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Exporters in India are going to have their dues such as rebate on state levies and IGST cleared very soon. Necessary steps will also be taken to prevent cheaper imports.
Exim Bank has been advised to work out a special scheme for reducing the interest rate burden on exports instead of increasing IES benefits. A decision will soon be taken on blocked/embedded central taxes. Industry associations and export promotion councils have been encouraged to directly approach their respective state governments.
The Indian textile industry has been facing numerous challenges in the international market and the global competitiveness of the industry has been affected after the implementation of GST.
The delay in clearing various dues and the TUFS subsidy has created a severe financial crunch. In addition, high tariff barriers have been the major bottleneck for India in achieving a sustained growth rate in exports.
The cyclic element of lower global demand, changes in structural demand, reduction in export benefits and tariff barriers affected exports. Certain leading manufacturers had to divert their investments to countries like Ethiopia and other countries to overcome the challenges of tariff barriers.
The industry wanted these issues resolved so that it could emerge from the recession and grab the emerging global opportunity.
Huntsman will build a new polyurethanes systems house in Dubai.
The facility will strengthen Huntsman’s differentiated downstream capabilities in the heart of the Middle East. Targeted for completion by the second half of 2019, the investment will increase the company’s systems production capacity in the region and add a new dimension to its polyester polyol capabilities. It will serve as a strategic platform to expand its business in the Middle East and North Africa and build its market leading position. It represents the next step in Huntsman’s plan to strengthen its downstream network.
The systems house will enable the company to supply traditional and high-end rigid polyurethane formulations from a local source. It will also enable Huntsman to leverage its development and production know-how in polyester polyol and polyol blends for the fast-growing flexible foam and footwear markets, as well as pre-polymers for adhesives, coatings and elastomers applications.
Huntsman has 30 facilities worldwide. Huntsman Textile Effects is a leading provider of high quality dyes and chemicals to the textile and related industries. It is continuing to invest in research and development to bring cutting-edge innovation to the textile industry. The company’s chemical products are sold worldwide to manufacturers serving a broad and diverse range of consumer and industrial end markets.
Indian apparel exporters are facing stiff competition from their counterparts in Bangladesh and Vietnam.
Both these countries grant tax incentives in addition to export incentives. Besides these countries are preferential importers for several global markets.
Indian exporters used to get a duty drawback of 7.5 per cent before GST implementation. This has been slashed to 2.5 per cent due to which there is a significant impact on exports. As incentives have been cut, the prices of Indian products have increased.
In addition key global markets like Sri Lanka and the Middle East have imposed a value-added tax (VAT) on apparel exports from India. Recently, the UAE imposed VAT on apparels imported into their country, which further led to an increase in prices. With the duty drawback slashed, exporters were already struggling to generate export volumes at competitive prices. Now they face a stiffer competition in these regions due to changes in tax rates.
Export incentives for cotton and polyester have reduced. This makes Indian products more expensive in international markets and reduces their competitiveness.
Nearly a year after the implementation of GST, exports of textiles as well as garments have been found to have declined significantly.
Gujarat accounts for 12 per cent of the apparels exported from India. Exports have gone down by an estimated 30 per cent from Gujarat.
The textile industry in India may be made to buy cotton and jute from farmers at least at the minimum support prices.
The move is part of efforts to ensure a 50 per cent profit to farmers over their cost of production.
The proposal — fraught as it is with serious implementation challenges — could spell trouble for the labor-intensive textile and garment industry.
MSP for cotton will increase by at least 28 per cent in 2018-19 from the current level. Cotton accounts for roughly 60 per cent of yarn costs and yarn makes up for 50 per cent of fabric costs. Fabric, in turn, makes up for 50 per cent of garment costs. So higher cotton prices will push up costs in the entire value chain and jeopardise its competitiveness.
The idea is being mooted at a time when garment production has dropped for 11 months in a row and exports have contracted for a seventh straight month through April, with most units reeling under elevated costs.
Garment production dropped 11 per cent in 2017-18 and exports contracted almost four per cent even though the country’s overall merchandise exports rose 9.8 per cent.
Also, the proposal will potentially render the Cotton Corporation of India irrelevant.
From 2020 to 2040, India will have a large and growing section of its population in the working age, giving it a bigger workforce than China’s.
Deploying this large young workforce in productive areas could potentially create a huge economic output in the long run.
Due to rising labor costs, China is shifting focus to high-end manufacturing. With China vacating this space, a huge opportunity is up for grabs.
To begin with, labor cost in India is less than one-third of that in China. Secondly, the raw material is easily available. India is the world’s second largest cotton producer and no imports would be needed. Synthetic textiles are also manufactured in India. Availability of cotton and synthetic textiles, coupled with low labor cost, offers a huge advantage for apparel manufacturing in India which few other countries could match.
To add to it, more jobs can be created by investing in labor-intensive industries compared to automation-driven industries.
Every 0.1 million of rupees invested in apparel manufacturing is expected to create 24 new jobs compared to only 0.3 in automobiles or 0.1 in steel.
A structured policy on creating large local manufacturers in sectors like leather, apparel and footwear could go a long way in creating high volume jobs in India.
