FW
The Union Textile Ministry plans to promote cotton exports under the Kasturi Cotton Initiative that has so far registered 300 ginners from across the country.
With an aim to promote Indian cotton through branding, traceability and certification; the Kasturi Cotton Initiative will now target premium export segments.
Rachana Shah, Textile Secretary, states, demand for textiles is slowly picking up in the international markets and Union Finance Ministry will soon decide on the extension of loan moratorium under the Emergency Credit Line Guarantee Scheme (ECLGS).
India is ranked amongst the top 5 apparel exporting countries and plans to expand its export base via new FTAs, adds Shah. Assuring that import surges in all segments of textiles are being monitored and value chains for raw materials strengthened, Shah pointed out that Quality Control Orders are being issued in viscose, polyester and other segments to ensure quality and curb sub-standard imports.
By hosting the Bharat Tex 2024 exhibition from February 26-29, 2024, the Indian government aims to drive more investments and sourcing of raw materials in the sector. In 2023, it trained around 1.2 lakh people under the Samarth scheme, including 1.08 lakh women. National Institute of Fashion Technology (NIFT) also plans to expand India’s textile exports by signing MoUs with other nations of the world.
Footwear brand Nike’s revenues surged by 1 per cent Y-o-Y to $13.4 billion in Q2 FY2024. However, the brand’s value fell by 11 per cent to $519 million due to the declines in North America and Europe markets.
Nike’s revenues in North America dropped by 4 per cent to $5.63 billion during the quarter while revenues in EMEA surged by 2 per cent to reach $3.57 billion.
Revenues in Greater China grew by 4 per cent to $1.86 billion, while APLA also recorded a 13 per cent increase in revenues to $1.8 billion.
Nike’s gross profit for the quarter surged by 5 per cent Y-o-Y to $5.97 billion, resulting in a gross margin of 44.6 per cent. The brand’s net income grew by 9 per cent to $1.58 billion.
According to Mathew Friend, Chief Financial Officer, Nike’s second quarter financial results drive a more profitable growth for the brand as it continues to focus on gross margins expansion and efficient management of costs.
At a press conference in the country, Cao Huu Hieu, Director, Vietnam Textile and Garment Group (Vinatex) said, Vietnam’s textiles and garments exports to the US and EU dropped significantly in 2023 as consumers curtailed spending on discretionary items including textiles and garments.
This led to a sharp drop of 10 per cent in the export turnover in the industry, added Hieu According to him, geopolitical instability and rising inflation caused immense difficulties for the textile and garment industry in 2023 as order prices dropped by over 30 per cent for small quantities and 50 per cent for large quantity items.
Rising labor costs and depreciating currency rates of other countries also made Vietnam’s textile and garment exports uncompetitive, he adds.
Currently, Vietnam is the second largest wage payer in the industry with wages rising to $330 per month compared to $420 per month in China.
Wages in the country are three times higher than that in Bangladesh, over two times higher than India, 1.8 times higher than Cambodia.
The VND exchange rate also remained stable during the first eight months of the year while the Chinese Yuan depreciated by 5 per cent, Bangladeshi Taka fell 5.9 per cent and Turkish Lira dropped 31 per cent.
Sri Lanka’s textiles and apparels (T&A) exports declined by 18.84 per cent to $4.42 billion during the period between January-November 2023.
The country’s total earnings from garments exports declined by 20 per cent during the first eleven months of 2023. Textile exports too slowed to t 4.84 percent as against the same period in 2022.
Hit by a slowdown in consumer spending, Sri Lanka’s clothing exports further suffered from the rising inflation in the US and EU markets. The exports also reeled under the impact the Russia-Ukraine war and the ongoing Israel-Hamas war that continue affect textiles and garments exports from most Asian countries including Sri Lanka
Co-held exhibitions, FESPA Global Print Expo 2024, European Sign Expo, Personalisation Experience and Sportswear Pro will be attended by over 425 exhibiting companies this year.
To be held in Amsterdam from March 19-22, 2024, these exhibitions will showcase hard solutions such as wide format flatbed and roll-to-roll printers, screen printing carousels, and finishing solutions from exhibitors hailing from 36 countries.
They will highlight suppliers including Afga, Brother, Colorjet India, HanGlory, Liyu International, MHM Mimaki, Roland, Epson and Multoh who will showcase products for digital wide format and screen and textile printing.
