According to the Third annual State of Fashion Report, co-published by McKinsey & Company and Business of Fashion, US will cede its position as the world’s largest fashion market to China in 2019. The McKinsey Global Fashion Index forecasts growth of 3.5 to 4.5 percent next year, which will come in slightly below the predicted 4 percent to 5 percent growth for 2018.

The report emphasises in the coming year, companies need to take an active stance on social issues, satisfy consumer demands for ultra-transparency and sustainability, and, most importantly, have the courage to ‘self-disrupt’ their own identity and the sources of their old success in order to realise these changes and win new generations of customers. They also need to invest in enhancing their productivity and resilience, as the outlook is increasingly uncertain. External shocks to the system continue to lurk around the corner, and growth cannot be taken for granted.

Indonesia has abolished import duties of up to 30 per cent on 20 some Pakistani products. The aim is to secure the future of more than $1 billion of palm oil exports to the South Asian economy that is shifting to a new supplier.


In January, Indonesia and Pakistan finalised the review process for the preferential trade agreement. Indonesia has agreed to grant tariff concessions on major exports from Pakistan, including zero per cent tariff on tobacco, textile fabric, rice, ethanol, citrus, woven fabric, T-shirts, apparel and mangoes.


On an annualised basis relaxation of tariffs will enhance exports from Pakistan to Indonesia by 133 per cent and reduce the deficit by 15 per cent. Indonesia has long been mulling import duty concessions for 20 tariff lines, including rice, mangoes and value-added textiles, under the revised preferential trade agreement originally signed with Pakistan in February 2012.

As per a new report ‘Global Market Review of Denim and Jeanswear’ by apparel sourcing publisher just-style, the global jeans market will be worth $60 billion by 2023. The report predicts a growth of 4.9 per cent over the next five years from $57 billion in 2018, with the US set to remain the largest jeans market, with China the second largest.

The fastest growing markets are predicted to be South America, with 12.1 per cent growth, and the Rest of the World (all markets excluding North America, Europe, Turkey, Asia and South America), with 19.7 per cent growth. The report also identified a major shift in China’s market, with nearly half of the country’s jeans production now remaining in the country instead of being exported. The study estimates that around 22 per cent of manufactured jeans are now traded outside the traditional retail markets in exchange for goods or services rather than currency.

"As per Chinese Textile Industry Association, the textile industry uses 25 per cent of global chemical output. Out of this 42 per cent is used by China reveals the United Nations Environment Program. Greenpeace published a report, Dirty Laundry in 2011 that urged consumers worldwide to demand change in the fashion industry. The report outlined the wastewater in textile industry zones of Guangdong and Zhejiang contained cancer causing chemicals harmful to reproduction. Supply chain investigations linked the products from those factories with global brands like Adidas, Nike, H&M and Zara."

As per Chinese Textile Industry Association, the textile industry uses 25 per cent of global chemical output. Out of this 42 per cent is used by China reveals the United Nations Environment Program. Greenpeace published a report, Dirty Laundry in 2011 that urged consumers worldwide to demand change in the fashion industry. The report outlined the wastewater in textile industry zones of Guangdong and Zhejiang contained cancer causing chemicals harmful to reproduction. Supply chain investigations linked the products from those factories with global brands like Adidas, Nike, H&M and Zara.

A few months later Chinese non-governmental organisations, including the Institute for Environmental and Public Affairs and Friends of Nature, published a report on fashion’s polluting practices, warning global mega-brands of severe breaches of regulation in their Chinese supply chains, with a grave impact on the country’s water environment”.

Leading manufacturers like Inditex (Zara’s owner) and H&M, along with Puma, Nike and Adidas, are committed to ending the release of harmful substances from their supply chains by 2020. The key elements of that commitment include management of chemicals used in the supply chain, information transparency and the replacement of harmful chemicals with alternatives.

Companies detox to rid off harmful chemicals

Before the report was published, the textile industry focused on the quality of products and use of chemicals in them. As per the report, 80 fashion brands and suppliers, accounting for 15 per cent of the global clothing market, have agreed to “detox”. These companies are setting up a Manufacturing Restricted Substances List (MRSL), often described as a harmful substances blacklist that can guide the elimination of harmful chemicals from the manufacturing process.

In 2012, H&M published its MRSL along with a list of endorsed alternative chemicals. It then started training suppliers to understand the importance of these changes.

Managing and replacing harmful chemicals

Management of these chemicals involves the entire supply chain including the wet processing stage, where companies have to provide training and technical support to build these capacities from scratch. Supply chain transparency can help this process if companies publicise their progress and ensure that more suppliers make wastewater monitoring data public.

Ultimately, we need to replace the chemicals that cause harm but cost and availability of alternatives is the toughest part of the process. The role of industry consensus in this can be deciphered from the replacement of dimethly fumarate (DMF). A widely used solvent in the textile and leather industry, DMF was listed by the EU as a Substance of Very High Concern (SVHC) for being hazardous to health. On searching for an alternative, fashion brands found a solution of synthetic leather and so several major firms required the removal of DMF from their supply chains, with deadlines ranging from 2020 to 2025.

Policies for making chemical management easier

Spurred by the emergence of online shopping and e-commerce, the textile and clothing industry is dominated by small firms, which makes change more difficult. In China, many factories supply lesser-known brands, or produce cheap unbranded clothing. This means the bulk of the clothing supply chain is not subject to strict chemicals management.

H&M’s Veera Sinnemaki agrees government policy is needed for the industry to change. Policies holding chemical companies accountable will make chemical management much easier for both brands and suppliers. In April, a number of large Chinese suppliers of dyes, additives and chemicals to the clothing sector launched a voluntary initiative to produce a ‘Manufacturing Restricted Substances List’ and a positive list of preferred substances that apply to their own sector. This would integrate several existing industry standards.

