and New Zealand etc visited this show from the very first day of this show.
Besides the trade show, there were four key seminars organised by Denimsandjeans.com. On the first day of the show, Jeanologia from Spain held a seminar titled – ‘Vietnam Horizon 2020’ by Borja Trenor Casanova and the focus of the presentation was to analyse the past and current situation of Vietnam as a denim manufacturing and exporting country and how technology is transforming the denim industry and is bringing Vietnam up as a key player in the supply chain. The seminar also focused on technology and sustainable solutions in the context of the Vietnamese Apparel Industry.
The European Union (EU) is looking to have closer ties with China. The new strategy on China will hasten the pace of cooperation especially in areas of trade and market status under the World Trade Organization (WTO) rules, analysts say. The strategy was brought to light in a joint communiqué issued last Wednesday by the European Commission and the European Parliament.
The document said that Europe sees China as a partner, which is rapidly increasing its international influence and should be more closely engaged for the next five years. China’s Foreign Ministry spokeswoman Hua Chunying has said they are willing to develop ties with the European Union from long-term perspective after gaining this information and China is urging EU members to grant market economy status to China in December.
The European Commission's last communication on China was adopted a decade ago in 2006. Since then both the EU and China have undergone considerable changes since then and China has a stronger presence in all regions of the world, economically and politically. Trade between China and the EU amounted to 521 billion euros in 2015 and China's share of total EU trade in goods has doubled since 2002, rising from 7 to 15 per cent, data from EU show.
The textile industry has a background of polluting water and causing deforestation when producing and using fabrics and leather. But over the last years, many companies have been changing their attitude to become more environment-friendly. Recently, Greenpeace launched Detox Catwalk. Textile companies were asked to adopt and implement solutions to avoid using and releasing dangerous chemicals from their global supply chain and products by January 1, 2020.
Chiara Campione, Fashion Duel Project Leader at Greenpeace Italy explained that H&M, Nike, Adidas, Valentino, Levi's and Burberry are among the 36 major fashion and retailer brands that have already joined the campaign. One of the historical districts of the textile made in Italy, renowned worldwide, is the region of Biella, North-West Italy. The secret to the success of this industrial area has been the chemical properties of its waters and the presence of big falls ensuring enough energy for production cycles.
At the Reda firm, founded in 1865, the finest merino wools are converted by the expert hands of local craftsmen into fabrics, some of which are worn by Hollywood stars. But this excellence is achieved while caring for the environment, for example by using water filtration systems and integrating renewable sources in the industrial process.
The fourth edition of Denim Boulevard was held in Italy from June 18 to 20. The exhibitors were a mix of denim fabric manufacturers and casual brands such as: for instance, Candiani Denim, Tela Genova, Blue Blanket, Attrezzeria-Laboratorio Base, Jacob Cohën, Manifattura Ceccarelli, Surf Hut, Blessed and Nanni from Italy.
Also hosted within the show was the Lost & Found area that presented American vintage pieces from the 1940s, 50s and 60s. Among exhibitors from Japan there were Samurai Jeans, Studio D'Artisan, Orgueil, Redmoon and Forty Niners. Other European exhibitors were Endrime, A S R, R.D.D. and Archive by Jack & Jones for Europe.
There were many dyeing workshops and a wide offer of handcrafted products. Kassim Denim organised some indigo dye workshops during the show inviting visitors and exhibitors to dye T-shirts and other pieces. Among young talents debuting in the market was Nicole Ajimal, who creates and personalises her unique hand woven indigo fabrics. Another newcomer was Angela Syrett Roper whose collection offers unique hand-treatments and ageing applied onto denim and casual pieces. Also interesting were some unique fabrics manufactured by Annegret Affolderbach Choolips Studio. Among the international exhibitors were Levi's, Tellason, Sperry and Santa Cruz.
According to Kaing Monika, Deputy Secretary General of the Garment Manufacturers Association in Cambodia (GMAC), the country will not feel the direct impact of Brexit for the time being, despite the United Kingdom being one of the main destinations for the country’s garment exports.
The European Union accounts for about 45 per cent of Cambodia's total garment exports, with the UK as one of the main destinations. Brexit is a very complicated matter and it is too early for them to exactly predict the consequences, feels Monika. Many don’t really know what is going to happen next. The fallout of the momentous Brexit vote is fueling fears of a break-up of the United Kingdom, with repercussions already felt in global markets.
The EU is one of Cambodia’s largest trading partners after the United States and more than 40 per cent of the country's exports head to Europe. Cambodia’s EU exports are given preferential treatment under the Everything but Arms (EBA) initiative for least developed countries.