Software suppliers such as Caldera, EFI, Fiery and Roq will display end-to-end workflows, automated job onboarding and color management. On the other hand, sustainable alternatives for media and consumables will be showcased by 3A Composites, Antalis, Epson, HEXIS SAS, InkTec Europe and ORAFOL Europe.
The European Sign Expo 2024 will showcase an array of solutions for signmaking and visual communications. It will host 85 exhibitors including Cosign, Domino Sign, EFKA, Harmuth CNC-Frästechnik, Jinan AOL CNC Equipment, Lintel Display, Navori Labs and NSELED.
These delegates will explore products for channel lettering, digital and dimensional signage, engraving, illuminated displays, out-of-home media, LED, outdoor systems, laser cutters and sign tools.
Exhibitors at the Personalisation Experience show include Antigro, Kit Builder, Mediaclip and XMPie, demonstrating software for customisation design and variable data marketing.
The inaugural Sportswear Pro will highlight solutions for direct-to-garment, direct-to-film, sublimation and heat transfer printing, as well as embroidery and laser cutting solutions.
Bangladesh’s imports of cotton, yarn and fabric, decreased significantly in 2023 as capacity utilisation in the country’s textile mills dropped by 50 per cent due to inadequate gas supply and slow demand for RMG in the global market.
Compiled by the Bangladesh Textile Mills Association (BTMA), data from the Bangladesh Bank shows, Bangladesh’s cotton imports declined by 24.85 per cent to 1.35 million tonne in 2023 from 1.80 million tonne in 2022.
Mohammad Ali Khokon, President, BTMA, attributes this decline in cotton imports to shortage of gas in the country which forced spinners to run their units at 50 per cent capacity. The ongoing dollar crisis also prevented some spinners from importing cotton, he added.
As per BTMA data, cotton yarn imports by Bangladesh fell 19.11 per cent to 0.92 million tonne in 2023 compared to 1.03 million tonne in 2022.
Imports of woven fabrics fell by 14.29 per cent to 0.49 million tonne while the imports of knit fabric fell by 10.34 per cent to 0.32 million tonne during the year.
However, Bangladesh’s export earnings from the apparel sector grew by 3.67 per cent during the year. Local value addition and an increase in unit prices boosted revenue growth from the sector, observes Faruque Hassan, President, BGMEA.
Increased procurement from local sources, utilisation of raw materials imported in 2022 and increase in import of artificial fibers also led to the earnings growth, Hassan adds.
Rakesh Mehra, Chairman, Confederation of Indian Textile Industry (CITI) has urged Nirmala Sitharaman, Union Minister of Finance to bailout spinners of the current severe financial strain being faced in the segment.
Since the last few months, the Indian spinning segment has been experiencing a severe downturn intensified by external factors such as the prolonged Ukraine-Russia conflict and the recent Israel-Hamas war.
The segment experienced a 50 per cent decline in cotton yarn exports alongwith a 23 per cent decline in textile exports. Total textiles and clothing exports dropped by 18 per cent during the FY 2022-23 compared to the previous year.
Capacity utilisation in the segment also dropped by almost 70 per cent due to factors like a prolonged economic impact of global conflicts, an 11 per cent import duty on cotton and issues related to MMF Quality Control Orders.
This placed many spinning mills, particularly Micro, Small and Medium Enterprises (MSMEs), under severe financial stress.
To deal with these challenges, textile mills association have urged the finance minister to introduce support measures like, extending the one-year moratorium for the repayment of the principal amount, converting three-year loans under the Emergency Credit Line Guarantee Scheme (ECLGS) into six-year term loans, and providing necessary financial assistance to alleviate stress on working capital on a case-to-case basis.
These measures will help spinners mitigate the current crisis in the sector, prevent job losses, sustain their market share and achieve the set export targets, adds Mehra.
India's textile and apparel industry, once a vibrant powerhouse, is facing a tough weave. Despite projections of robust growth, the sector struggles to translate potential into reality. Let's unravel the threads of this predicament, examining the roadblocks hindering progress and exploring potential pathways to a brighter future.
|
Metric |
2021 |
2022 |
2023 (estimate) |
|
Domestic textile production (billion USD) |
45 |
48 |
52 |
|
Apparel exports (billion USD) |
18 |
21 |
24 |
|
Textile and apparel employment (million) |
45 |
47 |
50 |
|
Investment in sustainable textile projects (million USD) |
120 |
150 |
180 |
Growth Stalled: While the global apparel market is projected to reach $1.7 trillion by 2025, India's share remains stagnant. Export growth, initially expected to hit $40 billion by 2022-23, has fallen short, hovering around $24 billion. This disconnects between projections and reality exposes underlying challenges plaguing the industry.