India’s apparel exports fell by 23 per cent in April 2018 compared to April last year.
Reasons include high input costs, delay in GST refunds and stiff competition from Bangladesh, Vietnam, Pakistan and China.
Apparel exports have fallen for the seventh month in a row.In rupee terms, exports in April 2018 declined by 21.4 per cent compared to the corresponding period last year. In 2016-17, the industry witnessed strong growth, but now exports are in a negative territory since October last year.
In particular India’s apparel exports from Punjab, Haryana and Uttar Pradesh have seen a steep decline. Around 200 exporters in Punjab and Haryana have been affected. Input costs in Punjab, Haryana and Uttar Pradesh are much higher compared to costs in the Tirupur cluster.
The industry has asked for expediting GST refunds and remission on state levies in a time-bound manner.
Due to their poor competitiveness in the international market, many Indian apparel exporters have increased their exposure in the domestic market. However this will not be good in the long run for India, which used to be a dominant player in the international apparel export market.
India’s readymade garment exports in the previous financial year were around 16.71 billion dollars compared to 17.38 billion dollars in 2016-17.
Technical textiles are the new buzz in the Indian textile industry and one of the most emerging and inventive industries in India.
India’s technical textile market is expected to grow at 12 per cent per annum.
With sufficient investments in technology, the industry will grow exponentially.
India comprises four per cent of the global technical textile exports. Demand for technical textiles is expected to stay steady during the period 2017 to 2020 due to a broadening application in end-use industries, such as automotive, construction, healthcare, and sports equipment and so on. To foster research and development in the sector, eight Centers for Excellence have been set up.
Technical textiles offer several advantages in their functional aspects for improving health and safety, cost effectiveness, and durability and strength of textile material. In India, this sector is in its nascent stages while on the global stage it’s a multi-million dollar industry. A large number of technical textile products are consumed by different industries like automotive, healthcare, infrastructure, oil and petroleum, among others.
Indian companies have been introducing several new developments in textile technology. Indian companies are developing products using meta aramid, a textile produced in India which is made from a blend of materials which are environment friendly, lightweight and perform better than asbestos.
AATCC received 50 entries, with 95 students participating from 14 colleges and universities. Students were challenged to showcase their skills in business, marketing, and merchandising by conducting a business model, determining a marketing strategy, and developing merchandising tools and products for an integrated new apparel line focused on and inspired by a specific outdoor or indoor athletic activity (cycling, running, group fitness, hiking, etc.). The new line had to transition from activity to everyday wear and incorporate a use case and supply chain of a realistic technology (e-textiles, chemical technologies, materials technologies, etc).
Among the winners are Impervious Apparel by Hannah Norum and Mylisa Krueger, Oregon State University; Equilibre: A Work to Workout Clothing Line by Megan Singleton and Mallory Hayes, North Carolina State University; and Quick Fix by Mary Lee, Lyndee Johnston, Oksana Topchiy, and Renea Wright, University of Wyoming.
The American Association of Textile Chemists and Colorists (AATCC), based in the US, is the world’s leading not-for-profit association serving textile professionals since 1921. It provides test method development, quality control materials, and professional networking for members in about 50 countries throughout the world. It provides scholarships focused on textile design, merchandising, sciences, and engineering.
Kentwool Inc. and American Woolen Company have adopted a vertically-integrated business model that controls the entire production process from yarn spinning to finished product. This has helped the companies to successfully collaborate with premium apparel brands focused on wool, a natural fiber known for its thermal comfort, breathability and ability to be worn across seasons.
Established in 1843 in Pennsylvania, Kentwool owns a 135,000-sq. ft. state-of-the-art wool-based yarn spinning facility in nearby Pickens, which houses approximately 20,000 spindles and produces yarn from 100-percent wool or wool/man-made blends.
American Woolen Company grew to become the world’s largest wool manufacturer in the early 20th century. But the company diminished and become primarily an importer and wholesaler of woolen blankets. Long purchased the brand in 2013, and later had the opportunity to invest in a manufacturing location in the form of historic Stafford Springs, Conn.-based Warren Mill – a cashmere and camel hair woolen fabrics plant with more than 150 years of history.
The US wants Bangladesh to decide on the tenure of the buyers’ initiatives Accord and Alliance. Delays in approving extensions of Accord and Alliance would send a negative signal to buyers and consumers that Bangladesh was not committed to workplace safety. Factory safety and labor rights are a priority for US legislators, civil society, businesses and consumers.
Following the Rana Plaza building collapse in April 2013 that killed more than 1,100 people, European retailers formed the Accord on Fire and Building Safety in Bangladesh and North American buyers announced the Alliance for Bangladesh Worker Safety, which undertook a five-year plan, which set time frames and accountability for inspections and training and workers empowerment programs.
Accord has already obtained conditional extension for six more months as the tenure of the platform is going to end on May 31. The extension of the time frame for Alliance remains under process and the time frame of the platform would end on June 30. Alliance may however, obtain an extension up to December 31 this year.
The United States also wants Bangladesh to resolve the long-standing labor rights concerns so that Bangladesh can focus on preparing for its future as a middle income country and, eventually, a developed country.