Texprocil has appointed KV Srinivasan, Managing Director, Sree Narasimha Textiles, Premier Mills and Premier Fine Linens as the new chairman. He is a Committee member of the Cotton Textiles Export Promotion Council from 1998.

A B.Tech in Textile Technology from PSG College of Technology and MSc in Textile Technology from the University of Manchester, Srinivasan is also the chairman of the South Indian Textile Research Association, Coimbatore.

The cotton stakeholders across the textile value chain have been demanding reintroduction of the Technology Mission on Cotton in a revised format with two mini missions focusing on technology development and technology transfer under the Ministry of Agriculture and another two mini missions focusing on clean cotton and branding Indian cotton textile products.

The Technology Mission on Cotton was announced in 1999 and closed in 2012. It made India the largest cotton producer and net exporter in the world. The Ministry of Textiles has already submitted a proposal to allocate funds to implement clean cotton and branding Indian cotton textile products missions. Additionally, Southern India Mills’ Association (SIMA), has sent a representation to the Union Textile Minister seeking her intervention by empowering the Cotton Corporation of India (CCI) to enforce certain regulations to curb the malpractices resorted to by certain ginners.

It has suggested empowering the textile commissioner, the secretary, textiles committee, the Director, TRAs, CIRCOT, and CMD of CCI to make periodical inspection in ginning factories and take necessary action on the factories resorting to malpractices. Textiles committee should conduct periodical audits and recognise three to five-star rated ginning factories by posting the details on the CCI website and CCI should introduce the 16-digit RFID code for individual bale quality parameters on par with USDA that practises the same since 1991.

Exporters in Tirupur have been awaiting their ROSL (Rebate on State Levies) refunds for three months. For the Tirupur knitwear cluster alone, the pending ROSL claims (1.7 per cent free on board worth exports) work out to be Rs 105 crores. Settlement of pending claims would be helpful to plants at a time when the units are operating under wafer-thin margins and struggling to sustain in the price-conscious global market. These have to compete against countries which are enjoying duty-free status in the European Union and the United States markets.

Under the ROSL scheme, a rebate on state levies is provided such as value-added tax and central sales tax on inputs, including packaging, fuel, and electricity duty, accumulated through various stages of production, from yarn to finished garments. For exporters, the scheme offers enhanced duty drawback cover on inputs.

The scheme takes into consideration all taxes paid by exporters like VAT, electricity duty, octroi, entry tax etc. The ROSL rate for garment items exported varies from 2.65 per cent to 3.9 per cent.

Tirupur exporters also want India to expedite the free trade agreement with Russia, which has given Bangladesh the duty-free garment facility, and they hope India can also avail of this facility.

Sourcing practices of clothing retailers in the UK have come under scrutiny. Online clothing retailers in the UK such as Primark, H&M, and Zara get 21 per cent of their stock from China, 14 per cent from Bangladesh and India and 12 per cent from Vietnam. All these four e-tailers have manufacturing facilities in the UK.

Fashion e-tailers Boohoo, Asos and Missguided were facing scrutiny for below-legal wages and unethical conditions for clothing manufacturing workers. Missguided has reduced its presence in Leicester, after recognizing its inability to satisfactorily audit the factories it was using. Having started this year working with 35 manufacturers at 80 different sites, the company now sources from 12 suppliers at 20 factories.

There have been allegations Boohoo underpays workers and promotes unsustainable and non-environmental consumer buying patterns. In the meantime, retailers in the UK like John Lewis, Marks & Spencer and Next have agreed to support moves to stop modern slavery in the textile trade.

Global fashion brands have increased the overall social and environmental transparency of their sourcing practices by just five per cent since last year. While many have taken widely publicized steps in recent years to ensure the safe working conditions and living wages of their workers, a lot remains to be done.

There are at present, over 30 textile units and workshops operated by Vietnamese in the province of Vladimir and other neighbouring districts. These facilities have given jobs to hundreds of Vietnamese all over Russia. Do Van Tien’s workshop in Sarlanter in Vladimir employs ver 65 Vietnamese workers. These workers have been working on contractual basis.

Started a decade back, the unit specialises in making sports apparels under the brand name Sarlanter. Tien’s unit has also been generating good revenue thereby widening the scope of creating more job opportunities. Besides offering good working and living conditions, the facility also encourages workers to play sports and improve their communication skills.

Registration at the International Sourcing Expo Australia and co-located Footwear & Leather Show Australia increased 10 per cent from last year, with more than 4,000 visits from large fashion retailers to niche fashion brands, start-up labels, online outlets and fashion designers looking to make valuable connections with potential and existing suppliers.

Buyers and production managers toured the world’s apparel, accessories, texiles and footwear suppliers at the Melbourne Convention and Exhibition Centre over three days from November 20-22, 2018. Visitors met with more than 720 manufacturers and agents exhibiting at the expo from 19 countries – China, India, Pakistan, Bangladesh, Hong Kong, Indonesia, Vietnam, Malaysia, Singapore, United States, Fiji, Australia, Turkey, South Africa, Taiwan, Nepal, Serbia, Italy, and Thailand.

A highlight of the event was the launch of Global Runway, where emerging and established designers from Indonesia, China and Australia showcased their collections. These shows were supported by Australian Fashion Council and enjoyed by strong crowds across two days. The expo’s Global Sourcing Seminar series led by industry experts and facilitated by fashion commentator and journalist, Patty Huntington, provided valuable market insights and business tips. From international denim trends, expert sourcing tips, legal information, ethical sourcing advice, help for fashion start-ups, international fashion and footwear insights and more, the seminar series had something for all industry professionals.