Cost Concerns Cast a Shadow: High input costs are the first knot tightening the industry's grip. Raw materials like cotton, coupled with complex tax structures and logistical snarls, inflate production costs. A 2023 Invest India report reveals Indian spinning mills pay 20-25% more per kg of cotton compared to global benchmarks. This price pinch makes it tough to compete with countries like Bangladesh and Vietnam, where costs are more forgiving.
Import Tsunami Washes Away Profits: Rising imports of cheaper ready-made garments further squeeze domestic players. In 2022-23, India's apparel imports crossed $11 billion, a significant surge from $6.4 billion in 2019-20. This influx floods the market and erodes the profit margins of local manufacturers, impacting capacity utilization and job creation.
Sustainability Concerns Unravel the Fabric: Environmental woes add another layer of complexity. The industry grapples with water pollution from dyeing processes, inefficient energy consumption, and mountains of textile waste. A 2021 McKinsey report estimates the global fashion industry accounts for 10% of global carbon emissions. This necessitates a shift towards greener practices, such as embracing renewable energy, using organic dyes, and adopting circular economy principles.
Glimmers of Hope in the Loom: But amidst the challenges, threads of resilience shine through. Government initiatives like the Amended Technology Upgradation Fund Scheme (ATUF) and the Production Linked Incentive (PLI) scheme aim to modernize the industry and boost exports. Companies like Aditya Birla Fashion and Retail are weaving sustainability into their core, with Birla Cellulose becoming the world's first man-made cellulosic fibre plant to achieve water and energy positive status.
2024: A Year of Reckoning? The road ahead remains uneven, but promising threads of opportunity emerge. Increased domestic demand, fueled by a burgeoning middle class and evolving consumer preferences, presents another avenue for growth. Additionally, a focus on niche markets like sportswear and technical textiles can tap into new segments.
Despite concerns about global oversupply , Cotton Association of India (CAI) has maintained its pressing estimate for the 2023-24 season at 294.10 lakh bales of 170 kg each. These estimates were based on the inputs from cotton-growing state associations and trade sources.
Influenced by Brazil’s record-high production in 2022-23 season, India’s cotton prices declined marginally by 0.18 per cent. The expansion of cultivation with rise in cotton productivity led to a surge in the global cotton supply. However, unfavorable economic conditions led to a sluggish demand during the year resulting in elevated inventories and a subsequent reduction in cotton prices worldwide. Also, infestation of pink bollworm in the cotton crop reduced from 30.62 per cent in 2017-18 to 10.80 per cent in 2022-23.
According to the International Cotton Advisory Committee (ICAC), global cotton production is set to surpass consumption for the second consecutive year. Production of cotton lint is projected to grow by 3.25 per cent to 25.4 million metric tons, while consumption is forecasted to marginally decline to 23.4 million metric tons.
Cotton consumption in the US is expected to decline while production and ending stocks are likely to increasing during the 2023/24 season. The global cotton market is undergoing long liquidation open interest dropping by 1.44 per cent drop in open interest. Cottoncandy prices are hovering at 56000. They are expected to stabilize at 56100. Various factors, including a delicate balance between global supply and demand, are influencing cotton prices in the current economic landscape.
Bangladesh-based Badsha Group of Industries has unveiled a three-phase plan to
reach $700 million in annual denim exports. To raise its annual export earnings, the company plans to open a new RMG factory at Madhabpur in Habiganj.
The denim maker also plans to set up a spinning mill at Madhabpur in Habiganj with an investment of over 18 billion takas (roughly $73 million). The mill will begin production next year and employ at least 15,000 workers.
This company’s goals are in line with Bangladesh’s plans to boost RMG exports to $100 billion ts by 2030. However, this requires the country to double its denim exports, according to Md Siddiqur Rahman, Former President, BGMEA.
Currently, 42 mills in the country produce 900 million yards of denim fabric annually, according to BTMA.
Established in 1976, Badsha Group forayed into denim fabric manufacturing in 2017. The mill manufactures denim fabrics via Pioneer Denim. It produces 60 million yards of fabric annually, and aims to increase this to 100 million by 2025.
